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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

2009-04-24 USER

Posted by WARREN MOSLER on April 24th, 2009


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Durable Goods Orders (Mar)

Survey -1.5%
Actual -0.8%
Prior 3.4%
Revised 2.1%

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Durable Goods Orders YoY (Mar)

Survey n/a
Actual -23.6%
Prior -29.7%
Revised n/a

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Durables Ex Defense MoM (Mar)

Survey n/a
Actual -0.6%
Prior 0.2%
Revised n/a

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Durables Ex Transportation MoM (Mar)

Survey -1.2
Actual -0.6%
Prior 3.9%
Revised 2.0%

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Durable Goods ALLX (Mar)

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New Home Sales (Mar)

Survey 337K
Actual 356K
Prior 337K
Revised 358K

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New Home Sales Total for Sale (Mar)

Survey n/a
Actual 308.00
Prior 324.00
Revised n/a

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New Home Sales MoM (Mar)

Survey 0.0%
Actual -0.6%
Prior 4.7%
Revised 8.2%

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New Home Sales YoY (Mar)

Survey n/a
Actual -30.6%
Prior -37.4%
Revised n/a

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New Home Sales Median Price (Mar)

Survey n/a
Actual 201.40
Prior 208.70
Revised n/a

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New Home Sales TABLE 1 (Mar)

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New Home Sales TABLE 2 (Mar)


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4 Responses to “2009-04-24 USER”

  1. yeago Says:

    Interesting.

    What portion of the current state of home sales is recession vs return to reality, would you say? Do you think there’s any productive precedent for the 2005 levels of building?

    Reply

  2. Winslow R. Says:

    Banks seem to be just too expensive to act as conduits…..

    Obama touts plan to change college loan system

    The president’s proposal would switch the federal student loan system entirely to direct lending from the government.

    Obama has claimed that the change would save at least $48 billion over the next 10 years — money that could be funneled to student aid. But Republicans are concerned about the costs of that and even some Democratic lawmakers oppose the switch.

    http://news.yahoo.com/s/ap/20090425/ap_on_go_pr_wh/us_obama_college_costs;_ylt=Auuj9nGWnobfppoREXjgsMta24cA;_ylu=X3oDMTJwanAzcGc0BGFzc2V0A2FwLzIwMDkwNDI1L3VzX29iYW1hX2NvbGxlZ2VfY29zdHMEY3BvcwMyBHBvcwMyBHNlYwN5bl90b3Bfc3RvcmllcwRzbGsDb2JhbWFwdXNoZXNm

    Reply

  3. Captain CraZ Says:

    Mancur Olson, the political economist, in his books (The Logic of Collective Action and The Rise and Decline of Nations), speculated that small distributional coalitions tend to form over time in developed nations and influence policies in their favour through intensive, well-funded lobbying. The policies result in benefits for the coalitions and its members but large costs borne by the rest of population. Over time, the incentive structure means that more distributional coalitions accumulate burdening and ultimately paralysing the economic system causing inevitable and irretrievable economic decline.”

    Government attempts to deal with the problems of the financial system, especially in the US, Great Britain and other countries, illustrates Olson’s thesis. Active well funded lobbying efforts and “regulatory capture” is impeding necessary actions to make needed changes in the financial system. Urgent steps are necessary to accurately recognise losses on assets, remove toxic assets from balance sheets, recapitalise the banks and allow normal financial transactions to resume. If such actions are not taken then the broader economy and sustainable growth levels will be adversely affected.

    http://www.eurointelligence.com/article.581+M52ca24c9961.0.html

    Reply

  4. hooverprintingpresses Says:

    In a May 2002 article in The Asia Times titled “Global Economy: The BIS vs. National Banks,” economist Henry C K Liu observed that the Basel Accords have forced national banking systems “to march to the same tune, designed to serve the needs of highly sophisticated global financial markets, regardless of the developmental needs of their national economies.” He wrote:

    “[N]ational banking systems are suddenly thrown into the rigid arms of the Basel Capital Accord sponsored by the Bank of International Settlement (BIS), or to face the penalty of usurious risk premiums in securing international interbank loans. . . . National policies suddenly are subjected to profit incentives of private financial institutions, all members of a hierarchical system controlled and directed from the money center banks in New York. The result is to force national banking systems to privatize . . . .

    “BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies. . . . The IMF and the international banks regulated by the BIS are a team: the international banks lend recklessly to borrowers in emerging economies to create a foreign currency debt crisis, the IMF arrives as a carrier of monetary virus in the name of sound monetary policy, then the international banks come as vulture investors in the name of financial rescue to acquire national banks deemed capital inadequate and insolvent by the BIS.” (emphasis added)

    Ironically, noted Liu, developing countries with their own natural resources did not actually need the foreign investment that trapped them in debt to outsiders:

    “Applying the State Theory of Money [which assumes that a sovereign nation has the power to issue its own money], any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation.”

    When governments fall into the trap of accepting loans in foreign currencies, however, they become “debtor nations” subject to IMF and BIS regulation. They are forced to divert their production to exports, just to earn the foreign currency necessary to pay the interest on their loans. National banks deemed “capital inadequate” have to deal with strictures comparable to the “conditionalities” imposed by the IMF on debtor nations: “escalating capital requirement, loan writeoffs and liquidation, and restructuring through selloffs, layoffs, downsizing, cost-cutting and freeze on capital spending.” Liu wrote:

    Reversing the logic that a sound banking system should lead to full employment and developmental growth, BIS regulations demand high unemployment and developmental degradation in national economies as the fair price for a sound global private banking system.

    http://www.financialsense.com/fsu/editorials/deepcaster/2009/0424.html

    Reply

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