Economy Archive

Berlusconi Insists Italy’s Economy is Prospering

Berlusconi insisted that Italy’s economy was broadly prospering. “The restaurants and vacation spots are always full, nobody thinks there is a crisis,” he said. ...Read More

Jobless Claims Dip, Still in Range; Trade Deficit Jumps

As previously discussed, the real economy seems to be muddling through, and at firmer levels than the first half of the year. The trade report will probably result in Q2 GDP being revised down to just below 1%, but up from the .4% reported for Q1 So Q3 still looks like it ...Read More

Bernanke: No Plans to Add New Stimulus Measures Now

More evidence of the suspected understanding with China- they resumed buying US Tsy secs in return for no more QE: The U.S. economy “has been doing worse than expected” and Beijing needs to “seriously assess” possible risks to its vast holdings of American debt, said Yu Bin, an economist in the Cabinet’s ...Read More

Economy Faces a Jolt as Benefit Checks Run Out

When there is a lack of aggregate demand due to high ‘savings desires’ as the unemployed take jobs when benefits expire, it just means someone else loses a job, and then some, as govt deficit spending falls as well, further reducing aggregate demand. It also serves to drive down wages, as per ...Read More

Consumer Borrowing Rises $5.1 billion

Down a bit from April, but the larger question is whether higher gasoline prices led to more borrowing to buy what previously was bought from income. Yes, savings is growing, but that is mainly in the form of reduced and unwanted private sector debt, and not dollars in savings accounts. Consumer Borrowing ...Read More

China Extends Crackdown on Off-Balance-Sheet Loans

Cutbacks now will further slow things: China Extends Crackdown on Off-Balance-Sheet Loans July 4 (Reuters) — China’s bank regulator has cracked down on off-balance-sheet lending by the country’s banks, sources told Reuters on Monday, its latest step to prevent over-zealous and risky lending from hurting its financial system. China Banking Regulatory Commission ...Read More

mtg apps dip

How does that go again about low rates helping housing? Mortgage Applications Dipped Last Week June 29 (Reuters) — Applications for U.S. home mortgages slipped last week as demand waned, even as mortgage rates dropped, an industry group said Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application ...Read More

Major Banks Likely to Get Reprieve on New Capital Rules

The real problem is if you understand what a bank is, you wouldn’t be trying to use capital ratios to protect taxpayer money. First, notice that the many of the same people clamoring for higher capital ratios have also supported ‘nationalization’ of banks, which means there is no private capital. So it ...Read More

mtg apps for new purchases fall again

Seems the fall off after the tax credit ended April 30th has yet to fully run its course: US Mortgage Applications Soar on Refinance Demand July 7th (Reuters) —Refinancing drove total U.S. mortgage applications to a nine-month high last week, while demand for loans to purchase homes sunk to a near 13-year ...Read More

Deficit large enough to turn the economy?

[Skip to the end] Given our counter cyclical tax structure, a weak economy causes the deficit to rise until it adds sufficient income and net financial assets to turn things around. It then goes the other way, with the strong economy driving up revenues faster than even the government can spend, until ...Read More