by Adrian Ash on September 23, 2009
“A debt bubble, yes. But a consumption binge…?”
IT’S A COMMON-PLACE of political, investment and bar-room debate that the Anglo-Saxon economies enjoyed a debt-fuelled consumer boom over the last decade or so.
In fact, it’s a given…the one sure thing any analysis builds on, whether it’s begging for votes, fund-management fees or a shared cab-ride home. The US and UK piled more debt on household balance-sheets than any other nations in history, forgetting to add a balancing item beyond the apparent value of the roof over their heads.
Thing is, the data don’t support it. Worse yet, they don’t deny it either. Anglo-Saxony took on a record volume of household debt, simply to keep household spending growing on trend. Something ugly but hidden – economic dark matter – forced consumers deep into hock just to keep pace during the early 21st century.
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by Kris Sayce on September 1, 2009
Is this the morning after? Or Boxing Day? Or even the day after your birthday?
Well, if the stimulus programmes were the night out on the… town, Christmas Day and your birthday all rolled into one, then there is always going to be a big let down the day after.
Could this be it? Has the stimulus finally run its course?
Well, let’s take a look. But first a brief follow-up to the property saga.
We don’t think the Money Morning mailbag has ever seen as much action as it has over the last week or so.
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by Adrian Ash on July 23, 2009
If this sounds like a rough and clumsy translation of Italy’s proposed gold tax, you should see the original…
THERE’S ONLY so many ways you can say “No” in Italian (just the one in fact), and the Bank of Italy has used them all in defending its gold hoard from Rome’s over-spent politicians in the last 10 years.
“We always knew they didn’t get on,” as Stefano Sansonetti wrote at Italia Oggi back in late June. In fact, finance minister Giuli Tremonti and Banca d’Italia governor Mario Draghi make the UK’s Alistair Darling and Mervyn King look like the best of pals. (Though they might seem more chummy than ex-US chief Hank Paulson and Fed chair Ben Bernanke before too long…)
“Nor is it news,” Sansonetti went on, “that the finance ministry has had its eye on the Banca d’Italia’s gold for some time. There have been plenty of attempts to make use of these resources.”
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by Adrian Ash on July 21, 2009
Type “rubbish economist” into Google. Then hit “I’m Feeling Lucky”…
The INCOVENIENT TRUTH about statistics, as Al Gore would no doubt confess if you threatened to stop him flying, is they look backwards, not forwards – and not even quite to the present.
That’s as true of last-quarter earnings as it is of GDP. You’re left guessing what today’s outcome will be, right up until it becomes historic and you can try to claim it as fact. Even “up-to-the-minute” inputs have to exclude the very minute we’re in, and corduroy-patch models like Greg Mankiw at Harvard should know this. So too should his chum, the White House’s own Larry Summers.
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by Dan Denning on July 17, 2009
On two of the fronts in the war against inflation/deflation (the enemy varies from week to week) there appeared to be progress yesterday and overnight. The Sino-American alliance delivered a one-two punch to recovery sceptics with some impressive numbers and Aussie stocks benefited. Let’s have a look.
First the rising power in the East. China’s GDP growth took off like a rocket in the second quarter, from 6.1% in the first quarter to a sizzling 7.9% in the second. Resource-intensive industrial output was up 9% in the quarter, according to China’s National Bureau of Statistics. And Chinese retail sales expanded at an annual rate of 15% last month alone.
If it wasn’t official before, it ought to be now. There is a credit boom in China and it’s impressive. Banking lending is up and government spending is on the loose and asset prices have responded with a big rally. And not just Chinese asset prices!
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