A sequester you say? America’s profligacy

With all the talk of sequester, I thought I’d take a closer look at the money. Not so much where it comes from – more on that later – but where it goes and how much is spent on what. The chart above shows that we as a nation are spending 63% more money [...]

Where is the money?

Commercial paper is a key driver of business activity in The United States, so important that when the market started seizing up in in the throes of The Credit Crunch a bailout one (one of the few bailouts I agreed with) was engineered in the form of the Commercial Paper Funding Facility. This was [...]

The Real Estate Industrial Complex

Real estate is an important driver of the American economy, accounting for perhaps as much as 17% of GDP and one in nine jobs, by some accounts. Of course that was a pre-recession metric so how large a contributor is real estate now?

A little difficult to measure directly, but lets look at [...]

Will consumer debt kill the recovery?

The chart above shows two series: first the amount of consumer loans outstanding at commercial banks (CCLACBM027SBOG, black line) compared to the personals savings rate (GPSAVE_PC1, blue line), while the grey vertical bar illustrates The Great Recession; some observations are apparent.

First, consumer loans apparently surged immediately after the Great Recession, jumping 65% [...]

Anything but the US $

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Even though over the past year gold has markedly under performed other assets, for example only increasing 4.45% compared to the S&P 500′s 20.97%, Central Bankers reportedly haven’t lost the faith. In fact in 2012 Central Banks have purchased gold at levels not seen since 1964. What’s going on?

Simple, the United States [...]

A picture says it all

Sometimes its difficult to appreciate the sheer scope and intensity of The Great Recession and the depth of the hole the US economy has to crawl out of. The chart above shows real Gross Domestic Product (aka, “GDP”, GDPC1, black line) from October 2007 to the present. Further, I’ve baseline the series to 100 [...]

Spooked consumers are saving …

The growth in job creation has all but flatlined, while the expanding labour force has pushed unemployment rate up and fully 80% of Americans have directly experienced unemployment or known someone who has been unemployed during The Great Recession, and the canaries in the coal mind are sending signals we’d best not ignore.

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Talking about bubbles

With The Fed buying $85B a month of [...]

While rates are low …

Talk of the debt ceiling and attempts to abolish it are troublesome since folks tend to not look at the bigger picture.

The chart above shows the cost of servicing US Federal Debt ( red bars )1 compared with the benchmark, US 10 year interest rate ( black line )2 from 1988 to [...]

Goverment stewardship of US taxes

I’ve been looking at a lot of Bureau of Economic Analysis (BEA) data for a client lately, and for my own purposes started looking at longer term trends regarding what the US government gets up to with our money. Here is an interesting one: the chart above shows the ratio of what’s called Federal [...]