If anything is going to be charged off, it might be student loans. All the rage nowadays, the government, approximately half of it, is busily working out how it “should” be done and by just how much. A matter of economic stimulus, loan cancellation proponents are correct that students have burdened themselves with unprofitable college “education” investments. Without any jobs, [...]
Why is inflation ex-food and energy considered core? Isn't food and gas about as core as it gets for most people? Why do economists think it is important to stabilize the price of luxuries but not the price of needs? As a society shouldn't we prefer a monetary policy that stabilizes food, energy and shelter prices first? Shouldn't the poorest [...]
Though we deal mostly in data, it is always prudent to remain connected and aware of anecdotes. It may even be more so in these kinds of times, where something like conditioning can desensitize analysis. Context is always important for any data, whether market or macro. My colleague Joe Calhoun pointed out recently a program in Maryland that has been [...]
Although he didn’t state it specifically in his November 2010 Washington Post op-ed formally justifying QE2, it was very clear that then-Fed Chairman Ben Bernanke intended it to work through lending and especially the bank channel. Though he doesn’t explain, nor has any official ever, why a second one was needed given that the first was “quantitatively” determined, Bernanke was [...]
Revolving consumer credit turned upward in March last year, which signaled to economists that the true end of the Great Recession was at hand. The largest impediment to the monetary version of the recovery was the “debt hangover” from the mortgage surge during the housing mania. Consumers, rightfully cautious after that disastrous experience, spent the early years of the “recovery” [...]
To add depth to the consumer credit version of consumer inclinations in 2015, Gallup’s estimates of daily spending in March came in at $86. That was only $4 greater than February’s $82 which hadn’t rebounded at all from January. In other words, there is “something” wrong with consumers so far in 2015, even as compared to prior years of lethargy. [...]
Consumer credit is somewhat useful as a gauge for actual consumer behavior in actual activity, as opposed to consumer sentiment surveys which tend to follow stock prices (and be dominated by the upper incomes) and the theory on the “wealth effect.” In terms of the current “cycle”, or supercycle as it may be, sentiment and debt could not be further [...]
If you don’t have much by way of income growth, then there are other less desirable options for spending sources. There are “entitlements” or transfers and then there is debt. In the current age, the federal government has been responsible for originating and disbursing the vast majority of consumer credit in the form of student loans, in what is really [...]
The end of deleveraging, or the end of the cycle? That is where pertinent attention needs to focus from April’s jump in revolving credit. For most of the “recovery” period, households eschewed credit cards. That changed in the snowy winters of early 2014, which either means deleveraging has finally run its course and a new debt cycle is beginning, or [...]
The primary argument in favor of “aggregate demand” policies, or at least attempts at demand-side “stimulus”, amounts to putting more money into the economy as spending. You hear it all the time, as in give money to people that do not have it now and they will spend it, thus creating a “pump priming” that stirs the economic engine as [...]
Stay In Touch