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  • Economic Rollercoaster Gaining Downward Momentum [View article]
    Tom, agree that a roller coaster is not a good simile for GDP - the roller coaster analogy was meant for economic news in general (which does include the markets).
    Jul 29 11:21 AM | 3 Likes Like |Link to Comment
  • Weekly Economy Review: Are There Any Recessionary Flags? [View instapost]
    Moon, 100% agree with you. but what politician would go along with this approach?
    Jul 22 08:26 AM | 1 Like Like |Link to Comment
  • Are Healthcare, Food, And Gas Killing Consumer Spending? [View article]
    Allstreets,
    all demand is elastic over time - it depends how fast change occurs. HOWEVER, i agree with your overall sentiment. the lower end of the population in many ways does not have the means to take advantage of many of the options to keep their budgets under control.
    Jul 15 10:55 AM | 4 Likes Like |Link to Comment
  • Are Healthcare, Food, And Gas Killing Consumer Spending? [View article]
    Whitehawk,
    please note as John Lounsbury points out, this whole subject of regulation is like arguing which religion is the best. we all have opinion, but are unable to drive the convincing nail into the coffin.

    i tend to believe that the issue is not regulation per se, but the way one goes about regulation. as one who has been the subject of corporate, external, and government audits - i can assure you that an auditor cannot find anything i did not want them to find. the only way an auditor has a chance of finding something is to embed the auditor. if the auditor is embedded, then they start identifying with the audited - instead of being the auditor.

    solutions are all less than perfect. my best-of-the-bad-options is to to gravitate towards criminal charges (not civil) against the entire chain of command. corporation and business management always claim they did not know what was going on - which is true because they did not want to look - and the gating process to go into management makes sure that you are the type to shield your bosses from things it is better for them not to know.

    the other side of the coin is regulation
    - that prevents market entry - and limits competition;
    - because of free trade, makes it easier (cheaper) to produce the item elsewhere.

    likely the current situation is too heavily reliant on audit - and the cost element of each line of regulation has not been properly thought out.
    Jul 15 08:36 AM | 3 Likes Like |Link to Comment
  • Are Healthcare, Food, And Gas Killing Consumer Spending? [View article]
    Allstreet -
    "Note that gasoline went up 50% while gasoline consumption dropped only 15%. That's a demonstration that gasoline is practically an unavoidable purchase, so it's relatively price inelastic. Similarly food prices up 18%, but consumption down only 2%. Healthcare prices up 12% but spending up only 7%."

    the graphs say the following:

    Note that gasoline went up 50% while TOTAL gasoline SPENDING dropped 15%. Similarly food prices up 18%, but TOTAL SPENDING IS down 2%. Healthcare prices up 12% but TOTAL spending up only 7%.
    Jul 15 07:56 AM | 2 Likes Like |Link to Comment
  • Is Joe Sixpack Returning To Consumption? [View article]
    GreenRiver -
    take a look at the following graphic which will be in next week's seeking alpha post:
    http://bit.ly/RVzPWm
    this graph comes from the personal consumption expenditures you discuss. it shows costs up - but expenditures expressed as a indexed percent of the total PCE is constant.

    my take is more and more people are going without medical coverage :(
    Jul 10 08:36 AM | Likes Like |Link to Comment
  • Is Joe Sixpack Returning To Consumption? [View article]
    Ed,
    agreed. no one will make me believe that a larger segment of the economy has now gone underground in the new normal.
    Jul 8 09:13 PM | Likes Like |Link to Comment
  • Is Joe Sixpack Returning To Consumption? [View article]
    allstreets..
    the income distribution likely is distorting the data - we all think of this but there are specific data series to confirm (or refute). we have to use data series like
    http://bit.ly/N8qR7t
    to say that the average Joe is making more money (this removes the bank ceo's).

    i think the big difference is that a whole bunch of people do not have a job (either high or low paid)
    http://bit.ly/MfmDcf

    gasoline price increases are average for the cost increases seen by the consumer.
    http://bit.ly/N8qNET

    "Finally, the idea that the recent "rise" in housing values, which I sincerely doubt exists, would have any meaningful positive wealth effect on GNP strikes me as preposterous. "
    housing price deltas vary by zip code. i would think too that the average consumer must see the increases (and you do not). i live somewhere where the improvement is obvious. However, because of other new normal factors such a demographic shift - we too are reluctant to declare this link valid in the new normal (even though it is valid historically).
    Jul 8 09:10 PM | Likes Like |Link to Comment
  • Is Joe Sixpack Returning To Consumption? [View article]
    Hammerhead,
    whenever any author uses charts from FRED - the indices and the formula to create the chart is shown in the code. in this case the code is:
    ( ( oehrenwbshno + a576rc1 ) / pop ) * (dspic96 / dspi ) * 1000000

    just put oehrenwbshno into google search - you will be brought to the page that explains. same with the other code in this formula.

    i tend to use a lot of FRED graphs in my analysis so that readers understand that i am not playing with the data (or at least know how i am playing with the data).
    Jul 8 07:54 PM | Likes Like |Link to Comment
  • Is Joe Sixpack Returning To Consumption? [View article]
    One thing about Joe, he has been down for so long - will he even respond to improving conditions (as he likely will assume they are temporary - and they may be temporary regardless). My view from the cheap seats is that everything seems to be on hold - waiting for the next shoe to drop.

    this is one reason we were uncomfortable with reading too much into the results of this index. if this was pre-great recession, i would have no qualms about touting Joe's return.

    an finally, presidential election years normally give the economy a boost - but the last one did not.

    One final point, i really work at finding an element which is recessionary. there just is nothing. yes, somethings are close - but the real economy (non-monetary things i can count) seems like it is growing at a moderate clip.
    Jul 8 07:45 PM | Likes Like |Link to Comment
  • Joe Sixpack's Recession - The Sequel [View article]
    Dancing -
    right on target. i cover student loans extensively. http://bit.ly/LjPcSU

    and this is the only real growth element of the consumer. and to amplify Old Trader's comment - student loans are the number one asset on the fed's books too:
    http://bit.ly/LjPadM
    Jun 25 01:15 AM | 1 Like Like |Link to Comment
  • Is Joe Sixpack's Economy Deep Into A Recession? [View article]
    Rich,
    lot of questions, and they deserve answers which i will try to cover in the coming weeks in my posts (as they are not simple answers). but i have a short answer to your depression question - it is a matter of definition. if this was pre-ww2, we would call today's economy a depression.
    http://bit.ly/N9sZvt

    i am trying to lay out an argument that gdp is not the only way to look at an economy - and that the economy looks different depending on your position in it and how you view it.
    Jun 18 08:50 AM | 2 Likes Like |Link to Comment
  • Is Joe Sixpack's Economy Deep Into A Recession? [View article]
    if one backs out student loans, per capital consumer credit has been falling since the beginning of the recession. i am not one to argue lifestyle changes as i know no way to analytically present this - except to say that consumer sentiment is so low that it is hard to imagine that the average Joe is not thinking his life is worse.
    Jun 17 09:34 PM | 4 Likes Like |Link to Comment
  • Is Joe Sixpack's Economy Deep Into A Recession? [View article]
    Old Trader,
    Your comment brings a smile to my face. Jeff is one of my favorite authors. Jeff is not arguing the economy - he is arguing investing strategy. and not trying to shock, Jeff and I communicate off the record at regular intervals - and this article was a by-product of a discussion between us. And no, it was not a response to an argument - this flowed from a discussion of GDP, and one's ability to remove segments of GDP for stand-alone analysis.

    he seems to tolerate my existence in his universal, and i am thankful.
    Jun 17 10:20 AM | 4 Likes Like |Link to Comment
  • The Real Eurozone Crisis Is Not Greece, But Keeping The Banks Healthy [View article]
    skiman and John - yes, the $90 million was gross revenue. sorry for the error.
    Jun 2 07:49 PM | 1 Like Like |Link to Comment
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