User 268734

Is the Consumer Confidence Index an Indicator of Future Spending?

<The study tracked both the University of Michigan index and the Conference Board index from 1968 to 2002. Ludvigson found the Conference Board and University of Michigan’s consumer confidence indexes to have “…both statistically and economically significant predictive power for quarterly consumption growth, in a variety of expenditure categories.”>

Nice statistics, but the current state of US consumer income flows and balance sheets are far more relevant. Without the aid of any statistical props, I'd hazard a guess that these are far more predictive than surveys of feelings - which have anyway been artificially shaped by media happy-talk and the bank recapitalisation rally.

The Law of Unintended Consequences: 20th Century and Beyond

Chris B: I can't disagree with any of the six steps you suggest, but I wouldn't characterise them as 'relatively minor'. In the context of the existing US political system they are as revolutionary as rolling out the guillotine was in France.

Asset Re-Allocation Might Make S&P Rise 20%

"Even in 2008, the classic Bond/Equity portfolio still worked well. As you can see from the chart below, a very simple portfolio with only Equity (SPY: S&P 500) and bond (TLT: iShares Lehman 20+ Year Treas Bond ) diversified your risk and did much better than the market: this simple portfolio was down 16%, vs. –40% for SPY in 2008."

If this is the writer's definition of working 'well', I'm wondering what it would take to do 'badly'.

Is America on a Downward Slope?

"Have the extreme socialist schemes implemented by the President, Treasury, Federal Reserve, and Congress marked the climax of our great capitalist experiment?"

Very interesting article, most of which is hard to disagree with. However, like many who post on SA the author has a rather strange notion of 'socialism'. There is no doubting that the wider US economic system does have elements of socialism (although not very strong elements, at least by European standards). However, the bail-out bubble strikes me as just the opposite of socialism; few genuine socialists would advocate channelling public money to cronies on the scale we are now witnessing in the US (although of course such cronyism does happen in countries that are ostensibly, rather than genuinely, socialist). I think there is an argument that the the US is - and in fact has for some time been - an essentially corporatist state, with power shared within the corpus by the financial elite, the defence-industrial complex, senior corporate management of large non-financial companies, and those who feed off scraps from their table - notably politicians (acting for the most part in their own rather than the public's interests) and lobbyists.

Of course, it could be that the next President will do some stuff that really is socialist. He need only look to Britain for ideas. For example, subsidising pregnant teenage single-mothers or buying, taxing, and insuring cars for people in lieu of disability benefit. Not sure which is worse - my hell or yours.

The Failure of TARP and the Government's Solution

RCA: "Will we become The United Socialist States of America? "

Questionable choice of tense.

Credit Markets Showing Signs of Thawing

Take a look at the longer end. It ain't so pretty.

Why Are Investors Returning to the Dollar?

Good article. Thanks.