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On Fox Business’ Varney and Company today, Stuart Varney asked me about mortgage foreclosures. Are they ending? I said sure, “As long as The Fed doesn’t take away the punch bowl.” Will The Fed take away the punch bowl? Not likely. Sputh Korea just reduced their interest rate making it the 511th rate cut by a Central Bank since June 2007. That’s a whole lot of rate cuts! Sovereign rates are dropping towards the zero barrier. But the GDP growth rates in Europe are stagnant at best. At least China and Australia are experiencing above 3% real GDP growth. In...

U.S. Government Manipulated Economic Statistics Politics / Economic StatisticsApril 27, 2013 - 04:22 PM GMT By: Peter Schiff Don Draper, Mad Men's master advertiser likes to say "when you don't like what they are saying, change the conversation." When it comes to the current economic weakness, which was confirmed again today by the release of lower than expected GDP data, Washington would love do just that. Fortunately for them, they consistently outdo the master minds of Madison Avenue when it comes to misdirection. If the government doesn't like what people are saying, they don't bother just to change the conversation,...

look at this country's debt situation, especially relative to the United States, is truly amazing. This country is paying 21% of government revenue on interest payments to support a 236% debt-to-GDP ratio. With annual spending twice as high as its revenue, the government is running a deficit of $455 billion a year and adding to its $11.2 trillion debt. This is all before the monetary stimulus programs announced recently by its central bank. If you thought the United States government was a financial basket case, Japan is exponentially worse. A collapse in the yen and the stock market is all...

No matter how many times the White House tells us recovery — real recovery — is just around the corner it never quite pans out.

Q1 Real GDP was released by the BEA this morning. It was a mixture of disappointment and good news (for retailers). Real GDP grew by 2.5% (annualized), but analysts were expecting 3.0%. So, this was a swing and a miss. According to the BEA, “The acceleration in real GDP in the first quarter primarily reflected an upturn in private inventory investment, an acceleration in PCE, an upturn in exports, and a smaller decrease in federal government spending that were partly offset by an upturn in imports and a deceleration in nonresidential fixed investment.” Personal consumption expenditures rose 3.2% in Q1,...

The Commerce Department reported GDP grew at a 2.5 percent pace in the first quarter but don't break out the champagne. Several one-time factors contributed to this seemingly robust performance. The economy is already slowing and new crises threaten. Most of first quarter growth likely was concentrated in January and February and the economy slowed, and actually may have contracted, in March. In the fourth quarter, inventory investments and defense purchases were uncharacteristically weak-the former rebounded and the latter declined much less in the New Year. Also, extraordinary year-end corporate bonuses and dividend payments, intended to soften the blow of...

U.S. economic growth regained speed in the first quarter, but not as much as expected, which could heighten fears the already weakening economy could struggle to handle deep government spending cuts and higher taxes.

Well, that's a relief. For a while there I thought our economy was tanking while growing at a rate of less than 2%. Never fear. The government is about to wave a magic wand and add 3% to our GDP growth. From the Financial Times: The US economy will officially become 3 per cent bigger in July as part of a shake-up that will see government statistics take into account 21st century components such as film royalties and spending on research and development. Billions of dollars of intangible assets will enter the gross domestic product of the world's largest economy...

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/52d23fa6-aa98-11e2-bc0d-00144feabdc0.html#ixzz2RBbpuFGV The US economy will officially become 3 per cent bigger in July as part of a shake-up that will see government statistics take into account 21st century components such as film royalties and spending on research and development. Billions of dollars of intangible assets will enter the gross domestic product of the world’s largest economy in a revision aimed at capturing...

One of the measures I like to follow is the spread between real GDP growth and potential real GDP growth. Potential GDP is the highest level of real Gross Domestic Product output that can be sustained over the long term. As of the end of 2012, the output gap (potential – actual real GDP growth) logged in at $840 billion. And that is just for Q4 2012. Notice that the US has been running almost a trillion dollars in subpar performance per quarter since 2009. Nobel Laureate Robert Lucas from University of Chicago gave a lecture in 2011 where he...

This is the worst economic recovery since the Great Depression. And the global economy is slowing. But never fear! The US economy will gain 3% in GDP in July … by changing the accounting rules! GDP will now include 1) Research & Development, 2) Artistic Originals and 3) Pension Accounting among other items. These additions will add 3% to GDP or about $500 billion. Artistic originals? Treating artistic production as capital investment would change BEA’s measures of GDP and capital stock. Artistic production was $51.6 billion in 2007, 0.35 percent of GDP. So, Ben Affleck’s acting in Reindeer Games counts...

Whoops.An apparent error in Carmen Reinhart and Kenneth Rogoff’s influential study of government debt was the result of a simple mistake in Microsoft Excel that all spreadsheet jockeys fear. Here it is: The cells outlined in dark blue contain the data points that Reinhart and Rogoff used to reach their conclusion that countries with a debt-to-GDP ratio of 90% or higher see average growth of -0.1%. As you can see, they failed to include Denmark, Canada, Belgium, Austria, and Australia. Including those countries—and making a few other adjustments—makes the growth rate 2.2%, according to new research.The Excel mistake could have been avoided with a few simple tricks.As...

Gene Fama from the University of Chicago had an interesting paper in The American Economic Review entitled “Interest Rates and Inflation: The Message in the Entrails [Vol. 67, No. 3 (Jun., 1977), pp. 487-496]. Well, we know that inflation has been declining since the Volcker experiment. Paul Volcker, a Democrat, was appointed chairman of the board of governors for the Federal Reserve System in August 1979 by President Jimmy Carter and reappointed in 1983 by President Ronald Reagan. The Fed raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The...

The Big Bend Mountain was a mile and a quarter thick and the C&O Railroad couldn't go around so the company decided to cut right through. It would take more than three years and in the process a thousand men would perish from the brutal work, smoke and dust. These were hard scrubbed men and hard as nails, but one stood out from them all. John Henry was born a slave in the 1840's and went on to be the strongest steel-driver for the Chesapeake & Ohio Railroad. He was hard working and prideful. One day a salesman came to...

Another sign that Europe is NOT improving is the panic signal from Poland. March 6 — Poland’s central bank cut its main interest rate for a fifth month as policy makers seek to avert the worst economic slowdown in 12 years after consumer spending plunged amid Europe’s debt crisis. The Narodowy Bank Polski lowered the benchmark seven-day reference rate by 50 basis points to 3.25 percent today. The European Union’s largest eastern economy will expand 1.2 percent this year, the weakest pace since 2001, as domestic demand falters and a euro-area recession hampers exports, according to EU forecasts. The NBP...

Investing In A Low Economic Growth World Stock-Markets / Investing 2013February 17, 2013 - 10:42 AM GMT By: John Mauldin The jury – unless you are the Fed and Ben Bernanke or the Congressional Budget Office, which cannot make lower growth assumptions without really blowing their deficit projections out of the water – is pretty well in on GDP growth: it’s going lower. Ed Easterling and I wrote a recent Thoughts from the Frontline on multiple pieces of research suggesting slower future growth. We asked the question, “So what about stock prices; will they follow suit?” Our thought was that,...

History shows that the destruction of affluent societies is often self-induced. Why do once-successful societies ossify and decline? Hundreds of reasons have been adduced for the fall of Rome and the end of the Old Regime in 18th-century France. Reasons run from inflation and excessive spending to resource depletion and enemy invasion, when historians attempt to understand the sudden collapse of the Mycenaeans, the Aztecs, and, apparently, the modern Greeks. In literature from Catullus to Edward Gibbon, wealth and leisure — and who gets the most of both — more often than poverty and exhaustion, cause civilization to implode. One...

The Japanese have said “Enough.” After a generation of stagnation, they’ve chosen an all-of-the-above policy to boost economic growth. The nation’s new prime minister, Shinzo Abe, is promising a “three arrows” strategy: bold monetary easing, increased public-works spending, and structural changes, such as regulatory reform. He’s throwing the ramen against the shoji and hoping something will stick. Some of those ideas are good ones, some probably aren’t. But it’s clear that Tokyo’s priority is growth, growth, growth. Time to get Nippon moving again. Nations probably never choose decline, at least not consciously. More likely they become victims of a creeping...

The employment numbers are out today. The headline numbers are not good news for housing: U3 unemployment ROSE to 7.9% and U6 unemployment and partial employment remained the same at 14.4%. The good news? Labor force participation didn’t get any worse! It remained the same at 63.6%. The bad news? We are now like Japan in terms of labor force participation after we leveled off under President Clinton and began declining. The civilian employment to population ratio also remained the same as a measly 58.6%. But also like Japan, our employment to population ratio is generally declining. Like the movie...

France Is Dead Broke, But At Least Its GDP Came In Positive Economics / FranceJan 31, 2013 - 08:27 AM GMT By: Raul I Meijer US GDP came out today and it was a stinker: -0.1%. Enter a choir of 10,000 pundits who all figured out that all that bad smell was the result of one thing only: cuts in military spending. That's the sort of thing that tells me - or more correctly: confirms - that the optimism bias has become so strong and infectious it's no longer worth even discussing. And that's before I notice - caveat: I...