By New Deal democrat
Sales rebound from government shutdown-induced “mini-recession;” March housing lays an egg
While March retail sales rose strongly, total business sales for February – also released yesterday – which includes manufacturers’ and wholesalers’ sales in addition to retail sales, continued to languish. This adds to the evidence that there was a “mini-recession” for several months likely brought about by the lengthy government shutdown, and there has been a rebound since (including blockbuster new lows in jobless claims).
This post is  up at Seeking Alpha.
But I’ve been reluctant to conclude that the slowdown this year is off. This morning’s housing permits and starts for March were solid evidence in support of that position, showing that the

By Joseph Joyce

The global economy seems headed for a slowdown. The IMF now expects global growth this year of 3.3%, a drop of 0.2 of a percentage point from its previous forecast. Growth in the advanced economies is projected to be particularly feeble, with expected U.S. economic growth of 2.2%, growth of 1.3% predicted for the Eurozone , and Japan’s growth anticipated to be 1%. Of course, a breakdown of U.S.-China trade talks, the imposition of new U.S. tariffs on European cars or a disorderly Brexit could disrupt the forecasts. Can government policymakers improve these conditions?
Central banks have limited policy space. In the U.S., the Federal Reserve has made clear that it does not expect to raise the Federal Funds rate this year, and retains the

By New Deal democrat
The three best arguments against an economic slowdown

I still think I’m right that there will be a worsening economic slowdown that shows up by about summertime and continues towards the end of the year.But there is one long leading indicator and two important short leading indicators that are going the other way. Rather than ignore them, I accept them and explain why I don’t think they negate my forecast. This article is up at Seeking Alpha.
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On a more somber note, Today We Are All Parisians.

By New Deal democrat
The economy in 2019: a look at the “big picture”

Although I have a bunch of nerdy forecasting models, I view my primary mission as trying to explain what is going on in the economy for ordinary middle and working class American workers and consumers.I’ve been meaning to do a “30,000 foot perspective” on the economy for awhile, to draw together all the information into a Big Picture narrative. Well, I finally got around to it, and it is up at Seeking Alpha. This is something that should be of particular interest to those who have followed me all the way back from my Daily Kos days.
The most overlooked feature of the economy in the past five years has been the way low gas prices have allowed room for the economy – and real wages – to

By New Deal democrat
Weekly Indicators for April 8 – 12 at Seeking Alpha
My Weekly Indicators post is up at Seeking Alpha.
Lower interest rates have to some extent been offset by weaker real money supply. In any event, they haven’t fed through into other, shorter term indicators just yet.
As always, clicking over and reading should bring you up to date on the economy, and reward me a little for my efforts.

By New Deal democrat
Weekly Indicators for April 1 – 5 at Seeking Alpha
My Weekly Indicators post is up at Seeking Alpha.  Interest rates ticked up this week, which brought the readings on some interest rate indicators back down.
As usual, clicking over and reading helps reward me with a little $$$ for my efforts.

By Joseph Joyce    (lifted from Capital Ebbs and Flows)
Partners, Not Debtors: The External Liabilities of Emerging Market Economies

My paper,  “Partners, Not Debtors: The External Liabilities of Emerging Market Economies,” has been published in the January 2019 issue of the Journal of Economic Behavior & Organization.
Here is the abstract:
This paper investigates the change in the composition of the liabilities of emerging market countries from primarily debt (bonds, bank loans) to equity (foreign direct investment, portfolio) in the decades preceding the global financial crisis. We examine the determinants of equity and debt liabilities on external balance sheets in a sample of 21 emerging market economies and 20 advanced economies over the period of

By Joseph Joyce
Capital Flows in a World of Low Interest Rates
Interest rates in advanced economies continue to persist at historically low levels. This trend is due not only to the response of central banks to slow growth, but also fundamental factors. If these interest rates continue close to their current levels, what are the consequences for international capital flows?
The decline in rates in the advanced economies has been widely documented and studied. Lukasz Rachel and Thomas D. Smith of the Bank of England have investigated the determinants of the fall in global real interest rates. They attribute the decline in part to increased savings due to demographic forces, higher inequality and a glut of precautionary savings in emerging markets.

By New Deal democrat
February housing data indicates slump not over UPDATED

Housing data, in the form of February permits and starts, finally caught up after the government shutdown. Two sources of house price data were also released this morning.
The bottom line is that, depending on how you measure, housing construction is likely either at or just slightly above a short term bottom. Price growth, meanwhile, continues to decelerate.
I have a more detailed analysis in the queue at Seeking Alpha. Once it is published, I will link to it here.
UPDATE: Here’s the link to the Seeking Alpha article. As always, reading this not only should help you understand what is going on this important market, but rewards me a little bit for my efforts.

By New Deal democrat
Weekly Indicators for March 18 – 22 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.
As you can imagine, the big news was about the fact that almost every single yield curve there is – except the one I report on every week in that post – inverted yesterday.
Also, as I mentioned in an e-mail to a couple of folks this morning, the big thing that bothers me is that ***EVERYONE*** is watching it. And a forecasting tool that everyone pays attention to, ceases to be an accurate forecasting tool. It’s called “Second Order Chaos.” Humans are very clever and intelligent chimpanzees, and when you observe them, they observe you back, and react to the observation.
Anyway, as usual, clicking over and reading helps reward me with

By New Deal democrat
The widened Panama Canal is disrupting internal US transportation patterns
The newly-widened Panama Canal opened to traffic in late 2016. Since then, there have been several ongoing disruptions in how goods are transported from suppliers in Asia to their ultimate markets in the US, including affects on seaports, trucking, and rail.
This post is up at Seeking Alpha.  As usual, clicking over and reading should be educational for you, and helps reward me for my work.

By Steve Roth (reposted from Evonomics)
The Real Reason Stock Buybacks Are a Problem
 Buybacks are a massive tax dodge for shareholders
Bernie Sanders and Chuck Schumer’s New York Times op-ed, “Limit Corporate Stock Buybacks,” has thrown internet gasoline on the buyback debate. The left is waving the flag, and the right is trying to tear it down.
The core Sanders/Schumer argument: buybacks extract money from firms, money that could be used to pay workers more, and fund productive investment (including worker training and upskilling).
The counterargument: how are buybacks any different from dividend distributions that way? Both transfer cash from firms to households. We don’t hear people complaining about dividend distributions stealing money from workers

By New Deal democrat
More evidence for a Q4 “Recession Watch”
About a month ago, based on those Q4 2018 reports that had not been delayed by the government shutdown, plus workarounds for those that were missing, I went of “Recession Watch” for Q4 of this year.

Now all of the missing pieces have been reported, and they add to the evidence justifying the call.

This post is up at Seeking Alpha.

My base case remains slowdown vs. recession. But I see a slowdown becoming more entrenched as the year goes on, and government policy missteps (good thing we have a competent Administration, so we won’t see any of those! /s) could easily tip us into contraction. If we do go that route, it probably won’t be led by the producer side of the economy, but rather by

Via Brad Delong comes two pedictions FROM 2008/09 from our current economist in the White House

(Dan here…lifted from Bondadd blog)
by New Deal democrat
Climate change is the detonation of the Population Bomb

You know the drill … it’s Sunday so I speak my mind on things non-economic…..
Way back in the days of the dinosaurs when I was a young teen, I concluded that there were really only two extinction level threats to humanity:
1. Nuclear war
2. Overpopulation (a/k/a “The Population Bomb”)

As to the first, fortunately we have gone over 70 years since Hiroshima and Nagasaki. But I find it difficult to conclude that unless something changes, over a long enough time horizon, like 500 years, a nuclear war won’t happen. Just consider the likes of Donald Trump and Kim Jung Un with their fingers on the button, and wonder how long till someone like them

By New Deal democrat
Weekly Indicators for February 25 – March 1 at Seeking Alpha
My Weekly Indicators post is up at Seeking Alpha.
Last year the most significant developments were in the long leading indicators. Now that is translating into the short leading indicators.
As always, clicking and reading not only should be educational for you, but rewards me a little bit for my efforts.

By Joseph Joyce
Mars Descending? U.S. Security Alliances and the International Status of the Dollar

A decade after the global financial crisis, the dollar continues to maintain its status as the chief international currency. Possible alternatives such as the euro or renminbi lack the broad financial markets that the U.S. possesses, and in the case of China the financial openness that allows foreign investors to enter and exit at will. Any change in the dollar’s predominance, therefore, will likely occur in response to geopolitical factors.
Linda S. Goldberg and Robert Lerman of the Federal Reserve Bank of New York provide an update on the dollar’s various roles. The dollar remains the dominant reserve currency, with a 63% share of global foreign exchange