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Recession Watch: Falling Commodity Prices to Hurt America

Economic indicators are like biosigns of a living organism. They signal changes in complex systems that we cannot directly say and don’t well understand. The top rule is that rapid change in key indicators shows destabilizing forces at work, despite the complacency with which they’re usually seen by economists. We see this in the on-going …

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Recession Watch: a turning Point in Unemployment Claims?

A new era has begun for the US and global economy, trashing the simple rules of the post-WWII era. Instead of the business cycle (the “clock” analogy found in textbooks), we have secular stagnation interrupted by frequent bubbles alternating with bouts of debt deflation that are fought by massive government stimulus programs. Since we have …

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The Fed’s Vice Chairman warns about us about the strong dollar

Stanley Fischer (Vice Chairman of the Fed) gave us a warning in a speech on Nov 12. He’s someone we should list to. He reported that since July 2014 the US dollar has risen aprox 15% vs the currencies of our major trading partners, a “large, though not unprecedented” move. The Fed’s econometric model show …

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What Will the US Do in a Recession? Look to Japan for Answers…

Summary: In a previous article I listed the powerful tools the US government would deploy during the next recession. Today we discuss something more important: will they work? We can look to Japan for an answer. Their great stagnation began with the 1989 crash, 11 years before the tech bubble burst and began America’s new …

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Corporate profits are the market’s foundation, shaping a new America

Summary: Corporate profits have rising to an amazingly large share of our national income, powering the stock market while GDP and household income lag far behind. This has played a large role in shaping the New America of the 21st C. What caused this rise? What might reverse it? See my column at Wolf Street …

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