Economy

The Price of Hope in the Mayhem of Manufacturing

by Wolf Richter •  • Comments Off on The Price of Hope in the Mayhem of Manufacturing

In what may be a precursor of a monumental shift, Toyota and Honda are planning to export U.S.-made vehicles to South Korea. Apparently, it’s now cheaper to produce cars here and ship them halfway across the world than it is to produce them in Japan. But to what banana-republic levels will the dollar and real wages have to sink before U.S. manufacturing is competitive with China?

Inflation High on the Hog For the Holidays

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The season’s ditty: companies announce big profits after they jack up prices. But even the inexplicable American consumer, the toughest creature out there, struggles with these prices as misery spreads into the middle class. Now add HoneyBaked to the list, just in time for the holidays. But there is hope.

Economic Devil Is In The Details

by Wolf Richter •  • Comments Off on Economic Devil Is In The Details

According to last week’s GDP number, the economy has been growing supposedly at a rate of 2.5% in the third quarter—thanks largely to the inexplicable American consumer, the toughest creature out there. But there are some pernicious trends and unpleasant zigzags that point the opposite way.

The Inexplicable American Consumer Strikes Again

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Consumer confidence indices have collapsed to levels not seen in years or even decades. Yet the toughest creature out there that no one has yet been able to beat down struck again. Consumer spending increased at an annual rate of 2.4% during the third quarter, though the mood has become outright morose since.

A Dysfunctional System That Bankrupts A Generation

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Tuition did it again: up 8.3% for universities and 8.7% for community colleges. For many students, the increases are even steeper. Here in California, they’re outright ridiculous. Student loans will cover much of it, though student loan debt already exceeds $1 trillion. Why? It’s the system.

Obama’s Refi: Special Tax For People Who Can’t Do Math

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President Obama’s expansion of a mortgage refinancing program is a way for underwater homeowners to reduce their monthly payments. That would save them some money, he said, “…and it gets those families spending again.” But there is an insidious hook buried inside….

Tough Day For Our Calamity Economy

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The ugly numbers speak volumes on how the Fed’s policies hurt the real economy. But those policies enable Congress and the White House to run up ruinous budget deficits that make those of the Eurozone look benign.

That’s inflation—not jobs, wages, or GDP.

The Brutal Trade Deficit

by Wolf Richter •  • Comments Off on The Brutal Trade Deficit

At $46 billion in August and a hair-raising $376 billion year to date, the trade deficit is a powerful descriptor of what’s wrong with the U.S. economy. By year end, it will amount to half a trillion. Economic activity gone overseas. The cause: an ancient and valid business principle that is now harming the overall economy.

When False Premises Become Economic Policy

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“A shame that we can’t see Japan because of the marine layer” is an old joke in San Francisco. The premise that the fog over the Pacific keeps you from seeing Japan is just as false as the premise that running up huge deficits and printing trillions of dollars can create a healthy economy. Yet, that’s the line propagated by the status-quo media and its economists.

The Ugly World Of Auto Sales

by Wolf Richter •  • Comments Off on The Ugly World Of Auto Sales

The media giddily reported the September auto sales numbers—though there was little to be giddy about. They were still 20% lower than September 2006. Toyota and Honda got slammed, but don’t blame post-earthquake inventory shortages. They have been resolved. It’s a shift in the market.