Posted in Economy on Apr 9th, 2012
On Friday the economic statistic I was most interested in was the revolving credit in the Federal Reserve Consumer Credit report. Considering the returns we are experiencing in the stock market, bond market, housing market, and certificate of deposits, the best return for your investment is to pay down your credit card debt which is [...]
Posted in Economy on Mar 8th, 2012
Here’s the bottom line. The amount owed the government went up $28 billion and everything else stayed the same or went down. It looks like student loans is the only driver of consumer borrowing. Consumer credit increased at an annual rate of 8-1/2 percent in January. Revolving credit decreased at an annual rate of 4-1/2 [...]
Posted in Economy on Jan 28th, 2012
In his January 23rd newsletter John Mauldin used the McKinsey report, Working out of debt, to examine the probable plan that countries like the United States will use to reduce their debt level. If you follow John Mauldin and the McKinsey report’s reasoning then government deleveraging is inevitable and economic success depends on how well [...]
Posted in Economy on Jan 14th, 2012
If the recent up-tick in global optimism about the economy persists and Europe makes some headway toward fiscal responsibility then it is likely that the risk aversion for European financial assets will subside. The best example of this risk aversion for European financial assets is the historically low interest rate on 10 Year Treasury bonds. [...]
Posted in Economy on Jan 10th, 2012
A couple of weeks ago I decided that the muddle through economy was the most likely scenario for the United States in 2012. Having made that decision the next course of action was to investigate how the muddle through economy scenario will impact my personal finances and the place I work. Today I read a [...]
Posted in Book Reviews, Economy on Dec 19th, 2011
I have been reading This Time is Different: Eight Centuries of Financial Folly for the last month. It has been slow going since it reads like a text book and I have read my fair share of text books in my life. I would have given up except that the authors have some collected some [...]
Posted in Economy on Oct 17th, 2011
When I read the post, A Deep Look At Revolving Credit, And What It Means For Consumer Spending, the graphs inspired me to try my hand at answering some questions I have been about the importance of consumer debt to our last economic expansion. So the first thing I did was to create a graph [...]
Posted in Economy on Sep 21st, 2011
I was told of the importance of funding an emergency funds for most of my adult life but despite this sound advice, I did not an emergency fund one until about three years ago. It started when after many years, our farm starting to break even. So I started putting away money just in case [...]
Posted in Economy on Sep 12th, 2011
If Social Security is a Ponzi scheme then all of our defined benefit pension plans such as the California Public Employees’ Retirement System (CalPERS) risk falling into the same category. CalPERS is a $226 billion pension fund with an estimated $240 billion unfunded liability according to a Reuters article. So even if you are willing [...]
Posted in Economy on Sep 8th, 2011
For a stimulus to be economically helpful it needs to be “timely, targeted, and temporary.” This stronger version of the Lawrence Summers quote is an important economic policy issue to ponder. So let’s start out the discussion with a look at how the Swiss manage federal stimulus. The Swiss made it through the last recession [...]
On this day, the Virginia Tech community reflects on the vibrant lives of the 32 students and faculty who were tragically taken from us a year ago. Through light, art, and music we pay tribute to each and every person we lost. We gather to honor our friends, colleagues, and family members. We will never forget.