James Pethokoukis

Is unemployment finally biting consumer confidence?

May 22, 2009

Consumer confidence has strengthened as the prospects of a Great Depression 2.0 have seemingly subsided. But it’s out of the frying pan and into the fire thanks to rising unemployment.  And maybe that explains these plunging consumer confidence numbers from Rasmussen:

Another mustard seed

May 22, 2009

The Cleveland Fed likes what it sees in the steepening yield curve, but no guarantees:

Cap-and trade? Call me in 2010. Maybe 2011

May 22, 2009

I think political analyst Dan Clifton of Strategas, an institutional research firm, has it about right concerning the prospects for a cap-and-trade climate bill passing Congress this year:

China: U.S. climate bill too wimpy

May 22, 2009

I will admit that when I read the headline “China Looks for Big Cuts in Emissions” in the WSJ today, I thought the country had radically shifted policy and was joining the cap-and-trade crowd. My bad. The Reuters hed is more accurate: “China tells rich nations to cut emissions by 40 percent.” (Read the story.) I think it is more likely that the U.S. will eventually slap a carbon emissions tafiff on Chinese goods than it will accede to such demands, not that I think the former is too likely either.

Environmentalists: Climate bill won’t work

May 22, 2009

This just arrived in my inbox from Friends of the Earth. Here is why the group says it can’t support the Waxman-Markey climate bill:

Who’s going to default?

May 21, 2009

Here are some numbers (via The Big Picture) on how investors in credit default swaps views the odds of sovereign debt default by various nations:

CBO: Unemployment headed over 10 percent

May 21, 2009

This ugly news from the Congressional Budget Office:

In the Congressional Budget Office’s (CBO’s) judgment, the economy will stop contracting and resume growing during the second half of this year, but the hardships caused by the recession will persist for some time. The growth in output later this year and next year is likely to be sufficiently weak that the unemployment rate will probably continue to rise into the second half of next year and peak above 10 percent. Economic growth over time will ultimately bring the unemployment rate back down to the neighborhood of 5 percent seen before this downturn began, but that process is likely to take several years.

The meaning of the California earthquake

May 21, 2009

I’ve talked to loads of investors, pro and amateur, who think the game is up.  They think the American economy is doomed to downshift into a permanent slow-growth mode. Massive budget deficits, more regulation, more taxes.  My standard reply points out that global current, debt and equity investors would punish, sooner rather than later, any nation that follows such a course. The financial vigilantes would prevail in the end.

Where the growth is going to be

May 21, 2009

Not in the US, Europe or Japan, says economic analyst Ed Yardeni:

The “Old World” economies (the US, the UK, the Eurozone, and Japan) are likely to remain challenged by the unwinding of the financial excesses of recent years. They all seem to have lost their entrepreneurial spirit. They all have large government deficits and aging populations. The emerging “New World” economies, particularly in Asia and Latin America, seem to be more dynamic. They certainly have tremendous growth potential by simply catching up to the standard of living of the Old World. Standards of living may grow more slowly than in the past for the roughly one billion people in the Old World as a result of tougher credit conditions.

Unemployment and the 9-handle

May 21, 2009

The government’s nastier stress test scenario looked for U.S. unemployment to rise to 10.3 percent. Today’s weekly jobless claims report (631,000) is another indication that we are well on our way to that level. As the econ team at JPMorgan sees things: