10 reasons why the US economy will stay weak
From David Goldman’s Inner Workings blog (the actual post of chock full of charts, expanded explanation):
10. Exports are down by a quarter from their June 2008 peak.
9. Credit growth remains negative.
8. Weakness in existing home sales show that despite record low mortgage rates, screaming bargains in lower-priced homes, and tax breaks, the housing market continues to weaken.
7. The Fed’s Household Wealth Survey for the second quarter sounds impossibly optimistic.
6. Total consumer credit outstanding is still falling, and at the fastest rate since World War II.
5. Business are still reducing inventories, and at the fastest rate on record.
4. The Fed is caught between a rock and a hard place. Monetary stimulus remains out of control.
3. Dollar devaluation has helped about as much as it’s going to.
2. The effect of fiscal stimulus will come to an end: no more cash for clunkers, bailouts of bankrupt municipalities (by taking over their spending requirements), tax subsidies for mortgages, and so forth.
1. Barack Obama. By toying with a trade war with China in order to appease his organized-labor constituency, Obama has taken a giant step away from a prospective solution.