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PeakTrader said...

More Americans attending college, to add more future value to society, is one of the few bright spots in a generally dismal economy; where per capita real income should be $4,000 higher at this point in the recovery; $1 1/2 trillion annual budget deficits, which means more taxes and less benefits; substantially higher gasoline prices, due to a lack of domestic oil production, which may become worse, etc.

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PeakTrader said...

The LEI seems to signal direction, but not magnitude:

Economy struggles for momentum, data shows
Apr 21, 2011

"Data on Thursday showed steep declines in home prices in February... On a year-over-year basis, home prices fell 5.7 percent...The Philadelphia Federal Reserve Bank's business activity index fell to 18.5 in April, pulling back from March's 27-year high of 43.4 and far exceeding economists' expectations... the Labor Department said initial claims for state unemployment benefits fell 13,000 to a seasonally adjusted 403,000 last week, well above economists' expectations.

The reports came a week before government data is expected to show growth slowed significantly in the first quarter. The economy grew at a 2.0 percent annualized rate, according to a Reuters survey, after a 3.1 percent pace in the last three months of 2010.

The Fed's policy-setting committee will meet April 26-27 to assess the economy and is expected to reaffirm a June end date for purchases of $600 billion of government bonds."

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PeakTrader said...

Federal budget cuts (i.e. higher taxes and lower spending), along with continued state and local budget cutting may slow the U-shaped recovery:

"A survey by Blue Chip Economic Indicators issued on April 10 found that economists on average had downgraded their estimates for real GDP growth in the United States in 2011 to 2.9 percent, down from 3.1 percent only one month earlier."

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PeakTrader said...

Excess reserves reflect excess purchasing of bonds by the Fed (to increase the money supply).

Bank credit, which declined and remains low, may determine future inflation.

The hostility of Obama and Congress toward corporate America and the rich, along with little real fiscal stimulus for the masses and expensive failed economic policies, offset much of the monetary stimulus by the Fed.

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PeakTrader said...

Banks seem to have little confidence in the U.S. economy or its people (e.g. consumers and homebuyers more than businesses). So, they've kept additional reserves.

This lack of confidence is reflected by the Obama Administration, which doesn't seem to trust the American people with a large tax cut.

These small regulated tax cuts aren't enough to jolt the economy into stronger growth, i.e. a virtuous cycle of consumption-employment.

Also, many states raised taxes, fees, fines, fares, tolls, etc., which offset the tax cuts (and more regulation didn't help).

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Ron H. said...

"This lack of confidence is reflected by the Obama Administration, which doesn't seem to trust the American people with a large tax cut."

The Obama administration, and progressives in Congress, like progressives everywhere, don't "trust" the American people to tie their own shoes. That's why thy believe they must guide our every move. They usually speak of "spending" on tax cuts, as if they were using their own money.

Beyond that, they don't believe that people can make the best use of their own money, and therefore it must be spent for them, often for the benefit of people who are unable to make money on their own.

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PeakTrader said...

I noticed a comment that said if women were systematically underpaid, then employers would hire women instead of men.

Also, it went on to say women are more likely to balance home life with work (which I'm sure a lot of men appreciate).

However, the labor market prices-in all factors resulting in a fair wage. When the government intervenes, it tips the balance towards unfairness.