Festivus Flow-of-Funds Stocking Stuffers
December 18, 2006
One of my favorite economists, Paul Kasriel, wrote an excellent article last Friday in his weekly commentary, "The Econtrarian." Not only is it a great "outside the box" analysis but it also follows up to and illustrates several points that I made in my latest e-Letter, "Party Like It's 1999."
At Northern Trust, Paul is the Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts. He is also the recipient of the 2006 Lawrence R. Klein Award for Blue Chip Forecasting Accuracy.
His article "Festivus Flow-of-Funds Stocking Stuffers," offers us some insight into consumer debt and savings. He further goes on to discuss the trends in both consumer and corporate borrowing (and I should note that he provides some excellent data on both).
I believe you will enjoy Paul's analysis and find it to be both insightful and "Outside the Box."
Near a Bottom in Housing?
November 6, 2006
I touched briefly on the subject of housing in my Friday letter, "Thoughts from the Frontline" (you can view it here). Data from across the country points to a number of trends including declines in both new construction and existing home sales. Market "experts" are calling for both sets of outcomes with some saying that we have been through the brunt of the contraction and with others saying that further declines await us yet.
This week's letter is from Paul Kasriel of The Northern Trust Company. Paul is the Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts. He advises the Bank's Assets-Liabilities Committee as well as the Corporation's Investment Policy Committee.
In his commentary, "The Econtrarian," Paul addresses the housing market by taking a deep and thorough look at the data while asking the question of whether or not we are near a bottom. A further decrease in home prices would have a material effect on consumer spending and the decision making of the Fed.
Paul has a knack for taking a balanced look at the facts instead of paying attention to all of the noise generated by many media outlets. Let's take a look at this week's "Outside the Box."
Deflating The Housing Bubble
June 19, 2006
With so many variables to weigh in on, there has been a lot of speculation going around about how Fed Chairman, Ben Bernanke, is going to fare in his rookie season. The headlines of the financial press have been filled with reports of inflation and the dollar, but what of the U.S. housing market that once demanded so much investor attention?
This week's letter is from Paul Kasriel of The Northern Trust Company. Kasriel is Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts. He advises the Bank's Assets-Liabilities Committee as well as the Corporation's Investment Policy Committee.
Paul looks at the U.S. housing market in light of the Fed's recent actions and their effects on mortgage rates. He is in the "soft landing" camp for the recent slowdown in real estate but warns of what could happen to the market if a bubble were to burst. Now, let's take a look at this week's "Outside the Box."
Bleak US Economic Outlook?
March 27, 2006
This week's letter is from Paul Kasriel of The Northern Trust Company. Kasriel is Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts.
The US consumer has kept the economy strong, but can they maintain the current trend? Kasriel has assembled a long list of economic numbers and asks the readers to look at the data and make their own determination on our economic future. He lays out a straight-forward case that on average the US consumer is spending more than they are making, a situation that cannot last for too long.
A Look Inside The Housing Bubble
March 6, 2006
This week's letter is from Paul Kasriel of The Northern Trust Company. Kasriel is Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts. Not long ago Paul had a contest to try and come up with a new name for his Positive Economic Commentary and The Econtrarian: Your Alternative to the Econsensus won out.
In this edition he turns his focus on the housing market. Many are forecasting continued strength in the housing markets and they point out that previous slow downs have not been disastrous. Although they might go back and look at the Houston, Texas market in the early-to-mid 1980's during the oil industry collapse.
Is the housing market a bubble about to burst or merely in a late winter slow down? Kasriel takes a macro look at some of the numbers behind housing and why things might be different this time and that is why it was picked for this week's Outside the Box.
Hurricane Katrina
September 19, 2005
This week's letter is from Paul Kasriel of The Northern Trust Company. Kasriel is Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts. He advises the Bank's Assets-Liabilities Committee as well as the Corporation's Investment Policy Committee.
Paul looks at the effect Hurricane Katrina will have on the supply side and the effect the Fed is having on the demand side by raising rates. He thinks that the Fed will hold off raising rates at the next meeting, but that this could lead to "sluggish economic growth with rising core inflation." Now, let's take a look at this week's Outside the Box.
France and Leading Indicators
May 30, 2005
This week is we look at two short articles on different topics from some of my favorite writers. The first is by Anatole Kaltsky of GaveKal Research and looks at some of the recent political and economic problems in Europe and what must be done to help turn the EU around. Germany recently had state elections (big upsets), the French vote on the EU constitution was this weekend (expected to be a rejection). These and other issues will have interesting long term implications for Europe and the European economy. (I am writing this week's OTB a little head of time to take a holiday on Monday, so I am not sure of the French vote.)
The second article is by Paul Kasriel of Northern Trust and discusses the leading economic indicators (LEI) and why economists seem to ignore what it is telling them. Paul finds a strong correlation between the LEI and recessions. Can you guess what it might be telling us now?
These two articles were both short, but had some interesting things to say so that is why they were both picked for this week's Outside the Box.
Fed Pause Now Seen Later Rather Than Sooner
February 21, 2005
This week's letter is from another one of the country's top economic analysts, Paul Kasriel of The Northern Trust Company. Kasriel is Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts. He advises the Bank's Assets-Liabilities Committee as well as the Corporation's Investment Policy Committee.
I am a big fan of Kasriel, and look forward to reading his outlook, as it always gives me an insight or two. His forecast at the beginning of the year was for the Fed to "pause" raising rates in early 2005, but now Paul is forecasting that the "pause" will come later in the year. While I am still of the opinion that the Fed will go further than any of us thought when they started to raise rates last year, Paul gives us another well-reasoned viewpoint in this week's Outside the Box. Statistics and charts are presented to help back up his case.
Wealth Illusion
November 1, 2004
This week's letter is from another one of the country's top economic analysts, Paul Kasriel of The Northern Trust Company. Kasriel is Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts. He advises the Bank's Assets-Liabilities Committee as well as the Corporation's Investment Policy Committee.
Prior to joining The Northern Trust in 1986, Mr. Kasriel was an officer in the economic research department of the Federal Reserve Bank of Chicago. He also has been a lecturer in finance at the Northwestern University Kellogg Graduate School of Management. Mr. Kasriel received a B.A. degree in economics from the University of South Florida and an M.A. degree in economics from Indiana University.
Mr. Kasriel takes a look at what he calls the Wealth Illusion. He contends that people feel wealthy due to investing and real estate gains, but that the true gauge of wealth should be the growth in the country's capital stock and using this measure things don't look as bright for the U.S. Let's take an "Outside the Box" look at wealth.