Very good article, Michael,

Oxy Mora — Wed, 26 Aug 2015 03:46:44 +0000

In reply to Our Continued Demand Slump

Very good article, Michael, congratulations.

Of course, the stocks have had very high PE's and so a correction was probably in the works just on technical grounds. And uncertainties about China's practices in trying to control the markets has the world investor community wondering about unknowns.

But given underlying weaknesses which were being masked by inflated values the good news is that the market turmoil happened now before the Fed started putting on the brakes.

One kind of stuff we don't have enough of is affordable housing. It's too bad that the tight lending regs are restricting potential home buyers at a time when interest rates and building materials are low.

The Federal Reserve is

trkingmomoe — Tue, 25 Aug 2015 19:42:08 +0000

In reply to Our Continued Demand Slump

The Federal Reserve is expected to increase interest rates this fall. When the interest rates go up the stock prices fall. Some or the volatility is because traders are taking off the top their profits before Septembers interest rate hikes. This market correction has been expected. China's crash simply triggered it.

China doesn't know what it is doing by trying to maintain 7% growth. They have created some bubbles in the process and moves to hold on to the gains in their stock market is failing. They have been practicing a form a mercantilism of a export only economy. The Chines does not have the income to buy the products they make. There is no safety nets so money is saved instead of buying things. Many experts have been pointing out all summer that China may not be honest about their growth numbers and have been padding them.

Many western governments don't carry enough debt right now to keep their economies stimulated. US certainly don't have enough government debt and not enough tax revenue. Krugman talks often about this.

dagblog - Comments for "Our Continued Demand Slump"

Very good article, Michael,

The Federal Reserve is