Thursday, April 19, 2007

Salient Features of the U.S. Economy Before the Fed Eased in 1995 vs. Now

Northern Trust/Asha Bangalore does a good job in telling it like it is and is an excellent source of anti spin. keep this report in mind when you hear the bubbleheads pointing to the fed easing campaign in on the headline (pdf) to read all details.

Northern Trust erzählt die dinge zum glück so wie sie sind und unterscheiden sich wohltuend von dem sonstigen "goldilocks" gerede was ansonsten viel zu oft zu hören ist. kann schon jetzt die verweise auf die geglückte fed zinssenkungsrunde von 1995 auf cnbc hören. hat leider nichts mit der wirklichkeit zu tun. auf die überschrift klicken (pdf) um alle details zu ergattern.

The 1995 easing is often cited as the successful soft-landing episode. It is instructive to examine the similarities and differences between the current business cycle and the 1995 status of the U.S. economy to understand if a similar strategy is appropriate.

The Index of Leading Economic Indicators (see chart 14) is sending a stronger signal currently about slower economic growth in the months ahead compared to the signal in 1995.

Conclusion – Need we say more? The charts speak for themselves. Moreover, the exposition here excludes the ramifications of the housing market situation in 2007 and the impact of the reduction in mortgage equity withdrawals on consumer spending.

Both of these events are germane to the current business cycle only. There was nothing comparable to these developments that prevailed in 1995

thanks to machinehead! (also one of my favourite bands/ going to their concert in hamburg/june)

in addition to the Northern Trust piece i want to highlight this brilliant piece from aaron krowne

What (Really) Happened in 1995?

via itulip

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