Wednesday, February 11, 2015


 - by New Deal democrat

I'm going through a bout of blogger ennui. Not much dramatic is happening, and there's no big, changed insight into the immediate future.

I suspect retail sales will disappoint tomorrow, because the weekly numbers for January weren't very strong - it looks like consumers are saving a lot of their gas money.

The latest Eurocrisis is playing out as anticipated. Germany and the Euro institutions are squeezing Greece like a boa constrictor squeezes prey.  They will succeed unless Greece has the will to actually leave the Euro.  If so, then there will be a collective gasp from the rest of the EU as it sinks in that the Euro might actually fracture. That is the point at which a deal might be made.  From the US viewpoint, the Eurocrisis isn't enough to derail our economic expansion, although it will have an impact. The US interest is that there not be a disorderly dissolution of the Euro. An orderly dissolution might even be preferable to the continuation of an intact Euro in its present form.

Almost nobody except for the permabears is calling for a US recession this year.  Mish ridiculously based his call on residential construction, even though residential construction lags permits and starts by about a year. So we know where construction is going to go this year, and it isn't to recessionary levels.

The rest of the usual Doomer crew has moved on to other topics. Since jobs aren't cooperating, the best they've been able to come up with to whine about a scarequote "recovery" is the stagnation in wages (except, of course, we made a 35 year high in average real hourly wages in December).

 Politically, the Democrats aren't going to bother proposing anything serious. So far, the Republicans have accomplished exactly zero - which is the best we can hope for there. Obama has shown no sign of being willing to lift a finger to sign an order raising the maximum pay subject to overtime rules (entirely within his power). So, unless the Supreme Court decides to hold the 20th century unconstitutional (for which, let's face it, there are at least 4 votes),  the economy will probably follow its course undisturbed by Washington.

Which leaves me with nothing big to report to you. I'm still trying to get a better leading indicator for wage growth - without much success.  Aside from that, I've got a bunch of little things I can update, so I will probably inundate you with them.