Monday, October 24, 2011

Worth Reading

The Lehmann Letter (SM)

The world is waiting for Europe’s response to its sovereign-debt (what government’s owe) crisis, while we worry about the impact of households’ debt upon household spending.

Here are two recent articles worth reading.
On today’s New York Times op-ed page, Paul Krugman is pessimistic:

Prof. Krugman believes that Europe’s opportunity to act has passed. He believes Europe’s post-WWII string of successes is now be over.

This letter is not so gloomy. Let’s wait and see.

Regarding domestic developments, Saturday’s Wall Street Journal had an excellent account describing the debilitating impact of household debt on consumer expenditures:

As this letter has stated many times: We’re in a balance-sheet crisis. Too much debt, too little liquidity and shrinking net worth have hobbled households. They’ve reduced their key purchases (homes, autos, durables and other discretionary items) that drive our economy.

© 2011 Michael B. Lehmann

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