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Is the US Headed for Another Economic Crisis?

Is the US Headed for Another Economic Crisis?. Specific Topics. 1) Is the Banking Sector Stable? 2) Are State and Local Governments Solvent? 3) How Serious is the Federal Debt Problem? 4) Will the Real Estate Market Recover? 5) What About Consumer Spending?

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Is the US Headed for Another Economic Crisis?

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  1. Is the US Headed for Another Economic Crisis?

  2. Specific Topics 1) Is the Banking Sector Stable? 2) Are State and Local Governments Solvent? 3) How Serious is the Federal Debt Problem? 4) Will the Real Estate Market Recover? 5) What About Consumer Spending? 6) What Should we Expect Over the Next 12 Months

  3. 1) Is the Banking Sector Stable?

  4. FDIC Bank Closures1990 to 2011

  5. FDIC Problem Banks1990 to 2011

  6. Total Assets for all FDIC Insured Banks: Approximately $14 Trillion Total Assets for the 865 Banks on the FDIC Problem List: Approximately $400 Billion (Less Than 3% of the $14 Trillion)

  7. Overall Grade for the US Banking Sector

  8. Overall Grade for the US Banking Sector C

  9. US Banks are Flush with Cash

  10. 2) Are State and Local Governments Solvent?

  11. State and Local Government Revenue and Expenses

  12. Overall Grade for the Financial Condition of the Typical State or Local Government

  13. Overall Grade for the Financial Condition of the Typical State or Local Government B -

  14. 3) How Serious is the Federal Debt Problem?

  15. Total Federal Debt

  16. How Big of a Threat is the Federal Debt Problem for the General Health of the US Economy?

  17. Analogy to Debt Capacity for a Family There is a “Tipping Point” Beyond Which Lenders are Unwilling to Extend Credit The Level of Interest Expense and the Ability to Service the Debt are of Greater Concern Than the Level of Debt per se.

  18. Additional Factor in the Case of US Treasury Debt The International Transactions Demand for US Dollars and US Treasury Debt

  19. What the Implication of International Demand for the Tipping Point? International Demand Clearly Adds to the Capacity for US Debt Relative to the Level of Debt Capacity for Other Nations. However, the Full Extent of the Increase In Debt Capacity Had Yet to Be Tested In Addition, it is too Early to Assess the Potential Effect of a Nasty Political Debate Over US Debt

  20. US Debt Held by Foreigners

  21. Overall Grade for the Financial Condition of the Federal Government

  22. Overall Grade for the Financial Condition of the Federal Government D

  23. 4) Will the Real Estate Market Recover?

  24. Housing Starts

  25. Overall Grade for the Residential Real Estate Market

  26. Overall Grade for the Residential Real Estate Market E

  27. What About Consumer Spending?

  28. Consumer Spending

  29. Overall Grade for the Consumer Sector

  30. Overall Grade for the Consumer Sector A -

  31. 6) What Should we Expect Over the Next 12 Months?

  32. How Strong is (was) the Economic Recovery?

  33. Real GDP from 2002 to 2011

  34. Real GDP From 1950 to 2011

  35. Inventory to Sales Ratio

  36. New Factory Orders

  37. Average Weekly Overtime

  38. If the Economy was Recovering Then Why Has The Unemployment RateRemained So High?

  39. Unemployment Rate

  40. Unemployment 101

  41. Unemployment 101 Okun’s Law

  42. Unemployment 101 Okun’s Law Effects of Recession Severity on Critical Economic Linkages

  43. Unemployment 101 Okun’s Law Effects of Recession Severity on Critical Economic Linkages Growth in Labor Productivity

  44. Unemployment 101 Okun’s Law Effects of Recession Severity on Critical Economic Linkages Growth in Labor Productivity Growth in Work Force

  45. Unemployment 101 Okun’s Law Effects of Recession Severity on Critical Economic Linkages Growth in Labor Productivity Growth in Work Force Mechanics of the Unemployment Measure

  46. An Additional Observation The Absolute Decrease in Real GDP and the Absolute Increase in Real GDP Might not be the Best Way to Measure the Beginning and End of an Economic Recession. Most Economists Agree that a Better Measure is the Increase or Decrease in Real GDP Relative to the Long Term Trend in Productive Capacity

  47. Real GDP from 2002 to 2011

  48. The Recession of 1990-91

  49. The Recession of 2001

  50. What Has Been Driving This Economic Recovery?

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