Edward Harrison — You should be concerned about falling car prices and Ally’s profit warning

Yesterday, Ally Financial warned that profits would underperform expectations. Now, they dd not say that profits would fall or that they were taking credit writedowns. Neverthless, the warning is an important marker and should be of grave concern. Here’s why....

Credit Writedowns
You should be concerned about falling car prices and Ally’s profit warningEdward Harrison

Deficit is too small? Consumer spending rose most in six years.

Consumer spending rose 1 percent last month after a flat reading in March, the Commerce Department reported Tuesday. Incomes were up a solid 0.4 percent, matching the March gain. Wages and salaries, the most important component of incomes, gained 0.5 percent.

Where are the "deficit is too small" people? When will they admit that they are wrong? Do you keep on saying, for years, that there's going to be a recession? How is that useful?

We have had it correct the entire time with our analysis of flows. I use flows almost exclusively in my MMT Trader report.

It's all about flows. You don't even know what the deficit is going to be until the government spends first. You don't even know how much total taxes will be paid.

It's flows.

Liberty Street Economics — Just Released: Deleveraging Decelerates and Household Balances Increase

Turning point?

Liberty Street Economics — FRBNY
Just Released: Deleveraging Decelerates and Household Balances Increase
Andrew Haughwout, Donghoon Lee, Joelle Scally, and Wilbert van der Klaauw

See also

FRBNY
Household Debt and Credit Report

Tim Duy — Intractable output gap

But that still is not a story that rapidly returns the economy to potential output. Which brings me back to a familiar place - putting aside the threats to the economy, it is easy to see a positive growth path for the economy, but more difficult to see a rapid closure of the output gap.

Read it at Tim Duy's Fed Watch
A Few Quick Charts on Consumer Spending
by Tim Duy