MaxedOutMama
Sunday, February 17, 2013
Interesting Mastercard SpendingPulse Commentary
This is an interesting interview with Sarah Quinlan:
I really recommend listening to it. Note the age segmentation. The real impact of the payroll tax increase will be felt later when people notice that the residual in their checking accounts is lowering. The payroll tax increase adds up over time, because a lot of people roll from month to month and react when they start getting short. However, the lower transaction amounts noted late in January are important.
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A little context for the above:
One of the things you can do if you have a bank is just check what's happening in your own deposit accounts to get an update on your risks. When consumer rolling balances in checking accounts begin dropping, you can bet that your retailer accounts are going to follow, so you tighten up on your marginals.
Well, most of us don't have that data, but you do have H.8. Take a look at CC balances this January (Monthly SA data annualized change):
This January balances dropped much less than they did last January. I tend to think that's because of higher gas prices and the payroll tax increase, but it doesn't bode well.
Then we have Other Deposits:
Again, a different looking January compared to last January.
I want to stress that from everything I know, this effect should be cumulative over months. I do think that if it shows up in MC transactions and in bank accounts, the effect is real and that we have a headwind building.
I really recommend listening to it. Note the age segmentation. The real impact of the payroll tax increase will be felt later when people notice that the residual in their checking accounts is lowering. The payroll tax increase adds up over time, because a lot of people roll from month to month and react when they start getting short. However, the lower transaction amounts noted late in January are important.
<
A little context for the above:
One of the things you can do if you have a bank is just check what's happening in your own deposit accounts to get an update on your risks. When consumer rolling balances in checking accounts begin dropping, you can bet that your retailer accounts are going to follow, so you tighten up on your marginals.
Well, most of us don't have that data, but you do have H.8. Take a look at CC balances this January (Monthly SA data annualized change):
Then we have Other Deposits:
I want to stress that from everything I know, this effect should be cumulative over months. I do think that if it shows up in MC transactions and in bank accounts, the effect is real and that we have a headwind building.
Comments:
M_O_M,
Yes, Keynesian policies will take a big hit for the failure of the stimulus, but not until the current crop of endowed economic chairs are dead or retired.
After them, perhaps someone will be willing to look at the copious data and draw the appropriate conclusion--that there is no special government multiplier. At which point Keynesian policies (if not analysis) are toast.
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Love the video comment about "on the 15th when first paychecks came in" (paraphrasing). 4Q12 GDP already negative; can't wait to see 1Q13.
TJ - I think Q4 will be revised positive.
Rob - If our spendthrift ways qualify as "austerity", we will need to find a new word to fit the old meaning.
Government spending has gone through the rough since 2007 and we are nowhere close to adjusting that.
The sequester is not austerity, and the payroll tax restoration is not austerity. It's not surprising that we had such a severe and long downturn from the rolling bubbles beginning in the 1990s, but it is surprising that we have spent so much money and got so little economic benefit from it.
Really - although we cannot be honest about this publicly - it is a reality bitch-slap in the face for Keynesian theory.
Rob - If our spendthrift ways qualify as "austerity", we will need to find a new word to fit the old meaning.
Government spending has gone through the rough since 2007 and we are nowhere close to adjusting that.
The sequester is not austerity, and the payroll tax restoration is not austerity. It's not surprising that we had such a severe and long downturn from the rolling bubbles beginning in the 1990s, but it is surprising that we have spent so much money and got so little economic benefit from it.
Really - although we cannot be honest about this publicly - it is a reality bitch-slap in the face for Keynesian theory.
M_O_M,
Yes, Keynesian policies will take a big hit for the failure of the stimulus, but not until the current crop of endowed economic chairs are dead or retired.
After them, perhaps someone will be willing to look at the copious data and draw the appropriate conclusion--that there is no special government multiplier. At which point Keynesian policies (if not analysis) are toast.
Hmm is anyone else having problems with the images on this blog loading?
I'm trying to determine if its a problem on my end or if it's the blog.
Any suggestions would be greatly appreciated.
My site: service
I'm trying to determine if its a problem on my end or if it's the blog.
Any suggestions would be greatly appreciated.
My site: service
# posted by 
: 9:06 PM
: 9:06 PM
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It's nice to come across a blog every once in a while that isn't the same outdated rehashed information.
Wonderful read! I've saved your site and I'm adding
your RSS feeds to my Google account.
Feel free to visit my weblog ... originalno
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: 10:33 PM
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me to come here and visit more often. Did you hire out a designer to
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# posted by : 6:43 AM
: 6:43 AM << Home
