Friday, December 18, 2009

EconomPics of the Week: See You in 2010 Edition

If I see something that is VERY interesting, I may post (also possibly going to post a "best of" EconomPic for 2009). If not, happy holidays to all!

Too Indebted
Treasury Debt to Receipts Spiking
Treasury Debt to Receipts over the LONG Term

On the Timing / Importance of Stock Buybacks
The Great (Two Week Glimpse of What Can Happen) Unwind

Capacity Destruction?
Can Capacity Destruction be Good for GDP?
Capacity Utilization and Production Rebounding

Other Economic Data
Leading Economic Indicators Strong in November
State Personal Income Rebound
Consumer Price Index... Up, but (Seemingly) Contained
PPI Jumps from Energy Prices in November
Industrial Production Down in Eurozone


  1. Hi Jake, I was reading about the mortgage delinquencies at 10%-14%+ overall and thinking how that is breathtakingly high. I read an article about how people are really enjoying being out of their mortgage because their $4k/month mortgage payments are reduced to $2k/month in rental payments. They've got about $2k/month left over for spending.

    But with the trillion dollar mortgage market and 10%+ of all mortgages delinquent would that be a massive massive economic stimulus?

    If the mortgage market is $10 trillion and 10% are delinquent that is $1 trillion not being paid on.

    I'd love for you to do a post titled, "Mortgage Delinquencies as Economic Stimulus" and chart how much money has been freed up to spend on the economy by people not paying down their mortgage.

    I suspicion this is on the order of $100 billion a year.


  2. Eric- you are forgetting about the other side of the equation. Each mortgage not paid = principal and interest not received by the owner of that mortgage.

    The question is which side has a higher multiplier to the broader economy:

    A) the person paying $2000 less (spending $2000 more or less than that because they may be out of a job)
    B) the owner of the loan having less wealth as a result of a mortgage on a home that is in default (i.e. a home worth 30%-40% less when resold) = a loss in the ten to hundred thousands for a mortgage of $4000 / month.

    Not sure how stimulatory this is...