The power of faith is always impressive, and few demonstrate more faith than those who truly believe that California’s economy will always recover boundless economic prosperity regardless of policy. The true believers’ faith persists in spite of years of contrary evidence. California’s share of national jobs peaked in 1990. Domestic migration has been negative for… Read more

We’ve seen more and more forecasters and analysts revising their forecast down. In fact, after being among the lowest for years, we’re now almost consensus. Remember, they came to us. Downward revisions to United States gross domestic product (GDP) have driven most of the revisions. For about two years, we had trouble with the original… Read more

Until today, we’ve been confident that we could avoid a double-dip recession.  Too be sure, we’ve acknowledged that risks abound, particularly in the Middle East and in the Eurozone.  However, the recovery seemed to be proceeding about as we had expected, slowly, certainly slower than most forecasts. We believed that the United States economy, absent… Read more

It was big news when bank charge offs exceeded $40 billion in 2008’s fourth quarter.  It was the first time in history that wrote off more than $40 billion in uncollectable loans.  Since then, you’ve probably heard nothing about bank charge offs, unless you follow CERF. We think bank charge off data are important, because… Read more

We’ve been saying for a long time that the Eurozone has to break up.  There is no reason Greece and Germany should have the same monetary policy, never has been.  We’re glad to see other people are coming around. The Greeks are discussing it at the policy level.  Other countries are probably also discussing how… Read more

Previously Published March 22, 2011 Forecasting is a challenge in rapidly changing times, and these are very rapidly changing times. At the beginning of the year, it would have been unbelievable if someone had said that Mubarak would be deposed, we would be in a war in Libya, and there would be general uprisings throughout… Read more

Here are two facts about China: Real estate values declined 27 Percent last month. Inflation is increasing. Their economic growth has slowed a bit, but it is still really high at 9.7, at least by the official numbers.  Still, China’s leaders have a problem.  Inflation can eventually create disastrous problems, but eliminating it would require… Read more

Previously published March 22, 2011 It appears that California residential real estate is in the second dip of a double-dip decline. California home prices, and sales, crashed at the beginning of the recession. Then, last year they picked up in the first half of the year, a result of temporary government programs and optimism unsupported… Read more

Previously published March 22, 2011 California remains mired in something like a zombie state, not quite dead, but certainly not vigorous, moving but with no clear direction. Perhaps, jobs and migration data best show California listless nature. Jobs have been increasing in almost every sector, but that job growth has been anemic. We saw only… Read more

Previously Published March 17, 2011, in the California Economic Forecast A couple of weeks ago, somebody–I think it was Shiller–said that they expected residential real estate price to decline by another 20 percent or more. Soon after, I was contacted and asked if I thought that a 20 percent decline was possible. My answer was… Read more