This week, I wanted to highlight the United States auto industry. In 2008, the real estate market was the main culprit: everyone was talking about the “subprime” mortgage-crisis. Subprime involves riskier borrowers with lower credit scores. Two years ago, I emphatically said that it this time around a recession will not revolve around subprime mortgages, but more than anything else subprime auto loans. And this is especially remarkable given the fact that in 2008 various large American

A remarkable change of fate by the Fed, which already began to surface in November last year, has reached its pinnacle last week. The era of rate hikes that began in December 2015 in the U.S. appears to have come to a grinding halt.

It is September 26, 2017. The FOMC has just announced that it will hike rates to 2.25 percent. The Fed’s interest rate committee foresees strong economic growth for the years coming, unemployment declining even further, as well as subdued inflation. In other words, economic wonderland. According to my view, this was too good to be true, as I have explained earlier along these lines.

Days later, at the beginning of October, the Fed Chief Jerome Powell points out that an interest rate of 2.25 percent “still remains far removed from its neutral level.” The neutral rate is a level at which the Fed neither stimulates nor puts the breaks on the economy. According to the central bank, the neutral rate lies somewhere near 3 percent. A “rate that is still far from its neutral level”