A lot has changed in the past year. The chart below depicts the monthly US personal-savings rate and the the percentage change in Chinese exports from the same month a year ago. I think there's a lot of information in those 2 lines.

                                   
Click here to enlarge.

Why isn't the stimulus package working? See the white line. The tax cuts went straight into the bank. I wrote back in March about Baby Boomers downsizing the American Dream.
The personal-savings rate shows us that Boomers are still in downsizing mode -- and an extra $100 a month in the checking account isn't going change their new behavior.

There are certain things in the stimulus package that will probably make me get out the checkbook. The best example is the 30% up to $1500 tax credit for energy efficient windows. Now that makes a lot of sense: It directly puts money into the local economy and in the end, I'm actually going to have a permanent benefit. Cash for Clunkers is a similar program, although I think the mileage improvement required to qualify is too low, so it's really just another bailout for GM (GMGMQ), Ford (F), Honda (HMC), etc.

If another stimulus package is coming, it will be much more effective if it actually stimulates people to spend rather than just save the extra few dollars.

Now let's turn to the yellow line. I don't think anyone would doubt that the white line drives the yellow line. Since the Chinese can't force us to buy, what are they doing to stimulate their economy? The answer is "a lot" -- and it sure looks like deja vu all over again, as Yogi would say.

Bank-lending in China is going crazy. June new loans in China jumped more than 150% from May. The government is flooding the country with money to counteract the collapse of exports. Michael Pettis is a professor at Peking University and writes a blog following the Chinese economy. His June 30 blog lists the incredible growth in bank-lending talks and the apparent determination that the Chinese economy will hit the 8% growth target regardless of export collapse.

Certainly, this is another bubble in the making. And like all the bubbles we've seen, it will end badly. Keep this on your radar screen.