Archive for January, 2008
« Previous EntriesSubprime ARMs Are Only 7% of Loans Outstanding
Submitted by CARPE DIEM
Here’s a follow-up graph to the one in the post below, this one is through 2007-Q3 for “foreclosures started,” from the Mortgage Bankers Association(MBA). What is pretty obvious is that subprime mortgages in general are not the problem, but subprime ARMs that are the real problem. Subprime fixed foreclosures in 2007-Q3 were [...]
more on time in a capitalist economy
Submitted by unsettling economics
Part of what interested me in the article was the time requirement to find the best price. Economists tell us that prices are supposed to be signals indicating how utility can be produced with the least opportunity costs. In this sense, exploring alternative prices can be seen as a productive [...]
Thinking about Monetary Policy Efficacy: Back to the Textbooks
Submitted by Econbrowser
As the Fed drops interest rates, I’ve been trying to sort out all the channels that monetary policy will affect output, and which ones are likely to be short circuited this time around.
Paul Krugman observes that changing interest rates might not work on housing when the stock of housing is out of line [...]
Is Your Management Team Prepared for Recession?
Submitted by Businomics Blog
A business manager with 25 years of experience today has worked through two recessions.
Compare that to a generation ago: in 1983, a manager with 25 years of experience would have worked through FIVE recessions.
Whether the current economy is going into recession, or merely a “recessionette,” your senior company’s management team needs [...]
Freddie Mac: Delinquency Rates
Submitted by CARPE DIEM
Interesting chart above from Freddie Mac, showing foreclosures through the middle of 2007. Note that delinquency rates for FHA and VA loans were declining in 2007 and flat for prime conventional mortgages, so the delinquency problems (at least through the middle of 2007) were affecting only the subprime mortgage sector. It will [...]
8% Jobless Rate Good? In Germany It’s 15-Yr. Low
Submitted by CARPE DIEM
Jan. 31 (Bloomberg) — Germany’s unemployment rate fell to the lowest level in 15 years in January. The jobless rate, adjusted for seasonal swings, dropped to 8.1%, the Federal Labor Agency in Nuremberg said today.
Comment: We haven’t had an unemployment rate in the U.S. above 8% in almost a quarter century, [...]
Forbes’ Inaugural List: Top 10 Most Miserable Cities
Submitted by CARPE DIEM
Forbes Magazine introduces the Forbes Misery Measure, based on a city’s unemployment rate, personal tax rate, commute time, weather, crime, and toxic waste proximity. The top ten “most miserable” cities, according to Forbes:
1. Detroit, MI
2. Stockton, CA
3. Flint, MI
4. New York City
5. Philadelphia, PA
6. Chicago, IL
7. Los Angeles, CA
8. Modesto, CA
9. Charlotte, [...]
Wealth: Then and Now
Submitted by CARPE DIEM
Territory size shows the proportion of worldwide GDP, equalised in purchasing power parity, found there in the Year 1 A.D.
Territory size shows the proportion of worldwide GDP, adjusted for local purchasing power, found there in the Year 2002.
From WorldMapper.
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REFLATION IS ALL THE RAGE (AGAIN)
Submitted by The Capital Spectator
It’s too soon to say if the bond market will stay on board with the Fed’s new world order. From 10 miles up, however, all looks fine, as our chart below suggests. Rates and spreads have both dropped considerably, delivering an upward sloping yield curve along the way. Mr. Bernanke’s big [...]
Real Personal Disposable Income: 3.1% in 2007
Submitted by CARPE DIEM
From today’s BEA report“Real Disposable Personal Income increased 3.1% in 2007, the same increase as in 2006 (see chart above).”
In fact, there has only been one year since 2001, when real disposable personal income has grown at a higher annual rate than 2007 - the 3.6% rate in 2004.
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World Cars vs. Motorbikes/Mopeds
Submitted by CARPE DIEM
Territory size shows the proportion of all cars in the world that are found there.
Territory size shows the proportion of all the motorbikes and mopeds in the world found there.
From WorldMapper.
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World Polio and HIV/AIDS
Submitted by CARPE DIEM
Territory size shows the proportion of worldwide polio cases that were recorded there between 2000 and 2005.
Territories are sized in proportion to the absolute number of people who died from HIV/AIDS.
From WorldMapper.
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The New World: Then and Now
Submitted by CARPE DIEM
Distribution of World Population of the World: Year 1
Distribution of the World Population of the World: 2008
From WorldMapper
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Investors Get a Look at the Future
Submitted by A Dash of Insight
Today’s trading provided a rare opportunity — a look into the future. The Fed action, as we expected, showed determination to fight recession prospects in an aggressive fashion. The FOMC is attentive both to the current economy and to financial disruptions that could spiral into negative economic effects.
While many traders [...]
Fed rate cut
Submitted by Econbrowser
Today the Federal Reserve announced a further 50-basis-point cut in its target for the fed funds interest rate, bringing it down to 3.0% for a total reduction in January of 125 basis points. How long should it take before this has an effect on the economy?
In a recent research paper (quick summaries here [...]
Weak GDP report
Submitted by Econbrowser
The Bureau of Economic Analysis reported today that U.S. real GDP grew at a 0.6% annual rate in the fourth quarter of 2007, a weaker report than many of us had been expecting.
Consumption spending grew at a 2.0% annual rate during the fourth quarter, significantly weaker than the 3.2% growth that would have [...]
Yikes: 2007 Foreclosure Map
Submitted by CARPE DIEM
Check out the foreclosure map (click to enlarge), from RealtyTrac.
HT: FancyPlaid Pants.
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Year-to-Year Real GDP Growth Was Actually 2.5%!
Submitted by CARPE DIEM
WASHINGTON — The U.S. economy braked sharply last autumn, pulling growth for all of 2007 to its lowest speed in five years as the housing slump took a heavy toll.
Gross domestic product rose at a seasonally adjusted 0.6% annual rate October through December, the Commerce Department said Wednesday in the first estimate [...]
Another Downside of Ethanol: Haitians Eating Dirt
Submitted by CARPE DIEM
Making mud cookies in Port-au-Prince, Haiti
PORT-AU-PRINCE, Haiti (AP) — It was lunchtime in one of Haiti’s worst slums, and Charlene Dumas was eating mud. With food prices rising, Haiti’s poorest can’t afford even a daily plate of rice, and some take desperate measures to fill their bellies. Charlene, 16 with a 1-month-old [...]
IT’S STILL ALL ABOUT REAL ESTATE
Submitted by The Capital Spectator
Today’s first guess at fourth-quarter GDP revealed what everyone already knew: the economy slowed sharply in the last three months of 2007 to a 0.6% annual pace in real (inflation-adjusted) terms, the Bureau of Economic Analysis reported. That’s a world or two below the third quarter’s 4.9% surge.
What’s the source of [...]
Stimulus Package Nitwitery
Submitted by CARPE DIEM
There are three ways government can get the money for a stimulus package. It can tax, borrow or inflate the currency by printing money. If government taxes to hand out money, one person is stimulated at the expense of another who pays the tax, who is unstimulated and has less money to [...]
P.J. O’Rourke on Comedy Central
Submitted by CARPE DIEM
Political satirist P.J. O’Rourke says that the free market exists in the eyes of philosopher Adam Smith in order to decentralize our badness.
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If Not the Economy, It Might Stimulate Votes?
Submitted by CARPE DIEM
From Henry Payne.
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The Use and Abuse of Data: Two Excellent Commentaries
Submitted by A Dash of Insight
In the current issue of Barron’s Mike Santoli has some special insight for those trying to interpret the many historical analogies making the rounds. He writes:
• Every time the U.S. unemployment rate has risen by at least 0.3% in a month, as it did in December, a recession has [...]
Wafa Sultan Gives New Meaning to the Word “Bad”
Submitted by CARPE DIEM
Amazing video.
Time Magazine article here.
Wikipedia listing here.
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