Submitted by CARPE DIEM

For a $1,500 per month apartment in Tokyo:
1. New renters have to pay 2 month’s rent in advance = $3,000
2. New renters have to give another 2 month’s rent as a security deposit = $3,000
3. New renters also have to give another 2 month’s rent as a gift to the landlord, which […]

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Submitted by CARPE DIEM
Our model suggests that the market is undervalued by 25% today. With the economy picking up steam in 2008, our forecast is that the Dow moves up as well and our year-end 2008 forecast is 15,000, with the S&P 500 at 1625.
Once recession fears prove unfounded, US equities will soar. Those who […]

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Submitted by CARPE DIEM
With all of the turmoil and uncertainty about the stock market, here six good quotes from Warren Buffet:
1. The future is never clear, and you pay a very high price in the stock market for a cheery consensus. Uncertainty is the friend of the buyer of long-term values.
2. The most common cause […]

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Submitted by CARPE DIEM

No state has more experience with retail clinics than Minnesota, the birthplace nearly eight years ago of MinuteClinic, which still dominates the field even as competitors crowd in. An independent, nonprofit coalition of doctors, insurers, consumers, and employers called MN Community Measurement annually rates health clinics’ and doctors’ practices statewide.
The most recent […]

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Submitted by CARPE DIEM
From today’s San Diego Tribune, “New Incentives, Not Fiscal Stimulus, Are the Best Way to Bolster a Slowing Economy”:
The bottom line on fiscal stimulus to stave off or ameliorate a recession is this: None is needed for that purpose that wouldn’t be good policy under more normal circumstances. Low marginal tax rates […]

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Submitted by Econbrowser
It was a fun day to be a macroeconomist, don’t you think?
The Wall Street Journal has created a cute interactive graphic that allows you to watch the carnage in international equity markets– Australia down 2.9% Monday and another 7.3% Tuesday, China down 4.8% Monday and another 7.7% Tuesday, and so on– as the […]

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Submitted by Econbrowser
The Federal Reserve announced today it was lowering its target for the fed funds rate 75 basis points, from its previous value of 4.25% to a new value of 3.5%.
The Fed’s statement itself does not read like such a big deal:

The Committee took this action in view of a weakening of the economic […]

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Submitted by Businomics Blog
When two things have different names, they are usually different things. Take a look at stock prices and the economy:

The first thing you see is that changes in stock prices are far, far greater than changes in the economy. There are two good reasons for this. First, corporate earnings […]

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Submitted by CARPE DIEM
From Walter Williams’ column today “Subprime Bailout“:
As with most economic problems, we find the hand of government. The Community Reinvestment Act of 1977, whose provisions were strengthened during the Clinton administration, is a federal law that mandates lenders to offer credit throughout their entire market and discourages them from restricting their credit […]

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Submitted by The Capital Spectator
Panic, fear, and an emergency 75-basis-point cut in the Fed funds rate. Yes, dear readers, it’s time to start nibbling at asset classes that have fallen on hard times.
But let’s not go crazy. We’re not in the business of calling market bottoms, or tops. Nobody knows how long the selling will […]

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Submitted by CARPE DIEM
From Thomas Kuper at Human Events: “I thought it would be interesting to do a compare and contrast between a champion of the free market (Milton Friedman) versus a champion of government (Hillary Clinton).” Here are a few examples:
“The unfettered free market has been the most radically destructive force in American life […]

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Submitted by Econbrowser
As the decoupling thesis becomes more and more tenuous [1], and the rest of the world exhibits greater evidence of a slowdown [2], [3], [4], leading to predictions of a more persistent and deeper slump in the US than previously anticipated [5], I wonder — where did that presciption of a one percentage […]

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Submitted by A Dash of Insight
As we write this, foreign markets have plunged over the weekend. Stocks will open lower — much lower — at a frightening level. Individual investors may well panic. Some traders will see this as the indicator they have been seeking - a dramatically lower opening that provides […]

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Submitted by CARPE DIEM

From the International Herald Tribune: “Has the dollar bottomed out?”
“Foreigners are buying American assets at cut-rate prices. To make their purchases, foreigners need dollars; more demand for dollars pushes the exchange rate higher. And, according to some important measures of the dollar’s value, the greenback may have hit bottom over two […]

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