Archive for September, 2008
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Submitted by unsettling economics
I just dashed off the first draft of a discussion of the financial crisis to be published in a South Asian publication. It is still very preliminary. I could appreciate any pointers. Thanks.
Financial-Crisis
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George Bush solves the immigration crisis
Submitted by unsettling economics
Give George Bush credit. He is managing to shut down the flow of illegal immigration. Of course, he did it by trashing the economy, but now people are not as enthusiastic about coming to work in the United States.
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We Turned Good Renters Into Bad Homeowners
Submitted by CARPE DIEM
For decades, starting with Jimmy Carter’s Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out for economic reasons or, sometimes, because of racial and ethnic discrimination. What could be a more worthy cause? But it led to [...]
The Mind-Numbing Effects of Political Correctness
Submitted by CARPE DIEM
Uncovering the roots of the disastrous home mortgage bubble that popped last year will keep economic historians busy for decades. Yet, one factor has so far been largely overlooked: the bipartisan social engineering crusade to drive up the rate of homeownership by handing out more mortgages to minorities.
More than a negligible [...]
Almost a 15 Point Lead for Obama: 56.5% to 41.8%
Submitted by CARPE DIEM
Intrade. Is it over for McCain?
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Quote of the Day: The 20% Generation
Submitted by CARPE DIEM
Politicians will bend to any new wind that blows through, but this past week of financial turmoil has shown there’s a strong whiff in the air for the values of the greatest generation. This was the 20% generation. In the post-war years, young couples knew they’d somehow have to save 20% of [...]
ANOTHER BAILOUT IS COMING, BUT THE ECONOMY’S STILL HURTING
Submitted by The Capital Spectator
Surveying the financial and economic landscape looks increasingly like an exercise in watching the perfect storm unfold. Today’s sour updates on durable goods orders, new home sales weekly jobless claims only strengthen the sentiment.
Durable goods first: they’re down. Big time. The government reports that seasonally adjusted new orders for durable goods [...]
Housing Excess Looking Better–But Not As Good As It Seems
Submitted by Businomics Blog
The excess supply of housing units is being worked off quickly. Here’s the picture for new single-family homes:
We’ve made a lot of progress towards a normal inventory of unsold homes. At the rate we’re going (and not making any forecasts about changes in new construction or home sales), we’ll be down to [...]
Financial Crisis and the Economic Forecast: A podcast
Submitted by Businomics Blog
My latest thoughts on how the financial crisis is impacting business conditions is captured on a 17 minute audio program, available as an MP3. Click here to learn more.
The economic risks from the financial crisis
What’s happened in the economy over the last month
My latest forecast for the economy and financial markets
All this [...]
The Smart Money Will Stay Bullish On America
Submitted by CARPE DIEM
So far, Main Street has shown a surprising amount of resiliency given the problems of Wall Street. Even if the economy eventually succumbs to recession, as now appears more likely, it will bounce back before long. It always has.
There have been plenty of crises in the past — the stagflation and oil-price [...]
Spending on Food and Clothing At An All-Time Low
Submitted by CARPE DIEM
Using BEA data on annual expenditures for clothing and shoes (data), and annual disposable personal income (data), the chart above show spending on clothing as a percent of income from 1929 to 2007. From double-digit levels back in the 1930s and 1940s, average spending on clothing as percent of after-tax income was [...]
Spending on Food At An All-Time Historical Low; And It’s Nothing At All Like The Great Depression
Submitted by CARPE DIEM
The chart above is based on data from the USDA’s Economic Research Service showing “Food expenditures by families and individuals as a share of disposable personal income,” from 1929 to 2007. In the entire history of the U.S., it’s only been in the last eight years that the percent of income spent [...]
We Sacrificed Sound Credit Policies For Social Activism And Endangered Entire Mortgage Market
Submitted by CARPE DIEM
While many pundits are pointing to corporate greed and a lack of government regulation as the cause for the American mortgage and financial crisis, some analysts are saying it wasn’t too little government intervention that cased the mortgage meltdown, but too much, in the form of activists compelling the government to pressure [...]
Flashback to the 1990s: Origins of the Credit Crisis
Submitted by CARPE DIEM
It’s one of the hidden success stories of the Clinton era. In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. The number of African Americans owning their own home is now increasing nearly three times as fast as the number of [...]
How I Got Into Economics
Submitted by Businomics Blog
I’ve been asked more than once how I got to where I am. Here’s the brief story (allowing me to refer future inquiries to this post).
I always had an aptitude for mathematics, but I found math boring. I was interested in politics, but eventually decided politics had little basis aside [...]
The Financial Crisis and Entrepreneurship
Submitted by Econbrowser
Most of the discussion surrounding the current crisis has focused on the implications for major businesses and their hiring and investment decisions, or households and their employment possibilities, or consumer behavior. One overlooked (or underemphasized) aspect of the issue is the impact on small firms. Fortunately, my former colleague (and coauthor), Rob Fairlie [...]
Financialization: From The Confiscation of American Prospection
Submitted by unsettling economics
Here is a brief discussion of financialization taken from my recent book: The Confiscation of American Prosperity
financialization
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Obama’s Lead Increases to 11 Points: 55% vs. 44%
Submitted by CARPE DIEM
Intrade.
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Canada, Chile Now Economically Freer Than U.S.
Submitted by CARPE DIEM
Washington — Economic freedom around the world remains on the rise but it has declined notably in the U.S. since the year 2000, according to the Economic Freedom of the World Report: 2008 Annual Report from the Cato Institute and Canada’s Fraser Institute.
In 2000 the U.S. was the second-freest economy listed [...]
9-Point Lead: Obama: 54.4% vs. McCain: 45.2%
Submitted by CARPE DIEM
Intrade.
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THE ALLURE (AND RISK) OF SILVER LININGS
Submitted by The Capital Spectator
Financial crises, bank implosions and chaos generally don’t often inspire. But every debacle has a silver lining. One of those linings shows up these days in higher interest rate spreads. Investors willing to wade into the riskier realms of debt are being paid for their troubles, or so one could argue.
As [...]
THE ALLURE (AND RISK) OF SILVER LININGS
Submitted by The Capital Spectator
Financial crises, bank implosions and chaos generally don’t often inspire. But every debacle has a silver lining. One of those linings shows up these days in higher interest rate spreads. Investors willing to wade into the riskier realms of debt are being paid for their troubles, or so one could argue.
As [...]
Cartoon of the Day
Submitted by CARPE DIEM
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Credit Crunch? What Credit Crunch?
Submitted by CARPE DIEM
Based on data from the St. Louis Fed, Total Consumer Credit Outstanding reached an all-time high of $2.572 trillion in July (see chart above). The way the banking system is described in the media, you’d think the supply of commercial bank credit has completely dried up, e.g. do a Google News [...]
Lots of People Could Use A Cash Infusion
Submitted by CARPE DIEM
1. Barney “Big Un” Baumgartner of Windblown, Wyo., invited the Federal Reserve and the U.S. Treasury Department to take over his business, The Big Un 24 Hour Tow Service and Trophy Taxidermy. He’d be willing to let the government have 80% of his business for a quick cash infusion. He thought something [...]
