Archive for December, 2008
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Submitted by Businomics Blog
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HAPPY NEW YEAR!
Submitted by The Capital Spectator
The Capital Specator is taking short holiday break to ring in 2009. We’ll be returning on Friday, January 2 to review 2008 and consider risk and opportunity for the newly minted year ahead. It’s a dirty job, given the current economic climate, but we’ll forge ahead regardless. Perspective is always valuable, [...]
The oil shock and recession of 2008: Part 1
Submitted by Econbrowser
This is the first in what I’m planning will be a series of posts discussing the contribution that the energy price spike of 2008 made to our present economic difficulties. In this first installment, I revisit a very interesting research paper on the response of consumer spending to energy price increases written by [...]
Capitalists On The Way Up; Socialists on Way Down. During Crises, Balance Always Tilts Toward Gov’t.
Submitted by CARPE DIEM
Many are finding it hard to make merry in the aftermath of this year’s financial crisis. Collateral damage from the crisis is extensive—unemployment is rising in the US, exporters are hurting in emerging markets, global stock markets are depressed, and each day seemingly brings new cries for government help from struggling industries. [...]
Economically Possible? No. Politically Possible? Yes
Submitted by CARPE DIEM
Q: Is it economically possible to simultaneously demand low electricity prices but no new generating plants, while using ever increasing amounts of electricity.
Q: Is it economically possible to simultaneously have “open space” laws forbidding building while increasing “affordable housing”?
Q: Is it economically possible to add the costs of government bureaucracies [...]
The 2012 Pelosi GTxi SS/RT Sport Edition
Submitted by CARPE DIEM
From Congressional Motors: All new for 2012, the Pelosi GTxi SS/Rt Sport Edition is the mandatory American car so advanced it took $100 billion and an entire Congress to design it.
HT: KauaiMark AND Anonymous (sorry I left this out before)
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Bank Losses: Not as Bad as We Feared
Submitted by Businomics Blog
The FDIC now has the scoop on the banking industry’s third quarter results. They aren’t as bad as I had feared. Not that they are good, but it’s not catastrophic. Some key points:
The industry earned money third quarter, though a huge amount less than in the third quarter of 2008. Still, 76 [...]
TECHNICAL DIFFICULTIES
Submitted by The Capital Spectator
Dear readers,Due to technology issues beyond our control, our podcasts may load slowly. Apparently our hosting service for the shows is experiencing unusually heavy traffic today, or so they say. We’re told that the problem should be cleared up soon. Sorry for the inconvenience.
–JP
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TALKING WITH STAN RICHELSON, TODAY’S GUEST ON THE INSIDE VIEW PODCAST
Submitted by The Capital Spectator
Bonds are usually the only asset class that Stan Richelson owns in the client portfolios that he manages at his wealth management firm, Scarsdale Investment Group in Blue Bell, Pa. But not all fixed-income securities are created equal, of course, as he explains in his recent book Bonds: The Unbeaten Path [...]
Why Detroit Has a Bad Union Problem; Entrenched Bargaining Structure Causes Many Inefficiencies
Submitted by CARPE DIEM
How is it that successful executives become so unsuccessful as soon as they move to Detroit? Also, how can we explain that whenever GM, Ford and Chrysler leave our shores, they compete well in Europe, South America and China? What makes them viable competitors as soon as they cross the border?
The most [...]
Markets In Everything: Sell/Exchange Gift Cards
Submitted by CARPE DIEM
Many consumers face a dilemma on what to do with unused gift cards. If you’ve ever received a gift card to a store you don’t particularly care for, you know this feeling. While there are options on the internet to sell or exchange gift cards with other gift card holders, many consumers [...]
Volatility Index Coming Down From Oct-Nov Peaks
Submitted by CARPE DIEM
One of the most important but underreported financial indicators is the CBOE’s Volatility Index (^VIX), which measures the market’s expectation of future volatility in stock prices. (The CBOE has written a nice technical paper describing how it is calculated here.) Traditionally, the annualized volatility of the S&P 500 has been 20%, but [...]
Markets In Everything: Wearing A T-Shirt for Profit or “Selling the Shirt Right Off Your Back”
Submitted by CARPE DIEM
Hi, my name is Jason. In this up and down economy I’m outsourcing my wardrobe (namely shirts) to corporate america and you! I’m going to wear a different shirt for 365 days straight in 2009, take multiple pictures throughout my day and blog about it. Days are sold at “face value” so [...]
Google Monetizes Public Libraries?
Submitted by unsettling economics
With public libraries reeling under expanded budget cuts, Google’s new deal with the publishers seems to threaten public libraries, which offer Internet service.
Karen Coyle’s warning about Google’s new plan is short enough that I need not summarize it. Google’s response seems disingenuous.
Keep in mind that the major university libraries supplied books that [...]
WELCOME TO PARITY
Submitted by The Capital Spectator
Deflation is here. The question before the house: How long it will last?
Ideally, it’s just passing through, albeit throwing everyone into a temporary tizzy with worries that the U.S. is set to repeat the Japanese experience. Certainly the Federal Reserve is working over time in trying to make sure the disease [...]
Aggregate Demand and Finance and the Collapse in Trade
Submitted by Econbrowser
From “Trade-Finance Pinch Hurts the Healthy,” WSJ, 12/22/08:
The global financial crisis is drying up the financing that firms depend on for trade. That’s making the global recession nastier and deeper than it otherwise would be.
As with all kinds of credit these days, financial institutions are making less trade finance available and charging more [...]
Real Gas Prices Approach 7-Year Low, Saving U.S. Consumers and Businesses $1 Billion Per Day
Submitted by CARPE DIEM
Gas prices reached a new 2008 low of $1.61 per gallon, which is the lowest inflation-adjusted price since March 2002 (using EIA data), as real gas prices approach a 7-year low. From the $4.12 per gallon peak in July, American consumers and businesses are now saving $357 billion on an annual [...]
Notebook Computer Sales Beat Desktops in 2008:Q3, And Will Increase By +15.2% in 2009
Submitted by CARPE DIEM
NEW YORK (AP) — Shipments of notebook computers edged passed desktop sales in the third quarter for the first time, according to data from the research firm iSupply. Preliminary figures for the quarter show notebook PC shipments shot up 40% from the same period a year ago to 38.6 million. Meanwhile desktop [...]
Darwinian Effect of Recessions: Weak Companies Fail, Leaving The Survivors Bigger and Stronger
Submitted by CARPE DIEM
NEW YORK - Economic cycles are Darwinian, picking off weak companies and leaving survivors stronger. A year into the recession, solid retailers have their pick of mall space. Respected banks are getting an influx of deposits. Tech companies with money to spend are having an easier time hiring.
It has been a year [...]
A Christmas Card From the Oil Market
Submitted by CARPE DIEM
Monthly oil prices in 2007 and 2008.
See alternative version here.
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Great Depression II?
Submitted by CARPE DIEM
Great Depression II? We’re still a long, long way away, see chart above of monthly unemployment rates, from 2007.1 to 2008.11 and 1931.12 to 1935.12.
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Great Depression II?
Submitted by CARPE DIEM
Great Depression II? We’re still a long, long way away, see chart above of annual industrial production growth rates, monthly from 2007.1 to 2008.11 and 1930.1 to 1933.12.
Update: Data are available here, the annual growth rate is calculated as the percent change from the same month a year ago.
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$1 Billion Daily Savings From Tumbling Gas Prices
Submitted by CARPE DIEM
MY WAY — Retail gasoline prices tumbled Friday to the lowest level in nearly five years. And while crude futures rose, analysts believed it was a temporary pause in an extended, downward arc as the recession spreads.
“We’re paying about a billion dollars per day less than we were in July” for gasoline, [...]
Quote of the Day: Government Can’t Create New Jobs or Wealth, It Merely Redirects Resources
Submitted by CARPE DIEM
Governments cannot create but merely redirect. When the government spends, the money has to come from somewhere. If the government doesn’t have a surplus, then it must come from taxes. If taxes don’t go up, then it must come from increased borrowing. If lenders won’t lend, then it must come from the [...]
Bank Regulators Sending Mixed Messages
Submitted by Businomics Blog
The newspapers report that the chief banking regulators are urging banks to lend money. But the front-line bank examiners, the men and women who work face to face with actual bankers, are giving different orders. They are telling banks to build up capital and liquidity, which can only be done by SLOWING [...]
