Archive for May, 2009
« Previous EntriesNorth Korea’s Real Crime
Submitted by unsettling economics
I don’t like nuclear weapons, but for all the outrage regarding North Korea’s nuclear explosion, nobody seems to have noticed that this week the U.S. celebrated the opening of the $3.5 billion National Ignition Facility. The New York Times described project without mentioning its military purpose, except quoting the project director who [...]
My Therapeutic Rant on the Current Economic Madness
Submitted by unsettling economics
During the Vietnam War, a U.S. soldier seems to have anticipated the spirit of the current economic policy, explaining: “we had to destroy the village in order to save it.” The difference today is that while the government destroys villages of the working classes, it is devoting enormous to improve the castles [...]
Supply, demand, and the price of oil
Submitted by Econbrowser
Do recently rising oil prices signal a resurgence of economic growth?
In the WSJ Blog Environmental Capital, Russell Gold writes of
a growing belief that the economy could be regaining its footing and oil prices will climb to the price that OPEC is willing and able to defend…. “[T]here would be no reason why the [...]
Guest Blog: Japan’s first trade deficit in 28 years
Submitted by Econbrowser
By Eiji Fujii
Today, we’re fortunate to have Eiji Fujii, Professor of Economics at Tsukuba University as a guest blogger.
Shaken by the world financial crisis, Japan has recorded the first trade deficit (on the April-March fiscal year basis) in 28 years (see Figure 1). The trade balance of the 2008 Japanese fiscal year was [...]
Detroit vs. Pittsburgh: Hockey and Economics
Submitted by CARPE DIEM
NY TIMES (Jan. 7, 2009) — This is what life in one American city looks like after an industrial collapse: Unemployment is far below the national average (see chart above, data through April 2009). While housing prices sank nearly everywhere in the last year, they rose here. Wages are also up. Foreclosures [...]
CA Real Estate Market Recovery: Sales Boom, Marketing Time Falls, and Unsold Inventory Drops
Submitted by CARPE DIEM
LOS ANGELES (May 28) – Home sales increased 49.2% in April in California compared with the same period a year ago, while the median price of an existing home declined 36.5%, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) reported today.“With annualized sales at 540,360 units, April marked the eighth consecutive month of home [...]
Florida Home Sales Increase for 8th Straight Month
Submitted by CARPE DIEM
ORLANDO, Fla. – May 27, 2009 – Florida’s existing home sales rose in April – the eighth consecutive month that sales activity increased in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors (FAR). April’s statewide sales showed gains over the previous month’s sales level [...]
Restaurant Activity Index Increases For 4th Straight Month; Reaches Highest Level Since May 2008
Submitted by CARPE DIEM
(Washington, D.C.) — The outlook for the restaurant industry grew more optimistic in April, as the National Restaurant Association’s comprehensive index of restaurant activity registered its fourth consecutive monthly gain. The Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant [...]
Economic Subsidies for Economic Development: Not a Good Deal
Submitted by Businomics Blog
Oregon Business Magazine quoted me in its article about two subsidies, one that clearly failed and one that, they say, worked. If you think these things ever work, here are the facts cited in the article regarding the “good” subsidy. Genentech received over $32 million of incentives, in exchange for which they [...]
Better Presentations Through Better PowerPoint Slides
Submitted by Businomics Blog
I’ve seen plenty of bad presentations, but the good news is that we have plenty of resources for better PowerPoint presentations. Here’s a good lesson from presentation expert Dave Paradi:
Dave has more great tips on his website, www.ThinkOutsideTheSlide.com.
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The Unemployment Rate and State and Local Economic Policy
Submitted by Businomics Blog
My friends are telling me I’m an idiot. I was quoted in the local newspaper last week saying that our high unemployment rate was a bit of a mystery. Both friends and strangers have told me that it’s simple: our state has high unemployment because of bad policy, such as high tax [...]
THINKING ABOUT RISK PREMIUMS
Submitted by The Capital Spectator
What should we expect from Mr. Market? The answer’s always in doubt, but strategic-minded investors should run through the numbers anyway.
It’s hard to overrate the value of taking a hard look at investing assumptions. By continually putting an expected price on risk, we become better investors. There are no crystal balls, [...]
Clive W. J. Granger, 1934-2009
Submitted by Econbrowser
It is with great sadness that I report that Sir Clive Granger passed away last night. He had been a wonderful colleague and good friend.
Clive always had a particular passion for identifying what was predictable in economic relationships. He emphasized the importance of sorting out which variables are helpful for purposes of forecasting [...]
Cartoon of the Day
Submitted by CARPE DIEM
HT: Mitch Parr
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More Thoughts on Potential GDP and the Output Gap
Submitted by Econbrowser
In several past posts, I’ve been taken to task for using the CBO measure of the output gap (and the associated measure of potential GDP) [0] [1]. Some criticize the false sense of certainty that is provided by the official measures, since they are known to be revised as data comes in. Some [...]
The New C Word
Submitted by CARPE DIEM
A cartel is an organization of producers that agree to coordinate prices and production.
The Organization of the Petroleum Exporting Countries (OPEC) is a cartel of twelve countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. The cartel has maintained [...]
Bank Earnings Looking Better in 2009 First Quarter
Submitted by Businomics Blog
Breathe a sigh of relief. Bank earnings are not strong, but they are positive. Red ink seems to be so 2008:
It seems the farther we get from the fall of 2009 and the Lehman bankruptcy, the better things look. Although I do not forecast bank earnings to grow rapidly and return to [...]
READY OR NOT, INTEREST RATES ARE RISING
Submitted by The Capital Spectator
Is it an ominous sign, or just another step on the journey back to normalcy?
For the moment, the jury’s out, but there’s no question that the benchmark 10-year Treasury Note’s yield is upwardly mobile these days. Yesterday’s jump to 3.71% elevated the yield to its highest since last November. What does [...]
Unionized Companies Punished in Bond Market
Submitted by CARPE DIEM
NEW YORK (Reuters) - Scores of companies are being punished in the bond market as the Obama administration’s policies on General Motors and Chrysler LLC create new risks for creditors, a veteran bond strategist says.
As GM teeters toward a bankruptcy filing and Chrysler attempts to restructure in bankruptcy court, the Obama administration [...]
Baltic Dry Index Advances 20 Days in a Row
Submitted by CARPE DIEM
The Baltic Dry Index came close to reaching an 8-month high today, closing above 3,000 for the first time since early October, and hitting the highest level since September 30. The shipping index has advanced for each of the last 20 sessions, and the 222 point increase today was the largest [...]
Remember The Good Old Days?
Submitted by CARPE DIEM
Link.
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Controversy at Univ. of Chicago: “Men in Power”
Submitted by CARPE DIEM
April Unemployment Rates
Male: 10%
Female: 7.6%
Note: The 2.4% male-female jobless rate gap in April is at an all-time historical high.
Job Losses During the Recession:
Male: 79% of total
Female: 21% of total
Bachelor’s Degrees
Female: 57.4%
Male: 42.6%
Master’s Degrees
Female: 60%
Male: 40%
Note: Women earn 135 bachelor’s degrees for every 100 degrees earned by men, and by 2016 that ratio [...]
IS THE SMALL-CAP VALUE BETA STILL RELEVANT?
Submitted by unsettling economics
It’s been 17 years since the professors Eugene Fama and Ken French penned the first of several papers that identified small-cap value as a separate equity beta worthy of special consideration. The basic idea is that stocks that are generally shunned by the crowd, as indicated by a low price-to-book ratio, are [...]
More papers on the credit crunch
Submitted by Econbrowser
Links to some interesting papers that I recently read.
The first comes from a conference on financial markets held at the start of this month at the University of Illinois in Chicago. Last fall, V.V. Chari, Larry Christiano, and Pat Kehoe received a lot of attention (e.g., Tabarrok, Avent, Economist, Kwak, Bonddad, and Thoma [...]
Empire State Survey Suggests Recession is Ending
Submitted by CARPE DIEM
NY Fed Empire State Manufacturing Survey — The future general business conditions index rose 11 points in May to 43.8, its highest level since November 2007 (see chart above). This index has shown a cumulative increase of more than 40 points over the past two months. The future new orders and shipments [...]
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