Archive for December, 2009
« Previous EntriesDID THE STIMULUS WORK?
Submitted by The Capital Spectator
The rationale for the $787 billion stimulus legislation enacted in February 2009 is that government spending is necessary for juicing economic activity that would otherwise lie fallow. The idea comes from The General Theory of Employment, Interest and Money, the 1936 tome by Keynes that put macroeconomics on the map and [...]
Labor Market Turns a Corner: New Jobless Claims Fall to 18-Month Low, Lowest Since July 2008
Submitted by CARPE DIEM
1. The number of people filing new claims for unemployment benefits in the U.S. unexpectedly fell in the latest week to its lowest level in 18 months, a sign the labor market may be turning a corner. Initial claims for unemployment benefits fell by 22,000 to a seasonally adjusted 432,000 in the [...]
WSJ’s “Chinese Slapped in Steel Dispute” Rewrite: “Americans Slapped in Steel Dispute”
Submitted by CARPE DIEM
WALL STREET JOURNAL — U.S. steelmakers won U.S. consumers who purchase products made with steel and American companies that purchase steel as an input lost a case over Chinese steel imports, as the U.S. International Trade Commission voted that the domestic industry has been damaged industries that use steel have been subsidized too [...]
Markets in Everything: Refrigerators $69 to $15k
Submitted by CARPE DIEM
Possibly the world’s cheapest refrigerator, the $69 ChotuKool refrigerator above is being taken for field testing in rural India (it’s scheduled for release in March 2010). The portable, top-opening unit weighs only 17 pounds, uses high-end insulation to stay cool for hours without power and consumes half the energy used by regular [...]
IS THE STIMULUS STYMIED?
Submitted by The Capital Spectator
Deciding if the fiscal stimulus is productive, a wash or a drag on economic activity has inspired a furious debate in economic circles this year. Some of the analysis is wickedly complex. In the interest of brevity (and clarity), Professor Eugene Fama has boiled down the key issues as follows:
1. Bailouts [...]
Term deposit facility
Submitted by Econbrowser
On Monday the Federal Reserve proposed a new term deposit facility that would allow the Fed to borrow directly from private institutions. Here I offer some thoughts on how this fits into the Fed’s long-term plans and what its implications for the rest of us might be.
Let’s begin with some background on how [...]
Bronze Age Orientation Day: Creative Destruction
Submitted by CARPE DIEM
The forces of Schumpeterian creative destruction have been around for thousands and thousands of years…..
HT: Lee Coppock
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Everything’s Amazing but Nobody’s Happy
Submitted by CARPE DIEM
I’ve featured this before, but it’s a classic and worth viewing again - comedian Louis C.K. on Conan O’Brien.
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Markets in Everything: Free Econ/Bus. Textbooks
Submitted by CARPE DIEM
Free and Open Content Textbooks now available on the Internet:
Economics.
Business.
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2,000 Pages: Is it the New 25 Pages?
Submitted by CARPE DIEM
Nick Schulz at the Enterprise blog reports on the number of pages in various pieces of important U.S. legislation from the 1800s (Homestead Act with 9 pages) through the current heathcare bill (about 2,000 pages), see summary in the graph above.
By the way, here’s what 2,000 pages looks like, it’s Ford’s [...]
Nov. Trucking Volume Highest Level in a Year
Submitted by CARPE DIEM
ARLINGTON, VA — The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 2.7% in November, following a 0.2% contraction in October. The latest gain boosted the SA index from 103.6 (2000=100) in October to 106.4, its highest level in a year. Compared with November 2008, SA tonnage fell [...]
REFLECTING ON 2009
Submitted by The Capital Spectator
We’ve had the Great Recession and the Great Liquidity. Next comes the Great Unknown.
Central banks have averted the Great Depression 2.0 courtesy of liquidity injections on an unprecedented scale over the past 18 months. In essence, the Federal Reserve and its counterparts around the world have eased the economic and financial [...]
How Important Is Structural Unemployment in the Current Recession/Recovery?
Submitted by Econbrowser
Joseph Lawler at the Spectator distills the Austrian perspective on the sources of current unemployment.
Economists of a statist or Keynesian bent tend to posit that modern managers are quicker to fire employees and squeeze extra productivity out of their remaining workers, and then explore why that might be so. …
There is a more [...]
Markets Fail. That’s Why We Need Markets.
Submitted by CARPE DIEM
This seemingly paradoxical view is based on several overlapping strands of research in economics as it pertains to development, history, technology, business expansion, and new-firm formation. According to this view, entrepreneurs at work in the economy – in finance, high tech, manufacturing, services, and beyond – are constantly experimenting, creating new business [...]
Why We Have a Health Care Cost Problem and Why It Will Only Get Worse: Other People’s Money
Submitted by CARPE DIEM
The chart above shows why we have a health care cost problem. Patients have little direct connection in paying for their care, and their role has fallen significantly. Meanwhile, the government’s involvement has grown, as has that of the insurance industry.
Because so many Americans rely on an insurance policy or a government [...]
Global Bull Market Rally: MSCI World Stock Market Closes at 15-Month High, Up 71% from March Low
Submitted by CARPE DIEM
The MSCI World Stock Market Index reached 1,176.35 today, the highest closing index value since October 1, 2008, almost 15 months ago. From the March low of 688.64, the benchmark world stock index is up by almost 71%, and from the first of the year by almost 28%.
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The Danger of Overcapacity
Submitted by unsettling economics
“No Soul to Damn: No Body to Kick”: An Unscandalized Inquiry into the Problem of Corporate Punishment
While the US frittered away much of the stimulus on throwing money at banks, the Chinese actually created much more capacity. Business Week used to do a good job of understanding real issues. Here the new [...]
WILL A NEW YEAR BRING NEW JOBS?
Submitted by The Capital Spectator
The great economic question in the year ahead will center on job growth: Will there be any?
The answer will almost certainly be “yes,” but that invokes the inevitable follow-up: How much? In turn, that inspires the equally burning inquiry: “How soon?”
The latter two are the primary unknowns at the moment, and [...]
The Prospects for Global Imbalances: A View from the IMF
Submitted by Econbrowser
Following up on recent posts ([1], [2], [3], [4], [5] [6]) Here’s another take on the prospects for resolving global imbalances, from Olivier Blanchard and Gian Maria Milesi Ferretti, “Global Imbalances: In Midstream?” Staff Position Note 09/29 (Dec. 22, 2009):
IV.B. Lower Global Imbalances in the Future
What will happen in the future depends on [...]
VIX Below 20 for 3 Days, 1st Time Since May 2008
Submitted by CARPE DIEM
The CBOE Volatility Index (VIX) fell below 20 last week for the first time since August 28, 2008, almost sixteen months ago, and closed below 20 for three days in a row for the first time since late May 2008 (see chart above). See Forbes story below:
CHICAGO (Reuters) - The VIX, [...]
Unwinnable War on Drugs: 6k Murders in Mexico
Submitted by CARPE DIEM
1. WALL STREET JOURNAL — In the 40 years since U.S. President Richard Nixon declared a “war on drugs,” the supply and use of drugs has not changed in any fundamental way. The only difference: a taxpayer bill of more than $1 trillion. A senior Mexican official who has spent more than [...]
EU Green Protectionism = Economic Madness
Submitted by CARPE DIEM
Click to enlarge.Some excerpts from the new study “Green Protectionism in the European Union: How Europe’s Biofuels Policy and the Renewable Energy Directive Violate WTO Commitments” from the European Center for International Political Economy:
Biofuels production in Europe is heavily subsidized. Support has also been increasing in the past years and today stand [...]
2009 Global Stock Market Rebound
Submitted by CARPE DIEM
Year-to-date returns for the MSCI Emerging Markets (data here).
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M2 Growth Falls to 3.7%; Can That Signal Inflation?
Submitted by CARPE DIEM
Can this really be an inflationary environment with annual M2 money growth at close to the lowest level in 14 years, now at only 3.7% (data here)?
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Lost decade for stocks
Submitted by Econbrowser
Why were the aughts so nasty for stocks?
The U.S. ended the decade more or less where it began in terms of total employment.
Source: FRED.
The owners of capital fared no better, with the nominal S&P500 stock price index down 20% for the decade. The dividends stockholders collected made up for some of that, but [...]
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