Archive for January, 2010
« Previous EntriesBanning Foreign Companies’ Campaign Contributions
Submitted by unsettling economics
Many companies have tried to reduce taxes by incorporating abroad — the so-called Bermuda Inversion. Wouldn’t the banning of foreign campaign contributions apply to them.
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A CONTINENTAL QUESTION
Submitted by The Capital Spectator
Unemployment in Europe is now at 10%, matching the jobless rate in the U.S. Does this undermine the argument in favor of European-style bigger government that’s more proactive in trying to minimize the perceived limits of capitalism? One response is that Europe didn’t do as much as the U.S. to mitigate [...]
John Cochrane on the credit crisis
Submitted by Econbrowser
University of Chicago Professor John Cochrane (hat tip: Capital Spectator) has an interesting analysis of the causes of the financial problems of the last few years.
Cochrane writes:
The signature event of this financial crisis was the “run,” “panic,” “flight to quality,” or whatever you choose to call it, that started in late September of [...]
Remedial Writing
Submitted by CARPE DIEM
Prof. Jack Miller writes about his experience teaching remedial writing at Normandale Community College (Bloomington, MN):
“Whatever their backgrounds, their writing problems fit into relatively few categories. Not surprisingly, they have little understanding of grammar and see it as a set of arbitrary “rules” concocted by sadistic pedants harboring grudges against the young. [...]
Michael Moore’s Love Story: For Taxpayer Subsidies
Submitted by CARPE DIEM
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Sugar Tariffs Cost Americans $2.5 Billion in 2009
Submitted by CARPE DIEM
The chart above displays refined sugar prices (cents per pound) using monthly data from the USDA (Tables 2 and 5) for: a) U.S. wholesale refined beet sugar price at Midwest markets and b) the world refined sugar price. Due to trade restrictions on imported sugar coming into the U.S. at the world [...]
Dec. Restaurant Activity Index Highest Since Feb.
Submitted by CARPE DIEM
“Driven by improving sales and traffic levels, the National Restaurant Association’s comprehensive index of restaurant activity rose sharply in December. The Association’s Restaurant Performance Index (RPI) a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry stood at 98.7 in December, up 0.9% from November and [...]
V-Signs of Economic Recovery
Submitted by CARPE DIEM
Durable Goods (percent change from year ago).
Real GDP growth (percent change from year ago).
Here’s one more from Scott Grannis (Chicago PMI).
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Markets Don’t Stay Bad Forever: Cycles, Trends, and an Oil Refining Example
Submitted by Businomics Blog
Valero Energy Corp. is selling oil refineries that it had bought a few years ago. We used to have a shortage of domestic refining capacity, but now we have an excess—even though there has not been a new refinery built in the United States in years. Capacity at existing refineries was expanded [...]
Inventories in the Economic Recovery: Caterpillar Snaps the Bullwhip
Submitted by Businomics Blog
The recession is the time to cut inventories. The recovery is the time to re-stock. First, though, you have to make sure that your vendors are up to the challenge. The Wall Street Journal recently ran an excellent front page story about Caterpillar Inc. entitled, “’Bullwhip’ hits firms as Growth Snaps Back.” [...]
Submitted by CARPE DIEM
American Enterprise Institute scholar Sally Satel’s article “Kidney Mitzvah: Israel’s Remarkable New Steps to Solve Its Organ Shortage” appeared this week in Slate. Here’s a summary:
Israel is taking bold measures to address its severe organ shortage. With the introduction of two new laws, Israeli families that allow their deceased loved one’s [...]
Finance vs. Independence at the Fed
Submitted by unsettling economics
Richard Smith is a historian who is doing a biography about my mother’s cousin.
Here is his timely piece about the corrupting influence of finance on the Fed — in particular about A. P. Giannini got Truman to remove Marriner Eccles from his position as chairman of the Fed. So much for independence.
Smith, [...]
The Ideological Use of Cost-Benefit Analysis
Submitted by unsettling economics
This short section from my forthcoming Invisible Handcuffs discusses the ideological use of cost-benefit analysis.
cost-benefit
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Strong GDP growth with weak fundamentals
Submitted by Econbrowser
The Bureau of Economic Analysis reported today that the seasonally adjusted real value of the nation’s production of goods and services grew at a 5.7% annual rate during the fourth quarter. That’s great news, but…
Rate of growth of real GDP (annual rates), 1947:Q2 to 2009:Q4. Shaded regions represent dates of recessions as declared [...]
“No rate hikes likely in 2010…”
Submitted by Econbrowser
Despite the somewhat startling conclusion (at least to me), the implications are pretty straightforwardly arrive at. From Michael Rosenberg, Financial Conditions Watch (Bloomberg, Jan. 27, 2010) (link added 1/29 8am) [not online]:
Fed Funds Rate Outlook — A Taylor Rule Perspective
With U.S. real GDP growth moving back into positive territory in the second half [...]
G-7 Consumption Behavior and Global Rebalancing
Submitted by Econbrowser
Or, the end of the consumption follows a random walk view.
Following up this post last week on Lee et al., here is another analysis of consumption behavior, but this one is cross-country. From the abstract to “After the Crisis: Lower Consumption Growth but Narrower Global Imbalances?” by Ashoka Mody and Franziska Ohnsorge:
We estimate [...]
Q4 GDP SURGES. WILL THE LABOR MARKET FOLLOW?
Submitted by The Capital Spectator
First, the good news. This morning’s release of the government’s initial estimate of fourth-quarter GDP is a blow-out number: +5.7%. That’s the highest annualized quarterly real (inflation-adjusted) rise in GDP since 2003 and it’s also up sharply from Q3’s 2.2% rise. In addition, the Q4 number exceeded what most economists were [...]
BEN’S BACK IN TOWN
Submitted by The Capital Spectator
Fed Chairman Ben Bernanke was confirmed for a second term today in the Senate, albeit by a relatively thin margin: 70-30. That’s reportedly the “thinnest approval ever extended to a chairman in the central bank’s 96-year history.” Just a few days ago there was some question as to whether he would [...]
DIAGNOSING THE PANIC
Submitted by The Capital Spectator
Professor John Cochrane offers his take on the financial crisis of 2008 in the current issue of the Cato Institute’s Regulation.
His basic argument: “the signature event of this financial crisis was the ‘run,’ ‘panic,’ ‘flight to quality,’ or whatever you choose to call it, that started in late September of 2008 [...]
THE STRUGGLE CONTINUES
Submitted by The Capital Spectator
Last week we considered the possibility that the declining trend in new jobless claims had run its course. Today’s update on new filings for jobless benefits offers a reprieve from that ominous possibility. The reprieve may be temporary, of course, but for today at least it appears as though the nearly [...]
LOOKING (AND FEELING) BLUE
Submitted by The Capital Spectator
What shade of blue are you?
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HOENIG’S DISSENT
Submitted by The Capital Spectator
The Federal Reserve voted to keep rates unchanged today, but the vote came with glitch. “Voting against the policy action was Thomas M. Hoenig, who believed that economic and financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was [...]
THE FED’S SHOCKING DISCLOSURE (NOT)
Submitted by The Capital Spectator
The Fed announced that the target range for Fed funds would remain at 0% to 0.25%. This will suprise no one, given the weakness in the labor market, the rising political vulnerability of the President (who makes his State of the Union speech tonight), and recent questions about Bernanke’s reappointment prospects. [...]
A SMALL DOSE OF PERSPECTIVE FOR EQUITIES
Submitted by The Capital Spectator
A little perspective never hurts when surveying the equity landscape. There are no silver bullets, of course. But we must start somewhere in the thousand-mile journey of analyzing the possibilities in the land of equities, and a big-picture review of the global playing field is a reasonable way to begin.
For reasons [...]
Huge Gender Degree Gap at Age 22: National Crisis, Title IX, Government Funding? Probably Not
Submitted by CARPE DIEM
According to a report released yesterday by the BLS:
“Women were more likely than men to be enrolled in college and were more likely to have received a bachelor’s degree. Twenty-nine percent of women were attending college during the October when they were age 22, compared with 25.2% of men. Moreover, 12.8% [...]
