tag:blogger.com,1999:blog-71519692058038902412012-02-25T10:02:00.680-08:00follow mehttp://www.blogger.com/profile/06133151169182400082noreply@blogger.comBlogger16151100tag:blogger.com,1999:blog-7151969205803890241.post-71005276408363822682012-02-25T10:02:00.000-08:002012-02-25T10:02:00.687-08:00

This post attempt to assess what powers the fed has to control inflation, deflation, and economic growth. The key word in that sentence is "control". Let's take a look at where we are today.The Fed is only in control (using the word loosely as we shall see in a moment) of base money supply, reserve requirements, and short term interest rates. Even then the fed can not target money supply and

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My annual April op-ed piece on taxes...It’s that time of the year again. Some people filed their 1040 tax forms last January, received their refunds and are excited that they let the government keep their money (interest-free) for months. Others have procrastinated and are filing their taxes at the last minute. Few taxpayers have noticed their “payroll tax” (FICA) - even though it probably takes

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It was announced earlier this month that Southwest airlines will begin flying to Charleston SC. While I have always wanted to live in a city where Southwest flies that is not the exciting or interesting part of the story. Recently the South Carolina general assembly has been working overtime to provide incentives to attract Boeing, create retail establishments, and deals were in the works for

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Caroline Baum hit the nail smack on the head with her article Fed's Inflation Analysis Ranks With Zimbabwe's. I intended to do a supportive blog on it when it first came out but was delayed by some breaking news on housing. As it turns out I find that I am in a very small minority as reported in her followup piece From Pluto, U.S. Inflation Is Near 10%. Let's take a look at both articles.Fed's

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In political economy, Public Choice economists point to the foibles and failings of democracy: the disproportionate power of interest groups in some contexts (the tyranny of the minority); the unjust exercise of power by the general public (the tyranny of the majority); the problems caused by any system of government where people are fond of using power to take others' resources; and so

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Well, for the first time in six months we do have some real GDP data to look at, even if it doesn't make particularly attractive reading. If we start with the quater on quarter growth rates, we find that in Q4 2007 Italy's economy contracted by 0.4% vis-a-vis the Q3 2007 level, while Q1 2008 GDP was up by 0.4% on Q4 2007. Now the more astute among you might like to note that since the 0.4%

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As Paul Krugman recently pointed out, one of the central points they made in the latest IMF World Economic Outlook was that recessions caused by financial crises tend to get resolved on the back of export-lead booms, with countries normally emerging from the crisis with a positive trade balance of over 3 percent of GDP. The reason for this is simple, since consumers are so laden-down with debt

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French consumer spending on manufactured goods unexpectedly fell for a second month in April as shoppers scaled back purchases of cars and clothes. Such spending, which accounts for about 15 percent of the economy, dropped 0.8 percent, after a revised decline of 1 percent in March, Insee, the Paris-based national statistics office, said today. Economists expected a 0.5 percent increase, the

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Here is the question of the day: Is Morgan's 'gripe site' on Lennar protected free speech?STUART — A consumer watchdog group founded by Ralph Nader has come to the defense of a Stuart real estate broker who is being sued by Lennar Corp.The suit stems from the use of the home builder's name in a Web site that criticizes the quality of several of Lennar's houses.Public Citizen, based in Washington,

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Italian consumer confidence bounced back somewhat in May, rising to its highest level so far this year. The announcement was made the day after Prime Minister Silvio Berlusconi formed a new government and announced tax cuts and relief for homeowners facing higher mortgage payments.The Rome-based Isae Institute's consumer confidence index, calculated from a survey of 2,000 families, rose to 103.2

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The latest in "It's different this time" thinking comes from Tobin Smith at Change Wave in an article called Doom And Gloom Rehab.Remember The Super SpendersHere's one more thing people don't understand about this economy. We have what I would call the super spenders -- the top 10%-20% earners in the United States. This group accounts for almost 90% of our economic activity when you talk about

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Given the current economic crisis many state governments are trying to find new goods and services to tax. In an effort to generate more tax revenue they are taxing everything from children's entertainment in Maine to haircut's in Michigan and Nebraska.  CNN Money has all the new taxes highlighted. According to Kim Rueben, a senior fellow at the Urban Institute "These states are expanding the

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Looking through the latest round of EU GDP data, one thing is becoming increasingly obvious: when it comes to future monetary policy decisions at the ECB, and to exactly how many more interest rate hikes we are going to see, then the performance of the Italian economy is going to be critical. The growth pattern now is clear enough: Germany and France move forward at a lively pace, while the so

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The USA Today is reporting Sacramento: The pressure's on sellers to lower their prices.Here's an alarming fact about Sacramento's housing market: About one of every five existing homes on the market is a "short sale." That means the home is worth less than the value of the mortgage, and the lender is willing to accept less than full repayment of the loan to avoid foreclosure, says Tracey Saizan,

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Well the eurozone outlook is certainly deteriorating less rapidly at this point than it was, at least this is the impression given by the May flash Purchasing Managers Indexes (PMIs) - which show the pace of economic contraction slowing markedly from April. PMI readings for the 16-country euro area rose significantly this month, and hit their highest level for the last eight. It is, however,

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German business confidence bounced back slightly in May according to the Munich-based Ifo institute business climate index. The index which is based on a survey of 7,000 executives, rose to 103.5 from 102.4 in April.The IFO result is not that interesting, since the composite index has actually moved very little, and is still well below earlier highs. What is slightly interesting is that the

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Let's take a look at state tax revenues for a few states to see if we can spot potential problems down the road. This is not an all inclusive list of states but a representative sample of what potentially lurks ahead.State SamplesCaliforniaGeorgiaFloridaMichiganMassachusettsIllinoisCaliforniaBoston.com is reporting Google stock boom boosts California coffersSomeday, this era may simply be known

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German producer-price inflation, widely considered to be an early indicator of price inflationpressures in the economy, accelerated to the fastest pace in almost two years in April, largely on rising energy costs. Prices for manufactured goods increased 5.2 percent from a year earlier, the most since August 2006, the Federal Statistics Office in Wiesbaden said today.Adding to cost pressures,

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The ZEW Indicator of Economic Sentiment for Germany remained - more or less - stable in May 2008. The composite indicator decreased slightly - by 0.7 points - and now stands at minus 41.4 points after registering minus 40.7 points in April. This, however is still well below its historical average of 29.6 points.Movement in the ZEW Indicator of Economic Sentiment seems to have been mainly

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There was an interesting Q&A last Wednesday on Minyanville between Professor Scott Reamer and a fellow Minyan. Professor Reamer fielded this question on gold's role as an inflation hedge.Prof. Reamer,I always have a problem understanding what makes gold go up. Is it mainly the inverse relationship between gold and the dollar? If that's the case then if it is also an inflation hedge, that would

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Casey Mulligan from University of Chicago has a nice piece in today's New York Times online about job losses (and also job gains) during the Great Recession. His thesis: "Census Bureau data on employment by pay level cast doubt on credit-crunch and demand-based theories of the recession."If cutting payroll spending [which would be the presumed motivation during a credit crunch] had been the

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German Finance Minister Wolfgang Schaeuble told reporters in Brussels yesterday (Monday) that getting their deficits down was "the only task that everyone has to fulfill for himself and for the common good." Meanwhile, over in New York, Paul Krugman was busy writing on his blog that "the most startling and frustrating thing about the debate over the fate of the euro is the way almost everyone

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Imagine for a minute that you own a fruit stand. You sell oranges, grapefruit, lemons and limes. Perhaps in season you sell apples, peaches, and strawberries. What would you think if the government came in and forced you to sell broccoli, asparagus, and pecans? Hopefully you would be horrified. After all, wouldn't that smack of failed Soviet command economics?Well sad to say that is exactly the

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I was reading Robert Frost and I saw this. He doesn't like government planners and do gooders. I especially like the term "beneficent beasts of prey." Robert Frost recognized the evils of government benefits and dependency.It is in the news that all these pitiful kinAre to be bought out and mercifully gathered inTo live in villages, next to the theatre and the store,Where they won’t have to

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Recently Florida State University has come under attack for accepting a donation from the Charles G. Koch Charitable Foundation for new faculty hires.  The St. Petersburg Times reports that this is problematic because the Koch foundation will have some input into who is hired and this raises questions of academic freedom.  Maybe I am naive and do not fully understand my rights related to academic

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Yesterday, in response to an essay arguing for impeachment, I got the following comment:"If anything, the start of impeachment proceedings might force Bush to start the war against Iran early or cause him to bring about the false flag attack you mention. What better way to show the country how the Democrats engage in devisive partisan politics than to have them impeach him while the country is at

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In the past few months we have seen repeated bottom calls by David Lereah at the NAR. We have also heard Robert Toll proclaim to be "dancing above the bottom", and just this past week Greenspan himself said "The housing slump was all but over."Following is a a graphical presentation to see if we can determine just how likely those statements are to be true. The pictures speak for themselves.Hew

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I am constantly amazed at how we can fail to see things which are right under our nose.For example, former Congressman Dan Hamburg's excellent essay entitled "State of Emergency: The US in the Final Six Months of the George W. Bush Administration" got a lot of interest in the alternative press last Friday.In that essay, Mr. Hamburg wrote:We believe that this administration is so zealous, so

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Detroit News is reporting Ford fix-it plan off track.Report: Sales goals missed, morale lowFord Motor Co. is failing to meet key goals in its turnaround plan and employees are losing confidence in the company's ability to save itself, according to an internal report released to employees and obtained by The Detroit News on Thursday.Titled "Report Card: Ford North America," the report paints a

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Most Americans know that Bush, Cheney and the boys have committed impeachable offenses.But they assume it is "too late to impeach" them.Are they right?Well, in 1876, Secretary of War General William Belknap (who served in the administration of Pres. Ulysses Grant), accused of accepting a bribe, resigned just hours before the House was scheduled to consider articles of impeachment. The House went

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New car sales in Europe rebounded sharply in April, showing a 9.6-percent rise over April 2007 the ACEA European automakers association said today. The rebound is more of a statistical impact than a real rise however, since Easter was in March this year. Also the rise in April came after a slump of 9.5 percent in March. The y-o-y figures, which showed similar rises in both western Europe and the

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A series of economic reports came out on February 15th that can best be described as "dismal". Recession is now knocking on the door. In the weeks and months to come expect to hear the "R" word much more frequently. Let's take a look at some of the reports.Economic ReportsIndustrial OutputCapital FlowsWeekly Jobless ClaimsFactory Sector ISMIndustrial OutputIndustrial output falls sharply in

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Housing is Local (Except when it's National).The NAR is reporting a record slump in home prices.Fourth-quarter report from National Association of Realtors shows largest price drop on record as markets with price declines now outpace those with gains.Prices slumped 2.7 percent in the fourth quarter compared to the fourth quarter a year earlier, according to the report from the National

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"Some economists, myself included, look at Europe’s woes and have the feeling that we’ve seen this movie before, a decade ago on another continent — specifically, in Argentina" - Paul Krugman: Can Europe Be Saved"Think of it this way: the Greek government cannot announce a policy of leaving the euro — and I’m sure it has no intention of doing that. But at this point it’s all too easy to imagine

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Part of being a father is making sure my kids have enough to eat, have a roof over their heads, are protected from harm in our neighborhood.These are all fairly traditional notions of fatherhood.But being a father means more than that . . .Didn't See it ComingImagine that you're a father living in 13th century Mongolia. A farmer, you work hard, put plenty of food on the table, keep a

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Three Democratic senators are considering capping ATM fees at 50 cents. The CNNMoney.com writer notes that a likely result would be a smaller number of ATMs, which is entirely likely.The proposal is not new--similar efforts have been made in the past. Gene Callahan shredded one proposal of about ten years ago. The current proposal "estimates that it only costs banks somewhere in the neighborhood

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I've been trying to draw attention to what is happening to Slovakian GDP for some months now, since I felt the consensus has been missing something (see this post, and this one). The Economist, for example, has been arguing some sort of version of Baltic and Hungarian exceptionalism in Eastern Europe, and even pointing to Slovakia as a positive example to be followed.“Most other countries in the

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“I believe there are some grounds for being optimistic that the pace of decline in economic activity will decelerate markedly in the months ahead,” was the view being expressed by Bundesbank President Axel Weber earlier this week. And we'd better hope he's right, since with figures from the Federal Statistics Office this morning showing that Germany's recession worsened considerably in the first

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Many an economic eyebrow must have been raised last Friday when Europe's first quarter GDP data was released, and people discovered that the Greek economy had suddenly surged forward, rising by 0.8% over the level it had attained in the last three months of 2010 (or at a 3.2% annual rate, or faster than the US). Since almost everyone with knowledge of the situation is forecasting a further

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France's economic growth accelerated more than economists forecast in the first quarter as stronger exports more than offset weaker consumer spending. Gross domestic product in the euro region's second-largest economy expanded 0.6 percent from the previous quarter, when it grew 0.3 percent, national statistics office Insee said today in Paris. On a year on year basis the economy grew by 2.2%

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Italy's recession deepened at the start of 2009, with first-quarter gross domestic product falling to its worst level since at least 1980, confirming the impression that Europe's fourth-largest economy is now headed for its worst downturn since World War II. Preliminary data from the national statistics office (Istat) show that Italian GDP fell 2.4% in the first quarter when compared with the

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Flashback January 31, 2007 - Bloomberg reported: U.S. Economy: Growth Quickens, Propelled by Spending.The U.S. economy grew at the fastest pace in a year last quarter as declining energy costs helped power consumer spending and contain inflation, enhancing Federal Reserve Chairman Ben S. Bernanke's stature at the start of his second year.Gross domestic product increased at an annual pace of 3.5

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As reported by the Federal Statistical Office (Destatis), the consumer price index for Germany rose 2.4% in April 2008 on April 2007. Compared with March 2008, the index was down 0.2%. In March 2008, the year-on-year rate amounted to +3.1%. The estimate for April 2008 based on the results from six Länder was thus confirmed.The harmonised consumer price index (HICP) for Germany, which is

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According to preliminary estimates from the Spanish National Statistics Office published today, GDP contracted by 1.8% in the first three months of 2009 when compared with the last quarter on 2008. This follows a 1.0% drop in Q4 2008. This is equivalent to a 7.2% annualised rate of contraction, which is, of course, sharp.Over the first quarter of 2008 (that is year on year) GDP decreased by 2.9%

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“The 60 billion euros they announced is peanuts for an economy the size of the euro zone,” economics professor and former Bank of England policy maker Willem Buiter said at a conference in Dublin yesterday. “I expect they will announce more or that the recession in the euro zone will be longer and deeper than would otherwise be necessary. They have a record of being somewhat behind the curve.”

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France's inflation rate stayed close to a 12-year high in April, sustained by rising energy and food costs. Consumer prices climbed an annual 3.4 percent, down from 3.5 percent in March, based on European Union-harmonized methods, Insee, the national statistics bureau, said today in Paris. The March inflation rate was the highest since 1996, when Insee began reporting the data. Prices increased

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Spanish industrial output adjusted for calendar effects fell 2.6 percent in March from a year earlier, the National Institute for Statistics (INE) said. INE also said consumer goods output fell 4.6 percent from a year earlier, while capital goods output was down 0.4 percent. Intermediate goods output fell 6.9 percent, while energy goods output rose 10.2 percent.Unadjusted industrial output

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According to the quarterly GDP advance estimate issued today by the INE, during the first quarter of 2008, Spanish Gross Domestic Product registered a real growth rate of 2.7%, as compared with Q1 2007. Thus the slow down continued, following a trend which seems to have started in the first quarter of 2007. According to the statistics office the reduce figure was the result of a substrantial

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This is part 2 of Focus on Currencies. Focus on Currencies (part 1) covered Technical Analysis, Politics, and the Commitment of Traders report (speculation vs. hedging) of futures. Part two covers the carry trade and currency fundamentals.The Carry TradeLet's kick this section off with the question: What is the carry trade?The answer comes from the San Francisco Fed in an article entitled

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What follows is part one of a focus on currencies including the US dollar index, the Yen, the Euro, the British Pound and the Canadian dollar. There is a special emphasis on the Yen.This analysis covers five factorsTechnical AnalysisPoliticsCommitment of Traders (speculation vs. hedging) of currency futuresThe Carry TradeFundamentalsLet's kick off with the technicals.Forex traders will note that

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The Times is reporting that the Treasury Department will likely inject $15 billion into Fannie Mae and Freddie Mac:US TREASURY secretary Hank Paulson is working on plans to inject up to $15 billion (£7.5 billion) of capital into Fannie Mae and Freddie Mac to stem the crisis at America’s biggest mortgage firms....The capital-injection plan is said to be high on a list of options being considered

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The Supreme Court ruled today that suspected foreign terrorists held at Guantanamo Bay have rights under the Constitution to challenge their detention in U.S. civilian courts and to confront their accusers.The Court also slammed Congress for passing the Military Commissions Act of 2006, which set up the show trial military tribunals now in progress.The Court held that even in times of war, and

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Italian industrial production fell again in March for the second consecutive month. Output was down 0.2 percent from February, when it also fell by the same amount, the national statistics office said in Rome today. On a year on year and working day corrected basis (Easter was in March this year) output was down by 2.5%. Production of Italian consumer goods fell 0.7 percent from February and the

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This was Angela Merkel's point wasn't it, if you remember, as she came out of the April EU summit she argued:“Saying that the situation is the same for all central and eastern European states, I don’t see that……you cannot compare the dire situation in Hungary with that of other countries.”The Economist made a similar point at the time:“Most other countries in the region are faring much better,

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The title to this post poses an interesting question I think, since the answer you give to it would seem to depend more on the meaning you attribute to the word "really" than on any consensually agreed objective fact. This is especially the case since Spain itself has at least two "official" unemployment numbers, so the backround to (and reason for my asking) the question is the apparent

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Many have been asking for a Florida update from Mike Morgan at Morgan Florida. He has been quite busy with his consulting business giving tours to hedge funds but he sent me this update today. Here goes from Mike Morgan:This past week we conducted two tours with hedge fund managers. Following is a brief recap of what is going on in the Treasure Coast. Those on our retainer service will receive a

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According to constitutional scholar Bruce Fein, Nancy Pelosi "has threatened the removal of Michigan Rep. John Conyers from his chairmanship of the House judiciary committee if an impeachment inquiry were even opened".Why would Pelosi "take impeachment off the table" and threaten Conyers so he wouldn't initiate impeachment proceedings?Well, Pelosi was secretly tipped off about warrantless spying

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Glendale, AZ has agreed to pay the NHL $25 million to keep the Coyotes there for one more year. Commenting on the city council's decision, Mayor Elaine Scruggs stated: "This is a payment for a service. This is not a subsidy. We are keeping our community arena open for business. We are keeping that arena generating revenue." Mayor Scruggs' comments just further emphasize why politicians are

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The media keep resurrecting the faux-controversy over McCain's eligibility to be president. The Constitution provides that only a "natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President." The issue is whether McCain, who was born in the Panama Canal Zone and whose parents were both U.S. citizens, is a

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Just this past fall South Carolina state legislators could regularly be found giving statements about not being able to come up with the funds to cover the state's $5.3 billion budget (FY 2011). However, with a stronger state economy than had been expected and greater cigarette tax revenue, the state now claims that it will be running a $110 million budget surplus. Story here.So, what should

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The contraction in global services activity also seems to be easing up, following the pattern displayed by the manufacturing sector, and the JPMorgan Global Services Business Activity Index rose for the second month running in April, registering at 43.8 its highest level since last September. It is important to keep clearly in mind, however, that the headline index remained well below the

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Dear Speaker Pelosi, Majority Leader Reid, Chairman Conyers, and other leaders of the Democratic Party:We, the American people, know that your motivation in taking the impeachment of President Bush and Vice President Cheney "off the table" is to ensure victory in the 2008 elections.Further, we know that you hope that - by letting Bush and Cheney run amok between now and the swearing in of the new

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Last fall a University of Alabama "fan" poisoned the 130 year old oak trees that help mark Toomer's Corner in Auburn.  It's a tradition to roll these trees after a win.  When the news was released that these trees were deliberately poisoned Alabama alumni created a Facebook page "Tide for Toomer's" and raised over $50,000 to help save the historic trees.  On April 27th tornadoes devastated parts

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The two giant GSEs, Fannie Mae and Freddie Mac, have long imposed an externality on the public. We're now feeling that externality.Fannie and Freddie's primary purpose is mortgage securitization, but they also issue debt to finance their own portfolios of mortgages and mortgage-backed securities (MBS). As the mortgage market has frozen up, Fannie and Freddie have been securitizing mortgages less,

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For those who do not yet understand that Bush and Cheney have committed impeachable offenses with regard to 9/11, I will provide information to back up the relevant portions of Dennis Kucinich's articles of impeachment against President Bush which deal with 9/11: Article 2: Falsely, Systematically, and with Criminal Intent Conflating the Attacks of September 11, 2001, With Misrepresentation of

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If you thought Max Boot couldn't get any more delusional, you were wrong. Boot writes:How concerned should we be about demands emanating from the Maliki government for a withdrawal timetable for U.S. troops? Unless something changes dramatically, the answer I would give is: not very....[T]hey are blustering about the need to withdraw U.S. troops—eventually. But note that, unlike Barack Obama,

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Or so say Anne Case and Christina Paxson, in the latest Journal of Political Economy:The well-known association between height and earnings is often thought to reflect factors such as self-esteem, social dominance, and discrimination. We offer a simpler explanation: height is positively associated with cognitive ability, which is rewarded in the labor market. Using data from the United States and

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Frankly, I'm surprised at the level of outrage over Leona Helmeley's decision to bequeath about $8 billion of her estate to the care and welfare of dogs. This NYT op-ed by BC law professor Ray Madoff is almost comically silly. Madoff writes:If this were only a matter of Leona Helmsley wasting her own money, no one would need to care. But she is wasting ours too.The charitable deduction

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The original title of my post Arizona Circuit Court Ruling Legitimizes MERS is misleading. The title of that post been changed and I added this addendum to explain the change:Addendum:The original title of this post was Arizona Circuit Court Ruling Legitimizes MERS. The title is misleading. It should say 9th Circuit Court.A lawyer friend writes ...The 9th Circuit takes appeals from Arizona,

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Once again news from Europe resonates in the markets. The 2-day stock rally led by the German court ruling has been nearly wiped out.European EquitiesThe German DAX is near but not quite at a fresh low.Germany Prepares "Plan B" DefaultBloomberg reports Germany Said to Ready Plan to Help Banks If Greece DefaultsChancellor Angela Merkel’s government is preparing plans to shore up German banks in

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A ruling from the 9th Circuit Court - Cervantes vs. Countrywide gives legitimacy to MERS and deals a major blow to many of the arguments that attorneys representing homeowners try to make.The 9th Circuit takes appeals from Arizona, California, Hawaii, Montana, Nevada, Idaho, Oregon, and Washington. Patrick Pulatie at LFI Analytics shared his opinions on the case via email and I wish to pass

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This lengthy article on economics in The New Republic is, to put it charitably, bizarre. I don't know anything about the author, Alan Wolfe, but he's definitely not qualified to write an article on economics. For instance, he writes:[T]here is no denying that just as Levitt brought behavioral economics to the best-seller lists, Thaler and Sunstein are bringing it to the think tanks and maybe even

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America, we know, has a currency union that works, and we know why it works: because it coincides with a nation — a nation with a big central government, a common language and a shared culture. Europe has none of these things, which from the beginning made the prospects of a single currency dubious.Paul Krugman - Can Europe Be Saved?All theory depends on assumptions which are not quite true. That

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Well it is now official - or at least as official as it is going to get: the Spanish economy sneaked back into growth by a short head during the first three months of this year. According to data published in the Bank of Spain's quarterly report on the Spanish economy, Spain's GDP grew by 0.1% in the first quarter. Interannually output was still down by 1.3%, but this is evidently a considerable

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Presidents and Prime Ministers have to be careful with their choice of words. Especially in times of crisis and difficulty for their country. Former Mexican President José López Portillo will be remembered by history, not for his turbulent relations with his beautiful mistress Sasha Montenegro, but for the fact that one day after he appeared on national television stating "I will defend the Peso

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President Obama's rumored $300 stimulus program ballooned to $447 billion upon unveiling. For a full text of the speech, please see President Obama's jobs addressAmusingly, the plan is overweight tax cuts in an attempt to get Republican buy-ins.Let's dissect portions of Obama's speech, lie by lie.Obama: I am sending this Congress a plan that you should pass right away. It’s called the American

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Inquiring minds have watched Greek 1-Year bond yields approach 100%. 2-year Greek bonds yield 55% (assuming interest and principal is paid - but it will not be).Greece will be out of money no later than October 17 unless it gets the next trance of money as noted in Prospect of empty coffers looms large.The government is facing the possibility of not being able to pay wages and salaries in October

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Creative Capitalism, under the direction of Michael Kinsley and Conor Clarke, has assembled some of the biggest names in economics to discuss Bill Gates' proposal for a new kind of capitalism ("creative capitalism") aimed at helping the poorest countries. It's a great idea for a blog, and eventually the posts will be made into a book.At first, though, the discussion at Creative Capitalism seemed

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Did you ever think that a counterfeiting money could be good for the economy and that the counterfeiter could be considered an economic genius or even a national hero? I received an Email from Nic Corsetti, a friend of mine, describing exactly how that might happen. Here goes from Nic:Let’s say that I invent a printing press that allows me to produce counterfeit money (let’s say US dollars) by

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Following the move by the Swiss National Bank to devalue its currency, Japan's Finance Minister Will Tell G-7 Japan Ready to Take ‘Bold’ Action on Currency Japanese Finance Minister Jun Azumi said he will tell his Group of Seven counterparts that his country remains prepared to take “bold” action in currency markets when necessary. He spoke to reporters today in Marseille, France. Competitive

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Lots of interesting things came out of studying human trafficking in my international econ class. For one thing, women in Latin America sometimes get tricked into going with traffickers because the trafficker promises them a job in a sweatshop. Apparently women sometimes know that the sweatshop job may not be real, but the women risk it anyway.This makes sweatshops sound really bad. Not only do

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Exports from Germany fell for the second consecutive month in March as the global slowdown and rise of the euro continued to weigh on orders. Sales abroad, adjusted for working days and seasonal changes, declined 0.5 percent from February, when they when they were down 0.2 percent, the Federal Statistics Office said today. The rate of increase in Gernam exports has now been slowing steadily

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Industrial production in Germany declined in March as cold and wet weather kept building sites shut and production of factory machinery fell. Output, adjusted for seasonal swings and inflation, fell 0.5 percent from February, the Economy Ministry in Berlin said today.The slower pace of global economic expansion as well as the stronger euro are eroding demand for cars and chemicals made in Germany

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This claim is repeated so often that it's almost conventional wisdom. Robert Reich's op-ed in the NYT was even titled, "Poor Americans are getting hit hardest by the rising gas prices."But is it true? Not according to Larry Bartels. In his new book, Unequal Democracy, Bartels examines data from 1949-2005, and writes:[A] 50% increase in the real price of oil would reduce the real incomes of

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Today the ECB held the Eurozone interest rate at 1.5% while softening its stance on inflation. At a press conference following the rate cut decision, ECB president Jean-Claude Trichet stated the obvious: "risks have intensified". Trichet also admonished Greece saying "it would be an enormous mistake for Greece not to cut its deficit".Elsewhere Italian yields are up slightly and gold and the US

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It does not take a genius to understand why consumer spending is weak.Unemployment rate is 9%Real wages are fallingIncome advances go to the wealthyMiddle class is shrinkingJobs hard to findApproval ratings of Congress and Obama at record lowsConsumers have high debt ratiosHome prices are still fallingHomeowners are trapped in their homes, unable to refinanceBoomers need to save for

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U.S. 30-year mortgage rates are at record lows but it does not matter. Too few want to buy and many cannot refinance because they are underwater.Fixed mortgage rates fell this week to the lowest levels in six decades. But few Americans can take advantage of the rates to refinance or buy a home.The average rate for the 30-year fixed mortgage fell to 4.12 percent, down from 4.22 percent, Freddie

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Daniel Gross' Slate column this week is called "Phil Gramm's UBS Problem." Now, I think Phil Gramm is a dishonest hack, but I'm on record saying that the UBS-Gramm connection is basically meaningless. I thought Gross may have new information on the connection, or a good argument for why the connection is important.But Gross himself admits toward the end of the column that UBS's problems have

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With graduation upon us I found this article on college students interesting, which ironcally a former student of mine Peter Neiger posted on Facebook. Psychologist Zeljka Buturovic and economist Daniel Klein have an article in the most recent issue of Econ Journal Watch. The article discusses the relationship between students ideology and what they refer to as economic enlightenment.  They

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One of the many interesting aspects of the Eurozone crisis is how many key political and central bank leaders fail see (or at least admit) that Europe is out of time.Even more peculiar are statements by ECB president Jean-Claude Trichet who finally does realize time is of the essence, yet Trichet "solution" is a set of measures that must be passed by all 17 nations when those nations cannot agree

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The temporary (very temporary) Band-Aid placed on the global economic dike today by the German court ruling (see Stocks Rally in Yet Another Futile "We are Saved" Trade; Greek 1-Yr Yield hits 97%, "No Blank Checks"; Gold Decouples) is already in question, not in Europe but in Asia.Please consider Japan machinery orders slump, signal weak investmentJapan's core machinery orders tumbled in July at

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As stunning as the "Inflation Is Now Illegal" headline might seem, a new law was indeed just passed that officially makes inflation illegal.The New York Times is reporting As Inflation Soars, Zimbabwe Economy Plunges.Hyperinflation has bankrupted the government, left 8 in 10 citizens destitute and decimated the country’s factories and farms. Pay increases have so utterly failed to keep pace with

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Equity markets are up across the board, but particularly Europe following a German court decision that everyone pretty much knew would happen anyway.Please consider German court reins in Berlin on euro crisis.The Constitutional Court in the southern city of Karlsruhe rejected, as expected, a series of lawsuits aimed at blocking German participation in emergency loan packages. Chancellor Angela

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One of my former students from my readings in economics course is studying abroad this semester in China. I received the following email from her yesterday (she has to finagle her way onto a slow internet connection to get around China's restrictions):"So I'm in a small city in the middle of southern China called Yangshuo and I stumble upon an ENGLISH book shop (this is a huge deal in China

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by Claus VistesenI am sorry to paraphrase, arguably, one of Hollywood's better conceptions; but having left the last Fed meeting and looking towards Thursday's corresponding action in London and Frankfurt I cannot help but feel that the tail just might be wagging the dog this time around. One thing is certain; ever since the credit turmoil began and the Fed started to aggressively slash the

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Spain's unemployment rate rose to a three-year high of 9.6 per cent in the first quarter of this year, according to data released last Friday by the Spanish labour ministry. This data is calculated using the Spanish methodology, according to the seasonally adjusted comparable data using EU methodology and published by Eurostat, the figure was 9.3% in March (which is the latest month for which we

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The September Contrary Investor It's A Long Hard Road is an exceptional marriage of debt-deflation concepts, long-wave K-Cycles, credit cycles, and Austrian economic thinking. Here is a lengthy snip of several key points with permission.If there has been one consistent theme since day one at CI, it has been our perhaps near myopic focus and focal point highlight of importance that is the macro

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Total federal spending in FY2007 was roughly $2.7 trillion, right? Wrong.Outlays totaled $2.7 trillion. But outlays don't include the all-important category of "tax expenditures," which are the functional equivalent of government spending. Tax expenditures are "revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross

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A religion professor at my college recently gave a talk to economics seniors on the limitations of economics and the necessity of considering religious principles in determining what we should do. Economics, he said, has difficulty reconciling with the harsh criticism of market activity found in the Bible. There were, of course, other religions he could have considered, but Christianity was most

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A group called the Gold Anti-Trust Action Committee claims that the U.S. government has defrauded the American people out of the nation's wealth. Specifically, the group claims that the U.S. has secretly sold, leased or otherwise frittered away half of its entire gold reserves to pay for past military adventures abroad and other ill-conceived actions. Furthermore, the group claims that the

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