Wall Street versus Main Streethttp://www.economist.com/blogs/buttonwood/2013/05/investing-and-economics-0
25 minutes ago
-
Global Macro
Honest Economics
Can you be wrong a thousand times? You can, if your reasoning is based on media concoctions, wherein some events receive excessive and biased coverage and other, less sensational events are ignored, according to the whims of advertising contracts. What sells is the information “commodity” supposedly expected by the undiscerning public: sensations interlaced with commercials. [...]
-
Global Macro
Helicopter Money Debate: Lord Turner and Professor Woodford
A debate on helicopter money was held at the London Business School in April 2013 involving Lord Adair Turner and Professor Michael Woodford. An account of that important debate is included in an article ‘Helicopter money as a policy option’, at VoxEU.org, dated 20 May. In that debate the ‘Helicopter Money Financing model’ was compared [...]
-
Europe
Bail-In by 2016?
On 21 May 2013, the European Parliament’s Economic and Monetary Affairs Committee (ECON) published a press release detailing its negotiating position with respect to certain elements of the proposed Recovery and Resolution Directive (RRD). The negotiation position was approved by 39 votes to 6 and states that: the “bail-in” scheme should be operational by January 2016 at [...]
-
Geostrategy
The Oklahoma Tornadoes Can Teach Us About Our Climate, and Ourselves
Summary: The reactions to major events reveals much about us and our institutions. Such as the tragic Oklahoma tornadoes, showing the usual propaganda, the evolution of the news media, and an opportunity to learn about climate science. Those seeking to use global warming to change US public policy have become desperate as the failure of [...]
-
United States
Are There Reasonable Approaches to Fiscal Consolidation?
According to the CBO, under the President’s budget, the deficit hovers around 2% of GDP, and debt-to-GDP stabilizes through 2023 at levels lower than today’s. Hence, were the President’s budget to be implemented, the budget would be on a path to medium run stabilization. This point is illustrated in Figures 1 and 2 from the CBO [...]
-
Finance & Markets
Is Jamie Dimon Really Out of the Woods With Shareholder Thumbs Down on Splitting CEO/Chairman Roles?
There’s a surprising degree of blogosphere acceptance of JP Morgan’s messaging on the shareholder vote today regarding whether to split the CEO and Chairman roles, that this result was a vote of confidence in his prowess as CEO. Yet New York Magazine described the extent to which Dimon had to call in the big guns like Warren [...]
-
Geostrategy
Energy and Economic Growth: Interview with Mark Thoma
If you want an objective view of energy, ask an economist, who can tell you what to expect to pay at the pump in the coming years, and why, as well as what to expect from medium- and long-term economic growth and what the real drivers will be. These are questions that are crucial to [...]
-
Asia
Excess German Savings, not Thrift, Caused the European Crisis
One of the reasons that it is been so hard for a lot of analysts, even trained economists, to understand the imbalances that were at the root of the current crisis is that we too easily confuse national savings with household savings. By coincidence there was recently a very interesting debate on the subject involving several economists, [...]
-
Europe
UK Inflation Falls Across the Board
Inflation has been remarkably steady at 2.7% or 2.8% in recent months so the drop in April to 2.4% was a surprise, and a very welcome one. Lower petrol prices and air fares contributed most to the fall, which reduced inflation to its lowest since September. As Sir Mervyn King prepares to hang up his [...]
-
Geostrategy
Are Some Americans Too Powerful to Make Fun of?
In April 2013, Stephen Colbert interviewed former President William Jefferson Clinton. It would be difficult to imagine a more flattering interview, unless scripted by Clinton’s own press people (upon reflection — perhaps it was). For those not familiar with The Colbert Report, Stephen Colbert (masquerading as a right-wing political commentator) combines sardonic humor and detailed research, [...]
-
Latin America
Saving Latin America’s Unprecedented Income Windfall
Commodity exporting countries in Latin America have benefited strongly from the commodity price boom that began around 2002. And the accompanying improvements in public and external balance sheets have fed a sense that this time the macroeconomic response to the terms-of-trade boom has been different (and more prudent) than in past episodes. But, has it? [...]
-
United States
Narayana Kocherlakota on Safe Assets and the Natural Interest Rate
Narayana Kocherlakota, President of the Minneapolis Fed, recently participated in a panel where he discussed the key challenges facing central banks. He viewed the safe asset shortage and the related inability of the Fed to push the actual market rate down to its natural interest rate level as problem number one. Readers of this blog know I [...]
-
Global Macro
Sovereign Debt Concerns in 2013
Interest rates on government debt for a number of European countries– notably Greece, Portugal, Ireland, Italy, and Spain– shot up considerably during 2010-2012. Those yields have fallen significantly from their peaks, though these five countries still face higher borrowing costs than most other countries in Europe. Yields on long-term government bonds, Jan 2009 to April [...]
-
United States
Are You Ready for Some Fedspeak?
Ready or not, we should expect a week dominated by an even greater focus on Fed policy. There are four reasons: The economic data calendar is very light; Earnings season has ended; Many will be heading for the exits early, anticipating a holiday weekend; and finally Bernanke testifies on the economy before the Congressional Joint [...]
-
Global Macro
‘Hard Sell?’ Canada Doubles PR Budget to Promote Tar Sands in U.S.
Canada is, according to the U.S. Energy Administration, the leading source of United States crude oil imports, which average 9.033 million barrels per day (mbpd), with Canada sending 2.666 mbpd southwards to the U.S. Mexico is second with 1.319 mbpd and Saudi Arabia third with 1.107 mbpd. The EIA notes, “Canada is one of the world’s five largest [...]
-
Ed Dolan's Econ Blog
People are Drawing the Wrong Lesson from the IRS 501(c)(4) Scandal: We Need to Rethink the Whole Concept of Tax-Exempt Organizations
President Obama is shocked and angered that the IRS targeted certain conservative organizations for special scrutiny when they applied for 501(c)(4) tax exemptions as “social welfare” organizations. Republicans are just as shocked. The whole Washington political establishment is shocked, just shocked, that anyone, let alone the IRS, would try to stem the flow of political [...]
-
Asia
South China Sea Disputes Strain Vietnam–China Relations
Since 1991, comprehensive Vietnam–China relations have developed but remain constrained by the South China Sea (SCS) disputes. What makes the disputes highly relevant for future bilateral relations is that they have proven intractable, leaving the possibility of an eventual solution a matter of almost infinite uncertainty. The intractability of the disputes is rooted in their [...]
-
Global Macro
Has House Price Deflation Begun in Canada?
Yesterday, the Teranet-National Bank National Composite House Price Index for Canada was released. It showed that 12-month home price inflation in Canada was down to 2.0%, the lowest level since November 2009. And given the huge amount of talk in Canada about a potential housing bubble, there is a worry that this is the beginning of a housing bust. You [...]
-
United States
Pyromaniacs on the Potomac: The Problem With Obama’s Second Term
Six months into a second term and the Obama White House is on the defensive and floundering: Benghazi, the IRS’s investigations of right-wing groups, the Justice Department’s snooping into journalists’ phone records, Obamacare behind schedule, the Administration’s push for gun control ending in failure. Should the blame fall mainly on congressional Republicans and their allies [...]
-
Emerging Markets
Why Russia Should Change Its Immigration Policy
Today, there is a consensus among Russian economists that the country’s government should encourage labor migration from the former Soviet Union. Such respected experts as Sergey Guriev, the rector of the New Economic School in Moscow, and Aleh Tsyvinski, a professor of economics at Yale University, strongly oppose the establishment of barriers to migration from the Central [...]
-
Ed Dolan's Econ Blog
US CPI Falls in April at Fastest Rate since 2008. Even so, could it be Overstating the True Rate of Inflation?
According to data released yesterday by the Bureau of Labor Statistics, the U.S. Consumer Price Index fell in April at an annual rate of -4.35 percent. It was the second consecutive monthly decrease and the fastest rate of decrease since late 2008, when the economy was in free fall. The April decrease was largely attributable [...]
-
Great Leap Forward
Hyman Minsky and the Employer of Last Resort
A couple of weeks ago, I mentioned Hyman Minsky’s new book, “Ending Poverty: Jobs, Not Welfare”, less than $14 at Amazon. There is also a Kindle version. Take a look at the cover: MinskyFullCover3-14 – Minsky looking like a bit of a rougue! Here’s a link to Amazon (cut and paste if it doesn’t work):http://www.amazon.com/Ending-Poverty-Jobs-Not-Welfare/dp/1936192314/ref=sr_1_2?s=books&ie=UTF8&qid=1364998534&sr=1-2 I thought you [...]
-
Global Macro
Doing Business at the World Bank
A showdown is looming at the World Bank over whether to discontinue or water down the Bank’s annual “Doing Business” Report. As reported here, and blogged about here, and here, China is leading the charge against the report, which is one of the Bank’s most controversial and influential projects. The U.S. government has been lobbying in favor of Doing Business, but so far [...]
-
Geostrategy
There is No Problem With America’s Political System, or the Republic
Summary: I’m often asked for solutions to the most serious problem facing the Republic, the erosion of its foundation. There is a simple answer. The question makes a false assumption. Understanding this allows a clearer vision of America, and our available choices. An incident from the Constitutional Convention: Mrs. Powel of Philadelphia asked Dr. Franklin [...]
-
United States
Dodged That Bullet
I was reading Robin Harding’s take on the possible nomination of Federal Reserve Vice Chair Janet Yellen for the top job at the Fed, and a chill went down my spine when he reminded me of this: Mr Bernanke’s own appointment in 2005 was a case in point. There were several candidates that year. According to people [...]
