When the Bubble Bursts, Consider the
Anti-Bubble
Sunday, December 30, 2018
California’s Complicated Politics
California – A Land of Contradictions
Greenberg notes:
“Because of
Proposition 13’s property tax freeze forty years ago, 70 percent of
California’s budget, which for 2018–2019 totals just over $200 billion in
spending, depends on personal income taxes, 46 percent of which are paid by the
wealthiest 1 percent. To illustrate the state’s precarious reliance on its
richest residents, a single zip code in the town of Palo Alto, where Mark
Zuckerberg, Google co-founder Larry Page, and Apple CEO Tim Cook live,
accounted for nearly $1 billion in state taxes in 2016. A bad year in the stock
market, with reduced capital gains, could lead to a deficit, even if the
overall economy does well.”
Friday, December 28, 2018
Politics and Economics
Many American economists are letting personal political beliefs color their analysis:
Wednesday, December 26, 2018
Importance of Eurasia
Professor John Bew observes:
“Today, one
explanation for Eurasia’s growing importance is its richness in minerals,
fuels, foods and other natural resources. Almost 70 per cent of global oil
reserves and 65 per cent of natural gas reserves are in the Middle East, Russia
and central Asia. More than half of global wheat production takes place across
the same steppes and plains, while south Asia accounts for nearly 85 per cent
of global rice production. Those who envisage the future in terms of cyberspace
and artificial intelligence are apt to miss the vital importance of raw
materials for modern technology, such as silicon (75 per cent of which is found
in Russia and China).”
The New Silk Roads: The Present and Future
of the World by Peter Frankopan
Saturday, December 22, 2018
US Monetary Policy - Role of Politics
Trump Could Face Uphill Battle in Trying to
Fire Fed's Powell
https://www.bloomberg.com/news/articles/2018-12-22/trump-could-face-uphill-battle-in-trying-to-fire-fed-s-powell
Related:
https://www.bloomberg.com/news/articles/2018-12-22/rattled-markets-would-erupt-if-trump-fired-the-fed-chairman
Politics versus Principles:
Related:
https://www.bloomberg.com/news/articles/2018-12-22/rattled-markets-would-erupt-if-trump-fired-the-fed-chairman
Politics versus Principles:
Brian Chappatta correctly notes:
https://www.bloomberg.com/opinion/articles/2018-12-18/if-fed-s-50-b-s-are-wrong-now-then-when-s-right
“Active investors used to bemoan the lack of volatility in markets because of the Fed’s heavy hand, which boosted asset prices indiscriminately across the board. Now that the central bank is ever so slightly scaling back, they’re crying foul again. Shouldn’t this be the time that market savants like Druckenmiller shine? The Fed’s job isn’t to support risk assets by whatever means necessary; rather, it’s specifically designed to try to deflate areas of excess.”
https://www.bloomberg.com/opinion/articles/2018-12-18/if-fed-s-50-b-s-are-wrong-now-then-when-s-right
“Active investors used to bemoan the lack of volatility in markets because of the Fed’s heavy hand, which boosted asset prices indiscriminately across the board. Now that the central bank is ever so slightly scaling back, they’re crying foul again. Shouldn’t this be the time that market savants like Druckenmiller shine? The Fed’s job isn’t to support risk assets by whatever means necessary; rather, it’s specifically designed to try to deflate areas of excess.”
Voodoo Economics – 2018 Edition
https://www.washingtonpost.com/outlook/2018/12/19/postmodern-economics-trump-administration
https://www.washingtonpost.com/outlook/2018/12/19/postmodern-economics-trump-administration
Friday, December 21, 2018
Debt, Deficits and Fiscal Solvency
US fiscal profligacy may create a long-term debt sustainability problem:
http://www.ut.edu/uploadedFiles/Academics/Business/Economics/TBEFall2018.pdf
When Nations Don't Pay their Debts
https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ_focus/2018/q3/feature2.pdf
A Politics of Public Goods
When Nations Don't Pay their Debts
https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ_focus/2018/q3/feature2.pdf
A Politics of Public Goods
Eli Lehrer notes:
“Although federal
budgets have grown by trillions of dollars over the past half-century, one activity
of government has become steadily less substantial: the percentage of the
federal budget and the share of the national wealth spent on public goods. The
provision of things like clean air, national defense, basic scientific
research, and roads — things, in short, that benefit the great bulk of the
population through their very existence — has long been a core state function.
The shift in spending away from these goods and increasingly toward
social-insurance programs has correlated both with the growth of the state and
a decline in the respect Americans have for it.”
A debt crisis is coming. But don’t blame
entitlements
A Political Paradox
Where Government Is a Dirty Word, but Its
Checks Pay the Bills
RELATED:
Eduardo Porter notes:
“Research by Dean Lacy
at Dartmouth College on the presidential elections in 2004, 2008 and 2012 found
that states receiving more federal spending for every tax dollar they
contributed were more likely to go Republican.”
RELATED:
Moochers and Makers in the Voting Booth: Who
Benefits from Federal Spending and How Did They Vote in the 2012 Presidential
Election? By Dean Lacy, Public Opinion Quarterly, Volume 78, Issue S1, 1
January 2014. https://doi.org/10.1093/poq/nfu016
Voters often appear to vote against their
self-interest.
Thursday, December 20, 2018
Wednesday, December 19, 2018
US Tech Monopolies and User Rights
NYT piece notes:
“For years,
Facebook gave some of the world’s largest technology companies more intrusive
access to users’ personal data than it has disclosed, effectively exempting
those business partners from its usual privacy rules, according to internal
records and interviews.”
Google’s Earth: how the tech giant is helping the state spy on us
Google’s Earth: how the tech giant is helping the state spy on us
Tuesday, December 18, 2018
Quality of Life Indicators
Quality of Life Indicators: The Human Life Indicator
“Japan is the second-best place in the world in terms of human development, with Hong Kong in first place and Iceland in third, according to a new index called the Human Life Indicator that is supposed to be simpler and more accurate than the U.N. Human Development Index.”
Digital Reserve Currency
Digital Reserve Currency
The Case for Central Bank Electronic Money and the Non-case for Central Bank Cryptocurrencies
Monday, December 17, 2018
Goldman Sachs and Wall Street Corruption
Malaysia Files Criminal Charges Against Goldman Sachs Over 1MDB Scandal
Goldman 1MDB Charges Will Give Bankers Shivers
https://www.bloomberg.com/opinion/articles/2018-12-17/goldman-1mdb-charges-will-give-bankers-shivers
--
Update:
--
Update:
Bloomberg reports:
“No matter what happens
as December drags to a close, JPMorgan Chase & Co., Goldman Sachs Group
Inc. and the other four U.S. heavyweights made so much money in the first three
quarters that they’ve already topped last year’s total haul. Boosted by Donald
Trump’s tax cuts, they’re heading toward their first $100 billion year ever,
smashing the $93 billion record from 2016.”
Friday, December 14, 2018
Investment Strategies of the Super-Rich
The Economist on the investment strategies of the super-rich:
https://www.economist.com/leaders/2018/12/15/how-the-0001-invest
https://www.economist.com/leaders/2018/12/15/how-the-0001-invest
Thursday, December 13, 2018
2019 Economic Outlook
PIMCO’s Outlook for 2019:
The Fed needs a new strategy for 2019
GDP predictions are reliable only in the short term
Wednesday, December 12, 2018
History Lesson – George H.W. Bush and US Tax Policy Debate
Harvard’s Jeffrey Frankel on the tax debate during George
H.W. Bush’s tenure
Related:
Related:
U.S. debt under Trump has ballooned by size of Brazil’s GDP: Treasury
https://www.japantimes.co.jp/news/2018/12/13/business/economy-business/u-s-debt-trump-ballooned-size-brazils-gdp-treasury/Political Polarization - Insights from History and Psychology
What psychology experiments tell you about
why people deny facts
https://www.economist.com/united-states/2018/12/08/what-psychology-experiments-tell-you-about-why-people-deny-factshttps://www.theatlantic.com/magazine/archive/2018/11/newt-gingrich-says-youre-welcome/570832/
The key to understanding the 2018 midterm results — and the future of American politics — isn’t ideology or culture. It’s the different economies of red and blue America.
Tuesday, December 11, 2018
Monday, December 10, 2018
Early Signs of a Global Economic Slowdown
JPMorgan, BofA Detect Hints of a U.S. Recession Looming in 2019
The first signs of the next recession
https://www.newstatesman.com/politics/economy/2018/11/first-signs-next-recession
Wall St. Ignored Signs of Trouble for Months. Now It Sees Risks Everywhere
Wall St. Ignored Signs of Trouble for Months. Now It Sees Risks Everywhere
Sunday, December 9, 2018
A New Housing Bubble
Nobel prize winning economist Robert Shiller:
The Housing Boom Is Already Gigantic. How
Long Can It Last?
https://www.nytimes.com/2018/12/07/business/housing-boom-how-long-can-it-last.htmlSaturday, December 8, 2018
Useful Advice on College Grades and Career Success
What Straight-A Students Get Wrong
Wharton’s Adam Grant offers useful advice for college
students:
“The evidence is
clear: Academic excellence is not a strong predictor of career excellence.
Across industries, research shows that the correlation between grades and job
performance is modest in the first year after college and trivial within a
handful of years....
If your goal is to
graduate without a blemish on your transcript, you end up taking easier classes
and staying within your comfort zone. If you’re willing to tolerate the
occasional B, you can learn to program in Python while struggling to decipher
“Finnegans Wake.” You gain experience coping with failures and setbacks, which
builds resilience.”
Friday, December 7, 2018
Technological Change and the Labor Market
A.I. as Talent Scout
https://www.nytimes.com/2018/12/06/business/economy/artificial-intelligence-hiring.htmlDriverless Vehicles and the Future of the Trucking Industry
Are Millennials Different?
Are Millennials Different? by Christopher Kurz, Geng Li, and Daniel J. Vine
November 2018
Abstract
The economic wellbeing of the millennial generation, which entered its working-age years around the time of the 2007-09 recession, has received considerable attention from economists and the popular press. This chapter compares the socioeconomic and demographic characteristics of millennials with those of earlier generations and compares their income, saving, and consumption expenditures. Relative to members of earlier generations, millennials are more racially diverse, more educated, and more likely to have deferred marriage; these comparisons are continuations of longer-run trends in the population. Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth. For debt, millennials hold levels similar to those of Generation X and more than those of the baby boomers. Conditional on their age and other factors, millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations.
Rise of the Idiocracy – Latest Example
Heather Nauert cited D-Day as the height of U.S.-German relations. Now she’s headed to the U.N.
www.washingtonpost.com/nation/2018/12/07/heather-nauert-cited-d-day-height-us-german-relations-now-shes-headed-un/
Related:
https://www.washingtonpost.com/world/national-security/tillerson-says-trump-directed-him-to-do-things-that-violate-the-law/2018/12/07/2e8623dc-fa34-11e8-863c-9e2f864d47e7_story.html
Related:
https://www.washingtonpost.com/world/national-security/tillerson-says-trump-directed-him-to-do-things-that-violate-the-law/2018/12/07/2e8623dc-fa34-11e8-863c-9e2f864d47e7_story.html
Thursday, December 6, 2018
Economic Inequality and Protests in France
Interesting analysis of the causes of the recent riots in France:
https://www.bloomberg.com/opinion/articles/2018-12-06/macron-fans-the-flames-of-illiberalism
Related:
https://www.bloomberg.com/opinion/articles/2018-12-06/macron-fans-the-flames-of-illiberalism
Related:
Emmanuel Macron faces the first real test of his presidency
Wednesday, December 5, 2018
Political Uncertainty and Stock Market Volatility
President's Tweets and Stock Market Volatility
https://www.washingtonpost.com/politics/chaos-breeds-chaos-trumps-erratic-and-false-claims-roil-markets-again/2018/12/04/824506fa-f7ff-11e8-863c-9e2f864d47e7_story.html
https://www.nytimes.com/2018/12/05/business/global-markets.html
Not a great advertisement for the Efficient Market Hypothesis
https://www.washingtonpost.com/politics/chaos-breeds-chaos-trumps-erratic-and-false-claims-roil-markets-again/2018/12/04/824506fa-f7ff-11e8-863c-9e2f864d47e7_story.html
https://www.nytimes.com/2018/12/05/business/global-markets.html
Not a great advertisement for the Efficient Market Hypothesis
Tuesday, December 4, 2018
Has the US Dollar Rally Peaked?
Yield Curve Inversion and the US Dollar
https://www.bloomberg.com/news/articles/2018-12-04/as-yield-curve-inverts-there-s-a-bearish-omen-for-the-dollar
https://www.bloomberg.com/news/articles/2018-12-04/as-yield-curve-inverts-there-s-a-bearish-omen-for-the-dollar
Career Prospects for Economics Majors
What can you do with an Economics degree?
Career Advice for Economics Majors:
https://www.forbes.com/sites/billconerly/2015/04/29/career-advice-for-economics-majors/#1dda98faa99e
USAJobs.Gov - Economist Job Listings - US Government
https://www.usajobs.gov/Search/?k=economist
USAJobs.Gov - Economist Job Listings - US Government
https://www.usajobs.gov/Search/?k=economist
Monday, December 3, 2018
China and America - New Era of Superpower Rivalry
Roger Cohen on an An Era Without a Name
https://www.nytimes.com/2018/12/03/opinion/trump-china-cold-war.html
China’s Long-Term Economic Development –
Past, Present and the Future
AfCFTA - The Least Well-Known Free Trade Agreement
IMF (2018) notes:
“Africa ranks near the bottom when it comes to competing in the global economy, held back by fragmented markets that inhibit efficiency and constrain economic growth.
Now a new player is emerging with the potential to defragment Africa and boost the productivity of its economies: the African Continental Free Trade Area (AfCFTA). In March 2018, 44 African heads of state signed a framework to establish a single continental market for goods and services, with free movement of capital and business travelers. Five additional countries, including South Africa, joined in July. The AfCFTA still needs ratification by the parliaments of at least 22 countries; seven have done so thus far.
In addition to increasing market efficiency and reducing the cost of doing business by offering opportunities for economies of scale, the AfCFTA could ease trade and investment flows and shift the composition and direction of foreign direct investment flows into Africa.”
Useful Readings for Monetary Economists
Has Inflation Sustainably Reached Target?
Paul Volcker's Memoir:
https://www.economist.com/finance-and-economics/2018/12/01/paul-volckers-memoir-invites-a-rethink-of-the-fight-against-inflation
Saturday, December 1, 2018
Mexico - A Major Turning Point
President Amlo takes power with vow to
transform Mexico – but can he deliver?
Subscribe to:
Posts (Atom)