General Economic News Nov. 22-24

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News
WEDNESDAY
How to Improve the Financial-Reform Law
A brief proposal to protect the system—without stifling innovation.
Battered Ireland Clings to Its Low Taxes
Though the country needs $115 billion, it says its 12.5 percent corporate tax rate is "non-negotiable"
Home Sales Fell 2.2% in October
Sales of previously owned homes fell in October amid weak demand and concerns about the foreclosure process, putting sales for 2010 on pace to close at their lowest level in 13 years.
Remake of Obama Economic Team Broadens Scope
The departure of a number of administration officials is giving President Obama broader scope to remake his economic team even as the White House prepares to carry out a long-planned shuffle involving two of his closest political advisers.
Orders for U.S. Durable Goods Unexpectedly Dropped in October
Demand for so-called durable goods dropped 3.3 percent, the biggest plunge since January 2009, after a revised 5 percent jump in September that was larger than previously estimated.
New home sales: Down 80% from the boom
New home sales dropped to an annual pace of just 283,000, according to the Commerce Department. That was down 8.1% from a slow September and 28.5% from 12 months ago when the annualized sales rate was at 430,000.

TUESDAY
Study: Emissions Still Near Record Levels
Despite the global financial crisis, which was expected to significantly bring down carbon emissions last year, emissions were only 1.3 percent below the record levels of 2008, according to the annual carbon budget update by the Global Carbon Project.
Existing Home Sales Fall More Than Expected
Sales of previously owned homes fell by more than expected in October, possibly due to delayed foreclosures and as banks imposed "overly strict" lending standards, the National Association of Realtors said on Tuesday.
Whitney sees 5,000 bank branches closing
The bank shakeout is about to pick up steam.

MONDAY
Ireland Is Second Euro Nation to Seek Aid as Banks Wobble
Ireland became the second euro country to seek a rescue as the cost of saving its banks threatened a rerun of the Greek debt crisis that destabilized the currency.
What does the Irish bailout mean?
Europe and the International Monetary Fund are discussing the final details of a rescue package worth up to 100 billion euros to bail out Ireland's banking sector. What are the implications of the bailout for Irish people and the rest of the world?
French Fear ‘Brain Drain’ to the U.S.
Academics are increasingly leaving France for the United States, which carries the risk of a “brain drain” in France, according to a report this month by an independent study group.
Add 2.1 million houses to the glut
There's a large number of homes, either already repossessed by lenders or very seriously delinquent, that are poised to be added to the already glutted regular supply of homes on the market.
Weak world economy cuts carbon pollution last year
Weak world economy cuts carbon pollution last year
Holiday Drivers Face Highest Gas Prices in More Than 6 Months
Americans preparing for Thanksgiving travel face the highest gasoline prices in more than six months, with prices at the pump topping $3 per gallon in New York and on the West Coast.

Economist Comments
WEDNESDAY
The Laws of Economics Do Not Stop at Borders and Do Not Face an Expiration Date
Time and place matter in questions of the manifestation of the laws of economics, and the magnitude of the effect.  But the pure logic of human action is neither time specific nor country specific.

TUESDAY
There’s Nothing ‘Rapacious’ About America’s Income Differences
Here is a summary of some of the key differences between low-income and high-income households in America:
Would Higher 30 Year Fixed-Rate Mortgages Hurt Homeownership
At the center of the debate over Fannie Mae and Freddie Mac reform is the question of 30-year fixed-rate mortgages. The industry and progressive left argue that without some kind of government guarantee for housing finance, rates on 30-year mortgages will sky rocket to unaffordable levels and hurt homeownership.

MONDAY
Banks Face Another Mortgage Crisis
The government may have bailed out the nation's biggest banks, but now the courts will sort out who gets stuck with mortgage losses. Banks could lose more than $100 billion.
Taking von Mises to pieces
Why is the Austrian explanation for the crisis so little discussed?
Seeing the U.S. through Asia's eyes
Many leaders from Asia's growing economies believe the U.S. is in a state of denial. It's time to stop bickering and put our house in order.
Irish Bailout May Highlight New Problems in Portugal and Spain
While it appears that Ireland may be able to move forward from its financial crisis soon, the other two countries -- attempting to expand their economies while dealing with heavy debt burdens -- may not be so fortunate.

Blogs
WEDNESDAY
Fair Trade Is Less Fair (and Less Free) than Free Trade
Is there any doubt that replacing “free” with “fair” in this context would remove all teeth from the First Amendment?  In the same way, a policy of fair trade rather than free trade would, in practice, be a policy of unfree – and, by the way, unfair – monopoly privileges for politically influential domestic producers.
More on the Trade Deficit
Here’s a letter to Chris Isidore, Senior Writer at CNNMoney.com, on the trade deficit.
Production vs. Predation
One thing’s for certain: the proportion of personal wealth that is today the result of unjustified government-granted privileges is a great deal higher than it was before the 1930s – and even before 2008.

TUESDAY
General Motors. Never Again?
“Government bought 914 million shares at 43.71. Sold half at 33, own 500 million or so at 35. Taxpayers down about 9 billion. Why is there such celebration today about this 'great government success?'”
Confidence Affects the Business Cycle, Study Finds
Economists have long recognized that feelings influence economic decisions. When optimism rules, businesses hire in anticipation of better sales ahead, and consumers take on debt in expectation of bigger paychecks. John Maynard Keynes called it “animal spirits.”
Second thoughts on Ireland
Irish political economy seems to be falling apart in front of our eyes and the bond market isn't so happy, even after Ireland accepted the EU/IMF bailout.  That would appear to be political risk.  Maybe there won't be a happy ending even in the short run.
7 Thoughts About Ireland
Tyler Cowen ponders what went wrong.  As someone who wrote a bit about the Euro, and the Celtic Tiger, before this mess started, my thoughts:
Secondary Sources: The Euro, Students, Wall Street
A roundup of economic news from around the Web.

MONDAY
Forecasters See U.S. Economy Still Sluggish in 2011
Economic forecasters expect the U.S. economy to remain sluggish next year, weighed down by high public debt, unemployment and business regulation.
Schedule for Week of November 21st
This is a holiday week (Happy Thanksgiving!), but there will be plenty of data released early in the week. The key releases are existing home sales (on Tuesday) and New home sales (on Wednesday).
CoreLogic: Shadow Housing Inventory pushes total unsold inventory to 6.3 million units
Shadow Inventory Jumps More Than 10 Percent in One Year, Pushing Total Unsold Inventory to 6.3 Million Units
Microfinance as Subprime
Having done a fair amount of work in microfinance and closely related areas (development finance involving business clients with larger-than-microfinance loans) in the developing world, I am overall a big fan.  As many people are.  The question that has long loomed, however, is whether it can or should scale upwards to become a full-fledged part of the global capital markets, or whether it should remain a highly subsidized development activity for very poor people or, most plausibly, some of both.
New Fannie Mae Lending Guidelines
Good news. These are not seller-funded Down payment Assistance Programs (DAPs).
The Politics of the Mortgage Interest Deduction
For the real estate industry, the problem with giving in to Wyden-Gregg is that it would show weakness. Once we have been defeated once, the thinking goes, we can be defeated again. If our goal is to maintain the mortgage interest deduction, we must show that any attempt to trim the deduction, no matter how sensible and narrow, will result in devastating electoral punishment from the housing lobby.
Climate Talks or Wealth Redistribution Talks?
Typically the largest wealth distribution program that occurs in Cancun, Mexico, is college students spending their parents’ money. That could change at the upcoming United Nations climate summit if developing countries clamoring for money to cope with global warming get their wish. With each passing year, it’s clear that international climate change talks are less about climate and more about wealth redistribution.

Reports
WEDNESDAY
An International Comparison of Capital Structure and Debt Maturity Choices
This study examines the influence of institutional environment on capital structure and debt maturity choices by examining a cross-section of firms in 39 developed and developing countries. We find that a country’s legal and tax system, the level of corruption and the preferences of capital suppliers explain a significant portion of the variation in leverage and debt maturity ratios.

TUESDAY
Time to Raise Social Security’s Retirement Age
Americans are living longer, which means they are spending a higher proportion of their lives in retirement, receiving Social Security payments. Yet the government program is a mere five years away from being unable to pay out all of the claims it has promised. Because today’s retirees enjoy longer lives and better health, both Social Security retirement ages (“normal” and “early eligibility”) must be increased.

MONDAY
Economics Group
Weekly Economic & Financial Commentary