Monday, May 16, 2011

General Economics

Barron's | Economic Fears Boost Treasuries
Government-bond prices rose and yields fell last week amid fresh concerns about the economy that sent investors in search of safety.
CNN: Money | Flood wreaks havoc with Mississippi economy
The flood is causing a profound disruption to "the economic engine that is the Mississippi River," said Robert Hartwig, president of the Insurance Information Institute, an insurer-supported research group. "The Mississippi River flows with just as much money as it does water, even at this stage of modern transport," he said.
Source | Economists: Lower growth, higher oil prices coming
In a survey that the NABE releases Monday, a panel of 41 economists also said they "remain highly concerned" about the growing federal deficit, and said that growth in the first three months of the year had been weaker than expected.
National Journal | Obama Announces More Drilling in Alaska, Gulf
With a backdrop of high gas prices, President Obama used his weekly radio address on Saturday to announce plans to increase domestic oil and gas drilling onshore in Alaska and in the Gulf of Mexico.

Econ Comments                                                                                                             
Washington Times | ROHAC: Income inequality doesn’t matter
The poor benefit most from removal of economic obstacles.
USA Today | Column: How Wal-Mart drives progressives crazy
One reason Wal-Mart is such a fun company to observe is it drives progressives nuts. They have a split personality before the Bentonville behemoth.
WSJ | States of Business
Wisconsin jumps ahead in a new CEO survey.
National Journal | Sen. Sherrod Brown Calls for End to Big Oil Subsidies
"Big, profitable companies do not need handouts from the government to expand their business," Brown wrote, pointing to both the $32 billion in profits these companies in the first quarter as well as rising retail gas prices. "It would be one thing if they were using the subsidies to expand production, helping to lower prices at the pump. But production levels are at an all-time high, and Big Oil companies have testified before Congress that they do not need incentives for oil exploration." 
Washington Post | The elderly are better off than advertised
I have been urging higher eligibility ages and more means-testing for Social Security and Medicare for so long that I forget that many Americans still accept the outdated and propagandistic notion that old age automatically impoverishes people.
Minyanville | Voodoo Economics: Policy Responses to the Global Financial Crisis
In framing policy responses to the global financial crisis, central bankers and governments have increasingly embraced more exotic forms of "voodoo."

Calculated Risk | Schedule for Week of May 15th
Three key housing reports will be released this week: May homebuilder confidence on Monday, April housing starts on Tuesday, and April existing home sales
on Wednesday.
Calculated Risk | Unofficial Problem Bank list at 983 Institutions
Here is the unofficial problem bank list for May 13, 2011.
Heritage Foundation | What If Oil Producers Actually Received Subsidies Like Wind Energy Producers?
With the current debate over ending oil producers’ subsidies the question arises as to what subsidies do the producers actually get.  It is a surprisingly complicated question.  

NBER | The Cost of Fuel Economy in the Indian Passenger Vehicle Market
To investigate how fuel economy is valued in the Indian car market, we compute the cost to Indian consumers of purchasing a more fuel-efficient vehicle and compare it to the benefit of lower fuel costs over the life of the vehicle.
RCM: Wells Fargo | Weekly Economic & Financial Commentary
After a Momentous Week Comes a Discerning Week.


CNN: Money | Bringing the bucks back home
In their latest bid to repatriate corporate profits -- tax holiday! -- lawmakers are imposing few restrictions on how the proceeds can be used.
NYT | Going back on the Deal
Last year, Republicans refused to renew unemployment benefits unless the high-end Bush-era tax cuts were preserved. After the White House agreed to keep the tax cuts through 2012, they agreed to extend federal jobless benefits through 2011. Now, they want to renege.

Econ Comments                                                                                                             
WSJ | California's Tax Revolt—In Favor of Higher Rates
Education spending and student-teacher ratio are about where they were in 2004. The real problem is that tax dollars are being diverted for teacher benefits.
WSJ | The Coming Postal Bailout
Congress wants taxpayers to save mail worker pensions.
Fox Business | Taxpayers on the Hook for BP's Gulf Spill
BP booked $11.8 billion in tax savings in its fourth quarter as it partly wrote off the costs for the clean-up the $20 billion victim compensation fund and legal expenses.

Health Care

CNN: Money | Social Security and Medicare to run short sooner than expected
After the programs' trust funds are exhausted, Social Security and Medicare will be taking in only enough money to pay a portion of promised benefits to retirees.
National Journal | Trustees: Medicare to Go Broke in 2024
Medicare costs will continue to grow substantially, from a 3.6 percent share of the economy in 2010 to 5.5 percent by 2035, the trustees project in their annual report. But they say reforms in last year's health care law can help.
Politico | Medicare cost cutting job could be the worst in D.C.
Wanted: nationally known health care experts to serve on controversial health care board that will make painful Medicare spending cuts. Must be willing to quite current job to do it. Also, must be willing to go through bloody and humiliating confirmation fight.

Econlog | It is Health Care Consumption
Until somebody listens, I will keep shouting that it is not health care "costs" that are out of control. It is the utilization of medical services. To put it in terms that will provoke some, it is the consumption of medical care.
Heritage Foundation | Making Health Insurance More Accessible
How do the uninsured get away with not having the assets to pay their bills? Well, the average uninsured person only pays for about a quarter of their total health care costs. Taxpayers end up covering about 75 percent of the unpaid tab through direct payment and extra disproportionate share hospital (DSH) payments made by Medicaid and Medicare, while those with private insurance, hospitals, and charities pick up the rest.
Heritage Foundation | Medicare’s Deteriorating Financial Condition
The just released 2011 Medicare trustees report does not contain any big surprises. Much of what the trustees say in this report they have said before: Medicare poses enormous challenges for patients and taxpayers alike, and its financial condition continues a downward slide. Some key findings:


WSJ | Economists in Survey Discount Inflation
Most economists in the latest Wall Street Journal forecasting survey agree with the Federal Reserve that severe inflation pressures are "transitory" and price increases will be more moderate through next year.
Bloomberg | Treasury Bill Rates at Almost Record Low as U.S. Debt Ceiling Is Reached
Treasury bill rates were at almost record lows as the U.S. reached its federal borrowing threshold and a congressional vote loomed in the next few months on raising the nation’s $14.3 trillion limit.

Econ Comments                                                                                                             
WSJ | Using a Dictionary to Define Inflation Can Spell Trouble
Is inflation best defined as "rising prices" or "printing money?" The answer depends on which dictionary you use.
Bloomberg | Canadian Dollar Drops to Lowest Since March as Commodities, Equities Fall
Canada’s dollar fell to its weakest level since March versus its U.S. counterpart as heightened risk aversion pushed commodities and global stocks lower.
Minyanville | The End of QE2: Does It Matter?
Investors have been warned that the Fed's exit from the market should cause yields to rise substantially. Here, the factors one must consider when analyzing the impacts of the end of QE2.
Minyanville | With US at Peak Inflation, Will Gold Lose Momentum?
It's difficult to imagine gold continuing its strong momentum, especially in light of the imminent peaking of the US CPI inflation rate.

Daily Capitalist | The Economy Is Sliding Into A Stagflationary Spiral
According to most economists the Q1 GDP stumble was a blip, something we shouldn’t worry about because the economy is still on track for recovery. They are reacting to the preliminary report that GDP fell to 1.8% in Q1, down from 3.1% in Q4 2010. They are also rather unbothered by increasing prices at the wholesale and consumer level.


WSJ | As Debt Limit Reached, Agreement Still Far Off
The U.S. government is expected to hit the $14.294 trillion debt ceiling Monday, setting in motion an uncertain, 11-week political scramble to avoid a default. The Treasury Department plans to announce Monday it will stop issuing and reinvesting government securities in certain government pension plans, part of a series of steps designed to delay a default until Aug. 2.
WSJ | Geithner Issues Warning on Debt Ceiling
Treasury Secretary Timothy Geithner warned in a letter to Congress that failure to raise the $14.294 trillion debt ceiling would drive up interest rates, push down household wealth, put more pressure on federal entitlement programs and cause a double-dip recession.
WSJ | Questions and Answers About Reaching the Debt Ceiling
With the U.S. government reaching its legal borrowing limit on Monday, here are some answers to commonly asked questions:
CNN: Money | Paul Ryan won't back down
The House Budget Committee chairman will mount a defense of his controversial plan for federal spending in a speech to the Economic Club of Chicago Monday afternoon.

Econ Comments                                                                                                             
Bloomberg | Geithner Emerges as Obama’s Indispensable Man: Albert Hunt
If, two years ago, reports of Timothy Geithner possibly leaving reached the White House, some advisers would have seized on them as an opportunity; President Barack Obama’s Treasury secretary got off to a very rocky start, and was considered a short-termer.
Minyanville | Government Debt: The Biggest Bubble of Them All
It's going to take a great deal of luck and crisis management to keep the bubble of government debt afloat without wreaking havoc on the financial system and markets of the world.


CNN: Money | Where jobs are booming
A CNNMoney analysis of the more than 140 sectors tracked in the Labor Department's survey of employers found 15 that grew fairly steadily from the start of the recession until today. And an additional 11 sectors have recaptured more than half the jobs that they lost during the recession.

Econ Comments                                                                                                             
WSJ | Why the Job Market Feels So Dismal
The number of hires is the same today as it was when we were shedding jobs at record rates.