Monday, October 3, 2011

General Economics

News                                                                                                                             
WSJ | Disputed Trade Pacts Advance
Obama Nears Long-Delayed Deals With South Korea, Colombia and Panama.
CNN: Money | Forecast says double-dip recession is imminent
The official word on when recessions begin or end comes from the National Bureau of Economic Research, which has a committee that weighs economic data. But since the committee must wait for final revisions of the data, a call on the start or end of a downturn typically comes a year or more after it actually takes place.
WSJ | Gas Stays High as Oil Drops
Prices at the Pump Have Yet to Reflect the Substantial Decline in Crude Futures.
CNN: Money | U.S. to decide the Keystone XL pipeline's fate
The heated discussion over whether to build a 1,700-mile oil pipeline from the oil sands region of Alberta, Canada, to the Gulf of Mexico is almost over.
WSJ | Greek Economy to Keep Shrinking
Greece presented a 2012 austerity budget Monday that includes sharp increases in taxes and spending cuts amid a fourth year of recession and a deteriorating labor market.
Politico | China picks up U.S. slack in trade
Hungry for natural resources, China has overtaken the U.S. as the chief trading partner in Brazil, Chile and Argentina.

Econ Comments                                                                                                             
NY Times | Foreclosures Are Killing Us
Foreclosure is not just a metaphorical epidemic, but a bona fide public health crisis.
RCM | Thank Dodd-Frank For Your Debit Card Fees
Damned as an "outrage" in the press, Bank of America's just-announced $5 monthly fee for ATM use was a logical and predictable result of a Dodd- Frank financial bill that fixed prices. Guess who gets to pay for it?
Washington Post | Risk-averse America
We are prisoners of our rotten mood. Everywhere, the bias is to spend less and wait to see how things turn out. Just as optimism sustained the boom, pessimism prolongs the bust.
Financial Times | Why business despairs of Obama
Mr Obama’s administration predicted a V-shaped recovery, based on the historical experience of the 1970s and 1980s. Not this time. The $4,000bn of fiscal and monetary stimulus produced less than $1,000bn in growth. Gross domestic product is now running at about 1.8 per cent this year but two-thirds of this will come from growth in business inventories, not final sales.
RCM | Mass Refinancing Won't Solve the Housing Problem
With the country's housing market still anemic and a backlog of pending foreclosures, the Administration is reportedly considering a plan to refinance millions of extant mortgages at today's historic low interest rates - an idea kicking around the Beltway for at least a couple of years.
Politico | Hill finds elusive harmony on trade
Congress hasn’t had much to celebrate in a year dominated by bitter spending battles and partisan dysfunction. So lawmakers from both parties are heralding the pending passage of a major free-trade package as a victory — and a sign that Washington isn’t entirely broken.

Blogs                                                                                                                             
Calculated Risk | Schedule for Week of Oct 2nd
The key report this week will be the employment situation report for September on Friday. Also Fed Chairman Ben Bernanke's Congressional testimony on Tuesday will be closely watched.
Political Calculations | Forecasting GDP for 2011-Q3
Assuming that the deviation between our modified limo forecast value and actual GDP can be described by a normal distribution, we estimate a 68.2% probability of the BEA recording real GDP for 2011-Q3 somewhere between $13,160.1 billion and $13,439.5 billion, and a 95% probability of it falling between $13,020.4 billion and $13,579.2 billion. There is a 99.7% probability of 2011-Q3's GDP figure being recorded somewhere between $12,880.8 billion and $13,718.8 billion.
Calculated Risk | Unofficial Problem Bank list at 986 Institutions
The Unofficial Problem Bank List finished the month unchanged at 986 institutions with assets of $405.4 billion after six additions and six removals this week. A year-ago, there were 872 institutions with assets of $422.4 billion on the unofficial list.
Cato @ Liberty | Happy Fiscal New Year
We don’t have final numbers for the fiscal year that just ended, but let’s look at the CBO Monthly Budget Report, the CBO Economic and Budget Update, and the OMB Historical Tables, and see whether there’s anything worth celebrating.

Reports                                                                                                                         
RCM: Wells Fargo | Weekly Economic & Financial Commentary
Most of this week’s economic reports that dealt with the consumer continued to flash warning signals. Consumer confidence remains weak, income growth is lagging and home sales remain dead in the water.

Health Care

News                                                                                                                             
WSJ | Home-Health Firms Blasted
Senate Panel Alleges Big Providers Abused Medicare by Tailoring Patient Care to Maximize Profits.

Econ Comments                                                                                                             
Washington Times | EDITORIAL: Obamacare showdown
Repealing socialized-medicine law would decrease health costs
Washington Times | BURGESS: Supercommittee needs to put Obamacare on table
In fact, the Joint Select Committee on Budget Reduction could easily achieve nearly its entire target of reducing the nation’s deficit by $1.5 trillion and, most surprisingly, almost every dollar would come from benefits that do not yet exist.
Washington Times | WOLF: Bending Obamacare’s honesty curve downward
Growing list of health care lies plagues president’s overhaul.
Cato Institute | President Obama's Health Care Law Not Fulfilling Promise
There's no hiding it. Obamacare is delivering the opposite of what its supporters promised.

Monetary

News                                                                                                                             
Bloomberg | Treasury 30-Year Bonds Rise as Fed Starts Buying Longer-Term Maturities
U.S. debt securities also gained as finance ministers prepared to discuss boosting the European Financial Stability Facility. The extra yield investors get for holding long bonds instead of five-year notes was the narrowest in almost two years as the Fed started the program known as Operation Twist.
Bloomberg | Euro Drops to Decade Low Against Yen as Region’s Finance Ministers Meet
The 17-nation currency slid an eight-month low against the dollar. The yen rose against all its major counterparts as Japan’s biggest manufacturers remained below levels seen before a record earthquake in March.

Blogs                                                                                                                             
Daily Capitalist | Inflation or Deflation: A Mish Mash
The September Personal Income and Outlays report from the BEA came out today, and according to Mish, I should be howling. More on this in a moment. But, personal income declined slightly MoM, spending was up slightly, and PCE is low. To Mish this signals deflation.

Taxes

News                                                                                                                             
NY Times | In Debt Talks, Divide on What Tax Breaks Are Worth Keeping
Plenty of lawmakers are against tax breaks and so-called loopholes. Unless, of course, they personally helped create them.
Market Watch | Tax deadline for Roth IRA do-over coming up fast
Some retirement savers might rue the big tax bill that came from their decision to convert a traditional individual retirement account to a Roth IRA. But those who made a conversion in 2010 still have a couple of weeks left to undo that move.

Econ Comments                                                                                                             
WSJ | Driving the Rich Into the Sea
Megaship ahoy! To escape higher taxes, the wealthy could relocate...to open waters.
NY Times | The Problem With ‘No New Taxes’
Many professed fiscal conservatives still find it necessary to pander to voter illusions that only a modicum of fiscal adjustment is needed. That’s an indication of how far we are from true fiscal conservatism, but also a sign of how much it is needed.
Cato Institute | Bad for Taxpayers and Whales
Congress created the National Flood Insurance Program in 1968 as a way to reduce the expense of federal disaster assistance. The idea was that those choosing to live in harm's way should contribute ahead of time to their own assistance. Instead, the program has grown into a disaster of its own, currently $18 billion in debt.

Blogs                                                                                                                             
Heritage Foundation | Morning Bell: Ready for A Debit Card Tax?
Use a debit card? Now it’s really going to cost you. Bank of America announced last week that it will begin charging customers $5 per month for use of their debit cards. But if you’re looking for someone to blame, set your sights on Washington.

Employment

News                                                                                                                             
National Journal | Parallel Lines: In Washington, Universes Apart on Jobs
At the end of the day, organizers count a record-breaking 4,121 attendees at Rep. Eleanor Holmes Norton’s 14th annual jobs fair in August, all seeking the one thing that eluded them in a long, tedious and fruitless search.
Market Watch | The economy’s unfinished work: job growth
The big event on next week’s economic calendar is the monthly U.S. jobs report — but nobody expects a big jump in hiring.

Blogs                                                                                                                             
Heritage Foundation | Obama’s Economic Advisers Warned of Green Jobs Agenda’s Pitfalls
A pair of years-old anecdotes, recently revisited, show that top economists in the White House and Obama’s cabinet expressed serious doubts about the White House’s emphasis on and approach to green jobs. Three top economic advisers, on at least two occasions, have sounded alarms about that agenda.

Reports                                                                                                                         
CRS | American Jobs Act: Provisions for Hiring Targeted Groups, Preventing Layoffs, and for Unemployed and Low-Income Workers
Although they are not discussed in this report, tax reductions for employers ($70 billion) and employees ($175 billion)—largely through payroll tax cuts—form the largest single category of spending under the American Jobs Act. Another $75 billion would go to infrastructure projects, including transportation ($50 billion), an infrastructure bank ($10 billion), and grants to rehabilitate foreclosed or vacant properties ($15 billion), in addition to $30 billion for school modernization.

Budget

News                                                                                                                             
WSJ | Greece Will Miss Its Deficit Target
Government Agrees to Extra Austerity Measures, but Economists Warn Stringent Cuts Will Worsen Country's Recession.
CNN Money | 32 plans to cut the debt. Really.
Members of the bipartisan debt committee have no fewer than 32 debt reduction plans at their disposal.
Politico | Larger deal may elude deficit panel
A month into the supercommittee’s term, Senate Republicans are telling K Street that they don’t believe the powerful deficit-cutting panel can reach a “grand bargain” agreement, sources familiar with the negotiations say.