Friday, January 13, 2012

General Economics

News                                                                                                                             
Bloomberg | Import Prices in U.S. Fall for Fourth Time in Five Months
The 0.1 percent decrease in the import-price index followed a 0.8 percent gain in November, Labor Department figures showed today in Washington. Prices excluding fuel climbed 0.1 percent, the first increase in three months.
Market Watch | Paychecks will grow in 2012 — but not much
With lower inflation expected this year, workers may take home greater earnings than in 2011.
CNN: Money | Iran's 'distressed' oil to keep flowing - at deep discount
Despite tightening sanctions on Iran's oil industry, experts say the country's crude should still flow -- but perhaps at a deep discount. In fact, the bargaining has already begun, two analysts said.
Bloombeg | Obama Will Seek Authority to Merge Agencies in Effort to Shrink Government
The president is scheduled to speak today at 11:20 a.m. Washington time on steps to make the U.S. government leaner and more consumer-friendly, said the official, who spoke on the condition of anonymity in advance of the remarks.
Market Watch | U.S. trade deficit widens sharply in November
After declining for four straight months, the U.S. trade deficit widened in November, bringing the trade gap up to its highest level since June.
CNN: Money | Business group and consumer bureau in cease-fire
The Consumer Financial Protection Bureau has been in the spotlight since President Obama sidestepped Congress and made a recess appointment of its new director Richard Cordray last week.
WSJ | Euro Zone Posts Rare November Trade Surplus
A surge in exports helped the euro zone post a major surplus on trade with the rest of the world in November, an unexpected development that could boost hopes that the region will avoid a severe economic downturn.
Daily Finance | Billion Dollar Phobia? Friday the 13th Fears Take a Big Economic Toll
Superstitious investors may remember the mini-stock market crash of Oct. 13, 1989, when a megabillion-dollar leveraged buyout of struggling airline carrier United Airlines hit the skids and contributed to the Dow plummeting nearly 7% on that fateful day.

Econ Comments and Analysis                                                                                          
NBER | Time-Varying Fund Manager Skill
Mutual fund managers can outperform the market by picking stocks or timing the market successfully. Previous work has estimated picking and timing skill, assuming that each manager is endowed with a fixed amount of each and found some evidence of picking skills and little evidence of timing skills among successful managers.
WSJ | How Private Equity Works
The companies in which private-equity investors are able to turn a profit generally grow, rather than shrink. This is because the preferred "exit strategy" by which private-equity firms profit is to take the private companies in which they invest and enable them to go public and sell shares that will help the company grow even stronger.
Market Watch | U.S. has growth without prosperity, economist says
Credit Suisse’s Neal Soss says we’ll just have to wait it out.
AEI | Rolling the housing dice, again!
Recall that as late as July 2008, a mere two months before being placed in conservatorship, Fannie and Freddie's regulator found them to be "adequately capitalized, holding capital well in excess of the OFHEO-directed requirement, which exceeds statutory minimums."
Politico | Far-reaching effects of refining regulations
It is not only the EPA’s burdensome and often contradictory federal standards that pose serious technological and financial burdens on refiners.
CNBC | Why Aren't Banks Lending More? What Both Sides Say
Banks need to lend more. That is what regulators in Washington have been saying for months, even years now.
Bloomberg | An Upside-Down Recovery Goes Back to Square One: Caroline Baum
The U.S. recession may have ended in June 2009, according to the official arbiter of the business cycle. But by all signs, the recovery is just beginning.
Forbes | The Worst Economic Recovery Since The Great Depression
What that record shows is that President Obama, with his throwback, old-fashioned, 1970s Keynesian economics, has put America through the worst recovery from a recession since the Great Depression.
Daily Finance | Ponzi Scheme or Not, Social Security Can't Keep Up the Pace
Even if Social Security's trust fund weren't in trouble, the program generally replaces only about 40% of a person's average lifetime income, indexed for inflation. When Social Security's trust fund is gone and the program pays out reduced benefits, the typical recipient will get closer to 30% of average earnings.

Blogs                                                                                                                             
Heritage Foundation | The 2012 Index of Economic Freedom: Latin America’s Underperformers
When it comes to Latin America, most of the rankings won’t come as much of a surprise. Of the 29 nations in South and Central America and the Caribbean, Chile held strong at the top, jumping up to become the world’s seventh-freest economy with its overall score increasing by 0.9.

Health Care

News                                                                                                                             
National Journal | Uncertainty Challenges State Efforts to Set Up Health Insurance Exchanges
Even the states with the most expertise, the most political will, and the biggest head start on setting up health insurance exchanges find themselves up against an epic task. And they don’t even have the rule book yet.

Monetary

News                                                                                                                             
Fox News | Documents show Bernanke thought economy could pull off 'soft landing' from falling home prices
Ben Bernanke presided over his first meeting as Federal Reserve chairman in March 2006 believing the nation's economy could pull off a "soft landing" from falling home prices. Three months later, Bernanke had begun to grasp that he and others had underestimated the risk housing posed to the economy.
National Journal | QUICK TAKE: Papers Differ Over Who in Fed Was Most Vocal About Brewing Crisis
Transcripts of closed-door Federal Reserve meetings in 2006 reveal the extent to which central bank officials failed to anticipate the 2008 financial crisis, multiple news sources reported on Friday.
WSJ | Euro Zone Leaves Rates Unchanged
Central Bank Chief Cites 'Stabilization' in Business Activity.

Econ Comments and Analysis                                                                                          
Bloomberg | Draghi Says Crisis Strategy Is Working as ECB Fights Threat From Turmoil
The ECB’s massive injection of cash into the financial system last month is beginning to lubricate seized credit markets and there are “tentative signs” of economic stabilization in the euro area, Draghi said in Frankfurt yesterday.
RCM | Central Banks Have Us In a Monetary Trap
As much as there is a perception of disjointed confusion to all these "emergency" measures, including the ad hoc and disconnected timing to them, there is a definite element of commonality running through them, an unmistakable theme. Central monetary authorities are, in essence, running through a kind of pre-scripted economic playbook.
CNN: Money | The lure to leave the euro may prove irresistible
Greece, Italy, and the other embattled euro zone nations may need to start looking out for themselves and consider leaving the euro. Better to be Argentina than Latvia.

Blogs                                                                                                                             
Minyanville | Central Bank of Chile Unexpectedly Cuts Interest Rate to 5% on Slowdown in Domestic, Global Growth
Chile's Central Bank has cut the interest rate to 5%, thanks to domestic cooling and unstable international markets, both of which offset high inflation.

Taxes

News                                                                                                                             
National Journal | Poll Finds Voters Want Mortgage-Interest Deduction Untouched
A new study shows voters overwhelmingly opposed to changes in the mortgage-interest income tax deduction — an idea that’s been widely discussed as Washington seeks to tame the national debt.

Employment

News                                                                                                                             
CNN Money | Novartis to cut nearly 2,000 U.S. jobs
The Swiss drugmaker Novartis is cutting nearly 2,000 jobs in the United States, anticipating the impending loss of patent protection on its blockbuster drug Diovan.

Blogs                                                                                                                             
Political Calculations | The Number of New Jobless Benefit Claims for the First Week of 2012
We'll find out the answer to that question later this morning, but in the meantime, we can make a pretty good guess using our updated forecast chart for the number of seasonally-adjusted initial unemployment insurance claims filed each week!

Budget

News                                                                                                                             
Roll Call | Debt Limit Vote Set for Next Week
President Barack Obama formally notified Congress today of the need to raise the debt limit, setting up a vote next week in the House on a resolution of disapproval.
WSJ | Government Edges Toward the Debt Ceiling
Raising Borrowing Limit Is Likely; Deal Struck After Last Year's Showdown Makes $1.2 Trillion Increase 'a Fait Accompli.'
Washington Times | Italy, Spain easily raise $28 billion
Spain and Italy gave financial markets a boost Thursday as they successfully raised nearly euro22 billion ($27.98 billion) in two keenly watched debt auctions that showed renewed investor confidence in the countries’ attempts to get a grip on their debt problems.

Econ Comments & Analysis                                                                                            
CBO | Final Sequestration Report for Fiscal Year 2012
In CBO's estimation, a sequestration (cancellation of budgetary resources), which would be triggered by a breaching of the caps, will not be required in 2012.

Blogs                                                                                                                             
Cato@Liberty | How Good Are Government Deficit Forecasts?
In just a few weeks Washington enters that alternative universe called “budget season,” when the President delivers his budget proposal to Congress and Congress begins constructing its budget for the coming fiscal year (at least in normal years, don’t expect much budget action in 2012).