Tuesday, March 13, 2012

General Economics

News                                                                                                                             
Bloomberg | Retail Sales in U.S. Rose in February by Most in Five Months
Retail sales in the U.S. rose in February by the most in five months, reflecting broad-based gains that indicate the world’s largest economy is picking up even as gasoline costs climb.
Market Watch | NFIB small-business index up for sixth month
The National Federation of Independent Business said its optimism index edged up 0.4 points to 94.3, as owners became slightly more pessimistic about the outlook for business conditions but more optimistic about future sales growth.
CNN Money | Retirement scare: 60% of workers have less than $25,000 saved
Concerns about job security and piles of debt have left American workers more pessimistic about retirement than ever.
WSJ | Trade Fight Flares on China Minerals
China's state media warned on Tuesday that U.S. plans to push a case involving rare earths before the World Trade Organization could trigger a backlash and hurt ties.
NY Times | Bank Officials Cited in Churn of Foreclosures
Managers at major banks ignored widespread errors in the foreclosure process, in some cases instructing employees to adopt make-believe titles and speed documents through the system despite internal objections

Econ Comments & Analysis                                                                                            
AEI | The 'Beijing Model' Bubble
The idea that China is practicing a new form of capitalism, and may even be “doing capitalism better than America,” is reaching a fever pitch in policy and business circles.
Washington Times | Red ink on the rise
When it comes to regulations, President Obama’s message to his conservative critics seems to be: Message received. Early last year, he vowed to crack down on overzealous rule-making, noting that the “rules have gotten out of balance” and “have had a chilling effect on growth and jobs.” He’s right - they have.
WSJ | California's Greek Tragedy
Long a harbinger of national trends and an incubator of innovation, cash-strapped California eagerly awaits a temporary revenue surge from Facebook IPO stock options and capital gains. Meanwhile, Stockton may soon become the state's largest city to go bust
Real Clear Markets | Message to China: Trade "Deficits" Are Quite Beautiful
With word that China's economy fell into the "red" last month thanks to a trade "deficit", business journalists predictably used the information as a straw man to proclaim a looming economic slowdown in this rising nation.
NBER | Does Linking Worker Pay to Firm Performance Help the Best Firms Do Even Better?
This paper analyzes the linkages among group incentive methods of compensation, labor practices, worker assessments of workplace culture, turnover, and firm performance in a non-representative sample of companies: firms that applied to the “100 Best Companies to Work For in America” competition from 2005 to 2007.

Blogs                                                                                                                             
Calculated Risk | Housing: Short Sales increase, Foreclosure Sales down Year-over-year
This will be very useful data over the next several months as we try to track the impact of the mortgage servicer settlement. There are only a few areas where the MLS breaks down monthly sales by foreclosure, short sales and conventional (non-distressed) sale.
Keith Hennessey | Nearly doubling renewable energy generation
Let’s look at my favorite energy graph, produced by Lawrence Livermore National Laboratory, a part of the Department of Energy.  It translates all energy usage into a common unit (BTUs) for comparison. 
Calculated Risk | Public transportation ridership increases 2.3% in 2011
From the APTA: 10.4 Billion Trips Taken On U.S. Public Transportation In 2011
Marginal Revolution | Counting benefits does not much change the income stagnation story
A third worry is that the income measure used to calculate median family income is too thin. If a growing portion of GDP has gone to employer benefits, that would help middle-class households, but it wouldn’t show up in these income data.
Minyanville | Could This Be a Self-Sustaining Economic Recovery?
Investing is a lot like whaling. Investors are constantly searching for that whale of a stock with the “ambergris factor.” And that is what I was doing last week at Raymond James’ 33rd Annual Institutional Investors Conference in Orlando, Florida.
Atlantic | Free the Banks! The Case for Massive Deregulation of the Financial System
Since the financial crisis of 2008, everybody and their mother has been looking for some way to make sure it doesn't happen again. The responses so far have been woefully inadequate. No one thinks the reforms that have been enacted or are being considered would solve the problem. 

Health Care

News                                                                                                                             
Politico | Health care reform: States may test HHS power
The law is very clear: The Department of Health and Human Services has the power to set up a federal health insurance exchange in states that don’t set up their own. But a federal exchange can’t function solo. It needs some help from a state’s Medicaid program and insurance department.
CNN Money | Health reform's cost under scrutiny
Capitol Hill's official budget cruncher will offer new estimates on Tuesday of one of the most controversial parts of health care reform: the government's cost of covering tens of millions of uninsured Americans.

Econ Comments & Analysis                                                                                            
Politico | Medicare fight is not over yet
This Republican Congress of Chronic Chaos is dusting off last year’s same failed playbook — where seniors would lose their Medicare while Republicans give more tax breaks to millionaires and Big Oil companies.

Blogs                                                                                                                             
Atlantic | The CBO Warns on Too-High Medical Loss Ratio Requirements
One of the more quixotic amendments to the Senate health care bill has been Jay Rockefeller's insistence that companies get their medical loss ratio to 90% or higher--i.e., spend 10% or less on administrative costs.

Monetary

News                                                                                                                             
Bloomberg | Fed Bond-Buying Seen Less Likely After Best Six-Month Job Gains Since 2006
The best six months of job gains since 2006 have helped reduce the odds of a third round of asset purchases by the Federal Reserve, according to a Bloomberg News survey of economists.
Market Watch | Stress-tested banks set to hike dividends
The Federal Reserve is expected to allow a number of the big U.S. banks to hike dividends to as much as 26% of earnings as part of the latest round of stress test results to be released Thursday afternoon, according to analysts and attorneys.
CNN Money | The dollar is mighty once more
The U.S. economy appears to be gradually improving -- and the dollar is coming along for the ride. Imagine that.

Blogs                                                                                                                             
Library of Economics | Gold and Oil Prices
Oil prices aren't high right now. In fact, they are unusually low. Gasoline prices would have to rise by another $0.65 to $0.75 per gallon from where they are now just to be "normal". And, because gasoline prices are low right now, it is very likely that they are going to go up more--perhaps a lot more.

Taxes

News                                                                                                                             
WSJ | Crisis-Era Tax Benefit for Bailed-Out Firms Draws Fire
Former members of a congressional panel that oversaw federal bailout spending decried on Monday a years-old Treasury Department determination that allows American International Group Inc. and other companies to avoid paying billions in taxes
Bloomberg | Anti-Obesity Soda Tax Fails as Lobbyists Spend Millions: Retail
Last month, Hawaii lawmakers killed a proposed tax that would have added 17 cents to a single-serve bottle of soda. It was the second failed attempt, even though Governor Neil Abercrombie had pushed the proposed levy.
WSJ | Putting Out Fires for a Fee
When fires or medical emergencies beset this rural county in the Appalachian foothills, the volunteer fire department races to the scene—seemingly free of charge.
USA Today | Property tax collections to start downward trend
More than five years after real estate prices began to tumble, Americans are finally starting to get property tax breaks on their devalued homes, a USA TODAY analysis finds.

Blogs                                                                                                                             
The American | Will a tax tsunami sink the economy in 2013?
I see no reason why investors should be optimistic. As we recently found out, President Obama is fairly comfortable with the idea of letting all the Bush tax cuts expire. That would not be a good idea. A few years back, Goldman Sachs ran a study looking at what would happen if all the 2001 and 2003 tax cuts were repealed at the end of 2010.

Employment

News                                                                                                                             
WSJ | Global Employment Prospects Improving
The global employment outlook is improving, with firms well placed to swiftly adapt their plans to the current fluid economic backdrop, a quarterly survey by ManpowerGroup showed Tuesday.
USA Today | Largest companies are spending, adding jobs
Collectively the nation's biggest companies, including Caterpillar, Jabil Circuit and Qualcomm, added 4.2% more net jobs globally in 2011, based on S&P Capital IQ's analysis of the 437 companies in the Standard & Poor's 500 that reported employee statistics.

Econ Comments & Analysis                                                                                            
WSJ | How to Keep More Kids on the Streets
Raising the minimum wage hurts the very people—low-skilled workers—that champions of the raise intend to help, because it prices many such workers out of jobs.
Forbes | The House GOP Authors a Jobs Recovery
Speaker of the House John Boehner, House Majority Leader Eric Cantor and their fellow House Republicans should claim credit for this jobs recovery. It never would have happened had they not stopped the counter-productive fiscal policies of the Obama Administration

Blogs                                                                                                                             
The American | Why the disconnect between jobs and growth?
JPMorgan economist Jim Glassman asks, “How can we reconcile soft GDP figures with solid, actually impressive, job figures?”

Budget

News                                                                                                                             
WSJ | States Keep Axes Sharpened
States are moving to cut jobs and other spending to close budget deficits, even though their protracted fiscal crisis is easing a bit in an improving economy.
Bloomberg | EU Budget Deal May Leave Spain Struggling to Meet Deficit-Reduction Goal
European Union pressure on Spain to make additional budget cuts may not be enough to compel the government in Madrid to bring its deficit in line with the 27- nation bloc’s rules next year.

Econ Comments & Analysis                                                                                            
Washington Times | Gauging the financial tipping point
Despite the encouraging U.S. jobs-report data last week, the fiscal situation in the United States and most of the rest of the world continues to deteriorate.
Roll Call | House Democrats to Offer Up Budget
House Democrats, led by Budget ranking member Chris Van Hollen (Md.), are planning on releasing an alternative budget resolution to contrast their priorities with the Republicans.
WSJ | Euro-Zone Debt—Not All Toxic
Against what would appear to be insurmountable odds, and in the midst of a once-in-a-generation sovereign-debt debacle, the European corporate bond market is thriving. And according to industry experts, that is not at all surprising.
Fortune | Meredith Whitney was right
The more general point that Meredith Whitney was trying to make about public debt -- that municipal finances in this country were a mess that was only going to get messier -- was dead on.
Project Syndicate | Europe’s Trust Deficit
Of course, in all of these areas, the critics have a point. But none of these is the deficit that really matters. The deficit that prevents Europe from drawing a line under its crisis is a deficit of trust.

Blogs                                                                                                                             
The American | Sorry, but the Postal Service will need a bailout
Last week, I pointed out that the U.S. Postal Service is in danger of needing a taxpayer bailout. My post received a great deal of feedback in the comments section; unfortunately, many do not appreciate the nature or magnitude of the unfunded liabilities that the Postal Service has incurred since its inception, and where those unfunded future liabilities stand today.
The American | Surprise! Obama has a secret plan to deal with a catastrophic U.S. debt crisis. Here’s what might be in it
In May 2009, the president asked [White House budget director Peter Orszag] to draft a secret memo laying out the government’s options in the event of a fiscal crisis, in which a runaway deficit sent interest rates spiraling upward. No other member of the Obama economic team was even aware of the assignment.