Monday, June 4, 2012

General Economics

News                                                                                                                             
CNN Money | U.S. sees a decline in millionaires
The number of millionaires is on the decline in the United States, even as the number of wealthy individuals has increased worldwide.
Bloomberg | Hedge Funds in Longest Rout Since Global Recession
Hedge funds curbed bullish bets on commodities for a third consecutive month, the longest retreat since the global recession, as Europe’s worsening debt crisis and slowing U.S. job growth sent prices tumbling.
CNN Money | Mass transit use jumps amid high gas prices
Mass transit use jumped 5% in the first quarter of 2012, as high gas prices and a rebounding economy put more people on the bus and train.
Politico | Poll: Most worry for next generation
A majority of Americans, 58 percent, are dissatisfied with the opportunity of the next generation to reach the American dream of having a better life than their parents, according to a Gallup Poll Monday.
WSJ | Canada GDP Below Central Bank Forecast
Canada's first-quarter growth was well below the central bank's forecast, expanding at an annualized rate of 1.9%, Statistics Canada said Friday.
FOX News | Farmers face squeeze in proposed subsidy cuts
A program that puts billions of dollars in the pockets of farmers whether or not they plant a crop may disappear with hardly a protest from farm groups and the politicians who look out for their interests.
CNN Money | 'Significant' rise in electric bills seen
Higher electric bills. Emphasis on solar power. A surge in electric cars.
WSJ | Euro-Zone Reports Deepen Gloom
Euro-zone data out Friday showing a fresh decline in manufacturing and the highest number of jobless people in the bloc's history suggested further economic floundering as the region's debt crisis deepens.
CNN Money | Your dry cleaning bill's about to get worse
If your weekly dry cleaning bill already has you cringing, brace yourself for more pain. As soon as your next pickup, prices may be higher.
Bloomberg | Growth Slowdown Seen in U.S. as Recession Dodged: Economy
The U.S. economy looks set to deliver a repeat performance in 2012: for the third straight year, it may suffer a swoon yet not slip into a recession.
WSJ | Government-Bond Yields Sink to Record Lows
Yields on government bonds perceived as safe, from the U.S. to Germany to the U.K., plunged to record lows, as weak economic data exacerbated concerns over the fate and composition of the euro zone.
USA Today | Why the U.S. economy is stuck in the slow lane
The recession officially ended three years ago, but the 'recovery' has been a frustrating mix of good and bad news.
CNN Money | Credit union membership spikes in first quarter
After hitting record membership last year, credit unions are still piling on new customers.
WSJ | New Bank Rules, More Lending Worries
Regulators trying to promote both sound financial institutions and economic growth are getting an earful from big banks about tougher capital rules.

Econ Comments & Analysis                                                                                            
Washington Post | Europe’s grim choices
Europe is at the abyss — again. Its turmoil is rattling global stock markets and stoking fear and bewilderment. The obvious question is, what’s the solution? The answer is, there is no solution.
WSJ | An Economy Built to Stall
Well, this week makes it official. The weakest economic recovery since World War II has become weaker still, sinking into a spring slowdown for the third year in a row.
Washington Times | Regulators regulate - that’s our problem
Federal regulators are keeping America from moving forward. According to recent news stories reviewed by my colleagues at Engage America, federal red tape has squelched at least 736,203 potential jobs. If those positions were filled, today’s unemployment rate would fall from 8.2 percent to 7.6 percent.
NBER | Status Competition and Housing Prices
While in standard housing economics housing is regarded as an asset and a consumption good, we study in this paper the consequences for housing prices if housing is also a status good.
Real Clear Markets | Horror of Horrors, The Poor Have Too Much Computer Access!
Leave it to the New York Times to sound the alarm on the latest "gap" separating the rich from the poor-which of course can only be remedied with a billion-dollar government program.
Minyanville | Why a Grexit Would Make Lehman Look Like Child's Play
Maybe I’m wrong, but every time I look at the possibility of a Greek exit right now I see it spiraling out of control and dragging down the entire global economy.

Blogs                                                                                                                             
Heritage Foundation | Morning Bell: 10 Ways to Lower Gas Prices
The average price of a gallon of regular gas is now $3.66, and has been decreasing for eight straight weeks. This is causing some of the President Obama’s advisors to declare energy prices an irrelevant issue.
Politico | The next great depression?
If the world slides into a global depression over the next year, consider yourself forewarned by the Wall Street Journal. Yesterday's edition was packed with so many grim headlines that one could be forgiven for believing that we could be seeing cash-filled wheelbarrows by the end of the summer.
Calculated Risk | Schedule for Week of June 3rd
The key report this week is the April Trade Balance report.
WSJ | World-Wide Factory Activity, by Country
A global manufacturing slowdown took hold in May, as Europe weighed heaviest on world-wide factory activity.
The American | Did the stimulus create as much growth as Obama predicted? Not even close
After every jobs report, I update the jobs forecast and chart Team Obama put out in January 2009 that projected the future unemployment rate if Congress passed his stimulus plan. It shows the unemployment rate far higher today than what Obama economists predicted back then, 8.2% vs. 5.7%.
Calculated Risk | Unofficial Problem Bank list declines to 927 Institutions
As anticipated, most changes to the Unofficial Problem Bank List were removals. In all, there were four removals that include one unassisted merger
Neighborhood Effects | Trickle-Down Economics: Does Anyone Actually Believe In It?
I have heard a lot about “trickle-down economics” lately. The President has taken to using it in speeches. And pundits have increasingly invoked the idea.

Health Care

News                                                                                                                             
National Journal | Study: Cancer to Rise Globally by 75 Percent
The number of cancer cases globally will spiral up by 75 percent by 2030, in part because other diseases that kill people sooner are being eradicated but also because of spreading, unhealthy western lifestyles, researchers report.
WSJ | Big Changes in College Health Plans
Some colleges are dropping student health-insurance plans for the coming academic year and others are telling students to expect sharp premium increases because of a provision in the federal health law requiring plans to beef up coverage.
National Journal | Obama Worried About Health Reform Law - Report
President Obama may be expressing confidence publicly that the Supreme Court will uphold the 2010 Affordable Care Act, but in private dinners with donors he's admitting he is worried, Bloomberg reports on Friday.

Econ Comments & Analysis                                                                                            
WSJ | The 5th Avenue to Serfdom
American big cities tend to be one-party states to begin with, but at least their totalitarian impulses end up being merely cute because they're so easy to evade.

Blogs                                                                                                                             
Heritage Foundation | Obamacare’s Five Most Damaging Effects on Seniors
In anticipation of the Supreme Court’s Obamacare decision, it is important to remember that the constitutionality of the individual mandate isn’t the only problem with the law.

Monetary

News                                                                                                                             
CNN Money | Fed's Fisher: No need for QE3
The elephant in the room - QE3 - is stomping around again thanks to that deeply disappointing jobs report. So, will the Federal Reserve open the floodgates and throw more stimulus into the market?
Market Watch | Rehn: EU weighs bank recapitalizations via ESM
The European Commission has considered the possibility of directly recapitalizing euro-zone banks via the region's permanent bailout fund, but such a maneuver would require a treaty change, Olli Rehn, commissioner for monetary and economic affairs, said Monday, according to news reports.
Bloomberg | JPMorgan So-Called Hedge Is Awkward for Fed Knowing Its Meaning
When is a hedge not a hedge? That’s the question regulators from the Federal Reserve to the Office of the Comptroller of the Currency are confronting after JPMorgan Chase & Co. (JPM) reported a $2 billion trading loss from a credit-derivatives position Chief Executive Officer Jamie Dimon called a “hedge.”

Blogs                                                                                                                             
Minyanville | First Deflation, Then Inflation. But the Timing...?
Today we will examine that question in more detail, as we look at how interest rates could actually be negative (!!!) this week in German and Swiss bonds and why the US 10-year has dipped below 1.5%.
The Economist | A central-bank failure of epic proportions
I'd like to say a bit more about the policy side of things given the state of the world economy. There is a great deal of attention paid to fiscal issues, and certainly fiscal issues deserve scrutiny.
WSJ | With Rates so Low, QE3 Won’t Matter
Here’s the problem, already cited by many observers: the market has done what any additional Fed monetary easing (code name: QE3) would maximally accomplish, lowering interest rates to induce more borrowing and increase economic activity.

Taxes

News                                                                                                                             
CNN Money | Estate tax increase: Forgotten fiscal cliff issue
The estate tax was here. Then it was gone. Now it's back. And it's about to become much bigger next year.
NY Times | A $1 Cigarette Tax Starts a $47 Million Brawl in California
California has some of the toughest antismoking laws in the country — it is illegal, in some places, to smoke in your own apartment — and boasts the second-lowest per capita smoking rate in the 50 states.
CNN Money | Eurozone unemployment at record high 11%
The 17-nation eurozone's unemployment rate reached the highest level since the creation of the common currency 13 years ago, climbing to 11% in April as employers slashed 110,000 jobs.

Econ Comments & Analysis                                                                                            
WSJ | How to Put a Waitress Out of Work
It's an election year, which means there's no shortage of legislative proposals that appeal to the heart rather than the head. A recent example is Sen. Tom Harkin's Rebuild America Act.

Blogs                                                                                                                             
CATO | More Sub-Par Employment Numbers
The Labor Department just released its monthly employment report and the White House is probably not happy.
WSJ | Vital Signs: Fewer Help-Wanted Ads
The number of help-wanted ads posted online fell in May. Total U.S. job vacancies on the Internet slipped by nearly 1% from April to 4.72 million, the Conference Board said.

Employment

News                                                                                                                             
CNN Money | Why the unemployment rate will fall
The unemployment rate could fall in coming months, but don't get too excited.
USA Today | U.S. employers waiting and watching before hiring
Business has picked up. Yet American companies are too nervous to step up hiring.
Washington Times | U.S. hiring likely modest for 3rd straight month
U.S. companies likely hired at a modest pace in May for the third straight month, underscoring the slow but steady nature of the recovery.
NY Times | Obama Turns to Congress for Jobs Help
Stung by a new report showing that the nation’s job market is sputtering, President Obama made a new appeal Friday for Congress to enact measures to revive the economy, not only to shake the United States out of its torpor but to act as a buffer against storm clouds in Europe.

Econ Comments & Analysis                                                                                            
Heritage Foundation | Heritage Employment Report: May Jobs Report Has No Spring in Its Step
Given all of this economic news, the U.S. economy cannot afford the massive tax hikes scheduled for the end of this year. Congress should act quickly to prevent massive tax increases—a genuine Taxmageddon—from further weakening the labor market.
WSJ | Promises, Promises
Actually, according to the Bureau of Labor Statistics, "nonfarm payroll employment changed little in May (+69,000), and the unemployment rate was essentially unchanged at 8.2 percent."
Real Clear Markets | The Hidden Message In Friday's Unemployment Number
The weak showing in May nonfarm payroll jobs - up 69,000 - failed to pass the Bureau of Labor Statistics (BLS) test of statistical significance and so in technical parlance the change was not different from zero.
Forbes | As Unemployment Predictably Rises, the Solution Couldn't Be Simpler
In January, the Congressional Budget Office projected that the jobless rate would rise to 8.9 percent by the end of this year – today’s report bumped it up from 8.1 to 8.2 – and that Gross Domestic Product would increase a mere 2 percent for 2012 and just 1.1 percent for 2013.

Blogs                                                                                                                             
WSJ | Broader Jobless Rate Jumps to 14.8%
The U.S. unemployment rate ticked up to 8.2% in May and a broader measure rose even more to 14.8%. But the increases belied a slightly positive trend.
Daily Capitalist | Unnatural Disasters: Jobs, Wages, And Savings
The employment numbers that came out today (Friday) were very bad and caught most economists and analysts by surprise. Nothing the Fed has done has worked.
WSJ | Even Mediocre Job Growth Coming From Wrong Places
The number of Americans working full-time fell by 266,000 in May, erasing all the gains of the past three months. The total employment figure only rose because 618,000 more people got part-time jobs.
Calculated Risk | Sluggish Growth and Payroll Employment: An Update
At 200,000 payroll jobs per month, it will take an additional 25 months (June 2014) to get back to the pre-recession level from the current level.
Political Calculations | The Jobs Picture for May 2012
By now, you've heard that the May 2012 jobs report was really dismal. And why wouldn't you think that, especially if you go by the portion of the report that says that the U.S. economy only added 69,000 jobs in May 2012.

Budget

News                                                                                                                             
WSJ | Balanced Budget for Spain's Regions
The Spanish government said Friday that the country's regions posted a balanced budget in the first quarter, a rare piece of good news that the government hopes will bolster confidence in the ailing economy even as fresh signs of strain emerge.
National Journal | Where Is Congress With Appropriations?
Both the House and the Senate appropriations committees are off to strong starts in the appropriations process for fiscal 2013. Will both chambers pass all 12 major bills before the end of the current fiscal year on Sept. 30? Probably not.
WSJ | Irish Voters Seen Passing European Union Fiscal Pact
Ireland headed to the polls Thursday for a vote on the European Union's fiscal treaty, designed to bring financial stability to the euro zone by binding countries to tougher rules on balancing their budgets.
Bloomberg | U.S. Employers Add 69,000 Jobs, Fewer Than Forecast
The American jobs engine sputtered in May as employers added the fewest workers in a year and the unemployment rate rose, dealing a blow to President Barack Obama’s re-election prospects and raising the odds the Federal Reserve will step in to boost growth.
WSJ | Spain Says It Has Months to Raise Bank-Rescue Funds
Spain's government says it has until at least October to raise the funds it needs for the €19 billion ($23.5 billion) rescue of lender Bankia SA, a move government officials hope will let Madrid pick the right moment to raise funds from financial markets and explore other funding options as it aims to avoid an international bailout.

Econ Comments & Analysis                                                                                            
WSJ | California's Casino Budgeting
California's fiscal and governance crisis careens from bad to worse. The latest blow: a 70% increase in the state's projected budget deficit in Gov. Jerry Brown's revised budget, to $16 billion from $9 billion.
Forbes | Austerity With Growth? Easy To Achieve, But Witless Politicians Don't Know How
Now Europe’s leaders say they want “austerity with growth.” Sounds nice. They have no clue as to how to achieve it.
WSJ | Bank-Bailout Lessons
In Europe's endless crisis, the latest focus is Spain's banks. Some €31 billion in deposits fled Spanish lenders in April, the second largest monthly capital flight from Spain in the euro era.
Forbes | The Ugly Truth About Social Security Is Revealed
A recent front page USA Today story inadvertently exposed the lie that is Social Security. Though the article was ostensibly about budget deficits, and how unfunded liabilities of the Social Security variety were not properly being accounted for in deficit calculations (they quadruple taxpayer liability), a staff expert at a liberal think tank shed light on why.
Project Syndicate | Austerity and Debt Realism
Many, if not all, of the world’s most pressing macroeconomic problems relate to the massive overhang of all forms of debt.

Blogs                                                                                                                             
CATO | Looking at Austerity in Spain
Spain is perhaps the weakest link in the Eurozone after Greece. Almost a quarter of its labor force is unemployed; its banking system is extremely vulnerable and it might collapse anytime; housing prices haven’t yet returned to normalcy after the burst of its real estate bubble; and the economy is in its second recession in two years and it’s expected to contract further in 2012 and maybe even in 2013.
Keith Hennessey | The Obama spending binge
Over Obama’s four budget years, federal spending is on track to rise from $3.52 trillion to $3.58 trillion, an annualized increase of just 0.4%.