Thursday, June 14, 2012

General Economics

News                                                                                                                             
CNN Money | Spanish borrowing costs soar: 10-year hits 7%
Spain just can't catch a break. The yield on the 10-year bond topped 7% early Thursday, just one day after Spain's credit rating was slashed by Moody's.
Market Watch | U.S. Q1 current account gap widens to $137.3 bln
The U.S. current account deficit widened to $137.3 billion in the first quarter, or 3.6% of gross domestic product, from $118.7 billion in the fourth quarter, the Commerce Department reported Thursday.
WSJ | Moody's Cuts Spain to Brink of 'Junk' Territory
Moody's Investors Service downgraded its rating on Spain to the brink of junk territory and placed its ratings on review for possible further downgrade, and it also put Cyprus two notches deeper into "junk" territory, as the latest flare-up in Europe's sovereign-debt problems continue to worsen.
FOX News | May sees pickup in homes facing foreclosure risk
Lenders initiated foreclosure proceedings against more U.S. homeowners in May, setting the stage for increases in home repossessions and short sales — scenarios that could further weigh down home values in coming months.
CNN Money | Foreclosures spike 9% in May
Foreclosure filings in May spiked 9% compared with a month earlier, according to an industry group.
Market Watch | Deutsche Bank cuts China's 2012 growth outlook
Deutsche Bank said Thursday it was lowering its forecast for China's 2012 economic growth to 7.9% from its earlier view of 8.2%, citing weakness in second-quarter activity and a slowing U.S. economy.

Econ Comments & Analysis                                                                                            
Politico | We can do better on economy
We are living through the weakest economic recovery since the Great Depression. More than 20 million Americans cannot find work, have given up searching or have been forced to accept part-time jobs. We must do better.
WSJ | Italy's Reform Stall
If last weekend's bailout of Spain was supposed to reduce the risk of euro-contagion ahead of Sunday's elections in Greece, it hasn't had the desired effect. Yields on Spanish government debt have since hit a high of 6.78% on 10-year bonds.
The American | What Our Grandkids Actually Want
The question is not ‘how will our grandkids pay back all the debt?’ Rather, it is ‘How can we grow the economy such that paying the interest will be at least as easy for our grandkids as it has been for us?’
WSJ | Whose Fault Is Today's Bad Economy?
Claiming that the U.S. economy has slowed during the past couple of years because it was in poor shape when a new president took office in January 2009 makes no more sense than Smith's explanation of his disastrous sixth inning. Just as poor pitching by Smith doomed the home team, ineffective and counterproductive policies of the past three years have put us back on the brink of recession.
Real Clear Markets | Highway Construction As Stimulus? Not So Fast
President Obama is sending strong signals that he wants more stimulus spending to keep the American economy out of recession, even if the White House is not saying it explicitly.
Washington Times | Your money is safe and sound
Nothing - absolutely nothing - is more important to Americans’ financial security than knowing that their savings and investments are safe and protected. Yet to believe the naysayers in Washington, the latest financial headlines again stir doubts about the safety and soundness of our financial institutions.
Forbes | The Economic Insanity Underlying President Obama's "Private Sector Is Fine" Gaffe
President Obama committed a major gaffe during his press conference on June 8.  However, the gaffe was not his statement that, “The private sector is doing fine.”

Blogs                                                                                                                             
Economist | Roiled
It was a "turbulent year" for global oil markets according to BP's Statistical Review of World Energy, published on June 13th. Libya's civil war and the Arab spring played a part in crimping supplies and prices rose by 40%.
WSJ | Consumers Are Facing Stronger Headwinds
Consumer headwinds are strengthening. Hiring is sluggish, incomes are barely keeping pace with inflation, future tax policy is uncertain. No wonder shoppers are taking a breather.
Coordination Problems | Lin's Last Word --- One Size Fits All Public Policy Would Be A Grave Mistake
Elinor Ostrom had a contribution planned for Project Syndicate that was published yesterday -- "Green from the Grassroots".  Many will focus on the first word in the title, I would argue that the lasting message of her work is to be found in the last word in the title.
WSJ | Weak Retail Sales Trigger Downgrades to GDP Forecasts
May’s retail sales report showed that American consumers pulled back for the second straight month. The figures are the latest sign that the recovery remains tepid, and many economists reacted by trimming their second-quarter growth forecasts.

Health Care

News                                                                                                                             
CNN Money | Employers' 'plan B' if health reform is axed
How Corporate America will react if the Supreme Court overturns the landmark 2010 health care reform law is a big fat -- scary -- question mark.

Econ Comments & Analysis                                                                                            
WSJ | Obama's Health-Care Opportunity
As the Supreme Court gets ready to announce whether President Barack Obama's heath-care reform is constitutional, some Democrats hope it strikes down the law. They believe bad news for ObamaCare is good political news for Mr. Obama.

Blogs                                                                                                                             
The American | More evidence Obamacare distracted Obama from the economy
It’s more than just a GOP talking point. The push for healthcare reform in 2009 and 2010 does seem to have distracted the Obama administration from focusing more on boosting economic growth and job creation.

Monetary

News                                                                                                                             
WSJ | Dollars Become Scarce as Argentina Cries Peso
To combat a thriving black-market in greenbacks, Argentina's government has taken to deploying tax inspectors with dollar-sniffing dogs and widely publicizing its busts of street money changers—known as arbolitos, or little trees, because of the wads of green they flash around.
Bloomberg | Fed Growth Forecasts Key to Easing as Job Market Stalls
Chairman Ben S. Bernanke told lawmakers last week the “central question” confronting the Federal Reserve at its next meeting is whether growth is fast enough to make “material progress” reducing unemployment.
FOX Business | Consumer Prices Post Biggest Drop in Over 3 Years
Consumer prices fell in May by the most in over three years as households paid less for gasoline, possibly giving the U.S. Federal Reserve more room to help an economy that is showing signs of weakening.

Blogs                                                                                                                             
Daily Capitalist | The Dreaded “D” Word
Prices are falling. The Fed will interpret this as “deflation” whereas it is more related to lack of demand. They will interpret falling prices as “deflation” and view this as dangerous to the economy.

Taxes

News                                                                                                                             
Daily Finance | Budget-Minded Moms Foot the Bill for Absurdly High Shoe Tax
Although the recession officially ended in 2009, it hasn't for Payless' core shoppers: moms with limited incomes and multiple children, Massey says. With more than 4,500 stores, the discount chain is the largest seller of children's footwear in the U.S.
Politico | Business tax negotiations get serious
Top Senate Democrats and Republicans have launched an effort to renew tens of billions of dollars in business tax breaks, which could send a signal to financial markets that the two parties can find some common ground ahead of the looming fiscal cliff facing Washington at year’s end.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Choose Lower Taxes for Economic Recovery
Senate Finance Committee Chairman Max Baucus's tax reform speech on Monday to the Bipartisan Center, a Washington think tank, indicted the American tax system. Too bad the Montana Democrat didn't propose specific remedies.
City Journal | Flatten California!
I’ve had a lot of company of late. Firms, people, investments, and tax revenues are fleeing California, repelled by the most onerous antigrowth business environment in the United States. California’s after-tax rate of return for doing business lags so far behind other states’
Heritage Foundation | Delaying Obamacare Tax Increases Key Part of Stopping Taxmageddon
Taxmageddon, a one-year $494 billion tax increase, threatens to strike the economy on January 1, 2013, unless Congress and President Obama act to stop it soon.

Employment

News                                                                                                                             
CNN Money | Nokia to cut 10,000 jobs worldwide
Nokia said Thursday it will cut up to 10,000 jobs worldwide by the end of next year, part of an accelerated cost reduction program at the Finnish cellphone maker.
CNN Money | Jobless claims on the rise
The number of Americans filing for first-time unemployment benefits climbed last week, indicating continued trouble for the labor market.

Econ Comments & Analysis                                                                                            
WSJ | Obama's United Auto Workers Bailout
President Obama touts the bailout of General Motors and Chrysler as one of the signature successes of his administration. He argues that the estimated $23 billion the taxpayers lost was worth paying to avoid massive job losses. However, our research finds that the president could have both kept the auto makers running and avoided losing money.
AEI | Only the public sector is 'doing fine'
So is it really the case that the public sector needs help more than the private sector? We are skeptical, to put it mildly.
CNN Money | Just the facts about jobs
In the coming months Barack Obama and challenger Mitt Romney will be working hard to frame how voters think about the President's jobs record. These stats will help you see beyond the candidates' spin.

Blogs                                                                                                                             
The American | Is work sharing an answer for high unemployment?
An individual today, faced with the option of working 20 hours a week or drawing unemployment benefits, might be tempted by the latter. But, back in the 1930’s, before unemployment insurance, 20 hours was better than nothing.
Heritage Foundation | At Solyndra, More Jobs Lost—and Even More Jobs Lost
Documents obtained by The Bay Citizen under the Freedom of Information Act revealed that the Solyndra bankruptcy resulted in 1,861 people losing their jobs—over 700 more than the defunct solar company previously reported. In reality, the job loss count is even higher than that. What hasn’t been counted are the jobs that could have been created with that half-billion-dollar government subsidy.

Budget

News                                                                                                                             
USA Today | Germany has much to lose in eurozone austerity standoff
The cartoon ballot making the rounds on Greek social networks offers two choices for voters deciding their country's fate in Sunday's elections: A Greek man kisses Angela Merkel's foot in one box, and boots the German chancellor in her behind in the other.
USA Today | Billions in subsidies at stake in votes on 5-year farm bill
Senate passage of a half-trillion dollar farm and food bill depends in part on resolving a dispute over subsidies between Southern rice and peanut growers and Northern corn and soybean producers.