Friday, July 13, 2012

General Economics

CNN Money | JPMorgan's trading loss: $5.8 billion
JPMorgan said Friday that the loss from the bank's chief investment office's errant trades has totaled $5.8 billion so far this year.
Market Watch | Consumer sentiment lowest since December
The University of Michigan-Thomson Reuters consumer-sentiment index fell to a preliminary July reading of 72 -- the lowest since December -- from 73.2 in June, according to Friday reports.
USA Today | Moody's downgrades Italy debt rating 2 notches
Credit ratings agency Moody's Investors Service has downgraded Italy's government bond rating two notches on concern that deteriorating financial conditions in Europe will lead to a sharp rise in borrowing costs.
CNN Money | Euro slides to fresh 2-year low
The euro continued to weaken against the dollar Thursday, falling to another two-year low as investor fear over European stability intensified.
USA Today | Thirty-year mortgage rate drops to another record low
Average rates on fixed mortgages fell again to record lows, giving would-be buyers more incentive to brave the housing market.
CNN Money | 700,000 homeowners no longer underwater on mortgages
Thanks to improving home prices, fewer mortgage borrowers owe more on their homes than they are worth.

Econ Comments & Analysis                                                                                            
WSJ | What's Really Behind the Entitlement Crisis
Demography is not a popular subject, nor is it discussed much in the public square. But it casts a long shadow over the entitlement crises in nations everywhere, including our own.
CBO | Infrastructure Banks and Surface Transportation
From 2008 to 2011, governmental spending on surface transportation infrastructure—highways, mass transit, and passenger rail—totaled $200 billion a year.
Washington Times | Exit strategy from the United Nations
For years, pundits, politicians and columnists - including me - have fiercely criticized the United Nations. This institution has become a political cesspool controlled by totalitarian states and rogue nations that despise democracy, liberty and freedom. It’s only getting worse with time.
NBER | Men, Women, and Machines: How Trade Impacts Gender Inequality
This paper studies the effect of trade liberalization on an under-explored aspect of wage inequality – gender inequality. We consider a model where firms differ in their productivity and workers are differentiated by skill as well as gender.
WSJ | The Middle Class Needs a Lifeline
You can't conduct a small-group discussion with ordinary Americans today without coming back shaken. They are in trouble, and they know they are in trouble. They are holding on or slipping, dealing with unemployment in the family, the overhang of debt and loss of any cushion in life.

Heritage Foundation | CBO Report Confirms Rich Already Pay Their “Fair Share”
The Congressional Budget Office (CBO) just released its latest estimates on the share of taxes paid by income level, giving voters a way to check the argument that the rich do not pay “their fair share.”
AEI | Julia’s mother: Why a single mom is better off with a $29,000 job and welfare than taking a $69,000 job
The U.S. welfare system sure creates some crazy disincentives to working your way up the ladder. Benefits stacked upon benefits can mean it is financially better, at least in the short term, to stay at a lower-paying jobs rather than taking a higher paying job and losing those benefits. This is called the “welfare cliff.”
Calculated Risk | Buffett: US Housing Picking Up, Rest of economy slowing down
In a live CNBC interview from Sun Valley with Becky Quick of "Squawk Box," Buffett says the general economy's growth has "tempered down" so that it is now "more or less flat."
AEI | Exposing the food stamp stimulus fallacy
Here’s some amazing, Keynesian-style voodoo economics from the U.S. Department of Agriculture claiming that every additional $1 of food stamp spending magically creates almost $2 in new economic activity

Health Care

Washington Times | Slow growth expected in costs for medicines
Spending on medicine will grow at historically low levels in the U.S. during the next two years while developing countries will see such spending double and match the U.S. market by 2016, a report released Thursday shows.
National Journal | Kentucky to Set Up Insurance Exchange
Kentucky wants to set up its own health insurance exchange, the state told the federal government on Tuesday.
CNN Money | Trying to duck health care's employer rules? Don't bother
In the wake of the Supreme Court's health care decision, several companies with 50 or more full-time workers have embarked on a quest.

Econ Comments & Analysis                                                                                            
WSJ | Medicaid Moment of Truth
In medicine, the treatments known as heroic measures pose grave risks to patients but are performed anyway because the alternative is certain death. That also more or less describes what Chief Justice John Roberts did to save the Affordable Care Act, and now the entitlement faces another challenge, especially in the states.

Heritage Foundation | Facts Deflate Sebelius’s Defense of Obamacare
It must be a tough job defending Obamacare, but someone’s got to do it. This week, that someone is Secretary of Health and Human Services Kathleen Sebelius, who wrote an op-ed for The Washington Post.


WSJ | Euro-Zone Banks Still Hoarding
The European Central Bank's latest interest rate cuts have finally taken effect, but there was still no convincing sign Thursday that euro-zone banks had stopped hoarding their excess cash.
Market Watch | Fed slated to release Libor documents
The New York Fed is slated on Friday to release documents about problems with a global benchmark interest rate during the financial crisis as the controversy swirls on both sides of the Atlantic.
Market Watch | U.S. wholesale prices rise 0.1% in June
U.S. wholesale prices rose a seasonally adjusted 0.1% in June as higher costs for food, light trucks and appliances offset another decline in energy costs, the Labor Department said Friday.
CNN Money | Geithner identified Libor problems in '08
Treasury Secretary Tim Geithner suggested ways to prevent banks from manipulating the Libor interest rate in a memo to the Bank of England back in 2008, when he was president of the New York Federal Reserve, according to a copy of the memo published Friday.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Central Banks Pour Gasoline On the Fire
The US Treasury completed a re-opened auction of 10-year government bonds yesterday into what was an otherwise uneventful day in US markets. Just before the auction was completed, the expected 10-year yield ("when issued") was trading about 1.516%, an extremely low level itself.

Economist | QE sera, sera
This week's print edition includes a long primer on QE. Asset-purchases have been the principal unconventional monetary policy tool deployed by rich-country central banks in this crisis, and their use is once again ramping up; the Bank of England just scaled up its QE plans by £50 billion, the Fed may use its next meeting to pivot from "Twist" operations back to QE proper, and the ECB's recent interest rate moves have some suggesting that QE could be on the table there, as well. 
Economist | The inflation question
What you may be able to pick out there is that the Fed tends to respond to falling inflation expectations. Over the past few months, inflation expectations have been moving down; they're currently at about 1.78%. But unless there is a substantial drop in expectations in the next couple of weeks, a decision at the Fed's next meeting (on July 31-August1) to initiate new asset purchases would mark the highest level of 5-year inflation expectations at which a new purchase plan was rolled out.


Roll Call | GOP Blocks Senate Small-Business Tax Cut Bill
Senate Republicans made good on their threat to filibuster a Democratic small-business tax cut bill today, ensuring the bill fell seven votes short of what it needed to move forward.

Econ Comments & Analysis                                                                                            
Brookings | End the Bush Tax Cuts and Start Over
Earlier this week, President Barack Obama proposed to extend the Bush-era income tax cuts, which expire at the end of this year, for one year for people with income below $250,000. People with higher income would continue to receive all of the benefits of lower taxes on their first $250,000 of income, but the tax rate they face on income above that amount would rise.

Heritage Foundation | Obama’s Small-Business Tax Could Average $25,000
President Obama has made raising taxes on “the rich” a central plank of his re-election campaign. Yet even many Democrats are questioning the wisdom of hiking taxing on job creators while the economy is still struggling and unemployment is still lingering at over 8 percent.
Politico | Webb 'a no' on Obama tax plan
Sen. Jim Webb (D-Va.) said Thursday he's opposed to President Barack Obama's plan to extend the Bush-era tax cuts to household income under $250,000 for one year, joining Sen. Joe Lieberman (I-Conn.) as two members of the 53-member Senate Democratic Caucus who plan to vote against the plan.
CNN Money | The Bush tax cuts everyone would keep
Washington is locked in a battle over what to do about the Bush tax cuts, which are set to expire at the end of the year.
Greg Mankiw | Anti-poverty programs raise effective marginal tax rates
We calculate the effective average marginal tax rate if this household increases its income from $10,000 to $40,000. That is, how much of the additional $30,000 of earnings is lost to government through direct taxes or loss of benefits?


Washington Times | U.S. jobless claims plunge to lowest in 4 years
The number of people seeking unemployment benefits plunged last week to the lowest level in four years, a hopeful sign for the job market — but the decline was due party to temporary factors.

Political Calculations | Worst. Recession. Jobs. Recovery. Ever. Updated.
In the chart, we're measuring the strength of all the post World War II recession recoveries as measured from the very bottom of payroll jobs lost. The last time we featured it, the recovery from the 2007 recession was just barely the worst ever.
WSJ | About 2.7 Million Jobs for Youth Are Missing
More than two and a half million jobs for young people aged 16 to 24 are currently missing from the American economy, according to a new report that paints a depressing picture of the economic outlook for that age group.


WSJ | Spaniards Feel Sting of Big Budget Cuts
When Spain's government announced €65 billion ($79.7 billion) in planned budget cuts on Wednesday, it didn't take long for local Mazda salesman Sergio Junquera to feel the impact.
Bloomberg | Spanish Banks’ ECB Loans Leap to Record Amid Bailout: Economy
Spanish lenders’ net borrowings from the European Central Bank jumped to a record 337 billion euros ($411 billion) in June as the European bailout agreement failed to ease their access to funding.
FOX News | US government records $904.2B deficit through June
The U.S. budget deficit grew by nearly $60 billion in June, remaining on track to exceed $1 trillion for the fourth straight year.