Wednesday, July 18, 2012

General Economics

CNN Money | Bank of America's earnings win
Bank of America beat analysts' expectations for its second-quarter earnings Wednesday but missed revenue forecasts.
WSJ | Fed Dims View, Weighs Its Options
Federal Reserve Chairman Ben Bernanke delivered a bleak new assessment of the U.S. economy to lawmakers on Tuesday but remained guarded about what, if anything, the Fed would do about it.
CNN Money | More signs of a housing rebound
A recovery in home construction seems to be underway, with both housing starts and permits up in June year-over-year, according to a report released Wednesday by the Census Bureau.
Market Watch | New-home construction rises 6.9% in June
U.S. builders started construction on new homes in June at the fastest pace since fall 2008, though building permits fell, the government reported Wednesday.

Econ Comments & Analysis                                                                                            
AEI | Is the financial system stable without regulation?
In recent weeks, the Fed has been pressing the SEC to tighten the regulation of money market mutual funds (MMFs)-a step which surveys show could substantially reduce the value of this $2.6 trillion industry to corporate investors. But there is much more at stake in this controversy than the future of an industry.
WSJ | Asia Needs Economic Reform, Too
Asia has lost its economic stride. China's central bank has cut rates twice in quick succession, and Korea's central bank surprised with a rate cut last week.
Businessweek | The Last Years of America's Historic GDP Reign
If the International Monetary Fund is right, in a mere four years the U.S. will no longer be the world’s largest economy.
CNBC | Congress, Not the Fed, Needs to 'Get to Work'
The Senate Banking Committee’s grilling of Federal Reserve Chairman Ben Bernanke just got weird.
Washington Times | Millennial mortgage shortage
Voters in the swing states are unemployed or underwater or both. The 2012 average home price in all-important Florida has fallen 48 percent off its peak and 61 percent of mortgage holders in Nevada are underwater.
WSJ | The Feds' New Mortgage Disclosures Are a Bust
The Consumer Financial Protection Bureau's "Mortgage Disclosure Team" just came out with two proposed forms that are supposed to make things easier for borrowers. It took CFPB a year and half of research, drafting and field testing to produce the new documents.
Politico | Investing in America produces the best return
The question I’m most often asked these days is, “Where should I invest?” In recent years, we all know, there has been an unusually high degree of uncertainty.

Calculated Risk | First Look at 2013 Cost-Of-Living Adjustments and Maximum Contribution Base
The BLS reported this morning: "The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.6 percent over the last 12 months to an index level of 226.036 (1982-84=100). For the month, the index decreased 0.2 percent prior to seasonal adjustment."
Daily Finance | Oh, Canada! Americans' Northern Neighbors Are Now Richer
The U.S. may bill itself as the land of opportunity, but right now, Canadians are making out better.
CATO | Beyond Manufacturing
Yesterday, a World Trade Organization panel ruled that certain actions taken by China related to the processing of electronic payments (e.g., credit cards) violate WTO rules on trade in services. 
Heritage Foundation | Obama Ends Welfare Reform as We Know It, Calls for $12.7 Trillion in New Welfare Spending
Last Thursday, the Obama Administration quietly issued new bureaucratic rules that overturned the popular welfare reform law of 1996. This was an illegal move, and it completely undoes years of progress that helped millions of Americans.

Health Care

National Journal | Health Reform Is Law Now, but It Will Change, Says Former CMS Head
The Affordable Care Act is now law and implementation will move forward, but the law is almost certain to change, a former administrator for the Centers for Medicare and Medicaid Services told an audience of health policy experts on Tuesday.
National Journal | Health Funding Fights Hit House Appropriations
Partisan sniping will be in full force on Wednesday morning as the House Labor, Health and Human Services Appropriations Subcommittee meets to mark up its fiscal 2013 bill, with Republicans proposing to slash funding to below 2009 funding levels.

Econ Comments & Analysis                                                                                            
WSJ | Report Details Threats to States' Fiscal Health
Rising Medicaid costs and pension expenses for public employees threaten states' abilities to provide basic government services as they continue struggling with unreliable tax bases in a weak economy, according to a task-force report.

Politico | Obama: Health care mandate is a 'principle'
In the ongoing debate over whether the Affordable Care Act's mandate is a tax or a penalty, President Obama tried a different approach — calling it a "principle."
National Review | The One Word That Could Trip Up Obamacare
If the bill was properly drafted (which is a separate question altogether considering how fast it was written) and Cannon and Adler are correct, the “tax subsidies were meant [to] encourage states to build exchanges and not leave the task to the federal government,” Kliff explains.


Bloomberg | Bernanke Outlines Range of Options for Additional Easing
Federal Reserve Chairman Ben S. Bernanke outlined options to ease policy further in case the flagging economic recovery fails to lower unemployment.
CNBC | Strong Possibility of Further Fed Easing by September: Goldman
The U.S. Federal Reserve could ease monetary policy when policymakers meet in August or September, although a large move is more likely to come only after the elections later in the year, Goldman Sachs said in a report.

Econ Comments & Analysis                                                                                            
CRS | LIBOR: Frequently Asked Questions
This report answers several common questions regarding the London Interbank Offer Rate (LIBOR), an index representing prevailing interest rates in London money markets.

Economist | To target, and beyond
Britain's inflation figures released this morning—the lowest since November 2009—kill off the idea inflation is its biggest problem. The consumer price index dropped to 2.4% in June, down from 2.8% in May. The retail price index, which includes housing costs, was 2.8% in June, down from 3.1% in May.
FOX News | Bernanke: Fed had no power to change LIBOR
Federal Reserve Chairman Ben Bernanke learned from news reports four years ago that banks were manipulating a key British interest rate. But Bernanke said Tuesday that the Fed was powerless to do anything beyond contacting British authorities.
WSJ | Boston Fed Wants to Cut Discount Rate, Kansas City Fed to Raise It
Federal Reserve officials discussed possible monetary policy action last month amid concerns about recent signs of weakness in the U.S. economic recovery, but kept the discount rate unchanged as expectations continued for moderate growth


CNBC | Democrats Propose Plan to Sidestep Anti-Tax Pledge
Senate Democrats — holding firm against extending tax cuts for the rich — are proposing a novel way to circumvent the Republican pledge not to vote for any tax increase: Allow all the tax cuts to expire Jan. 1, then vote on a tax cut for the middle class shortly thereafter.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Look Who's Holding the Economy Hostage Now
On Monday, Sen. Patty Murray, who heads the Democratic Senatorial Campaign Committee, said that "unless Republicans end their commitment to protecting the rich above all else, our country is going to have to face the consequences of Republican intransigence."
Washington Times | Obama’s double-tax rap
Foreign investment would be attracted to America and our own companies’ profits would stay at home if the top U.S. corporate tax rate were lowered and we made the switch from a worldwide to a territorial tax system so that businesses would only be taxed in the country where the profits are made.
Forbes | Income Equality Is the Road to Middle-Class Taxation
It’s staple fare in opinion pages and textbooks these days that “inequality” has been on the rise in this country over the past generation. President Obama’s economic policy, for what it’s worth, has been based on this premise. The introduction to Obama’s first budget, back in 2009, went on at length:
Heritage Foundation | Congress Should Not “Pay for” Stopping Taxmageddon Tax Increase
Taxmageddon is a massive one-year $500 billion tax increase that is poised to strike the economy on January 1, 2013. It is mostly the result of tax policies that expire at the end of the year.

Heritage Foundation | New Poll: Majority of Americans Want to Stop Tax Hikes for All Incomes
A new poll shows the majority of Americans—including those on the low end of the income spectrum—are against hiking taxes for those making more than $250,000.
Political Calculations | Maryland vs Virginia: Tax Returns
We're going to feature three charts today, in which we'll compare the states of Maryland and Virginia in the United States. Why?


Bloomberg | U.S. to Lose 710,000 Jobs From Tax Rise, Chamber Says
The U.S. would lose 710,000 jobs and economic output would decline by 1.3 percent, or $200 billion, if tax cuts for high earners are allowed to lapse, said a report prepared for the U.S. Chamber of Commerce and other supporters of the tax breaks.
National Journal | Bernanke: Economy Faces Dire Risk From Fiscal Cliff
Federal Reserve Board Chairman Ben Bernanke delivered a bleak assessment of the U.S. economy on Tuesday, warning of dire risks surrounding the approaching fiscal cliff.
Bloomberg | Temporary Work Demand Rises as Companies Avoid Commitments: Jobs
As orders from food makers have picked up during the past year, Create-A-Pack Foods Inc. turned to a staffing company, Kelly Services Inc. (KELYA), to add about 100 workers.

Econ Comments & Analysis                                                                                            
Real Clear Markets | The Government Worker Retirement Spree
Now that states and cities are requiring workers to contribute more to their health and pension costs and work longer before retiring, government employees are rushing to the door, according to press reports. That's not surprising, but it's also not quite as unusual as the press would have us believe.


CNN Money | Bowles and Simpson: Still pushing boulder up the Hill
A new campaign launched Tuesday aims to create public support for lawmakers who have been too afraid to back a bipartisan debt-reduction plan.
Market Watch | State budget crisis seen lasting
Even if the U.S. economy rebounds from the meltdown of 2008, leading budget experts said Tuesday that the financial crises facing many states will continue indefinitely.
Politico | GOP fears shutdown showdown
Top congressional Republicans are plotting ways to avoid a government shutdown fight when the fiscal year ends Sept. 30, believing the partisan brinkmanship that defined last year’s budget battles would be devastating to their party heading into the November elections.

Econ Comments & Analysis                                                                                            
CNN Money | Fiscal cliff fight: Missing the big picture
Which is worse: Republicans' threat to not raise the debt ceiling without more spending cuts? Or Democrats' threat to go off the fiscal cliff unless taxes go up on the rich?

National Review | You Can Raise Taxes, But You Still Have a Spending Problem
President Obama has repeatedly said he wants to let the Bush-era tax cuts for couples earning more than $250,000 a year ($200,000 for individuals) expire at the end of the year.