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Thursday, March 27, 2014

General Economics

News                                                                                                                             
Bloomberg | Economy in U.S. Expands More Than Previously Estimated
The U.S. economy grew more rapidly in the fourth quarter than previously estimated as consumer spending climbed by the most in three years, showing the expansion had momentum heading into this year’s harsh winter.
Bloomberg | Consumer Sentiment in the U.S. Declines to a Seven-Week Low
Consumer confidence in the U.S. declined to the lowest level in seven weeks as Americans turned more pessimistic about the economy.
Market Watch | U.S. corporate profits slow in fourth quarter
The growth in aftertax U.S. corporate profits slowed to 2% in the fourth quarter from 2.4% in the third quarter and 3.5% in the second quarter, adjusted for inventories and other special accounting effects, the government reported Thursday.
WSJ | Lehman to Dole Out Additional $17.9 Billion to Creditors
The team winding down Lehman Brothers Holdings Inc. said it would be doling out $17.9 billion to creditors more than five years after the investment bank's collapse triggered the financial crisis.
CNBC | Being poor not a person's fault: CNBC survey
As the nation engages in a heated debate over inequalities' causes and cures, the latest CNBC All-America Economic Survey finds a majority of Americans believe people are poor because of circumstances outside their control but are split on whether the wealthy have earned their riches.

Econ Comments & Analysis                                                                                            
Forbes | New, Revolutionary Way To Measure The Economy Is Coming -- Believe Me, This Is A Big Deal
This month a new way to measure the economy will be released, which, as time passes, will have a profound and manifestly positive impact on economic policy and politics.
Fortune | Why a mean reversion would be mean to the stock market
If the benchmarks used to determine the value of securities were to suddenly reverse course, the "new normal" could soon be history.
WSJ | Why Can't the Left Govern?
Surveying the fall in support for the governments of Barack Obama, New York City's progressive Mayor Bill de Blasio and France's Socialist President Fran├žois Hollande, a diagnosis of the current crisis begins to emerge: The political left can win elections but it's unable to govern.
AEI | Long-term home ownership trends: The US, England, and Canada
A century ago, in 1910, the U.S. homeownership rate was 46%. It rose to 48% in the great boom of the 1920s, then called “the Coolidge Prosperity,” after the U.S. President of the time. This was when the U.S. government had its first home ownership promotion: the “Own Your Own Home” campaign, begun in 1922 under then-Secretary of Commerce (later President) Herbert Hoover.
WSJ | The New Republican Reformers
Their target is the GOP, but they are not angry liberals bent on destroying it. They are reform-minded Republican leaders intent on strengthening it.

Blogs                                                                                                                             
WSJ | 5 Things We Learned in the Economic Census of Businesses
The U.S. Census Bureau on Wednesday began releasing data from its 2012 Economic Census. The survey of American businesses, taken every five years, provides the broadest and most complete picture of the U.S. economy. It also reveals changes since the pre-recession 2007 census. Below are five highlights from the report.
Heritage Foundation | How to Avoid Another Housing Crisis, Explained in Under a Minute
Fannie Mae and Freddie Mac cost taxpayers billions of dollars, even in good economic times, write Heritage’s Norbert Michel and John Ligon. When the housing market collapsed in 2008, they note, the cost to taxpayers was even higher.
Calculated Risk | NAR: Pending Home Sales Index down 10.5% year-over-year in February
The Pending Home Sales Index, a forward-looking indicator based on contract signings, dipped 0.8 percent to 93.9 from a downwardly revised 94.7 in January, and is 10.5 percent below February 2013 when it was 104.9. The February reading was the lowest since October 2011, when it was 92.2.
WSJ | Vital Signs: Still No Momentum in Business Spending
The latest data on business spending remains sluggish. Shipments of nondefense capital goods excluding aircraft edged up 0.5% in February, but that followed a 1.4% drop in January. The numbers suggest the business equipment sector is contributing almost nothing to first-quarter gross domestic product growth.

Health Care

News                                                                                                                             
National Journal | Here's Who Gets An Obamacare Extension
Obamacare's enrollment deadline isn't dead, but the administration may have just added a new loophole. The window still technically ends on March 31. But people who couldn't finish the enrollment process will get extra time to sign up, as long as they say that they tried to meet the deadline, the Centers for Medicare and Medicaid Services said Wednesday.

Econ Comments & Analysis                                                                                            
Politico | A brief history of Obamacare delays
In reality, the administration is just continuing a long pattern of delays. They’re all designed to show flexibility and help the law work better, but they also fuel a public perception that Obamacare deadlines never really mean anything.
WSJ | The Individual Mandate Goes Poof
One by one, the myths of the Affordable Care Act have been revealed. When the curtain on open enrollment falls on March 31, the last remaining big myth of ObamaCare will be fully exposed: The individual mandate has failed.

Blogs                                                                                                                             
FOX Business | What You Need To Know Before Signing Up For Health Insurance
The administration had said it wanted seven million people to sign up, but only five million have done so, according to.the most recent government report. So, you can bet the healthcare.gov website will be pretty busy over the next several days. Here’s what you need to know if you plan to sign up:

Monetary

News                                                                                                                             
Market Watch | Fed's Pianalto: Next move based on range of data
No single data point will determine how long the Federal Reserve can keep short-term interest rates low, said Sandra Pianalto, president of the Cleveland regional central bank branch, on Thursday.
WSJ | Fed Kills Citi Plan to Pay Investors
Citigroup Inc. failed to get Federal Reserve approval to reward investors with higher dividends and stock buybacks, a surprising blow to Chief Executive Michael Corbat's effort to bolster the bank's reputation following a 2008 government rescue.

Econ Comments & Analysis                                                                                            
Fortune | Citi and four other banks stumble in Fed stress tests
The Fed approves the capital plans of 25 others. Goldman and Bank of America were forced to resubmit.
Market Watch | Fed's Bullard: Financial stability concerns loom large
St. Louis Federal Reserve Bank President James Bullard said Thursday that the key risk for U.S. economy would be a bubble forming as the central bank removes monetary-policy accommodations, while he also raised concerns about financial stability in the U.S. economy.
Fortune | Redeeming Greenspan: Don't blame the Fed for bubbles
Critics love to call out monetary policy as one of the prime causes of the financial crisis. But the data just don't back that up.
CRS | Financial Condition of Depository Banks
A bank is an institution that obtains either a federal or state charter that allows it to accept federally insured deposits and pay interest to depositors. In addition, the charter allows banks to make residential and commercial mortgage loans; provide check cashing and clearing services; underwrite securities that include U.S. Treasuries, municipal bonds, commercial paper, and Fannie Mae and Freddie Mac issuances; and other activities as defined by statute.

Blogs                                                                                                                             
WSJ | Fed’s Plosser Wants Inflation to Creep Higher
A top Federal Reserve official said Wednesday he wants to see U.S. inflation, which has been undershooting the central bank’s target for some time, to move higher.
Library of Economics | Central banks do not deserve our respect
Nor (in my view) do they deserve our contempt. They should be viewed skeptically. They are trying to do a good job, but often fall well short. One such occasion occurred in 2011 when the ECB tightened monetary policy.

Taxes

News                                                                                                                             
WSJ | Illinois Governor Seeks to Keep Temporary Tax Rise
Illinois Gov. Pat Quinn proposed making permanent a temporary income-tax increase put in place in response to the recession, saying the money is needed to prevent deep cuts and continue stabilizing a state plagued by fiscal problems.

Employment

News                                                                                                                             
FOX Business | U.S. Jobs Market Dropouts Increasingly Likely To Stay Out
A growing number of Americans quitting the labor force are likely gone for good, offering a cautionary note to the Federal Reserve as it tries to gauge how tight the jobs market is and how quickly to raise interest rates.
CNN Money | Connecticut boosts minimum wage to $10.10 by 2017
The state legislature approved the bill Wednesday and Gov. Dannel Malloy, who proposed the increase, announced he would sign it on Thursday evening.
Bloomberg | Fewer Firings Signal U.S. Will Regain Growth Momentum: Economy
Fewer Americans than forecast applied for unemployment insurance payments last week, pointing to an improving labor market that will help the economy regain momentum following the harsh winter.

Blogs                                                                                                                             
WSJ | Fewest Americans Earning Minimum Wage Since 2008
The number of Americans earning the federal minimum wage or less last year fell to the lowest level since 2008, reflecting both broader wage growth and an increasing number of states setting their higher levels.

Budget

Econ Comments & Analysis                                                                                            
Daily Caller | Obama’s new budget will hamper energy job creation
Earlier this month President Obama unveiled his FY2015 budget proposal. His plan includes hefty new taxes on job creators. Much of this burden will fall on the energy industry, which has proven to be a particularly powerful engine of new employment in recent years.
Market Watch | Treasury curve now flattest since 2009
Investors ditched the Treasurys most sensitive to rising interest rates while gobbling up longer-term securities on Monday, sending the differential between their yields to the narrowest since 2009.

Blogs                                                                                                                             
Neighborhood Effects | Hercules, California’s Herculean debts
What lead the city of Hercules, California to default on its debts? Guest poster Marc Joffe, Principal Consultant at Public Sector Credit, finds a case of mission-creep in the “dynamic city on the Bay’s”  decision to issue debt to finance power plants and affordable housing.