Monday, April 7, 2014

General Economics

CNN Money | Stock experts say the bull isn't dead yet
The 26 investment strategists surveyed in the past week by CNNMoney have an average year-end target for the S&P 500 of 1,968. That would work out to a 6.5% gain for the year and is slightly higher than what experts in our exclusive survey predicted back in January. Of course, this still pales in comparison to last year's gain of nearly 30% for the benchmark index.
WSJ | Lawmakers Worried About Fate of Pacific Trade Pact
Lawmakers who shape U.S. trade policy expressed fears Thursday that a multiyear bid to create a trans-Pacific trade pact may go the way of other moribund trade negotiations.
Bloomberg | Capital Spending in U.S. Seen From Macy’s to Berkshire
The oldest capital stock in decades, more clarity on fiscal policy, improving growth prospects and companies awash in cash mean the stars have aligned to boost spending on commercial structures and equipment, according to economists such as David Rosenberg and investors such as Brian Jacobsen. Companies from Macy’s Inc. to Warren Buffett’s railroad are planning on increasing capital outlays to enhance competiveness.
CNN Money | Brace yourself for ugly corporate earnings
Earnings for the companies in the S&P 500 are expected to be down 1.2% in the first quarter, according to estimates from FactSet Research. That would mark the first overall decline since the third quarter of 2012, when earnings fell 1%.
Market Watch | Here’s what’s killing China’s economic growth
Central to China’s economic growth is a shift from debt-driven investment to consumption.
WSJ | Nigeria's Economy Surpasses South Africa's in Size
Nigeria on Sunday took a big step past South Africa as the continent's biggest economy, a pivotal moment for two aspiring global players and one that validates foreign companies' moves into Africa's riskier markets.

Econ Comments & Analysis                                                                                            
Politico | Envying the U.S. mortgage system?
Moscow officials hoping to boost the Russian housing market have been visiting the United States for more than a year to learn how the American mortgage machine works.
Real Clear Markets | Why Has Consumer Confidence Been So Slow to Recover?
Consumer confidence is one of the most reliable and useful economic indicators. If you had paid attention to it back in 2007 and 2008, you could have safely sold your stocks well before the market plummeted. As reported by Floyd Norris recently in the New York Times, consumer confidence has finally returned to a level above where it was at the start of the recession.
AEI | High-frequency trading: We need more data
Government shouldn’t rush to judgment on Wall Street’s high-speed traders. Granted, this whole business probably looks dodgy to Main Street’s 401(k) owners and stock pickers. Financial brainiacs are employing sophisticated computer programs called algorithmic robots to quickly scan financial data streams for subtle stock-market patterns.

Heritage Foundation | How Average Americans Are the Victims of Excessive Regulation
In his State of the Union address earlier this year, President Obama vowed to wield his executive powers when faced with congressional resistance to his legislative agenda: “America does not stand still – and neither will I. So wherever and whenever I can take steps without legislation … that’s what I am going to do.”
Washington Post | More on the competitive consequences of Dodd-Frank’s regulatory burden
I’ve written on several occasions of my hypothesis that the eventual legacy of Dodd-Frank will be to promote consolidation of the banking industry, driving out small banks and entrenching too big to fail. One reason for this is the well-recognized theory that the costs of regulatory compliance often fall relatively more heavily on small than large businesses because not all types of regulatory compliance scale with size (the other is the possible entrenchment of a TBTF subsidy in capital markets, for which as an empirical matter the jury still seems to be out).

Health Care

Politico | Behind the Obamacare surprise
The administration overcame a disastrous start to actually hit 7 million enrollees. They lost two months — and all the political capital they won from the government shutdown — to a broken website that seemed to prove every one of their critics’ complaints, and fed the most negative coverage and worst polls President Barack Obama’s ever gotten.
Politico | Enrollment in Medicaid, children's health program grows by 3 million
About 3 million more people enrolled in Medicaid or the Children’s Health Insurance Program from October through February, an increase tied to the opening of the Obamacare insurance marketplaces.


WSJ | Unconventional Monetary Policies Spell Success in Any Language, Fed Paper Says
Central banks in the U.S., Japan, the U.K. and Europe all have resorted to unconventional policies in recent years to combat the global financial crisis and recession. The details have differed across international borders, but in all four cases, they’ve proven successful in terms of easing overall monetary conditions, according to new research from the Federal Reserve.
Market Watch | New IMF paper says bond purchases should be used only in rocky times
Many of the world’s leading central banks, notably the Federal Reserve, the Bank of Japan and the Bank of England, have taken the unprecedented step to purchase bonds after interest rates hit the lower bound. A new paper from the International Monetary Fund argues such purchases should be done only in exceptional times.
WSJ | Fed Releases Staff Memos Prepared for December 2008 Policy Meeting
Earlier this year, the world got a deeper look at the Federal Reserve‘s struggle to grasp and then respond to the unfolding financial crisis when the central bank released transcripts of its 2008 policy meetings.
Library of Economics | Never reason from an inflation rate change
We all know that inflation is extremely unpopular with voters. We also observe that inflation remains extremely unpopular in a variety of northern European economies, which typically have more egalitarian distributions of income (though not always wealth) than does the United States. In any case the top 0.1 percent in those countries has less wealth per capita than in the U.S. and, at least according to progressives, less political influence too.


FOX Business | Credit Suisse Faces Threat Of New U.S. Tax Probe
Credit Suisse faces the threat of a new investigation into its role in helping wealthy Americans avoid paying taxes after New York state's top financial regulator requested documents from the Swiss bank.

Econ Comments & Analysis                                                                                            
CNN Money | Should people without kids pay higher taxes?
The chat-o-sphere has been abuzz lately about a proposal by Slate columnist Reihan Salam: The childless should pay higher taxes so that lower- and middle-income parents can pay less.
CRS | Recently Expired Housing Related Tax Provisions ("Tax Extenders"): In Brief
On April 3, 2014, the Senate Finance Committee passed the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, which would extend a set of expired tax provisions through the end of 2015. These and other tax provisions that are regularly extended for one or two years are often referred to as "tax extenders."
CBO | Presentation on Raising the Excise Tax on Cigarettes: Effects on Health and the Federal Budget
Presentation by James Baumgardner, CBO’s Deputy Assistant Director for Health, Retirement, and Long-Term Analysis, to the 30th International Congress of Actuaries


National Journal | Unemployment Extension Looks Murky as Congress Heads Toward Break
With their 17-day spring break beckoning at the end of the week, House and Senate lawmakers will have to scramble to reach agreement on restoring long-term unemployment insurance. But don't bet on such a deal blooming.

Econ Comments & Analysis                                                                                            
Fortune | America's young workers: Destined for failure?
They face a very different economy than their parents' generation, so simply working hard and getting a good education is no longer enough.
Real Clear Markets | Jobs Report Drives a Stake Through Unemployment Benefits
The 0.39 percentage point increase in labor force participation since extended benefits expired in December is the largest seen for any calendar quarter since 2Q1984. And, the increase in total employment (Household Survey) during the first quarter of 2014 was the biggest quarterly advance in 14 years.
FOX News | Here are 5 signs that the US job market may finally be accelerating after a brutal winter
Hiring over the past 12 months has outpaced population growth. More workers in the prime 25- to 54-year-old age group are finding jobs. The winter freeze was less destructive to hiring than had been assumed. Layoffs have declined since February. And an increase in hours worked suggest that incomes will rise.
Fortune | Why this is the jobs recovery for the 1%
This month's jobs report, which came out on Friday, showed that we have nearly regained all the jobs that were lost in the recession. That's good, I guess. But it's also depressing that it took six years to get back to where we were -- the longest period on record. Prosperity is supposed to increase over time, not just do loops. That's not the only good reason to still be worried about the health of our jobs market.
Market Watch | Why long-time unemployed can’t get back on track
Studies show that once a person is out of the job market for longer than six months, they face a slimmer chance of finding stable work. Only 11% of the long-term unemployed find permanent, full-time work a year later, according to a research paper by Alan Krueger and other economists from Princeton University. It’s more likely that those job seekers will find unsteady work, with 14% of job hunters finding part-time work and 11% landing temporary work more than a year after losing their jobs.
Mercatus | Labor Force Participation Improves
 for Those Under 25 Years of Age
The US economy added 192,000 jobs in the month of March, according to the Bureau of Labor Statistics. Meanwhile, the labor force participation rate ticked up 0.2 points to 63.2 percent, though it remains well below pre-recession levels.

CATO | Minimum Wage Solidarity Misplaced
Senate Democrats are anxious to bring the Minimum Wage Fairness Act (S. 1737) up for a vote to express their solidarity with “progressives.”  That solidarity, however, is misplaced. The bill is not a panacea for the prosperity of low-skilled workers; it is anti-free market and immoral—based on coercion not consent.


Econ Comments & Analysis                                                                                            
Bloomberg | America’s Fiscal Health Affirmed as Treasuries Demand Rises
As the Federal Reserve scales back its unprecedented bond buying this year, the ability of the world’s largest debtor nation to attract investors underscores the strides the U.S. has made to strengthen its creditworthiness after the worst financial crisis since the Great Depression. With the budget deficit at a seven-year low and household wealth rising to a record, investors from mutual funds to foreign central banks are buying a greater share of Treasuries at government auctions than ever compared with bond dealers that are obligated to bid.
WSJ | A Golden Fiscal Rule Nurtures Prosperity
The current debate between advocates of "austerity" and "growth" is frustrating for anyone who supports limited government. Austerity folks assert that deficits are economic poison and that balanced budgets, largely achieved with higher taxes, should be the goal of fiscal policy. So-called growth advocates believe more government deficit spending will boost economic performance.