Friday, June 13, 2014

General Economics

Bloomberg | Support Eroding for U.S. Money Funds Rule as SEC's White Pushes Vote
One year after the U.S. Securities and Exchange Commission proposed new protections for money-market mutual funds, support is eroding for the agency’s plan to rein in the riskiest funds.
WSJ | Greek Economy Expected to Return to Growth This Year
Greece's central bank said it expects the country to exit a six-year recession this year, but warned that any complacency on reforms could thwart the economy's positive momentum.

Econ Comments & Analysis                                                                                            
CNN Money | Auto bailout still largely unpopular
The CNNMoney American Dream poll shows six in 10 Americans believe the government should not have spent billions to rescue General Motors (GM) and Chrysler from the brink of bankruptcy. Just under four in 10 -- 38% -- believe the bailout was the right move.
Bloomberg | China No-Money-Down Housing Echoes U.S. Subprime Loan Risks
China’s home buyers are being offered no-money-down purchases in an echo of the subprime lending that triggered a U.S. economic meltdown and the global financial crisis.
NY Times | Remember the Problems With Mortgage Defaults? They’re Coming Back With Student Loans
Student loans, along with mortgages and car loans, have become one of the three largest sources of credit, exceeding credit-card debt. This growth in student debt appears to have caught regulators unprepared. Compared with mortgages, auto loans and credit cards, student loans are loosely regulated, and that regulatory weakness is particularly threatening to consumers because they can’t discharge their debts through bankruptcy and escape lenders who are causing them harm.
Real Clear Markets | Don't Despair, A Changing Economy Is On the Rebound
June 2014 marks five years since the Great Recession officially ended and, despite the frenetic and sometimes imaginative (remember ‘Cash for Clunkers') lever pulling by policy makers in Washington, the recovery has been anything but great.
Washington Times | Cleaning (school) house on teacher tenure
Bad teachers must go. And now they might, in California. A California court, invoking common sense with the Constitution and the law, ruled that exaggerated protection of incompetent teachers without regard for the impact on their students is a violation of the Equal Protection Clause in the Constitution. It’s a welcome victory for students in poor and minority districts.
AEI | Rescuing subprime borrowers won't fix the economy
In their new book, House of Debt, Atif Mian and Amir Sufi make a persuasive argument that a decline in consumption caused by a drop in home prices slowed the economic recovery more than a weakened banking system. Even if banks were strong, they argue, the demand for loans would still be weak. Mian and Amir Sufi blame a sharp increase in savings by highly levered homeowners for the fall off in consumption and borrowing; as a result, the authors urge taxpayers to cover homeowner losses, including unrealized losses, to stimulate demand and help grow the economy.

WSJ | Risky Business in China’s Financial System
Is China heading for a financial crisis? Some risk indicators have risen markedly over the past twelve months: Interbank rates are more volatile, with liquidity shortages increasingly common; there have been a few minor bank runs; and the country experienced its first corporate default in recent history earlier this year.
WSJ | Experts: Builders’ Shift to More Home Construction Might Take 1-2 Years
Home-building experts predict it might take a year, perhaps two, before the industry fully shifts to constructing a greater volume of homes at lower prices from its current focus of padding profit margins by selling fewer, more expensive homes.

Health Care

Politico | Obamacare Hill subsidy case to go to court
Sen. Ron Johnson’s lawsuit against the Obama administration policy that allows the federal government to pay for a portion of lawmakers’ and staffers’ health insurance policies in the Obamacare exchanges will go before a Wisconsin district court judge on July 7.
Daily Signal | 18 States Delay ‘Employee Choice’ in Obamacare for Small Businesses
President Obama has allowed 18 states to continue delaying a key part of Obamacare’s health insurance exchange for small businesses—“employee choice”—from being implemented until 2016, if then.


Bloomberg | Wholesale Prices in U.S. Unexpectedly Decreased in May
Wholesale prices in the U.S. unexpectedly fell in May, suggesting demand isn’t robust enough to push inflation closer to the Federal Reserve’s target.
WSJ | Fed Proposes Changes to Annual Stress Test
The Fed, in a proposal released Thursday, said it would limit banks' ability to distribute dividends or buy back shares if firms don't raise the levels of capital proposed as part of their official capital plan submitted to the central bank.
Bloomberg | Treasury Yield Curve Flattens Amid Fed Rate Speculation
The Treasury yield curve approached the flattest level in almost five years as investors speculated the Federal Reserve may raise interest rates sooner than forecast.

Econ Comments & Analysis                                                                                            
Real Clear Markets | Search Central Banks For Our Lost Dynamism
In light of recent events in the world of central banking and finance, I find myself increasingly drawn back to an extremely obscure episode that never amounted to much by itself. It might be fair to say that I have spent an inordinate amount of time researching this topic, commensurate with nothing other than what might fairly be called obsession; though I am reticent to take that license and instead prefer to keep it in the realm of "passionate" rather than crossing some psychiatric boundary.
Miliken Institute | Banking Structure and Regulation in 1993 and 2013
After two decades of extreme turbulence in banking and financial markets around the world, it is reasonable to ask about the current status of banking regulation and supervision. Our unique starting point for answering that question comes from the fact that 20 years ago we developed the first detailed, multi-country database on banking regulation and supervision.

WSJ | Start the Countdown: Fed to Begin Raising Rates in a Year — WSJ Survey
The Federal Reserve will likely begin raising interest rates at a gradual pace in June of 2015 after leaving them near zero for an unprecedented six-and-a-half years, according to the median estimate of economists surveyed by The Wall Street Journal.


WSJ | House Approves Permanent Small-Business Tax Break
While the move adds to momentum for congressional efforts to extend a range of now-temporary tax breaks, it also sharpens a conflict between the House and Senate over whether to extend the breaks permanently or temporarily.


National Journal | 40 Years of Unemployment Rates in One GIF
A new GIF from online brokerage firm Movoto Real Estate reveals the ebb and flow of unemployment in each state in the last 40 years. The lighter the shade, the lower the unemployment rate.
National Journal | The Job Training Program That Actually Works
When Tracie Roberts was laid off from her job at Target in 2009, she walked around the Mall of America every day for five weeks looking for work. Roberts, who's tall and soft-spoken, had worked at the Minneapolis store for 13 years as a team leader—sort of like a floor manager. She was told she was overqualified to work as a cashier. And yet without a four-year degree, she couldn't get a job in retail management. She was in her mid-40s, and she was stuck.

Econ Comments & Analysis                                                                                            
WSJ | WSJ Survey: Economists Optimistic Stage Is Set for Pickup in Wage Growth
Economists are increasingly looking for wage growth to pick up in coming months, a long-awaited development that would put more money in the pockets of consumers and could spur accelerated growth in the broader economy.
Businessweek | Here's Why the Student Loan Market Is Completely Insane
President Obama made news this week by expanding a student loan program to broaden the eligibility of borrowers and proposing to limit monthly payments to 10 percent of a student borrower’s income. On the margin, such moves might help. But the administration’s efforts don’t address a more fundamental problem: These loans aren’t calibrated for risk. In other words, students from Harvard and less-prestigious regional colleges are thrown in the same bucket, despite quite different risk profiles.
Heritage Foundation | Job-Training Reform: Finding Out What Works
Last month, congressional negotiators reached a bipartisan deal to reauthorize Department of Labor (DOL) job-training programs. Overall, the compromised legislation, the Workforce Innovation and Opportunity Act (WIOA), continues the funding of federal job-training programs that have a long history of failure based upon the results of large-scale experimental evaluations.


CNN Money | Millennials 'overwhelmed' by debt
Four in 10 millennials say they are "overwhelmed" by their debt -- nearly double the number of baby boomers who feel that way, according to a Wells Fargo survey of more than 1,600 millennials between 22 and 33 years old, and 1,500 baby boomers between 49 and 59 years old.

Econ Comments & Analysis                                                                                            
Daily Signal | 9 Government Programs Your Tax Dollars Are Being Wasted On
If someone approached you on the street and asked for a dollar to promote mohair exports—or to perfect a weight-sensing skateboard—would you give it to him? Probably not. Yet these are enterprises you have unknowingly supported through paying your federal taxes.

WSJ | Has China got an external-debt problem? Not likely
With authorities trying to curb soaring credit as China’s economy slows, companies have resorted increasingly to tapping cheap global credit and investors hungry for higher yields have been only too happy to oblige them.
WSJ | Governors Remain Cautious on Spending, Even as Tax Collections Grow
On average, states will increase spending on general operations by 2.9% in the fiscal year starting July 1, below the 5% increase this year and 5.5% average over the last three decades, according to a survey by the National Association of State Budget Officers released Thursday.