Monthly Archive:: December 2010

Karim on Jobless Claims Data and Year End Comments

Agreed with Karim, the relatively modest recovery remains on track. Left alone, I see GDP in the 3.5%-5.5% range for next year, and possibly more. Though they didn’t add much, the latest tax adjustments did take away the down side risk of taxes going up at year end. I do, however, see ...Read More

Full Employment Deficit

Wondering if something like the red line I drew might be some kind of approximation of what the ‘neutral’/full employment deficit needs to be. The reason would be the ‘demand leakages’ that seem to grow geometrically due to tax advantages, such as funds being added to and compounding in pension funds, insurance ...Read More

Howard Dean Comments

It’s by far my #1 concern for next year. Seth Mosler wrote: Howard dean-major liberal, progressive–msnbc-need budget cuts now and tax increases on everyone including middle class to balance budget cut soc sec and medicare should start in 2011 to save our children we have no choice and bonds keep going down ...Read More

Beijing City to Raise Minimum Wage 21%

It’s a game of political survival. The people want no inflation and they also want more income to keep up with rising prices. Not totally impossible to achieve both, but requires a lot more than the traditional macro tools taught in the western universities. Beijing city to raise minimum wage 21% By ...Read More

ECB’s Stark: Helping governments cannot and should not be a goal of these operations

Right, as if that has anything to do with inflation, thanks No question the state of the art is pitiful when it comes to mainstream headline awareness of monetary operations. Roger Erickson wrote: “€73.5 billion …. an amount the ECB will on Tuesday seek to reabsorb from the eurozone financial system to ...Read More

State Revenues Rising

Yes, revenues are going up, but my guess is actual state spending is not. In other words, the rate of state ‘borrowing to spend’ including capital budgets has likely slowed? That’s a net drop in aggregate demand- higher taxes without that much higher spending. Also, spending federal funds is already figured in ...Read More

Comments on Robert J. Shiller Article

Glenn wrote: Warren – would you care to comment on the ny times article by Robert Shiller? He’s correct on all counts, including the point that the multiplier might not be 1. In fact, a 1 multiplier requires all of our demand leakages (pension/ira type contributions, insurance reserves, other corporate reserves, ...Read More

ECB’s Stark: Helping Governments Cannot and Should Not be a Goal of These Operations

The Fed is conducting it’s QE to lower the risk free term structure of rates for the further purpose of supporting lending in the economy in general. The ECB is buying member nation debt in the marketplace specifically to help member nations fund the deficits and avoid default. What the ECB is ...Read More

Refund Anticipation Loans

Interesting! Could move income and spending from q1 to q2 ??? H&R Block 5yr 600 (+65bps) The Office of the Comptroller of the Currency told HSBC Hldgs PLC not to make refunds-anticipation loans (RALs) This prompted the bank to end an exclusive contract w/ HRB 3yrs early ...Read More

Pre Christmas update

The good news is the US budget deficit still looks to be plenty large to support modest top line growth. And as the deficit continuously adds to incomes and savings, the financial burdens ratios continue to fall, and the stage is set for a ‘borrow to spend’, ‘get a job buy a ...Read More