Posts

Showing posts from November, 2013

Does media bias boost Dem advantage in GDP growth?

Over at Econbrowser, Professor Hamilton discusses a recent paper by Blinder and Watson that looks at the difference between GDP growth rates under Democratic and Republican administrations.  Growth is higher under Democratic administrations, but the researchers find that this is due to luck, not policy.  Republicans tended to be in office during GDP-killing oil shocks, while Democrats benefited from things like the productivity-enhancing growth of Walmart.

But the third factor after oil shocks and productivity gains cited by the authors is "more optimistic consumer expectations (as measured by the Michigan ICE)."  Could this be influenced by more optimistic media coverage of the economy during Democratic administrations?  Remember the relentless drumbeat of negativity in the media during the second half of the Bush I presidency? Surely that constant refrain begins to affect consumer sentiment.  A 2004 Federal Reserve study found that indeed, news coverage does significantly …

Obamanation permanent government dependency in action

Hear it from the mouth of the "beneficiary."  Is this the country you want?  Is this good for the recipients?



Incentives, people.  Incentives.

HT: Mish.

Businessweek reporter Kyle Stock is a blithering idiot

Image
Proving once again that a little knowledge is a dangerous thing, Bloomberg / Businessweek reporter Kyle Stock beclowns himself by pretending to understand financial ratios.

Stock makes the attention-grabbing claim, "Hey, Shoppers: Black Friday Savings Are a Hoax" based on corporate operating margins:
Forget the door-busters, coupons, and “friends and family” deals. U.S. shoppers on the whole will be paying more over the next few weeks than they do the rest of the year. Turns out, retail profit margins tend to be higher during the holiday period, despite all the promotions.

Among the 15 largest U.S. retailers, operating margins in the holiday quarter last year were 11 percent, compared with 9 percent in the preceding nine months. Amid the year-end shopping frenzy, these companies padded their bottom lines, on average, by roughly one-quarter.

Wrong, moron. Higher holiday season operating margins do not mean shoppers are paying higher prices.

Kyle Stock doesn't understand …

Happy Buy Nothing Day!

Just Say No to crap consumerism. Get out there and Buy Nothing!

Happy Thanksgiving!

Image
Cartoon by Rick McKee

The magazine that couldn't tell an empty suit from a messiah

Image

Greenspan's Body Count: Harmandeep Singh and Karanjit Kaur

We were commenting just yesterday that Greenspan's Body Count has slowed down. Most victims of Greenspan's bubble have long since been foreclosed, gotten loan mods, found new jobs, or otherwise hung onto their houses long enough for Bernanke's echo bubble to bail them out.

Well, speak of the devil...

ABC Fresno:
Police say they have uncovered a critical piece of evidence that is shedding light on what lead to two deaths over the weekend at a Fresno home. The man who police believe shot and killed his wife and then turned the gun on himself left behind a note.

Family members Monday said Harmandeep Singh left a suicide note that was turned over to detectives. While the couple may have seemed to be all smiles around their family, police are finding there were some underlying problems.

[...]

Since Saturday, investigators have learned the pair had some financial problems police believe may have contributed to the murder-suicide.Harmandeep Singh and Karanjit Kaur lived at 6577 W…

Thought for the day

Who would have thought that a guy with no understanding of economics trying to rule a command economy by executive order would be a problem?

Zimbabwe Janet: I'm going to keep printing like a mofo

From the mouths of maniacs:
We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession. Unemployment is down from a peak of 10 percent, but at 7.3 percent in October, it is still too high, reflecting a labor market and economy performing far short of their potential. At the same time, inflation has been running below the Federal Reserve's goal of 2 percent and is expected to continue to do so for some time.

For these reasons, the Federal Reserve is using its monetary policy tools to promote a more robust recovery. A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases. I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.Sounds like she just took the December taper off the table.

Thought for the Day

"Most realists, they die sad and alone. You gotta bullshit some too." - Mike Tyson
Image

Bubbles

Image
We've been thinking a lot about bubbles lately. Bonds are clearly in a bubble by any measure. Real estate has surpassed the highs of the last bubble in many high-end areas.

Stocks are at all-time highs, and at extremes by many valuation measures after four and a half years of double-digit returns. But as we noted in 2010, the government and the Fed can't afford to let stock or real estate prices fall. Since that time, the banks have earned their way back to healthy balance sheets thanks to free Fed money, but households and Federal, state, and local governments would all be devastated by a collapse in stocks and house prices. It's not CPI deflation the Fed is terrified of; it's asset price deflation. Therefore, the printing will continue as long as it's necessary to keep asset prices up.

John Mauldin has an excellent review of the history of financial bubbles over the last 100 years here. You'll have to sign up for his free newsletter to read the whole t…

TSA worker goes postal at LAX [UPDATED: nope]

BREAKING. Source tells @CBSNews TSA agent who was shot at LAX has now died; the suspect is an off-duty TSA agent.
— Charlie Kaye (@CharlieKayeCBS) November 1, 2013

UPDATE: Nope?

Federal officials: suspect arrested in LAX shooting is 23-year-old Paul Anthony Ciancia, a US citizen & LA-area resident - @PeteWilliamsNBC— NBC Nightly News (@nbcnightlynews) November 1, 2013