Archive for November 2011
The Five Little PIIGS
In October ’08 European banks looked pretty healthy; they held few toxic US mortgage backed securities. But, this strength was a fiction. European banks met their Waterloo in large holdings of euro-denominated sovereign debt of the PIIGS (Portugal, Ireland, Italy, Greece and Spain). The banks assumed that Germany, France, and other strong European economies would…
Read MoreThis Old House
When parties lose majority status in Congress and when a return to majority status looks tough, retirement announcements become common. When the Ds lost their majority in the House in ’94 29 announced they would not run in ’96. When the Rs lost their House majority in ’06 27 Rs did not seek reelection in…
Read MoreGovernment Closure as a Tactic
The 20 day State of MN government shutdown this July cost MN $60 million in lost revenue but saved about $65 million n salaries not paid, according the MN Management and Budget Department. Of course, the report failed to look at the damage caused to the state’s reputation. However, given that Gov. Mark Dayton (D)…
Read MoreHappy Thanksgiving
The annual US turkey crop of 248 million birds (7.1 billion pounds, or 23 pounds/person) is worth $4.4 billion. MN produces the most birds followed by NC, AR, and MI. The US produces about 750 million pounds (2.5 pounds/person) of cranberries; more than half come from WI. Lastly, the pumpkin crop is worth $117 million.…
Read MoreBad Economy, Fewer Babies
US birth rates fell for the 3rd straight year in ‘10 according to the CDC. Teen births saw the biggest decline, 9%, to 43.3 births/1,000 females, the lowest rate ever. And, for the 1st time in a decade cesarean section rates declined from 32.9% in “09 to 32.8% in ’10. More than 33% of births…
Read MoreSneaky Securities Scam
Mutual funds (MFs) must get 90% of their income from stocks, bonds and traditional securities. To bypass this, MFs that invest in derivatives and commodities set up shell corps in the Caymans to do it. They then sell shares in the offshore subsidiary shells to the mutual funds. This way the funds technically invest in…
Read MoreTaller is Richer
The Friday File: Tall men make more money than short men, about $1,000/ year for each inch they are above average. 3 smart economists (are there any other kind?) from the Univ. of PA explain why. They find that men who were short in high school earn like short men, while short men who were…
Read MoreBirmingham Bankruptcy
The biggest civic bankruptcy in America is official with Jefferson County, AL (Birmingham, AL) filing for Chapter 9 last week. Harrisburg, PA had held this dubious honor. The full impact of the filing will not be known until a judge approves the move at hearing next month and the county learns how much of its…
Read MoreStupor Committee
With barely a week before the deficit reduction panel must make its recommendations to Congress, and with little hope of success, bank on the goalposts being moved! If the Panel totally fails, expect Congress to pass a law canceling the $600 billion cuts in both defense and social programs. And, if the Panel passes something…
Read MoreTax Cut Stimulus
If Congress does not extend the temporary Social Security payroll tax cut on employees of 2% (from 6.2% to 4.2% on the first $106,800 of income) beyond the end of ’11, that would cut about $120 billion off GDP. And, if long-term unemployment compensation is not extended that’s another $30 billion. Together, that’s a 1%…
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