Month: January 2013
Despite GDP contracting at an annual rate of 0.1% in Q4 2012, the worst quarter since the end of the recession in 6/09, another recession isn’t in the cards. That’s because the data also showed relatively strong spending by consumers…
Read MoreGiven Republican unwillingness to raise taxes and Democratic insistence on it, the delayed automatic $110 billion sequester will kick-in on March 1st. This will reduce GDP growth by 0.75% and guarantees a weak first half of ’13 as the economy…
Read MoreAs the economy strengthens, the Fed must begin to end its exceptionally expansionary monetary policy of the last half decade. It will begin by halting its purchases of $85 billion/month in Treasuries and mortgage-backed-securities. Second, it will stop reinvesting interest…
Read MoreIf a continuing resolution is not passed by the Congress by 3/27/13, the Obama administration will be forced to shut down activities funded by appropriations and all non-essential government operations. But this isn’t that ominous. Only 40% of federal spending…
Read MoreThe Friday File: Flavanols in cocoa slow and even reverse age-related cognitive decline. Better yet, a nations’ annual per-capita chocolate consumption is correlated with the number of Nobel laureates. The country with the most Nobels per-capita and the greatest per-capita…
Read MoreWhile raising taxes and cutting spending can solve our debt problem, a better approach is to foster faster growth! If an increase of 1% in the economy’s growth rate were maintained over the next decade, the debt-to-GDP-ratio in 2023 would…
Read MoreWhile the Fed has increased the money supply by $2 trillion and will increase it by another $1 trillion by 1/1/14, inflation is MIA. This is because the velocity of money, or the number of times a dollar changes hands…
Read MoreAccording to CoreLogic, house prices rose 7.4% for the 12 months ending 11/12 (6.7% excluding short sales), the best numbers since 5/06! With 30-year mortgage rates at 3.4%, this means that the real cost of financing a home is NEGATIVE…
Read MoreBecause households irrationally assign fixed amounts to budget categories such as clothes or food, price changes within a category can result in bizarre behavior; case in point, gasoline. Seems a rise in gas prices (which reduces purchasing power) causes households…
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