Month: January 2013

Invisible Inflation

01/16/2013

While the economy is improving, inflation is MIA. Wages adjusted for inflation were up just 0.3% in 2012 after falling 1% in 2011. Meanwhile, the CPI and core CPI (excluding food and energy) were up 1.7% and 1.9% respectively in…

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Cheap Charity

01/15/2013

By raising marginal tax rates for the upper 1% of the population from 35% to 39.6%, passage of the fiscal cliff avoidance bill will encourage increased charitable giving by the rich because it’s cheaper! To be precise, it’s 7.8% cheaper…

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Budget Deficit Perspective

01/14/2013

In 2009, the budget deficit hit a post WWII record of 10.1% of GDP as receipts fell to a 60-year low of 15.1% of GDP, while outlays hit a 60-year high of 25.2%. Only between 1942 and 1945 has the…

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Befuddling BMI

01/11/2013

The Friday File: Researchers find that being overweight (BMI between 25 and 30) surprisingly lowers risk of death by 6%, and having a BMI between 30 and 35, by 5%! While no one knows why, health experts are spinning like…

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Death of a Giant

01/10/2013

James McGill Buchannan, winner of the 1986 Nobel Prize in economics, died earlier this week. He was best known for promoting public choice theory, an approach which treats politicians and bureaucrats as utility-maximizing economic agents motivated by self-interest. Rather than…

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Money in my Pocket

01/09/2013

Total debt service payments as percentage of disposable income have fallen from a peak of 14.1% in 7/07 to just 10.6% today, a level last seen in 10/93; a decline of 25%. This is due to a combination of low…

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Declining Deductions

01/08/2013

With passage of the American Taxpayer Relief Act of 2012 (the fiscal cliff bill), the residential real estate industry dodged a bullet. While Schedule A deductions are phased out for couples with incomes above $300,000, the phaseout is mild. A…

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Unhedged Is Best

01/07/2013

In 2012, hedge funds rose an average of 3% compared to 13.4% for the unmanaged S&P 500. Worse, over the past decade a portfolio of 60% stocks and 40% sovereign bonds returned 90%, while hedge funds eked out a measly…

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Nutty Situation

01/04/2013

The Friday File: Skippy Peanut butter, first sold in 1933, has been bought by Hormel Foods of MN from Unilever for $700 million in cash. Skippy, with an 18% market share, is the number two peanut butter brand in the…

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Congressional Cowards

01/03/2013

Only by pushing off all hard decisions was Congress able to prevent us from going over the fiscal cliff. Now we face Debt Ceiling Battle II which must be resolved by March, a fight over annual spending cuts of $100…

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