Month: March 2014
In an attempt to prevent deflation, the European Central Bank (ECB) is actively considering charging banks, rather than paying banks interest on deposits. Doing this, it’s hoped, will encourage bank lending to private firms, which will lower their borrowing costs.…
The Friday File: After controlling for the location from which the basketball is released and the location of defenders, it turns out there is a small but yet statistically significant “hot hand” effect. When a basketball player is “feeling it”…
The percentage of workers who voluntarily quit their jobs fell to 1.7% of employed workers in January from 1.8% in December, the first decline since 3/13. The number is way up from a low of 1.3% in late 2009 but…
While many fret that existing housing sales have recently been slumping, the angst is misplaced. Since early last year sales have declined 7%, but distressed sales as a percentage of all sales have fallen from 25% of sales to just…
In 2013 the Fed earned interest income of $51.6 billion from its vast holdings of Treasury securities, $36.6 billion in interest from its portfolio of mortgage backed-securities and another $2.2 billion from miscellaneous sources. After paying for its own expenses…
The most interesting thing to come out of last week’s Fed statement wasn’t that the Fed Funds rate will start rising in 2015 or that the unemployment rate isn’t the single most important number, but that the Fed expects the…
The Friday File: A product or service is considered normal if demand for it rises as consumer income rises. Good examples include BMWs, vacations to Hawaii, shopping at Whole Foods, and higher education. An inferior good is one where demand…
2014 is looking good for hotels. Occupancy rates are up 2.1% year-over-year to 64%, the average daily rate (ADR) per occupied room rose 4.8% year-over-year to $114.85 and revenue per room (which includes occupied and non-occupied rooms) was up 7.1%…
The decision by the Chinese government to finally let a domestic bond default occur is good, as it may force the market to start pricing in risk. But, investors have no idea why Beijing allowed this default or what criteria…
With unemployment at 6.7%, close to the 6.5% level at which the Fed has said it would raise short-term rates, the Fed must change its short-term interest rate guidance. The Fed is wrestling with how much slack exists in labor…