Econ70

Despite a very manageable budget deficit for the next few years, budget hijinks will soon return to DC. A bi-partisan budget agreement that provided substantial sequestration relief through FY15 expires 10/1/15, the debt limit of $18.2 trillion will be reached…

The inflation-adjusted median wealth of families headed by someone over 61 rose 40% between 1989 and 2013, from $150,000 to $210,000. For households headed by someone aged 40 to 61, wealth fell 31% from $154,000 to $106,000, while for households…

Recently revised GDP numbers show that GDP in Q1/15 grew at 0.6% not by -0.2%, but also revealed that GDP growth was just 2% between 2012 and 2014, not 2.3%, a sizable reduction. This means labor productivity growth is worse…

The Friday File: Over the past 6.5 years, trustee Irving Picard has recovered almost $11 billion of the $17 billion stolen by Bernard Madoff. But this work has been costly. At $413.30/hour after a “public interest” discount of 10%, the…

While the inflation rate is about 0%, the price of goods is falling at 3.3%/year while services inflation is running at 2%/year. Goods are falling in price due to cheap imports, a strong dollar, excess capacity, and falling raw material…

While the Fed did not raise rates at today’s just concluded interest rate setting meeting, they removed any semblance of date guidance and again told us that the data will determine when the first rate rise since 2006 occurs. No…

The cost of diesel is below the price of gasoline for the first time since 2009. Gasoline prices peak in spring/summer due to driving, while diesel demand peaks in autumn and winter due to agricultural activity and winter heating. Therefore,…

The Friday File: Assuming exchange rates and prices eventually adjust to make the same item equally priced everywhere, the Big Mac Index was developed. In Switzerland, a Big Mac is a whopping $6.82, its currency is hopelessly overvalued. In Russia,…