Econ70
The Friday File: Plants and pests naturally evolve in an arms race of resistance and conquest that usually has no winners. But grafted trees, because they don’t reproduce sexually, are genetically identical to each other and thus never evolve. However,…
Given a widening trade deficit, disappointing retail sales, weak inventory accumulation and now yesterday’s surprisingly bad housing starts at just 836,000 units, I’m reducing my Q2 GDP estimate to just 1%. Interestingly, single-family starts, 2-4 unit starts, and 5+ starts…
The recent Chinese cash crunch was a sign from the government of its intention to reign in credit growth to the shadow banking system, wasteful local governments and speculators. Part of the problem is that Chinese banks can’t offer competitive…
While the Senate is indeed broken, preventing the minority from filibustering presidential nominees to the executive branch will make things worse by beginning to turn the Senate into the House, where the minority party has no power. The Senate must…
All interest rate increases aren’t created equal. A rise in 10-year treasury rates from 2%, where they are now, to 3% or 4% is a sign of improving business conditions and opportunities resulting from a strengthening economy. By contrast, a…
The Friday File: The 35 mile Gotthard Base Tunnel in Switzerland will be the world’s longest rail tunnel when opened in 2016. Today, the world’s longest rail tunnel is the 33.5 mile Seikan Tunnel in Japan connecting the islands of…
While the Fed’s balance sheet has mushroomed from $850 billion in 2008 to $3.3 trillion today as a result of three rounds of quantitative easing, the last of which is not yet done, these holdings bring in considerable amounts of…
The virtue of the gold standard was that countries with trade surpluses saw their gold holdings rise, which increased their money supply, raised prices and reduced exports. Conversely, countries that ran deficits lost gold, which caused their money supply to…
Consumer borrowing rose by $19.6 billion last month, substantially more than the $12.5 billion forecast by economists (big surprise there) and up from $10.9 billion in May. Non-revolving debt, which includes car loans, student loans and mobile homes loans increased…
With 195,000 new jobs in June, the average monthly gain in the first half of 2013 is 202,000 – way up from the 130,000/month pace when QE3 began. Moreover, the unemployment rate remained unchanged, because 177,000 people joined the labor…