The Bowtie Economist's Daily Dose of 70-Word Wisdom

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,…

June existing home sales hit their highest number since 7/06, and while the median sales price hit a record-high of $236,400, an inflation-adjusted price comparable to 7/06 would be $270,014. Part of the picture is that the number of distressed…

Since hitting a high of $1,889/oz. on 8/21/11, gold has steadily declined and is now about $1,100/oz. Investors sought gold out of misplaced fears that inflation would run wild due to lax monetary policy. Now that the economy is out…

While housing starts and permits are rising smartly, it’s entirely due to multifamily (2 or more units). Last month, multifamily starts enjoyed their best month since 4/88 and their best first half of the year since 1989! Moreover, in June…