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


Size Matters

05/01/2013

The Brown-Vitter proposal to force banks with assets over $500 billion to hold roughly double the capital of smaller banks, is overly simplistic. Big banks should be forced to hold extra capital to eliminate any “Too Big to Fail” funding…

Read More

Peaking Out

04/30/2013

Since the previous GDP peak in 12/07, real GDP has risen 3.18% or about $400 billion, yet total employment is down by 2.07% or about 2.9 million persons. This is because today’s workers are more productive. How much more? In…

Read More

Renovation Run

04/29/2013

Despite residential construction being on the mend, its contribution to GDP is tiny. During Q1 2013, the value of new single family construction was just $157 billion, or 0.98% of GDP, while residential improvements contributed $161 billion or 1%. This…

Read More

Tough Taxes

04/26/2013

The Friday File: Every percentage point increase in state income taxes faced by free-agent baseball players raises their salary by $22,500/year. By contrast, the same tax increase reduces slightly the average skill level of free-agent basketball player signings. It’s because…

Read More

Want a Job?

04/25/2013

Since 3/12 the unemployment rate has fallen 0.6%, and the labor-force participation rate (LFPR) has fallen by 0.5%. If by 3/14 the LFPR falls another 0.5%, it would take only 107,000 new jobs/month to get the unemployment rate down another…

Read More

Finally!

04/24/2013

Next week the European Central Bank will finally lower its key interest by a quarter-point to 0.5%, as the euro-region recession continues. Most importantly, Germany, Europe’s largest economy, may now officially be in recession and business confidence is slumping. Meanwhile,…

Read More

UNINSPIRING

04/23/2013

Three weeks ago, the United Nations voted to link arms sales to the human rights record of the buyers. While superficially appealing, this treaty is worthless. The treaty only covers exports (not imports), countries that didn’t vote for the treaty…

Read More

Arbitrage

04/22/2013

One reason the stock market is doing so well is due to stock buybacks. Despite high share prices, for dividend-paying firms with top-notch credit ratings, interest rates have never been lower. These firms are borrowing long-term at 2% to buy…

Read More

Eat What?

04/19/2013

The Friday File: A jalapeno pepper registers 6,200 Scoville heat units (SHU), a Habanero 350,000 SHU, and a Naga Viper 1.382 million SHU which made it the world’s hottest pepper. The title recently transferred to the Trinidad Scorpion Butch T…

Read More

Happy Housing

04/18/2013

In yet another sign the housing market is strengthening, the number of distressed sales (foreclosures and short sales) has declined dramatically. Moreover, short sales now generally outnumber foreclosures in most cities, a far cry from the situation just last year.…

Read More

Recent Posts

Categories

Archives