Two weeks ago, the Department of Labor reported that private sector employee compensation rose 2.3% Y-o-Y, the highest level since the start of the Great Recession but quite low. Last Thursday, the DOL reported that unit-labor-costs, a measure of worker…
If US long-term interest rates are falling because long-run inflation expectations are dimming, the Fed should wait before raising short-term interest rates. But what if our long-term rates are declining primarily because foreigners are pouring money into our long-bonds because…
The Friday File: This past Monday, Punxsutawney Phil the weather-predicting groundhog from Pennsylvania regrettably saw his shadow. This means winter will last six more long weeks. But don’t give up hope. Since 1887, Punxsutawney Phil has seen his shadow 80%…
Under normal conditions central banks alter short-term interest to change economic activity. During the Great Recession, short-term rates hit zero so the Fed began to reduce long-term interest rates via quantitative easing (QE). QE works in two ways. By driving…
While all oil-producing nations are suffering as oil prices collapse, the hardest hit nation is Venezuela. It’s getting crushed as oil prices collapse since oil accounts for 95% of export earnings, 45% of budget revenues and 12% of GDP. If…
In 2015 about 500,000 households that lost their homes to foreclosure or a short sale back in 2007 will, if their finances are sufficiently solid, be able to again qualify for a conforming home loan. In all, over seven million…
While the efficient markets hypothesis says that markets instantly and continually price into shares all known information, making it impossible to consistently beat the market using any rational strategy, it doesn’t suggest that markets are right. Last Wednesday markets plunged…
The Friday File: In a recently released and terribly designed study by brainless economists commissioned by Facebook, the social media site finds that in 2014 it created $227 billion in world economic impact and 4.5 million jobs! Are you kidding?…
The Fed paid banks $7 billion in interest on $3 trillion in excess reserves parked at the Fed. The primary way the Fed will raise short-term rates is by increasing the rate they pay banks on those reserves. Thus in…
While the unemployment rate has fallen dramatically from 10% in 10/09 to 5.6% today, the number of persons employed is barely 2 million higher than it was before the Great Recession began in January 2008. It’s because the labor force…