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


Bye Bye Bankruptcy

03/06/2013

In a sign of reduced economic stress among households and firms, total US bankruptcy filings are down. They fell from 104,537 last February to 82,285 this February, a fall of 21%. Consumer filings declined from 99,378 to 78,611 while commercial…

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Cashless Cyprus

03/05/2013

While small, the Cypriot bank bailout is causing heartburn across the Eurozone. At its peak, the banking sector had assets eight times GDP and now needs $13 billion. If Cyprus borrows the money, their debt-to-GDP ratio becomes unsustainable. Writing down…

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Tough Tax

03/04/2013

While imposing a financial transaction tax (FTT) on purchases of stocks, bonds, options and derivatives will reduce trading and may raise revenue — if traders don’t move their business elsewhere which is usually the case — it also increases volatility,…

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Papal Probabilities

03/01/2013

The Friday File: With a papal conclave fast approaching, Cardinal Peter Turkson from Ghana is the leading contender with odds of 11-4 that he leaves the conclave as pope. Next is Archbishop Angelo Scola of Italy at 3-1 and Cardinal…

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Construction Employment

02/28/2013

Despite a boom in residential construction activity, construction employment growth has remained lackluster and is up just 100,000 from the trough in early 2011. This is because residential building declined by more than residential employment resulting in value added/worker falling…

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Building Stock

02/27/2013

In another sign of good news for home building, TRI Pointe Homes’ IPO was the sector’s first since 2004. The firm raised $233 million selling 13.7 shares at $17 on 1/31/13. Today’s close, $18.45. And, it looks like Taylor Morrison…

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Mortgage Monopoly

02/26/2013

During the 1990s, the percentage of new mortgages guaranteed by Fannie and Freddie averaged about 44% and that number rises to about 55% if you add FHA and VA loans. During 2005 and 2006, those numbers fell to historic lows…

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Sequester Symptoms

02/25/2013

Despite sequestration calling for $110 billion in annual cuts, the full impact will not be felt until after 2015. Outlays will be reduced by $44 billion in FY 2013, by $89 billion in 2014, and $102 billion in 2015. Full…

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Head Banger

02/22/2013

The Friday File: Being required to wear a bicycle helmet reduces head injuries for 5-19 year olds by 13%. But, and there’s always a but, it also reduces non-head bicycle injuries by 9%, and results in an 11% increase in…

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Government Diversion

02/21/2013

Federal government spending has steadily increased from 14% of GDP in 1950 to about 25% today. Because of this, legislators and bureaucrats are increasingly lobbied in an effort to have them bestow government largess on one group or another. Unfortunately,…

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