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


Unfunded Liabilities

06/22/2011

Advanced economies with aging populations have made lavish spending promises that are unafforadable absent huge tax increases. In Canada the “unfunded” amount is 7 times GDP. In Korea it is 6.8, in Spain it is 6.5, here in the USA…

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Moral Hazard

06/21/2011

Ideally Greece would leave the Euro, default on its debts, and get on with its economic existence. But, leaving the Euro would be a disaster for the Euro zone. So the Europeans won’t let it happen. Neither will the Chinese…

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Weak in Review

06/20/2011

Weak in Review: The latest jobless claims numbers are still troublesome. The key takeaway is that first time claims have now exceeded 400k for 10 weeks in a row and the four-week moving average is stuck at 425k. Moreover, the…

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Recession Reduces Romance

06/17/2011

US births fell for a 3rd straight year. Births peaked at 4.3 million in ’07 but by ’10 births were just 4 million. In ’08 and ’09 the only increase in births was for women over 40. The decline is…

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Texas; #1 in Job Growth

06/16/2011

37% of all net new jobs created since the recovery began were created in TX. TX has added 265K net jobs. NY was 2nd with 98K, PA 93K. TX is also one of 4 states that has more jobs now…

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A Rise in Earnings?

06/15/2011

In the early ’90s Pfizer patented sildenafil to treat various heart-related conditions. That patent expires in ’12. During clinical trials men taking sildenafil experienced spontaneous erections. This led Pfizer to develop the same drug (Viagra) for ED. Pfizer then applied…

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Peak GDP Growth; Dismal!

06/14/2011

On a 4-quarter trailing basis real GDP growth peaked at 3.2% in Q3 of last year, declined to 2.8% in Q4 and now stands at just 2.3% If that Q3 peak of 3.2% holds, it will be the be the…

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Debt Ceiling Decisions

06/13/2011

The Congress will raise the debt ceiling! There have been 6 Biden Summit meetings (hosted by VP Biden and attended by 3 key players from each party) in the past 6 weeks but 3 are scheduled for this week, the…

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Shift to Capital Goods

06/10/2011

According to the Dept. of Comm. since the recovery began business spending on employees has increased 2%, while spending on equipment and software (E&S) has risen 26%. A spending rebound that divergent has only occurred once–after the ’82 recession. This…

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Triple Crown Drought

06/09/2011

The Triple Crown drought has reached 33 years since Seattle Slew won in ’78 (Secretariat in ’73). Why the dearth? The ’85 tax law changes proved dramatic. Owners no longer could write off racing expenses unless they were involved on…

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