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Inflation, as measured by the Christmas Price Index, based on purchasing all 12 items in “The Twelve Days of Christmas,” rose 1% in 2014 and now stands at $27,673. The most expensive item: seven swans-a-swimming at $7,000. Six geese-a-laying rose 71.4% and now cost $360. In a good sign for housing, pear trees, the home…

The Saudis export seven million bbl/day of oil, and their budget is balanced at $106/bbl. At $60/bbl, Saudi Arabia’s budget deficit is $118 billion/year: 12.7% of GDP! Saudi Arabia has foreign reserves of $750 billion to help withstand this. But at $60/bbl, the Saudis will consume 16% of their reserves/annum. The Saudis have till 2018…

The Friday File: 21% of Americans have at least one tattoo, up from 15% during the middle of the last decade. 26% of persons in the West have one, compared to 21% in the East and Midwest, and just 18% in the South. 23% of women and 19% of men have a tattoo; however, among…

Between 2002 and 2012, real median incomes of the 16% of US households headed by someone without a high school diploma fell at an average annual rate of 2.4%. Among the 51% of households with a high school diploma but without a college diploma median income fell at an average annual rate of 1%. This…

In her press conference today, Fed Chairwoman Yellen clearly provided the Fed with more flexibility regarding interest rates. With GDP growth firming, unemployment falling and inflation benign, Yellen is hinting at maybe earlier but probably incrementally smaller rate hikes. And she has largely said that the Russian currency collapse and the bear market in oil…

OPEC’s decision to push oil prices down assumes that lower prices reduce the supply of oil. However, unlike most natural resources, the marginal cost of producing another barrel of oil is low, once a well is drilled. Thus, oil pumping does not generally respond to price shocks. However, drilling new wells does. Thus, the future…

While a strong brew of internecine party politics and special interest lobbying appears to have made passage of the FY 2015 budget difficult, don’t be deceived. The budget battle is over the stagnant $1.1 trillion discretionary portion of the budget. The $2.4 trillion and growing mandatory spending (Medicare, Medicaid, Social Security, interest payments) portion sailed…

The Friday File: The college football playoff final-four was designed to let the top four teams (Alabama, Oregon, Florida State, Ohio State) play to determine a winner, rather than relying on dubious polls. The top four played 13 games each while teams #5 and #6 played 12 as they’re in the Big-12 (which has 10…

Unemployment in the Eurozone is at a sky-high 11.5% (its peak here was 10%), annual inflation is running at a microscopic 0.3% matching a five year low and is expected to fall further. Worse, manufacturing activity is stalling and is declining in France, Germany and Italy. Given this backdrop, now might be a great time…

In a shrewd move the Fed will impose added capital requirements on the nation’s biggest banks. The additional capital will penalize banks that rely heavily on short-term funding. This will force these banks to hold more capital and reduce their profitability, or shrink and escape the requirement. Either way, it reduces both the funding advantage…