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Lobbying Loot
In yet another sign of how omnipresent government is in the economy and thus how lucrative having access to and influencing policymakers is, the law firm of Cravath Swaine & Moore just hired David Kappos, departing Director of the US Patent and Trademark Office, and last year hired Christine Varney former Assistant Attorney General. They…
Read MoreHagel Hurts
Nominating Senator Hagel for Secretary of Defense raises serious doubts among allies and enemies that President Obama will use all means necessary to prevent Iran from acquiring nuclear weapons. Therefore, the chances of a negotiated settlement fall (despite biting sanctions), because for negotiations to have any hope of success, the Iranians must believe the US…
Read MoreEuro Risk
Despite the euro zone being in recession, the euro is dramatically rising against the US dollar, from $1.20/euro in July to $1.36 today. Why, because massive European Central Bank (ECB) action prevented Spain from collapsing, and the ECB is fast becoming an inflation hawk and has thus started to shrink its balance sheet, until, of…
Read MoreDoubling Debt
While per capita debt has ballooned from $1,640 in 1/66 to $53,000 today, it’s the growth rate that matters. Between 1/66 and 10/77 (11.75 years) the debt doubled. It doubled again by 7/84 (6.75 years), again by 10/90 (6.25 years), again by 7/05 (14.83 years) and again by 1/13 (7.5 years). The debt actually grew…
Read MoreBad Green Vegetables
The Friday File: 2.2 million Americans get sick annually from contaminated leafy vegetables. That represents 23% of all food-borne illness. Fruits, vegetables and nuts sicken 4.4 million persons, beef, pork and poultry cause 2.1 million illnesses and dairy products, another 1.3 million. As for deaths, the pathogens on poultry are particularly deadly, accounting for 19%…
Read MoreGDP Behaving Badly
Despite GDP contracting at an annual rate of 0.1% in Q4 2012, the worst quarter since the end of the recession in 6/09, another recession isn’t in the cards. That’s because the data also showed relatively strong spending by consumers and businesses. Military spending posted its sharpest quarterly drop in 40 years, 22.2% (a one-time…
Read MoreSequester Certainty
Given Republican unwillingness to raise taxes and Democratic insistence on it, the delayed automatic $110 billion sequester will kick-in on March 1st. This will reduce GDP growth by 0.75% and guarantees a weak first half of ’13 as the economy is already painfully digesting the two percentage-point Social Security tax hike that began 1/1/13. The…
Read MoreReserved Federal Reserve
As the economy strengthens, the Fed must begin to end its exceptionally expansionary monetary policy of the last half decade. It will begin by halting its purchases of $85 billion/month in Treasuries and mortgage-backed-securities. Second, it will stop reinvesting interest and principal on its holdings. Third, it will start raising overnight interest rates and lastly…
Read MoreGovernment Goes On!
If a continuing resolution is not passed by the Congress by 3/27/13, the Obama administration will be forced to shut down activities funded by appropriations and all non-essential government operations. But this isn’t that ominous. Only 40% of federal spending relies on appropriations and two-thirds of that is considered “essential” and thus will continue even…
Read MoreNobel Chocolate
The Friday File: Flavanols in cocoa slow and even reverse age-related cognitive decline. Better yet, a nations’ annual per-capita chocolate consumption is correlated with the number of Nobel laureates. The country with the most Nobels per-capita and the greatest per-capita chocolate consumption: Switzerland, followed by Sweden and Denmark. The U.S. was in the middle. To…
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