70 Words

Debate’s Effect on Sentiment

08/16/2011

The University of Michigan consumer sentiment index fell to 54.9 (the lowest level since the recession of ‘81)! This reading is, I think, a result of the corrosive debt ceiling debate; not due to chronic problems like high unemployment and…

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Undervalued Yuan

08/15/2011

Chinese exchange rate and monetary policy is little more than a huge a transfer of income from poor households to wealthy corporations. An undervalued Yuan makes imports expensive but helps exporters. Similarly, very low interest rates on savings accounts and…

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Labels and Quality

08/12/2011

The Friday File: Designers of fancy clothes believe their clothes lend an air of status and prestige to the wearer. And they do! Research shows that it is not the design itself that counts but the label! Why? Same reason…

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Currency Wars?

08/11/2011

Declaring the Yen’s rise to be a threat to the economy the Bank of Japan massively intervened in the foreign exchange market to drive down its value. The Swiss did the same thing and now so are the Turks! I…

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Deficit Reductions? It looks bad…

08/10/2011

9 of the 12 members of the Joint Select Committee on Deficit Reduction, tasked with finding $1.2 trillion in deficit reductions over the decade, have been announced; it looks bad. Because there are 6 Ds and 6 Rs, 1 member…

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Methxico

08/09/2011

Mexico is now the #1 supplier of methaphetamines in the US. Two reasons: a crackdown on marijuana eradication in Mexico has pushed producers there into synthetic drugs like meth which can be made more discreetly, can be produced in just…

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New Jobs? Uh…

08/08/2011

The July jobs report showed 117K new jobs, but the report also showed no rise in temporary help, no jump in hours worked, no bump in overtime. And, annualized wage growth of 2.8% in July was less that the 3.4%…

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Wealth Matters

08/05/2011

The stock market has fallen by about 10% in the last two weeks, destroying about $2 trillion of wealth. If the market does not rebound quickly this will cut GDP by about $70 billion; half a percent. Here’s why. Suppose…

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Blackmailer’s Paradox

08/04/2011

Faced with a no new taxes or a debt default ultimatum from the Tea Party, Obama should have either called their bluff and appeared genuinely willing to let the US default or should have pursued the 14th amendment option with…

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Pork Bellies: RIP

08/03/2011

No future for pork bellies: Two weeks ago at the ripe old age of 50, pork belly futures passed away. Once the most popular and glamorous contract on the Chicago Mercantile Exchange it was also the first involving livestock. But,…

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