Posts Tagged ‘econ70’
Borrowing Beijing
With growth in China slowing substantially and Chinese leaders still slavishly forecasting 7.5% GDP growth, expect Beijing to step in and support the economy with aggressive fiscal stimulus. The problem, increased reliance on debt and infrastructure spending along with the easing of lending standards prevents the economy from becoming consumer driven. Worse, the economic boost…
Read MoreQuick Cash
In another nod to technological innovation, several of the largest US banks will soon allow their large depositors to print money directly on their home printers. While the Fed has remained mum on the subject, the U.S. Secret Service, the agency created to combat counterfeiting, along with the National Security Agency and the Comptroller of…
Read MoreDeflecting Deflation
In an attempt to prevent deflation, the European Central Bank (ECB) is actively considering charging banks, rather than paying banks interest on deposits. Doing this, it’s hoped, will encourage bank lending to private firms, which will lower their borrowing costs. It will also make the euro slightly less attractive, which will reduce its value and…
Read MoreHot Hand
The Friday File: After controlling for the location from which the basketball is released and the location of defenders, it turns out there is a small but yet statistically significant “hot hand” effect. When a basketball player is “feeling it” they really do shoot better. The reason the data have not until now shown this…
Read MoreJob Jumping
The percentage of workers who voluntarily quit their jobs fell to 1.7% of employed workers in January from 1.8% in December, the first decline since 3/13. The number is way up from a low of 1.3% in late 2009 but much lower than the average of 2.1% from 2002 through 2007. Quits are good as…
Read MoreHousing Holds
While many fret that existing housing sales have recently been slumping, the angst is misplaced. Since early last year sales have declined 7%, but distressed sales as a percentage of all sales have fallen from 25% of sales to just 15%, a drop of 10 percentage points, more than the 7% drop in sales. Thus,…
Read MoreBountiful Billions
In 2013 the Fed earned interest income of $51.6 billion from its vast holdings of Treasury securities, $36.6 billion in interest from its portfolio of mortgage backed-securities and another $2.2 billion from miscellaneous sources. After paying for its own expenses and making capital adjustments, the Fed returned $79.6 billion to the Treasury; 2.9% of all…
Read MoreFed Funds Focus
The most interesting thing to come out of last week’s Fed statement wasn’t that the Fed Funds rate will start rising in 2015 or that the unemployment rate isn’t the single most important number, but that the Fed expects the rate at which interest rates rise will be much slower than in previous recoveries. To…
Read MoreInferior Children
The Friday File: A product or service is considered normal if demand for it rises as consumer income rises. Good examples include BMWs, vacations to Hawaii, shopping at Whole Foods, and higher education. An inferior good is one where demand declines as consumer income rises. Examples of this include white bread, margarine, and children! As…
Read MoreHappy Hotels
2014 is looking good for hotels. Occupancy rates are up 2.1% year-over-year to 64%, the average daily rate (ADR) per occupied room rose 4.8% year-over-year to $114.85 and revenue per room (which includes occupied and non-occupied rooms) was up 7.1% year-over-year to $73.52. Over the past 12 months Atlanta, Denver and Dallas experienced the biggest…
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