Firmer Fannie and Freddie

Rather than waiting to pass housing finance reform, which is impossible, why not merge Fannie and Freddie in the meantime? Both firms do the same things — buy loans and securitize them — are regulated by the same agency, are in receivership, are undercapitalized, and are owned by the same entity, you and me! Merging…

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Pregnancy Problem

The Friday File: A recent study that tracked 500,000 women for five years found that the chances of being in a car accident vary during pregnancy. When not pregnant and during the first month of pregnancy, the chances of being in a car crash are 0.45%/annually. It rises to a peak of 0.76% during the…

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Delayed Draghi

With unemployment at 11.8%, GDP growth barely positive, inflation at a microscopic 0.7% and the ECB balance sheet a trillion euro smaller than it was in 7/12, Mario Draghi will finally engage in stimulative monetary policy. While buying sovereign bonds won’t happen, negative interest rates, purchases of bank loans and long-term loans to banks at…

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Labor Lacking

In January 2008, the number of working Americans totaled 138,365,000. By the end of this month, that total will be surpassed, and while that’s great news, it’s 77 months later! To keep the unemployment rate from rising due to new job entrants resulting from population growth, the economy needs to produce 80,000 jobs/month. Had that…

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Cable Consolidation

The recently proposed $45 billion takeover of Time Warner by Comcast should be allowed. Combined competition from Verizon, AT&T/Dish, Netflix, DirectTV, Aereo, Google, Amazon, Apple and others should be enough. And while having 30 million households would give Comcast an edge in negotiations but content providers have also been bulking up. By the way, in…

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Brilliant Becker

Last week Nobel Prize winning economist Gary Becker died. He was the first to use economics to explain social phenomena including discrimination, crime, divorce and family size. Based on observations over time and across cultures he concluded that the less income women could earn, the larger their families. This discovery has had huge policy implications.…

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Busy Bodies

The Friday File: No matter how measured, Hartsfield-Jackson Atlanta Airport which handled 45.8 million passenger boardings in 2012 is the busiest airport in the US. O’Hare is next at 32.2 million followed by LAX at 31.3, Miami at 30.2, Dallas-Fort Worth at 28.0 and Denver at 25.8. By cargo Memphis is first handling 3.9 million…

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Struggling Starts

At 350,000 starts/year, multifamily housing activity has largely returned to pre-recession levels. However, at 650,000 starts/year single-family activity remains mired in levels only seen in recessions, despite an economy about to enter the sixth year of a recovery. Were single-family starts to reach one million, the average level since 1959, it would create a million…

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Excellent Exports

The March trade deficit narrowed from $41.9 billion to $40.4 billion; good news. The better news, exports at $193.9 are at their second highest level ever and are 17% above their pre-recession high. Imports, while hitting a new all-time high of $234.3 billion, are just 1% higher than their pre-recession peak. Both imports and exports…

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Medical Maneuvers

Pfizer’s $106.4 billion buyout offer of British pharmaceutical giant AstraZeneca is being largely driven by high US corporate taxes. At yearend 2013, Pfizer had $70 billion of overseas earnings that, if repatriated, would result in huge US taxes. Buying AstraZeneca with the overseas earnings eliminates the tax bill on the $70 billion and moving the…

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