Sinking Senate

While the Senate is indeed broken, preventing the minority from filibustering presidential nominees to the executive branch will make things worse by beginning to turn the Senate into the House, where the minority party has no power. The Senate must be a check on the House. Instead, force those wanting to filibuster to speak non-stop,…

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Varying Interest

All interest rate increases aren’t created equal. A rise in 10-year treasury rates from 2%, where they are now, to 3% or 4% is a sign of improving business conditions and opportunities resulting from a strengthening economy. By contrast, a rise in rates from, say, 5% to 7% or 8% is a sign of an…

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Fed Funds

While the Fed’s balance sheet has mushroomed from $850 billion in 2008 to $3.3 trillion today as a result of three rounds of quantitative easing, the last of which is not yet done, these holdings bring in considerable amounts of interest. Because the Fed must return all residual earnings to the Treasury, in 2012 the…

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Gimme Credit

Consumer borrowing rose by $19.6 billion last month, substantially more than the $12.5 billion forecast by economists (big surprise there) and up from $10.9 billion in May. Non-revolving debt, which includes car loans, student loans and mobile homes loans increased by $13 billion – $9.2 billion excluding government guaranteed student loans. Credit card debt, which…

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Interesting Jobs

With 195,000 new jobs in June, the average monthly gain in the first half of 2013 is 202,000 – way up from the 130,000/month pace when QE3 began. Moreover, the unemployment rate remained unchanged, because 177,000 people joined the labor force! Unfortunately, 112,000 of the new jobs were either in leisure and hospitality or retail…

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Worth Less Used Cars

The Friday File: Wonder why driving a new car off the lot reduces its value by 25% or more? One reason has to do with the retail showroom price versus the resale/used price. The other has to do with car quality. Why return a new car unless it’s a lemon or suffered non-visible damage? Thus,…

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Workless Policy

With the Obamacare requirement that most employers offer affordable health insurance to their employees soon to become law, expect total employment to rise and hours worked/worker to fall. This is because employers will force their employees, where possible, to work less than 30 hours/week. But employers will have to compensate by hiring more workers to…

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Delicious Daddy

The Friday File: While female spiders are well known to eat their suitors following intercourse, the question has always been why. Turns out, spiderlings born of females that eat their partner have a 48% of survival while spiderlings born to females who don’t dine on daddy have only a 12% chance of survival. In this…

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Bet Your Fannie

Including a one-time $50.6 billion adjustment, Fannie’s Q1 income was an amazing $58.1 billion! Even excluding the $50.6 billion, its ordinary earnings of $8.1 billion were outstanding. Assuming it does that well the rest of 2013, Fannie’s 2013 income would be $32.4 billion. That’s a bit behind ExxonMobile and Apple but ahead of Chevron, and…

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Builder Sediment

Home builder sentiment recently fell for the second straight month despite a booming housing sector. This is probably because small builders face increasing difficulty finding lots, spec loans are still largely off limits, lumber prices have doubled, and labor shortages abound. Despite these woes, housing starts will rise by 200,000 units in 2013. The question…

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