Wednesday:• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.• At 8:30 AM, Housing Starts for January. The consensus is for 1.415 million SAAR, down from 1.608 million SAAR.• Also at 8:30 AM, The Producer Price Index for December from the BLS. The consensus is for a 0.1% increase in PPI, and a 0.1% increase in core PPI.• During the day, The AIA's Architecture Billings Index for January (a leading indicator for commercial real estate).• At 2:00 PM, FOMC Minutes, Meeting of January 28-29, 2020
Rezession! That's how you say Recession in german. German economy barely grew at the end of 2019. The German economy is in stagnation since the summer of 2018, and it is getting worse by the month. In the fourth quarter of 2019, There has been zero growth. The manufacturing halted, while the... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]
So you still think Coronavirus is an accident? In the land of the blind the one eyed man is King The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]
from Lars Syll In my view, scientific theories are not to be considered ‘true’ or ‘false.’ In constructing such a theory, we are not trying to get at the truth, or even to approximate to it: rather, we are trying to organize our thoughts and observations in a useful manner. Robert Aumann What a handy […]
The US has spent the entire post-war period running a massive and ever-growing Ponzi scheme that takes from the young and gives to the old. This column discusses how the scheme has been and is being run by expanding take-as-you-go-financed Social Security, Medicare, and Medicaid systems, by running huge official deficits, and by imposing a larger share of taxes on the young and a smaller share on the old. Take as you go, whether done on or off the books, has done precisely as theoretically predicted – reduced the US’s national saving rate from 13% in the 1950s and 1960s to 3% in the last two decades. This underlies, in large part, a commensurate drop in the domestic investment rate, which was also 13% between 1950 and 1969 and is now running at 4%. The textbook predicted consequence? Lower median labour productivity and median real wage growth.
The application form is here, lists of previous cohorts of winners are here. And please note there are two special tranches: Progress Studies tranche, and a tranche for: “advancing humane solutions to those facing adversity – based on tolerance, universality, and cooperative processes” And might anyone be interested in working on the issue of why […] The post Apply for Emergent Ventures appeared first on Marginal REVOLUTION.
With the ten year yield at 1.55%, and based on an historical relationship, 30-year rates should currently be around 3.5%. Mortgage News Daily reports that the most prevalent 30 year fixed rate is now at 3.46% for top tier scenarios.The graph shows the relationship between the monthly 10 year Treasury Yield and 30 year mortgage rates from the Freddie Mac survey. Currently the 10 year Treasury yield is at 1.55%, and 30 year mortgage rates were at 3.46% according to the Freddie Mac survey last week - about as expected.The record low in the Freddie Mac survey was 3.31% in November 2012 (Survey started in 1971).To fall to 3.31% on the Freddie Mac survey, and based on the historical relationship, the Ten Year yield would have to fall to around 1.4% (but there is some variability in the relationship).
Today's Water Cooler: Biden, Bloomberg, Buttigieg, Sanders, Warrren, NV early voting, Empire State manufacturing, mortages, shipping and COVID-19, supply chain, Galazy Z not glass?, electric bacteria, dental, "Reagan National University," KickStarter union, Civil War podcast, Mediterranean diet
Oren Cass believes conservatives have blundered by outsourcing GOP economic policymaking to libertarian “fundamentalists” who see the free market as an end unto itself, rather than as a means for improving quality of life to strengthen families and communities. The former domestic policy director on Mitt Romney’s 2012 presidential campaign quit his job as a senior fellow at the Manhattan Institute to launch a new group called American Compass that aims to reorient the right. He previewed their plans in an exclusive interview on Monday afternoon. This is the first paragraph of a long Washington Post piece on Oren Cass: James Hohman, with Mariana Alfaro, “The Daily 202: Conservative intellectuals launch a few group to challenge free-market ‘fundamentalism’ on the right,” Washington Post, February 18, 2020. The title, by the way, is accurate. It’s Cass’s understanding that’s off. Don Boudreaux, over at CafeHayek has done a nice job, as always, of homing in on a basic problem Cass has in understanding what free-market advocates believe. By the way, if you start a whole group based on a misunderstanding, what are the chances that you get a good result? I want to focus, though, on another economic point Cass gets wrong. Of course I’m assuming that the reporters stated his thoughts correctly. In this case, though, since Cass has a track record of saying similar things, I think the odds that they got it right are high. Here’s how the WaPo reporters quote Cass: Likewise, if you are generating growth by trading off the non-market work that people historically performed within their households for a model where everyone goes to work and then they pay each other for the things they used to do in their own household, that’s not great either. Actually, it is great, and a little economics shows why: it has to do with marginal tax rates. The big advantage of non-market work within the home is that it’s not taxed. So, for example, if my wife raised our daughter in our home, which she did, and, as a result, did little free-lance work during our daughter’s formative years, the time spent raising our daughter was not taxed. But if instead my wife had done more free-lance work and put our daughter in day care for a few hours a day, the money we paid for day care would have been taxed. Similarly, if I had done gardening at our house, the time I spent gardening would not have been taxed. But if I hired someone to do gardening, which I have done, the money he makes is taxed. Given those facts, what can we say when we observe people working outside the home and hiring others to do work inside the home? We can say is that even with the tax disadvantage, it’s worth doing. The tax system was distorting the choice between unpaid work at home and paid work. So when we observe people nevertheless finding it worthwhile to work outside the home and pay those taxes, that means that in spite of the higher taxes they still find it worthwhile. And these taxes can be substantial, even on middle-income people. Remember that we’re thinking on the margin here. A middle-income man or woman will likely pay a marginal federal tax rate of at least 12%, a Social Security plus Medicare tax rate of 7.65% (and it really is 15.3% because even if the person is an employee, the income is taxed at 15.3% and that’s part of the tax wedge), and, likely a state income tax rate of at least 4%, for a total of 23.65%. And, the marginal federal tax rate for a substantial slice of the middle class is 22%, making the overall marginal tax rate 33.65%. Cass could reply that I’ve got it wrong in the case of the parent outsourcing child care rather than doing it at home because I’m not taking account of the wellbeing of the kid. If that would be his reply, though, it’s not a good one. One of his recent tweets about his new enterprise emphasizes the importance of family. So let’s talk about families. While some families can make bad choices, who is likely to have the best interest of the child at heart: the parent who knows the kid intimately or Cass, who doesn’t even know the kid’s name? There is one bright spot in the report, not that Cass sees it that way. The reporters write: Running as a populist, Trump challenged Republican orthodoxy on free trade and tapped into the disaffection of blue-collar workers in the heartland who have been left behind by the growing, but uneven, economy. For the most part, however, he [Cass] said conservative elites in the think tank world have not followed suit. We often hear that the Republican Party has caved to Donald Trump’s bad ideas on trade. And I admit that this is one of my very big worries. But that quote above made me slightly less worried. (11 COMMENTS)
That’s the title of my new Mercatus working paper. Here’s the abstract: Concern over currency manipulation plays a major role in international economic diplomacy. Unfortunately, the concept is not well defined, and the most coherent explanations apply to a concept more accurately termed “saving manipulation,” as it has little to do with market exchange rates. I argue that the costs of currency manipulation are far lower than they are widely assumed to be and that the optimal response is either to do nothing or to boost domestic saving rates. Some of the ideas first appeared in this blog, but not all. Comments would be appreciated. PS. There’s also a shorter policy brief. (3 COMMENTS)
1. Review of a new and apparently impressive biography of Frank Ramsey. 2. Arnold Kling on public intellectuals. 3. Update on the World Bank paper controversy. And here is the paper. 4. “…the power costs less to generate in India than the cheapest competing fossil fuel—coal—even with subsidies removed and the cost of construction and […] The post Tuesday assorted links appeared first on Marginal REVOLUTION.
While there are a number of uncertainties in the global economy today, many investors may not realize the depth and breadth of potential opportunities emerging markets still offer—on both the equity and fixed income side. Franklin Templeton Multi-Asset Solutions’ Subash Pillai outlines the team’s approach to risk management when it comes to emerging market investing, noting that not all countries in this category should be viewed through the same lens. Artykuł A Multi-Asset Approach to Assessing Risk and Opportunity in Emerging Markets pochodzi z serwisu Investment Adventures in Emerging Markets.