Blogs

New Deal Democrat vs. New York Fed on Economic Recovery and the Yield Curve

The New York Fed has just published a study on the predictive power of the yield curve in 3 months vs. 10 year Treasury bonds. (warning: pdf. For an html friendly summary with graphs, see Prof. Mark J. Perrys' claims that the NY Fed research means the recovery has already begun!).

The study updates previous research dating from the 1980's onward to the effect that a negative spread between the 3 month and 10 year Treasury yields (negative means 3 month Treasuries pay more interest than 10 year Treasuries) is means economic contraction - a recession - 1 year later. Conversely, a positive spread means economic expansion 1 year later.

Based on that, the New York Fed says that the recession is over! I disagree.

TARP COPs are back - Report Assesses Treasury Strategy & Actions on Financial Crisis

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The Congressional Oversight Panel has released a new report, Assessing Treasury’s Strategy: Six Months of TARP. First, the $$$:

Over the last six months, Treasury has spent or committed $590.4 billion of the TARP funds. Treasury has also relied heavily on the use of the Federal Reserve’s balance sheet which has expanded by more than $1.5 trillion (not including expected TALF loans) in conjunction with the financial stabilization activities it has undertaken beyond its monetary policy operations. This has allowed Treasury to leverage TARP funds well beyond the funds appropriated by Congress.

My Thoughts on Socialism in America

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I am a baby boomer, a post WWII son of 2nd generation immigrant parents. I'm a bit older than Paul Krugman, but I grew up in exactly the same America he talks about in "Conscience of a Liberal".

Postwar America was, above all, a middle-class society. The great boom in wages that began with WWII had lifted tens of millions of Americans - my parents among them - from urban slums and rural poverty to a life of home ownership and unprecedented comfort. The rich, on the other hand, had lost ground. They were few in number and, relative to the prosperous middle, not all that rich. The poor were more numerous than the rich, but they were still a relatively small minority. As a result, there was a striking sense of commonality: Most people in America lived recognizably similar and remarkably decent material lives.

The Final Stage in the Deindustrialization of America

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I'm old enough to clearly remember their lies. Their promise to us was that we would "think" while others would "sweat".
It sounded too good to be true, and like anything that sounds too good to be true, it was a lie.

The pro-globalization, pro-free trade crowd was very clear. If we lowered our trade barriers to cheap foreign imports, while we retrained our workforce, other nations would do the hard, manual work of producing goods while we would do the do the mental stuff of high-tech goods and services.
It was an appeal to our egos. They tried to manipulate us with false pride, and it worked to some extent.

What was sowed was hubris. We are now reaping that false promise.

Sunday Morning Comics - Government Financial Management Edition

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Sponsored by The Federal Government - We guarantee this post is funny. If it is not funny, print out IRS form 2034, follow the 89 page instruction booklet, estimate your laughs, chuckles & smiles history, based on your uploaded medical profile, complete with your current medication list, for the last 5 years. Upon evaluation you will be compensated with jokes from President Obama himself, on a sliding scale, depending upon your current chuckle intake. Those determined not in smile need or who are laugh enriched will be expected to contribute to the snide comment campaign for future Presidential conferences.
Cup O' Joe

 

Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the Funnies!

 

The Great Strike Wave of 1946

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[The 1946 coal strike] is the most momentous event in the country's peacetime history."
- Evansville Courier, 1946

When most people think of labor unrest in America they think of the 1930's, or the various major strikes of the 19th Century. The fact is that no year, before or since, saw so many strikes, and such a large percentage of people on strike, or so many industries effected by strikes, as 1946.
Never before had labor unions flexed so much muscle.

But that success also sowed the seeds of labor's long-term downfall.


Picketers (and dog) in jail during Rochester General Strike

Friday Movie Night - Taleb & Johnson

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It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!

This week is an Bill Moyers Now interview with Simon Johnson and PBS interview with Black Swan author Nicholas Taleb.

I was planning on showing Frontline but the last two documentaries have been truly infiltrated with some sort of special interest agenda. The deficit response was all about gutting social security and Medicare and the documentary on health care never uttered single payer universal health as an option. I think we all have watched enough corporate and special interest spin to last a lifetime so I am not even linking to them.

With that, below are interviews which you missed are a profound must see.

Dead Money Talks, Sick Children Walk

As you probably already know, 2010 is the year to die is you are really wealthy. The Estate Tax disappears for one year only. Under the Bush plan, it would have reverted to its pre-2001 rates of 55% of estates over a $2 million exemption. President Obama proposed a 45% percent rate over a $7 million exemption.

Even this was too much for every single Republican and 9 Democrats in the Senate, who voted by 51-48 to enact a 35% rate over a $10 million exemptioin.

Here are the nine Democrats who voted against Obama's proposal

Evaluation of Market Bottoming Evidence

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 The most recent chatter concerning evidence of a market bottoming pattern is widespread in nature, occurring in both financial and traditional media outlets. The impetus for this new found optimism was the release of several economic data points throughout the past week, and subsequent media analysis of the chart pattern formed by the inclusion of these data points.

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