Holiday cheer? "Bah, humbug!" Here’s some coal for your stocking... In a paper entitled "The Age of Reason: Financial Decisions over the Life-Cycle with Implications for Regulation" authors Sumit Agarwal, John C. Driscoll, Xavier Gabaix, and David Laibson argue that when it comes to money our accumulated experience and wisdom are lost to our declining [...]
Consumer spending accounts for 65%-70% of GDP so if the US economy is to experience a sustainable economic expansion it will be on the backs of the American consumer. Are consumers spending? How can we?! We’re deluged on a daily basis with stories of layoffs, foreclosures and bankruptcy. Those of us with jobs face frozen [...]
With stock and bond markets well off their March lows some of us are using this “confirmation” of economic recovery to add risk to our investment portfolios. Since one can always count on the American public to have a short memory here’s a sobering reminder of what it felt like to live through the meltdown. [...]
The Labor Dept said Tue that its Producer Price Index - a measure of inflation at the wholesale level considered an early read of price trends - rose 0.3% in Oct after failing 0.6% in Sept. Consensus estimates were for an increase of 0.5%. Core PPI - a measure excluding volatile food and energy prices [...]
On November 5th The House passed The Worker, Homeownership and Business Assistance Act. A day earlier it cleared The Senate by a vote of 98 to 0. The proposed legislation now heads to President Obama where quick signature is expected. Among other things The Act extends the First-Time Homebuyer Tax Credit through 04/30/10. The refundable [...]
Today The White House said it believed the $787 billion stimulus package (or the "Un-stimulating Stimulus" package as we dubbed it in our 2/16/09 analysis) saved or created 650,000 jobs. This "belief" is based upon review of state and local projects and activities paid for by the stimulus such as education funding, highway repairs and [...]
Recent months have seen historical lows in interest rates. Two key factors have been a rush by investors to the safety (real or perceived) of US Treasury bonds and unprecedented intervention in financial markets by The Fed and Treasury. With rates so low it’s obvious the only place they can go is higher. Will this [...]
Unsustainable deficits, quantitative easing, lack of faith and a near zero Fed Funds rate have conspired to punish the Dollar in recent months. Commodity prices have risen nearly as much as the Dollar as fallen since most are Dollar-denominated and require increased pricing to preserve purchasing power (as opposed to reflecting supply/demand considerations). Speculators borrowing [...]
The Labor Department reported CPI fell 1.3% over the past 12 months. So much for worrying about inflation! As a result the IRS announced in Revenue Procedure 2009-50 that tax rate brackets and various tax benefits will remain unchanged or change only slightly for tax year 2010. Highlights include the following: The value of each [...]
We live in a society that likes to measure and classify. It’s a way to make sense of things and gives us a sense of control. We learn to measure early in life as schools introduce us to grades. A-students are smarter than B-students who are smarter than C-students and so on. For some it [...]