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While there’s no guarantee Washington won’t try to thwart economic growth again in 2014, the growing consensus is that if Congress keeps its distance, the economy is ready to accelerate. As reported at Calculated Risk, Merrill Lynch is making a case that the economy “exits rehab and starts growing at a 3%” next year. And it’s not as if we need to hold our breath that more things go right to get us to that level of growth. As the Merrill Lynch forecasters noted we would have been at 3% to 3.5% this year “absent the shocks out of Washington.”
The age of austerity may be nearing an end as governments ease the fiscal cuts that restrained economic recoveries. After three years of slashing budgets bloated by recession and the stimulus deployed to fight it, U.S. and euro-area officials are finding less need to retrench as their previous efforts and improving economic growth help narrow deficits.
Unemployment at record highs and fragile growth may not be the most fertile of soil for a recovery, but Andrew Lillico, the director of consultancy group Europe Economics, has told CNBC that the euro zone is ready to rise as the next economic superpower.
The euro hovered near five-week highs against the dollar on Friday and analysts say it could be headed for further gains now that the prospect of negative interest rates in the euro zone appears to be off the table.
Job growth in November was probably strong enough to keep payroll gains on track for the best year since 2005, economists said before a report today.
95, was the most important leader in South Africa’s history and one of the global giants of his time. What people often overlook, however, is the role Mandela played in building up Africa’s largest economy. Nearly as consequential as Mandela’s moral example was his skill in managing the transition from apartheid without widespread violence, repression, or economic collapse.
Smoking has not been a barrier to footballing excellence. You’d be able to pick a decent enough XI out of this lot: Dino Zoff, Johan Cruyff, Garrincha, Gérson, Socrates, Zinedine Zidane, Nat Lofthouse, Dixie Dean, Jack and Bobby Charlton, Ossie Ardiles, Paul Gascoigne, Fabien Barthez, Billy Bremner, Jimmy Greaves, Carlo Ancelotti, Gordon Banks, Alfredo Di Stefano and, eh, Jack Wilshere. Cesar Luis Menotti and Enzo Bearzot can fight it out for the right to puff away pensively in the dugout.
I have long argued, along with other Market Monetarists, that the Fed could solve this problem by adopting a NGDP level target. Why would this help? The key reason is that it would create an expectation that some portion of the monetary base growth from the asset purchases would be permanent (and non-sterilized by IOER). That, in turn, would mean a permanently higher price level and nominal income in the future. Such knowledge would cause current investors to rebalance their portfolios away from highly liquid, low-yielding assets towards less liquid, higher yielding assets.
President Obama’s critics are right: Obamacare doesn’t guarantee that everyone who likes their health insurance can keep it. In some cases, Obamacare is the reason people will lose health insurance they liked. What Obamacare comes pretty close to guaranteeing, though, is that everyone who needs health insurance, or who wants health insurance, can get it.
In the final week of 2013 that the Senate and House are scheduled to be in Washington at the same time, lawmakers and aides are optimistic that negotiators can reach a budget accord and continue to make progress on a farm bill and other measures.
That we at Pieria have spent the last few weeks discussing an economy based on abundance rather than scarcity may have seemed oddly timed. After all unemployment is still horrendously high in most developed economies over five years since the onset of the Great Recession.
Interesting little exercise from Andrew Wilkinson at Miller Tabak & Co. Having seemingly generated a lot of client interest with some earlier research looking at valuations of key US indices, he’s now extended the methodology to bourses around the world.
John Linehan, head of U.S. Equities at asset manager T. Rowe Price (TROW) recently noted that we’re on track for just the 10th calendar year since 1950 in which the S&P 500 did not experience at least one stretch where the index had a 5% price decline. (Though we did sure get close, as the late May-late June taper tantrum pushed the index down 4.97%. And, yes, we do have three more weeks to navigate before the calendar turns on 2013.)
If you can’t afford to own, you can rent. But what if you can’t afford to rent, either? Millions of Americans are in precisely that situation, according to a study released today by the Joint Center for Housing Studies of Harvard University. The availability of apartments, especially cheaper ones, hasn’t nearly kept up with demand, and the problem has worsened since the 2007-09 recession, the study says.
The coldest place on Earth has been measured by satellite to be a bitter minus 93.2 Celsius (-135.8F). As one might expect, it is in the heart of Antarctica, and was recorded on 10 August, 2010.
Another good snippet from the BIS quarterly review that’s worth highlighting comes in the observation that banks are losing their raison d’etre due to the erosion of their funding advantages versus non-banks. Which means they’re increasingly resembling listless entities devoid of purpose in a capital shadowland that’s not willing to let them move onto another more deathly plane.
Despite a plethora of bubble talk, chatter about high cyclically adjusted price-earnings valuations and market tops, investors have been carrying an awful lot of cash. This is not a new phenomenon, but rather, has been a persistent condition since this most hated rally in Wall Street history began.
With idle labor and slack capacity at their current levels, the best bet is that such a program would boost total real GDP by at least $2 trillion over the next five years–and actually raise the government’s debt five years hence by at most $333 billion because of the federal, state, and local taxes that would be paid on the added income from higher real GDP.
But Chen Yao, of Warwick Business School, Maureen O’Hara, of Cornell University and Mao Ye, of University of Illinois, discovered that more and more big trades were being ‘sliced and diced’ to less than 100 shares so they remained hidden, leading to a ‘two-tier market’. They found four per cent of the volume of shares traded were done as odd lots in 2009 and that had risen to 4.9 per cent in the summer of 2013. In some cases they found that 60 per cent of a stock’s shares were traded as odd lots and so were hidden from the public transaction feed.
At time the legislation passed, the conventional wisdom said ‘this thing solves coverage but does nothing on costs,'” he recalls. “The experience since suggests the coverage part was a little rockier than people expected but the cost story turned out much better than anyone could have anticipated at the time.
The fifth generation of mobile communications technology will see the end of the “cell” as the fundamental building block of communication networks.