| Defunct Economist

Is the Budget Deficit Really an Issue?

In the most recent The Regional Economist there was a new section called “Dialogue With The Fed.”. The topic is the budget deficit and if it’s really an issue. The whole section is worthy of reading, but I understand most are not dedicated economist. Thus, I’ll give you the highlights. Note: The interview, thus the [...]

Predicting A Recession

On November 14, 2011, the Federal Reserve of San Francisco made the following statement: “…the odds are greater than 50 per cent that we will experience a recession sometime early in 2012.” – Federal Reserve Bank of San Francisco Just how accurate is the Federal Reserve at predicting a recession? How accurate is any economist [...]

Fraudulent Nature of fractional reserve banking

Fraud: noun: deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage. Describing the current fractional reserve banking system as fraudulent seems dramatic, however that is exactly what it is. Let’s start with a quick summary of what fractional reserve banking (FRB) is. “[banks]must maintain legally [...]

Condition of the credit markets

Take a look at the following tables. The first graph shows the delinquency rate for single family homes, and the bottom graph shows the actual charge off rate (both are percent change) . Obviously during the recession both spiked, however look at post recession. Compare that to the historical time periods after recessions. What concerns [...]

Obama’s Job Stimulus *updated 9/13*

Keynesian economics took a black eye last night as Obama put the focus on tax cuts instead of aggregate demand.  For the first time since he’s took office, in my opinion, Obama is showing some signs of political leadership.  Like any fiscal policy, there are pro’s and con’s.  So let’s take a quick look at [...]

Raise my taxes

It’s no secret, Uncle Sam has a spending problem. A lot of focus is on cutting spending, which is good. However, we also need to focus on raising taxes. With the stalled economy, many worry that raising taxes could create additional obstacles for economic recovery. That really depends on HOW the government raises taxes. I [...]

How’s the Recovery Going?

The National Bureau of Economic Research declared the Great Recession over in June 2009. Per their news release: In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee [...]

Unemployment Rate Falls: That’s Not Good News

Unemployment fell from 9.2% to 9.1%. Sounds like great news doesn’t it? Majority of mainstream media outlets tout it as great news, however, that is not really the case. So let’s look at some facts about this report (taken straight from the BLS report which you can find here) To learn how to read the [...]

So You Want To Raise Taxes?

With the debt ceiling debate settled (for now), one of the main issues is raising taxes. So let’s take a look at the effect raising taxes has on the economy. Below is a graph showing personal current taxes and household consumption of durable goods. (source is St. Louis Federal Reserve F.R.E.D) I chose durable goods [...]

Debt Ceiling: Initial Reaction

My initial reaction to debt ceiling plan is positive.  I haven’t read the entire plan since only portions are released right now.  But it looks like just over $900 billion is cut now and $1.2 trillion would be reduced in 2013, which is also the year that some current tax cuts expire.  Thus a boost [...]

What are Economic Indicators: Durable Goods Orders

Economic Indicator: Durable Goods Orders (aka Advance Report on Durable Goods, Manufacturers’ Shipments, Inventories and Orders) Importance: High What is it: Indicator on future manufacturing activity Frequency: Monthly Source: Census Bureau http://www.census.gov/manufacturing/m3/ Revisions: Major Why is it important? One of the few indicators that give clues on future activity. The report on ‘orders’ is about [...]

Another Shot at Keynes

Great article. Contradicting Keynes: Bernanke’s Debt Default Scare Quotes from the author: Has Bernanke now abandoned his adherence to Keynes’s money or liquidity supply-and-demand theory of interest rates, or was he merely participating in the debt-default scare to further the federal government’s agenda of raising the debt ceiling to accommodate its profligate spending? The author [...]

Unemployment Increases, How Bad Is It?

Unemployment increased from 9.1% to 9.2% as economy creates a dismal 18,000 jobs. Adding insult to injury, the April and May jobs report was also downgraded. April jobs were decreased from +232,000 to +217,000 and May from +54,000 to +25,000. Below is a graph of the unemployment rate for those who have been unemployed 15 [...]

The Failure Known as QE2 Finally Ends

QE2 ends today, but that won’t stop the Fed from buying more and more treasuries. The Fed is set to buy an additional $300 billion in treasuries, which is half the size of QE2. The unprecedented amount of monetary stimulus being pumped into the global economy by the Federal Reserve will come to a sudden [...]

What are Economic Indicators: Survey of Consumer Sentiment

Economic Indicator:  Survey of Consumer Sentiment Importance: MEDIUM (HIGH-During Economic Turning Points) Frequency: Preliminary – 2nd Friday of the month.  Final – Last Friday of the month. Source:  Reuters/University of Michigan Revisions: Low   Why is it important? Timely assessment of consumer attitudes on consumption, personal finance and the economy.  Many believe this to be [...]