TOP NEWS: Economy: September 26th, 2012
Excerpts and More Top News and Analysis:
JOBS: Labor-Market Scars Left by Redistributive Public Policy – NYT
Redistributive public policy not only depressed the labor market but changed the composition of the work force so that it includes more people who are married and more skilled.
JOBS: Comparing the Job Losses in Financial Crises – NYT
When shown alongside the track records of other financial crises, the American job losses caused by the recent financial crisis don’t look so terrible.
REDISTRIBUTION: ‘Redistribution’ Debate Has a Gray Area - NYT
Demographics alone suggest that regardless of who is the next president, the government is going to wind up distributing more of the nation’s wealth than it does today.
INVESTMENT: In Round 3 for the Fed, a Challenge for Investors – NYT
Amid the Federal Reserve’s new effort to bolster the economy, which stocks are good bets? Analysts advise looking at history, and trying to surmise the Fed’s goals.
INVESTMENT: Do You Really Believe in Diversification? – RPS VIA RCP
I was talking to an advisor recently (“Joe”) who was considering the replacement of a manager for what he claimed was poor performance. Based upon my inquiries, however, it became clear that there was no problem with relative performance or with risk-adjusted returns. Most fundamentally, what this conversation revealed was that Joe neither understood nor believed in diversification.
MARKETS: Consumer Confidence Is the Highest in 7 Months – NYT
Consumers were more optimistic in September about the labor market, inflation and their income prospects, in a sign that Americans might be ready to loosen their spending.
MARKETS: Bond Investors Register Nervousness About Spain – NYT
An auction of short-term debt took place at sharply higher yields, a sign of uncertainty over whether Spain would ask for help from the European Central Bank.
HOUSING: Rising US home prices cheer consumers – FT
Rising property prices and better performing stock markets have boosted confidence and spending among US consumers amid a sluggish recovery
HOUSING: Home Prices Rise Again, This Time on the Low End – NYT
The housing market is still gathering strength, new data showed, and the gains appear to be spreading even to the cheapest homes in many cities.
DEFICIT: 4th Straight Trillion Dollar Deficit Test for Obama – NYT
Four years ago, Barack Obama campaigned for president on a promise to cut annual federal budget deficits in half by the end of his term. Then came financial calamity, $1.4 trillion in stimulus measures and a maddeningly slow economic recovery
REGULATIONS: US businesses wary of red tape and ‘cliff’ - FT
A new survey shows that businesses believe it is more difficult to succeed in the US than it was three years ago, as uncertainty created by Washington holds them back
REGULATIONS: Greatest Monetary Experiment of All Time - RCP
September 2012 will surely go down in history as the month in which the world’s top central bankers set the seal on the greatest monetary experiment of all time.
REGULATIONS: The Stunning, Sudden Reversal of Economic Freedom In America - FORBES
“I believe we are on an irreversible trend toward more freedom and democracy, but that could change.” This quotation– while there is some confusion as to the author’s identity, there can be no disputing its accuracy – certainly not insofar as our nation’s economic freedom is concerned.
BANKING: Geithner under attack for ‘protecting’ Citi – FT
Former FDIC Chairman Sheila Bair says in a new book that US Treasury Secretary Tim Geithner acted to shield Citigroup from accountability during the financial crisis
BANKING: Tinker, Tailor, Soldier, Central Banker - WSJ, OPINION
Have central bankers been taking lessons from John le Carre? The double think, deception and distortion of the cold-war era looks like it’s being reproduced today. Except, unlike then, when it was state trying to manipulate state, now it’s central banks manipulating individuals and markets.
FISCAL CLIFF: The 900 Pound Gorilla In the 2012 Campaigns – RCM
There are not a lot of issues of more critical importance in the 2012 elections than the fiscal cliff. It is the near-term manifestation of the U.S.’s debt/deficit problem, and its threatened $500 billion jolt to the economy could push the country into another recession unless Congress and the President act.
STIMULUS: History Helps Explain Why the Stimulus Failed - RCP
Ask most Americans about the big-spending government policies of the last few years, and they will tell you the programs have failed.
FUTURE ECONOMY: Losing the Future - FP
DANIEL ALTMAN: Why short-term thinking is the greatest threat to the global economy.
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