Category Archives: economics

China (and Inflation) Datapoint of the Day

Jim Surowiecki: According to the Yale economist Peter K. Schott, machinery and electronics products made in developed countries sell in the U.S. for four times the average price of Chinese products. And, since the late nineteen-eighties, that price gap has … Continue reading

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Why GE’s Selling its Appliances Division

GE looks as though it’ll sell off its appliances business, and John Gapper wonders why GE is not prepared to invest enough in the business to turn it into a global powerhouse when it clearly expects someone else to buy … Continue reading

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Pricing Panmure House

The Adam Smith Institute reports that Edinburgh councillors have sold the great economist’s house to Heriot-Watt University: They chose the £800,000 bid over a higher offer, on the grounds that the University would make the building more accessible to the … Continue reading

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Why Shutter When You Can Sell?

Warner Brothers is closing down its two art-house production companies, Picturehouse and Warner Independent Pictures, with the loss of about 70 jobs. The idea, according to Warner’s Alan Horn, is that "between both New Line and main Warner’s, we had … Continue reading

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Why Inflation is Lower Than You Think

In one of the smartest pieces of linkbait I’ve seen in a very long time, David Leonhardt today not only defends the CPI, but even says it’s overstating inflation: When the new inflation numbers come out next week, they will … Continue reading

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Why Negative Equity in Car Loans Doesn’t Matter

Nouriel Roubini is now worried about negative equity in auto loans; I have to say this doesn’t bother me in the slightest. For one thing, auto loans are personal loans, they’re not non-recourse mortgages, which means you can’t jingle-mail your … Continue reading

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How a Weaker Dollar Can Mean a Bigger Trade Deficit

Tim Worstall, after leaving a semi-cryptic comment on my blog yesterday, explains himself in a bit more detail today. I was confused about how US net exports could deteriorate even as the currency was weakening, but it turns out that … Continue reading

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The US Economy Reaches a Fork in the Road

There’s been a lot of good stuff written on the GDP report, much of it on the slightly boring question of whether it means we’re in a recession. To me, the answer’s pretty simple: you have to be clear about … Continue reading

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Why Some Countries Find it So Hard to Get Rich

Nobel laureates are always a big draw at the Milken Conference, so it wasn’t much of a surprise that the room was full when Michael Spence moderated a panel on the relationship between growth and development featuring Myron Scholes. It … Continue reading

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What the Internet Doesn’t Transform

The PR panel in some ways encapsulated the weird nexus between corporate America and internet-era technology which has characterized a large part of the Milken Conference. Monday it was newspapers, Tuesday it was music, Wednesday it was PR: in each … Continue reading

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Political Hacks: The Backlash

Macroeconomic discussions at the Milken Conference tend to feature a great deal of party-political Republican talking points. The lunch panel on Monday was moderated by Steve Forbes, the breakfast panel on Tuesday was moderated by Paul Gigot. And with people … Continue reading

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Learning from Amex

It’s very long (8,500 words!) but if you have some time I’d recommend reading the transcript of yesterday’s American Express earnings call. American Express is a very interesting company to watch at times like this: it’s a borrower, and a … Continue reading

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Can Restaurants Auction Their Reservations?

Adam Platt’s rave review of Momofuku Ko won’t make it any easier to get a table at the white-hot 12-seater in New York’s East Village. But one of the most interesting things about the four stars that Platt awarded the … Continue reading

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Iceland: Victimized by its Tiny Currency

Jim Surowiecki has a good piece on Iceland this week. "When we look at Iceland’s predicament," he says, "we should say that there but for the grace of China go we." It’s a good point. If Iceland risks becoming the … Continue reading

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Recession: What can the President do?

Paul Krugman and Jesse Eisinger both have new columns out today, and they’re remarkably similar, dealing as they do with what, if anything, the next president is going to be able to do about the economic malaise facing the USA. … Continue reading

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Frontier Airlines, The Latest Credit Card Victim

I’m well aware that there’s no such thing as a free lunch. But some things come close, at least to the untrained eye, and one of them is the insurance that you get whenever you buy something on a credit … Continue reading

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Parsing the Global Recession

We all know what a recession is: two consecutive quarters of negative growth. Easy. So a global recession, that’s the same thing, but on a global level, right? Actually, no. Recessions happen, in all countries, but they don’t happen in … Continue reading

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Bankruptcies: Still Rare

I’m signed up to the WSJ’s email alert service, which sent me a couple of messages last night. At 12:14 am there was this: WSJ NEWS ALERT: Linens ‘n Things Is Expected to File For Chapter 11 And at 2:19 … Continue reading

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Sovereign Wealth Funds: Still Big

Quite impressive, really, the effect that an unpublished research paper by an unknown analyst can have. After the WSJ’s Bob Davis got his hands on a leaked paper about sovereign wealth funds from the Milken Institute’s Christopher Balding, I expressed … Continue reading

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Sovereign Wealth Funds: Yes, They Really Are That Big

Bob Davis has got his hands on a leaked paper by the Milken Institute’s Christopher Balding, in which Balding claims that sovereign wealth funds might not have as much money as everybody seems to think that they have. Without seeing … Continue reading

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Howard Marks, The Optimistic Bear

Peter Lattman has the latest memo from Howard Marks, and it’s not pretty. If you want the most bearish soundbite, this is it: We’ve had collapses in the past, but never so broad-gauged and systemic. Marks foresees some drastic measures … Continue reading

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Will Burglaries Rise in a Credit Crunch?

The world of stolen goods, like any other market, is in thrall to the dynamics of supply and demand. The supply comes from burglars, who burgle houses and steal goods. The demand comes from a much more disparate and less … Continue reading

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Rant of the Day: Jezebel’s “Dear Ben” Letter

Sophisticated financial analysis it isn’t; heartfelt, however, it is. Moe Tkacik went on the rampage yesterday afternoon, speaking for the unmoneyed everywhere when she told Ben Bernanke to, well, I’ll let her say it: Fuck the Street. Please, Ben Bernanke, … Continue reading

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Never Lend Money to Gisele Bundchen!

Enrichetta Ravina studied 11,957 loan requests from 7,321 borrowers and concluded: Borrowers whose appearance is rated above average are 1.41 percentage points more likely to get a loan and, given a loan, pay 81 basis points less than an average-looking … Continue reading

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Please, China, Sell Your Treasury Notes!

One more post on Krugman, if I may, and then I’ll move on. Check out the chart he reproduced on Saturday: it looks very much like it comes from the Economist, but I can’t find the specific article. In any … Continue reading

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