TW: Many folks are conflating our medium and long-term fiscal problems with the current fiscal situation. I have said before and will keep repeating, the implementation of fiscal constraints amidst a massive demand contraction would have and would still result in a vicious circle of even worse demand contraction. In other words a repeat of the Hoover approach of the early 1930's.
Most Republican politicians realize this but will keep conflating the issues right up until the time they regain political power at which point they will throw their fiscal concerns right back in the hamper where they resided until Jan 20th, 2009 to be replaced by the call for "supply side" (i.e.for the wealthy)tax cuts. The tax cuts that allegedly magically pay for themselves but somehow never do.
From Paul Kedrosky:
"In his latest column, the FT’s Martin Wolf spanks historian Niall Ferguson for his recent column equating Greece and the U.S. Here is the money ‘graph from Wolf’s latest:
'If these governments had decided to balance their budgets [in 2009/2010], as [Niall Ferguson and] many conservatives demand, two possible outcomes can be envisaged: the plausible one is that we would now be in the Great Depression redux; the fanciful one is that, despite huge increases in taxation or vast cuts in spending, the private sector would have borrowed and spent as if no crisis at all had happened. In other words, a massive fiscal tightening would actually expand the economy. This is to believe in magic.' "http://paul.kedrosky.com/archives/2010/02/martin_wolf_spa.html
Showing posts with label Paul Kedrosky. Show all posts
Showing posts with label Paul Kedrosky. Show all posts
Wednesday, February 17, 2010
Tuesday, February 9, 2010
Brilliant (cont.)!!
From Paul Kedrosky's blog
TW: Anti-theft lunch bags!!
http://www.marginalrevolution.com/marginalrevolution/2010/02/markets-in-everything.html
TW: Anti-theft lunch bags!!
http://www.marginalrevolution.com/marginalrevolution/2010/02/markets-in-everything.html
Sunday, February 7, 2010
It Is All Relative: Population Across the World
TW: When pondering America's place in the world population is one metric. The first represents total population, the 2nd the population of centurians which is a decent proxy for the age of populations. Click on the images to enlarge.
From Paul Kedrosky's
"I found these three Worldmapper chloropleths striking. Remember, in this sort of map country sizes change depending on the relevant measured variable – in this case, population..."
http://paul.kedrosky.com/archives/2010/02/us_corners_glob.html
From Paul Kedrosky's
"I found these three Worldmapper chloropleths striking. Remember, in this sort of map country sizes change depending on the relevant measured variable – in this case, population..."
http://paul.kedrosky.com/archives/2010/02/us_corners_glob.html
Friday, January 22, 2010
Be Careful What You Ask For...
TW: Populism is fun, it lets many folks blow off steam frequently without the burden of thinking too hard or reconciling those emotions to actual governance. It is also dangerous. Both political parties will try to harness its power for their electoral benefit. I assure you the Republican establishment is merely using the teabaggers as pawns as their core philosphy of what is good for Wall Street is good for them (think Chamber of Commerce) does not jive well with the teabaggers.
Many "street" pros who have spent the past year lamenting "guvmint" intervention are starting to get nervous about "populist" policies actually being enacted.
From Paul Kedrosky:
"My friend Doug Kass has out a lucid musing on the market’s Howard Beale moment. There is a populist uproar in progress, one that people overlook at their peril.
'The populist uproar is geared toward the incumbent, toward anyone in power. It does not run on party lines, nor is it focused on health care. It is the zeitgeist of dissatisfaction, a sign of the times. Maybe it's a function of high unemployment or the electorate ticked off at the wealthy and the largest institutions (especially of a banking kind). This dissatisfaction was expressed in the Democratic tsunami that brought Obama the Presidency, and it was seen yesterday in the Massachusetts Senatorial election that brought Brown the Senate seat. In other words, the mood of the country has been changing for a while, and it is being reflected in a very negative view toward those who have not suffered from high unemployment or from wayward derivative bets (and still got paid). And, as I have written before, this will lead to policies that are arguably needed but, generally speaking, are valuation deflating.
…While I recognize that historically political gridlock is generally seen as a market positive, it might not be this time as the nation needs sound direction and leadership, not legislative inertia. Given the complexity and scope of our country's fiscal problems, obstruction and the perception of continued divisive and partisan political agendas and the lack of an overall governmental community (which could thwart desperately necessary legislative solutions) might quickly be seen as a negative.' "
http://paul.kedrosky.com/archives/2010/01/the_markets_how.html
Many "street" pros who have spent the past year lamenting "guvmint" intervention are starting to get nervous about "populist" policies actually being enacted.
From Paul Kedrosky:
"My friend Doug Kass has out a lucid musing on the market’s Howard Beale moment. There is a populist uproar in progress, one that people overlook at their peril.
'The populist uproar is geared toward the incumbent, toward anyone in power. It does not run on party lines, nor is it focused on health care. It is the zeitgeist of dissatisfaction, a sign of the times. Maybe it's a function of high unemployment or the electorate ticked off at the wealthy and the largest institutions (especially of a banking kind). This dissatisfaction was expressed in the Democratic tsunami that brought Obama the Presidency, and it was seen yesterday in the Massachusetts Senatorial election that brought Brown the Senate seat. In other words, the mood of the country has been changing for a while, and it is being reflected in a very negative view toward those who have not suffered from high unemployment or from wayward derivative bets (and still got paid). And, as I have written before, this will lead to policies that are arguably needed but, generally speaking, are valuation deflating.
…While I recognize that historically political gridlock is generally seen as a market positive, it might not be this time as the nation needs sound direction and leadership, not legislative inertia. Given the complexity and scope of our country's fiscal problems, obstruction and the perception of continued divisive and partisan political agendas and the lack of an overall governmental community (which could thwart desperately necessary legislative solutions) might quickly be seen as a negative.' "
http://paul.kedrosky.com/archives/2010/01/the_markets_how.html
Friday, January 8, 2010
Forecasting Uselessness
TW: Economists are highly consistent. As the graph portrays they almost always forecast 2-3% growth. Unfortunately life is less predictable. And they get paid much money to forecast 2-3% growth...one wonders why...
http://paul.kedrosky.com/archives/2010/01/the_world_accor_1.html
http://paul.kedrosky.com/archives/2010/01/the_world_accor_1.html
Thursday, January 7, 2010
Our Car Population Is Shrinking!
TW: This chart only goes back to 1990 but I would suspect the lines had not crossed for quite awhile prior either. The number of vehicles being scrapped is exceeding those new vehicles registered meaning our population of vehicles is shrinking for the first time probably since vehicles were invented. I believe something like 1.2 vehicles are registered per American meaning there are a heck of alot of vehicles populating our roadways, garages and driveways. Excessive consumption is rightly derided within the U.S. this is change for the better even if it is highly painful for the industry.
Thursday, November 19, 2009
The Rise And Fall Of Western Empires
Visualizing empires decline from Pedro M Cruz on Vimeo.
TW: Very cool visual representation of the evoluation of European colonies through time. Via Paul Kedrosky.
http://vimeo.com/6437816
Tuesday, October 27, 2009
Sunday, August 30, 2009
Agreed
From Paul Kedrosky's blog:
"Air travel security restrictions are nuts. No shoes was bad enough, creating this U.S.-wide pajama party, but now this one: Nothing in the seatback pockets please. I kid you not:
'The Federal Aviation Administration said Monday that airlines whose flight attendants had been telling passengers that no personal items of any kind could be placed in seatback pockets were “following our guidance, if they are enforcing this with travelers.”
The agency’s response came after numerous inquiries following a flight I made from Denver to Tucson operated by SkyWest Airlines, on which the flight attendant announced before takeoff that, as a safety measure, nothing could be placed in seatback storage pockets — no eyeglasses, no ticket stubs, no iPods or bottles of water or magazines.'
My suggestion: Let’s go straight to no humans on planes. They’re just a general security risk, and they smell badly too."
TW: I used to fly a ton, 100K+ miles annually. I did not mind travel but since 9/11 things have gotten stupid (er).
"Air travel security restrictions are nuts. No shoes was bad enough, creating this U.S.-wide pajama party, but now this one: Nothing in the seatback pockets please. I kid you not:
'The Federal Aviation Administration said Monday that airlines whose flight attendants had been telling passengers that no personal items of any kind could be placed in seatback pockets were “following our guidance, if they are enforcing this with travelers.”
The agency’s response came after numerous inquiries following a flight I made from Denver to Tucson operated by SkyWest Airlines, on which the flight attendant announced before takeoff that, as a safety measure, nothing could be placed in seatback storage pockets — no eyeglasses, no ticket stubs, no iPods or bottles of water or magazines.'
My suggestion: Let’s go straight to no humans on planes. They’re just a general security risk, and they smell badly too."
TW: I used to fly a ton, 100K+ miles annually. I did not mind travel but since 9/11 things have gotten stupid (er).
Sunday, July 19, 2009
Its All About the Potato
From Paul Kedrosky's blog:
There is a fascinating new NBER paper out making the case for the humble potato as disruptive innovation:
We have estimated the effect of the introduction of the potato on Old World population growth and urbanization. The nutritional and caloric superiority of the potato, and its diffusion from the New World to the Old, allows us to estimate causal effects using a difference-in-differences estimation strategy. According to our most conservative estimates, the introduction of the potato explains 22% of the observed post-1700 increase in population growth. These results show that food and nutrition matter. By increasing the nutritional carrying capacity of land they can have large effects on population.
To the extent that urbanization serves as a measure of the shift from rural agriculture to urban manufacturing, our estimates also provide historic evidence of the importance of agricultural productivity for economic development. According to our estimates, the introduction of the potato explains 47% of the post-1700 increase in the average urbanization rate. Our estimates suggest that increased agricultural productivity can play a significant part in promoting the rise of urban centers, industry, and economic development."
TW: And something tells me that decades (maybe centuries) from now someone will do a story on how the potato's morph into the french fried version had even greater implications (e.g. why by 2100 the average weight of an American approached 300 lbs etc.).
There is a fascinating new NBER paper out making the case for the humble potato as disruptive innovation:
We have estimated the effect of the introduction of the potato on Old World population growth and urbanization. The nutritional and caloric superiority of the potato, and its diffusion from the New World to the Old, allows us to estimate causal effects using a difference-in-differences estimation strategy. According to our most conservative estimates, the introduction of the potato explains 22% of the observed post-1700 increase in population growth. These results show that food and nutrition matter. By increasing the nutritional carrying capacity of land they can have large effects on population.
To the extent that urbanization serves as a measure of the shift from rural agriculture to urban manufacturing, our estimates also provide historic evidence of the importance of agricultural productivity for economic development. According to our estimates, the introduction of the potato explains 47% of the post-1700 increase in the average urbanization rate. Our estimates suggest that increased agricultural productivity can play a significant part in promoting the rise of urban centers, industry, and economic development."
TW: And something tells me that decades (maybe centuries) from now someone will do a story on how the potato's morph into the french fried version had even greater implications (e.g. why by 2100 the average weight of an American approached 300 lbs etc.).
Thursday, July 2, 2009
Americans Are Spoiled Regarding Health Care
From Paul Kedrosky and Economist:
"I've said something like the following before, but never so succinctly:
The trouble with health care in America, says Muriel Gillick, a geriatrics expert at Harvard Medical School, is that people want to believe that “there is always a fix.” She argues that the way Medicare is organised encourages too many interventions towards the end of life that may extend the patient’s lifespan only slightly, if at all, and can cause unnecessary suffering. It would often be better, she thinks, not to try so hard to eke out a few more hours or weeks but to concentrate on quality of life."
TW: Americans are spoiled with many things but health care perhaps more so than others. Over time Americans have become more and more risk averse. Risk averse to the point of dysfunction. The never ending effort to reduce risk in personal lives pervades our society. Combined with the unwillingness to make challenging decisions like end of life, we have a health care system oriented towards infinite costs.
We deal with this climb towards infinity with indirect rationing (i.e. lots of uninsureds and underinsureds). Furthermore we watch take home paychecks stagnate as incremental income is diverted towards health care plans (either private or public plans). The status quo is inequitable and unsustainable.
We must make choices, some of them VERY tough. Our political system is the means by which to formulate those decisions collectively. No, no, no politics accomplishes nothing. Lets reform.
"I've said something like the following before, but never so succinctly:
The trouble with health care in America, says Muriel Gillick, a geriatrics expert at Harvard Medical School, is that people want to believe that “there is always a fix.” She argues that the way Medicare is organised encourages too many interventions towards the end of life that may extend the patient’s lifespan only slightly, if at all, and can cause unnecessary suffering. It would often be better, she thinks, not to try so hard to eke out a few more hours or weeks but to concentrate on quality of life."
TW: Americans are spoiled with many things but health care perhaps more so than others. Over time Americans have become more and more risk averse. Risk averse to the point of dysfunction. The never ending effort to reduce risk in personal lives pervades our society. Combined with the unwillingness to make challenging decisions like end of life, we have a health care system oriented towards infinite costs.
We deal with this climb towards infinity with indirect rationing (i.e. lots of uninsureds and underinsureds). Furthermore we watch take home paychecks stagnate as incremental income is diverted towards health care plans (either private or public plans). The status quo is inequitable and unsustainable.
We must make choices, some of them VERY tough. Our political system is the means by which to formulate those decisions collectively. No, no, no politics accomplishes nothing. Lets reform.
Wednesday, July 1, 2009
Some Insight From Paul Samuelson
TW: Paul Samuelson is a liberal economist, Nobel Prize winner in economics and still dishing it out at age 94.
From Paul Kedrosky:
"A few more quotable quotes from that new interview:
On Greg Mankiw and Ben Bernanke
The 1980s trained macroeconomics -- like Greg Mankiw and Ben Bernanke and so forth -- became a very complacent group, very ill adapted to meet with a completely unpredictable and new situation, such as we've had.
On Robert Lucas and his acolytes (TW: Lucas is also a Nobel winner from U. of Chicago, a conservative)
Those guys were useless at Federal Reserve meetings.
On Alan Greenspan
But the trouble is that he had been an Ayn Rander. You can take the boy out of the cult but you can't take the cult out of the boy.
On Milton Friedman
He was a libertarian to the point of nuttiness.
On bubbles
And I'm not sure most of the people that get caught up in the middle of a bubble can be described as irrational. It seems pretty rational to buy a house and flip it in the next few weeks at a profit when that's been happening for along time. It works both ways.
On the dollar:
I think it's almost inevitable that, with a billion people in China wide awake for the first time, and a billion people in India, there's going to be some kind of a terrible run against the dollar. And I doubt it can stay orderly, because all of our own hedge funds will be right in the vanguard of the operation.
On economic history: what would you say to someone starting graduate study in economics?
Well, I’d say, and this is probably a change from what I would have said when I was younger: Have a very healthy respect for the study of economic history, because that’s the raw material out of which any of your conjectures or testings will come. And I think the recent period has illustrated that. "
From Paul Kedrosky:
"A few more quotable quotes from that new interview:
On Greg Mankiw and Ben Bernanke
The 1980s trained macroeconomics -- like Greg Mankiw and Ben Bernanke and so forth -- became a very complacent group, very ill adapted to meet with a completely unpredictable and new situation, such as we've had.
On Robert Lucas and his acolytes (TW: Lucas is also a Nobel winner from U. of Chicago, a conservative)
Those guys were useless at Federal Reserve meetings.
On Alan Greenspan
But the trouble is that he had been an Ayn Rander. You can take the boy out of the cult but you can't take the cult out of the boy.
On Milton Friedman
He was a libertarian to the point of nuttiness.
On bubbles
And I'm not sure most of the people that get caught up in the middle of a bubble can be described as irrational. It seems pretty rational to buy a house and flip it in the next few weeks at a profit when that's been happening for along time. It works both ways.
On the dollar:
I think it's almost inevitable that, with a billion people in China wide awake for the first time, and a billion people in India, there's going to be some kind of a terrible run against the dollar. And I doubt it can stay orderly, because all of our own hedge funds will be right in the vanguard of the operation.
On economic history: what would you say to someone starting graduate study in economics?
Well, I’d say, and this is probably a change from what I would have said when I was younger: Have a very healthy respect for the study of economic history, because that’s the raw material out of which any of your conjectures or testings will come. And I think the recent period has illustrated that. "
Tuesday, June 16, 2009
The Birth Of a Traffic Jam
via Paul Kedrosky's blog
TW: Researchers in Japan demonstrate why drivers propagate jams.
Sunday, April 12, 2009
A Shocker!! Traffic Tix Are a Revenue Source
TW: We all know this but it is always good for someone to put some data behind the hypothesis. So given the economy, one should exercise extra vigilance whilst breaking the speed laws...
From Paul Kedrosky's blog:
"Municipalities have revenue motives for enforcing traffic laws in addition to public safety motives because many traffic offenses are punished via fines and the issuing municipality often retains the revenue. Anecdotal evidence supports this revenue motive. We empirically test the revenue motive using a panel of annual data for North Carolina counties from 1990 to 2003. We find that significantly more tickets are issued in the year following a decline in revenue but that the issuance of traffic tickets does not decline in years following revenue increases. Elasticity estimates reveal that a 10 percent decrease in negative revenue growth results in a 6.4 percent increase in the growth rate of traffic tickets. Our results suggest that tickets are used as a revenue generation tool rather than solely a means to increase public safety"
http://paul.kedrosky.com/archives/2009/04/expect_a_lot_mo.html
From Paul Kedrosky's blog:
"Municipalities have revenue motives for enforcing traffic laws in addition to public safety motives because many traffic offenses are punished via fines and the issuing municipality often retains the revenue. Anecdotal evidence supports this revenue motive. We empirically test the revenue motive using a panel of annual data for North Carolina counties from 1990 to 2003. We find that significantly more tickets are issued in the year following a decline in revenue but that the issuance of traffic tickets does not decline in years following revenue increases. Elasticity estimates reveal that a 10 percent decrease in negative revenue growth results in a 6.4 percent increase in the growth rate of traffic tickets. Our results suggest that tickets are used as a revenue generation tool rather than solely a means to increase public safety"
http://paul.kedrosky.com/archives/2009/04/expect_a_lot_mo.html
Friday, January 16, 2009
Things (Economically Speaking) One Should Stop Caring About
TW- Kudos to Paul Kedrosky from his blog:
"Things I Don't Care About or Believe In
I find myself becoming increasingly irritated at so much of what is going on out there. Here is a quick list of the things I just don't care about:
1) Where Bernie Madoff is in NYC on his way to/from hearings. Who cares? Really?
2) Apple statements on Steve Jobs' current employment status. Apple is marginally less trustworthy than the Kremlin.
3) Conversation about further capital injections in banks. Nationalize them, let them fail, or shut up. And pretending that PE firms can do the deed in the largest banks is tantamount to putting a dunce cap on your head.
4) Credit default swaps on the largest sovereigns. Sure, they're tradable, but in default who is on other side?
5) Decoupled anything. I have been arguing this point for a year, and I still run into idiots who think, say, China is going to bounce right back because it doesn't need trade. It not only won't bounce right back, it will likely go into outright recession.
6) Depression/recession chatter. We're doing that denial thing about a depression the same way we did about about a recession. A credit collapse, trade spiral, disappeared confidence, failing banks, fast-rising unemployment, and loss of confidence worldwide: We are in a depression of some to-be-determined eventual severity. Stop talking and move on.
I find it helpful to keep track of things I don't care about. That way I can stop paying attention when they come. It's liberating, like emptying out the garage."
"Things I Don't Care About or Believe In
I find myself becoming increasingly irritated at so much of what is going on out there. Here is a quick list of the things I just don't care about:
1) Where Bernie Madoff is in NYC on his way to/from hearings. Who cares? Really?
2) Apple statements on Steve Jobs' current employment status. Apple is marginally less trustworthy than the Kremlin.
3) Conversation about further capital injections in banks. Nationalize them, let them fail, or shut up. And pretending that PE firms can do the deed in the largest banks is tantamount to putting a dunce cap on your head.
4) Credit default swaps on the largest sovereigns. Sure, they're tradable, but in default who is on other side?
5) Decoupled anything. I have been arguing this point for a year, and I still run into idiots who think, say, China is going to bounce right back because it doesn't need trade. It not only won't bounce right back, it will likely go into outright recession.
6) Depression/recession chatter. We're doing that denial thing about a depression the same way we did about about a recession. A credit collapse, trade spiral, disappeared confidence, failing banks, fast-rising unemployment, and loss of confidence worldwide: We are in a depression of some to-be-determined eventual severity. Stop talking and move on.
I find it helpful to keep track of things I don't care about. That way I can stop paying attention when they come. It's liberating, like emptying out the garage."
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