Economics Roundtable

January 2014 Payroll Employment

We are getting closer to the previous peak.

Click on the image to get a bigger version.


Jobs

The best summary of the state of our economy is the graph (below) of employment as a fraction of population for people over 16 years old. The decrease is large, but the most troubling feature of the graph is the flat trend .


Click on the image to get a bigger version.


Graph-of-the-Year Candidates

Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?

Brad DeLong favors the U.S. gdp gap.


Remember M1?

Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?


Click on the chart for a larger version.


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The Aleph Blog (David Markel)


April 20, 2014, 3:23 am, 1257911

This is a hard book to review. I have respect for the author, and most of his opinions.  But extraordinary claims require extraordinary proof.  There is evidence here, but not extraordinary proof.  I agree that we are in a bad spot, and that ...


April 19, 2014, 1:23 am, 1257728

Stocks & Industries

Invest In Stubs, Spin-Offs And Liquidations For Alternative Returns http://t.co/ccezep0K9Y Cites a Gabelli article http://t.co/xTrqEfmQeq $$ Apr 19, 2014Real Estate Management Better Than Owning Real Estate? http://t.co/IFaDLiwTRa Sometimes yes, sometimes no. Definitely adds more leverage $$ Apr 19, 2014Wells Fargo Securities Lending Lawsuit Ends in Settlement http://t.co/w3lSY4Cw8D Low margin business that can go badly wrong in ...


April 18, 2014, 3:23 am, 1257475

About 4.5 years ago, I wrote a short piece called The Good ETF.  I’ll quote the summary:

Good ETFs are:

Small compared to the pool that they fish inFollow broad themesDo not rely on irreplicable assetsStorable, they do not require a “roll” or some replication strategy.Not affected by unexpected credit events.Liquid in ...


April 17, 2014, 3:23 am, 1256815

The growth of corporations is always constrained by something.  The trick is figuring out what the “something” is.  Tonight, I am here to simplify it for you.

Financial businesses that are regulated

We value these via book value or tangible book value.  Capital levels constrain business growth, so look at the return ...


April 16, 2014, 3:23 am, 1256177

I’ve been blogging for over seven years… this is just an experiment, and unlikely to be repeated.  Here goes:

Have you ever read through comment streams on major financial news and blogging websites?  Or the Message Boards at Yahoo?  It is often ugly, bitter, and uninformed.  That’s why I am bringing ...


April 15, 2014, 1:23 am, 1255554

There have been a few articles recently on the underperformance of Pimco, and on the increasing concentration on the buy side of the bond market.  There is danger here for large active managers and their clients.

Two years ago, I wrote a piece called Don’t Become the Market.  Though ...


April 13, 2014, 1:23 am, 1254782

US Policy & Politics 

Nearly Half of Dodd-Frank Rules Still Unwritten http://t.co/TwzSawT298 Experiment of regulation by study committees continues albeit slow $$ Apr 12, 2014Banks Given Two Extra Years to Fully Comply With Volcker Rule http://t.co/XVfO9CKMm7 Banks prefer abolition; Fed offers a delay $$ #more? Apr 12, 2014How Big Banks Created a Fed to Serve Their ...


April 12, 2014, 3:23 pm, 1254685

In the early 90s, there were not many investment actuaries.  One of the Holy Grail ideas of the early-to-mid ’90s was creating floating rate funds with yield so that floating rate Guaranteed Investment Contracts could be profitably written.  I chronicled my efforts there in this article.

One avenue that I ...


April 11, 2014, 3:23 am, 1254112

Much as I appreciate those who like what I write at this blog, I don’t write to be loved.  I don’t write to be hated, either.  I am sensitive to what people think of me, but not to the degree that it changes what I write.

I may have nonconsensus views ...


April 10, 2014, 11:23 am, 1253702

I’m working on my taxes.  I’m not in a good mood.  Okay, writing that made me chuckle, because I am usually in a good mood.

Let me divide my working life into four segments:

1986-1998: Actuary — reasonably well paid, and significantly underpaid compared to the value I delivered.1998-2007 — Investment risk ...