Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
|
Last |
Change |
Percent |
|
|
S&P Futures |
1420.8 |
6.4 |
0.45% |
|
Eurostoxx Index |
2603.5 |
28.2 |
1.10% |
|
Oil (WTI) |
89.54 |
0.6 |
0.71% |
|
LIBOR |
0.311 |
0.000 |
0.00% |
|
US Dollar Index (DXY) |
79.87 |
-0.288 |
-0.36% |
|
10 Year Govt Bond Yield |
1.64% |
0.03% |
|
|
RPX Composite Real Estate Index |
191.1 |
0.0 |
Markets are higher this morning after a better than expected PMI report out of China and Europeans took steps to solve their crisis there. We will get the November ISM report and Construction Spending at 10:00 am. Bonds are down a point, while MBS are down a few ticks.
Talks on the fiscal cliff seem to be at a stalemate. Both sides are digging in their heels and making their respective cases on the Sunday morning talk shows. Given that we have seen this movie before in the debt ceiling and the last time we approached the cliff, the markets are taking a sanguine view. Two economists sum up the left / right views pretty well this morning: Sameulson vs Krugman.
Has the G-fee become the new Social Security Trust Fund – in other words, the piggybank government uses to fund items unrelated to housing? It would appear so. They were used in the debt ceiling deal a couple of years ago, and are now being used to pay for visas for highly skilled immigrants. Never mind that the G-fee is more or less an insurance policy payment used to compensate the GSEs for credit risk. Maybe the “G” in G-fee should be changed from “guarantee” to “general”
The Fed is contemplating another round of asset purchases as Operation Twist ends this year. While Minneapolis President Kocherlakota believes “monetary policy if anything is too tight,” Philly Fed President Charles Plosser warns that additional stimulus may not have the capability to affect employment rates and risks the possibility that the “US turns into a Japanese experience where we have extremely weak modest growth over a long period of time.” It is refreshing to hear someone invoke the “J” word – Japan – which should be the elephant in the room, both in Washington and at the Fed.
Filed under: Morning Report |
All Things in Moderation 
I am relieved that the markets are not in a panic over the machinations in D.C.
To me, the public posturing of the negotiators is noise. It is not directed at the opposing negotiator. We will not know with accuracy what is talked about in private, although it, and all the rumors, will be available for public consumption.
I do wonder here who are the primary targets of the public posturing.
Surely, not the financial markets. Probably the party bases. Probably not our world trade partners and rivals.
I also wonder who has the ear of the negotiators outside the teams. They have both heard everyone and every idea in the general sense. But who could now call a negotiating team member and be heard? I think, perhaps, no one.
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I’ve been reading Chrystia Freeland’s work pretty frequently lately and this one is interesting regarding income inequality.
According to Dervis, and the research collected in “Inequality in America,” a growing number of economists suspect that once inequality passes a certain point, it may jeopardize economic stability and economic growth.
As the book argues, “rebalancing of the distribution of income may play a role in unlocking the U.S. economy’s growth potential in a sustainable way.”
Now that is a truly radical thought, and it brings us back to Milanovic’s earlier view that income inequality was a forbidden subject in the United States.
Worrying about the poor is one thing. To contend that equality is necessary for growth is an altogether different and more radical idea. Three decades later, trickle-down economics has met its antithesis. We are set for one of the great battles of ideas of our time.
http://blogs.reuters.com/chrystia-freeland/2012/11/30/income-inequality-government-warren-buffett-and-growth/
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Samuelson’s screed is pure granny-starving. Who is to say that Social security benefits are too generous? Not the people on them, that’s for sure. His claim about SS outlays being more than current income is hogwash too because there were no qualms about collecting the excess for the decades where it was more.
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” As the book argues, “rebalancing of the distribution of income may play a role in unlocking the U.S. economy’s growth potential in a sustainable way.”
Now that is a truly radical thought, and it brings us back to Milanovic’s earlier view that income inequality was a forbidden subject in the United States.”
To me the relevant metric is equality of opportunity, not equality of outcome. Having said that, I think top incomes have skewed far beyond any rational valuation of what an individual can add to the economy. It represents a failure of the free market that Mark Zuckerberg has allegedly added 10 billion dollars of value to the economy.
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“yellojkt, on December 3, 2012 at 11:50 am said:
Samuelson’s screed is pure granny-starving. Who is to say that Social security benefits are too generous?”
The people stuck paying for them.
The extreme income inequality in the financial sector is being driven by successful rent seeking and crony capitalism. The solution isn’t to redistribute it based on politics but rather to end the rent seeking through anti-trust enforcement.
Leaving the current system in place and just taxing it a little more does nothing to address the economic inefficiency at the root of the problem.
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As someone hoping to have government provided health care in a decade or two, I don’t think they are too generous at all. Not there isn’t a sustainability problem but reducing benefits or raising eligibility requirements is just nibbling at the edge. We need systemic changes to get something better and cheaper.
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jnc:
Do you monitor the e-mail address next to your avatar?
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“As someone hoping to have government provided health care in a decade or two”
not me. but Medicare doesn’t really cover care provided outside of the USA. another great feature of a one-size-fits-some system.
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You’re planning on retiring outside the U.S., NoVa? Where to? I personally have plans to live at least half time in Costa Rica.
BB
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I’m a long way from retirement, but we have two long term goals.
1 — in 10 years or so we plan to take our son out of school for a year and travel round-the-world. figure when he’s in 8th grade. a career break for us and exposure to how the rest of the world lives for him (and us). could probably do some consulting from the road. but that (and most of this) is TBD.
We’ve talked about retiring overseas. Belize is on the list. but it’s such a long way off for us it’s not even in the planning phase. more of a “what do you think about” this?
our “gap year” is though. we’re in the planning/savings phase now (and have been for about a year or so). http://meetplango.com/
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Not regularly. I’ll check it.
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jnc:
Thanks. Just sent you something.
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