Professor Mark J. Perry's Blog for Economics and Finance
Based on Intrade.com trading:
NEW DELHI: American cult bike brand Harley-Davidson may finally hit the Indian roads.
The small clinic at Kaival Hospital in Anand, India matches infertile couples with local women, cares for the women during pregnancy and delivery, and counsels them afterward. Anand's surrogate mothers (pictured above), pioneers in the growing field of outsourced pregnancies, have given birth to roughly 40 babies.
Cheap Chinese products, like motorcycles that sell for only $440, are flooding China's southern neighbors and consumers in Myanmar, Laos, Vietnam and Cambodia are laying out the welcome mat.
I have posted previously on low-cost, consumer-friendly, market-driven, walk-in retail health care clinics in retail stores like Walgreens, CVS and Wal-Mart, see here, here, here and here. Now Target has joined the market for retail clinics by opening Target Clinics in Minnesota (18 locations) and Maryland (5 locations).
For 2008, the economic outlook is Topic No. 1 for almost all investors. Stock prices and bond yields already reflect recession worries, but an actual downturn would hit portfolios hard. To help get a handle on what to expect, BusinessWeek asked 54 forecasters for their views on everything from housing and the credit crunch to Fed policy and global growth. (Click here for full survey results.)
A: Nobody.
From the article: "More Grads, But Cognitive Ability Declines: Degrees and diplomas may not translate to on-the-job success," in a recent edition of InsideRecruiting, a recruiting industry trade publication:
From John Stossel in today's NY Sun: NPR Morning Edition--In 2007, foreign investors acquired more than $43 billion worth of U.S. properties — almost double the amount foreigners spent a year earlier.
Home prices have been falling (see WSJ article), but still dominate stocks over the last 10 years. Compared to ten years ago, the S&P500 Index today is 2X higher, but home prices are 2.68X higher.
The chart above uses international macroeconomic data on real GDP growth from the USDA's Economic Research Service. Over the last four years, the world economy has grown at an annual average rate of 3.6%, the fastest growth in real world output over a four-year period in almost twenty years (see shaded areas above). If there is any kind of slowdown in global economic growth, it sure hasn't shown up yet in real GDP data. The American middle class is fighting for its life -- or at least that's what Lou Dobbs would have you believe. The CNN anchor's rants about "the war on the middle class" are probably the most prominent examples of such economic doom-saying, but he isn't alone. Democratic presidential candidates pepper their debates with references to the assault; leading liberal thinkers argue that supply-side conservatives captured the Republican Party during the Reagan administration and implemented policies that continue to privilege the super rich today. They tell a compelling tale of middle-class decline. Pity it isn't true.
This is the season of frenetic shopping, but for a devious few people it’s also the season of spirited shopdropping.
The events of 2007 have made the U.S. much more affordable for international home buyers. Severe dollar declines against the euro and pound have made U.S. homes much cheaper for Europeans. But even foreign buyers without that sort of currency advantage are benefiting from sharp drops in housing prices at a time when problems in mortgage lending are keeping many Americans out of the market.
TORONTO (AP) — Oscar Peterson, whose early talent and speedy fingers made him one of the world's best known jazz pianists, died at age 82.JEFFERSON, Iowa - Because of rising demand for ethanol, American farmers are growing more corn than at any time since World War II. And sea life in the Gulf of Mexico is paying the price.
From Wordsmith.org:
Study of the long economic history of the world suggests two things. Cheap fossil fuels actually explain little of how we got rich since the Industrial Revolution. And after an initial period of painful adaptation, we can live happily, opulently and indeed more healthily, in a world of permanent $100-a-barrel oil or even $500-a-barrel oil.
Hey, it's a little slow for new postings, so I thought I'd recycle an interesting post from last December about the market for used light bulbs in the Soviet Union, especially because: a) I'm taking a group of MBA students to Russia in April 2008, b) Russia's Putin is Time Magazine's "Man/Person of the Year," c) my MBA students in MGT 551 are studying price controls in CH 4 of the Gwartney textbook and d) I didn't have a lot of regular readers last year at this time. Here it is:
"The humble improve."
The BEA released it final estimate of third quarter (July-September) real GDP growth today, and it remained unchanged from its previous estimate of 4.9%. Third quarter growth in real GDP was more than twice the average growth this decade of 2.2%, and followed second quarter growth of 3.8% (see chart above). Notice also that the strong back-to-back growth in real output during the last two quarters looks nothing like the recessionary period of 2001, or even the pre-recession period of 2000.
The top chart above is from a previous CD post, and the bottom chart above is from Larry Kudlow's blog, and he featured it last night on Kudlow and Company.
See chart above (click to enlarge) for evidence of Walter Williams' claims that Education majors perform poorly on standarized tests like the LSAT, GMAT and GRE.
(HT: Ironman at Political Calculations)
American education will never be improved until we address one of the problems seen as too delicate to discuss. That problem is the overall quality of people teaching our children. Students who have chosen education as their major have the lowest SAT scores of any other major. Students who have graduated with an education degree earn lower scores than any other major on graduate school admissions tests such as the GRE, MCAT or LSAT. Schools of education, either graduate or undergraduate, represent the academic slums of most any university. As such, they are home to the least able students and professors with the lowest academic respect. Were we serious about efforts to improve public education, one of the first things we would do is eliminate schools of education.
Subject to any last minute changes, I'll be a guest on CNBC's "Kudlow and Company" tonight at 7 p.m. EST to discuss some of my recent blog postings on inflation.
Real direct tourism spending increased at an annual rate of 1.6% in the third quarter of 2007, according to data released today by the U.S. Bureau of Economic Analysis.
Another post on the theme "The good old days are now." The standard of living for the average American just keeps getting better and better over time. One reason we don't appreciate it, is that the improvements, though persistent and relentless, happen gradually year after year, so we end up taking it for granted. If the average home size increased from 983 sq. ft. to 2,349 sq. ft. overnight, we would treat it as a modern miracle. When it happens 25 sq. ft. per year for a half century, we don't even notice it.
Using mid-December exchange-rate data from FT.com, the chart above shows the one-year forward discount or premium for the US dollar vs. the Euro and British Pound in 2005, 2006, and 2007. There are a myriad of factors involved in the rising costs of health care, but the biggest factor in rising medical costs? The medical doctors themselves, says one physician......
Even more predictable than the post-Thanksgiving appearance of shopping-mall Santas is the inability of pundits at this time of year to say or to write "commercialism" without prefixing to it the word "crass."
Exhibit A: See graph below (click to enlarge) of the Adjusted Monetary Base, from the St. Louis Federal Reserve, from 2002-2007. Notice the decline in growth from 10% to 2%, suggesting a deflationary trend in high-powered money.
Exhibit B: See graph below of the Adjusted Monetary Base vs. M1 Money Supply, from 2002-2007. Notice that as the growth in high-powered money growth, controlled by the Fed, has come down from 10% in 2002 to 2% in 2007, the M1 Money Supply has stablized at about $1.36 trillion.
SAN FRANCISCO--Buffett indirectly blamed the Bush administration for a tax code he said is out of whack.
For the political left and most of the media, this means only that the rich are getting richer. However:
In other words, despite the tax reductions of 2001 and 2003, the rich saw their share of taxes paid rise at a faster rate than their share of income. This makes it hard to pin their claim of "rising inequality" on the Bush tax cuts, though the income redistributionists are trying. By this measure, the Clinton years were far worse for "inequality."
Conclusion from the WSJ: "We hate to break up the media's egalitarian chorus with these details, but facts are facts. If Democrats really want to soak the rich, they'll keep tax rates where they are, or, better, lower them some more."
(HT: NCPA)
According to the BLS labor report on December 7, "Nonfarm payroll employment continued to trend up in November (94,000), and the unemployment rate held at 4.7%."
NY Times: Swiss chocolatiers, having long ago conquered markets in Europe and North America, are now aiming at the vast expanses of Russia, India and China, making Swiss chocolate a case study in globalization.
Reminder: Trade works both ways. As economies like India, Russia, China, and Brazil become wealthy and prosperous by producing goods and services for the U.S. and European markets, the workers of those economies also become increasingly wealthy and prosperous consumers of American and European products.
Exhibit A: Swiss chocolate.
WASHINGTON - The Supreme Court on Monday (December 10) said judges may impose shorter prison terms for crack cocaine crimes, enhancing judicial discretion to reduce the disparity between sentences for crack and cocaine powder.
From the Minneapolis Fed's interview with University of Chicago economist Eugene Fama (pictured above):
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
