Saturday, May 23, 2009

Real Estate Market is Booming in Phoenix: What A National Housing Recovery Could Look Like

LA TIMES -- More Phoenix homes are selling than at any time since 2006. Prices are slowly stabilizing. Buyers find themselves in bidding wars over low-end properties. It's what a national housing recovery could look like.

Mike Orr, a Phoenix real estate analyst, thinks the market already has hit bottom. Among the signs: As recently as January, a year's worth of homes sat on the market; in March, that dropped to seven months' worth of inventory."It's a dramatic change in just three months," he said. "I never imagined it'd get this crazy this quickly."

In a throwback to the boom, real estate agents and investors are swapping stories of brutal competition for bottom-end homes. Orr called on one property to find it had already received 14 bids. Realtor David Thomas recalled getting a client in a $60,000 foreclosed home in the suburb of Avondale, on a street lined with vacant properties. He recently returned to find almost all the for-sale signs gone.

NY TIMES
-- The low end of the Phoenix real estate market — and in some equally hard-hit places like inland California and coastal Florida — is becoming as wild as anything during the boom.

One real estate agent was showing a foreclosed house to a prospective client when a passer-by saw the open door, came in and snapped up the property. Another agent says she was having the lock changed on a bank-owned home when a man happened by, found out from the locksmith that it was available, and immediately bought it. Bidding wars are routine.

Who Could Possibly Object to Expansion of Low-Cost, Convenient Retail Health Clinics in Texas?

Texas has only about 85 of the 1,200 retail health clinics in the nation. San Antonio does not have a single one. The clinics are popular wherever they exist because nurse practitioners can treat common ailments and minor injuries with little waiting time and fees that average about $60, much less than emergency rooms. The clinics operate evenings and weekends and accept insurance plans. The clinics would represent real health care reform, especially in Texas. Most of the state, 179 counties out of 254, is classified as medically underserved. Among them are 45 metropolitan counties.

MP: Who do you suppose could possibly object to, and successfully block, the expansion of affordable, convenient retail health clinics in Texas, including in the medically underserved areas? Find out here, I am sure you can probably guess.

Buying Brand New $23,000 Cars For Commuters in Phoenix is Cheaper Than Light Rail for $1.4B

The other day, Phoenix trumpeted that its daily light rail ridership had reached 37,000 boardings per weekday. Since most of those people have two boardings per day (one each direction) we can think of this as 18,500 people making a round trip each day.

Well, if we bought each of these folks a brand new Prius III for $23,000 it would cost us just over $425 million. This is WAY less than the $1.4 billion we pay to move them by rail instead. We could have bought every regular rider a Prius and still have a billion dollars left over! And, having a Prius, they would be able to commute and get good gas mileage anywhere they wanted to go in Phoenix, rather than just a maximum of 20 miles on just one line.


~Coyote Blog

Friday, May 22, 2009

Unintended Consequences: CAFE Standards Will Cause More Pollution and Increase Highway Deaths

An economic phenomenon called "price elasticity of demand" is well established when it comes to automobile purchases. In other words, if you raise the price of new cars, people will buy fewer of them or, at a minimum, put off the purchase for a year or so while they drive the old clunker for a few thousand more miles. And fewer new cars means more pollution, which can cause significant health problems. Yet environmentalists and the press have ignored this issue, so as not to inject a note of complexity or doubt into the chorus of glee that greeted the president's attack on greenhouse-gas emissions.

The Obama fuel efficiency plan may also contribute to a significant increase in highway deaths as vehicles are required to quickly meet the new CAFE standard and will likely become lighter in weight as a result. According to a study completed in 2001 by the National Research Council (NRC), the last major increase in CAFE standards, mandated by the Energy Policy and Conservation Act of 1975, required about a 50% increase in fuel economy (to 27.5 mpg by model year 1985 from an average of 18 mpg in 1978). The NRC study concluded that the subsequent downsizing and down-weighting of vehicles, "while resulting in significant fuel savings, also resulted in a safety penalty." Specifically, the NRC estimated that in 1993 there were between 1,300 and 2,600 motor vehicle crash deaths that would not have occurred if cars were as heavy as they were in 1976.

The president now proposes a fuel economy increase of similar magnitude in an even quicker time frame -- to 39 mpg by model year 2016 from 27.5 mpg now. Given the time it takes for new technologies to be developed, tested and incorporated into new car models, it is likely that down-weighting of cars will be an important means of meeting the new standard. And one result again could be highway deaths that might otherwise not have occurred.

~Robert Grady in today's WSJ

April Jobless Rate Falls in 21 States, Stays the Same in 11 States; Best State Jobs Report In A Year

Regional and state unemployment rates were little changed in April. Twenty-one states recorded over-the-month unemployment rate decreases, 18 states and the District of Columbia registered rate increases, and 11 states had no rate change, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.

MP: April's report was the best state unemployment report in a year, measured by the number of states experiencing either a decrease in jobless rate (21 states in April including CA, FL, NY, TX, MN, WI, MO, etc.) or no rate change (11 in April) compared to the previous month. The last time that the jobless rate for 32 states either decreased or stayed the same compared to the previous month was last April 2008, when the
BLS reported that 28 states and the District of Columbia recorded over-the-month unemployment rate decreases and 8 states had no change (total of 36 states).

For example, in
December 2008 all 50 states and D.C. recorded over-the month unemployment rate increases, in January 2009 49 states and D.C. recorded over-the month increases, in February 2009 there were 49 states and D.C. with jobless rate increases, and in March 2009 there were 46 states with rate increases from the previous month and 3 with no change.

From the
data in Table 3 of today's report, it looks like some of the 18 states that recorded jobless rate increases in April had pretty large increases like Michigan (0.30% increase), Ohio (0.50% increase), Illinois (+0.40%), Connecticut (+0.40%), Rhode Island (+.50%), W. Va. (+0.7%), and those increases were much greater than the monthly decreases of -.10% or -.20% in many of the 21 states that recorded decreases in their April unemployment rates. That would explain why the national jobless rate increased in April to 8.9%, even though 21 states had lower rates in April compared to March.

Bottom Line: The fact that 21 states recorded decreases in monthly unemployment rates for April, and 11 states recorded no change in rate for the first time in a year, seems like a positive sign that job markets in most states around the country are stabilizing and recovering. The employment problems that persist are concentrated in certain Rust-belt states like MI, IL and OH, and high-tax states like CT and RI.

Quote of the Day on the Global Network System

Our modern living standards are almost entirely the result of investment, entrepreneurial discovery, and gains from depersonalized trade - trade between people who do not know each other and often never meet. As Adam Smith noted long ago, the division of labor is limited by the extent of the market. Much like a telephone or an Internet system, a market economy is a network good. As the size of the market expands from the local town or village to the region, nation, and beyond, network participants derive larger and larger benefits from trade, specialization, and economies of scale. For those connected to the global market, this system generates employment opportunities, high productivity per worker, and a vast array of consumer goods that are available at almost unbelievably low prices. This network system makes high-income levels and living standards possible.

~From James Gwartney's 2008 Presidential Address to the Southern Economic Association via Cafe Hayek

MP: It also could be noted that in the international network system known as the Global Economy, the gains from trade do not depend on whether the participants (buyers and sellers) both have driver's licenses from the same state (intra-state trade) or different states (interstate trade), and further don't depend on whether the participants have passports from the same countries (intra-country trade) or different countries (international trade).

Thursday, May 21, 2009

When Will We Know For Sure Recession is Over? 2011

There has been a lot of discussion lately about green shoots, mustard seeds and an end to the recession sometime this year. How long would it take for the NBER to make the official announcement that the current recession is over? Let's look at the last two recessions.

The last recession ended in November 2001, but the official announcement by the NBER didn't come until July 17, 2003, almost 20 months after the recession was over.

The 1990-1991 recession ended in March of 1991, but the NBER official announcement that the recession ended was not released until December 22, 1992, almost 21 months later.

Let's be optimistic and assume that the recession ends in the middle of 2009, and let's pick June 2009 as a possibility. In that case, given the past record of the NBER, we wouldn't know officially that the recession ended until February or March of 2011.

Bottom Line: Under the most optimistic circumstances, we won't know until 2011 that the recession has officially ended.

Scientific Calculators: The Good Old Days Are Now

Pictured above is the HP-35, Hewlett-Packard's first pocket calculator and the world's first scientific pocket calculator. The HP-35 was available from 1972 to 1975, and retailed then for $395 (more than $2,000 it today's dollars).

Market studies at the time had shown no market for pocket sized calculators. However, HP co-founder Bill Hewlett began development of a "shirt-pocket sized calculator," and it turned out that the marketing studies were wrong. In the first months orders were exceeding HP's expectations as to the entire market size. 100,000 HP-35 calculators were sold in the first year, and more than 300,000 by the time it was discontinued in 1975, 3 and 1/2 years after its introduction.

The new HP
35s Scientific Calculator was introduced in 2007 to commemorate the 35th anniversary of the HP-35, and it sells today for about $50, or 1/40th the price of the original HP-35 in constant dollars.

HT: Lee Coppock


Update: The calculator used three rechargeable 'AA'-sized NiCd batteries assembled into a removable proprietary battery pack. Thanks to Tseeba for the information.

Policy Ineffectiveness Theory Demonstrated

Another policy response was the Economic Stimulus Act of 2008 passed in February. The major part of this package was to send cash totaling over $100 billion to individuals and families in the United States so they would have more to spend and thus jump-start consumption and the economy. Most of the checks were sent in May, June, and July. As would be predicted by the permanent income theory of consumption, people spent little if anything of the temporary rebate, and consumption was not jump-started as had been hoped.

The evidence is presented in the figure above. The top line shows how personal disposable income jumped at the time of the rebate. The lower line shows that personal consumption expenditures did not increase in a noticeable way. As with the earlier charts, formal statistical work shows that the rebates had no statistically significant increase in consumption.

~From Stanford professor John Taylor's paper "The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong" (HT: Lee Coppock)

This is a good example of the Policy Ineffectiveness Proposition, which suggests that "governments are powerless in the management of output and employment in an economy."

Child’s Ability to Delay Gratification is a Predictor of Future Success, Higher SAT Scores By 200 Points

In the late 1960s, Stanford University conducted an experiment on young childrens' self-control and ability to delay gratification. Researchers would give young children a choice: the child could either eat one marshmallow right away or, if he or she was willing to wait while the researcher stepped out of the room for a few minutes, the child could have two marshmallows when the researcher returned. If the children rang a bell on the desk the researcher would come running back, and the child could eat one marshmallow but would forfeit the second.

Most of the children struggled to resist the treat and held out for an average of less than three minutes. About 30% of the children successfully delayed gratification until the researcher returned, some fifteen minutes later. These kids wrestled with temptation but found a way to resist.

An analysis of the results showed that the children who rang the bell quickly, seemed more likely to have behavioral problems, both in school and at home. They got lower S.A.T. scores. They struggled in stressful situations, often had trouble paying attention, and found it difficult to maintain friendships. The child who could wait fifteen minutes had an S.A.T. score that was, on average, 210 points higher than that of the kid who could wait only thirty seconds.

~The New Yorker

Does the 58-Point Increase in the Philly Fed Forecast Index Signal the End of Recession?

The Philadelphia Fed reports today that the Six-Month Indicators Show Continued Improvement:

Broad indicators of future activity showed improvement again this month. The future general activity index remained positive for the fifth consecutive month and increased 11 points, from 36.2 in April to 47.5. The index has now increased 33 points in the past two months (see chart above, click to enlarge). The indexes for future new orders and shipments also improved, increasing 13 and 14 points, respectively.

For the first time in eight months, the percentage of firms expecting employment to increase over the next six months exceeded the percentage expecting declines (26 percent versus 16 percent). The future employment index jumped 22 points, to its highest reading since last September. The six-month capital expenditure index showed a modest four-point improvement, increasing for the second consecutive month; at -0.2 the index is 22 points higher than its record low in March.

MP: Notice in the chart above that in 2001 a 60-point increase in the forecast index signalled the end of the 2001 recession. Hopefully the recent 58-point increase in the future activity index since December 2008 is signalling the end of the current recession.

According to the Philadelphia Fed, "Most broad indicators for future business conditions improved markedly again this month, suggesting that an increasing number of the region's manufacturing executives expect a recovery in business activity before the end of the year."

Wal-Mart: Everyday Job Creator: 1,400 in May

JACKSONVILLE, Fla., May 13, 2009A new Walmart opens this month in Jacksonville, bringing 400 new jobs, savings for local shoppers and an increase in tax revenue to support the area’s economy. Nonprofit organizations will also benefit from the retailer’s ongoing charitable contributions and support for community projects. The Walmart, located at 10251 Shops Lane, will be open to customers at 8:15 a.m., Wednesday, May 20th.

MARICOPA, Ariz., May 15, 2009The new Walmart in Maricopa will celebrate its grand opening this week, bringing the community 320 new jobs, support for local organizations and Walmart’s unbeatable prices on a full line of groceries and general merchandise. The new store, located at 41650 W. Maricopa Casa Grande, will open at 8 a.m., Wednesday, May 20 and give local shoppers a glimpse at Walmart’s next generation of store design and customer experience.

CAMDEN, Ark., May 14, 2009A new Walmart opens this month in Camden, bringing 170 new jobs, savings for local shoppers and an increase in tax revenue to support the area’s economy. Nonprofit organizations will also benefit from the retailer’s ongoing charitable contributions and support for community projects. The Walmart, located at 950 California Ave., will be open to customers at 8 a.m., Wednesday.

WAL-MART MARKET TO BRING ABOUT 90 JOBS TO LARGO -- The 42,000-square-foot former Kash n' Karry in southwest Largo has been a sign of the harsh reality of the stark economic times. But things are looking up for the once-vacant building.

Scheduled to open as a Wal-Mart Neighborhood Market on July 15, the store is seeking potential workers. Wal-Mart is looking to hire at least 90 people to staff the 24-hour, seven-day-a-week grocery store.

New Albuquerque Wal-Mart Hiring 420 -- Wal-Mart is hiring 420 people for its new Albuquerque Supercenter, which is scheduled to open July 15. "It's almost like bringing hope back to the community," said store manager Alberta Garcia. "When you have all these companies laying off people and here we are bringing 420 jobs in."

Wednesday, May 20, 2009

Aren't Regulations A Form of a Tax?

Remember when Obama said that not one single American making under $250,000 would pay a single dime more in federal taxes? Well the new emission standards Obama wants will make the cars we all buy as much as $600 - $1,300 more expensive.

Link.

The Great Driving Reduction: Consumers Save Money Voluntarily, With No New Legislation

According to data released today from the Federal Highway Administration, travel on all roads and streets in the United States fell by -1.2% in March 2009 compared to March 2008. This marks the 17th consecutive month of traffic volume decline (starting in Nov. 2007) compared to the same month in the previous year. The moving 12-month total for traffic volume has fallen now for 16 consecutive months, going back to December 2007 (see chart above).

The 12-month moving total for March is the lowest traffic volume (2,914 billion miles) in any month since February 2004 (see red line on the chart above, click to enlarge).

WASHINGTON -- President Barack Obama is asking consumers to put their money -- up to $1,300 per new vehicle by 2016 -- behind his plan for higher efficiency standards for cars and trucks and tougher rules on their greenhouse gas emissions.

In return, Obama said Tuesday in unveiling the plan, drivers would make up the higher cost of more fuel-efficient, cleaner vehicles by buying less gas at the pump. It would take just three years to pay off the investment and would, over the life of a vehicle, save about $2,800 through better gas mileage, the president said.

MP: It seems like consumers have already decided on their own that voluntarily buying less gas at the pump can be in their own self-interest, and are now driving the same number of miles as they were five years ago, even with more cars and more drivers. Without stricter CAFE standards, consumers on their own have been driving less, have been buying less gas at the pump, and in the process have reduced greenhouse gas emissions.

Positive Relationship

Indexed.


Chinese Demand Increases, BDI Hits 7-Mo. High


May 19 (Bloomberg) -- The Baltic Dry Index, a measure of shipping costs for commodities, rose to a seven-month high in London on accelerating Chinese demand for iron ore. China’s imports of iron ore, used in steelmaking, jumped 33% in April, setting a record for a third month, the customs office said last week. The nation, the world’s biggest steel producer, is stockpiling commodities as part of a reallocation of its sovereign wealth, Brian Jackson, senior strategist at the Bank of Canada in Hong Kong, said yesterday.

The index tracking transport costs on international trade routes added 39 points, or 1.5%, to 2,644 points, according to the Baltic Exchange. That’s the highest since Oct. 8 and marks a 13th consecutive advance. Rentals climbed for every class of ship tracked by the bourse.

MP: The Baltic Dry Index advanced again today (May 20), for the 14th consecutive day, rising another 21 points to 2,665.

Markets in Everything: Free Money Saving Website

BillShrink provides a free, web-based service that provides users with personalized recommendations for everyday services such as cell phone plans and credit cards. These recommendations are computed in real-time by matching your indicated usage profile against literally millions of different market options. The results enable you to view and compare options so that you can make a well-informed decision that maximizes your savings.

Football Justice and Supreme Court Justice

President Obama's articulated criteria for his nominee to the U.S. Supreme Court is: "We need somebody who's got the heart to recognize -- the empathy to recognize what it's like to be a young teenage mom, the empathy to understand what it's like to be poor or African-American or gay or disabled or old. And that's the criteria by which I'm going to be selecting my judges."

The Pittsburgh Steelers have won six Super Bowl titles, seven AFC championships and hosted 10 conference games. No other AFC or NFC team can match this record. By contrast, the Arizona Cardinals' last championship victory was in 1947 when they were based in Chicago. In anyone's book, this is a gross disparity. Should the referees have the empathy to understand what it's like to be a perennial loser and what would you think of a referee whose decisions were guided by his empathy? Suppose a referee, in the name of compensatory justice, stringently applied pass interference or roughing the passer violations against the Steelers and less stringently against the Cardinals. Or, would you support a referee who refused to make offensive pass interference calls because he thought it was a silly rule? You'd probably remind him that the league makes the rules, not referees.

I'm betting that most people would agree that football justice requires that referees apply the rules blindly and independent of the records or any other characteristic of the two teams. Moreover, I believe that most people would agree that referees should evenly apply the rules of the games even if they personally disagreed with some of the rules.

The relationship between Supreme Court justices and the U.S. Constitution should be identical to that of referees and football rules. The status of a person appearing before the court should have absolutely nothing to do with the rendering of decisions. That's why Lady Justice, often appearing on court buildings, is shown wearing a blindfold. It is to indicate that justice should be meted out impartially, regardless of identity, power or weakness.

~Walter Williams

Tuesday, May 19, 2009

TANSTAAFL: Credit Card Edition; Creditworthy Borrowers Will Now Subsidize Riskiest Borrowers

NY TIMES -- Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years. Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.” (Bold added.)

HT: R Adams

Markets In Everything: Digital Legacy

Your will (or estate or trust) protects your car, your house, your retirement account, and all your other assets for you. It ensures these valuables make their way to your spouse, siblings, children, or other loved ones. But what happens to all the assets you've created on the Internet, from your email address(es) to your PayPal account to your Facebook profile?

Most of the websites we all use on a regular basis have little-to-no provisions in place for a loved one to transfer account information in a time of need. In some cases you might even need to get a lawyer involved just to access an email inbox. Your digital legacy needs protection, and we've built Legacy Locker to help solve these problems.

Legacy Locker is a safe, secure repository for your digital property that lets you grant access to online assets for friends and loved ones in the event of death or disability.

HT: Steve Horwitz


The Great Right North: Lessons From Canada

WASHINGTON POST -- Long derided by American conservatives as "socialist" and praised by the left for its generous government spending, Canada is casting off those stereotypes. Over the past few years, while U.S. politicians presided over huge increases in spending and debt, the Canadian government tightened its belt, slashed tax rates and balanced budgets. Consider these trends:





HT: Dennis Gartman

Monday, May 18, 2009

Average Home Price in Detroit Falls to $11,533; Monthly House Payment Would Be Less Than $50

According to the Michigan Association of Realtors and Detroit Board of Realtors (data here), the average sales price of a Detroit home fell to $11,533 in April (Year-to-Date), a -43.8% decline from the $20,514 average home price during the same period last year (see chart above). 2009 year-to-date unit sales increased by 23.1% to 4,139 homes, compared to 3,360 Detroit homes sold last year over the same period. From the $97,850 peak Detroit home price in 2003, prices have fallen by an amazing 88%.

With a 20% down payment on a $11,533 average priced home in Detroit, the monthly payments on a 30-year fixed-rate mortgage at 5% would be only $49.53.

For the entire state of Michigan, the average YTD home sales price has fallen by -28% to $87,033 through April 2009, compared to last year's average price of $120,481 for the same period.

Camera Phones to Interpret Visible World for Blind

iVisit, a company out of Santa Monica, California that specializes in video teleconferencing applications, has teamed up with the National Institutes of Health to turn a mobile phone's camera into an eye for the blind. Using advanced image recognition software to identify what is in front of the phone, the system reads off what it is seeing.

Watch this demo video below of the software in action:



Link.

Volatility Index Falls To A Level Suggesting "Market Correction is Complete, Back to Business As Usual"

The CBOE Volatility Index closed today at just barely above 30 (30.24), falling almost 3 points from Friday's close of 33.12, and is now more than 50 points below the November highs that were above 80.

According to Yale Professor Ian Ayres at the Freakonomics Blog on December 24, 2008: "When it (the VIX) drops below 30%, it will be a strong indication that the market correction is complete and we’re back to business as usual."

Exhibit A: Tax The Rich, Lose The Rich

BUFFALO NEWS -- Ending any speculation about another possible run for governor, Rochester businessman and Sabres owner B. Thomas Golisano said Thursday he will be moving his legal residence to Florida to escape New York state taxes.

Golisano told a gathering of Rochester business executives that he will remain as owner of the Buffalo hockey team, but he is fleeing the Empire State to avoid paying $13,000 a day in state income taxes (MP: Almost $5 million per year).

The billionaire earlier this year told The Buffalo News that the only thing keeping him in New York was his family. “The only reason I’m staying in this state is I have family here. Economically, it just doesn’t make sense,” he said in February.

But since then, Gov. David A. Paterson and lawmakers approved a state budget that will raise $4 billion in new income taxes this year on wealthier residents. In Golisano’s case —and anyone else making more than $500,000 this year — he is seeing his state tax rate go from 6.85% to 8.97%.

HT: R. Adams

Tax The Rich, Lose The Rich

Here's the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.

Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.

We believe there are three unintended consequences from states raising tax rates on the rich. First, some rich residents sell their homes and leave the state; second, those who stay in the state report less taxable income on their tax returns; and third, some rich people choose not to locate in a high-tax state. Since many rich people also tend to be successful business owners, jobs leave with them or they never arrive in the first place. This is why high income-tax states have such a tough time creating net new jobs for low-income residents and college graduates.

~Art Laffer and Stephen Moore in today's WSJ

Bottom Line: If you tax something, you get less of it. Is that so hard to understand?

Plagiarism Update

Plagiarism update, following this CD post.

1. NY Time’s Maureen Dowd Caught Plagiarizing

2. It is common online behavior to copy and paste content off a website. Right or wrong, it happens,
but now with Tracer (available free in Beta from Tynt), you can watch each instance and begin to learn what people are most interested in. Each time a user pastes content from your website into an email, blog or website , we automatically add a URL link back to your site’s original content. This ensures you get credit for content that you have created. You can’t stop users from copying off your site but you can make the pasted content your virtual ambassador!

Read more: "Tynt Tracer » Take Credit" -
http://tracer.tynt.com/take-credit#ixzz0FrncutQC&A)

(Note: Since I copied and pasted the text above from the Tynt website, it automatically added the reference and link above. And when you go to that link, it highlights in yellow the text that was copied.)

HTs: Suzanne Perry (1) and David Damore (2).

Markets in Everything: Dynamic Pricing for Baseball

Baseball Tickets Too Much? Check Back Tomorrow

Because baseball teams set their prices months before opening day and resist changing them later, they have trouble reacting to the unexpected, like the weather, winning and losing teams or, this year, the ferocity of an economic downturn.

The San Francisco Giants are experimenting with a possible solution — software that weighs ticket sales data, weather forecasts, upcoming pitching matchups and other variables to help decide whether the team should raise or lower prices right up until game day. The Giants are the first major league team to test the software, which some industry analysts say could transform the way teams adjust to the ebb and flow of the season, not unlike how airlines, hotels and rental car companies — which also use dynamic pricing — adjust to changes in the travel industry.

NY Times

The Communists Are Out, India's Market Soars

MUMBAI, India (AP)India's stock market surged an unprecedented 17%, forcing trade to close for the day, after the Congress Party's definitive victory in national elections set the scene for long-delayed economic reforms. Within seconds of trading, the Bombay Stock Exchange's benchmark Sensex vaulted 2,110.79 points, or 17.3%, to 14,284.21, triggering the historic shutdown Monday (see chart above). Infrastructure, banking and real estate companies led gains.

Putting to rest fears of an unwieldy coalition, the victory raised hopes of a revival in foreign direct investment and economic growth, as well as tax reform and significant infrastructure spending. The near collapse of India's once powerful communist parties — which lost more than half their parliamentary seats — paves the way for long-awaited economic reforms, many of which the Left had blocked over the last five years.

The Congress party now has more room to ease restrictions on foreign investment in insurance, retailing and banking. The government may also sell some of its stakes in state-run oil, banking, and fertilizer companies. The nation's pension regulator could get proper legal standing, which would encourage greater investment. And some steps might be taken to loosen hidebound labor laws, like allowing contract labor, analysts and business groups say.

Citigroup economist Rohini Malkani said the result would likely revive India's investment growth, which was a key driver of the nation's four-year boom that's now waning in the face of the global slump.

MP: The BSE reached an 8-month high, the highest level since Sept. 11, 2008, and is up by almost 50% from the early March bottom.

Sunday, May 17, 2009

According to OECD, US GDP Fell By -1.6% in Q1

Bureau of Economic Analysis -- Real GDP -- the output of goods and services produced by labor and property located in the U.S. -- decreased at an annual rate of 6.1% in the first quarter of 2009, (that is, from the fourth quarter to the first quarter), according to advance estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP decreased 6.3%.

The Times of London -- The eurozone economy slumped by a record 2.5% in the first three months of the year, dragged down by Germany, which recorded the biggest drop in its GDP in nearly 40 years. The German economy, the engine room of the 16-nation eurozone, contracted by 3.8% in the first quarter of the year, battered by the fall in demand for manufactured goods. The US economy shrank by 1.6% in the same period.

MP: Notice how real GDP growth gets reported differently in the U.S. than in Europe. In the U.S., the quarterly real GDP growth rates are annualized by multiplying the quarterly percent growth rate by four (-1.6% quarterly x 4 = -6.4%, difference from -6.3% above due to rounding). European countries and the OECD report quarterly growth rates for GDP from the previous quarter, without annualizing. According to the OECD (data here) and the news report above, U.S. real GDP fell by 1.6% in the first quarter of 2009, and that rate is stated as a quarterly rate, not an annual rate.

Stronger the Drug Laws, The Stronger the Drugs

Washington, D.C. -- Today, the Office of National Drug Control Policy (ONDCP) released the latest analysis from the University of Mississippi's Potency Monitoring Project, which revealed levels of THC - the psychoactive ingredient in marijuana - have reached the highest-ever levels since scientific analysis of the drug began in the late 1970s. According to the latest data on marijuana samples analyzed to date, the average amount of THC in seized samples has reached a new high of 10.1%. This compares to an average of just under 4% reported in 1983 and represents more than a doubling in the potency of the drug since that time.

According to data from the White House (
here and here), the graph below shows that the purity of powder cocaine more than doubled between the early 1980s and the 1990s and after.

MP: As a general economics principle, I think it would be safe to say that the stronger the drug laws, and the stronger the enforcement of drug laws, the stronger the drugs.

Exhibit A: The original drug of choice made from poppies in the 1800s was opium, but after it became illegal, the market for heroin was born, which is made from opium/morphine.

Exhibit B: During prohibition in the U.S. during the 1930s, most illegal "moonshine" was the strongest possible alcohol like "bathtub gin," etc. Nobody bothered making illegal beer or wine, everybody wanted the strongest, purest alcohol possible.

Exhibit C: Going from powder cocaine to crack cocaine in the 1980s and 1990s, to get more "bang for the buck."

Top graph HT: Pete Boettke

Next to Heroin & Cocaine, Tobacco Most Addictive


According to this chart, heroin is both the most addictive and most harmful drug. On the dependence scale, the three most addicting drugs are heroin (#1), cocaine (#2) and tobacco (#3).

Update: As Colin points out in the comments, tobacco is both more addictive and more harmful than cannabis, and yet tobacco is legal and marijuana is illegal?

Business Week: 5 Reasons Ethanol is a Major Scam

Where's the Logic?

1. The primary job of the EPA is to protect our environment. Yet using ethanol actually creates more smog than using regular gas, and the EPA's own attorneys had to admit that fact in a court case.

2. Independent studies on ethanol, such as those written by Tad Patzek of Berkeley and David Pimentel of Cornell, show that ethanol is a net energy loser. Other studies suggest there is a small net energy gain from it.

3. All fuels laced with ethanol reduce the vehicle's fuel efficiency, and the E85 blend drops gas mileage between 30% and 40%, depending on whether you use the EPA's fuel mileage standards or those of the Dept. of Energy.

4. Forget what biofuels have done to the price of foodstuffs worldwide over the past three years; the science seems to suggest that using ethanol increases global warming emissions over the use of straight gasoline. Just these issues should have kept ethanol from being brought back for its fourth run in American history.

5. Don't let anybody mislead you: The new push to get a 15% ethanol mandate out of Washington is simply to restore profitability to a failed industry. Only this time around those promoting more ethanol in our gas say there's no scientific proof that adding more ethanol will damage vehicles or small gas-powered engines. With that statement they've gone from shilling the public to outright falsehoods, because ethanol-laced gasoline is already destroying engines across the country in ever larger numbers.


~Ed Wallace writing in BusinessWeek