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Ed Dolan

 
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  • Revisions For Q1 Show Biggest Drop In U.S. GDP In 5 Years [View article]
    I don't think we will get a taper pause, even though the Fed did revise their growth estimate for the year downward from 2.8-3 to 2.1-2.3
    Jun 29, 2014. 11:12 AM | Likes Like |Link to Comment
  • Revisions For Q1 Show Biggest Drop In U.S. GDP In 5 Years [View article]
    See my reply to Newbeach861 elsewhere in this thread
    Jun 29, 2014. 11:11 AM | Likes Like |Link to Comment
  • Revisions For Q1 Show Biggest Drop In U.S. GDP In 5 Years [View article]
    Yes, it was an aberration. The three signs pointing to this (mentioned, although only briefly, in the post) are:

    (1) Some of the problems, probably including inventories and part of the export drop, were clearly weather-related. GDP usually drops in the winter, and the data are seasonally adjusted to reflect that fact, but harsher than normal weather exceeded the seasonal adjustment parameter.
    (2) The third estimate includes data from a new survey of healthcare services, which shows that, contrary to the preliminary data, Obamacare is not causing the runaway burst of spending that was previously indicated. There is a good explanation of the details here: http://read.bi/1lpuEdh
    (3) Jobs data in April and May, the first two months of Q2, although not spectacular, were strong enough to indicate that the economy had returned to growth. See here for details: http://bit.ly/1lpuEdj

    Hope this helps
    Jun 29, 2014. 11:10 AM | Likes Like |Link to Comment
  • The Dollar Doesn't Get Much Respect [View article]
    You write, "It's comforting to see that it is still about 5% above its all-time lows "

    Just who does it comfort to see the dollar "strong"? Yes, it would comfort me personally to see it stronger, since I like to vacation in Europe, spend my money there rather than in US hotels and restaurants. Also, I prefer French to California wine, so a strong dollar comforts me there, too.

    What I fail to see is how a strong dollar "comforts" US firms who are trying to create jobs and earn profits by exporting to foreign markets or competing with imports from China or Bangladesh.

    What do you think, does the comfortingly strong dollar have anything to do with the collapse of US exports in Q1, which was one of the biggest contributors to near-zero growth so far this year?

    Your charts are interesting and useful, but please keep in mind that a "strong" dollar isn't a comfort to everyone.
    May 11, 2014. 09:43 AM | 2 Likes Like |Link to Comment
  • Unemployment Plunges To 6.3% In April As Economy Adds 288,000 Payroll Jobs [View article]
    Yeah, I'm a public school guy (in the American sense), but how do you know it was "she"? And what "essay" are you referring to, the post or something in a comment box? Naturally, I agree both are worth "A's" :)
    May 5, 2014. 10:56 PM | 1 Like Like |Link to Comment
  • Unemployment Plunges To 6.3% In April As Economy Adds 288,000 Payroll Jobs [View article]
    People who are looking for the sour side of things always love the labor force participation rate. They rarely mention that much or most of the decline in the rate is due to the aging of the baby boom generation. Much of the rest is due to the fact that teenagers are (wisely) staying in school longer so that they won't have to take "those low wage and part time jobs." Look at the whole picture, not just the part that supports your priors.
    May 4, 2014. 11:18 PM | Likes Like |Link to Comment
  • Unemployment Plunges To 6.3% In April As Economy Adds 288,000 Payroll Jobs [View article]
    I think you should look more closely at what you are offered before you say things like "nobody." For example, if you had bothered to click through to the slideshow version of the post, you would have found the number you mention. BTW, it was a decline of 73,000, not 70,000.
    May 4, 2014. 11:14 PM | Likes Like |Link to Comment
  • Unemployment Plunges To 6.3% In April As Economy Adds 288,000 Payroll Jobs [View article]
    Whitehouse commentary that I saw left out the negatives like flat wages and falling workforce. My post did not. BTW, the full title at my home blog did not omit the negatives, unlike SA's shortened version. It read, in full, "April Unemployment Rate Plunges to 6.3 Percent on Gain of 288,000 Payroll Jobs but Details Still Show Some Weaknesses in Employment Situation"
    May 4, 2014. 08:45 PM | 1 Like Like |Link to Comment
  • As GDP Growth Stalls, This Chart Shows Just How Badly The Fed Is Missing Its Targets [View article]
    See my reply to David de Los Angeles
    May 1, 2014. 10:15 AM | Likes Like |Link to Comment
  • As GDP Growth Stalls, This Chart Shows Just How Badly The Fed Is Missing Its Targets [View article]
    You say "The difficult part is not setting the target, it is hitting the target."

    I agree, that is a legitimate criticism. On the one hand, it is fair to compare the economy's performance to the Fed's targets if only for the reason that the Fed sets such targets. On the other hand, it is not fair to hold the Fed solely responsible. A very sound argument can be made, and I believe both Bernanke and Yellen would agree, that part of the reason for the underperformance of the economy lies with excessive fiscal austerity, especially in the early and middle phases of the recovery.
    May 1, 2014. 10:14 AM | Likes Like |Link to Comment
  • As GDP Growth Stalls, This Chart Shows Just How Badly The Fed Is Missing Its Targets [View article]
    You say that the way that unemployment is calculated is "meaningless to any serious economist." I am not quite sure which "unemployment" figures you are referring to. Being aware that unemployment is hard to measure, the BLS publishes 6 different unemployment rates and conducts two separate employment surveys each month (household and establishment), plus dozens of other indicators like part-time work, discouraged workers, etc. Which of these is most/least defective in your view, or what kind of approach, entirely different from all of them, do you find most meaningful? I would value your views in more detail.

    May 1, 2014. 10:09 AM | Likes Like |Link to Comment
  • The Curse Of Riches: Resource Wealth And Social Progress [View article]
    You raise several interesting points. Let me reply to them one at a time:

    1. Like so many other academic papers, this suffers from absence of an answer to the "so what" question.

    I GUESS THE SO-WHAT IS "DON'T WISH FOR RESOURCE WEALTH UNLESS YOUR COUNTRY IS WELL GOVERNED."

    2. Correlation is not causation. Too many control variables are left out, such as education level, cuture, government structure, time since independence, reliegion, size of country, etc.

    BTW THIS IS NOT AN ACADEMIC PAPER. IF YOU GOOGLE THE ACADEMIC LITERATURE YOU WILL FIND DETAILED DISCUSSION OF EACH OF YOUR CONTROL VARIABLES. THE BOTTOM LINE IS THAT YES, MANY OF THEM MATTER, BUT WHEN YOU CORRECT FOR THESE THINGS, THE RESOURCE CURSE TURNS OUT TO BE PRETTY ROBUST

    3. High export ratio means lower domestic consumption ratio by definition. It is not so much being resource rich, as consumtion low?

    YOU ARE JUST WRONG HERE. HIGH *NET* EXPORTS WOULD COMPETE WITH CONSUMPTION, BUT THE DISCUSSION HERE IS ABOUT RESOURCE *GROSS* EXPORTS. THE PROCEEDS OF THOSE EXPORTS COULD PERFECTLY WELL GO TO PAY FOR IMPORTS OF CONSUMER GOODS, AND IN SOME COUNTRIES, THEY DO, E.G. RUSSIA'S OIL EXPORT BOOM HAS SUPPORTED A CONSUMPTION BOOM

    4. That chart one is not "systematic". Whenever you have data, in which moving just a few data point changes everything, you have "non-systematic".

    ??

    5. China is weighted the same as Finland. What, 1 Bill vs 10 mil? Weight the coutries. Different conclusion.

    INTERESTING YOU SHOULD MENTION CHINA. CHINA IS A RESOURCE EXPORTER, NOT A RESOURCE IMPORTER, SO I DIDN'T LABEL IT IN MY CHARTS. YOU CAN MARK IT IN IF YOU WANT. ON CHART 2, PER CAPITA GDP AT MARKET RATE IS $6700 AND AT PPP IT IS 9800, SO THE YUAN IS A LITTLE UNDERVALUED, BUT ABOUT WHAT YOU WOULD EXPECT FOR A COUNTRY AT THAT LEVEL OF GDP. THE SPI FOR CHINA IS 58.67, A LITTLE LOW FOR A COUNTRY OF ITS LEVEL OF INCOME. YOU CAN FIND THE POINT FOR CHINA ON THE SPI CHART AS THE DOT THAT IS HALFWAY DIAGONALLY BETWEEN ALG AND IRN
    Apr 25, 2014. 05:38 PM | Likes Like |Link to Comment
  • The Curse Of Riches: Resource Wealth And Social Progress [View article]
    Yes, the "multiplier" or "spillover" argument is part of the story. Dates back to Hirschman, if my memory serves me.

    Still, that does not mean other mechanisms don't play a role. For example, a government really interested in the welfare of the nation can invest the proceeds of point-source resource wealth in a way that benefits the whole nation and provides the "multipliers" you are missing. Something like that happens in Canada, Norway, etc.
    Apr 25, 2014. 05:23 PM | Likes Like |Link to Comment
  • U.S. Inflation Edges Up In March But Inflation Expectations Remain Moderate [View article]
    You say, "Higher food and oil prices is not good inflation. The economy is better off with deflation than these two rising."

    I hope you noticed that there is no long term trend for food and energy prices to rise faster than other prices. If there were, there would be a long-term divergence between the core and the all-items CPI, but the graph shows that there is not. The difference between the core and the all-items CPI is due to greater monthly and annual volatility of the food and energy components.

    As for your view that the Fed's policy is driven more by the need for cheap finance of the Treasury than by larger economic policy considerations, I would only comment that the FOMC does a remarkably good job of keeping quiet about that during its official meetings. I guess you would think that they are reading from a phony script during the meetings, and then later meet in some restaurant with the Secretary of the Treasury to make the real policy decisions.
    Apr 21, 2014. 10:08 AM | Likes Like |Link to Comment
  • Ukraine's Crisis Also Threatens To Drag Down Russia's Economy [View article]
    Good points. And don't forget the special case of Crimea, which adds to complexity. Crimea became part of the Ukraine only in the Khrushchev era. In Soviet times, that was an administrative technicality, but since Ukrainian independence, it has been a sore point. I sometimes wonder if the Western nationalists wouldn't be better off to jettison Crimea and let it go back to Russia (subject to a local referendum that would presumably pass). They would get rid of the unwanted Russian naval base at Sevastopol and at the same time, guarantee Western Ukraine a reliable majority in the government in Kiev, instead of a national electorate more or less split down the middle. Sounds win-win to me, but who am I to say, I'm only an outsider.
    Feb 25, 2014. 12:43 PM | 2 Likes Like |Link to Comment
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