Obamacare: Is a $2,000 deductible ‘affordable?’
States are starting to roll out details about the exchanges, providing a look at just how affordable coverage under the Affordable Care Act will be. Some potential participants may be surprised at the figures: $2,000 deductibles, $45 primary care visit co-pays, and $250 emergency room tabs.
Those are just some of the charges enrollees will incur in a silver-level plan in California, which recently unveiled an [...]
By Mike “Mish” Shedlock
Bloomberg reports Japan Machinery Orders Fall 13% in Sign of Limits on Investment.
The decline from the previous month, announced by the Cabinet Office today in Tokyo, compared with the median estimate in a Bloomberg News survey of 26 economists for a 1.7 percent fall.
Today’s data are a reminder that business investment will not drive the recovery, said Izumi Devalier, a Japan economist at HSBC Holdings Plc in Hong Kong.
January 29, 2013
On 29 January, Eurostat announced that household real income per capita fell by 0.3 per cent in Eurozone while the business investment rate was down to 19.9 per cent.
Household real income fell by 0.3 per cent during the third quarter of 2012, after a decrease of 0.5 per cent at last year’s second quarter. Moreover, Eurostat’s figure suggests that the real growth of actual final consumption per [...]
Wolf Richter www.testosteronepit.com
Slovenia joined the Eurozone in 2007, went on a borrowing binge that blind bond buyers eagerly made possible, dousing its two million people, or at least some of them, with riches, creating a real estate bubble that has since burst, and driving up its external debt by 110%. And in October, it may go bankrupt, admitted Prime Minister Janez Jansa this weekend. Because borrowing binges can last only so long if you can’t [...]
GDP Highlights: Inflation Data Won’t Constrain Fed
A few quick thoughts on GDP report out this morning:
Key price indexes are uniformly running below the Federal Reserve’s 2% objective. The personal consumption expenditures price index was up 1.6% from a year ago, thanks in part to falling gasoline prices. This is the price index that the Fed watches most closely, more so than the consumer price index produced by the Labor [...]
BY TODD BUELL, DAVID ROMÁN AND ALEX BRITTAIN
A fall in German industrial output in April suggested the debt crisis may finally be impacting Europe’s largest and strongest economy.
With Spanish factory production worsening further, and euro-zone business investment dropping sharply in the first quarter, the figures from Germany raise fears that the country won’t be able to keep its weaker neighbors afloat indefinitely.
Output from the German industrial sector fell 2.2% in [...]
Cullen Roche, Pragmatic Capitalism
Here we go again. It’s all about Europe. And now we’re all in wait and see mode on Greece and whether they’ll default and defect and possibly trigger the Lehman 2.0 scenario that so many have been worried about for years now. In many ways this market has a 2008 feel to it. I wouldn’t say it’s quite the same because the global economy had been on a [...]
Consumer spending does remain strong. 0.8% growth in February was the best number in 7 months.
Retail sales and consumer confidence have also been strong.
But the numbers can’t last. Personal income growth as just 0.2% in February.
Thanks to college tuition and the car market, consumer debt is growing again.
The housing market is still miserable.
State and local spending is still depressed.
There’s still plenty of excess capacity, restraining business investment.
It call [...]
THE past four years have been bad for workers and savers but good for the corporate sector. Profit margins in America are higher than at any time in the past 65 years. That helps explain why the equity market has rebounded so strongly despite a lacklustre economy.
Margins have been boosted by firms’ tight control of labour costs and by a reduction in interest expenses caused by the policies of central [...]
Can This Man Save the American Economy?
When faced with a recession and high unemployment, advanced economies ask the central bank to cut interest rates. Lower rates spur interest-sensitive purchases, primarily in vehicles for both consumer and business-investment purposes, and in physical structures like housing, offices, warehouses, and storefronts. This helps reduce unemployment in highly cyclical sectors and helps stabilize the economy by bolstering incomes. Conversely, if inflation is too high, [...]
Published: August 02, 2002
“To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”
Published: January 22, 2012
“But anyone who has looked seriously at how we got into this slump knows that private debt, especially [...]
The White House is on the political offensive, and one of its chief claims is that it isn’t the overregulator of business and Republican lore. This line has been picked up by impressionable columnists, so it’s a good time to consider the evidence in some detail.
Jan Eberly, an Assistant Treasury Secretary, kicked off the Administration campaign with a white paper in October that purported to debunk the “misconceptions” that “uncertainty [...]
FED: FINANCIAL STRAINS STILL POSE `SIGNIFICANT DOWNSIDE RISKS’
FED REPEATS `EXCEPTIONALLY LOW’ RATES THROUGH AT LEAST MID-2013
FED SAYS ECONOMY `EXPANDING MODERATELY’ AS GLOBAL GROWTH SLOWS
FED LEAVES OPERATION TWIST PROGRAM UNCHANGED
FED SAYS CONSUMER SPENDING `HAS CONTINUED TO ADVANCE’
FED SAYS UNEMPLOYMENT RATE TO DECLINE `ONLY GRADUALLY’
FED EXPECTS `MODERATE PACE’ OF GROWTH IN COMING QUARTERS
FED: FINANCIAL STRAINS STILL POSE `SIGNIFICANT DOWNSIDE RISKS’
EVANS DISSENTS FROM FOMC DECISION, PREFERRING MORE EASING
The market can not [...]
The Wall Street Journal felt the need to tell readers that Bernanke’s action to provide liquidity to the banking system:
“may have prevented a repeat of the Great Depression.”
This is not true. We know how to reinflate an economy after a collapse. It just requires massive amounts of government spending, as happened during World War II. The first Great Depression was not caused just by the failure to counter the initial financial [...]
Democrat criticizes Obama for ’4,200 pages’ of pending regulations By Joshua Altman – 11/22/11 12:29 PM ET
Former Democratic Sen. Blanche Lincoln (Ark.) attacked the Obama administration Tuesday for proposing a litany of new regulations she says are hurting the economy.
“You’ve got 4,200 pages of pending, new regulations to be put on the books that just create huge uncertainty,” Lincoln said.
Lincoln lost her reelection bid last year to Sen. John Boozman [...]
Britain needs 10 years of austerity to fix its economic problems, a leading think-tank has warned as it questioned Coalition plans to restore growth by unleashing a building boom and urged George Osborne to stick to his spending cuts.
Declaring “austerity is the new normal”, the think-tank stressed that the Government “must avoid the temptations of quick fixes and inconsistency” [...]
Graphs of GDP report, consumer confidence, capital goods orders
The Commerce Department this week said the U.S. economy grew at a 2.5% clip in the third quarter. While that’s the best quarterly growth of 2011, the blue line above shows the cumulative growth since the recession ended, and compares it to other post-recession expansions. Verdict: The recovery hasn’t been impressive.
The depths of the recession
View Enlarged Image
Here’s the chicken-or-egg riddle regarding our lost economic decade: Did it result from malinvestment — the real estate bubble — or too little productive investment?
The question is key because the answer has implications for crafting a suitable economic remedy.
Those on the left who think the U.S. is suffering from a straightforward, if severe, post-bubble collapse in demand see demand-side stimulus as the logical response.
But many [...]
Late this week, President Obama stunned the EPA and environmentalists by dropping plans to tighten Bush-era ozone standards.
Tighter rules would increase the “regulatory burden” that Republicans blame for the crappy economy.
Paul Krugman says this is yet another example of Obama wimping out in the hopes that Republicans will stop attacking him. He also argues that the move will actually hurt the economy.
Why will not tightening ozone rules hurt the [...]
WASHINGTON — After a slew of wretched economic news, Federal Reserve Chairman Ben Bernanke warned Tuesday there had been a “loss of momentum” in the US jobs market.
Two years into a slow and largely jobless recovery, Bernanke predicted employment growth would eventually pick up, but that a recent soft-patch needed to be carefully monitored, and that stimulative policies were still needed.
“The jobs situation remains [...]
Some people have asked me for reactions to this piece by Alan Greenspan (pdf) on how Obama’s activism is preventing economic recovery. I could go through the weak reasoning, the shoddy econometrics that ignores a large literature on business investment and ignores simultaneity problems, etc., etc..
But never mind; just consider the tone.
Greenspan writes in characteristic form: other people may have their models, but he’s the wise [...]
The Japanese government has spent two decades squandering the wealth of its citizens. The New York Times detailed the trillions wasted in a story last year:
Japanâ€™s rural areas have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy from a severe downturn caused by the bursting of a real [...]
You can’t fund the social programs we have when tax revenues keep falling. In just the next four years, the President says interest on debt will go from $188 billion to over 1/2 trillion and the CBO that came up with that number says it is too optimistic. They stated in their report that they can’t take into consideration the things the real world throws at projections.
However, let’s say the [...]
That is all that is happening. We have an economic empire being marginalized and replaced and that is very normal, not the end of anything.
Jobs, business and investment money continue to flow to the emerging markets where there is growth and out of the U.S. that has been in decline for a couple decades or so.
I think you just have to adjust the view you have of the market from [...]
Mauldin and many others make the assumption that hyperinflation canÃ¢â‚¬â„¢t occur without some kind of economic demand. It is the mainstream theory that money has to make its way into the economy (via bank lending and then business investment or consumption) for price inflation to occur.
The private sector or even the Federal Reserve isnÃ¢â‚¬â„¢t the root cause of hyperinflation. Hyperinflation occurs when [...]