Of course everyone reads this blog, which is why since I published a modest piece on the inverted yield curve as a recession predictor, everyone seems to be talking about predicting recessions. Two recent articles caught my eye. One by the SF Fed on the Conference Board’s Leading Economic Index (LEI) prediction record, and how [...]
Entries Tagged as 'Economics'
Animated Yield Curve
August 15th, 2010 · No Comments · Economics
Spot the arbitrage opportunities here. Don’t worry, though, you already missed them. HT to Econbrowser for the link. ~alex
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The Baltic Dry Index. A misleading economic indicator …?
July 19th, 2010 · No Comments · Economics
For those of you who follow such things, it has certainly been interesting to note the decline in the Baltic Dry Index (or BDI). I have, for the moment anyway, a chart of the BDI in the right column of this blog. A quick glance will show you its direction. Namely: down. I wasn’t the [...]
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Predicting recessions
July 12th, 2010 · No Comments · Economics, Information Design
While leading economic indicators get a lot of the press around predicting the short term future of the economy, there is one method of predicting recessions that has a pretty good track record: an inverted yield curve. An inverted yield curve happens when long dated US treasury bonds yield less than short dated ones. Typically [...]
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Worth quoting: Inequality caused the recession
July 12th, 2010 · No Comments · Economics
Raghuram Rajan, my new favorite economist, has an interesting piece on the Project Syndicate website, How Inequality Fueled the Crisis. The crisis in the title of course refers to our recent recession. But then the crisis we’re in can perhaps be perceived as something more long lasting. At UM we’ve talked about the income gap [...]
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An ugly graph but a powerful message
July 7th, 2010 · No Comments · Economics, Information Design
From the NYTImes, Economix. The chart title — Percent change of constant-dollar median usual weekly earnings by educational attainment and sex — is a mouthful, but the message is simple: 1. Men without a 4 year college degree likely earn less than their fathers 2. Men with a 4 year college degree likely earn more [...]
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TED Spread vs. US bank failures, 2000 to present
June 28th, 2010 · No Comments · Economics, Information Design
The TED spread is the difference between the interbank loan rates and the short term treasury rates (3 month LIBOR – 90 day Treasuries). The higher the spread, the less faith there is in the strength of the banks. ~alex
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French retirement
June 22nd, 2010 · No Comments · Economics, Information Design
It is considered a right in most industrialized countries: a longish (hopefully peaceful) retirement after your many years of service to society as a taxpayer and worker. And yet our long, peaceful retirements have a cost. And the longer (and more peaceful?), the costlier … as the French are finding out. (WSJ, subscription required.) The [...]
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Predicting the Fed funds rate
June 16th, 2010 · 2 Comments · Economics
From the recently released “economic letter,” The Fed’s Exit Strategy for Monetary Policy, by Glenn Rudebusch (an economist for the SF Fed) we get these charts: 1. This plots the actual fed funds rate vs. what it might be if the Fed followed a simple rate setting rule for the fed funds rate (and could [...]
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Unemployment rates and education
June 4th, 2010 · No Comments · Economics, Information Design
via Economix of the NYTimes The left (y) axis is the unemployment rate, the percent of the number of unemployed people divided by the total size of the work force. ~alex
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