Economy Blog

Other than the subject of APATHY (which although I hate, it’’s a free country so should the apathetic not be embraced?), please keep your political emails to yourself. I am sick of receiving Obama and Hilary videos and emails and why I MUST do this or that.
How is that different than Cramer touting a stock or me getting spammed with penny stocks. You will argue a lot and I will say you that you know Hilary or Obama as well as Cramer knows today’s 50 stocks he is touting.
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(February 5, 2008 03:48 PM, by Bryan Caplan) If you write extensively, you’ve probably had the following experience: You sit down to work on a project, but the……
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(February 5, 2008 03:39 PM, by Bryan Caplan) Fun facts from Kip Viscusi’s article on "Job Safety" in David Henderson’s encyclopedia: Annual OSHA penalties for safety violations (2002):……
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$$$ Deals: Waiting for Yahoo
In our M&A Roundup for the week ended Feb. 3, the number of agreements is up, but overall activity remains quiet as the market awaits news of Microsoft’s hostile bid for the search engine. [CFO.com]

$$$ Sykic …
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addslashes(Top 10 Most Searched Stocks on TheStreet.com, February 5

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Megan Barnett has not one but two excellent articles on Portfolio.com today. This morning she checked in on the Citadel IPO story, concluding that for all the buzz, it still ain’t gonna happen. This afternoon, she tells the story of a private-equity firm, Clayton, Dubilier & Rice, which bought Allied Van Lines, steered it into bankruptcy, and s…
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CPI inflation expected to remain high in January.…
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Stoking fears labour cost increases could spark wage-price spiral.…
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We all know the thesis that the subprime crisis is Alan Greenspan’s fault for cutting interest rates way too much and fuelling an unsustainable mortgage-credit bubble. But now Michael Mandel comes along with the flipside argument: that the
subprime crisis is Alan Greenspan’s fault for raising interest rates way too much and thereby concentrating pain on the holders of adjustable-rate mortgages.
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If you have been following tech stocks for a decade or more, JDS Uniphase (NASDAQ: JDSU) is one you will know quite well. For almost the entire 2000’s, you probably wish you didn’t know it if you had not been short the stock. We even noted this one recently as a turnaround that just hadn’t ever been turned. Maybe that is changing. Shares are surging in after-hours trading after the company blew the handle off of some estimates with its earnings report, despite earnings lower year over year. Net revenues came in at $399.2 million and net income was $0.09…
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A new study by the Economic Mobility Project – a group of experts from prominent Washington think tanks — finds that the federal government spends more than $700 billion a year to promote mobility, but the funds often exclude lower-income families.
The authors dissected the budget to identify hundreds of tax and spending programs aimed at advancing mobility, ranging from tax breaks on home sales to work training programs to business incentives. In 2006, that amounted to $212 billion in direct spending (1.6% of gross domestic product) and $534 billion in tax subsidies (4.1% of GDP). More than 70% of the combined $746 billion was delivered through work subsidies or savings incentives that favored middle- and higher-income households.
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I should mention that although systemic breakdowns are rare these days, they’re not impossible, and I’m thankful to Nouriel Roubini for explaining over the course of 3,461 words today just how a global financial meltdown might happen. If you’re in the mood for bearishness, you know where to go:

A contagious and cascading spiral of credit disintermediation, credit contraction, sharp fall in asset prices and sharp widening in credit spreads will then be transmitted to most parts of the financial system. This massive credit crunch will make the economic contraction more severe and lead to further financial losses. Total losses in the financial system will add up to more than $1 trillion and the economic recession will become deeper, more protracted and severe.
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I’ve received several e-mails in the last couple days about municipal auction rate securities, after auction failures in both Nevada and Georgetown University. The e-mails ask three important questions.1) What the hell is an auction rate security?2) Why the hell are the auctions failing?3…
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addslashes(High Corn Prices, Production Squeeze Ethanol

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addslashes(The Real Story Wrap, February 5

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Rick Bookstaber has stopped blogging, so does Jim Surowiecki feek a need to fill the gap? Here he is channelling Bookstaber in the pages of the New Yorker:

The situation illustrates a fundamental paradox of today’s financial system: it’s bigger than ever, but terrible decisions by just a few companies–not even very big companies, at that–can make the entire edifice totter…
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Bear-market rallies are strange phenomena. They exist for all but the savviest traders as teases, a brief flurry of optimism that inspires a bit of confidence that is all-too-fleeting as other fundamentals overwhelm a particular stock or index, sending it lower.
The rally that lasted through the past two weeks may indeed represent a final bottoming-out (one that will be re-tested later), or may be yet another of these eternal teases,…
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Just a bunch of things I’ve been scratching my head about in a day full of noise and running around: … Why do guests go on financial TV shows only to say that retail investors shouldn’t do anything in response to all good or bad news on financial TV? What’s the point? Those people aren’t watching live financial television anyway, by definition. … How did the ISM report leak today? Did the ISM folks leak their report because they knew it leaked, or because they thought it leaked? If the latter, did they make themselves the leakers? …
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THQ inc. (NASDAQ: THQI) just posted earnings that it called in-line with previous guidance. The video game maker just posted $0.24 non-GAAP EPS on $509.6 million in revenues. First Call had estimates at $0.33 EPS on revenues of almost $503.3 million. The results today include already-noted charges of approximately $27 million in non-cash charges related to canceling certain projects and approximately $20 million in accelerated amortization expense. The company is also guiding to -$0.06 EPS on a non-GAAP basis on sales of approximately $200 million. First Call has Next quarter estimates at $0.01 EPS on $211.4 million. The company already…
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Federal Reserve Chairman Ben Bernanke is to testify on the economy and financial markets to the Senate Banking Committee next week, two weeks ahead of his semiannual testimony on monetary policy.

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