tag:blogger.com,1999:blog-60885676791247691462024-02-07T23:16:48.406-05:00Financial Technologies Corp.Financial Technologies provides economic and financial analysis advisory services to businesses, entrepreneurs, investment banks, and personal investors.Unknownnoreply@blogger.comBlogger121125tag:blogger.com,1999:blog-6088567679124769146.post-18718607098621559082023-02-15T14:30:00.000-05:002023-02-15T14:37:55.837-05:00Retail Sales Increased 3.0% in January<p> </p><h3 class="post-title entry-title" style="background-attachment: initial !important; background-clip: initial !important; background-color: white; background-image: none !important; background-origin: initial !important; background-position: initial !important; background-repeat: initial !important; background-size: initial !important; background: none white; border-bottom: none; border-left: none; border-right: none; color: #222222; font-family: Georgia, serif; font-size: 28px; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-weight: normal; line-height: normal; margin: 0px; padding: 0px 0px 0px 10px;"><span style="font-size: 15.6px;">On a monthly basis, retail sales were up 3.0% from December to January (seasonally adjusted), and sales were up 6.4 percent from January 2022.</span></h3><div class="post-body entry-content" style="background-color: white; border-bottom-width: 0px; border-left: none; border-right: none; color: #222222; font-family: Georgia, serif; font-size: 15.6px; padding: 10px 20px 1px 10px;"><p style="margin: 0px 0px 0.75em;"><br />From the Census Bureau <a href="https://www.census.gov/retail/sales.html" style="color: #0c2765;">report</a>:<br /></p><blockquote style="background: rgb(244, 244, 244); line-height: 1.5em; margin: 1em 40px;">Advance estimates of U.S. retail and food services sales for January 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $697.0 billion, <b>up 3.0 percent from the previous month</b>, and up 6.4 percent above January 2022.<br /><span style="font-size: x-small;">emphasis added</span></blockquote><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhz-v90Ac-8DSaZ9VEIpzYXoIia-gtggezwpdDLql-S8I3nfOkepJ142roIJVn2eqHEk1_vKJpHSYO2xrLzy6ZPq3eCbYSm755PBR3v68oWpT93_nUaKCTBrWAIbBVWyeQf004-8i4780lpVT09fvFD-tmUig3UW0607MvaVVHZypIfIWiLlQ/s1044/RetailJan2023.PNG" style="color: #0c2765; margin-left: 1em; margin-right: 1em;"><img alt="Retail Sales" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhz-v90Ac-8DSaZ9VEIpzYXoIia-gtggezwpdDLql-S8I3nfOkepJ142roIJVn2eqHEk1_vKJpHSYO2xrLzy6ZPq3eCbYSm755PBR3v68oWpT93_nUaKCTBrWAIbBVWyeQf004-8i4780lpVT09fvFD-tmUig3UW0607MvaVVHZypIfIWiLlQ/s320/RetailJan2023.PNG" style="border: 1px solid rgb(0, 0, 0); float: right; margin: 10px; padding: 4px;" /></a><br /><br />This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).<br /><br />Retail sales ex-gasoline were up 3.2% in January.<br /><br />The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.<br /><br />Retail and Food service sales, ex-gasoline, increased by 6.8% on a YoY basis.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbANMljkTqkNDCwWJn43b8oKYCnThnendQWnGBlv1LNUU8-wPmmRnTPWvYblemzt7U17NT3qliUk0AqxwFDM5TRGmarg_NzJUkfYpdBoOoQGvQ_JCaviG7nV51E_KZd15MIQWbRE8I7jZtkpWo3-dfsW7bSsyyRWNJVC5cAeaELYdGqaYS2w/s975/RetailYoYJan2023.PNG" style="color: #0c2765; margin-left: 1em; margin-right: 1em;"><img alt="Year-over-year change in Retail Sales" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbANMljkTqkNDCwWJn43b8oKYCnThnendQWnGBlv1LNUU8-wPmmRnTPWvYblemzt7U17NT3qliUk0AqxwFDM5TRGmarg_NzJUkfYpdBoOoQGvQ_JCaviG7nV51E_KZd15MIQWbRE8I7jZtkpWo3-dfsW7bSsyyRWNJVC5cAeaELYdGqaYS2w/s320/RetailYoYJan2023.PNG" style="border: 1px solid rgb(0, 0, 0); float: right; margin: 10px; padding: 4px;" /></a>Sales in January were well above expectations, however, sales in November and December were revised down, combined.<p style="margin: 0px 0px 0.75em;"></p><div style="clear: both;"></div><div ic_pageid="bbf16612-31ea-4cd4-94b9-0628a7ca91ac" ic_placementid="2424" ic_tagid="2423" id="investingchannel_div_636895531376764"><br /></div></div>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-31173448281908165172023-02-15T14:20:00.008-05:002023-02-15T14:23:29.686-05:00How Private Equity Fared in 2022 - Bloomberg<p> </p><header class="TheArticle_header_R8qvI" style="box-sizing: inherit; font-family: OpenSans, arial, sans-serif; grid-area: 3 / 1 / auto / span 23;"><h3 style="box-sizing: inherit; color: #292e31; letter-spacing: -0.64px; line-height: 44px; margin: 12px 0px; padding: 0px; text-align: left;"><span style="background-color: white; font-weight: normal;">By many measures, private equity deal activity in 2022 slowed compared to the super-hot market seen in 2021. An analysis of deal volume and terminations, company valuations, the biggest players in the industry, and diversity among portfolio company founders paints a picture of last year’s PE market.</span></h3></header><article class="TheArticle_article_1WieB" data-test="article-body" style="border-bottom: none; border-top: 1px solid rgb(151, 151, 151); box-sizing: inherit; grid-area: 5 / 1 / span 1 / span 15; margin: 12px 0px 0px; padding: 12px 0px 0px;"><div style="box-sizing: inherit;"><div style="box-sizing: inherit;"><div class="QvNnGjy8J7gi" style="box-sizing: inherit;"><div style="box-sizing: inherit;"><h2 style="box-sizing: inherit; color: #292e31; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-xlarge); font-weight: var(--font-weight-demi); line-height: var(--size-line-height-large); margin-bottom: 8px;"><span style="background-color: white;">PE Investment Activity Dropped Off</span></h2><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">In 2022, the amount of mergers and acquisitions deal activity involving private equity parties fell by about a third year-over-year. Aggregate investments in the private equity corner of the <a href="https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-with-no-q4-surge-2022-m-a-activity-limped-to-a-close" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">M&A market</a> saw YoY reductions of 38.6% to $1.30 trillion in 2022, down $820.5 billion from $2.12 trillion in 2021, according to Bloomberg data.<br style="box-sizing: inherit;" /></span></p><div class="embedded-image" style="box-sizing: inherit; font-family: OpenSans, arial, sans-serif; margin-bottom: 24px;"><span style="background-color: white;"><img data-size="embedded" src="https://db0ip7zd23b50.cloudfront.net/dims4/default/bfb3361/2147483647/resize/633x10000%3E/quality/90/?url=http%3A%2F%2Fbloomberg-bna-brightspot.s3.amazonaws.com%2F9d%2Fe8%2F3c89e7734e66ae9c26b7112dfffd%2Famillerpedealvolume.png" style="border: 0px; box-sizing: inherit; height: auto; max-width: 100%; vertical-align: middle; width: 631.997px;" /></span></div><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">The entire M&A market saw a similar drop: A total of $3.6 trillion was invested in 2022—a reduction of $1.7 trillion or 31.2% from the $5.2 trillion high achieved in 2021.</span></p><h2 style="box-sizing: inherit; color: #292e31; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-xlarge); font-weight: var(--font-weight-demi); line-height: var(--size-line-height-large); margin-bottom: 8px;"><span style="background-color: white;">Venture Capital Deals</span></h2><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">Across the venture capital landscape, Series A/1 funding rounds (the first round of capital raising efforts by companies with strong underlying ideas and developed business models) continued to account for the most common series of funding by deal count.</span></p><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">In 2022, venture capitalists invested $452.3 billion across approximately 16,000 deals. That marked a $260.9 billion, or 36.6%, pullback from the record-setting $713.0 billion invested in 2021.<br style="box-sizing: inherit;" /></span></p><div class="embedded-image" style="box-sizing: inherit; font-family: OpenSans, arial, sans-serif; margin-bottom: 24px;"><span style="background-color: white;"><img data-size="embedded" src="https://db0ip7zd23b50.cloudfront.net/dims4/default/5507a01/2147483647/resize/633x10000%3E/quality/90/?url=http%3A%2F%2Fbloomberg-bna-brightspot.s3.amazonaws.com%2Fe1%2Fa4%2F9bacb9364088899f385bf0813b41%2Fgraph-2-awm-01.13.23.png" style="border: 0px; box-sizing: inherit; height: auto; max-width: 100%; vertical-align: middle; width: 631.997px;" /></span></div><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">Despite the decrease, VC deal activity remained healthy in 2022, historically speaking. 2023 could be a harder year for capital raising efforts by VC-backed companies, meaning they will likely need to consider alternative sources of capital like <a href="https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-as-down-rounds-loom-vc-backed-companies-have-options" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">venture debt</a>.</span></p><h2 style="box-sizing: inherit; color: #292e31; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-xlarge); font-weight: var(--font-weight-demi); line-height: var(--size-line-height-large); margin-bottom: 8px;"><span style="background-color: white;">Portfolio Companies Lose Their Luster</span></h2><h2 style="box-sizing: inherit; color: #292e31; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-xlarge); font-weight: var(--font-weight-demi); line-height: var(--size-line-height-large); margin-bottom: 8px;"></h2><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">As interest rates creep up and financial markets suffer heavy losses as <a href="https://news.bloomberglaw.com/banking-law/death-of-easy-money-creates-financial-upheaval-around-the-globe" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">a result</a>, differences in valuation methodologies become evident between fund types. Mutual funds, which are required to disclose valuations of investment companies on a regular basis, have marked companies down at a far more <a href="https://www.bloomberg.com/graphics/2023-hedge-funds-private-company-share-valuation/" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">aggressive rate</a> than their more secretive counterparts—hedge funds.</span></p><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">A Bloomberg <a href="https://www.bloomberg.com/graphics/2023-hedge-funds-private-company-share-valuation/" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">analysis</a> of the valuations of 46 privately held companies with equity owned by both mutual and hedge funds showed that mutual funds marked down about 70% of the companies an average of 35% through September of last year. To see the difference in valuations by fund type, look no further than the valuations of the software company, <a href="https://www.bloomberglaw.com/company/ticker/0932547D%20FP%20Equity?utm_source=ANT&utm_medium=ANP" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">Algolia</a>, which lost 39% of its value according to mutual funds managed by Fidelity, despite being marked down just 9% by hedge fund firm <a href="https://www.bloomberglaw.com/company/ticker/77987Z%20US%20Equity?utm_source=ANT&utm_medium=ANP" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">Lone Pine</a>, according to Bloomberg’s analysis.</span></p><h2 style="box-sizing: inherit; color: #292e31; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-xlarge); font-weight: var(--font-weight-demi); line-height: var(--size-line-height-large); margin-bottom: 8px;"><span style="background-color: white;">Heavy Hitters</span></h2><h2 style="box-sizing: inherit; color: #292e31; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-xlarge); font-weight: var(--font-weight-demi); line-height: var(--size-line-height-large); margin-bottom: 8px;"></h2><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">The list of the biggest players in private equity in 2022 comes as no surprise. According to Bloomberg data, <a href="https://www.bloomberglaw.com/company/ticker/BX%20US%20Equity?utm_source=ANT&utm_medium=ANP" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">Blackstone Inc</a> topped the list of PE buyers, engaging in 60 deals valued at a total of $118.1 billion, including the largest deal in terms of announced value at $45.0 billion: the <a href="https://news.bloomberglaw.com/mergers-and-acquisitions/benettons-blackstone-offer-to-buy-atlantia-for-20-7-billion" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">take private deal</a> of <a href="https://www.bloomberglaw.com/company/ticker/ATL%20IM%20Equity?utm_source=ANT&utm_medium=ANP" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">Atlantia SpA</a>. <a href="https://www.bloomberglaw.com/company/ticker/1132L%20US%20Equity?utm_source=ANT&utm_medium=ANP" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">Kirkland & Ellis</a> topped the Legal Adviser League Table, advising just over 13.5% of PE deals. <a href="https://www.bloomberglaw.com/company/ticker/GS%20US%20Equity?utm_source=ANT&utm_medium=ANP" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">Goldman Sachs</a> topped the list of financial advisers in the space, having advised just over 23.5% of all deals.</span></p><h2 style="box-sizing: inherit; color: #292e31; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-xlarge); font-weight: var(--font-weight-demi); line-height: var(--size-line-height-large); margin-bottom: 8px;"><span style="background-color: white;">Terminated Deals</span></h2><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">According to Bloomberg data as of Jan. 11, 2023, terminations of PE deals were few and far between—an indication that dealmakers aren’t signing agreements that don’t instill a sense of confidence.</span></p><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">Of the 24,169 deals signed in 2022, just 18 deals valued at a combined $7.62 billion have been terminated thus far. Of deals signed in 2021, 43—worth a total of $53.9 billion—have been terminated.</span></p><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">Time will tell just how many 2022 deals will end in termination, but for now, deals announced last year have a low rate of termination. In fact, the last year in which fewer deals were terminated was 2013, in which 17 deals worth a total of $4.58 billion were terminated. That’s pretty remarkable considering that 2022 had 2.5 times the number of completed deals compared to 2013 by count.</span></p><h2 style="box-sizing: inherit; color: #292e31; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-xlarge); font-weight: var(--font-weight-demi); line-height: var(--size-line-height-large); margin-bottom: 8px;"><span style="background-color: white;">Diversity in Private Equity</span></h2><h2 style="box-sizing: inherit; color: #292e31; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-xlarge); font-weight: var(--font-weight-demi); line-height: var(--size-line-height-large); margin-bottom: 8px;"></h2><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">In the US, Black- and female-founded companies have made progress in the private equity space over the <a href="https://www.blackenterprise.com/venture-capital-funding-for-black-founders-reaches-record-high-can-the-momentum-last/" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">past several years</a> in terms of the amount of capital they’ve raised each year in VC deals, but that amount remains low.</span></p><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">Black-founded startups raise about <a href="https://news.bloomberglaw.com/private-equity/black-startups-get-one-third-as-much-venture-capital-as-peers" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">one-third</a> of the venture capital as their counterparts, according to recent <a href="https://www.nber.org/papers/w30682?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg26" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">research</a>. Consistent with these findings, just <a href="https://techcrunch.com/2023/01/06/black-founders-still-raised-just-1-of-all-vc-funds-in-2022/" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">1.0%</a> of the total VC capital raised in 2022 was by Black founders, a slight decrease from 1.3% in 2021.</span></p><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">From Q1 to Q3 of 2022, companies founded by women closed more deal value than in any full year other than 2021, and companies founded by all-female teams raised $3.6 billion by Sept. 30, 2022, according to Crunchbase data. However, the figure pales in comparison to the $154.9 billion raised by their all-male counterparts.</span></p><p style="box-sizing: inherit; color: #2a2c30; font-family: OpenSans, arial, sans-serif; font-size: var(--size-font-medium); line-height: var(--size-line-height-medium); margin: 0px 0px 16px; padding: 0px;"><span style="background-color: white;">Analysts and investors may take some solace knowing that deal activity really didn’t come to a screeching halt last year. However, the economy clearly pulled back, and <a href="https://www.bloomberg.com/quote/VIX:IND" style="box-sizing: inherit; color: #267abd; text-decoration-line: none;">volatility remained high</a> compared to pre-pandemic levels, which leaves a giant question mark about what’s around the corner.</span></p></div></div></div></div></article>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-73872969987397506192023-02-15T13:42:00.008-05:002023-02-15T13:43:25.042-05:00NAHB Housing Market Index: "Cautious Optimism for Builders in February"<p>The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. The data is collected from a monthly survey of about 900 home builders asking respondents to, "rate market conditions for the sale of new homes at the present time and in the next six months as well as the traffic of prospective buyers of new homes." It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 42 is up 7 from last month's 35, marking two consecutive months of gains.</p><p><br /></p><p>Here's an excerpt from this morning's blog update:</p><blockquote style="border: none; margin: 0 0 0 40px; padding: 0px;"><p style="text-align: left;">Two consecutive solid monthly gains for builder confidence, spurred in part by easing mortgage rates, signal that the housing market may be turning a corner even as builders continue to contend with high construction costs and building material supply chain logjams. Builder confidence in the market for newly built single-family homes in February rose seven points to 42, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This is the strongest reading since September of last year.</p></blockquote><p><br /></p><p>“With the largest monthly increase for builder sentiment since June 2013*, the HMI indicates that incremental gains for housing affordability have the ability to price-in buyers to the market,” said NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Ala. “The nation continues to face a sizeable housing shortage that can only be closed by building more affordable, attainable housing. However, the two monthly gains for the HMI at the start of 2023 match the cautious optimism noted by the large number of builders at the recent International Builders’ Show in Las Vegas, who reported a better start to the year than expected last fall.”</p><p><br /></p><p>*Largest monthly increase since June 2020</p><p><br /></p><p>Here is the historical series, which dates from 1985.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://www.advisorperspectives.com/images/content_image/data/64/6415c7ed177cf05a2d0a5dacabbeb7c0.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="580" data-original-width="800" height="580" src="https://www.advisorperspectives.com/images/content_image/data/64/6415c7ed177cf05a2d0a5dacabbeb7c0.png" width="800" /></a></div><br /><p><br /></p><p><br /><br /><br /></p>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-75270710568625541952023-02-15T13:34:00.000-05:002023-02-15T13:34:05.487-05:00Current State of the Housing Market: Overview for mid-February<p> </p><h3 class="post-title entry-title" style="background-attachment: initial !important; background-clip: initial !important; background-color: white; background-image: none !important; background-origin: initial !important; background-position: initial !important; background-repeat: initial !important; background-size: initial !important; border-bottom: none !important; border-left: none !important; border-right: none !important; color: #222222; font-family: Georgia, serif; font-size: 28px !important; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-weight: normal !important; line-height: normal; margin: 0px; padding: 0px 0px 0px 10px !important;"><br /></h3><h3 class="post-title entry-title" style="background-attachment: initial !important; background-clip: initial !important; background-color: white; background-image: none !important; background-origin: initial !important; background-position: initial !important; background-repeat: initial !important; background-size: initial !important; border-bottom: none !important; border-left: none !important; border-right: none !important; color: #222222; font-family: Georgia, serif; font-size: 28px !important; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-weight: normal !important; line-height: normal; margin: 0px; padding: 0px 0px 0px 10px !important;"><span style="font-size: 15.6px;">A brief excerpt:</span></h3><div class="post-body entry-content" style="background-color: white; border-bottom-width: 0px; border-left: none !important; border-right: none !important; color: #222222; font-family: Georgia, serif; font-size: 15.6px; padding: 10px 20px 1px 10px;"><blockquote style="background: rgb(244, 244, 244); line-height: 1.5em; margin: 1em 40px;">Here is a graph of new listing from Realtor.com’s <a href="https://www.realtor.com/research/january-2023-data/" style="color: #0c2765;">January Housing Trends Report</a> showing new listings were down about 5% year-over-year in January. Although new listings are at a record low for January, the year-over-year decline was smaller in January than in Q4 2022. From Realtor.com:<blockquote style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; line-height: 1.5em; margin: 1em 40px;">In January, the number of homes newly-listed for sale declined by 5.4% compared to the same time last year. This is a much lower rate of decline than last month’s 21.0% decrease and November’s 17.2% decrease. However, new listings remain 25.0% below pre-pandemic 2017 to 2019 levels.</blockquote><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFcCX0wqW7bEzJb4t-RIbM9qO6RNDSOdUDXJhoEzFeWPnRD8mS3qbuNBxLugBolISshqilZLVa2_NGAKmZXRZ3aHLSPgym0d-JuXCj37QxZxdQXpdymOZ1AqkZEYGL4RS3xU6t1LBDdl4tmyEsZpzedQ53jw4JXWEZ_gpxf4WYO9JJjSWHmg/s868/RealtorNewJan2023.PNG" style="color: #0c2765; margin-left: 1em; margin-right: 1em;"><img alt="New Listings" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFcCX0wqW7bEzJb4t-RIbM9qO6RNDSOdUDXJhoEzFeWPnRD8mS3qbuNBxLugBolISshqilZLVa2_NGAKmZXRZ3aHLSPgym0d-JuXCj37QxZxdQXpdymOZ1AqkZEYGL4RS3xU6t1LBDdl4tmyEsZpzedQ53jw4JXWEZ_gpxf4WYO9JJjSWHmg/s320/RealtorNewJan2023.PNG" style="border: 1px solid rgb(0, 0, 0); float: right; margin: 10px; padding: 4px;" /></a>And the <a href="https://calculatedrisk.substack.com/p/2nd-look-at-local-housing-markets-0f7" style="color: #0c2765;">local markets I track</a> that have reported so far, show new listings were down less in January than in December.<blockquote style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; line-height: 1.5em; margin: 1em 40px;">For these areas, new listings were down 9.2% YoY. … Last month, new listings in these markets were down 21.7% YoY. <b>This is a significantly smaller YoY decline in new listings, and something to watch</b>.</blockquote></blockquote></div>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-9585006405577840762023-02-15T13:28:00.007-05:002023-02-15T13:30:32.231-05:00Industrial Production Unchanged in January<p> </p><br /><div class="post-body entry-content" style="border-bottom-width: 0px; border-left: none; border-right: none; padding: 10px 20px 1px 10px;"><p style="margin: 0px 0px 0.75em;">From the Fed: <a href="https://www.federalreserve.gov/releases/g17/Current/default.htm" style="color: #0c2765;">Industrial Production and Capacity Utilization</a><br /></p><blockquote style="background: rgb(244, 244, 244); line-height: 1.5em; margin: 1em 40px;"><b>Industrial production was unchanged in January</b> after falling 0.6 percent and 1.0 percent in November and December, respectively. In January, manufacturing output moved up 1.0 percent and mining output rose 2.0 percent following two months with substantial decreases for each sector. The output of utilities fell 9.9 percent in January, as a swing from unseasonably cool weather in December to unseasonably warm weather in January depressed the demand for heating. At 103.0 percent of its 2017 average, total industrial production in January was 0.8 percent above its year-earlier level. <b>Capacity utilization declined 0.1 percentage point in January to 78.3 percent</b>, a rate that is 1.3 percentage points below its long-run (1972–2022) average.<br /><span style="font-size: x-small;">emphasis added</span></blockquote><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIOEg7PNQXOcIeAf1Zsu3qHUHGvYxkYcij8XdiuSPV1YhbLKSLpkJTZXqMdC5VLn1oC39U-5i9iYgpfCSuW1iA3zLc6viy6q3U5rplBwNc4qki_sRGkKxHrSSOfHxL1yYTtAQl3Pznuzl83MZI_jljgjFr-s3D-eHtXBh3cXOIvaarrpHG9A/s1008/CapUJan2023.PNG" style="color: #0c2765; margin-left: 1em; margin-right: 1em;"><img alt="Capacity Utilization" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIOEg7PNQXOcIeAf1Zsu3qHUHGvYxkYcij8XdiuSPV1YhbLKSLpkJTZXqMdC5VLn1oC39U-5i9iYgpfCSuW1iA3zLc6viy6q3U5rplBwNc4qki_sRGkKxHrSSOfHxL1yYTtAQl3Pznuzl83MZI_jljgjFr-s3D-eHtXBh3cXOIvaarrpHG9A/s320/CapUJan2023.PNG" style="border: 1px solid rgb(0, 0, 0); float: right; margin: 10px; padding: 4px;" /></a><i><b><span style="font-size: 13.26px;">Click on graph for larger image.</span></b></i><br /><br />This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and above the level in February 2020 (pre-pandemic).<br /><br />Capacity utilization at 78.3% is 1.3% below the average from 1972 to 2021. This was below consensus expectations.<br /><br />Note: y-axis doesn't start at zero to better show the change.<div><br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPDMzHkLgXM_zg0ghdczd8eQ2wNWllyd5TrStl-0d1f6Fe7Oi3UgWIQ9xVxpEuxpvpWM9YUf4Lqdi3s16NpmZt95e1NTHUy6JgyaSuIm_aMMj6Nyhag21YewxbjDARbqJYP1q8VP4SDfg0BDtW7LH88HY3By5OcZJSU6IBDR0_6Kaf5U25Hw/s1010/IPJan2023.PNG" style="color: #0c2765; margin-left: 1em; margin-right: 1em;"><img alt="Industrial Production" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPDMzHkLgXM_zg0ghdczd8eQ2wNWllyd5TrStl-0d1f6Fe7Oi3UgWIQ9xVxpEuxpvpWM9YUf4Lqdi3s16NpmZt95e1NTHUy6JgyaSuIm_aMMj6Nyhag21YewxbjDARbqJYP1q8VP4SDfg0BDtW7LH88HY3By5OcZJSU6IBDR0_6Kaf5U25Hw/s320/IPJan2023.PNG" style="border: 1px solid rgb(0, 0, 0); float: right; margin: 10px; padding: 4px;" /></a>The second graph shows industrial production since 1967.<br /><br />Industrial production increased slightly in January to 103.0. This is above the pre-pandemic level.<br /><br />The change in industrial production was below consensus expectations.</div><p style="margin: 0px 0px 0.75em;"></p><div style="clear: both;"></div><div ic_pageid="0718400b-9d58-4ca5-b011-ead731903f93" ic_placementid="2424" ic_tagid="2423" id="investingchannel_div_4504603088042491"><br /></div></div>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-39472353367243334542015-06-19T08:26:00.004-04:002023-02-15T14:19:08.279-05:00GOP bill would repeal federal ethanol mandate<span style="font-weight: normal;"><a href="http://thehill.com/policy/energy-environment/245151-bill-would-repeal-federal-ethanol-mandate" target="_blank">From The Hill</a></span><br />
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By <span rel="sioc:has_creator"><a href="http://thehill.com/author/timothy-cama" style="color: #003366; outline: none; text-decoration: none;" title="All articles by Timothy Cama">Timothy Cama</a></span> </div>
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A new Republican bill introduced Tuesday would completely repeal the federal mandate to blend ethanol into the nation’s gasoline supply.</div>
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Sen. Bill Cassidy’s (R-La.) legislation would completely do away with the renewable fuel standard, which first took effect in 2005 and now requires increasing levels of ethanol and biodiesel to be put into traditional fossil fuels.</div>
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The mandate invites frequent criticism from Republicans, the oil industry and sectors that complain the demand it creates for corn ethanol increases agricultural prices.<br />
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“Workers, refiners, producers, farmers and ranchers across the country are affected by the renewable fuel standard,” Cassidy said in a statement. “More mandates mean less jobs. It means families are paying more for gas and groceries.”</div>
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Cassidy represents Louisiana, one of the largest states in terms of fuel refining capacity. Refiners say that buying ethanol or fuel credits increases their prices, and they must pass those costs onto consumers.</div>
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The Environmental Protection Agency (EPA) has had trouble keeping up with the annual volume mandates amid a decrease in fuel use. The agency <a href="http://thehill.com/policy/energy-environment/243438-epa-sets-ethanol-blending-requirements" style="color: #000066; font-weight: bold; outline: none; text-decoration: none;">proposed</a> mandate levels for 2014 through 2016 last month.</div>
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The proposal would increase ethanol levels, though not to the goals set out in the law, leading to criticisms from both supporters and opponents of the mandate.</div>
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“American energy production is increasing and fuel efficient technologies are improving,” Cassidy said. “Our workers need policies that help move our energy, farming and manufacturing industries forward — that starts by repealing the RFS.”</div>
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Sens. Dianne Feinstein (D-Calif.) and Pat Toomey (R-Pa.) have sponsored multiple legislative attempts at reforming the law by removing the ethanol mandate, but leaving other provisions, such as those for biodiesel.</div>
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</article>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-4370364199391794342014-10-31T12:59:00.000-04:002014-10-31T12:59:20.140-04:00Economic News This Week<br />
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<li><a href="http://www.bloomberg.com/news/2014-10-30/economy-in-u-s-grew-3-5-in-third-quarter-more-than-forecast.html" target="_blank">U.S. Economy Up 3.5% in 3rd Quarter, Capping Best 6 Months in Over a Decade</a></li>
<li><a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/30/the-u-s-recovery-is-frustrating-but-its-the-envy-of-the-advanced-world/" target="_blank">The U.S. recovery is frustrating — but it’s the envy of the advanced world</a></li>
<li><a href="http://www.ritholtz.com/blog/2014/10/can-macroeconomists-get-rich-forecasting-exchange-rates/" target="_blank">Can Macroeconomists Get Rich Forecasting Exchange Rates?</a></li>
<li><a href="http://www.nytimes.com/2014/10/31/business/inflation-deflation-is-new-risk.html?partner=rss&emc=rss&_r=0" target="_blank">Inflation? Deflation Is New Risk</a></li>
<li><a href="http://www.reuters.com/article/2014/10/31/us-usa-economy-sentiment-idUSKBN0IK1HD20141031?feedType=RSS&feedName=businessNews" target="_blank">U.S. consumer sentiment at highest since July 2007</a></li>
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Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-4061418377039477592014-10-17T14:38:00.003-04:002014-10-17T14:39:36.941-04:00How to visualize 14.5 trillion dollars in Federal Debt<h3 class="post-title entry-title" itemprop="name">
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This image is in one hundred dollar bills...<br />
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<b></b><br />Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-84879633310585420712014-10-17T14:30:00.002-04:002023-02-15T13:40:14.072-05:00GDP Charts from Advisorperspectives.com<div class="separator" style="clear: both; text-align: center;"><div class="hidden-print" id="dfp-launch-alert-bar" style="background-color: white; box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 18px; text-align: start;"><div class="ap-dfp-slot hidden-print dfp-ap-2016-native-launch-alert-bar" data-dfp-slot-name="/307582875/AP_2016.Native.Launch_Alert_Bar" data-dfp-slot="1" data-google-query-id="CPS65PSVmP0CFS-FpgQd3zkKOw" id="dfp-ap-2016-native-launch-alert-bar" style="box-sizing: border-box;"><div id="google_ads_iframe_/307582875/AP_2016.Native.Launch_Alert_Bar_0__container__" style="border: 0pt none; box-sizing: border-box; display: inline-block; height: auto; width: 1175px;"><iframe aria-label="Advertisement" data-google-container-id="m" data-is-safeframe="true" data-load-complete="true" frameborder="0" height="124" id="google_ads_iframe_/307582875/AP_2016.Native.Launch_Alert_Bar_0" marginheight="0" marginwidth="0" name="" role="region" sandbox="allow-forms allow-popups allow-popups-to-escape-sandbox allow-same-origin allow-scripts allow-top-navigation-by-user-activation" scrolling="no" src="https://015bd7afe3b38c5d26e53a1a47f1fab0.safeframe.googlesyndication.com/safeframe/1-0-40/html/container.html" style="border-style: initial; border-width: 0px; box-sizing: border-box; min-width: 100%; vertical-align: bottom;" tabindex="0" title="3rd party ad content" width="0"></iframe></div></div></div><div class="ap-content-header" style="background-color: white; box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; text-align: start;"><h1 class="ap-content-title" style="box-sizing: border-box; color: black; font-family: inherit; font-weight: 500; line-height: 1.1; margin: 5px 0px;"><span style="font-size: x-small;">by <a class="byline-author" href="https://www.advisorperspectives.com/search?author=Jennifer%20Nash" style="background-color: transparent; box-sizing: border-box; color: black; text-decoration-line: none;">Jennifer Nash</a>, <span class="byline-date" style="box-sizing: border-box;">1/27/23</span></span></h1><h1 class="ap-content-title" style="box-sizing: border-box; color: black; font-family: inherit; font-weight: 500; line-height: 1.1; margin: 5px 0px;"><em style="box-sizing: border-box; color: #333333;"><span style="font-size: x-small;">This article was originally written by Doug Short. From 2016-2022, it was improved upon and updated by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at Advisor Perspectives/VettaFi.</span></em></h1></div><div class="dshort__content" style="background-color: white; box-sizing: border-box; text-align: start;"><div class="ap-content-body" style="box-sizing: border-box; line-height: 1.8;"><div class="ap-content-lazy-loader" style="box-sizing: border-box;"><div class="ap-content-lazy-loader-page" data-page-number="1" id="page-1" style="box-sizing: border-box; overflow: hidden;"><hr style="border-bottom: 0px; border-image: initial; border-left: 0px; border-right: 0px; border-top-color: rgb(238, 238, 238); border-top-style: solid; box-sizing: content-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; height: 0px; margin-bottom: 20px; margin-top: 20px;" /><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;"><em style="box-sizing: border-box;"><span style="box-sizing: border-box; font-weight: 700;">Note:</span> The charts in this commentary have been updated to include the Q4 2022 advance estimate.<br style="box-sizing: border-box;" /></em></p><hr style="border-bottom: 0px; border-image: initial; border-left: 0px; border-right: 0px; border-top-color: rgb(238, 238, 238); border-top-style: solid; box-sizing: content-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 18px; height: 0px; margin-bottom: 20px; margin-top: 20px;" /><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;">The chart below is a way to visualize real GDP change since 2007 and uses a stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics:</p></div></div></div></div></div><blockquote style="border: none; margin: 0 0 0 40px; padding: 0px;"><div class="separator" style="clear: both; text-align: center;"><div class="dshort__content" style="background-color: white; box-sizing: border-box; text-align: start;"><div class="ap-content-body" style="box-sizing: border-box; line-height: 1.8;"><div class="ap-content-lazy-loader" style="box-sizing: border-box;"><div class="ap-content-lazy-loader-page" data-page-number="1" style="box-sizing: border-box; overflow: hidden;"><p style="box-sizing: border-box; line-height: 1.8; margin: 0.5em 0px 1em; text-align: left;"><span style="color: #333333; font-family: Helvetica Neue, Helvetica, Arial, sans-serif;">Real gross domestic product (GDP) increased at an annual rate of 2.9 percent in the fourth quarter of 2022 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.2 percent.</span></p></div></div></div></div></div></blockquote><div class="separator" style="clear: both; text-align: center;"><div class="dshort__content" style="background-color: white; box-sizing: border-box; text-align: start;"><div class="ap-content-body" style="box-sizing: border-box; line-height: 1.8;"><div class="ap-content-lazy-loader" style="box-sizing: border-box;"><div class="ap-content-lazy-loader-page" data-page-number="1" style="box-sizing: border-box; overflow: hidden;"><div id="lightbox-inline-form-fc277d64-b6cc-48ca-8151-4bd45ebdf030" style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 18px;"></div><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;"><a class="galleryImg" href="https://www.advisorperspectives.com/images/content_image/data/f0/f0500115742becfeeea6d84209730835.png" style="background-color: transparent; box-sizing: border-box; color: #1da4a8; text-decoration-line: none;"><img alt="GDP Components" class="ap-lazy-image loaded" data-src="/images/content_image/data/f0/f0500115742becfeeea6d84209730835.png" height="662" src="https://www.advisorperspectives.com/images/content_image/data/f0/f0500115742becfeeea6d84209730835.png" style="border: 0px; box-sizing: border-box; height: auto; max-width: 100%; opacity: 1; transition: opacity 0.25s ease 0s; vertical-align: middle;" width="908" /></a></p><blockquote style="background-color: #eeeeee; border: none; box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: inherit; margin: 0px 0px 20px; padding: 10px 20px;"><p style="box-sizing: border-box; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 0px;"><em style="box-sizing: border-box;"><span style="box-sizing: border-box; font-weight: 700;">Note:</span> The conventional practice is to round GDP to one decimal place, the latest at 2.6%.</em></p></blockquote><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;">Here is a chart of the latest estimates.</p><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;">Over the time frame of this chart, the personal consumption expenditures (PCE) component has shown the most consistent correlation with real GDP. When PCE has been positive, GDP has usually been positive, and vice versa. In the latest GDP data, the contribution of PCE came in at 1.49 of the 2.9 real GDP, down from the previous quarter.</p><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;"><a class="galleryImg" href="https://www.advisorperspectives.com/images/content_image/data/46/46e5b4224b25a4c179b6c041f72bb4a0.png" style="background-color: transparent; box-sizing: border-box; color: #1da4a8; text-decoration-line: none;"><img class="ap-lazy-image loaded" data-src="/images/content_image/data/46/46e5b4224b25a4c179b6c041f72bb4a0.png" height="528" src="https://www.advisorperspectives.com/images/content_image/data/46/46e5b4224b25a4c179b6c041f72bb4a0.png" style="border: 0px; box-sizing: border-box; height: auto; max-width: 100%; opacity: 1; transition: opacity 0.25s ease 0s; vertical-align: middle;" width="548" /></a><a class="galleryImg" href="https://www.advisorperspectives.com/images/content_image/data/76/7684a5da271bb96a2fa1ee2e96464216.png" style="background-color: transparent; box-sizing: border-box; color: #1da4a8; text-decoration-line: none;"><img class="ap-lazy-image loaded" data-src="/images/content_image/data/76/7684a5da271bb96a2fa1ee2e96464216.png" height="511" src="https://www.advisorperspectives.com/images/content_image/data/76/7684a5da271bb96a2fa1ee2e96464216.png" style="border: 0px; box-sizing: border-box; height: auto; max-width: 100%; opacity: 1; transition: opacity 0.25s ease 0s; vertical-align: middle;" width="456" /></a></p><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;">Gross private domestic investment was a positive contributor.</p><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;">Net exports were positive in Q4.</p><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;">Government consumption expenditures also came in as a positive contributor.</p><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;">As for the role of PCE in GDP and how it has increased over time, here is a snapshot of the PCE-to-GDP ratio since the inception of quarterly GDP data in 1947. To one decimal place, the latest ratio of 70.6% is just below its record high.</p><p style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;"><a class="galleryImg" href="https://www.advisorperspectives.com/images/content_image/data/e0/e052adb9577698b9bdc35df4b132af22.png" style="background-color: transparent; box-sizing: border-box; color: #1da4a8; text-decoration-line: none;"><img alt="PCE Percent of GDP" class="ap-lazy-image loaded" data-src="/images/content_image/data/e0/e052adb9577698b9bdc35df4b132af22.png" height="662" src="https://www.advisorperspectives.com/images/content_image/data/e0/e052adb9577698b9bdc35df4b132af22.png" style="border: 0px; box-sizing: border-box; height: auto; max-width: 100%; opacity: 1; transition: opacity 0.25s ease 0s; vertical-align: middle;" width="908" /></a></p></div><div class="ap-content-lazy-loader-page" data-page-number="2" id="page-2" style="box-sizing: border-box; color: #333333; font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 18px; overflow: hidden;"><div class="row ap-signup-inline" style="box-sizing: border-box; margin-left: -15px; margin-right: -15px;"><div class="col-lg-offset-3 col-lg-6" style="box-sizing: border-box; float: left; margin-left: 301.25px; min-height: 1px; padding-left: 15px; padding-right: 15px; position: relative; width: 602.5px;"><form action="https://www.advisorperspectives.com/signup/content_page_2" class="form ap-signup-form" data-parsley-validate="" method="POST" novalidate="" style="background: rgb(70, 51, 138); border-radius: 10px; box-sizing: border-box; color: white; margin: 10px 0px; padding: 20px;"><p style="box-sizing: border-box; line-height: 1.42857; margin: 0px 0px 10px;">Sign me up to receive email newsletters from <span style="box-sizing: border-box; font-weight: 700;">Advisor Perspectives</span></p><div class="input-group" style="border-collapse: separate; box-sizing: border-box; display: table; position: relative;"><input class="form-control" data-parsley-errors-container="#ap-signup-form-errors-content_page_2" name="email" placeholder="Name@email.com" required="required" style="background-color: white; background-image: none; border-color: rgb(204, 204, 204); border-radius: 4px 0px 0px 4px; border-style: solid; border-width: 1px; box-shadow: rgba(0, 0, 0, 0.075) 0px 1px 1px inset; color: #555555; display: table-cell; float: left; font-family: inherit; font-size: 14px; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; height: 34px; line-height: 1.42857; margin: 0px; padding: 6px 12px; position: relative; transition: border-color 0.15s ease-in-out 0s, box-shadow 0.15s ease-in-out 0s; width: 475.903px; z-index: 2;" type="email" /><span class="input-group-btn" style="box-sizing: border-box; display: table-cell; font-size: 0px; position: relative; vertical-align: middle; white-space: nowrap; width: 56.5972px;"><button class="btn btn-signup" style="appearance: button; background-color: #755fc4; background-image: none; border-color: transparent; border-radius: 0px 4px 4px 0px; border-style: solid; border-width: 1px; color: white; cursor: pointer; font-family: inherit; font-size: 14px; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-weight: 400; line-height: 1.42857; margin: 0px 0px 0px -1px; overflow: visible; padding: 6px 12px; position: relative; touch-action: manipulation; user-select: none; vertical-align: middle; z-index: 2;" type="submit">Try It</button></span></div><div class="ap-signup-form-errors" id="ap-signup-form-errors-content_page_2" style="box-sizing: border-box;"></div></form></div></div><div class="ap-content-inline-placement-container" style="box-sizing: border-box; margin: 0px auto; min-height: 0px; min-width: 300px;"></div><p style="box-sizing: border-box; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;">Let's close with a look at the inverse behavior of three of the GPDI components during recessions. PCE and especially GC generally increase as a percent of GDP whereas GPDI declines. Note the three with different vertical axes (PCE on the left, gross private domestic investment and government consumption on the right) to highlight the frequent inverse correlations.</p><p style="box-sizing: border-box; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;"><a class="galleryImg" href="https://www.advisorperspectives.com/images/content_image/data/ca/cacca0fe30d9cf7a85c9e869cf6bc895.png" style="background-color: transparent; box-sizing: border-box; color: #1da4a8; text-decoration-line: none;"><img alt="Three Components of GDP" class="ap-lazy-image loaded" data-src="/images/content_image/data/ca/cacca0fe30d9cf7a85c9e869cf6bc895.png" height="662" src="https://www.advisorperspectives.com/images/content_image/data/ca/cacca0fe30d9cf7a85c9e869cf6bc895.png" style="border: 0px; box-sizing: border-box; height: auto; max-width: 100%; opacity: 1; transition: opacity 0.25s ease 0s; vertical-align: middle;" width="908" /></a></p><p style="box-sizing: border-box; font-size: 1em; line-height: 1.8; margin: 0.5em 0px 1em;"><br /></p></div></div></div></div></div><br /><br />
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<br /><br />Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-49165573245961630382014-10-17T14:24:00.001-04:002014-10-17T14:24:20.582-04:00Q2 2014 GDP<h1 itemprop="headline">
U.S. GDP Grew 4.6% In Second Quarter 2014, Up From Earlier Estimates</h1>
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On
Friday, the Bureau of Economic Analysis released its third estimate of
real gross domestic product for the second quarter of 2014 — covering
April, May and June of this year. The release showed output in the U.S.
increasing at an annual rate of 4.6%. This is relative to the first
quarter when real GDP declined a sharp 2.1%.<br />
The revision is up from BEA’s 4.2% <a class="exit_trigger_set" href="http://www.forbes.com/sites/samanthasharf/2014/08/28/u-s-gdp-grew-4-2-in-the-second-quarter-2013-up-from-first-estimate/">second estimate</a> released last month as well as its 4% <a class="exit_trigger_set" href="http://www.forbes.com/sites/samanthasharf/2014/07/30/u-s-gdp-grew-4-in-the-second-quarter-2014/">advance estimate</a> out
in July. The revision, BEA said in a release, was largely due to a
larger than previously estimated increase in nonresidential fixed
investment and exports. Of the revision the BEA wrote, “The general
picture of economic growth remains the same” as when it released the
second estimate.<br />
The 4.6% growth in real GDP reflected growing personal consumption,
private inventory investment, exports, both residential and
nonresidential fixed investment, as well as local government
spending. The gains were partially offset by an increase in imports,
which negatively impact GDP, and a 0.9% decline in federal government
expenditures.<br />
“Given the partial indicators in between the second and third
estimate this was broadly anticipated but that doesn’t dull the good
news,” Jeremy Lawson chief economist at Standard Life Investments. He
also noted that consensus was for the upward revision to be driven by
growth in personal consumption but the real driver was fixed business
investments with 9.7% growth. This, Lawson says, is a strong sign for
future growth and critical for productivity. At the same time the 2.5%
personal consumption growth was slightly lower than anticipated but “not
a disappointment.”<br />
The price index for gross domestic purchases — which measures prices
paid by U.S. residents — increased 2%, up slightly from the prior
estimate and compared to 1.4% growth in the first quarter. Real personal
consumption expenditures increased 2.5%, keeping with the second
estimate and up from the 1.2% increase in the first quarter.<br />
The BEA now estimates second quarter corporate profits increased
$164.1 billion, compared to a $201.7 billion decrease in the first
quarter. Taxes on corporate income increased $45.7 billion in the second
quarter, compared with an increase of $66.9 billion in the first.<br />
The S&P 500, Dow Jones Industrial Average and Nasdaq Composite
were all in the green following the pre-market release pushing higher
upward momentum seen earlier in the day.<br />
BEA — a division of the Department of Commerce – will release its advance estimate of Q3 GDP estimate on Thursday, October 30.Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-48658440000775080232014-09-24T09:31:00.001-04:002014-09-24T09:31:37.968-04:00One in Five U.S. Workers Laid Off in Last Five Years, Report Says <img alt="Need a Real Sponsor here" src="http://s.wsj.net/img/wsj_print.gif" />
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<li class="dateStamp first"><small>September 24, 2014, 8:00 AM ET</small></li>
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<h1>
One in Five U.S. Workers Laid Off in Last Five Years, Report Says</h1>
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<h3 class="byline">
ByPedro Nicolaci da Costa</h3>
One
in five U.S. workers, nearly 30 million people, say they were laid off
from their jobs in the last five years, according to a new survey that
highlights lasting scars from the spike in U.S. long-term unemployment
following the last recession.<br />
While the <a href="http://blogs.wsj.com/economics/tag/long-term-unemployment/" target="_blank">extent of long-term joblessness</a> has been discussed widely, including by top <strong>Federal Reserve</strong> officials, the <a href="http://heldrich.rutgers.edu/sites/default/files/products/uploads/Work_Trends_September_2014_0.pdf" target="_blank">survey from the</a><strong><a href="http://heldrich.rutgers.edu/sites/default/files/products/uploads/Work_Trends_September_2014_0.pdf" target="_blank"> John J. Heldrich Center</a> for Workforce Development</strong> at <strong>Rutgers University</strong> could add fuel to the debate over how much of the problem can be dealt with through better economic policy.<br />
The report finds that losing one’s job, even for a short period, can be more than just a temporary setback.<br />
“Laid-off workers who found another job seldom improved their
financial situation,” the report said. “Two-thirds said their new jobs
either paid less than their previous one (46%) or paid the same (21%).”<br />
Just a quarter of laid-off workers say their next job was a step up
from their last. One in five workers laid off during the preceding
five-year period never found another job. And some two-thirds of adults
in the Rutgers survey, including those who kept their jobs, said the
recession a negative impact on their standard of living.<br />
This deterioration in household finances has led to a broad
reassessment of how long Americans will need to keep working in order to
survive as they get older. Half of 45- to 59-year olds said they now
expect to retire later than they had planned.<br />
U.S. long-term unemployment has been falling, but it remains quite elevated by historical standards.<br />
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The problem cuts across income brackets and educational attainment, the survey found.<br />
“Long-term unemployed workers are represented in all age categories,
educational levels, regions of the nation, and income strata,” the
survey said.<br />
</div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-18464493074778313602014-09-24T09:23:00.001-04:002014-09-24T09:23:32.134-04:00The Effects of Benefits on Unemployment and Labor Force ParticipationThe Federal Reserve Board has released the linked research paper analyzing the effects of extended unemployment benefits on the unemployment rate and labor force participation.<br />
<br />
<br />
<a href="http://www.scribd.com/doc/240195344/201465-Pap" target="_blank">http://www.scribd.com/doc/240195344/201465-Pap</a>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-7797341291545084362014-04-24T21:51:00.001-04:002014-04-24T21:51:09.988-04:00<div style="background-color: white; font-family: 'PT Serif', Georgia, serif; font-size: 14.44444465637207px; line-height: 21px; margin-bottom: 15px;">
Over at Political Calculations, they have updated an excellent graphic showing the various folsk Uncle Sam owes money to:<br /><em>click for larger graphic</em><br /><img alt="Tax-Day-2014-To-Whom-Does-US-Govt-Owe-Money" class="alignnone wp-image-121477" height="397" src="http://www.ritholtz.com/blog/wp-content/uploads/2014/04/Tax-Day-2014-To-Whom-Does-US-Govt-Owe-Money.png" style="border: 0px; height: auto; max-width: 100%; vertical-align: middle;" width="547" /><br />Source: <a href="http://politicalcalculations.blogspot.com/2014_04_01_archive.html" style="color: #007776; text-decoration: none;" target="_blank">Political Calculations</a></div>
<div style="background-color: white; font-family: 'PT Serif', Georgia, serif; font-size: 14.44444465637207px; line-height: 21px; margin-bottom: 15px;">
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Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-15870326841441685512014-03-18T12:23:00.001-04:002014-03-18T12:23:42.549-04:00The 15 Highest-Paying Companies in America<div id="page">
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<h2>
<a href="http://247wallst.com/special-report/2014/03/18/the-15-highest-paying-companies-in-america/" rel="bookmark" title="Permanent Link to The 15 Highest-Paying Companies in America">The 15 Highest-Paying Companies in America</a></h2>
<small>March 18, 2014 by Douglas A.</small>
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<div class="wp-caption alignleft" alt="186171981" src="http://247wallst.files.wordpress.com/2014/02/186171981.jpg?w=400" width="400" height="269" data-credit="Thinkstock" data-id="216742" data-caption" style="width: 410px;">
<a href="http://247wallst.files.wordpress.com/2014/02/186171981.jpg" target="_blank"><img alt="186171981" class="alignleft replaced" data-caption="" data-credit="Thinkstock" data-id="216742" src="http://247wallst.files.wordpress.com/2014/02/186171981.jpg?w=400&h=269" height="269" width="400" /></a><br />
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Source: Thinkstock</div>
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Median
income for Americans was $34,750 in 2012. At some companies, however,
the median is more than five times the national number. Based on figures
provided by Glassdoor, 24/7 Wall St. examined the highest-paying
companies in America.</div>
<div class="entry">
The companies that pay their employees the most fall primarily into
two industries: management consulting firms and tech companies. These
companies employ graduates of elite schools who have skills that are in
high demand and have high salary expectations to match.<br />
<a href="http://247wallst.com/special-report/2014/03/18/the-15-highest-paying-companies-in-america/2/"><b><span style="color: green;"><br /></span></b></a>
Consultancies can afford to pay high salaries. Generally, they are
high-margin businesses, relying on a relatively small workforce to
generate revenues. McKinsey & Co. and Boston Consulting Group, two
consultancies that pay big salaries, continue to draw interest from
business school students as they compete with some of the nation’s
largest public companies to recruit top performers. <span style="font-size: 14px; line-height: 1.5em;">According to Forbes, 2013 revenue at McKinsey & Co. was $7.8 billion, generated by only 17,000 employees. </span><br />
<br />
<span style="font-size: 14px; line-height: 1.5em;">For tech companies,
maintaining the talent pool requires paying very high salaries to bring
in software developers and engineers. According to a study by Glassdoor
published last year, the six companies that paid engineers the most
included Juniper Networks, LinkedIn, Yahoo!, Google, Twitter and Apple —
all of which were among the top 15 highest-paying companies overall.</span><br />
<br />
Many of the highest-paying companies in America are also listed in
Glassdoor’s 2014 Best Places to Work. Most notably, LinkedIn, Twitter
and Google are all among the top 15 paying companies, as well as among
the top 10 places to work based on employee reviews. Apple,
Salesforce.com, Chevron, Riverbed Technology and eBay are also among the
30 best-paying companies and the top 50 places to work.<br />
<br />
Many of the companies paying the highest salaries are headquartered
in some of the wealthiest metro areas in the country. Boston, the
fifth-wealthiest metro area by median income, is home to Boston
Consulting Group. San Francisco, the nation’s fourth-wealthiest such
area, is home to four of the top payers, including both design and
engineering software-maker Autodesk and social networking company
Twitter.<br />
<br />
But no metro area is home to more top-paying companies than the San
Jose area, where Apple, Google, LinkedIn, Yahoo! and Juniper Networks
are all headquartered. San Jose topped the nation with a median
household income of $79,841 in 2012.<br />
<br />
To identify the companies paying employees the most, 24/7 Wall St.
reviewed data from Glassdoor on median annual salaries by company, as
well as job reviews and average salaries for specific positions. We also
examined Glassdoor’s 2014 study on the Best Places to Work. In
addition, we reviewed 2012 median salaries by occupation from the Bureau
of Labor Statistics (BLS).<br />
<br />
<a href="http://247wallst.com/special-report/2014/03/18/the-15-highest-paying-companies-in-america/" target="_blank">These are the 15 highest-paying companies in America.</a><br />
<img alt="" src="http://stats.wordpress.com/g.gif?host=247wallst.com&rand=0.5352218979850892&blog=5450697&v=wpcom&tz=-4&user_id=0&post=220067&subd=247wallst&ref=http%3A//247wallst.com/special-report/2014/03/18/the-15-highest-paying-companies-in-america/" id="wpstats" />
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Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-8006432886323403772014-03-18T12:19:00.003-04:002014-03-18T12:19:29.681-04:00Milk Prices Reach All-Time High<small>March 18, 2014 by Paul Ausick</small>
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<div class="wp-caption alignleft" alt="200464179-001" src="http://247wallst.files.wordpress.com/2012/12/200464179-001.jpg?w=400" width="400" height="266" data-credit="Thinkstock" data-id="170756" data-caption" style="width: 410px;">
<a href="http://247wallst.com/retail/2012/12/03/dean-foods-sells-dairy-business/attachment/200464179-001/" rel="attachment wp-att-170756"><img alt="200464179-001" class="alignleft replaced" data-caption="" data-credit="Thinkstock" data-id="170756" height="266" src="http://247wallst.files.wordpress.com/2012/12/200464179-001.jpg?w=400&h=266" width="400" /></a><div class="wallst_image_source">
<span>Source:</span> Thinkstock</div>
</div>
The
price of milk rose to an all-time high in Chicago on Monday. At $24.32
per hundredweight, the price of milk is up 35% since early December. And
the increases are almost entirely due to increased demand from foreign
buyers.</div>
<div class="entry">
In 2013, U.S. milk production totaled 201 billion pounds, according
to the U.S. Department of Agriculture (USDA), up 0.3% over 2012
production. The number of milk cows declined 0.1%, however, to 9.22
million, and the average production per cow rose 102 pounds to 21,822
pounds. Average annual production per cow is up 15.1% since 2004,
according to the USDA.<br />
At the same time that production is rising slightly, export demand is
soaring. The U.S. Dairy Export Council reports that exports of milk
powder, cheese, butterfat, whey and lactose rose 19% year-over-year in
January 2013, and that the total value of those exports rose 35% to
$583.7 million. Some 14.5% of all U.S. milk production was exported in
January, up from 12.3% in January 2013.<br />
At least part of the explanation for the rise in exports is the lower
demand for milk in the United States.<br />
<br />
A USDA study from May of last
year showed that in the 30-year period between 1977-78 and 2007-08, the
portion of preadolescent children who did not drink any fluid milk on
any given day doubled, from 12% to 24%, while the percentage that drank
milk at least three times a day fell from 31% to 18%. Dairy farmers have
had to turn to exports to make up the difference.<br />
Perhaps even more responsible for the rise in milk prices has been
the improving global economy, especially in emerging markets. As people
get relatively richer, once-expensive foods like beef, pork and milk
become more affordable. According to the USDA, beef exports rose 5% in
January, and the forecast for 2014 calls for total beef exports of 2.435
billion pounds. Pork exports rose 4.5% in January, helped along by
Americans who are substituting pork for higher priced beef, which has
the effect of raising pork prices as well.<br />
<br />
Lower production in the United States has a few obvious causes.
California, the country’s largest milk producer, has suffered from
drought, forcing dairy farmers to import hay from outside the state and
driving up costs. Herds were also culled a few years ago when corn
prices skyrocketed. The number of cows peaked at 9.32 million in 2008
and dropped to 9.12 million in 2010 before rising again to 9.22 million
last year.<br />
<br />
From mid-2010 through the first few months of 2013, the rise in
exports was more or less steady at around 140,000 metric tons per month.
Then exports spiked to near 190,000 metric tons per month, before
falling back somewhat to around 163,000 metric tons. Prices have moved
commensurately.<br />
U.S. consumers are already paying more for milk and other dairy
products. In February, dairy prices rose 5.1% month-over-month and 27%
year-over-year according to the USDA.<br />
Supermarket prices for milk could soon be $1 a gallon higher than
they were a year ago, but some analysts suggest that prices will start
to fall soon. After all, when prices reach an all-time high, it is hard
to predict that they will continue to climb indefinitely.<br />
</div>
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Posted in <a href="http://247wallst.com/commodities-metals/" rel="category tag" title="View all posts in Commodities & Metals">Commodities & Metals</a> | <span>Comments Off</span></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-28259699734127768992013-10-30T22:42:00.001-04:002013-10-30T22:42:25.164-04:00Obamacare’s Fatal FlawMartin Feldstein, Professor of Economics at Harvard University, adeptly explains the flawed logic of Obamacare and the root of its ultimate demise. <a href="http://www.project-syndicate.org/print/on-how-america-s-health-care-reform-could-unravel-by-martin-feldstein" target="_blank"> LINK</a><br />
<br />Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-31413472306784234242013-10-05T08:17:00.001-04:002013-10-05T08:28:51.745-04:00<b>Debt Limit Primer:</b> Nothing New, but those with middle-school math skills surely notice the exponential growth rate in federal debt. Is the U.S. federal government's borrowing capacity unlimited? What percentage of the overall economy does $16.7 trillion represent?<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.ritholtz.com/blog/wp-content/uploads/2013/10/NA-BY338_DEBTLI_G_20131004174513.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="428" src="http://www.ritholtz.com/blog/wp-content/uploads/2013/10/NA-BY338_DEBTLI_G_20131004174513.jpg" width="640" /></a></div>
<br />
<br />
<br />
<b>Do the equity markets favor the government shutdown?</b><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.ritholtz.com/blog/wp-content/uploads/2013/10/Screen-Shot-2013-10-03-at-9.36.15-AM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="295" src="http://www.ritholtz.com/blog/wp-content/uploads/2013/10/Screen-Shot-2013-10-03-at-9.36.15-AM.png" width="400" /></a></div>
Obama/Soetoro to reporter Harwood on October 3: "Wall Street should be worried."Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-35303575175279046952013-09-06T08:45:00.002-04:002013-09-06T08:50:57.747-04:00Economic News Postings for September 7<b><a href="http://advisorperspectives.com/dshort/guest/Shedlock-130905-Long-Term-Unemployed.php" target="_blank"><span class="thdr1">No Progress for Long-Term Unemployed </span></a></b><br />
<ul>
<li><span class="thdr1"></span><i>Nearly seven million people say they want a job but aren't actively
looking for work. The share of the population that is working or looking
for work—a measure known as the participation rate—stands near a
three-decade low.</i></li>
</ul>
<span class="thdr1"><i></i></span><br />
<ul>
<li><i>Some of those who have left the labor force are unlikely to return. More
than 8.9 million Americans were receiving federal disability payments in
August, 1.8 million more than when the recession began. Experts suspect
many of the new recipients would have kept working in a healthier
economy; research has found that once people begin receiving disability
payments, relatively few return to work. </i></li>
</ul>
<a href="http://advisorperspectives.com/dshort/guest/Ted-Kavadas-130905-Recession-Probability-Models.php" target="_blank"><b><i> </i><b class="thdr1">Recession Probability Models</b></b></a><br />
<br />
<a href="http://advisorperspectives.com/dshort/commentaries/Market-Valuation-Inflation-and-10-Year-Yields.php" target="_blank"><b><b class="thdr1"> </b></b><b class="thdr1">Market Valuation, Inflation and Treasury Yields: Clues from the Past</b></a><br />
<br />
<div id="disqus_title">
<b><a href="http://www.bloomberg.com/news/2013-09-06/payrolls-in-u-s-rose-less-than-forecast-jobless-rate-at-7-3-.html" target="_blank"><span style="font-size: small;">Payrolls in U.S. Rose Less Than Forecast; Jobless 7.3%</span></a></b><br />
<br />
<div id="disqus_title">
<b><a href="http://www.bloomberg.com/news/2013-09-05/g-20-wrangles-over-stimulus-exit-as-syria-roils-markets.html" target="_blank">G-20 Faces Growth Threats as Syria Adds to QE Exit Risks</a></b></div>
<h1>
<span style="font-size: small;"> </span></h1>
</div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-58264973868031690382013-08-31T08:21:00.000-04:002013-08-31T08:27:08.615-04:00Economic News Postings for August 31<a href="http://www.bloomberg.com/news/2013-08-29/dollar-gains-after-gdp-as-japan-futures-rise-oil-slips.html" target="_blank">S&P 500 Extends Worst Month Since May 2012</a><br />
<div>
<a href="http://www.bloomberg.com/news/2013-08-30/consumer-spending-in-u-s-increased-in-july-for-a-third-month.html" target="_blank">Cooler Spending in U.S. Signals Slow Start for Quarter: Economy</a></div>
<div>
<a href="http://www.bloomberg.com/news/2013-08-30/consumer-sentiment-in-u-s-declined-less-than-forecast-in-august.html" target="_blank">Consumer Sentiment in U.S. Fell Less Than Forecast in August</a></div>
<div>
<a href="http://www.ritholtz.com/blog/2013/08/us-10-year-cpi-and-annual-percentage-change-to-1791/" target="_blank">US 10 Year, CPI, and Annual % Change, 1791-Present</a></div>
<div>
<a href="http://www.russell.com/Helping-Advisors/Markets/EconomicIndicatorsDashboard.aspx?DCMP=EMC-dashupdt20130821" target="_blank">What's the State of the Economy -- Interactive Chart</a></div>
<div>
<a href="http://blogs.wsj.com/economics/2013/08/29/five-takeaways-from-gdp-revisions/" target="_blank">Five takeaways from GDP revisions</a><br />
<a href="http://blogs.wsj.com/economics/2013/08/30/vital-signs-saving-rate-is-slipping/" target="_blank">The savings rate is slipping</a><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://s.wsj.net/public/resources/images/OB-YS731_VSSavi_E_20130830104934.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="http://s.wsj.net/public/resources/images/OB-YS731_VSSavi_E_20130830104934.jpg" width="320" /></a></div>
<br />
Five and a Half Years Later, Output Returns to Per-Person Peak (WSJ):<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://s.wsj.net/public/resources/images/OB-YS442_GDPCAP_E_20130829150059.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="http://s.wsj.net/public/resources/images/OB-YS442_GDPCAP_E_20130829150059.jpg" width="320" /></a></div>
<br /></div>
<div>
<br /></div>
<div>
What's your favorite college football team?</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.ritholtz.com/blog/wp-content/uploads/2013/08/AR-AD440_SP_MAP_G_20130829234508.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="350" src="http://www.ritholtz.com/blog/wp-content/uploads/2013/08/AR-AD440_SP_MAP_G_20130829234508.jpg" width="640" /></a></div>
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Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-36403170414612126122013-08-24T08:20:00.001-04:002013-08-24T08:23:58.887-04:00News for Week of August 24<br />
<br />
<ul>
<li><a href="http://www.bloomberg.com/news/2013-08-23/sales-of-new-homes-in-u-s-plunged-more-than-forecast-in-july.html" target="_blank">Sales of New U.S. Homes Fell More Than Forecast in July</a></li>
<li><a href="http://www.bloomberg.com/news/2013-08-23/dishwashers-beat-clothes-as-u-s-moms-use-hand-me-downs.html" target="_blank">Dishwashers Beat Clothes as U.S. Moms Use Hand-Me-Downs</a></li>
<li><a href="http://janav.wordpress.com/2013/08/04/manias-panics-and-crashes/" target="_blank">Manias, Panics, and Crashes</a></li>
</ul>
<br />
<br />
<br />Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-47384570196733607642013-06-05T09:19:00.002-04:002013-06-05T09:22:14.199-04:00IBD: Social Security Trust Funds' Health In Bad Shape<div class="byline">
By <span itemprop="author" itemscope="" itemtype="http://schema.org/Person" style="display: inline;"><a href="http://www.investors.com/search/searchresults.aspx?source=filterSearch&Ntt=JASON+H.+FICHTNER+AND+FREDERICK+W.+KILBOURNE&Nr=OR%28Author%3aJASON+H.+FICHTNER+AND+FREDERICK+W.+KILBOURNE%2cAuthor%3aJason+H.+Fichtner+And+Frederick+W.+Kilbourne%29" itemprop="url"><span itemprop="name" style="display: inline;">JASON H. FICHTNER AND FREDERICK W. KILBOURNE</span></a></span></div>
<br />
<div class="newsStory">
<div itemprop="articleBody">
Pre-colonial English
explorers assumed that black swans didn't exist, simply because they had
seen only white swans. In the book "Black Swan," Nassim Nicholas Taleb
describes how people are too wedded to biases of history and become
blinded to the impact of a rare event.
<br />
In other words, just because something has a small probability of happening doesn't mean it can't — or won't.<br />
Social scientists (especially economists and actuaries) use history
as a guide to projecting the probability of an event occurring in the
future. If an event has a low probability of happening, we usually
discount it or ignore it altogether.<br />
But the recently released Social Security Trustees report has us wondering if we're blinded to the Black Swan headed our way.<br />
<span style="color: red;"><b>The 2013 report released last Friday estimates the Social Security
trust funds will become exhausted in 2033, just 20 short years from now.</b></span><br />
It also estimates that t<span style="color: red;"><b>he 75-year shortfall is $9.6 trillion in
present value terms.</b></span> If we indefinitely extend past the 75-year period,
the "infinite horizon," the shortfall is a whopping $23.1 trillion.<br />
As bad as those numbers are, Harvard and Dartmouth social scientists
Gary King and Samir Soneji assert that the finances are far worse
because the Social Security actuaries are underestimating how long we
will live — a claim the SSA actuaries refute.<br />
Without going into the weeds of methodological conflicts, we suggest
that the worst-case future for Social Security might be worse than the
program's trustees think, and that the Black Swan may be swimming right
up behind us.<br />
<b>A Game Of 'What If'</b><br />
While the commonly reported figures for trust fund insolvency are
based on intermediate assumptions — not too high, not too low — the
trustees also calculate high- and low-cost assumptions. Social insurance
experts are well aware that the high-cost projections of Social
Security's future do not represent a worst-case scenario — the combined
trust fund insolvency date under the high-cost assumptions is 2027, just
14 years from now.<br />
Many of these same experts nonetheless claim that the worst-case
future for Social Security is that promised benefits would have to take a
25% haircut if the trust funds go insolvent in 2033. Though a 25%
reduction in benefits is scary enough, a Black Swan event could be
catastrophically worse.<br />
Consider a chronically sluggish economy that causes the gross
domestic product to continue to fall well short of current projections,
with attendant increases in disability rates and declines in birth
rates.<br />
Throw in a cure for cancer, and you have a flock (technically, a
wedge) of Black Swans that will result in Social Security beneficiaries
seeing far more than a 25% cut in their benefits.<br />
We think the trustees and others who say "sooth" for a living should
pay more heed to those surprising events that occasionally darken our
skies and our lives.<br />
The call of the Black Swan can often be heard before the bird itself
arrives — and we should take advantage of such fortuitous heralding when
it comes to the future of Social Security.<br />
To be clear, we are not recommending that the current and normal
distribution analyses that underlie the trustee reports should be
replaced or even augmented by reliance on abnormal distributions.<br />
<b>Black Swan Czar?</b><br />
We would, however, like to see the SSA's Office of the Chief Actuary
hire a Black Swan Curator, charged with searching the skies for large
birds headed our way, charting their course and finding a way to deflect
those that might do us great harm.<br />
One such bird is the stork, who threatens us more with his absence
than with his presence, causing fertility rates to decline and Social
Security's financial problems to increase.<br />
Another is the vulture, whose absence is anticipated by King and
Soneji, with inadequate mortality causing distress to the trust funds.<br />
Perhaps most needed is the owl, whose wisdom may help us understand
the influence of taxation and regulations on unemployment rates and GDP,
and the subsequent impact of such economic parameters on the
demographic assumptions (fertility, immigration, disability) used by the
actuaries.<br />
We hope that our recommendation to hire a Black Swan Curator (actual name optional) will be enthusiastically received.<br />
But we are concerned that cost — and turf — control may prevent such a
position from being created. We thus have ready a low-cost backup
recommendation, which is that every trustee report be emblazoned with
the warning: Black Swans Bite!<br />
• Fichtner is senior research fellow at the Mercatus Center at George
Mason University, having previously served at the Social Security
Administration as acting deputy commissioner and chief economist.<br />
• Kilbourne started actuarial divisions for three international consulting firms.</div>
</div>
<br />
Read More At Investor's Business Daily: <a href="http://news.investors.com/ibd-editorials-perspective/060413-658741-social-security-trust-funds-health-may-be-even-worse-than-projected.htm#ixzz2VLbut5SW" style="color: #003399;">http://news.investors.com/ibd-editorials-perspective/060413-658741-social-security-trust-funds-health-may-be-even-worse-than-projected.htm#ixzz2VLbut5SW</a>
<br />
Follow us: <a href="http://ec.tynt.com/b/rw?id=dW0sw4iSyr3P7iab7jrHtB&u=IBDinvestors" target="_blank">@IBDinvestors on Twitter</a> | <a href="http://ec.tynt.com/b/rf?id=dW0sw4iSyr3P7iab7jrHtB&u=InvestorsBusinessDaily" target="_blank">InvestorsBusinessDaily on Facebook</a>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-58763826422622377272013-02-16T12:19:00.001-05:002013-02-16T12:35:51.290-05:00Implications of a Minimum Wage Rate Increase<a href="http://online.wsj.com/article/SB10001424127887323478004578302510280314712.html?mod=hp_opinion" target="_blank">WSJ: The Minority Youth Unemployment Act: A higher minimum wage will hurt Obama's most loyal supporters.</a><br />
Key Points by the Author:<br />
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<li>About 85% of the studies "find a negative employment effect on low-skilled workers.</li>
<li>The minimum wage is also an ineffective way to reduce poverty. Most families in poverty don't have someone who works, so making it more difficult to get a job exacerbates poverty.</li>
<li>when the jobless rate is high, as it still is in California and New York, the increase punishes minority youth in particular.</li>
<li>A study by economists William Even of Miami University and David Macpherson of Trinity University concludes that in the 21 states where the full 40% wage increase took effect, "the consequences of the minimum wage for black young adults without a diploma were actually worse than the consequences of the Great Recession."</li>
<li> after the July 2009 increase 600,000 teen jobs disappeared in the next six months even as GDP expanded.</li>
<li>Mr. Obama's economists know all this, but then the minimum wage has nothing to do with poverty or unemployment. It's a political play to reward unions and box in Republicans. </li>
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<br />Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-51690799108977025092013-02-13T15:41:00.002-05:002013-02-13T15:52:42.568-05:00Reading for Week of February 11<div class="title">
<a href="http://www.cnbc.com/id/100436227" target="_blank"><span style="font-weight: normal;"><span style="font-family: inherit;">Long-Term Unemployment Now a Thing of the Past?</span></span></a></div>
<div class="title">
<span style="font-weight: normal;"><span style="font-family: inherit;"><a href="http://www.cnbc.com/id/100456180" target="_blank">Higher Taxes Put Brakes on Retail Spending</a></span></span></div>
<div class="title">
<span style="font-weight: normal;"><span style="font-family: inherit;"><a href="http://www.cnbc.com/id/100455444" target="_blank">Risks of a Minimum Wage Increase</a></span></span><br />
<span style="font-weight: normal;"><span style="font-family: inherit;"><a href="http://advisorperspectives.com/dshort/updates/Gasoline-Update.php" target="_blank">Gasoline continues to rise </a></span></span><br />
<span style="font-weight: normal;"><span style="font-family: inherit;"><a href="http://advisorperspectives.com/dshort/commentaries/Sequestration-National-Defense-130211.php" target="_blank">National Defense Spending</a></span></span></div>
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<span style="font-weight: normal;"><span style="font-family: inherit;"><br /></span></span></div>
<div class="title">
<span style="font-weight: normal;"><span style="font-family: inherit;">CNN: Where American's want Tax Dollars spent:</span></span></div>
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<span style="font-weight: normal;"><span style="font-family: inherit;"><br /></span></span></div>
<div class="title">
<span style="font-weight: normal;"><span style="font-family: inherit;"> </span></span><img alt="" class="alignnone wp-image-89406" height="594" src="http://www.ritholtz.com/blog/wp-content/uploads/2013/02/chart-american-tax5.jpg" style="display: inline;" title="chart-american-tax5" width="442" /></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-84923397018942547872013-02-08T22:33:00.002-05:002013-02-08T22:33:37.374-05:00Why Some State Incentives for Business Work—And Others Don't<br />
Why Some State Incentives for Business Work—And Others Don't<br />
A $46 million Connecticut deal with a pharmaceutical company meant spending $230,000 per new job.<br />
By TOM FOLEY AND BEN ZIMMER<br />
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Every state does it, to one degree or another: pays incentives to private companies to keep jobs in-state. Supporters say this is necessary for job creation, detractors call it corporate welfare, and nationwide it costs more than $80 billion a year. So when are such incentives sound economic policy, and when do they merely serve certain firms, lobbyists and politicians?<br />
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Jobs created with incentives are good when they are net contributors to the economy. They are bad—handouts, effectively—when the incentives cost the state more than the jobs contribute back to the economy.<br />
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The Connecticut Policy Institute has identified three criteria for determining when job incentives go from good to bad:<br />
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• Does the total cost of the incentive exceed the amount that would be paid back through incremental tax revenues over 10 years? In most states, this threshold is crossed when the total cost of the incentive rises above 50% of the annual compensation for jobs kept or created.<br />
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• Do the incentives provide only for jobs that would not otherwise come to the state, or would otherwise leave?<br />
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• Do the incentives promote jobs that will remain viable and stay in-state after the incentives expire?<br />
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Some state incentive programs meet these criteria. In October 2012, Kentucky offered Berry Plastics $10 million to refurbish and reopen a manufacturing plant in Madisonville, about 150 miles southwest of Louisville. Berry committed to bring 400 jobs to Kentucky, a reasonable rate of $25,000 per job. The plant had closed in 2011 because the products it produced could be more competitively produced elsewhere. But the refurbished plant will produce a different product that can be competitively produced in Kentucky.<br />
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Most incentive programs aren't so effective. In 2011, Connecticut agreed to pay The Jackson Laboratory, a genetics research institute, $300 million in exchange for a promise to bring 300 new jobs to Connecticut. That cost a whopping $1 million per job. The same year, Connecticut paid Alexion Pharmaceuticals $46 million to commit to hiring 200 new employees. At $230,000 per job, this still far exceeds the threshold for a sound investment in the state's economy.<br />
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In 2007, Michigan announced a film-industry incentive program that would reimburse 50% of production costs spent in the state. The program brought hundreds of jobs to Michigan, according to local records, but when the incentives expired in 2011 the movie producers relocated and the jobs disappeared.<br />
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Incentive programs can be problematic even when not targeted at particular companies or industries. Oklahoma's Small Business Capital Formation Incentive Act provides a 20% tax credit for investments in Oklahoma small businesses. In 2009, reported the Oklahoma Tax Commission, the program cost the state $17 million but generated only 21 new jobs.<br />
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Connecticut recently passed a Job Expansion Tax Credit awarding businesses a subsidy of up to $32,000 per employee for every new hire between Jan. 1, 2012 and Jan. 1, 2014. This subsidy will induce businesses to hire some employees they otherwise wouldn't, but much of the cost will be wasted paying companies for hires they would have made anyway. Meanwhile, there is no guarantee that any of the new employees will still have jobs once the subsidy expires three years after their date of hire.<br />
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If many job incentives are poor public investments, why do states get away with offering them? Because good policy and good politics are often at odds. Politicians want to be re-elected, and a solid record on nominal job growth—regardless of the cost—tends to be more important to officials' re-election prospects than is the prudent management of public funds. That is one reason most such programs are structured to yield job creation immediately while deferring the cost of the incentive into the future—preferably when other politicians will be in office.<br />
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State competition for jobs should be a good thing that promotes fiscal stability, low tax rates, dynamic labor markets, balanced regulatory environments and responsible investment in infrastructure and human capital. These—and not one-time tax breaks—are the factors that are most likely to attract employers and drive good jobs policy.<br />
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6088567679124769146.post-50817741770553228892013-02-08T22:28:00.002-05:002013-02-08T22:31:27.878-05:00Venezuela Slashes Currency Value<div>
Venezuela Slashes Currency Value</div>
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Devaluation Aims to Ease Shortages</div>
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CARACAS—Venezuela devalued its currency against the dollar on Friday, a move made by the government of ailing President Hugo Chávez to ease deepening shortages, but is also expected to stoke inflation and further weaken the economy.</div>
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Venezuela's government has had strict currency exchange controls since 2003 and maintains a fixed, government-set exchange rate.</div>
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The bolívar—whose official name is the Strong Bolívar—was slashed by nearly a third of its value to 6.3 per dollar from a previous rate of 4.3 per dollar, Finance Minister Jorge Giordani told a news conference.</div>
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The move will help narrow the Venezuelan government's budget shortfall, but will also spur inflation that is already among the world's highest—highlighting the increasingly difficult trade-offs faced by Mr. Chávez after a more than a decade of populist economic policies.</div>
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The devaluation was widely expected sometime this year after the government ramped up spending in 2012 ahead of October's presidential election. In that vote, Mr. Chávez handily won re-election before falling ill again to an undisclosed type of cancer.</div>
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The spending helped Venezuela's economy to grow by more than 5%, but also deepened the budget shortfall to anywhere from 8% to 17% of annual economic output, depending on the estimate.</div>
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It also drove a shortage of dollars as Venezuelans anticipated their bolívars would soon be worth less and began snapping up greenbacks on the black market, where the value of the bolívar has slid to 18 per dollar.</div>
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A lack of dollars needed to buy imports also has led to widespread shortages of some staple foods, such as cornmeal, chicken and sugar, spurring discontent.</div>
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What was something of a surprise was the timing of the currency move, with Mr. Chávez in a hospital in Havana, where he has been since a Dec. 11 surgery for a recurrence of his cancer. The president hasn't been seen since and many observers wondered if the government would take a politically risky step like devaluation without Mr. Chávez around.</div>
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Some analysts viewed the decision to devalue now as a sign there is growing confidence that Chavistas have united behind Vice President Nicolás Maduro, Mr. Chavez's designated successor.</div>
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"Evidently, the situation is as grave as people say, with a high fiscal deficit, liquidity problems, and lots of shortages," said Javier Corrales, an expert on Venezuela at Amherst College. "But it also shows that the people within the Chavista movement are very committed to the government to do something as risky as this at this time."</div>
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The move should ease the fiscal gap by giving the government more in local currency terms for every dollar it earns in oil exports through state oil giant Petroleos de Venezuela, one of the world's biggest oil companies. The fiscal gap will close to 5.3% of gross domestic product compared with 8.5% last year, said Francisco Rodriguez, an economist at Bank of America Merrill Lynch.</div>
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"It's still a high deficit, the government hasn't completely solved the problem and they will most likely have to devalue again at the end of this year or the beginning of next year," he said.</div>
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The move will raise the cost of imports, and Venezuela's economy—hit by widespread nationalizations during the Chávez years—is increasingly dependent on imports. Alberto Ramos at Goldman Sachs estimated Venezuela's inflation will rise to 30% this year as a result.</div>
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Venezuela carried out a similar devaluation in 2010. Economists said another adjustment was long overdue since prices had increased by an estimated 98% since the last change.</div>
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"This shows that economic imperatives trump political calculations," says Moisés Naím, a senior associate for the Washington based Carnegie Endowment for International Peace. But Mr. Naím said the devaluation would do little to solve the country's deep seated economic problems.</div>
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"When the smoke clears and the mirrors are packed away, we'll be left with a more cash-flush government, a less cash-flush populace, and with all of the pre-existing distortions and absurdities somewhat attenuated, but very much in place," wrote Venezuelan blogger Francisco Toro.</div>
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Among the biggest losers of the devaluation are foreign companies hoping to repatriate dollars home, Mr Naím said. The Venezuelan government has held up providing dollars to many companies, and will now give them fewer dollars for their sales in local currency terms.</div>
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In earnings calls in recent weeks, <span style="color: red;">top executives from Procter & Gamble Co., Colgate-Palmolive Co. and Kimberly-Clark Corp. warned that a currency devaluation in Venezuela would likely reduce their earnings outlook this year. Among the most exposed is Colgate, which derives roughly 5% of its sales from Venezuela, and P&G and Clorox Co., which get about 2% of their sales from the country, analysts say.</span></div>
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Venezuela is also a big market for Avon Products Inc., a direct seller of beauty products and other items, but the company may be in a better position to try to recover the potential impact because cosmetics aren't subject to tight price controls, says Javier Escalante, an analyst with Consumer Edge Research in Stamford, Conn.</div>
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Most of the world's economies moved away from fixed exchange rates in the 1990s after a series of high-profile devaluations, from the Mexican peso to the Thai baht. But Mr. Chávez's populist policies have gone in the other direction. He implemented currency controls in 2003 after increased government spending led to inflation and then price controls.</div>
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Since then, Mr. <span style="color: red;">Chávez's government has periodically devalued the currency every few years.</span></div>
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The moves are partly meant to breathe new life into struggling local industry—weighed down by widespread nationalizations and price controls—by giving them a chance to compete against imports.</div>
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But the step is unlikely to boost competitiveness unless the government overhauls the rest of its policies, including price controls and other measures.</div>
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"For a long time the Chávez government has driven the economy with one foot on the gas, and the other on the brakes," said Mr. Naim. "It has launched all kinds of initiatives to stimulate demand while braking hard on supply."</div>
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<span style="color: red;">The currency move is likely to set the stage for a showdown in coming days between retailers and the government, which is keen to prevent the devaluation from feeding through to price increases that could erode consumers' buying power and the popularity of the Chávez government.</span></div>
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<span style="color: red;">In Jan. 2010, a similar devaluation led to shoppers swarming stores to buy goods before prices were marked up. Prices did rise, stoking inflation to about 30% at the time,</span> and the government responded by threatening to shut down businesses that raised prices. Few were actually shut down at the time.</div>
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Central Bank President Nelson Merentes also said the government would scrap a dollar-bond trading platform called Sitme, which was used to distribute dollars into the local economy at a preferred rate, saying that the system was forcing Venezuela to issue unnecessary debt.</div>
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<span style="color: red;">Barclays estimates that between 2007 and 2011 Venezuela averaged $9.4 billion a year in debt issuance, tops of any other country in emerging markets</span>. Much of the bonds were feed through the Sitme system, which sold dollar-denominated bonds locally that would then be unloaded overseas for greenbacks.</div>
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Investors' wariness of Mr. Chavez has long made borrowing money in international markets costly and Venezuela cut back on bonds sales last year.</div>
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"The government is maintaining its own difficult situation. They're the ones increasing spending for their political goals but at the same time trying to keep these currency controls. We're seeing that it's a combination that is not working," said Ronald Balza, an economist and professor at Universidad Catolica Andres Bello in Caracas.</div>
Unknownnoreply@blogger.com