Sunday, November 29, 2009

Does the Welfare State Make Older Workers Unemployable?

Gilles Saint-Paul has a new working paper that looks into if the welfare state makes older workers unemployable:

One characteristic of European labor markets (as opposed to “Anglo- Saxon” ones) is that they are heavily regulated. Historically, most of these regulations arose to protect some archetypal “insider” workers, with little concern for how they would aect the market for “outsiders”. Older workers were not highly represented among the “insiders”, which means that the im- pact of regulations on their employability had little weight in the design of those regulations. Furthermore, the problem was aggravated by ill-conceived attempts to “make room” for younger workers by inducing older workers to retire earlier, which were due to collide with the increased labor participation of the latter required by the aging problem. As a result of those developments, a culture has arisen where the older workers are assumed to be unemployable. Accordingly, some specif…c provisions that made it harder to …re them have been implemented in some countries, like the French “De- lalande” contribution discussed below.

The figure below shows employment of older workers across countries. It shows a positive relationship between the age of retirement and the employment rate of old workers.

[Via http://freemarketmojo.wordpress.com]

Saturday, November 28, 2009

Signaling Strategies and the Quest for Employment

For fairly obvious reasons, the issues of signaling in the employment context have been heavily on my mind lately. It has been clear for some time now that I am in dire need of a new strategy for my own signaling methods, but knowing that something needs to change is a good deal easier than knowing what to change. But as it stands, I am failing to send potential employers a clear (and hopefully accurate!) indication that I’m a worthwhile candidate.

This post on snap judgments and taking superficial first impressions seriously summarizes the basic situation nicely:

If you’re applying for a job, you want good credentials so your resume doesn’t go straight to the circular file. The key elements in this story are (a) high rewards, and (b) high search costs. Since the rewards are high, lots of people try to win; and since lots of people are trying to win, it’s too expensive to carefully study all of the candidates. The result: People try really hard to make a good impression, and anyone who fails to make a good impression pays a heavy price.

There are a lot of people “trying to win” right now, so employers are forced into ever greater reliance on arbitrary filters, in order to pick out a rough list of the candidates for whom spending more on search costs is most likely to offer a good ROI. While conducting the initial screening, employers know there’s a high rate of false negatives, but accept this as a necessary cost; even if the “best” candidate is accidentally overlooked in favor of a candidate marginally worse, the company is still better off, as it is not efficient to spend ten times more in search costs merely to find the candidate that is just a tiny bit better.

This is a problem for me, as, unfortunately, I am pretty sure I am not making it through that initial sorting. That is, right now, I am doing a poor job at signaling to employers my potential value.

I look decent on paper: decent class rank at a decent law school with the usual decent assortment of accomplishments and attributes on my resume. Not a rockstar by any means, but nothing that should flag me as a potential axe-wielding sociopath to be avoided at all costs. However, to an employer sorting through resumes and making a couple hundred snap judgments, I would imagine I also look pretty boring. Boring is not necessarily bad — if I looked like I had all the personality of a box of Shredded Wheat, that might actually count in my favor so long as I boasted an editor position with a law review and a couple summers at Skaddington McKirkland & Jaworsknight.

But I don’t. So as it stands, there is very little reason for an employer, in an initial evaluation, to tag me as a candidate worth expending additional search costs on.

To make things worse, right now I have another factor working against me: it has been more months than I care to count since graduation, and I still do not have a job. To employers, this can be taken as a strong indication that I am not likely to be a good employee, and may have some hidden flaws that my resume is not revealing. It makes sense for someone hiring to assume that, “Well, if this young lawyer has been unable to secure a job from anyone she has previously applied to, that raises an assumption she was not good enough for any of them, and therefore is likely not good enough for me either.”

Effectively, I am pre-screened as a candidate who likely should not be hired by all of the many employers that have previously failed to hire me. It is simply not worth it to an employer to spend extra resources on giving me a closer look, when presumably other firms already have given me such a look and found me to be wanting.

So my problem is this: I need to find a strategy that increases the odds of an employer deciding to invest further time and money on obtaining a closer evaluation of me. Once they do that, they will, hopefully, discover that I am a capable and effective lawyer, and worth hiring. I believe this to be true; if it’s not, well, I have far bigger problems to deal than merely getting hired, and addressing the whole signaling issue would be kind of unnecessary. So for discussion purposes only, I am just going to stipulate that I am in fact the employee that any firm or agency making a hiring decision might like to find. How, then, can I quickly signal to employers that (1) I am worth taking seriously, and (2) the signal is very likely to be truthful?

I’ll be discussing this more here, both how it might particularly apply to my own situation and strategies for employee signaling in general. And who knows, with a good deal of luck, maybe in the near future I’ll even get some first hand experience on what signaling strategies work.

-Susan

[Via http://viewfromll2.com]

Dubai Woes to Hit India Hard? "No" Says India's Think Tank :)

 

Dubai Woes to Hit India Hard? "No" Says India's Think Tank



Indian policy-makers are not really worried over the potential adverse impact on the country’s economy because of the multi-billion-dollar debt default risk faced by Dubai World, ranked among the largest conglomerates in the region.

.

Commerce Minister Anand Sharma said “India is a very large economy. It is a resilient economy”. “I don’t think some development in real estate in Dubai will have an impact on the Indian economy” he added.

.

:) He also said “As far as India is concerned, the housing, real estate sector and construction industry are all doing well.

.

This is confirmed by the increasing demand for construction materials, cement and steel,”

.

Finance Secretary Ashok Chawla also saw little impact of the Dubai World’s woes on the country’s economy.

.

Though he was a trifle more circumspect and preferred to watch the situation before hazarding a guess.

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“We will have to study what the issue is, what is the problem, what will be the possible implication if any for the Indian economy, the people and corporates,” Chawla told.

.

:) Asked if the crisis will impact money flows into India,since the Gulf region accounts for over half the total inward remittances worth over $25 billion annually from expatriate Indians, Chawla said: “It’s unlikely.”

.

The state-run Dubai World stunned the global financial world Thursday when it announced it would need to restructure its debt, estimated at $59 billion, to preempt default and asked creditors for a six-month deferment. . The conglomerate, which has a host of companies under its fold, has interests in a wide range of businesses such as realty, infrastructure, logistics and economic zones.

.

And that is not just in the region but across a clutch of countries including India.

.

:) Indian equities reacted adversely to the development, with the benchmark sensitive index (Sensex) of the Bombay Stock Exchange (BSE) down as much as 634.16 points, or 3.76 percent, midway into the trading session Friday.

.

It later recovered and closed with a loss of some 220 points, or 1.3 percent over the previous close. .

:)

“Indian markets have rallied more than 100 percent from the lows a year ago,mostly backed by news of recovery and not necessarily on fundamentals,” said Jagannadham Thunuguntla of brokerage firm SMC Capital.

.

“This is why such news will have a negative impact on our markets and we will be dragged down,” Thunuguntla, who heads the equities division of SMC Capital told. . Even some Gulf-based companies, like Emmar, which have business interests in India, said there will be virtually no impact on their ongoing projects in India.

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The response was similar from India’s leading engineering and construction major Larsen and Toubro Ltd, which said its exposure in Dubai was around $20-$25 million.

.

:)

[Via http://smcinvestment.wordpress.com]

A Kwanzaa Thought on This Thanksgiving Weekend

While many Americans have a lot to be thankful for this Thanksgiving weekend, this particular Thanksgiving was played out against one of the most disturbing reports on state of America: One in seven American households had a hard time putting enough food on the table last year.  A new report released by the U.S. Department of Agriculture indicated that 14.6 percent of U.S. households, nearly 50 million Americans, found themselves in need during 2008, an increase of 13 million people from the year before. The new figure is the highest since data collection began in 1995.  In the richest country on earth, at this the most thoughtful time of the year, this is a national disgrace which flies in the face of ritual of feasting on Thanksgiving Day. It suggest more than anything that national priorities and the indicators of economic well-being have nothing to do with the lives of everyday people.  To the contrary, the discussion in corporate media is focused on “Black Friday” and how much Americans will spend and consume.

For those of moral conscience, and in particular those of faith, this has to be a call to reorder national priorities and insist that the right to decent food and shelter become a non negotiable human right.  We can not leave it up to the market to take care of these pressing human issues.  In fact, the market is the cause and effect of the problem of hunger and homelessness.  That this does not merit discussion among elected officials is a disgrace and dishonor, that it does not raise to the level of dialogue and action by the faith community is a sin.  On Thanksgiving, we as a nation should be able to say:  We gave food to the hungry, clothes to those without, and shelter to the homeless.  This translates into a decent wage and living standard for all who live in America and for those in the world.  We must have this type of grand vision.  For anything less is morally offense and irresponsible.

[Via http://kwanzaaguide.wordpress.com]

Thursday, November 26, 2009

How to prevent overeating on Thanksgiving

Well, its Thanksgiving today and that means an inevitable feast. But there are a few ways to avoid overeating. Personally, I will avoid it by living outside of the United States in Israel (though Israelis do eat the most Turkey per capita in the world). But if you find yourself at the dinner table tonight, there are a few economic tips to help you avoid taking that extra bite.

In a great Washington Post article by Ezra Klein, he asks MIT Professor Dan Ariely how to apply (behavioral) economic principles to the dinner table. His suggestions include:

1) “Move to chopsticks!” Or if you can’t get away with that, use smaller plates and utensils.

2) Place the food “far away” so people have to get up for that extra scoop of mashed potatoes.

3) Start with a soup course or other low calorie option.

4) Limit the number of courses. As Klein explains:

Variety stimulates appetite. As evidence, Ariely brings up a study conducted on mice. A male mouse and a female mouse will soon tire of mating with each other. But put new partners into the cage, and it turns out they weren’t tired at all. They were just bored. So, too, with food. “Imagine you only had one dish,” he says. “How much could you eat?”

5) Make the food yourself:

Economists believe that the obesity epidemic is largely attributable to the rise in food we don’t make for ourselves.

There will be fewer calories available if Grandma’s stuffing isn’t supplemented with bowls of chips and cheese.

6) And if all else fails, “wear a very tight shirt.”

[Via http://freemarketmojo.wordpress.com]

Economics 11/26/2009

  • RGE – A Tale of Two American Economies

    tags: Economics

    • The story of the U.S. is, indeed, one of two economies. There is a

      smaller one that is slowly recovering and a larger one that is still in

      a deep and persistent downturn.
    • Many of the lost jobs – in construction, finance, and outsourced

      manufacturing and services – are gone forever, and recent studies

      suggest that a quarter of U.S. jobs can be fully outsourced over time

      to other countries.
    • And the credit crunch for

      non-investment-grade firms and smaller firms, which rely mostly on

      access to bank loans rather than capital markets, is still severe.
    • Larger firms – even those with large debt problems – can refinance

      their excessive liabilities in or out of court, but an unprecedented

      number of small businesses are going bankrupt. The same holds for

      households, with millions of weaker and poorer borrowers defaulting on

      mortgages, credit cards, auto loans, student loans and other consumer

      credit.
    • With

      the stock market rising and home prices still falling, the wealthy are

      becoming richer, while the middle class and the poor – whose main

      wealth is a house rather than equities – are becoming poorer and being

      saddled with an unsustainable debt burden.

      So, while the United States may technically be close to the end of a

      severe recession, most of America is facing a near-depression. Little

      wonder, then, that few Americans believe that what walks like a duck

      and quacks like a duck is actually the phoenix of recovery.

  • RGE – The Worst is yet to Come: Unemployed Americans Should Hunker Down for More Job Losses

    tags: Economics

    • Also, remember: The last recession ended in November

      2001, but job losses continued for more than a year and half until June

      of 2003; ditto for the 1990-91 recession.

      So we can expect that

      job losses will continue until the end of 2010 at the earliest. In

      other words, if you are unemployed and looking for work and just

      waiting for the economy to turn the corner, you had better hunker down.

      All the economic numbers suggest this will take a while. The jobs just

      are not coming back.

    • As a

      result of these terribly weak labor markets, we can expect weak

      recovery of consumption and economic growth; larger budget deficits;

      greater delinquencies in residential and commercial real estate and

      greater fall in home and commercial real estate prices; greater losses

      for banks and financial institutions on residential and commercial real

      estate mortgages, and in credit cards, auto loans and student loans and

      thus a greater rate of failures of banks; and greater protectionist

      pressures.

      The damage will be extensive and severe unless bold policy action is undertaken now.

Posted from Diigo. The rest of my favorite links are here.

[Via http://rosshunter.wordpress.com]

Tuesday, November 24, 2009

The Great Depression of the 14th Century - Murray N. Rothbard - Mises Institute

A wonderful excerpt from Murray Rothbard’s  The Austrian Perspective on the History of Economic Thought

The article discusses taxation in the 1400’s and how every government intervention creates new problems that require further government intervention.

Click on the link below.

The Great Depression of the 14th Century – Murray N. Rothbard – Mises Institute.

[Via http://vtfarmer.wordpress.com]

IMF Approves $1.4 Billion Loan For Angola

FRANKFURT — The International Monetary Fund has approved a $1.4 billion loan arrangement with Angola to help the African country restore macroeconomic balances and rebuild international reserves. The 27-month program provides space for 30% of total central government expenditures on social issues, the IMF said. “Angola has suffered a significant terms-of-trade shock because of the sharp drop in oil prices,” the IMF said in a statement late Monday. “The subsequent large drop in oil revenues caused a sharp slowdown in the economy, weakening of fiscal and external positions, depreciation of the exchange rate, and a rise in inflation.” The IMF welcomed Angola’s plan to establish a sovereign wealth fund. It also said that the resumption of foreign exchange auctions by the National Bank of Angola has contributed to normalizing conditions in the foreign exchange market. Angola’s real GDP is projected to be broadly flat in 2009, reflecting a big drop in oil production and a sharp slowdown in the pace of non-oil growth, the IMF said.

IMF Approves $1.4 Billion Loan For Angola

[Via http://srconor.wordpress.com]

Sunday, November 22, 2009

Environmental Performance Index: Where the World Stands

Overall_EPI_Score_by_Country_Quintile_2006

EPI is a parameter describing environmental impact with a single figure. It provides  an empirically grounded basis for comparing the environmental performance of countries worldwide. For instance, the 2008 EPI ranks 149 countries on 25 indicators ranging from air and water quality to biodiversity and the use of pesticides (see figure below). To make the 25 indicators comparable, each metric was converted to a proximity-to-target-measure with 0 to 100. Using these 25 indicators, scores are calculated at various levels of aggregation.

The EPI is based on targets for environmental performance and measures how close each country comes to these goals. As a quantitative gauge of pollution control and natural resource management results, the Index provides a powerful tool for improving policymaking and shifting environmental decision-making onto firmer analytic foundations.

Capture

The EPI was preceded by the Environmental Sustainability Index (ESI), published between 1999 and 2005. Yale and Columbia Universities were behind creating the index to highlight the cleanest countries, and give laggards the opportunity to benchmark efforts to improve their own environments and the health of their citizens. A visual outline of Environmental Performance Index is available at http://epi.yale.edu/Home

The Environmental Performance Index (EPI) suggests that it’s mainly the rich nations that enjoy excellent environments. The top five ranked countries  in the 2008, in order of best performance (with EPI in the range of 90.5-95.5), are Switzerland, Sweden, Norway, Finland, and Costa Rica. The world’s fifth most wealthy nation is also the world’s cleanest. Switzerland scores a perfect 100 in eight environmental indicators, including sanitation and water quality, forest health and pesticide control. But its mountainous landscape forces farmers to grow crops on every slope and in every cranny, reducing the country to a merely average score in agricultural practices.

Canada, Germany, and UK are ranked 13, 14, and 15 respectively with an EPI of just over 86. As expected, developed countries with significant financial resources for environmental management make up most of top performers. Costa Rica, a middle-income country, outperforms many developed countries as well as its neighbors, a rating that should only improve as it strives to become carbon-neutral by 2021.

Except Yemen with EPI of 49.7 the rest of the bottom 13 countries in order of performance are all located in Africa (Sub-Saharan) and lack resources for even basic environmental investments. Pakistan (with EPI 58.7) grabbed 27 while India 31 position (EPI 60.3) from the bottom showing their dismal performance on this environmental index. Along with India, China also was placed in the bottom third of the index. Nevertheless, China higher score is attributed to its better Environmental Health score.

Majority of the countries scored better in Environmental Health arena than in Ecosystem Vitality, for instance 66 countries had scores of 90 or above in Environmental Health, whereas only 2 scored above 90 in Ecosystem Vitality. For instance USA ranked at 107th in the Ecosystem Vitality category even with a very high score in the Environmental Health. It is the air emissions and climate change  which reduced  United States’ score drastically.

[Via http://khanidea.wordpress.com]

The recognition has gone GLOBAL!

As to the AGW scam. You’ve seen my other links, now try this one from The Canada Free Press!

Got this from BC @ the Rott, and it’s about as sweet as it gets. Der Speigel has had it, Russian news has had it, Canada has it, I want these fuckers arrested, tried, and jailed. I want everything they own evenly distributed between all the corporations they’ve fucked with their bullshit.

Goracolytes, pull your heads out of your asses. You’ve been had. v2.0 is coming.

[Via http://cmblake6.wordpress.com]

Saturday, November 21, 2009

One more little touch on the stimulus

How about an audit, to pop those embezzlers in the government trunk?

A congressman who famously shouted “You Lie” to Barack Obama when the president was addressing Congress to lobby for his health care proposal now is assembling a petition demanding the truth about the billions of dollars of federal stimulus money being spent.

And you want to see an absolute jaw-dropper?

“I think it is a serious problem,” James Scarantino, a former attorney for the Ameican Civil Liberties Union, told the newspaper. “The president said his administration was going to track every last penny of the stimulus. We’re now into the second or third round of reports, and every one of them has massive errors in it.”

Hot DAMN! This is getting good. How’s that “HopeNChange” going for you there, fiddy2?

BHO ensures dramatic decline in illegal worksite arrests; American jobs are casualty

Arrests of illegal alien workers have dropped abruptly under President Obama, according to recently released figures.

Criminal and administrative arrests along with indictments and convictions of illegal laborers at work sites have all fallen by more than 50 percent from fiscal 2008 to fiscal 2009 –  and not due to illegals returning home.

“The figures show that Obama has made good on his pledge to shift enforcement away from going after illegal immigrant workers themselves — but at the expense of Americans’ jobs,” said Rep. Lamar Smith (R-TX) who compiled the numbers from the Department of Homeland Security’s U.S. Immigration and Customs Enforcement agency (ICE).

Rep. Smith, the top Republican on the House Judiciary Committee, said a period of economic turmoil is the wrong time to be cutting enforcement and letting illegal immigrants take jobs that Americans otherwise would hold.

Read the Washington Times report here.

Thursday, November 19, 2009

World Poverty Rate Plummets

Mark J. Perry, who now blogs at the Enterprise Blog, has posed on an article by Kevin Hasesett titled “The Poor Need Capitalism.” Pointing to a new NBER study, “Parametric Estimations of the World Distribution of Income,” Hasesett writes:

The chart [below] draws on a landmark new study by economists Maxim Pinkovskiy and Xavier Sala-i-Martin. The authors set out to study changes in the world distribution of income by gathering data from many different countries. As a byproduct of their work, they are able to count the number of individuals who live on $1 per day or less, a key measure of poverty.

According to their calculations, the number of people living in poverty so defined has plummeted, from 967,574,000 in 1970 to 350,436,000 in 2006, a decrease of a whopping 64 percent. Whence the reduction? The biggest factor is the emergence of middle classes in previously poverty stricken China and India. And the spread of capitalism to other countries has similarly been followed by prosperity. The trend is even more impressive if one considers that the world population skyrocketed over that time, increasing by 3 billion.

If the trend continues for just 40 more years, poverty will have been essentially eradicated from the globe. And capitalism will have done it. There are those who have argued that the current financial crisis has served as proof that capitalism is a failed ideology. The work of Pinkovskiy and Sala-i-Martin suggests that there are about a billion people whose lives prove otherwise.

In addition, Perry points out that the NBER paper also finds that “the world poverty rate fell by 80 percent, from 26.8 percent in 1970 to only 5.4 percent in 2006 based on the $1 per day poverty measure (see chart below). “

The study also estimates poverty rates separately for five geographical regions (see below). Check out the results for East Asia (China, Taiwan, and South Korea). In 1960, East Asia had the highest regional poverty rate in the world, at 58.8 percent, compared to 39.9 percent for Africa. 36 years later, in 2006, the poverty rate in East Asia fell to 1.7 percent, below all other developing regions.

What accounts for East Asia’s falling poverty rates? Capitalism.

A Common Sense Political Agenda For A New Conservative and Libertarian Party: American Citizens Alliance Party (ACAP)--A CAP On Government Spending, Taxes, Debt and Regulations!

The following is a first draft of a political agenda for a new political party that would appeal to both conservatives and libertarians that now vote for candidates of the Republican, Democratic, Libertarian, and other political parties:

1. Job Creation: reduce the tax and regulation burden of small and medium size businesses to encourage business formation, economic growth, job and wealth creation.

2. Tax Reform: replace all Federal income, payroll, capital gains, estate and gift taxes with a national consumption tax–The FairTax.

3.  Federal Budget: require balance or surplus budgets only, no more budget deficits and deficit spending and absolutely no government bailouts and subsidies to businesses.

4. Federal Government Size and Scope: Eliminate  ten Federal Departments and the Federal Reserve System and their associated programs, subsidies, unfunded state mandates and the number of Federal employees by 50%.

5. Federal Government Regulation: reduce by a least half the number and scope of government regulations.

6. Energy Independence: promote oil and gas exploration and production and nuclear power generation plant construction.

7. Education: promote competition and accountability among schools by supporting  home schooling , school choice  and vouchers for parents to pay for school tuition and fees.

8. Health Care Reform: promote tort reform by limiting economic damages and defensive medicine, interstate competition among insurance companies,  health saving accounts paired with individual high deductible health insurance plans.

9. Social Security and Medicare: place both Social Security and Medicare on a financial and actuarial sound basis and transition to individually owned and controlled Social Security Retirement Accounts and Health Saving Accounts paired with high deductible health insurance plans.

10. Immigration: no amnesty for illegal aliens, stop illegal immigration by requiring all employers to use E-Verify to determine eligibility to work in the USA, complete and patrol the entire border fence, remove and deport all criminal aliens, and limit legal immigration to 250,000 persons per year.

11. National Security: bring the troops home from around the world including Germany, Japan, South Korea., Iraq and Afghanistan and budget 5% of Gross Domestic Product for national defense  to build and train all of the military services for defense of the nation.

12. International Affairs: withdraw from the United Nations and require the United Nations to move to another country.

Background Articles and Videos United States of Amercia Government

http://www.usa.gov/Agencies/Federal/Executive.shtml

Related Posts On Pronk Palisades A New Political Party In The United States? American Citizens Alliance Party–ACAP On Government Spending, Taxes, Debt, and Regulations! Third Party Time? Yes Provided You Have $10 Billion and 10 Years! Independents Lead The The Second American Revolution Surge–Independence Day–Saturday July 4, 2009 In Washington D.C.–Tea Party Time–On To Washington–Dare You To Move! 

Tuesday, November 17, 2009

CORN………. “The Un-discovered Legend” Part 1

Hello Friends here we come up with another write up on “Commodity Corner Series”.

Here we would touch upon the importance of Maize crop in Indian commodity market and its relevance in the context of Indian Scenario

CORN………. “The Un-discovered Legend”

Maize, also known as corn, is a cereal which is an important crop after rice and wheat.

The domestication of maize has been dated back as far back as 12,000 years ago. Today, maize is widely cultivated throughout the world, in a greater size with top producing countries like United States, China, Brazil, France, Indonesia, India and South Africa.

Indian Scenario:

Andhra Pradesh is now the largest producer contributing around 21% of annual maize production.

India ’s area harvested of maize and yield have risen by mainly on account of rising production of single cross hybrids seeds, its demand and increasing acceptability among farmers.

In India, its cultivation extends from the hot arid plains of Rajasthan and Gujarat to the wet hills of Assam and Bengal.

There are three distinct seasons for the cultivation of maize:

the main season is kharif;

next is Rabi in Peninsular India and Bihar and

in spring in northern India.

Normally, higher yields have been recorded in the rabi and spring crops.

Over 85 per cent of the maize acreage is sown under rain-fed conditions during the monsoon when over 80 per cent of the annual rainfall is received.

However, this year due to the erratic monsoon production has been affected, as a result of which maize prices have been in uptrend since the withdrawal of monsoon from the country.

During 2008-9, Indian exported 3 million tonnes of maize and 12,000 tonnes of maize seed worth of Rs 2,400 crore and Rs 2,000 crore respectively.

Stay Tuned for more on this.

In next blog we would touch upon the issues like Potential source of demand for Maize crop, Industrial Demand and PVO (Price-volume-open Interest) of MAize crops.

Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

Monday, November 16, 2009

How will the Repubs (and Blue Dogs) respond to increases in spending for Afghanistan?

… and how did they respond to other expenses? Especially, how will they
respond to comparably lower cost of Health Care? This from Truthsite.org:

Conservatives’ (including Blue Dogs’) selective concern about deficit spending Program Cost Conservative response War in Iraq $3 trillion “No problem!” Bush tax cuts for the rich $1.8 – $2.5 trillion “No problem!” Bush bailouts $9 – $24 trillion “No problem!” Military budget $650 billion/year(about the same as the rest of the world combined) “No problem!” “Public option” health care $1.1 trillion over 10 years* “It’s not revenue neutral!” Single payer health care Would save money, improve care “It’s socialism!”

*According to the Congressional Budget Office, the health care reform bill passed by the House in November, 2009 actually saves $11 billion annually. See Deficit hawks attacking the wrong prey.

Sunday, November 15, 2009

Weekly Economics Lesson: The "Sugar High" of Easy Money

Steve Pearlstein of the Washington Post has a common-sense column warning about the dangers of the Fed’s easy-money policy. It is possible, to be sure, that the Fed will withdraw (or “soak up”) all this liquidity as the economy recovers, but all the signs suggest that the central bank is kowtowing to the politicians and debasing the currency in order to help politicians create illusory growth. This is a recipe for a return to the 1970s. The bad policy started under Bush (and Greenspan) and is continuing under Obama (and Bernanke):

The Federal Reserve is still going through its “lessons-learned” exercise from the recent financial crisis, but there’s one lesson it clearly has not yet absorbed — the one about ignoring and enabling credit bubbles. That’s the only conclusion that can be drawn from the Fed’s decision last week to not only keep its benchmark interest rates at zero but also let everyone know that it intends to leave them there for a good long time. …Not surprisingly, all of this sparked a week-long party in financial markets that had already experienced powerful rallies over the past six months. Even with Thursday’s modest pullback on Wall Street, U.S. stocks are up 60 percent since March, and share prices in emerging markets have nearly doubled. Commodity prices are soaring once again, led by gold, which is now selling for more than $1,100 an ounce, and crude oil, which is up a whopping 126 percent since February. A rally in the junk-bond and third-world debt markets has driven interest rates back to where they were before the crisis. In urban China, India and Brazil, property prices have doubled in the past year. “The markets are on a sugar high,” Mohamed El-Erian, chief executive of Pimco, the giant money manager, told Newsweek’s Rana Foroohar last week. Judging from how sharply and quickly these prices have risen, it’s a pretty good guess that most of the buying has not been done by long-term investors who are suddenly upbeat about the prospects of global economic growth. The better bet is all this is the handiwork of short-term speculation by banks, hedge funds, private-equity funds and other financial center wise-guys moving as a herd, financing their purchases directly or indirectly with some of that yummy zero-percent money provided courtesy of the Fed. …There’s no way to know how long all this can continue before one of these bubbles finally bursts, the dollar spikes upward and investors all rush to unwind their trades at the same time. But it is a good guess that it will last as long as the Fed and other central banks indicate there is no end in sight for the current cheap-money regime. The longer they wait, the bigger the bubbles, and the bigger the mess to clean up. All of which is why the recent statements by policymakers were so disappointing — and so dangerous.

The Consumer Island: If the world was 6 people.

Suppose six castaways are stranded on a deserted island, five Asians and one American. Further, suppose that the castaways decide to divide the work load among them in the following manner: (for the purpose of simplicity, the only desire the castaways work to satisfy is hunger) one Asian is put in charge of hunting, an other in charge of fishing, and a third in charge of finding vegetation. A fourth is put in charge of preparing the meal, while a fifth is given the task of gathering firewood and tending to the fire. The American is given the job of eating.

So, on our island five Asians work all day to feed one American, who spends his day sunning himself of the beach. He is employed in the equivalent of the service sector, operating a tanning salon which none of the Asians on the island utilize. At the end of the day, the five Asians present a painstakingly prepared feast to the American, who sits at the head of a special table, built by the Asians specifically for this purpose.

Realizing that subsequent banquets will only be forthcoming if the Asians are alive to provide them, he allows them just enough scraps from his table to sustain their labor for the following day.

Modern day economists would say that this American is the lone engine of growth driving the island’s economy and that without his ravenous appetite, the Asians on the island would be unemployed. The reality, of course, is that the best thing the Asians could do to improve their lots would be to vote the American off the island. Without the American consuming all of their food, there would be a lot more available for them to eat.

Alternatively, they could spend less time on their food related tasks, devoting the extra time to greater leisure or to satisfying other needs, which previously went unfulfilled since much of their scarce resources are currently devoted to feeding the American.

Now some of you might be thinking that this analogy is flawed, as in the real world economy, Americans pay for their food, so real world Asians providing the meals receive value in exchange for their effort. O.K. lets assume that the American on our island pays for his food in the same manner real world American pay for theirs, buy issuing IOU’s. Let’s assume that at the end of the meal, the Asians present the American with a bill, which he pays by issuing IOU’s claiming to represent future payments of food.

However, all the castaways know that the IOU’s can never be collected, as the America has no food, or the means or even the intention, of providing any in the future. But the Asians accept them anyway, and each night add them to the piles of IOUs collected on previous days. Are the Asians better off as a result of this accumulation? Are they any less hungry? Of course not.

Now let’s assume another Asian castaway washes up onto the island, and assumes the role of central banker. Now each day the central banker taxes the other Asians on the island by confiscating a portion of the scraps of food the American throws them each day from his table. The central banker than agrees to return these morsels to the other Asians each day, in exchange for each Asian’s daily accumulation of the American’s IOU’s, less a small percentage for himself, because the central banker also has to eat.

Does the existence of a central banker change anything? Do the Asians have any more to eat because their own central banker gives them back a portion of the food he took from them in the first place? Do the American’s IOU’s have any more value because they can now be exchanged in this manner? Of course not.

Well, if it does not make sense for the six make-believe Asians to support one make-believe American, it does not make sense for billions of real world Asians to support millions of real world Americans. The fact that they do so in exchange for worthless IOU’s in no way alters this reality.

There is no question that in the short-run, by allowing the U.S. dollar to collapse (in effect voting millions of American’s off the island), there will be some temporary disruptions to Asian economies. Of course there will be some initial losers, particularly among those Asians who currently profit from this arrangement. However, these profits come only at the expense of far greater losses born by the broader Asian population.

In the end, the cessation of America’s excess consumption, which is a burden that the Asians now disproportionately bear, not a benefit that they enjoy, will be the best thing that can happen to the Asian people. Like the serfs being liberated from their lords, their scare resources will finally be freed to satisfy their own needs and desires, and their standards of living will rise accordingly. In addition, since their savings would then be available to finance additional capital investments, rather than being squandered by American consumers, their future standards of living will rise that much faster as well.

Unfortunately for Americans, being kicked off the Asian gravy train means its time to get back to work. In simple terms, this means a whole lot more hunting and fishing, and a whole lot less eating.

Saturday, November 14, 2009

Points to Remember while Selling Stocks – Part 2

Hello Friends here we come up with an extension of our previous blog, “Points to Remember while Selling Stocks Part 1”.

Points to Remember while Selling Stocks

In previous Blog we had touched upon few points related to selling stock tips.

In this blog lets get to know more of valuable points in this regard.:)

Major points when to sell your stocks ( starting from 4th..three already being discussed in Blog 1) 4. Stock is Over Valued:

During bull market, high quality stocks appreciate value.

But more importantly, with so much hype around the stock, they are often set up for a fall.

Therefore, investor may use the strategy of selling them first and buy at lower price.

5. Need Some Cash-

Certain unexpected circumstances may affect the time when to sell stock.

It is not wrong to sell stock to solve your financial emergency, especially the underperforming one.

However, it is advisable to have some emergency cash funds.

After all, basic investing rules is to start investing if you have enough money.


6. A Change in Monetary Policy-

The Central Bank, RBI changes monetary policy if it perceives that inflation is heating up.

By raising interest rates, it contracts the money supply and slows down the financial system.

It is generally seen that stocks normally react negatively against the action, and some time markets become more volatile.

If you are not happy with this type of risk then you should move a portion of your portfolio into stocks that will not be as affected with such changes.

7. A Company Suddenly Cuts Dividends or Lower Income Estimates-

This event should be investigated carefully before making any judgment to sell.

For good reason, the board of directors might want to retain more of their earnings for internal growth, rather than paying them out in dividends.

Sell a company’s stock if the performance is down.

Investors must never sell the stock of a fine company if its price goes either ways significantly – up or down.

Falling earnings margins and slowing earnings must be treated as a warning signal.

Lastly, I would like to say that always do your homework (Research) well while selling a company’s stock; you can use either the top-down approach or the bottom-up approach.

Markets are often full of rumors. You cannot make money in the market by acting on market rumors.

Always listen to the stories, but remember you should do your own research–and do it thoroughly.

Make your buy or sell decision based on your analysis of the company, not on what others tell you to do.

Note : For More Finance Gyan, Latest Industry, Stock Market, Economy News and Updates, please click here

Friday, November 13, 2009

Capitalism finds a way

OT requirements are being increased for FISCAL Week 46. Work is piling up. This is good NEWS in some Industry Sectors. All in spite Obama’s ignorance and his Administration attempt at trying to destroy the U.S. Economy with advice from George Soros and William Ayers. This to transfer Private Sector Jobs to Government Sector as reward to the SEIU. Projected Federal Budget (Obama) is around 1.2 Trillion. Up about 900+ Billion from 2008 (Bush) Budget. Life and Capitalism finds a way…

Thursday, November 12, 2009

CROP FORECASTING - “PAST - PRESENT – FUTURE”

Hello Friends here we come up with our another write up on “SMC Gyan Series”

CROP FORECASTING - “PAST - PRESENT – FUTURE”

Here we would get into the nitty gritties of CROP FORECASTING.

Why is it required and what are the objectives of CROP ESTIMATION SURVEY?

Agriculture occupies a dominant place in the economy.

It is the main source of livelihood of the majority of the population of the country.

Making available food-grains sufficiently to this huge population of the country throughout the year is very much necessary, & this needs making an advance plan or estimation to predict crop yields.

Crop estimation is a “MUST” for agriculture.

There are number of reasons why a good estimation is required.

Accurately estimating the size of the crop will take the pictures or the scenario size of the crop just before harvest, increasing farming costs for that year.

Overestimate the size of the crop will mean that the quality or quantity may not be achieved.

Therefore for the accurate results, many research advance techniques are used.

A sort of track record is maintained for maintaining & achieving the accuracy of crop estimation.

OBJECTIVE OF CROP ESTIMATION SURVEY:

The main objectives of the crop estimation survey are:

i. To provide estimates of area under and production of principal food and non-food crops with a high degree of precision at the block/ district/state levels.

ii. To provide estimates of productivity of different crop at block/district/state levels.

iii. To collect useful ancillary information on the existing cultivation practices in the State.

iv. To throw lights on the cropping pattern of the State/Districts/Blocks etc.

Stay Tuned for more on this where we would get to know of that what are the procedures of crop estimation survey.

Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

Newton's 3rd Law PLUS Some Algebra

This morning, I have two minor problems in my life. The first is that my daughter is failing algebra. Sadly, like so many others, she does not believe she will ever use it in real life. The second is my husband’s latest purchase. I am totally confident that I can help my daughter – certainly, I can demonstrate some real life algebraic concepts. However, in the case of problem number two, I’m waiting it out.

I know it’s old-hat to compare the shopping habits of women to those of men, but, for only a sentence or two, I must. Unlike the logic of a woman, where we buy things at a reduced price and claim the imaginary difference as money saved, men purchase items based on pretense. They rationalize their buying decisions on a whole different level of distortion. Typically this presents as a three-part recipe, combining two elements of practicality and one element of contingency. This is how we end up with things like wood chippers, blow torches and rusted out fixer-uppers in our garages.

Last week my husband bought a juicing machine on the pretense that it was both healthy and economical adding that, in the event it didn’t work out, he could always part it out for my son’s science project. I wasn’t big on the juicer idea and immediately voided the “healthy” part of the claim —as long as he had teeth in his head he wouldn’t need to juice a carrot to consume it. However, the economic aspect was a bit more difficult to debate since his intention was to put any aged or soggy vegetables to good use rather than discard them. Gross for sure, but how could I have reasonably evaluated such a benefit prior to implementation? Besides, his contingency plan was the work of pure genius.

Now, what comes out of my husband’s juicing contraption is one of the most disgusting substances I have ever seen. While he calls it a vegetable smoothie, I call it a fiber-rich death-sludgy. The origin of which comes from the fact that, as of late, I simply don’t see him very often which is further supported by the resulting lack of toilet paper in the house.

Every evening he prepares his batch of vegetable ooze for the following day and stores it on the top shelf of our refrigerator —right next to my coffee creamer, giving me no choice but to contend with it. As I reached for my creamer this morning, half asleep and ill prepared for reality, I was mentally hijacked by his death-sludgy du jour. It was golden brown with suspended pockets of air and topped with meringue-like foam. I suspect that it had significant cohesive properties, but I wasn’t going to touch it to find out. Rather, keeping a safe distance, I compiled a series of assessments. The first such assesment was my husband’s undeniable thrift. He had placed his concoction in a salvaged spaghetti jar and, in an apparent attempt to seal in its freshness, but unable to locate the lid, had covered it with a ragged piece of reused Saran Wrap and a rubber band. I sleepily blinked a few times and arrived at my second assessment; he’s gone off the deep-end and I fully believe that he plans to take me with him. Considering our toilet paper crisis, I sought out relativity. I opened the crisping drawer and arrived at my third assessment. We were out of produce —fresh or otherwise.

It’s too bad my daughter doesn’t need help in science because I believe my observations support Newton’s 3rd law of motion; every action does in fact have an equal and opposite reaction.

“Whenever a first body exerts a force on a second body, the second body exerts a force on the first body. Each force is equal in magnitude and opposite in direction.”

True dat.

By nature I am an analyst —I just can’t help myself. I’m closing in on his second element of practicality and therefore compelled to do the math. Considering my daughter’s lack of appreciation for algebra, I have decided to demonstrate one of those real life algebraic concepts.

I will begin with one simple question:

Given the fact that the recommended daily allowance of fiber for an adult is 25 grams, is it true that daddy’s new juicer is actually economical?

Now, the trick to algebra is to simplify your little butt off. Simplify till you just can’t simplify no-mo. So, we need to break it all down. Let’s start with the following chart. It’s a grossly conservative example of just ONE of his twice daily death-sludgies:

  Units Grams of Fiber per unit Qty in Death-Sludgy Grams of Fiber in Death Sludgy Carrots ea 1.7 4 6.8 Celery cup 8.0 3 24 Broccoli cup 6.0 2 12 Squash cup 4.0 2 8 Apple ea 4.0 2 8 Total Grams per Death-Sludgy: 58.8

Twice daily … multiply by 2 … 117.6 grams… again, I never see him anymore … the ratio is practically 5:1. (something similar to digesting a Brillo Pad)

 Next, we need to establish the hard costs, also known as the cost of goods

Where

c is a carrot and a carrot costs ten cents

l is cup of celery and a cup of celery costs ten cents 

b is a cup of broccoli and a cup of broccoli costs ten cents

s is a cup of squash and a cup of squash costs twenty cents

a is an apple and an apple costs thirty cents

And where 

He drinks 2 death-sludgies per day

 The formula looks like this (Teachers like it when you show your work):

2(4c + 3l + 2b + 2s + 2a) = COG

OR

2[(4 * .10) + (3 * .10) + (2 * .10) + (2 * .20) + (2 *.30)] = COG

 OR

2(.40 + .30 + .20 + .40 +.60) = COG

OR

2($1.90) = COG

OR

$3.80 = COG

So far, we’ve only looked at the amount of fiber and the costs of raw materials. There are also soft costs that need to be considered.

Each flush of a standard toilet uses 1.6 gallons of water.

Where

w is a gallon of water and costs .005

Then, the cost per flush is 1.6w= .008

It is speculated that a person typically uses *seven sheets of toilet paper per process. A roll of durable tissue has 308 sheets per roll and costs $6.99 for a 12 roll pack.

*results may vary based on actual product and/or mental disposition.

Where

 p is the cost of a package of toilet paper

r is sheets per roll

t is the cost of the seven sheet single process

The formula looks like this:

 t = 7[(p/12)/r]

OR

t = 7($6.99/12)/308

OR

t = 7($.58)/308

OR

(rounding to the nearest thousandth)

t = $.002

Where S is poop (I’m keeping it clean – we all know what S is)

It can be stated that

S = t+ w

OR

S = .002 + .008

OR

S = .01

With that said, and since we are only looking for the increase in costs, at the ratio of 5:1, naturally we can expect daddy to poop four times more than normal.

4S = 4(t + w)

OR

4S = 4(.002 + .008)

OR

4S = 4(.01)

OR

4S= $.04

We are finally at the economic feasibility of his proposal and will now tally up the total tangible cost of the death-sludgy.

The overall formula looks like this:

COG + 4S = [2(4c + 3l + 2b + 2s + 2a)] + 4(t + w)

OR

3.80 +.04 = [2(4 *.10 + 3*.10 + 2 *.10 + 2 * .20 + 2 * .30)] + 4(.002 + .008)

OR

3.84 = [2(1.90)] + 4(.01)

OR

3.84 = 3.80+ .04

OR

3.84 = 3.84

We have simplified ourselves straight to the answer. At $3.84 per day, daddy’s second element of practicality has been proven entirely false. Now my daughter can go to her algebra class with her chin held high, knowing that there is, in fact, a real life need for algebra.

Okay. I admit $3.84 is pretty cheap. However, it’s still on the plus side and I do anticipate the overall cost to increase rapidly. Any day now, I fully expect my husband to push out something that resembles shredded wheat which, at the very least, will result in a $20 co-pay.

On the bright side, once he recovers, we will be able to start my son’s science project post haste.

Tuesday, November 10, 2009

Science (esp. econ) made fun

| Gabriel |

In a review essay, Vromen talks about the (whodathunkit) popular book/magazine-column/blog genre of economics-made-fun that’s become a huge hit with the mass audience in the last 5 to 10 years. Although Vromen doesn’t mention it, this can be seen as a special case of the science-can-be-fun genre (e.g., Stephen Jay Gould’s short essays that use things like Hershey bars and Mickey Mouse to explain reasonably complex principles of evolutionary biology.)

Vromen makes a careful distinction from the older genre of economists-can-be-funny (currently exemplified by the stand-up economist), which is really a special case of the general genre of scientists doing elaborate satires of their own disciplines for the benefit of their peers. There is an entire journal of this, but my all time favorite example is a satire of mid-20th century psychology in the form of a review of the literature on when people are willing to pass the salt at the dinner table.  Two excerpts from the “references” section should suffice to convince you to click the link and read the whole thing.

  • Festinger, R. “Let’s Give Some Subjects $20 and Some Subjects $1 and See What Happens.” Journal for Predictions Contrary to Common Sense 10, 1956, pp. 1-20.
  • Milgram, R. “An Electrician’s Wiring Guide to Social Science Experiments.” Popular Mechanics 23, 1969, pp. 74-87.

If you don’t remember what Festinger and Milgram actually did in the 50s and 60s this won’t be funny, but if you do it’s hilarious. Hence, the scientists-can-be-funny genre is a self-deprecating genre for an audience of insiders that simultaneously demonstrates the joker’s mastery of the field and the field’s foibles. In contrast, the science-can-be-fun genre is targeted to a mass audience and is about demonstrating the elegance and power of the field. The former inspires humility among practitioners, the latter awe among the yokels.

One of the interesting things about the econ-made-fun literary genre is that it is largely orthogonal to any theoretical distinction within scholarly economics. The most prominent “econ made fun” practitioners span such theoretical areas as applied micro (Levitt), behavioral (Ariely), and Austrian (Cowen). In part because the “econ made fun” genre exploded at about the same time as the Kahneman Nobel and in part because “econ made fun” tends to focus on unusual substantive issues (i.e., anything but financial markets), this has led a lot of people to conflate “econ made fun” and behavioral econ. I’ve heard Steve Levitt referred to as a “behavioral economist” several times. This drives me crazy as at a theoretical level, behavioral economics is the opposite of applied micro, and in fact Levitt has done important work suggesting that behavioral econ may not generalize very well from the lab to the real world. That people (including people who ought to know better) nonetheless refer to him as a “behavioral economist” suggests to me that in the popular imagination literary genre is vastly more salient than theoretical content.

I myself occasionally do the “sociologists can be funny” genre (see here , here, and here) but these are basically elaborate deadpan in-jokes and I am under no illusions that anyone without a PhD would find them at all funny. I have no idea how to go about writing “sociology can be fun” (this is probably the closest I’ve come) along the lines of Levitt/Dubner or Harford, nor to be honest do I see any other sociologist doing it particularly well. There are plenty of sociologists who try to speak to a mass audience, but the tone tends to be professorial exposition or political exhortation rather than amusement at the surprising intricacy of social life. Fortunately Malcolm Gladwell has an intense and fairly serious interest in sociology and is very talented at making our field look fun.

Obamacare is Killing Jobs...

Here’s a look at the health care boondoggle and how it will affect many in this nation. This comes from someone on the edge of poverty.

Obamacare: Killing Jobs and Spiking Inflation
By Jeff Soyer

We know that none of the Democrats who voted for the bill yesterday have actually read all 1900 pages of it. If they did, they are traitors to the future health of our economy. Writing in the Wall Street Journal, Betsy McCaughey lists some things you’d better know:

On Nov. 2, the Congressional Budget Office estimated what the plans will likely cost. An individual earning $44,000 before taxes who purchases his own insurance will have to pay a $5,300 premium and an estimated $2,000 in out-of-pocket expenses, for a total of $7,300 a year, which is 17% of his pre-tax income. A family earning $102,100 a year before taxes will have to pay a $15,000 premium plus an estimated $5,300 out-of-pocket, for a $20,300 total, or 20% of its pre-tax income. Individuals and families earning less than these amounts will be eligible for subsidies paid directly to their insurer.

Now. There are a lot (millions) of individuals who choose not to have insurance. Mostly they are aged 18 to 40-years-old and are in good health. If they are now forced to purchase insurance, that is (let’s use the example above) $5,300 dollars less that they will have to spend on clothing, dining out, electronic gadgets, car payments, etc.

More…

Sunday, November 8, 2009

'Not Your Grandfather's (or Keynes’s) Economy'

Arnold Kling has written an excellent article countering the claim that the current economic crisis calls for the implementation of Keynesian economics.

“This back-to-Keynes movement,” Kling writes, “ignores the dramatic restructuring of our economy over the past 50 years.”

He points to three major changes:

1. The decline in manufacturing production workers as a percent of employment.

2. The increase in the proportion of the work force with at least some college education.

3. Proportion of unemployed not on temporary layoff, at peak during a recession.

Kling concludes:

The way I see it, the complexity of today’s economy means that old-fashioned Keynesian policies will not restore full employment. Pump-priming and stimulus policies are a good fit for a manufacturing economy with homogeneous labor affected by temporary layoffs. They are not such a good fit for a post-industrial economy with an educated labor force facing permanent structural changes.

Over the next ten years, some sectors of the economy on long-term downward trends will continue to shrink. Sectors that became bloated in recent years, notably mortgage finance, will eventually settle back to lower, sustainable levels. Much of the new strength in the economy will come from underlying long-term forces. New workers will be absorbed by businesses that have not yet been launched in industries that we have not even imagined. For this restructuring, what I like to call The Great Recalculation, Keynesian stimulus will be irrelevant.

Lewis Black does Keynesian economics

A year after Barack Obama’s historic election, one of his most contentious programs has been the $700 billion stimulus package. Here’s a clip of Lewis Black explaining John Maynard Keynes’ theory of how public works projects can stimulate the economy in his own inimitable (and be warned, very foul-mouthed way):

Now, just in case you’re thinking “that’s just crazy comedian talk and has no basis in proper economics” here’s the view of Keynes himself from ”The General Theory of Employment, Interest and Money”:

“If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coal mines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.” (p. 129)

So while Barack Obama may not have been thrilled about having to spend such a huge amount of money getting the American economy going and saddling the American taxpayer with such a large debt (yes, I said it), is was absolutely the correct thing to do. In this instance, to compromise the spending aspects of the package to appease Republicans (the people who, to a large extent, created this mess) in the name of bipartisanship could have led to the Great Recession becoming the second Great Depression and may have left future generations with an even more unmanageable National Debt. The world is now in the thankful state of seeing a light at the end of the tunnel, just over a year after we faced economic catastrophe, as the recession ends (at least technically) in many countries and hopefully we can get back to job creation in the new year…

 

Saturday, November 7, 2009

RBI’s Monetary Policy - Analyst View

Hello Friends, last month we witnessed loads of action with the RBI’s monetary policy being laid down.

Just an extension of our previous blog “RBI’s Monetary Policy Stance – Part 3”.

 

RBI Monetary Policies and Projections Part 4

 


In this Blog we would read the Analyst views with respect to the monetary point of view.

Analysis from the Analyst from monetary point of view:

Though there is a hike in SLR to 25 % but we think it will not have much more impact because the total investment book of commercial banks is already at 30.4% of total NDTL.

Although key rates of CRR, reverse repo and repo rates have been left unchanged, special repo facilities have been withdrawn.

Real estate loans provisioning are set to become more expensive.

NPA norms for banks have been tightened while liabilities of scheduled banks arising from transactions in CBLO with Clearing Corporation of India Ltd. (CCIL) will be subject to maintenance of CRR.


The RBI is thus attempting to withdraw liquidity from areas where excess liquidity had reached a point it was more than comfortable with, while also targeting better quality management of credit.

Another point is that in the policy stance, RBI has given first priority to keep a vigil on trends in inflation and to be prepared to respond swiftly and effectively through policy adjustments to stabilize inflation expectations.

Second, it will monitor the liquidity situation closely and manage it actively to ensure that credit demands of productive sectors are adequately met while also securing price stability and financial stability.

Lastly, RBI will maintain a monetary and interest rate regime consistent with price stability and financial stability, and supportive of the growth process.


In conclusion, it bears emphasis that the Reserve Bank is mindful of its fundamental commitment to price stability.

It will continue to monitor the price situation in its entirety and will take measures as warranted by the evolving macroeconomic conditions swiftly and effectively.


To conclude all the factors it seems that with the withdrawal of special liquidity measures together with an imposition of CRR in borrowing in CBLO market, RBI has taken a first to step towards controlling liquidity.

With prioritizing inflation it is expected that the next step of RBI could hike in CRR as it has also reduced the indicative growth of Broad money to 17% from 18%.


Note : For More Finance Gyan, Latest Industry, Stock Market, Economy News and Updates, please click here


Dances with Pundits

Today, Jake Tapper of ABC reports, the President lunched with:

Mike Allen – Politico

David Brooks – New York Times

Chris Cillizza – Washington ost

Gail Collins  – New York Times

Howard Fineman – Newsweek

David Gergen – Media Whore

Mara Liasson – NPR

Josh Marshall – Talking Points Blog

John Meacham – Newsweek

Cynthia Tucker – Atlanta Journal Constitution

Andrew Rosenthal – New York Times

With his Journo List and the use of the National Endowment for the Arts for propaganda purposes, we have never seen a president waging all out propaganda warfare in this country. To Obama, Obama is the Message. As we see Paul Krugman advocate Weimar monetary policy, it would seem that much of the punditocracy have lost all critical perspective, and perhaps some of their common sense as well.

The President has used these lunches and dinners to communicate his message, which is then interpreted the pundits. No one discussed the religious aspect of yesterday’s massacre, I’m sure, just as no one questioned the foreign policy fiascos that are racking up like frequent flyer miles as the president’s strategies on Iran, Pakistan, Palestine, Honduras, and Central Europe go awry. No one, I am sure, brought up the monstrosity of the Health Care bill before the house tonight.

No, these are party line affairs meant to co-opt his friends and neutralize or win his opponents. The hard questions go unanswered as they build up day by day. The announced unemployment rate is 10.2%. The structural rate including those who have given up on their searches for jobs is closer to 14% or 15%. In parts of the country unemployment is above the levels of the Great Depression.

As the President and his staff have, in an unprecedented manner, waged war against Limbaugh and Fox News, everyone had a nice lunch and oh so interesting conversation. Thomas Jefferson said ” were it left to me to decide whether we should have a government without newspapers or newspapers without government, I should not hesitate for a moment to prefer the latter”. He also said “the force of public opinion cannot be resisted when permitted freely to be expressed”.  Obama’s co-option of the message is unprecedented, and if anyone should be wary, it is these very pundits.

 

 

 

Thursday, November 5, 2009

"La economía va cada vez mejor a ritmo más rápido"

Paul Romer, economista, uno de los candidatos favoritos al premio Nobel de Economía

“La economía va cada vez mejor a ritmo más rápido”

53 años. Nací en Denver (Colorado) y vivo en California. Divorciado, tengo dos hijos y un nieto. Licenciado en Matemáticas y Física y doctor en Economía. Profesor de la Universidad de Stanford. La política más importante es la buena organización. Creo en el ser humano

¿Qué provocó el salto de la física a la economía?

Las perspectivas de trabajo en física no eran demasiado prometedoras y sí lo era la investigación en economía.

Crematístico, pero suena usted para el Nobel.

Seguí investigando en las grandes preguntas que me interesaban en física y las apliqué al ámbito de la economía.

¿Y cuáles eran esas grandes preguntas?

En física, la creación del universo, y en economía, por qué aumentaba el crecimiento visto con la perspectiva de miles de años. La mayoría de los economistas mira qué pasó el año pasado y qué pasará el próximo. Yo observé que la economía aumenta y va cada vez mejor a ritmos más rápidos.

¿Ya sabe por qué?

La teoría económica dice que las cosas deberían empeorar porque los recursos son limitados. Pero la otra fuerza es el descubrimiento de ideas, y los humanos han ido descubriendo ideas cada vez más rápido. Yo trabajo la economía de las ideas en lugar de la economía de los objetos.

¿Y así llegó a su famosa teoría del crecimiento?

Empecé a trabajar en economía a finales de los 70, cuando todos pensaban que la inflación estaba fuera de control y que nos íbamos a quedar sin petróleo. Era una época que se parecía bastante a la de ahora.

¿Una época pesimista?

Sí, y yo dije que era sólo una bajada temporal de una tendencia al alza, y tenía razón.

¿Ahora volverá a tener razón?

Estoy convencido. Me interesan las normas que rigen la economía y el día a día: las de circulación, cortesía, intercambio de ideas…; todo ese tipo de normas que establecen cómo interactuamos, ahí está el quid.

¿Cuál es su previsión?

Los países que puedan mejorar sus normas mejorarán y crecerán más rápidamente.

¿Normas que se establecen desde los gobiernos?

Las más fáciles de cambiar son las leyes y los reglamentos. Pero hoy las más importantes son las relacionadas con el sector financiero: cómo podemos cambiar las normas para frenar los booms y las caídas en picado.

¿No son consecuencia de la avaricia?

Hay que cambiar las normas para desanimar a toda esta gente avariciosa y, una vez las cambiemos, la gente empezará a cambiar su percepción de lo que está bien y lo que está mal, sus valores.

Parece sencillo…

En muchos países tenemos normas que dicen que si el sector financiero asume un riesgo grande y todo marcha bien, se queda con las ganancias; pero si sale mal son los contribuyentes los que sufren. Tenemos que cambiar eso.

Clama al cielo.

Hay que implementar normas que animen a la movilidad, al cambio de empresa e incluso de profesión, favorecer por ejemplo los años sabáticos.

Muchos de sus colegas dicen que se acabó el capitalismo rabioso.

Hay que implantar normas medioambientales y seguir descubriendo cosas que producen más valor con menos recursos (del tocadiscos al iPod). Si realmente creamos valor, todos los seres humanos podrán tener una mejor calidad de vida en el futuro, y eso es básico porque nos ayuda a ser optimistas y tener esperanza, ser mejores personas.

¿Está seguro?

El optimismo del buen crecimiento saca lo mejor de la gente y evita el pesimismo de tener que luchar por los recursos escasos, que ha sido la realidad durante gran parte de la historia de la humanidad.

Las ciudades están llenas de hoteles y comercios que no venden.

Muchas economías como la de EE. UU. se han basado en el exceso de consumo y no en invertir en el futuro a través de un buen sistema sanitario y de la educación, un bien básico que nos hace mejores ciudadanos y trabajadores más productivos, es decir, mejores a la hora de solucionar problemas.

Ya.

Pero no podemos obtener una mayor educación aumentando el tiempo que los alumnos pasan en la escuela; hay que encontrar maneras de aprender más, aumentar la productividad de la educación, y aquí de nuevo es donde deberíamos cambiar normas.

El ciudadano está muy normatizado.

Hay que encontrar buenas normas que dejen a la gente mucha libertad para que muestre sus propias capacidades. Normas que saquen lo mejor de nosotros.

¿De dónde deben proceder las normas?

Esta es actualmente la pregunta más importante para la economía. Algunas veces las normas vienen de los políticos; otras, de los activistas sociales y de gente con autoridad moral, que cambian nuestros valores y eso cambia las regulaciones.

Acaba de decir algo importante.

Sí, que la comunidad activista bien formada y pensante puede ser una fuerza muy positiva que nos empuje hacia mejores normas.

¿Y qué haremos con el 30% de paro?

Mayor flexibilidad y respuesta por parte de la Administración. Más apoyo a las personas para que cambien de sector: si ahora la construcción no es boyante, haz otra cosa. Y animar las iniciativas. El problema es que no tenemos buenos sistemas para cambiar las normas, es ahí donde hay que innovar. Las buenas normas es el gran reto humano.

“La economía va cada vez mejor a ritmo más rápido”

El optimista

Está considerado una de las 25 personas más influyentes por la revista Times.Ya con su tesis doctoral, a comienzos de los 80, puso del revés la idea que economistas y políticos tenían sobre la macroeconomía. En su teoría del crecimiento, que para muchos es merecedora del premio Nobel, Romer asegura que el conocimiento ha desplazado a la fabricación de objetos físicos en el crecimiento. Sobre eso habló en la 14. ª edición de la Jornada d´Economia de Caixa Manresa y sobre su actual trabajo: construir nuevas ciudades con normas adecuadas, bien gobernadas, en países en vías de desarrollo. “Yo siempre he sido un rebelde en el mundo de la economía porque me niego a no ser optimista”.

Revenue and Profit Declines at Time Warner

Time Warner, the media conglomerate that was once the world’s largest but has lately slimmed down by shedding some businesses, said both revenue and profits declined in the recent quarter.

The results were hurt by one business that the company has said it will spin-off — AOL — and another that has been battered by the advertising recession and is not viewed by executives as central to the company’s future, the Time Inc. magazine publishing empire.

The company’s biggest business, cable networks, which includes channels such as HBO, TNT, TBS and CNN, gained in revenue and profit. Revenue at the movie unit, the Warner Brothers studio, declined mainly because of lower DVD sales, a trend that has been felt across Hollywood, although its profitability improved.

Time Warner’s performance, like the results posted Monday by a rival, Viacom, is emblematic of a mainstream media industry that is largely contracting as consumers change how they view television and movies. The trend is compounded by the recession.

So media executives are left to cut costs to maintain profitability, rather than increase the revenue pie.

“We are executing well, despite the tough environment,” said Jeffrey L. Bewkes, Time Warner’s chief executive officer, in a conference call with Wall Street analysts.

Over all in the third quarter, revenue declined 6 percent, to $7.1 billion. Net income was $661 million, down from $1.1 billion in the last year’s third quarter. Operating income decreased 10 percent, to $1.4 billion.

The results, though, were better than Wall Street forecast, and the company raised its financial outlook for the remainder of the year. Excluding certain items, the company reported earnings-per-share of 61 cents, better than the 55 cents expected by Wall Street, according to Thomson Reuters.

AOL posted a 23 percent drop in revenue, to $777 million. But the company plans to complete its spin-off of the unit by the end of the year. At Warner Brothers, revenue fell 4 percent, while operating income increased 6 percent to $291 million .

Warner Brothers, like other studios, is facing a decline in DVD sales, which once drove growth in Hollywood. But the performance of the unit, particularly the increase in profits, surpassed what many on Wall Street expected. The studio’s major release in the quarter was “Harry Potter and the Half-Blood Prince.” “I think the most noteworthy thing in the quarter is film,” said Anthony DiClemente, an analyst at Barclays Capital. “They’ve grown operating profits at film for each of the past six quarters. “A lot of it is streamlining and cost cutting,” he said.

The only division of Time Warner to post revenue growth was its cable networks. Revenue there rose to $2.87 billion, from $2.73 billion in the quarter a year ago. Operating income rose to $938 million from $909 million.

Time Warner confirmed that it would take a $100 million restructuring charge to lay off hundreds of workers at Time Inc., which publishes titles like Time, Sports Illustrated, People and Fortune. Also Tuesday, the company said it would close Fortune Small Business, which is produced by Time Inc. but owned by American Express. In the quarter, Time Inc.’s revenue declined 18 percent to $914 million, while its operating income declined 40 percent, to $97 million, from last year’s third quarter.

Advertising revenue declined by $129 million, or 22 percent, while subscriptions declined 13 percent, to $49 million.

Mr. Bewkes said he believed much of the downturn in magazine advertising a result of the recession rather than permanent shifts of readers turning away from print and toward the Internet. This view runs counter to that of many others who believe that print is on a steady decline and will never return to the growth it once enjoyed.

Revenue and Profit Declines at Time Warner

Tuesday, November 3, 2009

Taxpayers Take Yet Another Screwing!

The bailout thing has been nothing but a good gang rape of the taxpayer from the beginning…..the bags of money delivered to Wall Street by the government  has done nothing for the taxpayer and everything for the greedy people on Easy Street…..

The Business journal is reporting:

CIT Group Inc. filed for bankruptcy protection Sunday after its board of directors approved of a plan to reorganize the giant small business lender.

The plan has also been approved by CIT’s creditors.

The bankruptcy of CIT is likely to hand the Treasury Department its biggest loss to date under the Troubled Asset Relief Program. It invested $2.3 billion in CIT last December.

CIT was caught in a squeeze between loans gone bad as the economy worsened in the past year and being cut off from the unsecured debt market, which it relied on for about 75 percent of its funding. More stable bank deposits made up less than 5 percent of its funds.

Wait!  Did the article say that the creditors approved the action?  Since the taxpayer is on the hook for billions……did anyone ask them if they approved?  I did not get a note asking me….how about you?

When are the people going to start exercising their muscle on asll this silliness?

The Democratic and Republican Progressive Parties--A Plague On Both Of Them--American Conservative/Libertarian Tea Party Time

Glenn Beck Show – Nov 2, 2009 – Pt 1 of 5

 

Glenn Beck Show – Nov 2, 2009 – Pt 2 of 5

 

Glenn Beck Show – Nov 2, 2009 – Pt 3 of 5

 

Glenn Beck Show – Nov 2, 2009 – Pt 4 of 5

 

Glenn Beck Show – Nov 2, 2009 – Pt 5 of 5

 

Background Articles and Videos

 

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Sunday, November 1, 2009

In Defense of Brain Drain

Michael Clemens and David McKenzie argue that the “movement of skilled workers from poor countries to rich ones is nothing to fear. In the long run,” they argue, “it will benefit both.”

Conventional wisdom once held that the wealth of a country declined when it imported foreign goods, since obviously cash was wealth and obviously buying foreign goods sent cash abroad. Adam Smith argued that economic development — or the “wealth of nations” — depends not a country’s stock of cash but on structural changes that international exchange could encourage. In today’s information age, the view has taken hold that human capital now rules the wealth of nations, and that its departure in any circumstance must harm a country’s development. But economic development is much more complex than that.

…But thanks to new research, we have learned that the international movement of educated people changes the incentives to acquire education, sends enormous quantities of money across borders, leads to movements back and forth, and can contribute to the spread of trade, investment, technology, and ideas. All of this fits very uncomfortably in a rhyming phrase like “brain drain,” a caricature that would be best discarded in favor of a richer view of the links between human movement and development.

Click here to read the entire article, it is worth the time.

HT: Andew Sullivan

The Public Option Has a Problem…

…and no, it isn’t Joe Lieberman.

Slate Magazine has an article pointing out that the Congressional Budget Office (CBO) has found that "[A] public plan paying negotiated rates … would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges."

What? I thought the public option was good to go. Now, this quote will be all over the air waves and the blogosphere (it already is) which will put more pressure on Congressional and Senate weenies moderates to capitulate on this important and necessary aspect of healthcare reform.

But not all is lost. The CBO is also clear that a public option will be more efficient than the private sector and will force overall prices down. The trouble is that the insurance industry are experts at not paying premiums especially for those who are very sick. This is the time honored way to keep costs down and profits high. The government-run option will tend to take all comers and pay a higher benefits to a larger proportion of its members. Consequently, the public option will tend to attract the people with serious health risks and those who cannot afford to take a chance that Blue Cross will deny payments. This means that the pool of members in a public option will tend to have more expensive needs than the private industry, which will tend to drive up premiums. As premiums go up, those who are healthier will flock to private insurers exacerbating the problem.

The trouble then is not a flaw in the public option, but in the fact that congress is requiring that the public option run completely as an insurance group that will require no governmental help. If that is to work, the government needs to insure that the insurance companies take users with pre-existing conditions and pay out premiums to one and all.

…well, Joe Lieberman is still a problem.