Why the US Housing Market Crashed – No Responsibility
CDOs explained by the film Inside Job which I highly recommend to all.
HEre's the feature trailer.
Stop Coddling the Rich – Why Buffet is Right
Did you catch this opinion piece in the NY Times August 15th, 2011? On the heals of a Republican hold out to get everything they wanted in the debt ceiling debacle using the American people as ransom, Warren Buffet, one of the richest men in all the world, suggested it was time for the rich to give up more of their wealth for the sake of the greater good of the nation.
Buffet mentions:
Capital Flight and Slowing Exports – Revaluation
Q. What kind of policies would policy makers Central Bank (CB) consider with: an exchange rate system with a "fixed E system", high export growth, a rise in inflow of capital in the past few years, a problem emerging with growth of exports are slowing down and most profitable opportunities are getting exhausted. Oh yea, and by the way there is an indication that capital flight is occurring?
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Debt Ceiling Deal Reached – How Republicans Are Killing America
The Republican hostage taking of the American economy in an effort to keep the rich richer has won out. Tea Party members must be thrilled, in the past year their 'compromise' has amounted to tax cuts and spending cuts galore.
And many economists will conclude that reducing government spending during times of economy downturn is the WORSE thing you could possibly do. But of course, don't tell that to thick skulled Republicans.
...the G.O.P. has just demonstrated its willingness to risk financial collapse unless it gets everything its most extreme members want. Why expect it to be more reasonable in the next round?
.....how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation’s economic security, gets to dictate policy? And the answer is, maybe it can’t. - Krugman in NY Times
Links Collection on America’s Debt Ceiling Debacle
The debts have to paid at some point, and Republicans don't seem to understand you can't live your life on credit and are unwilling to accept a deal that doesn't entirely represent their far right-wing conservative values. Democrats seem to forget that in order to curb debt you need to curb spending, even in the tough areas.
The sad part is both parties share the blame today when it was in fact 8 years of Republican era economics that erased the tiny surplus the Clinton administration was running prior. People forget about that and will hopefully think really hard come election time who was really responsible for this absolute debacle.
For those who need a refresher the debt ceiling is a cap on the amount of securities the Treasury can issue. The Treasury will issue, for example, short term bills to raise money to pay for government expenses.
Some will say raising the ceiling doesn't impact past expenses, but the capability of paying for future ones. Others highlight the perpetual cycle of debt accumulation that will inevitably cripple the US economy. Here's what economists are saying:
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Foreign Exchange Markets: Devaluation and Revaluation
We are re-posting this popular article about the foreign currency and the devaluation and revaluation systems. After all, what's the point of trying to predict foreign exchange markets (FOREX) if you don't even know how the market moves and reacts to change? The world's largest market that is open 24 hours does react to certain changes and you need to know how to watch and interpret these movements. Why let some third-party web application make predictions for you when you can do the work yourself?
Devaluation and Revaluation of Currencies
Incentives and Profit for Insurance & Drug Companies
Pharmaceutical companies are routinely called out for supposedly holding on to suspected cures because there's no money to be made. Sometimes drugs are available but because the condition is comparatively rare is costs thousands of dollars for one treatment you'll need the rest of your life.
How do they get away with it and why does it happen?
From a drug company's perspective the issue of what to product and research is far more complex than arbitrarily holding back cures. For example, the research required to come up with an approved drug can run into the hundreds of millions. There's also no guarantee the drugs will in fact be effective, sometimes R&D produces a dud, so that's millions lost.
It's no surprise that when a drug is approved drug company's will want to have a lot of sick people for a long time buying the drug. So this isn't necessarily a case of having no incentive to produce drugs for problems, but a need driven by the market to find drug treatments that will in turn product a profit.
Real Estate Market Heats up in Summer – For Some…
Summer time usually means the real-estate market heats up as people come out of their winter shells and look for property. Sales are historically higher in the Spring-Summer compared to the Winter. This year is no exception in Canada as single-family and condo sales were up sharply over the Winter period, but more importantly, over the same period from 2010. In Calgary single-family dwellings were up over 30% from the previous year.
What's the cause of the increase? We can chalk it up to two main factors: 1) economy, 2) consumer confidence.
The first has to do with current state of the economy, which in Canada, and particularly in Alberta, is recovering. Now the pace of this recovery is actually quite slow, is just looks torrid in comparison to the continued problems south of the border.
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Happy Forth of July from DiscussEconomics!
DiscussEconomics would like to wish all our American blog readers and contributors a happy Fourth of July. Hope you actually got the day off! PS. Please stop buying so many things on credit.
-B
Happy Canada Day from DiscussEconomics
To all our Canadian readers and students we want to wish you a Happy Canada. Keep it real Canada! (Which is where we're from FYI.)
- B
