Archive for March 2016

The Friday File: When looking to hire/marry the best candidate from a large pool, the solution is to interview and reject the first 36.8% of all candidates and then accept the next candidate that is better than any interviewed. Doing this, you will select the best candidate 36.8% of the time! If a good candidate…

Despite low interest rates, the medium-term fiscal outlook is deteriorating. Last year debt-to-GDP in 2025 was projected to be 81%, it’s now 91%, up from 75.6% today. This is because realistically, revenues are expected to remain flat while spending rises by 3 percentage points of GDP. Specifically, entitlements will grow by 1.7 percentage points, net…

Earlier today, the Fed announced, unsurprisingly, that it wasn’t raising short-term rates. What was mildly surprising is that despite pretty decent domestic growth, the Fed now expects to raise rates by just half a percentage point in 2016. In December, they anticipated raising rates by twice as much. Why the change? Weak global growth and…

Household liabilities peaked in Q3/08 at $14.3 trillion. They then declined, bottoming at $13.3 trillion in Q3/12. They have steadily risen since and are now $14.2 trillion. As a percentage of GDP, household liabilities peaked at 98.2% of GDP in Q2/09 and have steadily fallen and are now just 79.5% of GDP. Better yet, household…

Last Thursday, the ECB unleashed numerous measures to boost lending and inflation in Europe. The ECB pushed rates further into negative territory, from -0.3% to -0.4%, boosted the size of their bond purchases by €20 billion/month, and will now PAY banks up to 0.4% to borrow if they lend the money! While this massive (and…

The Friday File: A German passport allows bearers to visit 177 countries visa-free, more than any other nation. Sweden follows at 176, followed by Finland, France, Italy, Spain and the UK all at 175. In 8th position are Belgium, Denmark, Netherlands and the US, all at 174. An Afghan passport is the least valuable, allowing…

Among those 16 and over in the US who earned money in 2014, earning $10,000 put you in the 20th percentile of those with earned income. If you earned $27,000, you were in the 50th percentile while those earning $50,000 were in the 73rd. $100,000 of earned income placed you in the 92nd percentile, while…

Postal service employment peaked at 909,500 in 4/99. It then began a slow but steady decline, but temporarily peaked at 781,600 in December 2007, just before the start of the Great Recession. It then rapidly fell, hitting a trough of 588,200 in January 2014. Since then, post office employment has been slowly rising and is…

This year’s speaker at the Builder & Developer Luncheon, Dr. Elliot Eisenberg, offered a lively take on the current economy. Read more here.

In 2016, China is aiming for GDP growth of 6.5% to 6.7%. While that’s way too high, China will make it happen. That means increasing the money supply and lending by a dangerously high 13% each, having a budget deficit of 3%, up from 2.4% last year, and funneling more credit to bloated state-run-enterprises. With…