It’s all about deficits these days. The challenge is figuring out what it all means for the markets, the economy, the man on the street and for politics in Washington. What’s crystal clear at the moment is that there’s a bull market in red ink. That’s hardly a surprise, although the debt estimates continue to creep higher. That latest example comes from the Congressional Budget Office, which published a new analysis on Friday of President Obama’s budget outlook. The CBO concludes that the projected deficit for the decade ahead will be $1.2 trillion more than the White House predicts.
IS A NEW ERA DAWNING FOR CHINA’S CURRENCY POLICY?
Is China’s undervalued currency set to rise? That depends on how you interpret yesterday’s comments from the governor of China’s central bank.
FAMA, MARKET EFFICIENCY, AND THE LATEST RECAP
Debate about market efficiency is forever. That includes the ocassional commentary from the man who started it all, or at least played a pivotal role in bringing the idea to the financial fore, starting in the 1960s. What’s it all about? You could spend the better part of a year reviewing the academic literature, and the remainder of the decade catching up on the various threads of discussion–pro, con and everything in between. For the short, short, short recap, a line from Peter Bernstein’s classic Capital Ideas
INCLEMENT WEATHER FOR JOBS
It’s the weather, they say. The loss of 36,000 jobs in last month’s nonfarm payroll count may have been a victim of the snow, the Labor Department advises with this morning’s release of the February employment report. The unemployment rate, at least, was unchanged last month, albeit at a high 9.7%.
THE CHINA SYNDROME
Big deficits and rising mountains of public debt. Is it a nightmare? No, it’s the fiscal profile du jour of these United States. Or is it both? In any case, assuming Congress keeps current laws and policies intact, the federal budget deficit, as a share of the economy, is on track for fiscal 2010 to be the second highest since World War Two, the CBO projects.
THE PLOT THICKENS IN THE LABOR MARKET
Today’s weekly update on new jobless claims offers a reprieve on the darker visions conjured on these pages in recent weeks, including here. New filings for unemployment benefits dropped last week to by 29,000 to 469,000. Whew, that was a close one! But the risk for this series that we’ve been discussing lately is still with us, even if the latest report offers some breathing room for thinking positively.
MORE OF THE SAME: A SLOWDOWN IN JOB LOSSES
Two new private-sector reviews of last month’s labor market show that the economy is still shedding jobs. The only good news is that the rate of loss continues to slow. But a loss is still a loss at this late date in the economic cycle, and today’s numbers suggest that Friday’s monthly update on jobs from the government may suffer another round of red ink, albeit in relatively mild form.
THE REALLY BIG PICTURE
Some events are legitimately macro, or MACRO, such as the shifting of the Earth’s axis in the wake of the Chilean earthquake. The Feb. 27 earthquake “may have shortened the length of each Earth day,” according to the Jet Propulsion Laboratory.
Measured in dollar terms, the quake’s impact is easier to spot. One estimate puts the damage as high as $8 billion.
The human loss, of course, is beyond calculation. How can we help? No shortage of options, including the Red Cross and the International Medical Corps, to name but two of the many organizations that need financial support, for Chile as well as for the victims of Haiti’s recent quake.
THE ENDLESS SEARCH FOR MACRO POLICY SOLUTIONS
Everyone has a prescription for managing the business cycle these days, but no one has a solution. That’s because there are none, at least nothing that passes the smell test of a workable system that can deliver nirvana: maintaining capitalism’s power to drive economic growth while eliminating its tendency for stumbling from time to time.
IS THE TAX BITE THE NEW HEADWIND?
Today’s personal income and spending update for January looks like a warning of things to come, but not for the obvious reasons. The weasel in the henhouse is all the more troubling at the moment since it’s masked by the all-important topic of consumer spending, which rose substantially last month. Beneath this rosy surface, however, is a potentially troubling trend.