Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
First-time homebuyers hit lowest level in nearly 30 years (Diana Olick, CNBC) The last time the level of first-time home purchases were at this level a 30-year fixed-rate mortgage carried about 14% interest. Now it's a little above 4%. Yet only 33% of home sales are to first time buyers in 2014, compared to the long-term average of 40%. See next article.
Weekend Brings Record Snow to the Appalachians, New England (Michael Doll, Accuweather.com) Early season snowfall from Maine to Tennessee breaking all-time records for the date. In Bangor, ME a 12 inch snowfall broke the existing 02 November record of 0.5 inch (1951). Other records were set as Aroostock County recorded depths up to 21 inches and Mt. LeConte, TN received 22 inches. Higher elevations in the Smoky Mountains generally received more than a foot of snow. Other notables were snow across much of upstate South Carolina, with up to 4.5 inches in the Columbia area. Sugar Mountain Ski Resort, Banner Elk, NC opening Sunday with two trails skiable on a 10-32 inch machine-made base and 8 inches of new natural snow. Also low temperature records were set across much of Florida. Vero Beach had an overnight low Sunday morning of 41 degrees breaking the 1993 record by 6 degrees. Tampa had a high temperature Sunday of 67 degrees, breaking a 119 year-old record of 68. For a weekly update of weather pattern and climate news follow GEI Newsweekly global weather and climate review by weather economist Sig Silber every Monday evening.
With just one week to go until the midterm elections, a new poll indicates that billionaires are likely to retain control of the United States government.
The poll, conducted by the University of Minnesota's Opinion Research Institute, shows that the proxy candidates of billionaires are likely to win ninety-eight per cent of next Tuesday's races, with the remaining two per cent leaning billionaire.
Although the poll indicates that some races are still "too close to call," the fact that billionaires funded candidates on both sides puts the races safely in their column.
Articles about conflicts and disease around the world
Janus’ Bill Gross: Government Needs to Spend More (Gil Weinreich, ThinkAdvisor) Gross says that in a time of high debt deflation can crush an economy. Debt cannot be repaid in a deflating economy because the amount of money is, well, deflating. Gross argues that inflation of 2% is needed to keep a "fire-wall" against the devastation that deflation would bring. He feels that monetary policy is not enough in this regard and fiscal action is needed. Says Gross:
"The real economy needs money printing, yes, but money spending more so, and that must come from the fiscal side - from the dreaded government side - where deficits are anathema and balanced budgets are increasingly in vogue."
What boomers are getting so wrong about retirement (Suzie Orman, CNBC) Biggest mistake is retiring with debt. There are five other big mistakes that Suzie outlines on a video. Sometimes Suzie over-generalizes with her public venue advice, but in this case we thinks she is right on target.
So, here is my plea to Money and Banking professors. Spend less time teaching the mechanics of the deposit/bank-credit multiplier. Rather, spend more time explaining how this process creates credit figuratively out of thin air and why thin-air credit creation has such an important effect on the business cycle. Who knows? Perhaps one of your students will become a Fed official and can then explain this concept to her Fed colleagues.
This brief look at what QE did not do helps us understand why it is so hard to know what it did accomplish. It was an uncontrolled experiment. There was no way to apply QE to half of the economy and a placebo to the other half. Furthermore, for most of its life, the expansionary effects of QE were fighting against the contractionary effects of fiscal policy. It was a standoff, but there is no way to tell if that is because both policies were weak, or because both were equally strong. The most widely accepted conclusion about QE—that things would have been even worse without it—remains plausible, but since that is a counterfactual hypothesis that can never be conclusively tested, the debate will undoubtedly continue.
The Fiscal Barometer (Brookings Institute) The fiscal impact measure shows how much federal, state, and local government taxes and spending added to or subtracted from the overall pace of economic growth. Between 2008 and 2011, fiscal impact was positive, indicating that government policy was stimulative; in recent years, it has been negative, indicating restraint.
The Fiscal Headwinds Have Finally Subsided (Parinitha Sastry and Louise Sheiner, Brookings Institute) For the first time since the stimulus program ended in 2010 there have been two consecutive quarters with no subtraction from GDP growth due to the total fiscal actions of federal, state and local spending. The net of taxes and transfers continues to be a negative as the federal deficit continues to decline.
Other Economics and Business Items of Note and Miscellanea
Econintersect wants your comments,
data and opinion on the articles posted. As the internet is a
"war zone" of trolls, hackers and spammers - Econintersect must balance its
defences against ease of commenting. We have joined with Livefyre
to manage our comment streams.
To comment, just click the "Sign In" button at the top-left corner of
the comment box below. You can create a commenting account using your
favorite social network such as Twitter, Facebook, Google+, LinkedIn or
Open ID - or open a Livefyre account using your email address.
Econintersect Behind the Wall
Print this page or create a PDF file of this page
The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.
Take a look at what is going on inside of Econintersect.com