Office Rumors

Office Rumors Blog – “Better reading this than the insides of your eyelids!”

Archive for the ‘Economics’ Category

Moving Liabilities off Balance Sheet Nothing New

leave a comment »

Via Greg Mankiw, The New Yorker looks at how LBJ moved Fannie and Freddie off the government’s balance sheet (making them public) in order to fund the Vietnam War. What’s interesting in this is twofold:

  1. During this housing crisis, mark-to-market rules have caused the iBanks to recognize securities that they have moved off the balance sheet.
  2. Issues with both LBJ’s decision and the more current mortgage security situation have come to light in the current market.

This just goes to show that a lot of bad policy can be covered up as markets expand. Maybe its a good thing that the housing bubble popped. Now we know about these problems and can make decisions with them in mind.

UPDATE @ 11:55a: I don’t know what happened with the title. It was missing the final word. Now it makes a little more sense than before.


Written by walonline

July 23, 2008 at 9:08 am

The Economists’ Forum: A Debate On Moral Hazard

leave a comment »

The Financial Times has an interesting discussion on moral hazard, its part in the current economic conditions, and how to best maintain the economy (whether that is creating a moral hazard or otherwise). This discussion involves three economists: Ricardo Caballero, Charles Wyplosz, and Martin Wolf. They all present interesting ideas, but I believe I fall in with Wolf, who flatly states:

If we are talking about government rescues of shareholders in insolvent institutions (and surely that is what we are talking about here), we are not talking about capitalism at all. After all, these are already limited liability companies whose shareholders are, or should be, highly diversified. If they can’t lose their investment in the biggest housing bear market in US history, I really don’t understand what sort of economic systems we are discussing. But whatever it is it is not a market economy.

As stated before, the others provide valuable points, which all make for some interesting–if not mentally taxing–reading.

Written by walonline

July 22, 2008 at 9:46 am


leave a comment »

The follow graph from the Hoover Institution may cause limited-government-types to cringe. If you follow the link, there is another one showing the effect of probable taxation policies on the public in the next four years.

Hat tip to The Corner.

Written by walonline

July 21, 2008 at 3:49 pm

Posted in Economics, Politics

Tagged with ,

So True

leave a comment »

Hahaha. How the tables have turned, Mr. Banker!

Now, what happens when the application goes through? Did we taxpayers realize that we’d be allowing our government to do things like this when we gave the ‘o.k.’ for our representative system? Maybe we should pay a little more attention to these folks we’re delegating our decisionmaking to…

Written by walonline

July 17, 2008 at 11:33 pm

Leading Indicator: Volume of Mail?

leave a comment »

A very interesting post at Odd Numbers ( compiles reports from FedEx and UPS’s and shows how much those have dropped in the instance of recession. The numbers from the recession around 2002 show a significant drop. FedEx just announced a pretty stiff fourth quarter loss. Is this adding to the body indicators pointing to a recession?

Have a look at the post for the charts and further analysis to decide for yourself.

Written by walonline

June 20, 2008 at 4:11 pm

Recession Indicator My Macro Class Missed?

leave a comment »

Barry Ritholtz points out, at his blog Big Picture, a New York Times blog writer’s discussion of the change in private sector jobs. Over the past year, it has been off 125,000. He then goes on to point out that every recession since 1953 has seen negative numbers. The comments are well moderated, so worth while discussion continues there as also.

Have a look at the NYT article and Ritholtz’ post.

Written by walonline

June 10, 2008 at 11:10 pm

Posted in Economics

Tagged with

Oil Up Over $10 In Trading Day

leave a comment »

Oil rose $10.67 (8.35%) today as the dollar dropped on news that surprised analysts regarding employment in the US. Here is two investors takes via Bloomberg:

Oil is “being used as a hedge by speculative buyers for the weakened dollar,” said Gary Adams, vice chairman of oil and gas consulting at Deloitte & Touche LLP in Houston. “We are seeing that the price will continue to go up as investors look for alternatives.”


“This is all just a plain old stampede,” Tim Evans, an energy analyst for Citi Futures Perspective in New York, said in an e-mail. “The sellers have basically pulled their orders so it doesn’t take much incremental buying to push prices higher.”

Oil first spiked last night after US markets closed. This morning I mentioned it was up over $6. For a time, it looked like it would stay there, but by the close of the US markets Friday evening, it was up over $10. In addition, the market felt oil-based pressure and jobs-number surprise, which both added to pessimism and talk of recession.

This current economics situation is really something. Things are extremely volatile, but at the same time it doesn’t appear to have really nasty consequences, as we’re still without a by-the-book recession. We’ll see where this goes over the summer.

Recall, last year things calmed down from mid-June through August between nasty stretches.

UPDATED @ 4:23p: Barry Ritholtz points out the irony a specific magazine calls from the Economist.

Megan McCardle was writing about $40 oil a few years ago, but will now trade her blood for it.

Written by walonline

June 6, 2008 at 3:24 pm

Posted in Economics, Energy, Markets

Tagged with , , ,