The Angry Bear

The Fed just let Morgan Stanley and Goldman Sachs off the hook after both failed the required stress tests under Dodd-Frank. The stress test is supposed to predict whether banks and so-called banks like Morgan Stanley and Goldman Sachs can weather a financial crisis. This is not an instance of if you remember in 2008, who could forget? Few TBTF had set aside the necessary reserves to back the tranched MBS and the more risky CDS/naked CDS. These were the...

Weekly Indicators for July 2 – 6: long term forecast continues to deteriorate June data started out with another strong jobs report, but once again with weak wage growth. Motor vehicle sales and both the ISM manufacturing and nonmanufacturing indexes were very positive as well. May data included and increase in construction spending and factory orders. My usual note: I look at the high frequency weekly indicators because while they can be very noisy,...

In Defense of the Francois-Baughman Analysis of the Trump Tariffs Dr. Joseph Francois and Laura M. Baughman are being criticized for writing: This policy brief examines the potential net impacts on U.S. jobs across all industries of the proposed steel and aluminum tariffs applied to targeted steel and aluminum imports from all countries. It does not take into account any potential retaliation against U.S. exports; only of the tariffs themselves. We find...

pgl responded to the post below… “Corporations… make profits appear in low-tax countries; but there’s very little real production or employment behind those profits…. Tax-haven countries… show… ridiculously high levels of profits relative to wages… because the profits aren’t being earned where they’re being reported…. Ireland….” Krugman is referring to transfer pricing manipulation. One would have hoped tax reform would make enforcing the arm’s length...

June jobs report: another strong late cycle reading HEADLINES: +213,000 jobs added U3 unemployment rate up +0.2% from 3.8% to 4.0% U6 underemployment rate up +0.2% from 7.6% to 7.8% Here are the headlines on wages and the broader measures of underemployment: Wages and participation rates Not in Labor Force, but Want a Job Now:  up +75,000 from 5.183 million to 5.258 million Part time for economic reasons: down -205,000 from 4.948 million to 4.743...

(Dan here…Lifted from Robert’s Stochastic Thoughts) by Robert Waldmann Kung Fu Monkey Nobel Prize I just learned that Quinnipiak U polled asking people whether Donald Trump deserved a Nobel Prize for his Singapore summit. I honestly thought that this was a great opportunity for Kung Fu Monkey to score again. Kung Fu Monkey is a blog where a dialogue was posted in which one of the bloggers confidently asserts that 27% of US adults are insane reactionaries....

(Dan here…late posting) by New Deal democrat On July 4, a consideration of Dred Scot On a 4th of July on which the President has expressed open longing for a lifetime term, and murmurings that a significant share of enlisted men in the military would be willing to overturn the Constitutional order should he call on them to do so, I’m not too interested in empty sloganeering celebrations. With the obvious exception of African slaves, the Constitution was...

Pruitt’s EPA Trashing Benefit-Cost Analysis Of Environmental Policy Scott Pruitt increasingly looks the worst of the worst out of the appalling cabinet of President Trump, quite aside from his race to become the single most corrupt cabinet member in the entire history ofthe US.  The latter is trivial compared to his policy change after policy change that will increase pollution in the environment and end up killing people, to be blunt about it.  But now...

David Gelles interviewed Richard and Holly Branson for The New York Times Saturday David Gelles (NYT): What do you think those in positions of power should do to address social problems like income inequality? Richard Branson: A basic income should be introduced in Europe and in America. It’s great to see countries like Finland experimenting with it in certain cities. It’s a disgrace to see people sleeping on the streets with this material wealth all...