The Angry Bear

In The USA, there is a striking negative correlation between the relative price of housing and GDP growth over the following 5 years Given this simple correlation, it is possible to forecast the great recession using just that variable and a trend. In fact, the forecast recession is even more severe than the actual recession. This note examines other developed countries using the data set assembled by Oscar Jordà, Moritz Schularick and Alan Taylor...

March JOLTS report: powerful further evidence of a taboo against rasing wages The March JOLTS report this morning is powerful further evidence that raising wages (or training new workers) has become a taboo. Just about everyone thinks that, faced with a worker shortage, “rational” employers will offer higher wages to fill the empty skilled positions. This in turn will draw more marginal potential workers into open unskilled positions. That’s the theory,...

The simple jobs and interest rates model generates a yellow flag Several months ago, I started toying with a simple model of interest rates and job growth.* Based on the historical evidence, I suggested that: 1. a YoY increase in the Fed funds rate equal to the YoY% change in job growth has in the past almost infallibly been correlated with a recession within roughly 12 months. Figure 1 2. the YoY change in the Fed funds rate (inverted in the graph...

(Dan here…there is a lot of discussion about reasons for wages not keeping pace with productivity and the like.  There are also discussions on the impact outsourcing, the role of monopolies and monopsony. and outright making it a policy to keep wages from rising.) Spencer thinks: Even though the year over year change in average hourly wages appears stable, if you look at the 3 month rate of change it shows wage growth accelerating significantly....

CMS is allowing states to seek waivers to alter parts of the ACA. According to Republicans, state government knows better than the federal government the needs of its citizens and can design a better healthcare plan for them. Michigan along with Kentucky and another state have applied for waivers. Michigan and Kentucky have been approved. The Michigan bill has made it through the Republican legislature and will go to the governor to be signed (hopefully...

On Negotiations In Korea Let me say that if Donald Trump is able to finalize a serious agreement in Korea that brings an official end to the war there as well as establishing some kind of peaceful settlement in general that leads to some sort of mutually acceptable arrangement between the two Koreas that maintains a peaceful situation for some reasonably lengthy time into the future, pretty much irrespective of the exact details, I shall applaud.  I...

“Guaranteed jobs programs, creating floors for wages and benefits, and expanding the right to collectively bargain are exactly the type of roles that government must take to shift power back to workers and our communities,” — Senator Kirsten Gillibrand “By strengthening their bargaining power and eliminating the threat of unemployment once and for all, a federal job guarantee would bring power back to the workers where it belongs.” — Mark Paul, William...

Stock of Debt Held by US Public Has Tripled Over the Last Decade & Other Misleading Information My title was the heading of Figure 19 in something from Deutsche Bank that has John Cochrane all stressed out over a pending debt crisis again. This graph is gorgeous. US deficits have, historically, been driven overwhelmingly by the state of the business cycle, and have very little to do with tax policies and spending decisions that dominate press...