U.S. recession 2007 odds:
U.S. recession 2008 odds:
From today’s WSJ article “No Recession In Sight,” by the chief economist of the Bank of America:
“Despite recent financial turmoil and a dismal housing market, there are key reasons why the economy will continue to expand, albeit at a modest pace, and not go into recession. Businesses are well poised to absorb a period of weaker product demand and are unlikely to significantly alter their hiring and investment behavior. Consumer spending is supported by rising incomes. Exports are strong. And monetary policy is consistent with sustained growth in domestic demand. Next year, we will look back and once again marvel at the flexibility and resilience of the economy.”
The “no recession in sight” view is confirmed by futures trading on Intrade.com for contracts on a “U.S. Recession in 2007″ and a “U.S. Recession in 2008,” shown in the graphs above. For 2007, the chances for a recession have fallen from almost 15% a month ago to almost 5% currently. For 2008, odds of a recession were above 50% for most of September, and have now fallen below 50% in the last week.
Upcoming: On Decemer 1, 2007, the U.S. economic expansion will celebrate its 6th birthday.
Child labor is alive and well in America, read about it here in Slate.
From today’s WSJ article “India’s Populists Resist Big Retail”:
As India’s middle class grows and the shopping expectations of its citizens increase, retailing has become a magnet for Indian conglomerates and for Wal-Mart and other foreign operators.
India’s total retail market is about $370 billion a year and will expand more than 55% in the next four years to almost $600 billion. (MP: In contrast, annual U.S. retail sales are about $4.5 trillion, but is growning only about 4% per year). Supermarkets and department stores account for less than 5% of the industry, with millions of small grocers, tobacco stands and tea stalls constituting the rest.
Big issue: Those small Indian retailers with a 95% market share aren’t too excited about sharing the expanding market with big retailers like Wal-Mart and its Indian partner Bharti Enterprises.
Just like in the U.S., in India there’s a “growing backlash among those seeking to protect the livelihoods of small merchants and squelch the plans of large Indian retailers and foreign giants such as Wal-Mart Stores. The protesters contend that the introduction of large retailers will throw hundreds of thousands of smaller merchants out of work, an issue that has been simmering in the U.S. for decades with the expansion of Wal-Mart and other big retailers.”
Clarification: It would be the millions of (“greedy?”) Indian consumers who might decide to shop at Wal-Mart for lower prices, better selection and more convenient hours, who would put the small Indian merchants out of business, not Wal-Mart and Bharti.
As I pointed in an article about “consumer greed,” Wal-Mart can’t force people to shop at its stores; all it can do is offer a low-priced alternative to the high-priced small merchants. “Greedy” consumers do the rest.
In a market economy, it is consumers, not businesses, who ultimately make all of the decisions. When they vote in the marketplace with their dollars, consumers decide which products, businesses, and industries survive—and which ones fail. It is therefore consumers who indirectly but ultimately all of the decisions, not corporations.”
Shouldn’t the Indian consumer be able to vote with their rupees and shop at Wal-Mart if they want to?
NEW YORK (CNNMoney.com) — Despite a housing slump across the rest of the nation, home sellers in New York City are selling houses faster with the number of listings reaching a two-year low.
Prudential’s Douglas Elliman reported that inventory in Manhattan fell 31.7% to 5,204 units in the third-quarter from a year-ago total of 7,623 units, while units stayed on the market for 123 days, faster than the 150 days seen in the same period last year.
Corcoran Group reported that the average (mean) price of an apartment in Manhattan jumped to $1.41 million, up 14% from the same quarter last year. Market-wide, a Manhattan apartment sold for between a median price of $815,000 and $895,000 during the three months ended September 30.
UPDATE 1: Craigslist removed the original post at the link below, but here are some other links here and here that have reproduced the original post and response.
UPDATE 2: NYTimes has covered this story, see articles here and here.
Here is the opening paragraph of an actual post on New York’s Craigslist, in the Personals section called “Rants & Raves”:
“Okay, I’m tired of beating around the bush. I’m a beautiful (spectacularly beautiful) 25 year old girl. I’m articulate and classy. I’m not from New York. I’m looking to get married to a guy who makes at least half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don’t think I’m overreaching at all.”
Two responses follow the original post, and both invoke the “efficient markets hypothesis (EMH)”:
“I was taught early in my career about efficient markets. So, I wonder why a girl as “articulate, classy and spectacularly beautiful” as you has been unable to find your sugar daddy.”
“I also do believe in the efficient market theory, and am surprised that $500k hasn’t found you yet. There are plenty of rich lawyers, investment bankers and hedgies to go around in this city. What gives?”
The “efficient market hypothesis” assumes that there are no hundred dollar bills lying around on the sidewalk unclaimed, and would it not also imply that there should be no “spectacularly beautiful, classy and articulate 25-year old women” unattached in Mannhattan?
Actually the market for dating and marriage might not always be efficient, because it operates as a barter economy, and relys on the “double coincidence of wants,” or more accurately the “double coincidence of attraction,” unlike the stock market or currency trading, where barter is replaced by the much more efficient money to facilitate trading, avoiding the inefficient “double coincidence of wants.”
BTW, Eugene Fama at U. of Chicago, who developed the EMH in his Ph.D. thesis in the early 1960s at Chicago, has been mentioned as a likely candidate for this year’s Nobel Prize in Economics. The first 2007 Nobel Prize (medicine) will be announced tomorrow, Monday.
(HT: Sanil Kori)
Planning a family reunion, or meeting 1-3 old friends for a weekend and looking for a place to meet in the middle to equalize travel distance for everybody?
HappyMedian allows a user to enter 2 to 4 towns representing each person wishing to meet, via zip code, or a city-state combination. HappyMedian then finds the most fairly equidistant towns between those entered, and then provides a list of various types of places to meet, from restaurants and bars, to coffee shops and lodging.
From the NY Post article “Why Is The City Paying 757 People To Do Nothing?”
It’s all in a day’s work on the city payroll.
For seven hours a day, five days a week, hundreds of Department of Education employees – who’ve been accused of wrongdoing ranging from buying a plant for a school against the principal’s wishes to inappropriately touching a student – do absolutely no work.
The Post has learned that the number of salaried teachers sitting idly waiting for their cases to be heard has exploded to 757 this year – more than twice the number just two years ago – at a cost of about $40 million a year, based on the median teacher salary.
The city pays millions more for substitute teachers and employees to replace them and to lease rubber-room space.
Meanwhile, the 757 – paid from $42,500 to $93,400 a year – bring in lounge chairs to recline, talk on their cellphones and watch movies on portable DVD players, according to interviews with more than 50 employees.
MP: One of the problems is that NYC’s public schools are a monopoly, with unionized employees, so heavily regulated that it’s sometimes impossible to fire even dangerous teachers. Here are the illustrated procedures required to fire an imcompetent union teacher in NYC.
Another example above of bad, bad grammar that you see everywhere. For an explanation of why this is wrong, go here.
I think most Wal-Mart stores actually have correct grammar for their express lane signs (“Everyday Correct Grammar”), unlike Target, which has this one wrong and has bad, bad grammar in its stores.
Sites like StubHub may let people sell some World Series tickets for eye-popping prices. But letting the free market work actually leads to cheaper prices for fans.
The fact that there are services like StubHub increases the supply of tickets that can be sold on the secondary market, thus lowering the price.
It also helps that this year, Major League Baseball and more and more states around the country are finally acknowledging that it is in everyone’s best interest to have a true transparent secondary market for ticket sales.
Baseball ticket sales on StubHub soared, and the site is now on pace to sell 5 million tickets this year alone, after selling a total of 5 million tickets in its first six years of existence.
The deal with baseball was beneficial enough to StubHub that it gave the sport something it never granted other teams or sports in its sponsorship deals — a cut of the 25 percent combined commission that StubHub gets from the buyer and seller when a ticket is sold.
Read the full article here from CNN Money: Why $75,000 Playoff Tickets Are a Good Thing
(HT: Sanil Kori)
The chart above is from the Level Field Institute’s 2007 report, in which it says:
“Our car-by-car analysis also accounts for differences in market share. In other words, an automaker with 15% market share that employs 20% of U.S. autoworkers is overperforming on jobs, while an automaker with 15% market share that employs just 10% of autoworkers is underperforming.”
That’s a very interesting definition of “overperforming and underperforming on jobs,” isn’t it?
GM has a 23% market share and 29% of the autoworkers and is “overperforming on jobs?” That sounds a lot more like “ineffiency” to me. And Toyota has a 17% market share and 9% job share and is “underperforming on jobs?” That seems more like “efficiency” to me.
After all, corporations don’t exist to create the maximum number of jobs, they exist to serve consumers and shareholders by producing output with the least number of employees.