Deadweight Loss Re-defined
Removing Deadweight Loss from Economic Discourse on Income Taxation and Public Spendingby Charles F. Manski Published by Voxeu.org 18 August 2013
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Economists usually think of taxation as inefficient. This column argues that the anti-tax rhetoric evident in much lay discussion of public policy draws considerable support from the prevalent negative language of professional economic discourse. Optimal income taxation doesn't have to employ the pejorative concepts of inefficiency, deadweight loss and distortion; and this column argues that it is high time for economists to discard them and make analysis of taxation and public spending distortion-free.
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What We Read Today 17 September 2013
Econintersect: Click Read more >> below graphic to see today's list.
The top of today's reading list has three articles on climate change........ and the last article discusses China's fading efforts to tap their extensive shale gas resources.
Harmful Effects Of the Large And Growing USA Debt
from the Congressional Budget Office
How long the nation could sustain such growth in federal debt is impossible to predict with any confidence. At some point, investors would begin to doubt the government's willingness or ability to pay U.S. debt obligations, making it more difficult or more expensive for the government to borrow money. Moreover, even before that point was reached, the high and rising amount of debt that CBO projects under the extended baseline would have significant negative consequences for both the economy and the federal budget.
Markets Relatively Quiet Ahead Of The Fed Meeting
Midday Market Commentary For 09-17-2013
Markets at noon haven't done much and have stayed in a tight trading zone matching yesterday's midday session. The large caps are sliding sideways while the small caps are gradually melting upward but remaining below yesterday's historic highs.
Volume has fallen to anemic levels as investors await whatever the Fed's have to say. By 12:00 the averages have remained in the green but that could change in a heart beat. Even the BTFDers are not so sure of themselves as they too, sit on the sidelines.
Gold Gone? Germany Baffled As Fed Bars Access To Bullion
The world is losing trust in the dollar as a safe haven. Germany's Bundesbank demanded return of a big chunk of its gold being held in the US as some are concerned the assets held in the Federal Reserve are not secure or even there.
Markets Open Up Pausing At Yesterday's Highs
Opening Market Commentary For 09-17-2013
Premarkets were up +0.06% this morning and remained up after the 'not-so-good' financial's reported this morning, of course, what's new? No Earth shaking World news has been reported and investors are still focused on what the Fed has to say.
Markets opened flat with the $RUT in the red (-0.05) on low to moderate volume. By 10 am the averages had melted upwards where the DOW had tested yesterday's highs and paused. The SP500 was 2 points away from doing the same. The averages are all over the charts when looking for a 'trend' of some sort.
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August 2013 CPI Inflation Moderates
by Doug Short and Steven Hansen
The August 2013 Consumer Price Index (CPI-U) year-over-year inflation rate declined with energy commodity prices driving the moderation.
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Stratfor: Strategy, Ideology and the Close of the Syrian Crisis
By George Friedman, Founder and Chairman, Stratfor
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It is said that whenfamed Austrian diplomat Klemens vonMetternich heard of the death of the Turkish ambassador, he said, "I wonder what he meant by that?" True or not, serious or a joke, it points out a problem of diplomacy. In searching for the meaning behind every gesture, diplomats start to regard every action merely as a gesture. In the past month, the president of the United States treated the act of bombing Syria as a gesture intended to convey meaning rather than as a military action intended to achieve some specific end. This is the key to understanding the tale that unfolded over the past month.
Read more >>
QE Did Not Drive Down Long-Term Rates
by Lee Adler, Wall Street Examiner
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From mid November 2012 just before the Fed began to settle its QE3 MBS purchases to the date of the current statement, SOMA has grown by more than $800 billion. Meanwhile the yield on the 10 year Treasury rose in a sawtooth pattern from a low of 1.59 in May 2012 to a high of 2.90 on August 19, 2013. Has QE pushed long term rates down? Apparently not. [Find out the evidence, profiling why QE doesn't come up that demotivated long-term rates - right here in this video. To play, click the following link...]
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Germany is the World's No. 1 Automobile Exporter By Far
by Felix Richter, Statista.com
The world's top ten automobile exporters are still primarily developed economies, even though the developed world, led by China, is quickly closing the gap. In 2011, the top 10 exporters worldwide accounted for 70 percent of the world's total automobile export value.
Insider Trading 13 September 2013: Bill Gates Again a Big Seller of Microsoft
by Asif Suria
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Insider buying more than doubled with insiders purchasing $54.86 million of their stock last week compared to $25.89 million in the week prior. Selling also increased with insiders selling $2.85 billion of stock last week compared to $1.44 billion in the week prior.
Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week decreased to 52.02. In other words, insiders sold about 52 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 58.28.
The Cyprus Crisis through the Lens of Bank Investors
by Hesna Genay and Mike Mei - Chicago Fed Letter, Federal Reserve Bank of Chicago
Last year, Cyprus joined its neighbor Greece on the list of eurozone countries in financial crisis. Although Cyprus is one of the smallest economies in the euro area, following the announcement of the official financial aid package for Cyprus on March 16, 2013, bank investors in the rest of the eurozone suffered large losses. Analysis indicates that bank investors interpreted the Cypriot aid package as potentially forming a template for future eurozone bank restructurings, whereby bank investors would bear a higher fraction of the resolution costs.
Infographic of the Day: Gun Crimes Plummet Even As Gun Sales Rise
Gun crime has fallen dramatically over the past 20 years, a trend that a majority of Americans say they are unaware of.
CDS Primer from JP Morgan
Econintersect: There is a worthwhile lecture on CDS (Credit Default Swaps) posted by Sober Look, which can be reviewed after the Read more >> break).
Click on graphic for larger image.
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Week Ending 16 September 2013: 3.9 Cent Gasoline Price Decline
Econintersect: Gasoline prices fell an average of 3.9 cent nationwide this past week from last weeks fall of 2.0 cent from the week before. Since August 12th, gas prices have declined 1.4 cents.
Average prices by region and a breakdown by grade follow after the "Read more>>".
Barry Ritholtz, Josh Brown Form New Firm
Econintersect: Barry Ritholtz and Josh Brown announced Monday they are leaving Fusion Analytics to form a new investment advisory firm, Ritholtz Wealth Management. Brown will be the CEO of an organization starting up with five advisors and managing over $100 million. A report in Investment News said the specific figure was declined when the question was asked.
Twitter Doubles Revenue in 2013
by Felix Richter, Statista.com
Twitter will generate more than 500 million dollars in revenue this year, according to an assessment by PrivCo. This represents a doubling of the firm's estimated 245 million dollars of revenue in 2012.
Economists usually think of taxation as inefficient. This column argues that the anti-tax rhetoric evident in much lay discussion of public policy draws considerable support from the prevalent negative language of professional economic discourse. Optimal income taxation doesn't have to employ the pejorative concepts of inefficiency, deadweight loss and distortion; and this column argues that it is high time for economists to discard them and make analysis of taxation and public spending distortion-free. 
It is said that whenfamed Austrian diplomat Klemens vonMetternich heard of the death of the Turkish ambassador, he said, "I wonder what he meant by that?" True or not, serious or a joke, it points out a problem of diplomacy. In searching for the meaning behind every gesture, diplomats start to regard every action merely as a gesture. In the past month, the president of the United States treated the act of bombing Syria as a gesture intended to convey meaning rather than as a military action intended to achieve some specific end. This is the key to understanding the tale that unfolded over the past month. 
From mid November 2012 just before the Fed began to settle its QE3 MBS purchases to the date of the current statement, SOMA has grown by more than $800 billion. Meanwhile the yield on the 10 year Treasury rose in a sawtooth pattern from a low of 1.59 in May 2012 to a high of 2.90 on August 19, 2013. Has QE pushed long term rates down? Apparently not. [Find out the evidence, profiling why QE doesn't come up that demotivated long-term rates - right here in this video. To play, click the following link...] 
Insider buying more than doubled with insiders purchasing $54.86 million of their stock last week compared to $25.89 million in the week prior. Selling also increased with insiders selling $2.85 billion of stock last week compared to $1.44 billion in the week prior.
