CERF Blog

Last week the Federal Reserve released the Flow of Funds (FOF) report for the quarter ended December 31, 2012.  The report showed that household sector net worth increased by $1.2 trillion during the quarter to $58.5 trillion.  The financial crisis and subsequent recession has been marked by an enormous decline in household net worth, due… Read more

One of the more revered rules of thumb in retirement planning is that retirees can be comfortable in spending 4% per year of their accumulated net worth.  While the origin of this rule is not certain, it has been popularized by financial planning expert William Bengen in a series of articles dating back to the… Read more

Brian Caplan was writing about the Charter Cities, which he likes as a second-best choice because: The first-best solution to global poverty, therefore, is for the First World to allow much higher levels of immigration.  Unfortunately, despite its low absolute level (annual U.S. immigration is well under 1% of its population), immigration is already extremely unpopular.  For… Read more

Veronique de Rugy is a provocative woman, and a smart one.  Here’s what she said in a piece on women: Improving the lot of American women means lowering marginal tax rates, abolishing many workplace regulations, increasing the number of low-skilled immigrants, and ending the drug war. That’s what we call counter intuitive, but she makes… Read more

The headline is “AP: Wells Fargo customers soon will pay $7 checking account fee.”  It’s accompanied by a picture of Wells Fargo’s CEO, a picture that makes him look like he eats babies for breakfast.  The first paragraph reads: Customers in California and six other Western states soon will pay a $7 checking account fee,… Read more

I recently had a piece on immigration a San Diego’s Union Tribune.  It is about how an increase in legal immigration could be an economic spark, and I thought I was the only one thinking about the topic. Turns out I was wrong. There’s an outfit called the Partnership for a New American Economy, and… Read more

Economists assume that people attempt to smooth consumption over time.  The data are consistent with this assumption.  If you follow a cohort of people over a number of years, you will observe that their income will fluctuate a lot more than does their consumption.  Income generally rises sharply early in peoples’ careers, peaks out in… Read more

Veronique De Rugy at George Mason University’s Mercatus Center has a nice piece Debt Grows at a Faster Rate Than Economy for Foreseeable Future. My working definition of sustainability: when something is growing slower than the economy, it is sustainable.  Usually, we’re talking about prices, but debt works too. Something will have to change.

Shelly Sullivan has a piece, Cap-and-trade is not a budget solution, in Capital Weekly.  It’s well worth reading.  She’s correct, of course, but she fails to mention a key p0int: When most economists support cap-and-trade schemes,  the point is to use the proceeds to offset existing discretionary taxes.  That would minimize the economic costs of the regulation.  California’s proposal,… Read more

The FDIC’s quarterly banking report, QBR, came out yesterday. This report contains one of the CERF Indicators, which are a set of special economic indicators that we began tracking in the aftermath of the “Great Recession”. The CERF Indicator in the QBR report is net bank charge-offs. The other CERF Indicators are: the home ownership… Read more

I read an article yesterday that claimed that the FED has already initiated QE3, without an announcement.  Today, I had time to check the data.   Here’s a chart from FRED: There has been a recent increase in the base, but we’re only back to our previous high.   We could be seeing the initial stages of… Read more

In his State of the Union1 speech, President Obama laid out a new program to assist homeowners by enabling mass refinancing to the current very low level of mortgage rates.  The Administration claims that tens of millions of families may benefit by this program with an average savings of around $3,000 per year.  The cost… Read more

Condensed minutes of FOMC (Federal Open Market Committee) meetings are released three weeks after each meeting.  Detailed transcripts for the meetings in a given calendar year are released five years after the end of that calendar year.  Thus, last month the detailed transcripts for the 2006 FOMC meetings were released.  These transcripts have received a… Read more

I just finished John Taylor’s new book, First Principles. It’s a very good and fast read. It’s a little over 200 pages, and not a derivative in it. I don’t think there is even an explicit formula in it. Taylor writes very well, especially for an academic economist. Maybe that is from all his years… Read more

Dan already summarized the meat of last Friday’s jobs report, but I wanted to briefly comment on one fairly esoteric point.  The Friday release included an annual “benchmark revision” to the population, labor force and jobs numbers.  Each year the Bureau of Labor Statistics (BLS) updates historical data based on updates from the Census Department. … Read more