CERF Blog

Previously published on NewGeography.com on 7/11/2010 A year ago we were hearing all about green shoots. Analysts claimed to find them everywhere. Today, we never see the term. In fact, there seems to be a growing malaise. By the end of June the first quarter’s Gross Domestic Product (GDP) estimate was revised downward a full… Read more

The California Builders Association announced today that California’s new home sales fell 46 percent in May over the previous year.  This is a big decline from an already weak market.  The question, of course, is what caused the decline. The easy answer is the expiration of federal incentives on April 30th, but that is not… Read more

DJ is one of my dearest friends.  He was one of the first people to befriend me when I moved to a new city as a high-school junior.  He was there for the debriefs after high-school dates, and I was there for his.  He was there for an awful lot of firsts, none of which… Read more

Producer price growth has been declining for six months. It reached negative territory, deflation territory, three months ago, in April. This is extraordinarily unusual for the United States. What does it mean? Most of the June PPI deflation was due to declining food prices. Producer prices are up from a year ago, where of course… Read more

The National Venture Capital Association issued a couple of reports recently.  One is on venture capital fund raising.  The other is a report on a survey of venture capital professionals.  Each of them make for ugly reading, if you would like to see a robust recovery and dynamic economy. Here are a few key findings:… Read more

United States retail sales fell in June for the second consecutive month, to $360 billion dollars. This represents a 0.5 percent decline for the month, implying an annualized drop of six percent. Motor vehicles and parts also declined but at a much faster rate of two and a quarter percent for the month, implying a… Read more

NASSCO-General Dynamics announced that it was laying off 290 workers.  Here’s part of what the Union-Tribune had to say: “NASSCO-General Dynamics , the last major shipbuilder on the West Coast, laid off 290 of its 4,100 workers in San Diego on Monday because of a downturn in business and fluctuations in the repair work it… Read more

I receive the following question from a friend: “Yesterday, I read your newgeography.com post, Green Shoots and Immigration, in which you encouraged massive new immigration as a solution for our poorly performing economy. Today you blogged, Income Inequality and California’s Future, in which you call out international immigration as a catalyst for California’s growing low… Read more

Raghu Rajan has a piece on income equality and its impact on the recent financial crisis.  It’s the same theme he addressed in depth in his excellent recent book, Fault Lines.  As income inequality increases, politicians come under pressure.  They have three possible ways to address the problem: fix the underlying problem, wealth transfers, or… Read more

Famous economist Arthur Laffer has a piece in the Wall Street Journal today where he argues two points: unemployment insurance causes unemployment even in bad times and unemployment insurance is not stimulus. I’ll stipulate his second point, but his first point is all wrong. The data make it pretty clear that unemployment insurance increases unemployment… Read more

Our governor is trying to cut public employees wages to the minimum wage, and that is wrong.  What he’s doing is essentially holding the public employees hostage to try to leverage the legislature to act.  It’s not very different from holding a bank teller hostage to get the manager to hand over cash. I have… Read more

The June United States nonfarm job level declined by 125,000. The decrease reflected a 225,000 decrease in the number of temporary employees working on the 2010 Census. The government sector decrease was offset by a private–sector payroll employment increase of 83,000. The unemployment rate edged down from 9.7 to 9.5 percent. The unemployment rate drop… Read more

Forty-six states face budget shortfalls of $112 billion for the fiscal year ending next June. While there are political difficulties in closing these gaps there are also constitutional mandates for doing so. If and when they close these gaps, it is likely that some of it will be constricted expenditures and this will filter down… Read more

We participate in the monthly Macro Markets’ survey of the Case-Shiller housing price index and the June results are online as of today, see the press release link here.  The consensus projection is slightly more pessimistic than our forecast on housing prices. Comments about this month’s survey: First, the consensus as measured by this survey… Read more

A brief update of a blog of about a month ago regarding banking: The FDIC reports that 83 banks have been closed so far this year. While there were 140 bank failures in 2009, we are on track (based on a simple extrapolation of current trends) to experience at least 160 bank failures in 2010.… Read more