My morning reading material:

• Low Growth in Earnings Is Expected (NYT)
• The 401(k): Americans ‘just not prepared’ to manage their own retirement funds (Washington Post) see also How America Spends Money: 100 Years in the Life of the Family Budget (The Atlantic)
• Jamie Dimon’s 38 page Letter (JPM) or just read Highlights (WSJ)
• Don’t Look to the Market for Advice (Institutional Investor)
• HBS Survey on U.S. Competitiveness (Harvard Business School)
Conference: Innovative Data Sources for Regional Economic Analysis (George Washington Institute of Public Policy)
• Welcome to Ikea-land: Furniture giant begins urban planning project (The Globe and Mail)
• Antarctic ice shelf shrunk by 85 percent since 1995 (The Raw Story)
• Obama’s Game Plan: Let’s Make This All About the Republicans (New Yorker)
• Tax Haven Crackdown Creates Opportunities for Bankers (DealBook)

What are you reading?

Euro Zone Heading for Another Hot Summer

Source: WSJ

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

27 Responses to “10 Friday AM Reads”

  1. AHodge says:
    who said Newt doesnt understand modern finance??
    Get your buddies to loan your company $10 million,
    take it all out, loot it.
    and then declare bankruptcy, way to go newt
    you job creating small businessman
    the money’s all yours free and clear

  2. Pocket QQ says:

    Evidence linking Arctic amplification to extreme weather in mid-latitudes by Francis and Vavrus.

  3. Mike in Nola says:

    The “all about the Republicans” strategy has been obvious. They have been trying to out-nutcase each other so much, rational people will not vote for them, no matter how much Obama stinks (and he does).

    I think the criticism of the Supreme Court was a deliberate attempt to piss of the reactionaries on the Court so they’d throw out the bill and give him a good campaign issue. Doesn’t matter that he sold out to the insurers. The mandate is stupid and expensive and will probably be unpopular because it doesn’t really fix the problems. If they throw it out, he doesn’t have to deal with that and can run against the Court. As Carville recently said, if the Supreme Court declares Obamacare unconstitutional, the Republicans will own the health care system; if you need healthcare, call judge Alito.

  4. Sechel says:

    About Americans under-funding their 401k’s. Considering the American savings rate is a fraction of what it was in the 1980′s and earlier, and that many state pension plans are themselves under-funded, isn’t the discussion about 401 plans a difference without a distinction?

  5. VennData says:

    “…Tennessee Gov. Bill Haslam is likely in the coming days to sign into law a bill requiring that public schools allow science teachers to discuss purported weaknesses of theories such as evolution and global warming in their classrooms…”

    Thank goodness we have politicians willing to stand up to the “scientists.”

    And anyone who ever says George Will is a thoughtful political spokesman is.. uh… well…

    “…Barack Obama’s intellectual sociopathy…”

    George Will may “feel” that removing limits on political contributions from corporations has not allowed foreign-owned corporations to make donations, and he may site rabid supports of deregulating campaign finance, and he may ask others to show do the work to show political “giving” is up…

    but to call the other side in this argument “sociopathic” without numerical support to his position is hyperbole. He didn’t call Bush “sociopathic” when Bush criticized “un-elected judges.”

    George Will is a partisan headline advertiser for the GOP Media Machine.

  6. willid3 says:

    100 years of family budget

    and while we think we have it bad.
    we really really don’t

    The year is 1900. The United States is a different country. We are near the end of the Millennium, but in the “warp and woof of life,” we are living closer to the 1600s than the 2000s, as Brad DeLong memorably put it. A quarter of households have running water. Even fewer own the home they lived in. Fewer still have flush toilets. One-twelfth of households have gas or electric lights, one-twentieth have telephones, one-in-ninety own a car, and nobody owns a television.

    1900spend.pngSo where are we spending all our money? Most of our income goes to the places where we work — to the farm, to the textile mills, and to the house. The typical household haul in 1901 is about $750.

    Families spend a whopping 80% of that on food, clothes, and homes.

    In 1900, seen from perch of the Bureau of Labor Statistics — which counts national jobs, income and spending — the United States is like one big farm surrounded by a cluster of small factories. Almost half of the country works in agriculture. As for the budding services economy: There are more household servants than sales workers. As for the women’s rights movement: More than twice as many households report income from children (22%) than wives (9%).

    The year is 1950. Compared to just five decades earlier, the United States is already a different country. The population has doubled to 150 million. The economy’s share of farmers has fallen from 40% to 10%, thanks to the mechanization of the farm, led by the mighty tractor. At the same time, food has gotten much cheaper compared to wages, and its share of the family budget has declined from 43% to 30%.

    Meanwhile, the “making-stuff” economy is at its apex. Nearly half of working men are craftsmen or operators. (The female labor participation rate is still below 20%.) Factory wages have grown by seven-fold since 1901, and they’ve nearly tripled since the Great Depression. Textile manufacturing has never been higher and will never be higher. The year 1950 is its exact peak. Apparel manufacturing would grow through the 1970s before collapsing in the last third of the decade. The U.S. was the making-stuff capital of the world, and our dominance probably felt indefinite.

    Half a century later, factories, just like farms before them, would become the victims of American efficiency.

    It’s become fashionable to consider the 1950s a golden age in American economics. Employment was full. Wages were rising. Manufacturing was strong. But if you’re the kind of person who likes clothes or food, then welcome to paradise.

    2003spend.pngIn the last 50 years, food and apparel’s share of family has fallen from 42% to 17% (and remember, we were near 60% in 1900) as we’ve found cheaper ways to eat and clothe ourselves. Food production got more efficient, and we offshored the making of clothes to other countries with cheaper labor. As a result, apparel’s share of the pie, which hardly changed in the first half of the century, shrank in the second half by two-thirds.

    So if the typical American family feels squeezed, what’s squeezing us?

    I have two answers: The first answer is housing and cars. Half of that orange “other” slice is transportation costs: mostly cars, gas, and public transit. A century ago, if you recall, 80% of families were renters and nobody owned a car. Today, more than 60% of families are home owners, and practically everybody owns a car.*

    The other answer, which you can’t see as clearly in this chart, is health care. Health-care spending makes up more than 16% of the U.S. economy, but only 6% of family spending, according to the CES. One reason for the gap is that most medical spending isn’t out of our pockets. Employers pay workers’ premiums and government foots the bill for the elderly and the low-income. Government spending on Social Security, Medicare, and Medicaid has quadrupled since the 1950s in the most meaningful measurement, which is share of GDP.

    In short, health care costs are squeezing Americans. But the details of this squeeze elude the color-wheel above. We are paying for health care with taxes, borrowing, and compensation that goes to health benefits, rather than wages.

  7. willid3 says:

    also what is up with the login function? it seems to fail to login as often as it works

  8. Greg0658 says:

    its not breaking news but to this wesite (don’t think I see it)
    I heard yesterday on CNBC so it must be true – Facebook chooses the NASDAQ and they get FB
    so much to see / like Eric Cantor in that BigLaw signing behind the POTUS for you all (us all)

  9. Don Levit says:

    You are right about health care costs. According to the BLS, private industry workers are spending double for health insurance as compared to retirement and savings.
    Go to:
    The paper is entitled “Employer Costs For Employee Compensation – December 2011.”
    Look on page 3.
    3 partners and I are working with Milliman, an actuarial form, on what we think is a unique product design.
    The goal is to build up paid-up coverage, monthly, so that after 24-48 months, one has between $25,000 and $50,000 of paid-up coverage.
    This reduces premiums by 60-80%, by raising the funded deductible to $25,000-$50,000.
    We hope to form a 501(c)(4) insurer as a subsidiary of a for-profit life insurer that is heavily into teacher retirement plans.
    Less money for health insurance translates into more contributions for 403(b)plans.
    We should have the actuarials next week – and then the tweaking begins!
    Don Levit

  10. lumpy oatmeal says:

    Because I’m tired of reading about politics, the economy and so on and I’m glad there’s someone as cool as Jack White out there:

  11. ilsm says:

    Obama is wasting resources, unless he is unwilling to govern if he gets a second term. Including wasting time!

    His strategy must be to replace the tea party freshman class, as well as take back the house and fill up the senate.

    Until he gets on the legislative moving no support from me, because I do not see any progress……

  12. Jojo says:

    Now Everyone Can Lose Big Investing in Startups
    Obama’s new crowdfunding bill democratizes venture capital, for good and for ill.

    By Will Oremus | Posted Friday, April 6, 2012

    Stymied in his attempts to pass an actual jobs bill, President Obama settled on Thursday for passing something that sounds like a jobs bill. Don’t let the backronym fool you: The JOBS Act—that’s “Jumpstarting Our Business Startups”—won’t put a lot of unemployed Americans back to work right away. It doesn’t even take effect until 2013. Still, Obama was right when he called it “a potential game changer” for startups and small businesses. In the long run, it could do something that a less-targeted stimulus measure wouldn’t: level the playing field for non-Silicon Valley startups.

    What’s new in the JOBS Act is a provision that legalizes “crowdfunding”—that is, for a startup to raise small amounts of cash from large numbers of ordinary people. Until now, only “accredited investors”—a euphemism for a small number of very rich people with offices on Sand Hill Road—were allowed to invest privately in most startups and small companies. As Annie Lowrey explained in Slate last fall, that places limits on the type and the number of businesses that can raise the money they need to grow. And it feels downright un-American.

  13. willid3 says:

    congress can’t even do basic work any more. it used to be that transportation (you roads etc) was easy. not any more

  14. willid3 says:

    sechel, 401ks and pensions (any of them) are the same issue. partly is the lack of funding (in good times too) and partly its the current debacle that trashed the markets (down as much as 50%. and that also trashes the future cause even when it gets back to where it was, it actually has lost ground, cause it would have been higher with out the collapse).
    the only real different between them is that in 401ks, the investments decisions are by amateurs, part time. while pensions are by pros (supposedly) full time (supposedly).
    and oddly enough it wasn’t that long ago that a lot of pensions were making companies money.
    and oddly enough, its usually the executive pension that is in the biggest trouble. but of course its not the one they cut when it comes time to

  15. cognos says:

    Now Im not the biggest fan of Paul Krugman. But this column is 100% right. The current problems are all easy to fix and simple deflation, worldwide:

    There is NOTHING wrong with 3-4% inflation occasionally. This is NOTHING like hyperinflation.

    I would estimate the measurement problems with current inflation stats exceed the “2% target” thats mentioned… which is why this is the wrong target. 2.5 or even 3% would be better.

  16. DeDude says:

    When you cut the public sector in a recession it drags out recovery in employment. May be part of the reason this recession has been dragging out more than the previous three.

    I guess you can’t have your cake and eat it too.

  17. ssc says:

    Good news for Apple fans, they are finally getting enough market share:

    It seems forever that all the Apple people keep saying how secure their system is, Apple computers are NOT like the Widnows.. Well, now my Amiga 1000 has a better track record, it’s so secure that for 20 years, nobody even dare to try, LOL..

  18. willid3 says:

    arguments about borrowing, size of government, and war in the US. started about the same time the US did. and seemingly the same group arguing for war, are also against taxes too. and the example from 1812 shows how that works out. it lead to one of worst defeats we have ever had, including the burning of the nations capital!

  19. mathman says:

    Really gettin’ to be some fun out there hunh?

    Oh, and if you’re a bit bored after the running of the bulls, i guess you try this ol’ fave from the Roman Empire:

  20. Iamthe50percent says:

    @Mike in Nola

    Your every word is gold.

  21. SecondLook says:

    About that 100 years of family budget; the author doesn’t go into detail about the cost of car ownership.

    When you add up the total costs – the real price of the vehicle amortized over the length of ownership, the annual fuel bill, insurance, maintenance and repair – it comes to, on average, to about $6,000 per car per year. For a median income, two car family (the norm for most middle income households), it amounts to around 24% of their gross income; the second largest expense after paying for a home, or renting.

    In 1950, as a percentage of household income, it was approximately a third less. The basic cost of a car (how much you paid for it) was, in household income terms, nearly the same as now (and we get a lot better vehicle for the same money). The difference is in the other costs – vastly lower gas prices, less miles driven, and the other costs were generally lower.

    The food costs are a bit misleading, since they include only food purchased for home consumption. Considering how high a percentage of Americans eat out daily while at work, and buy take out for eating at home, the real cost is higher, but, still not as high as it was in 1950.

    “…factories, just like farms before them, would become the victims of American efficiency.” I disagree – and the evidence of a strong industrial sector in countries like Japan and Germany, who are at least as efficient as we are, would suggest the decline wasn’t about being able to produce more with less people, but rather a withering by indifference, public neglect. Encouraging new industries that would be based here, revitalizing those older ones that could reasonably stay, wasn’t part of anyone’s agenda.

  22. rd says:

    I like my 401ks. Assuming I work at a company for at least 5-6 years, everything in it is mine when I leave. That is not the case for pensions where you generally have to work 20 years or more at a single place to see good long-term benefits. I have never been eligible for a pension, so I would have virtually no tax-deferred way of saving for retirement without 401ks and IRAs.

    However, our educational system is failing the general population on a massive scale because it is not teaching basic everyday, household math, especially compound interest, nor does it teach history in a meaningful way.

    You can’t understand debt, inflation, savings, and withdrawal patterns without understanding the basics of compound interest. That should be at the core of every math class from Grade 7 on.

    History is far more than names and dates. People need to udnerstand what seminal events where and why. You can’t understand how your household budget and savings will fare across a lifetime without some sense of history. A concept of history as punctated equilibrium instead of just extrapolation of the last five years is essential and needs to be taught in high school.

  23. Greg0658 says:

    401Ks & standard vesting pensions and their worth down the road .. I have seen with my 2 eyes and in my own budget what can happen ..
    if I have a flavor it would be – that we need each other – you needed me to refuel nuke plants and remodel paint booth lines – along with hoards of other manufacturing rooms .. this system is broke for the ‘Sweats’

  24. willid3 says:

    rd, while you own your 401k, and can transfer. the only difference from a pension is that you can’t transfer it. but you will still get the benefits of that pension even if you leave the company. and not sure about math education has changed all that much (my father has a phd in math and taught for many decade before retiring a few years ago). i can recall he griping about the state of math education. back in the 60s and 70s. but that may only mean that its not a general human aptitude. or that a lot of parents don’t care about it and don’t encourage or help their children (maybe be because they dont see any benefit). and many never see any point to learning history. since they see no benefit. and so repeat it all the time