Posts filed under “Think Tank”

Measurement Issues Arising from the Growth of Globalization

These are the papers presented at the conference discussed earlier:

Session 1: Services Offshoring

Chair: Kenneth Ryder (NAPA)

Measuring the Impact of Trade in Services: Prospects and Challenges,” J. Bradford Jensen (Georgetown University and Peterson Institute for International Economics)
“Measuring Success in the Global Economy: International Trade, Industrial Upgrading, and Business Function Outsourcing in Global Value Chains,” Timothy Sturgeon (MIT) and Gary Gereffi (Duke University)
Background paper.” Clair Brown (University of California-Berkeley) and Timothy Sturgeon (MIT) with Peter Marsden (Harvard University) and Frank Potter (Mathematica Policy Research)

Discussant: Torbjörn Fredriksson (UNCTAD)
The discussant’s PowerPoint presentation is available.

Session 2: Measuring the Impact of Offshoring on the Labor Market
Chair: Janet Norwood (NAPA)

Addressing the Demand for Time Series and Longitudinal Data on Occupational Employment,” Katharine Abraham (University of Maryland) and James R. Spletzer (Bureau of Labor Statistics)
Understanding the Domestic Labor Market Impact of Offshore Services Outsourcing: Measurement Issues,” Lori G. Kletzer (University of California-Santa Cruz and Peterson Institute for International Economics)
The author’s PowerPoint presentation is also available.

Discussant: Timothy Sturgeon (MIT)

Session 3: Measurement Implications of Transformation Offshoring and Imported Intermediate Inputs
Chair: Ned Howenstein (Bureau of Economic Analysis)

Outsourcing, Offshoring, and Trade: Identifying Foreign Activity Across Census Data Products,” Ron Jarmin, C.J. Krizan, and John Tang (U.S. Census Bureau)
Effects of Imported Intermediate Inputs on Productivity.” Lucy P. Eldridge and Michael J. Harper (Bureau of Labor Statistics)
The authors’ PowerPoint presentation is also available.

Discussant: John Haltiwanger

Session 4: Offshoring and Price Measurement: Industry Case Studies
Chair: Jon Steinsson (Columbia University)

Offshoring and Price Measurement in the Semiconductor Industry,” David Byrne (Federal Reserve Board), Brian N. Kovak (University of Michigan), and Ryan Michaels (University of Michigan)
The authors’ PowerPoint presentation is also available.
“Measuring IT Software and Services: Implications for Real Trade Flows,” Catherine Mann (Brandeis University and Peterson Institute for International Economics)
Imports of Intermediate Parts in the Auto Industry—A Case Study,” Thomas H. Klier (Federal Reserve Bank of Chicago) and James M. Rubenstein (University of Miami, Ohio)
The authors’ PowerPoint presentation is also available.

Discussant: Kimberly Zieschang (IMF)

Session 5: Measurement of Import Prices
Chair: Michael Horrigan (Bureau of Labor Statistics)

Bias in the Import Price Index Due to Outsourcing: Can It Be Measured?,” W. Erwin Diewert (University of British Columbia) and Alice O. Nakamura (University of Alberta)
The authors’ PowerPoint presentation is also available.
“Are there Unmeasured Declines in Prices of Imported Final Consumption Goods?” Marshall Reinsdorf and Robert Yuskavage (Bureau of Economic Analysis)
The authors’ PowerPoint presentation is available.

Discussant: Barry Bosworth (Brookings Institution)

Session 6: Measurement of Import and Input Prices
Chair: Julia Lane (National Science Foundation)

Offshoring Bias: The Effect of Import Price Mismeasurement on Manufacturing Productivity,” Susan Houseman (Upjohn Institute), Christopher Kurz (Federal Reserve Board), Paul Lengermann (Federal Reserve Board), and Benjamin Mandel (Federal Reserve Board)
The authors’ PowerPoint presentation is also available.
Producing an Input Price Index,” William Alterman (Bureau of Labor Statistics)
The author’s PowerPoint presentation is also available.

Discussant: Emi Nakamura (Columbia University)

Session 7: Measurement of Import Prices and Import Uses: Evidence of Biases
Chair: Carol Corrado (Conference Board)

Imported Inputs and Industry Contributions to Economic Growth: An Assessment of Alternative Approaches,” Erich H. Strassner, Robert E. Yuskavage, and Jennifer Lee (Bureau of Economic Analysis)
Evaluating Estimates of Materials Offshoring from U.S. Manufacturing,” Robert C. Feenstra (University of California-Davis) and J. Bradford Jensen (Georgetown University and Peterson Institute for International Economics)

Discussant: William Milberg (New School for Social Research)
Background paper: “Errors from the ‘Proportionality Assumption’ in the Measurement of Offshoring: Application to German Labor Demand,” Deborah Winkler and William Milberg

Category: Data Analysis, Think Tank

1983 Redux? Only if They Make Trading Places 2

Dan Greenhaus is at the Equity Strategy Group at Miller Tabak + Co. where he covers markets and portfolio theory. He has contributed several chapters to Investing From the Top Down: A Macro Approach to Capital Markets (by Anthony Crescenzi). ~~~ We have been asserting for some time now that the issue for the market…Read More

Category: Think Tank

Green light continues with G20 stimulus

“We agreed to maintain support for the recovery until it is assured…We are not out of the woods yet,” said the UK Chancellor of the Exchequer Darling at the weekend’s G20 meeting. This continued green light on massive monetary and fiscal stimulus and no commentary about the US$ has the dollar index falling to within…Read More

Category: MacroNotes

Words from the (Investment) Wise 11.08.09

Words from the (investment) wise for the week that was (November 2 – 8, 2009)

“Words from the Wise” this week comes to you in a shortened format as I am about to leave Cape Town for a visit to the colder environs of Switzerland and Slovenia. Although reduced commentary is provided, a full dose of excerpts from interesting news items and quotes from market commentators is included. Blog posting will be slow (and totally absent on some days) while I am on the road. The normal blogging service will be resumed on my return to Cape Town on November 16.

The Federal Open Market Committee (FOMC) maintained its extraordinarily accommodative monetary policy following its meeting on Wednesday. The communiqué had no surprises and said that the committee expected to keep the fed funds rate target in the 0-0.25% range “for an extended period”. As expected, the European Central Bank (ECB) and the Bank of England (BoE) also kept interest rates unchanged at 1% and 0.5% respectively.

“A hesitant economic recovery, tame inflation and severe credit headwinds suggest that monetary policy will need to stay very easy for at least another year. Liquidity trends will not be a constraint on higher prices for risk assets for a while,” said BCA Research.

The jump in the unemployment rate to a 26-year high of 10.2% in October – an increase of 0.4 of a percentage point – reminded pundits of the challenges in the labor market and broader economy. While investors’ hopes of an economic recovery might have got ahead of reality, the cartoonists continually reminded us of worrisome issues …


Source: Stuart Carlson,

The past week’s performance of the major asset classes is summarized by the chart below. Gold bullion was the star of the week, especially subsequent to the purchase by India’s central bank of 200 metric tons of gold from the International Monetary Fund. The price jumped by 4.7%, recording an all-time high of just over $1,100, with platinum (+1.7%) and silver (+6.6%) also handsomely higher. (See my recent post “Gold bullion surging in all currencies“.)



A summary of the movements of major global stock markets for the past week, as well as various other measurement periods, is given in the table below.

The MSCI World Index (+2.4%) and the MSCI Emerging Markets Index (+2.4%) both made headway last week to take the year-to-date gains to 23.0% and an impressive 65.1% respectively. Interestingly, Chile is now only 3.9% down from its July 2007 high and could be one of the first markets to wipe out all the financial crisis/recession losses.

The US indices reversed a two-week down-patch and all the major indices and economic sectors closed higher for the week. The S&P 500 scored a full house of gains and the Dow Jones Industrial Index reclaimed the 10,000 level, putting these indices within 2.7% and 0.7% respectively of their 2009 highs.

The year-to-date gains in the US remain firmly in positive territory and are as follows: Dow Jones Industrial Index 14.2%, S&P 500 Index 18.4%, Nasdaq Composite Index 34.0% and Russell 2000 Index 16.2%.

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Category: Think Tank

The Glide Path Option

The Glide Path Option

November 6, 2009
By John Mauldin
The Present Contains All Possible Futures
The Ugly Unemployment Numbers
Argentinian Disease
The Austrian Solution
The Eastern European Solution
Japanese Disease
The Glide Path Option
Philadelphia, Orlando, and Phoenix
The present contains all possible futures. But not all futures are good ones. Some can be quite cruel. The one we actually get is dictated by the choices we make. For the last few months I have been addressing the choices in front of us, economically speaking. Today I am going to summarize them, and maybe we can look for some signposts that will tell us which path we’re headed down. For those who are new readers and who would like a more in-depth analysis, you can go to the archives at and search for terms I am writing about. And I will start out by briefly touching on today’s ugly unemployment numbers, with data you did not get in the mainstream media.

But first, let me welcome the readers of EQUITIES Magazine to this letter. The publisher is sending the letter to you directly. This letter is free, and all you have to do to continue receiving it is type in your email address at Likewise, I have arranged for my regular readers to get a free subscription to EQUITIES Magazine, if you would like. You can go to For those who don’t know, I write a brief monthly column for them.

The Ugly Unemployment Numbers

The headlines said unemployment, as measured by the “establishment survey,” was down by 190,000; and even though that was slightly worse than forecast, market bulls were cheered by the fact that the number was not as bad as last month’s. It is an improvement that we are not falling as fast.

Well, maybe. What I did not see in many of the stories I read was that the number of unemployed actually soared by 558,000, to 15.7 million, as measured by the household survey. The establishment survey polls larger businesses; the household survey actually calls individual households.

Let’s look at the real number in the establishment survey. If you don’t seasonally adjust the number, the actual change in unemployment for October was 641,000, or about 450,000 more than the seasonally adjusted number. And the Bureau of Labor Statistics added 86,000 jobs that they simply guess were created through the so-called birth-death ratio. Interestingly, the birth-death ratio number is not seasonally adjusted, so it is just added to the unemployment number.

The total (U-6) employment rate is at a record high of 17.5% (this includes those who are part-time for economic reasons). There are now over 10.5 million people who have lost their jobs since the beginning of the downturn.

My favorite slicer and dicer of data, Greg Weldon (, offers up an even more horrific number. As I have noted before, if you have not looked for work in the last four weeks, the BLS does not count you as unemployed. Quoting Greg:

“Moreover, when we combine the monthly change in the number of Unemployed, with the number Not in the Labor Force, we might consider the result to be a proxy for the actual ‘change’ in the underlying labor market situation … in which case, October’s figure of 817,000 represents the fourth LARGEST yet, behind last month’s (September’s) second largest figure of 1,021,000 … for a two-month combined figure of 1.838 million, in newly Unemployed, or no longer ‘in’ the Labor Force …

“… the second LARGEST two-month total EVER posted, barely trailing the December-08/January-09 total 1.955 million.

“Bottom line … basis this measure AND the ‘Total Unemployment Rate,’ we could conclude that not only is there NO ‘improvement’ in the labor market, but moreover, that it continues to DETERIORATE, intently.”

There are plenty more implications in the data, but let’s turn to the topic of the day.

Read More

Category: Think Tank

Consumer Credit continues downward trend

Consumer Credit outstanding fell $14.8b in Sept seasonally adjusted, almost $5b more than expected and marks the 11th month in the past 12 of declines. At $2.456T outstanding, it is 4.9% below the record high in July ’08. After a flat reading in Aug, (didn’t fall b/c of the CARS program), non revolving debt outstanding…Read More

Category: MacroNotes

The Home Buying Tax Credit costs what?

The Home Buying Tax Credit costs what? On the day President Obama signed the extension of the home buying tax credit, Rasmussen Reports released the results of a poll today saying that 57% favor the $8,000 tax credit for 1st time home buyers but when they hear that it will cost an additional $10b+, support…Read More

Category: MacroNotes

Payrolls, sluggishness continues

Oct Payrolls fell by 190k, 15k more than expected BUT net revisions were up by 91k over the two prior months. The unemployment rate rose to 10.2%, .3% more than expected and up from 9.8% in Sept as household employment fell by 589k and the labor force shrunk by 31k. The all in rate rose…Read More

Category: MacroNotes

As of today, our automated tool to gather FDIC bank call reports and generate Stress Index ratings has gathered data on some 5,063 institutions. Users of the professional version of the IRA Bank Monitor can see the ratings on a list we have built on the Bank Monitor home page that is sorted by assets….Read More

Category: Markets, Think Tank

Rate hike odds and inflation expectations update

With respect to future fed policy, here is an update in the fed funds futures for what is priced in for rate hikes in 2010. Odds of a 25 bps hike by the April meeting is now down to 28% vs 54% priced in just prior to yesterday’s FOMC statement release. Last Monday, the market…Read More

Category: MacroNotes