Tuesday assorted links

by on January 5, 2016 at 12:09 pm in Uncategorized | Permalink

1 Norman Pfyster January 5, 2016 at 12:17 pm

“real world…fiction”? As opposed to fictional fiction?

2 Steven Kopits January 5, 2016 at 12:20 pm

Here’s a piece I wrote for CNBC on China’s growth prospects. I argue that policy has taken a nationalist turn, and that’s bad for growth.

Tyler is quoted.

http://www.cnbc.com/2016/01/05/why-chinas-growth-could-be-over-commentary.html

3 Walter January 5, 2016 at 1:46 pm

Steven,

Your third scenario has China devaluing the yuan and picking up exports (and thereby raising commodity prices). Where are all these increased Chinese exports heading to? Who is going to buy more stuff from the Chinese.

4 Steven Kopits January 5, 2016 at 2:09 pm

If the yuan were 8-15% cheaper, then people could buy more Chinese goods for the same amount of money. We would be a significant buyer. If you look at the US trade deficit data, you’ll see that we’ve effectively substituted non-oil imports for oil imports, leaving the total trade deficit largely stable.

5 Dubious January 5, 2016 at 12:35 pm

I love that Douglas Holtz-Eakin seems to think that “ballooning federal debt” is lowering productivity growth. I’d love to hear him explain why he thinks that’s so.

6 libert January 5, 2016 at 12:48 pm

Holtz-Eakin’s blurb had no substance, in stark contrast to all the other people quoted. This is a perfect example of how a once-respected economist has morphed into a politician.

7 chuck martel January 5, 2016 at 1:16 pm

“The greatest challenge facing the U.S. is the pace of trend economic growth.”

I keep hearing that it’s global warming or too many guns.

8 T. Shaw January 5, 2016 at 3:25 pm

All they got are more regulations, income redistribution; higher taxes; AGW (higher electric bills/taxes slam bitter clingers, now angry white men), and gun control. They think can’t speak about any of it except gun control – which bullshit wins for the bitter clingers state houses and legislatures.

9 T. Shaw January 5, 2016 at 3:27 pm

Oh, I forget. They also have gender identity (?) as in a 60-plus year-old man is a woman if he wants to be.

10 Nathan W January 5, 2016 at 11:06 pm

Among other things, aren’t taxes a lot lower now than they were during the post-WWII boom years?

11 Brian Donohue January 6, 2016 at 12:07 am

No, no they aren’t. You are misled by high top marginal tax rates in the post-war years. The overall tax burden is a bit higher now I think.

12 derek January 5, 2016 at 4:16 pm

I would posit that the Fed is constrained by the necessity of preventing increases in cost of debt from overwhelming fiscal policy.

13 So Much For Subtlety January 5, 2016 at 5:29 pm

Government borrowing would normally crowded out private borrowing. There is only so much money saved, and so if the government spends it on propping up Detroit, there is less for the productive economy. Although thanks to East Asia and the retiring baby boomers, that is obviously not the case now.

Government debt has to be paid back. Borrowing now means higher taxes later. Obama has added unbelievable levels of debt – debt that cannot really be paid back. It will have to be inflated away or the defaulted on. Any sensible investor knows that a long-term investment now is a bad idea. Either way. So they will hold off. More hot money, less long-term funding for things that result in productivity break throughs.

14 Rock Lobster January 5, 2016 at 12:44 pm

Tyler, curious if you’ve seen and/or are planning to review The Revenant. It came out at an awkward time for end-of-year roundups.

15 jim jones January 5, 2016 at 3:15 pm

A good movie but it needs subtitles, the dialogue has too much mumbling.

16 Govco January 6, 2016 at 10:02 am

About half the movie is Decaprio grunting and squinting in a role reminiscent of Tom Hanks in Castaway (but without charm and humor). Another quarter was seemingly Terrence Malick homage, all nature shots and goofy mysticism. The final quarter was a decent period piece.

17 Hazel Meade January 5, 2016 at 12:46 pm

Reagrding #1:
So would it be advisible to move money into domestic US stocks, or into bonds or what?
I currently have some money in domestic stocks, some in bonds, and some in international emerging market stocks. However, I presume both domestic stocks and bonds are vulnerable, so what is the best place to move the money to?

18 Steven Kopits January 5, 2016 at 2:10 pm

Not a bad time to consider oil stocks. I’d stay clear of the IOCs, but I think better shale players are worth considering. On shore (but not offshore) services, too.

19 Yancey Ward January 5, 2016 at 6:58 pm

I don’t know about the oil stocks. Other than Exxon, most of them have dividends that are at great risk of being cut if oil doesn’t rebound soon.

20 Stephan January 5, 2016 at 2:58 pm

S&P 500 in the form of an ETF (VOO) from Vanguard. It’s cheaper than a year ago. Dividend yield is about 2% . Low risk to capital. Don’t expect huge appreciation but probably 3 to 6% this year

21 collateral January 5, 2016 at 3:28 pm

No one knows. If someone claims to, make sure you still have your wallet and start walking in the opposite direction.

22 Gochujang January 5, 2016 at 3:49 pm

Do what Maury Markowitz did, as opposed to what he advised.

(No one knows, but a balance of low fee stock and bond funds is not horribly unsafe. I am holding thus, despite my feeling that first half 2016 will not be good, rebound into 2017, ymmv.)

23 Jeff R. January 5, 2016 at 6:11 pm

Timeshares are always a good investment.

24 Anon. January 5, 2016 at 12:55 pm

I spent several minutes on the LARB website and was simply overwhelmed by the avalanche of content. It’s got paradox of choice up to here! The “most viewed” section, as always, is a cesspit of clickbait/identity politics (the most viewed article is yet another book-length essay on those fucking Yale Halloween costumes) instead of the best pieces. Finally I picked a review of the new HHH movie. It was unexceptional. Ctrl+w.

25 Swan January 5, 2016 at 1:06 pm

I now know what Ctrl+W does.

26 Urstoff January 5, 2016 at 2:42 pm

RIP Kotter

27 Larry Siegel January 6, 2016 at 2:57 am

Not sure if that is a joke. Kotter was Gabe Kaplan. As far as I know he is fine. Gil Kaplan was the publisher of Institutional Investor and an orchestra conductor.

28 RM January 5, 2016 at 3:01 pm

#4. I initially thought that this meant that shorter people were better at lying. I immediately thought Danny DiVito.

29 The Original D January 5, 2016 at 3:02 pm

Are we in another housing bubble? I’m thinking of buying a duplex this year, living in one unit and renting out the other.

30 Gochujang January 5, 2016 at 3:55 pm

I only skimmed a few predictions, but agree with Robert Rubin at the level of the piece. Who knows if we would agree on detail of how to refactor out of stagnation.

31 NPW January 5, 2016 at 4:01 pm

#4 I’m not convinced the writer knows the difference between force and acceleration. I wonder what the mass of the tongue is on a chameleon.

32 jorod January 5, 2016 at 4:24 pm

1. Personally I believe as taxes go up, the economy will grow slowly to negative. I don’t know of any economy that can grow fast as taxes go up unless they are starting very low or have some advantage in natural resources. Socialist countries generally squander their economic benefits on nonsense projects and crony enterprises. People should look at the Carter and Reagan administrations.

33 Ethan Bernard January 5, 2016 at 5:19 pm

Or some disadvantage in natural resources–rising and falling oil prices. People should look at the Carter and Reagan administrations.

34 gab January 5, 2016 at 6:15 pm

Therefore if taxes don’t go up, we can grow quickly?

35 JWatts January 5, 2016 at 6:46 pm

That doesn’t logically follow.

36 AIG January 5, 2016 at 7:25 pm

#1) “Climate change continues to be the biggest single issue we face”

Jesus H. Christ! Some people are still stuck in the 90s, I see.

37 Gochujang January 5, 2016 at 7:37 pm

That one got me too. Climate change is real and a problem, but it will kill far fewer people than ISIS this year.

38 wiki January 5, 2016 at 8:22 pm

I always admired Kaplan’s Mahler 2nd. A monument to what money, good taste, scholarship, and obsessiveness can produce. You don’t have to think he’s a genius to realize that his fixation on the Mahler 2nd has been a gift to musical research and to the promotion of classical music. Rarely has elite patronage produced such excellent outcomes.

39 Ray Lopez January 5, 2016 at 10:56 pm

‘I’m more worried about the political risks.’ – Jared Bernstein [seems wise]

‘A downturn is no more likely in 2016 than in a typical year, nor less likely.’ Jeffrey Frankel, James W. Harpel professor of capital formation and growth [seems wise]

‘More of the same’ – Scott Sumner, Ralph G. Hawtrey chair of monetary policy at the Mercatus Center at George Mason University [a wise safe choice, since the immeadiate past is the immeadiate present in most systems]

TC and the other commentators predicting a China slowdown or collapse are taking a rare gamble. I like their bravado, though usually such predictions fail.

40 LR January 5, 2016 at 11:59 pm

#1 – If you hadn’t previously thought that economics was for kids who couldn’t quite do engineering or physics but still thought they were smart and couldn’t bear the thought of sociology here is more proof.

41 Larry Siegel January 6, 2016 at 2:55 am

#5. I’m deeply saddened to read about Gil Kaplan. His mentor and business partner, Peter Bernstein, was my close friend. I wish I could conduct an orchestra 🙂

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