Month: February 2009
Headlines of the day
1. 6.2% Contraction Rate in 4th Quarter — Budget Based on Brighter Projection (that title is found only on the paper version).
2. Democrats Limit Future Financing for Washington Voucher Program.
3. Obama moves to undo rule on abortion procedures: "The Obama administration moved Friday to undo a last-minute Bush
administration rule granting broad protections to health workers who
refuse to take part in abortions or provide other health care that goes
against their consciences."
That's from today alone. I ask you: What song or song title comes to mind?
Markets in everything, club good edition
Matt S. points me to the following:
Matthew and Michelle Reed, along with their
2-year-old son and newborn baby boy, are the first of what could be a
stream of people to move to Dothan [Alabama] under a program that offers Jewish
families as much as $50,000 to relocate and get involved with the
city's only synagogue, Temple Emanu-El.
A
family that's been part of the reform congregation for decades funded
the $1 million resettlement program and launched it last year, fearing
the congregation would dwindle and die without an infusion of new blood.
Assorted links
1. Chat with a vulture investor.
2. The Geithner banking plan is not confusing; under my interpretation it is explained in a 45-second Japanese video.
3. Stephen Dubner interviews me, including a discussion of which smell I dislike and what I hope to spend more money on.
Markets in everything, New Orleans edition
I thank the insightful Skitzo for the pointer.
The unemployment rate as a measure of recessions
I wonder if it is as good a measure of economic severity as it used to be. The greater the heterogeneity of the labor force, the greater the potential for underemployment. Even if the downturn is bad, I am not sure unemployment will stay above ten percent for long. New search and matching technologies, such as found on the internet, might create quicker job pairings, albeit with continuing underemployment. Unemployment is of course important but let us not view this category in purely binary terms.
Counter-cyclical asset of the day: Atlas Shrugged
weeks of this year compared with sales for the same period in 2008. This
continues a strong trend after bookstore sales reached an all-time annual high
in 2008 of about 200,000 copies sold.
Hat tip to Newmark's Door.
Comparing Recessions 4
GDP was down at a 6.2% annualized rate in the last quarter of 2008 (revised figure). Earlier I criticized the Minneapolis Fed for a peculiar way of presenting data comparing recessions. I've been impressed, however, with how they have responded since I (and others) raised this issue. First, they quickly clarified what they were doing. Second, today they have added a very nice javascript which lets you compare output and employment during this recession to as many others as you like with a few clicks. Check it out.
Markets in everything
Pork brains in milk gravy (canned).
I thank Yves Smith for the pointer. Yves also points us to a rare cheetah captured on camera.
Assorted links
A Great Depression for rich people
What does a Great Depression for the relatively wealthy look like? If you spend lots of your budget on "luxuries" — especially durables — it is easy to postpone their consumption. This might cause gdp to fall more rapidly than if people were poorer. If you are spending most of your money to eat and stay alive, and a negative shock comes, you have to work harder to make up the difference.
It's so, so easy to put off the purchase of a new car. And that makes for a steep ride down, most of all for the geographically distant producers of durable goods. Whether the steep economic plunge is worse in utility terms is debatable but maybe not because wealth buffers are better built up.
On the other hand, the presence of so many wonderful free goods allows for easy substitution into activities which do not generate much economic revenue or employment.
For these ideas I am indebted to a conversation with Arnold Kling and Seth Ditchik, just before we ate superb barbecue at Oklahoma Joe's, get the ribs and french fries.
The countercyclical asset, northern Virginia edition
It is Little Seoul, mostly in Annandale, spilling over into West Alexandria. The number of innovative Korean restaurants continues to increase and they are usually crowded. I love the new place devoted to the many forms of Korean porridge. Seoul Gool Dae Gee Honey Pig on Columbia Pike has the best decor (and the pork neck) around. TodamSoonDooBoo (also known as Tofu House, next to the Giant, straddling 236 and Columbia Pike) has dumpling soup and tofu. The two branches of Shilla Bakery and Le Matin de Paris give Virginia a cafe scene. Much of my eating out is now Korean or in the new Vietnamese places in the Western Saigon interior branch of the Eden Center; either that or Ray's Hell-Burger, Hong Kong Palace, Thai X-ing, or the now-reopened Nava Thai, right next door to the shuttered old branch.
Annandale used to be a nice appendage to the peak places to eat. Now it's the epicenter, the main culinary show, and also the coolest place to hang out.
Addendum: Here is a good article, which mentions Korean food as the next trend to come. Let's hope not.
Battle of the Barbecues, Kansas City
The Kaufmann Foundation brought together many bloggers and many servings of Kansas City barbecue. (Isn't America a great country? I met Mark Thoma for the first time and tomorrow we talk about blogging and the future of the world.) Then we voted, using Borda Point Count. Tim Kane tells me:
Oklahoma Joe's
wins handily. Arthur Bryant's loses handily. Others are close.
(Hmmm … looks like a normal).
Policy update
Today President Obama proposed about $634 billion in new spending and taxes. But since we here at MR cover only the quantitatively significant policy initiatives, I have nothing to say about it.
What’s the opening chord in “Hard Day’s Night”?
It's sometimes called "the most famous chord in rock n' roll." I have wondered about this question for thirty-four years (all this time I'd been thinking it is an odd hybrid G7/9/13). Here is a history of thought on the controversy, including a list of nominated chords. It now turns out there is an answer. A mathematician applied Fourier transforms to break the sound into its constituent parts. Here's the bottom line:
The Beatles producer [George Martin] added a piano chord that included an F note,
impossible to play with the other notes on the guitar. The resulting
chord was completely different than anything found in songbooks and
scores for the song, which is one reason why Dr. Brown’s findings
garnered international attention. He laughs that he may be the only
mathematician ever to be published in Guitar Player magazine.
Here is a pdf of the researcher's findings. I thank Eric H. for the pointer.
Markets in everything
Rather than a CDS, imagine a derivative security on the prospect of an endangered species:
Under their plan, the government would determine the cost of
protecting a species if it becomes endangered. That money would be set
aside to fund contracts with payouts pegged to species health. The
contracts would be sold to landowners and developers whose actions
directly affect the animals, though the contracts could be freely
re-sold.
Should animal numbers fall beneath a predetermined threshold,
contracts would be voided, and money devoted to anticipated recovery
programs. If the species thrives, investors would be rewarded, with
profits growing in direct proportion to species health.
"If there's a 99 percent chance that a species is going to survive," said
Mandel, "you could trade that like a high-ranking bond. You know it's
going to pay out."
I thank Adam Winski for the pointer.