tag:blogger.com,1999:blog-151430522011-07-07T20:49:20.724-04:00Dissecting political economics like a drunk with a chainsaw.Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.comBlogger251100tag:blogger.com,1999:blog-15143052.post-88311566472805650562009-07-08T18:21:00.008-04:002009-07-08T18:45:28.449-04:00

There's been a lot of discussion lately of whether employment is a leading, lagging or coincident indicator of economic recovery.Without a doubt, Payroll Employment carries substantial weight in the National Bureau of Economic Research (NBER) Business Cycle Dating Committee’s demarcation of cycle peaks and troughs; that payroll employment factors so significantly in the NBER’s decision process

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com2tag:blogger.com,1999:blog-15143052.post-45615470917779846592009-03-29T18:37:00.017-04:002009-03-30T10:16:07.217-04:00

This past week, Treasury Secretary Tim Geithner released details of the Public-Private Investment Program, his plan to clear devalued, illiquid assets from troubled banks. As outlined in the program, Treasury co-invests with private investors, who bid on bank assets through Public-Private Investment Funds (PPIFs). The PPIFs' purchases are financed -- and levered, up to 6-to-1 -- using Fed- and

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com1tag:blogger.com,1999:blog-15143052.post-50750999118514097262009-02-28T13:43:00.018-05:002009-02-28T15:46:25.462-05:00

Many observers -- including recently the editors of Scientific American -- have argued that the financial and economic crisis the world faces today was caused by "quants" who miscalculated rare events, ignored correlations and fundamentally misunderstood "fat-tailed" distributions.Of course, mainstream econometrics and mathematical finance have addressed these issues for generations.

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-84977278661144637952009-01-28T18:41:00.002-05:002009-01-28T19:09:46.753-05:00

Car czars forcing auto lending? Treasury coercing "patriotic" bank mergers? Unfettered TARP and TALF dole outs? Congress dictating executive pay? Bad banks?Consider those government activities as you read the following excerpt on fascism from The Concise Encyclopedia of Economics:Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com1tag:blogger.com,1999:blog-15143052.post-62831630097121125182008-11-16T12:00:00.005-05:002008-11-16T14:07:46.221-05:00

According to the Mortgage Bankers Association, over a quarter of all mortgages originated from 2005 to 2007 were interest only. Freddie Mac estimated that about 15% of the mortgages in its portfolio on Sept. 30, 2007, had loan-to-value ratios above 90%.Of course, these so-called "homeowners" don't own their homes at all. Typically, these borrowers took interest-only, piggyback and

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-22020443263579290802008-06-15T16:46:00.006-04:002008-06-15T18:05:42.098-04:00

Germany's chancellor, Angela Merkel, called for a European ratings agency to counter, in her words, "a strongly Anglo-Saxon dominated system" of credit ratings, referring to Standard and Poor's and Moody's. (We'll leave aside for the moment that the Anglo-Saxons were in fact German.)She went on to say that "in the medium term Europe will need a working ratings agency because the robust currency

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-39026142833545928942008-06-05T12:49:00.002-04:002008-06-05T12:57:58.545-04:00

On the same day that Hillary Clinton announced her withdrawal from the presidential campaign, Bloomberg News reports that Obama's campaign may help Hillary's campaign pay off its $20+ million of debt.According to the article, Hillary has until the Democratic convention to pay herself back the $11 million she lent to her campaign; otherwise, it becomes a campaign contribution, and she can only

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-43398006125611887512008-06-01T11:11:00.003-04:002008-06-01T12:33:48.105-04:00

Where does Hillary Clinton get the willpower to fight on for the Democratic Party nomination, when it's pretty clear she's lost?She proclaims herself a "fighter" who wants to get her message to the people.But the April 30 Federal Election Commission filings paint a different picture.Hillary has lent her campaign over $10 million. The campaign is $20 million in debt, in addition to millions in

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-16952326485737391352008-03-08T17:53:00.006-05:002008-03-08T18:35:03.110-05:00

 The chart above illustrates the relationship of U.S. corporate profits (after tax) to U.S. gross domestic product. While it is clear that the U.S. economy has enjoyed over the past few years a period of record corporate profitability relative to GDP, it is equally clear that such levels have historically been unsustainable. Indeed, the estimated figure for 2007Q4 is a sign that the good times

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-46506635892975362702008-02-20T09:52:00.002-05:002008-02-20T12:25:29.562-05:00

The Pension Benefit Guaranty Corporation (PBGC) claims that, to avoid a taxpayer bailout, it must shift its asset allocation more heavily toward equities, the Financial Times reported yesterday. The PBGC plans to up its equity allocation from 28% in 2007 to 45% of total assets, and allocate 10% to alternative investments, including hedge funds and real estate. The remainig 45% will be held in

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-39938499493763095892008-02-10T15:04:00.000-05:002008-02-10T17:38:39.633-05:00

As if there hasn't been enough news about loose banking controls -- from subprime lending to special investment vehicles to rogue traders -- the New York Times reports that high-ranking employees within Wachovia knew that several telemarketing companies were using accounts at the bank to steal hundreds of millions of dollars from thousands of individuals. Not only was the bank aware of the fraud,

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-38606347190930214902008-02-03T15:18:00.000-05:002008-02-03T18:12:16.124-05:00

In an interview today on ABC's "This Week," Hillary Clinton reiterated that she would garnish the wages of Americans who fail to enroll in her proposed mandatory health-care plan.There's one problem with Sen. Clinton's policy: you can't garnish what isn't there.The people whose wages would be garnished would necessarily come from the ranks of the uninsured. According to the U.S. Census Bureau's

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com1tag:blogger.com,1999:blog-15143052.post-141670926212856642008-01-28T11:18:00.000-05:002008-01-28T12:23:21.161-05:00

Societe Generale's management has denied that its unwind of $74 billion of European equity index futures last week affected the markets. As quoted in the Financial Times ("SocGen raises questions over Fed rate cut", Jan. 24, 2008), Philippe Collas, the head of asset management at the bank, said, "It’s not possible that our covering operations contributed to the market’s fall."An analysis of

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-19225904104503292192008-01-24T13:12:00.000-05:002008-01-24T14:34:31.142-05:00

Societe Generale, the French bank, reported $7.2 billion in losses from unauthorized trades in European equity index futures.The fraud was reportedly discovered over the weekend, and the bank began liquidating positions Monday. Going into the weekend, European indices were down 10% or so for the year. Thus, to have generated losses of $7 billion, SocGen would have been net long notional positions

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-1148229503322397432006-05-21T12:00:00.000-04:002006-05-21T17:25:14.063-04:00

U.S. Attorney General Alberto Gonzales said today that reporters and their news organizations could be prosecuted for publishing classified information. Speaking on ABC's "This Week," Mr. Gonzales opined on the First Amendment: "It can't be the case that that right trumps over the right that Americans would like to see, the ability of the federal government to go after criminal activity." Sorry

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-1143128823372829792006-03-23T10:19:00.000-05:002006-03-23T11:02:03.246-05:00

The road to freedom in the Muslim world is fraught with obstacles. The latest pothole has the Afghani government arresting and attempting to prosecute one of its citizens for converting to Christianity. Apparently, under Islamic law, conversion to another religion is punishable by death.For those good people caught in a cycle of hand wringing and soul searching, telling us that we must respect

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-1142519842454800542006-03-16T09:06:00.000-05:002006-03-16T10:20:01.296-05:00

Today, the Washington Post reported that government agencies fared poorly in the House Government Reform Committee's annual report card on computer security, with the federal government as a whole getting a "D+". The Departments of Commerce, Housing and Urban Development, Treasury, and the Nuclear Regulatory Commission all received grades of "D", while the Departments of Agriculture, Defense,

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-1137428168709178642006-01-16T10:29:00.000-05:002006-01-16T14:27:04.540-05:00

The recent Medicare prescription drug debacle should cement in the public's collective mind that, despite political rhetoric, the Federal government is incapable of managing health insurance on a national level. The states, burdened with ever higher costs from Federal Medicaid mandates, are now flexing their legislative muscles. Maryland last week passed legislation that requires large

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com1tag:blogger.com,1999:blog-15143052.post-1131493840769500252005-11-08T19:59:00.000-05:002005-11-08T20:04:09.213-05:00

The accounting-challenged Federal Home Loan Mortgage Corporation – aka Freddie Mac – reported today that it is restating downward its first-half 2005 earnings by $220 million due to: "an error in a legacy computer system used to compute interest on certain mortgage-related securities (primarily non-agency securities) that accrue interest on other than a calendar-month basis."Yes, that's right,

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-1128721031379414692005-10-07T16:03:00.000-04:002005-10-07T17:42:15.300-04:00

Troy, Michigan, is the new City of Brotherly Love... if you happen to be a top executive of Delphi, that is.The struggling auto-parts maker said today that it was giving 21 top executives an additional 6 months of severance pay, for a total of 18 months, and also promised to pay them part of their bonuses if they were terminated or left for a good reason. (link)According to Delphi, the old

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-1128553503942611512005-10-05T17:02:00.000-04:002005-10-05T19:05:03.970-04:00

Today's headlines were pretty clear: "Inflation Jitters Sap Stocks" (WSJ), or "Economy Gets Another Inflation Warning" (AP). To be sure, stocks did take a severe tumble, with the S&P 500 down 1.5% and the Nasdaq 100 down 1.7% on heavy volume. Inflation fears weren't helped by the ISM reports that showed prices paid by supply managers jumped in September. Nor were they helped by the Dallas and

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-1127582094528898292005-09-24T10:57:00.000-04:002005-09-24T14:14:56.116-04:00

The open-source movement is to computer security what "intelligent design" is to the science of evolution:1) Its claims must be taken on faith.2) If you disagree, you must be crazy.3) There's no listening to reason.A fine example of this quasi-religious fanaticism centers on the Mozilla Firefox web browser, an open-source alternative to Microsoft's Internet Explorer (IE). There has been a

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-1123695125878234822005-08-10T13:20:00.000-04:002005-08-10T13:39:07.886-04:00

The Fed's Report to Congress on July 20 and the FOMC statement of August 9, 2005 indicate that the "The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity." This belief deserves questioning in light of the fact that the rate of growth of

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-1123267157474827572005-08-05T17:41:00.000-04:002005-08-10T13:38:56.236-04:00

The free, open, collaborative web-based Wikipedia encyclopedia has come of age. Its founder, Jimmy Wales, has said he will impose stricter editorial rules -- including a committee for freezing "undisputed" content -- to counter vandalism of the site. (The Wikipedia itself notes that vandalism has been a "constant problem".)Of course, if Wikipedia were an ordinary, privately compiled encyclopedia

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0tag:blogger.com,1999:blog-15143052.post-1123261226516145602005-08-05T16:02:00.000-04:002005-08-10T13:39:17.940-04:00

When did China, an admittedly Communist country, join the free-enterprise club?CNBC's Larry Kudlow is concerned that Congress is interfering with free markets by hindering Cnooc's purchase of Unocal. The editors of the New York Times fret that the U.S. government, in doing so, is mistreating and alienating China.The Chinese state owns or controls nearly all means of production and the financial

Gerald A. Hanweck, Jr.http://www.blogger.com/profile/12126914625829462221noreply@blogger.com0