Inflation Breakeven, Term Spread, Risk and Uncertainty: A Snapshot

As we get additional news day by day, it’s useful to see what financial and other indicators have to say about the economic outlook.

Figure 1: Five year inflation breakeven (blue), and 10 year – 3 month term spread (red), both in %. Source: Federal Reserve Board and author’s calculations.

 

Figure 2: VIX (blue, left scale), and Economic Policy Uncertainty index (light pink line, right scale), and EPU 7-day centered moving average (bold pink, right scale). Source: CBOE via FRED, policyuncertainty.com, and author’s calculations.

The breakeven and term spread didn’t move much over the weekend. Interestingly, financial market risk indicators (the VIX) has shown much more movement than the news-based policy uncertainty indicator (from Baker, Bloom and Davis).

 

76 thoughts on “Inflation Breakeven, Term Spread, Risk and Uncertainty: A Snapshot”

  1. T. Shaw

    For instance, 24 Nov 2021 The Buffett Indicator: 209%, which is 63% above historical average. US stocks MV – $49.6T; GDP – $23.7T. On 24 Nov DJIA was 34,746; 6 Dec – 35,228.

  2. ltr

    https://www.nytimes.com/2021/12/07/business/pandemic-savings.html

    December 7, 2021

    Americans’ Pandemic-Era ‘Excess Savings’ Are Dwindling for Many
    The drop in cash reserves has vast implications for the working class and could dampen consumer spending, a large share of economic activity.
    By Talmon Joseph Smith

    Infusions of government cash that warded off an economic calamity have left millions of households with bigger bank balances than before the pandemic — savings that have driven a torrent of consumer spending, helped pay off debts and, at times, reduced the urgency of job hunts.

    But many low-income Americans find their savings dwindling or even depleted. And for them, the economic recovery is looking less buoyant.

    Over the past 18 months or so, experts have been closely tracking the multitrillion-dollar increase in what economists call “excess savings,” generally defined as the amount by which people’s cash reserves during the Covid-19 crisis exceeded what they would have normally saved….

  3. ltr

    https://www.nytimes.com/2021/12/03/nyregion/covid-cases-surge-upstate-ny.html

    December 4, 2021

    Upstate New York Hospitals Are Overwhelmed as Covid Cases Surge
    Health care officials say a “perfect storm” of new Covid cases, staff shortages and filled nursing homes has created a crisis.
    By Sharon Otterman

    https://fred.stlouisfed.org/graph/?g=JxK3

    January 4, 2018

    Health Care Employment, 2017-2021

    https://fred.stlouisfed.org/graph/?g=JxKq

    January 4, 2018

    Health Care Employment, 2017-2021

    (Indexed to 2017)

  4. pgl

    Senator Turtle aka Mitch McConnell warns about the latest radical plan from Komrade Joe Biden which is a “toddler take over” that will sweep the youngest citizens into the big government net. OH MY – not our babies. Wait, wait – what is the turtle babbling about? Oh yea pre-K education and a child tax credit.

    Time to stop this Commie take over and while we are at it – end Obamacare, Medicare, Social Security – all to pay for more tax cuts for billionaires! MAGA!

  5. Moses Herzog

    We know that if the orange abomination was still inhabiting the White House, he’d be doing victory laps over this. So why isn’t Biden screaming this one from the mountain top?? Another example of Democrats being clueless on how to do better messaging:
    https://www.cnbc.com/2021/12/07/us-trade-deficit-narrows-sharply-in-october.html

    Hell…… if Copmala Harris is too booked up crying over having to ride a public school bus the the white people’s school (who else would be “abusing” her this way??) then get a woman of intelligence like Susan Rice out there to the cable News networks to spread the good news. Apparently no one else on the NEC is capable.

    1. pgl

      Of course, this is an improvement from the previous month’s record high trade deficit. I provided the historical data provided by Census.

      1. Moses Herzog

        As the CNBC story reports it’s the lowest number since last April. So it’s not “just” an improvement over the record. Now you can argue it’s “not notable” because it was in line with market forecasts. And I would probably agree. But that never stops Republican presidents from blowing the trumpet and banging the bass drum. And instead of sitting in their offices like hermit-like idiots, that members of the White House NEC might take a page from the other party which does a better job in the self-promotion and self-marketing dept. This all gets back to the points James Carville was making in this interview.
        https://www.pbs.org/video/vote-2021-discussion-1635973856/

        Apparently Democrats will forever be happy being “very principled” LOSERS with no faculty/positions from which to govern. Kind of reminds one of Hillary’s latest claim to fame on Twitter—that she’s never been indicted: https://twitter.com/HillaryClinton/status/1460269428139077651

        And let me say something else, Amy Walter can talk on TV with her jaws locked together like some bad amateur ventriloquist all she wants, but when Walter says “all politics is national and not local” it makes me wonder why, since HIllary loves bad political advice and fawning and flattery why Amy Walter wasn’t head of Hillary’s 2016 campaign team?? Even though the 2016 “I’m With Me” campaign result would have been the same.

        1. pgl

          An even better way of highlighting good news would be to note exports have been rising ever since Feb. 2021 and quite a lot. Imports were rising a bit faster for a few months but higher imports tend to follow a growing GDP. In other words, the Biden boom is being driven by strong exports.

          1. CoRev

            PGL, or the Biden boom is being driven by slowed imports, especially from the West Coast. You can spin it any way you wish, but please do not forget the fundamental conditions.

          2. pgl

            “CoRev
            December 8, 2021 at 11:56 am
            PGL, or the Biden boom is being driven by slowed imports, especially from the West Coast.”

            Ah CoRev – imports have been rising. I provided the monthly Census data. Try checking out the facts before you embarrass yourself again.

          3. pgl

            To be clear on CoRev’s latest incredible STUPID comment:

            “CoRev
            December 8, 2021 at 11:56 am
            PGL, or the Biden boom is being driven by slowed imports, especially from the West Coast.”

            Imports were $261 billion as of July 2018. But between Trump’s stupid trade war and his incompetent handling of this virus, they had declined to only $201 billion by May 2020. Last month they had increased to $291 billion. The data is from that Census link I provided yesterday so it is easy to see.

            We know CoRev writes a lot of really dumb stuff but the latest was off the charts. I guess his refusal to wear a mask or get the vaccine has led to some severe COVID-19 damage to that excuse of a brain he used to have.

          5. CoRev

            PGL & non-econ, bwa ha ha ha. The gift that keeps giving, “supply chain blockages”. Its blamed for slower GDP growth, inflation and now ignored for change in rates for imports vs exports.

            Wow! Cognitive dissonance.

          6. pgl

            CoRev
            December 9, 2021 at 4:43 am

            was followed by a bunch of incoherent rambling from someone who clearly has lost it. If anyone knows how to – can they send the medical professionals over to CoRev’s place as I fear is about to seriously hurt himself!

          7. noneconomist

            CoRev: Aye, Aye, Captain Blip!
            Impressive. You got “cognitive” and “dissonance “ in the correct order.

    1. pgl

      Given that we just had a call for Biden-Harris to cheer the reduction in the US trade deficit from Sept. 2021 to Oct. 2021, I thought it might be a public service to provide a FRED graph showing this Census reporting over the past couple of years:

      https://fred.stlouisfed.org/series/BOPGSTB

      If our host in the mood, maybe he will grace us with one of his usually excellent posts.

  7. Moses Herzog

    Some of us warned, that the gifting of Nord Stream 2 to the Russians was huge mistake for European security (shall I hunt up my old comments and link them?? Just tell me if you don’t remember my comments). We had some Weisenheimers on here, such as Ulenspiegel, telling me I was “oh so wrong” and had no idea what I was talking about.
    https://www.theguardian.com/world/2021/dec/07/ukraine-russia-latvia-foreign-minister-invasion-warning

    My very sarcastic advice to Europe now~~ keeping going on with Nord Stream 2. Keep going with Nord Stream 2. Just keep chugging full steam ahead. And when Putin invades Ukraine see how many American citizens want their sons to die because you do LAZY, self-destructive policies that even a 10 year old would know better than too do. Just you keep going on doing it how you’re doing. See how many Americans care to swallow their sons’ deaths as you shrug your shoulders on your Russian energy sources. See if people like me who warned you give a care when the Ukraine death count starts up. See how much Americans (à la France World War II ) want to give their sons for people who can’t lift a finger.

    1. JohnH

      Sounds to me like Biden is huffing and puffing because the US lost a lot of “ credibility” after pulling out of the pointless and futile war in Afghanistan.

      The media loves the drama of a new confrontation brewing. We can all hope that Biden doesn’t push it too far. War is hell. Just ask all those starving Afghan women that the US pretended it was there to protect

      1. pgl

        So if we carry out Bush43’s desire to protect these leaders, that would not be continuing a war that should have been ended back in 2002? Do make it your very confused mind.

        1. pgl

          These ladies (not necessarily leaders). Reading JohnH’s serial nonsense is not good for one’s brain.

    2. Macroduck

      Didn’t a German court suspend further action on a pipeline from Russia in recognition of the change in government? (Our local Xi-worshipper pointed it out as a bad thing, if I recall correctly.)

      So maybe the timing here is good.

  9. Macroduck

    WTI is climbing, though oil is not as near to its recent high as the S&P. The news on Omicron is getting better day by day. Still spreads like wildfire, but data on harm aren’t getting worse.

    2. JohnH

      Lumber, which represents a big portion of new home costs, is at $953.50…2x-3x its pre-pandemic price.

      And we were assured earlier this year that it was bound to return to normal! (In July pgl falsely claimed that I said it was not going to normal. Now I kind of wish I had said it!)

      1. pgl

        You have to lie about what I said so you can get back on your lumber obsession? I hope BBB lowers the cost of your meds as you really need to take them!

  11. ltr

    https://news.cgtn.com/news/2021-12-05/Why-isn-t-U-S-defence-budget-approved-Again-because-of-Nord-Stream-2-15KfzJlR8HK/index.html

    December 5, 2021

    Why isn’t U.S. defence budget approved? Again because of Nord Stream 2
    By Djoomart Otorbaev

    There is a fascinating process going on in the U.S. Congress right now. For a long time and behind closed doors, Congress members have been unable to approve the Pentagon’s defence budget of $770 billion. The stumbling block, like last year, was the construction of the Nord Stream 2 gas pipeline from Russia to Germany, which runs along the bottom of the Baltic and North Seas.

    Disagreements between representatives in the White House and members of Congress are about the need to impose sanctions against project participants, including a few European and Russian companies. President Joe Biden lifted congressional sanctions on the project last May that would have halted the project. As a result, the House of Representatives amended the National Defense Authorization Act to impose sanctions on Nord Stream 2 without presidential powers, making the sanctions bulletproof. For the administration, this placed a premium on stopping the amendment in the Senate, and Secretary of State Antony Blinken spent lots of time lobbying Senate Democrats to do just that.

    Since the congressmen did not approve the defence budget, it is clear that the Pentagon cannot order new weapons. Who would have thought that Nord Stream 2 could make such a significant contribution to reducing arms purchases?

    The U.S. and Germany are at odds over the new pipeline. Given that the German government is actively supporting its construction, the Biden administration is trying to soften the U.S. Congress’s position, which so far takes a clear hawkish position. Under its pressure on November 23, the U.S. Treasury Department imposed sanctions against the Russian-linked Transadria Ltd. and its Marlin vessel related to the gas pipeline construction.

    But in Germany, even most active opponents of the pipeline construction, including the German Greens party, a member of the Bundestag, recognized the inadmissibility of U.S. sanctions against Nord Stream 2. “The new U.S. sanctions are unacceptable even for the opponents of Nord Stream 2,” Omid Nuripur, an expert on the foreign policy of the Greens, told on November 23. “What kind of friendship do they strive for if they impose sanctions against friends when they do business with a third party, “he said. This is noteworthy the first time that the Greens have made such statements….

    Djoomart Otorbaev is the former Prime Minister of the Kyrgyz Republic, a distinguished professor of the Belt and Road School of Beijing Normal University.

    2. JohnH

      Much of the brouhaha over Nord Stream 2 stems from the simple fact that US energy companies want Germany to buy high priced LNG, not relatively cheap Russian gas.

      Follow the money. Congress is as corrupt as ever.

      1. pgl

        Dude – please do not go into foreign policy as you are even worse at it than Mike Jabba the Hut Pompeo.

      2. pgl

        Ever noticed how JohnH makes statements like this without a shred of evidence as to where the EU sources natural gas imports? This may be a bit dated but it is informative. Yes, the EU buys natural gas from Russia and it did not that the US might sell LNG to the EU in the future. But when this was written – a lot of LNG came from Qatar, Algeria, and Nigeria:

        https://www.wingas.com/en/raw-material-natural-gas/where-does-europe-get-its-natural-gas.html

        Yep it is a world market. Now if JohnH had something other than straw for brains, he might realize that imports of natural gas are cheaper than imports of LNG due to pesky little matters such as transportation costs and conversion costs. But no – let’s not expect too much from this straw headed troll.

      3. JohnH

        Obviously, pgl, who sits in judgment of anything others write, knows nothing about international markets in natural gas or about US-Russian competition for the European market. Here is a primer for his majesty, the ignorant judge: https://www.energypolicy.columbia.edu/research/report/impact-us-lng-russian-natural-gas-export-policy

        Beyond the gas itself, there is the matter of marketing. Russia wants bi-lateral, long term contracts that provide an assured revenue stream. The US wants to turn natural gas (via LNG tankers) into a version of the liberalized oil markets that it developed in the 1970s (and made sure that everything was priced in dollars.)

        And pgl of course can’t conceive of the idea that grubby economic competition underlies much of US foreign policy…not democracy, human rights, etc that propagandists like to portray nightly on the evening news. (Much better to have your constant military interventions seen as done for moral reasons, not economic self interest.)

        1. pgl

          That link is a long and excellent discussion so I guess we can excuse you for not reading. As in this key paragraph:

          When it comes to competition for the uncontracted niche in Europe, Russia has a significant advantage both on the long-run marginal cost basis (LRMC) and on the short-run marginal cost (SRMC) basis. LRMC includes all the full-cycle investments required to bring additional supplies to the market (e.g., building new LNG plants or new project construction). Russia is still one of the cheapest options for Europe. Upstream costs are very low—below 1 USD/MBtu (including taxes – figure 15)—though lengthy transportation and, for pipeline gas, the 30 percent export duty put some limits on this competitiveness, ruble devaluation supports the attractiveness of Russian gas (as a majority of the costs is fixed in rubles).

          Like I was trying to say – Russia has all sorts of cost advantages over US shale oil producers. But I guess havintg bashed US shale oil, you have decided to become their spokesperson.

          BTW – the very next paragraph noted supplies from Qatar and Nigeria. Like I said.

          But I digress. As usual you link to discussions which you have not bothered to read – which only makes us laugh at our favorite village idiot even more.

          But back to your “follow the money” which of course goes back to 1973. You forgot to tell us whose money we are following. Of course you can’t cause you have no effing clue.

          1. pgl

            We do not get to Nord Stream and Turkstream until the end of this article. And just before this we see figure 7 (who are the big natural gas exporters) with this dialogue:

            “Russia is consistently ranked first in the world for gas exports (figure 7). It provides for nearly one-quarter of the global cross-border gas trade, supplied to its foreign customers mainly through pipelines (93 percent) and, to a lesser extent, as LNG (7 percent). It remains the dominant supplier both for the European and the CIS gas markets, but this exclusive position in the global gas market is becoming more and more threatened by the expanding competitors—Qatar, Australia, and now the United States.”

            Oh gee – it is not Russia v. the US after all as Qatar and those Aussies among others that are exporting natural gas. I guess when I write it is a world market, this little reality just escapes JohnH’s limited thinking capacity!

        2. pgl

          grubby economic competition? I thought you were saying people in the government were bought and paid for. Do make up your ever confused mind WTF you are babbling about.

          1. JohnH

            Ted Cruz is busting Biden’s chops about Nordstream…but pgl thinks this is all about the noble US vs. the evil Putin!!!
            https://foreignpolicy.com/2021/07/22/ted-cruz-hold-state-department-biden-appointments-nord-stream-2/

            Of course, pgl probably doesn’t know that Cruz represents Texas evergreen interests either.

            It astounds me how oblivious most economists are to the powerful economic interests shaping US foreign policy. Of course, that presumes pgl is really an economist…

          2. JohnH

            Ted Cruz represents energy interests…not evergreen interests! Sometimes spell checker gives results as ridiculous as pgl’s.

          3. JohnH

            Ted Cruz represents energy interests…not evergreen interests! Sometimes spell checker gives results as ridiculous as pgl’s.

          4. pgl

            “JohnH
            December 8, 2021 at 1:48 pm
            Ted Cruz is busting Biden’s chops about Nordstream”

            Ted Cruz is now JohnH’s favorite Senator? Dude – everyone knows Cruz is a loud mouth clown. Your kind of dude!

            BTW moron – Cruz is fanning the flames for war with Russia. Is that what you now advocate?

        3. pgl

          Something else our village idiot skipped reading:

          ‘Globally, it is also raising questions about how Gazprom will compete in Asia, where demand is growing and gas suppliers are looking to place future production, as well as in other markets. Understanding how Gazprom will react to US gas is thus a critical economic and geopolitical question for LNG importers and exporters worldwide. In this paper the authors examine how Gazprom will maneuver in global markets under specific circumstances.’

          This paper was published 3 years ago but it did note the possibility of high Asian demand. Which would give Gazprom the possibility of selling its natural gas to Asian customers – not just the EU.

          Yes a global market. Like I said. But trying to get this across to a dense dunce head like JohnH is as productive as watching the grass grow in the winter.

        4. pgl

          “Beyond the gas itself, there is the matter of marketing. Russia wants bi-lateral, long term contracts that provide an assured revenue stream.”

          This statement is perhaps the clearest evidence that you cannot read even your own links. Yes – this was their pricing model up to 2002 before the commodity boom. But maybe you missed how the European pricing model changed once energy prices started to escalate. I’m sure the Germans would have loved to buy Russian natural gas at 2000 prices but even the Russians are not that stupid.

          It is a pretty discussion. Try READING it. DAMN!

    3. pgl

      Oh gee – the rest of the world has figured out that the Junior Senator from Texas is nothing more than a loud mouth jerk. Yes Ted Cruz went ballastic yesterday in a Senate speech, which the other 99 Senators just ignored.

      1. pgl

        And it seems JohnH has decided Cruz the Clown is now his hero in the Senate! Cruz comes across as one dumb dude but he does not come close to JohnH in this regard!

      2. JohnH

        pgl diverts attention from the obvious fact that grubby economic competition is driving US policy on Nordstream, It doesn’t get much grubbier than Ted Cruz and the energy industry. But no, let’s distract people’s attention from the machinations of special interests to how evil Putin is.

        Funny how much economists ignore international economic competition behind foreign policy. Economists ignoring economics. What a sad sight to behold!

        In pgl’s case I suspect it really is a case of ignorance. But are other economists really that oblivious? Have they been embedded too long in the current system and its mythologies? Or have they been co-opted?

        The most blatant “ignorance” came with the adoption of “free” trade agreements, justified by Ricardo’s comparative advantage, but really brought to fruition by the government acting on behalf of powerful, unmentioned interests who shepherded the negotiations through. And when it came to promoting the deals to the general public, economists helped these corporate interest disappear into the woodwork, rarely to be acknowledged ever again. Instead nonsense like claims that labor unions would benefit was what got trumpeted!

        1. pgl

          Why should anyone give a rats a$$ what Ted Cruz says? NO ONE in the Senate pays any attention to this lying clown. But you put him forth as some very influential force in terms of shaping actual policy? Seriously? I would think anyone would be that incredibly dumb. But then you have always exceeded expectations in this regard!

          1. JohnH

            Cruz is blocking important Biden appointments because of Nordstream. But pgl thinks that Cruz doesn’t matter! And Cruz’ anti-Nordstream, pro-industry position has support, including among corrupt Democrats.

            Pgl is too stupid to recognize the obvious connection between US foreign policy positions and powerful corporate interests! What a rube.

          2. pgl

            JohnH
            December 9, 2021 at 11:29 am

            Oh gee – now I’m too stupid not to realize Cruz is the President of the United States? Seriously? If this pathetic little troll is paying any attention to the real world, he might realize the actual President has not given Cruz what he wants.

            Now as far as blocking diplomatic appointments, Schumer could ram all these through the Senate before Christmas. I hope he does as it would neuter the pathetic little junior Senator from Texas.

  13. rsm

    Why didn’t your indicators predict the VIX spike, so we all could have profited by buying VXX low and selling high?

    1. Barkley Rosser

      Because nobody could foresee that the omicron variant would appear. Do you not understand that, rsm? Just how completely insane are you?

      1. AS

        Hi Barkely,
        Always appreciate your expert economic comments. Not trying to cause an argument, you just got me thinking about the odds of new problem variants.
        I wonder if we had an infectious disease expert responding if he/she would have an idea about troublesome variants and the odds of new troublesome variants?
        Since the Covid virus seems to mutate apparently easily, is it possible to run simulations to estimate new troublesome variants that may occur within the next year? Has anyone run such simulations? I wonder if someone has made money in the market due to forecasting troublesome variants. Are we on the recovery path or should we expect new bad variants within the next year?

        1. pgl

          I would hope smart people are doing such simulations. Of course if our host publish some of them – rsm would start bitching that the proper confidence intervals were not included. It is what rsm does – alas.

          1. AS

            pgl,
            In an email I received from the Census Bureau, I noticed the following comment about US International Trade in Goods and Services.
            “International trade statistics are compiled from documents collected by U.S. Customs and Border Protection and not a probability-based sample. Therefore, measures of statistical significance or sampling error do not apply.”

            I guess there could still be non-sampling errors to argue about.

        2. baffling

          you can predict how frequently a virus will mutate. but you cannot really predict whether the mutation will be harmful or beneficial. most mutations are neutral. in biological evolution, a virus goal is to replicate as much as possible. killing the host is not necessarily the best path to achieve that outcome. a virus wants to become easily transmissible and long living in a host, not killing the host. eventually the coronavirus will evolve into a common cold, or it will die out because of vaccination and immunity.

          1. AS

            baffling,
            I hope Covid is a smart virus (as you mention and as it should be) that follows the rules of mutating to be more benign and thereby spread without killing the host or causing the host to develop more vaccines.

        3. Barkley Rosser

          AS,

          Interesting question.

          As it is there is an established literature on this topic that has been developing for the last two decades or so. There are competing models regarding how the underlying systems operate. One major issue is whether one assumes an equilibrium model regarding mutation rates, selection pressure, and spread rates versus whether or not one assumes a disequilibrium model. Even within these competing models one must make assumptions regarding which there is no way to determine what is correct, with the rate of mutation one of the most important, but hardly the only one, there being a lot of other details about how to model this that get into really complicated population genetics in how this operates. There has in fact been at least one paper published this year in which authors claim to have reproduced the pattern of the initial spread of the coronavirus.

          However, here is something I can report highly relevant to these ongoing declarations by rsm. None of these studies claim to estimate probability distributions with reportable standard errors. None of these studies in fact report such errors. Indeed, if Menzie were to link to any of these, he would indeed be open to rsm whining about how no standard errors are being reported. How irresponsible of these scientists!!!!

          I am getting near just stopping commenting on rsm’s ongoing complaints as I have pretty much said most of what can be said, and having repeated most of my points several times, which I get tired of doing, even if he just keeps on repeating his discredited stuff. I would remind people that rsm has not answered an important question Menzie put to him: what do you think the variance of the variance of these reported errors is?

          Anyway, a bottom line is that while there is now a substantial literature on simulating mutational and disease spread systems, they do not provide the basis for modeling the variance of the variance lying behind changes in the Vix uncertainty indexes, the specific point that rsm was whining about here.

  14. ltr

    https://www.nytimes.com/2021/12/07/us/politics/defense-budget-democrats-biden.html

    December 7, 2021

    House Passes $768 Billion Defense Policy Bill
    Lawmakers tossed out some bipartisan provisions as they rushed to advance the bill, which would increase the Pentagon’s budget by more than what President Biden had requested.
    By Catie Edmondson

    WASHINGTON — The House on Tuesday overwhelmingly passed a $768 billion defense policy bill after lawmakers abruptly dropped proposals that would have required women to register for the draft, repealed the 2002 authorization of the Iraq war and imposed sanctions for a Russian gas pipeline, in a late-year drive to salvage a bipartisan priority.

    The legislation, unveiled hours before the vote, put the Democratic-led Congress on track to increase the Pentagon’s budget by roughly $24 billion above what President Biden had requested, angering antiwar progressives who had hoped that their party’s control of the White House and both houses of Congress would lead to cuts to military programs after decades of growth.

    Instead, the measure provides significant increases for initiatives intended to counter China and bolster Ukraine, as well as the procurement of new aircraft and ships, underscoring the bipartisan consensus on Capitol Hill for continuing to spend huge amounts of federal money on defense initiatives, even as Republicans lash Democrats for spending freely on social programs….

    1. ltr

      https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=3&isuri=1&select_all_years=0&nipa_table_list=5&series=q&1=5&2=2007&3=2018&4=q&5=x&first_year=2017&6=0&7=survey&last_year=2021&scale=-9&thetable=

      November 30, 2021

      Defense spending was 58.3% of federal government consumption and investment in July through September 2021. *

      $910.9 / $1,562.0 = 58.3%

      Defense spending was 22.3% of all government consumption and investment in July through September 2021.

      $910.9 / $4,083.7 = 22.3%

      Defense spending was 3.9% of GDP in July through September 2021.

      $910.9 / $23,187.0 = 3.9%

      * Billions of dollars

    2. pgl

      “The legislation, unveiled hours before the vote, put the Democratic-led Congress on track to increase the Pentagon’s budget by roughly $24 billion above what President Biden had requested, angering antiwar progressives who had hoped that their party’s control of the White House and both houses of Congress would lead to cuts to military programs after decades of growth. Instead, the measure provides significant increases for initiatives intended to counter China and bolster Ukraine, as well as the procurement of new aircraft and ships, underscoring the bipartisan consensus on Capitol Hill for continuing to spend huge amounts of federal money on defense initiatives, even as Republicans lash Democrats for spending freely on social programs”

      I for one wished nations would spend less on war but note that this is the result of Xi’s and Putin’s aggressions. Aggressions you give cover for – for some odd reason.

  15. ltr

    https://www.nytimes.com/2021/12/08/us/schools-closed-fridays-remote-learning.html

    December 8, 2021

    Schools Are Closing Classrooms on Fridays. Parents Are Furious.
    Desperate to keep teachers, some districts have turned to remote teaching for one day a week — and sometimes more. Families have been left scrambling to find child care.
    By Giulia Heyward

    DETROIT — Caitlin Reynolds, a single mother, was happy that her son, L.J., was finally settled into fourth grade after a rocky experience last year with remote learning.

    Then, on Wednesday, Nov. 17, an announcement: Detroit public schools would close their classrooms every Friday in December. There would be virtual school only.

    On Friday, a follow-up announcement: School was also canceled starting that Monday, for the entire week of Thanksgiving. This time, there would be no online option.

    “You need to take the kids back out again?” Ms. Reynolds said. “How is that not going to be harmful to these students?” …

  16. ltr

    https://news.cgtn.com/news/2021-12-08/Chinese-mainland-records-74-confirmed-COVID-19-cases-15OKbsjzl1m/index.html

    December 8, 2021

    Chinese mainland reports 74 new COVID-19 cases

    The Chinese mainland recorded 74 confirmed COVID-19 cases on Tuesday, with 44 linked to local transmissions and 30 from overseas, data from the National Health Commission showed on Wednesday.

    A total of 23 new asymptomatic cases were also recorded, and 465 asymptomatic patients remain under medical observation.

    Confirmed cases on the Chinese mainland now total 99,371, with the death toll unchanged since January at 4,636.

    Chinese mainland new locally transmitted cases

    https://news.cgtn.com/news/2021-12-08/Chinese-mainland-records-74-confirmed-COVID-19-cases-15OKbsjzl1m/img/77ecdbd56bf04b19a47280d65e9fb695/77ecdbd56bf04b19a47280d65e9fb695.jpeg

    Chinese mainland new imported cases

    https://news.cgtn.com/news/2021-12-08/Chinese-mainland-records-74-confirmed-COVID-19-cases-15OKbsjzl1m/img/0ab007875b1445d6a021a19e07c16873/0ab007875b1445d6a021a19e07c16873.jpeg

    Chinese mainland new asymptomatic cases

    https://news.cgtn.com/news/2021-12-08/Chinese-mainland-records-74-confirmed-COVID-19-cases-15OKbsjzl1m/img/5e70b855d5244d1ca96d3af470214907/5e70b855d5244d1ca96d3af470214907.jpeg

  17. ltr

    http://www.news.cn/english/2021-12/08/c_1310359094.htm

    December 8, 2021

    Nearly 2.57 bln COVID-19 vaccine doses administered on Chinese mainland

    BEIJING — Nearly 2.57 billion COVID-19 vaccine doses had been administered on the Chinese mainland as of Tuesday, data from the National Health Commission showed Wednesday.

    [ Along with nearly 2.57 billion doses of Chinese vaccines administered domestically, more than 1.85 billion doses have already been distributed to more than 120 countries internationally. Nineteen countries are now producing Chinese vaccines from delivered raw materials. ]

  19. pgl

    Washing machine transfer pricing and attempted tax evasion. This is a really good Appeals Court decision involving a scheme that followed the merger of Whirlpool and Maytag – which of course was an anti-competitive merger that never should have been allowed:
    https://www.opn.ca6.uscourts.gov/opinions.pdf/21a0280p-06.pdf

    Whirlpool/Maytag make their products in Mexico not the US which is just another reason why Trump’s tariffs made no sense for American workers and consumers. The maquiladora structure here used to be a device to rip off the Mexican tax base leaving more profits in the US than should exist under any reasonable transfer pricing. But this evil multinational figured out how to get $45 million per year in income sourced to a Luxembourg tax haven that had no employees. Aggressive? Yes. But none of this shocks me by now.

    But credit to the government lawyers in figuring out how to shut down this scheme down. Now if the fair share of profits could be sourced to Mexico but hey!

    1. JohnH

      And of course price increases on washers and dryers were blamed almost entirely on the Trump tariffs, while economists generally ignored the role of industry concentration and of companies’ price gouging.

      Apparently “free” trade is as much of a sacred cow as protecting oligopolies. I mean, we can’t discomfit the comfortable, can we? Or is Corporate America conducting a protection scheme that imposes silence on economists?

      1. pgl

        “price increases on washers and dryers were blamed almost entirely on the Trump tariffs, while economists generally ignored the role of industry concentration and of companies’ price gouging.”

        Now we get that you flat out lie a lot but why such a stupid set of lies. I have linked to economic research on the effects of the merger of Whirlpool and Maytag. I guess this is another topic where you just refused to actually read such things.

        It is bad enough that we have to endure rsm’s serial garbage. Your comments are infinitely worse.

      2. pgl

        https://www.nber.org/papers/w17476

        I posted this link to this NBER analysis of the Whirlpool-Maytag merger the last time the lying fool JohnH claimed economists have not looked into the market structure for washing machines. Can we remind this lying troll that the three authors are very good economists. Apparently this lying troll wants to pretend these three do not exist.

        BTW – one of the ways this company maintains its market power is to shield itself from foreign competition, which the Trump tariffs aided. That tie between mergers and trade protection has always been analyzed by economists. But I guess such matters are way over JohnH’s thick but limited little skull.

    2. joseph

      Interesting microeconomics on the washer tariffs. Tariffs of 20% were placed on washers but none on dryers. Turns out retailers then raised prices only 10% on imported washers, but also 10% on imported dryers which had no tariff. It seems that consumers generally buy washer and dryers in pairs so retailers could hide some of the sticker shock on washers by passing some of it on to dryers.

      1. Moses Herzog

        @ joseph
        Sounds like a slightly more sophisticated version of the old “bait and switch” they have done in the weekly advertisements and Sunday newspaper advertisement inserts for many decades. You’re more astute than you let on Sir.

Comments are closed.