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Economic Events on December 22, 2011

B.P.T. — Thu, 22 Dec 2011 12:50:02 +0000

At 8:30 AM Eastern time, the U.S. government will release its weekly Jobless Claims report. The consensus is that there were 380,000 new jobless claims last week, which would would be 14,000 more than the previous week.

Also at 8:30 AM Eastern time, the final GDP report for the third quarter of 2011 will be announced. The consensus is an increase of 2.0% in real GDP and an increase of 2.5% in the GDP price index. The real GDP estimate is the same as the preliminary value for the third quarter of 2011, and the GDP price index is the same.

Also at 8:30 AM Eastern time, the Chicago Fed National Activity Index for November will be released, providing an update on economic activity and inflationary pressure in the United States.

Also at 8:30 AM Eastern time, the monthly Corporate Profits report from the Bureau of Economic Analysis will be released.

At 9:45 AM Eastern time, the weekly Bloomberg Consumer Comfort Index will be released, providing an update on Americans’ views of the U.S. economy, their personal finances and the buying climate.

At 9:55 AM Eastern time, Consumer Sentiment for the second half of December will be announced. The consensus is that the index will be at 68.0, which would be an increase of 0.3 points from the level reported in the first half of the month.

At 10:00 AM Eastern time, the FHFA House Price Index for October will be released, providing more information about the direction of the housing market.

Also at 10:00 AM Eastern time, the Leading Indicators for November will be released, and the consensus is that there was an increase of 0.3% from the previous month.

At 10:30 AM Eastern time, the weekly Energy Information Administration Natural Gas Report will be released, giving an update on natural gas inventories in the United States.

At 4:30 PM Eastern time, the Federal Reserve will release its Money Supply report, showing the amount of liquidity available in the U.S. economy.

Also at 4:30 PM Eastern time, the Federal Reserve will release its Balance Sheet report, showing the amount of liquidity the Fed has injected into the economy by adding or removing reserves.

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Taxing investors to pay NGOs

Ajay Shah — Tue, 29 Nov 2011 17:40:43 +0000

In India, NGOs are fashionable. It is almost never wrong, in the Indian discourse, to give more money and more functions to NGOs.

Many people have worried about the extent to which NGOs are being used to supplant failing State machinery. This may seem expedient, but no country every became a developed country on the back of NGOs. There is no alternative to fixing the core mechanisms of the State.

In recent days, two pro-NGO policy elements seem to be in the pipeline:

A new Companies Bill seems to require that 2% of profit be spent on corporate social responsibility (CSR).
SEBI decided to force listed companies, starting with the top 100 firms, to describe measures taken by them along the key principles enunciated in the ‘National voluntary guidelines on social, environmental and economic responsibilities of business,’ framed by the Ministry of Corporate Affairs (MCA).

When the government grabs 2% of the profit of a company, and hands it out to any purpose (no matter how good or bad), that is called expropriation. The fact that it satisfies some bleeding hearts does not change the fact that it is expropriation. In a good country, property rights would be fundamental, and the Supreme Court would block such expropriation.

The job of a corporation is to efficiently organise production, and send dividends back to shareholders. It is the individual, the shareholder, who has to then make a call about whether he would like to give money to charitable causes or not. We do wrong by expropriating this money even before it reaches the individual.

We do wrong by placing the burden of charitable works upon the corporation. Corporations should not be organised to be do-gooders. They should be organised to obey laws, have high ethical standards and then power India’s way out of poverty by efficiently organising production. Anything that corporations do, other than focusing on efficient production, is a distraction from the main trajectory of India’s growth and development.

When a country is run by bleeding hearts, things start going wrong. If such a tax is enacted, it reduces the post-tax return on capital that Indian firms generate. Foreign investors and domestic investors have choices about where to invest. They will demand that firms only invest in a smaller set of high-return projects, which are competitive on the rate of return by global standards, even after being taxed. In other words, many projects will not be undertaken. This can’t be good for India.

To make progress in India, we need to be hard headed. We should not let the urge to do good crowd out intelligence and analysis. We are falling into this trap too often.

One key element that I blame is the Indian college education. We fail to teach political science (so we get things like the Anna Hazare phenomenon; too many people who have not read The Republic). We fail to teach economics, so we get the education cess. Given the absence of a positive strategy for what India should be doing, in the mainstream, we are willing to turn away from the hard work of fixing the State, and feel satisfied by funding some do-gooding NGOs.

Intellectuals are the yeast that make a society rise, and we in India have been skimping on this yeast.

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Economic Events on November 22, 2011

B.P.T. — Tue, 22 Nov 2011 12:46:51 +0000

At 7:45 AM Eastern time, the weekly ICSC-Goldman Store Sales report will be released, giving an update on the health of the consumer through this analysis of retail sales.

At 8:30 AM Eastern time, the preliminary GDP report for the third quarter of 2011 will be announced. The consensus is an increase of 2.4% in real GDP and an increase of 2.5% in the GDP price index. The real GDP estimate is 0.1% lower than the advance value for the third quarter of 2011, and the GDP price index is the same.

Also at 8:30 AM Eastern time, the monthly Corporate Profits report from the Bureau of Economic Analysis will be released.

At 8:55 AM Eastern time, the weekly Redbook report will be released, giving us more information about consumer spending.

At 2:00 PM Eastern time, the FOMC Meeting Minutes will be released, which will provide insight into how the Federal Reserve board governors and bank presidents view the economy.

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Economic Events on September 29, 2011

B.P.T. — Thu, 29 Sep 2011 11:50:15 +0000

At 8:30 AM EDT, the U.S. government will release its weekly Jobless Claims report. The consensus is that there were 420,000 new jobless claims last week, which would would be 3,000 less than the previous week.

Also at 8:30 AM EDT, the final GDP report for the second quarter of 2011 will be announced. The consensus is an increase of 1.2% in real GDP and an increase of 2.4% in the GDP price index. The real GDP estimate is 0.2% higher than the advance value for the second quarter of 2011, and the GDP price index is the same.

Also at 8:30 AM EDT, the monthly Corporate Profits report from the Bureau of Economic Analysis will be released.

At 9:45 AM EDT, the weekly Bloomberg Consumer Comfort Index will be released, providing an update on Americans’ views of the U.S. economy, their personal finances and the buying climate.

At 10:00 AM EDT, the pending home sales index for August will be announced. The consensus is that the index decreased 2.0% last month.

At 10:30 AM EDT, the weekly Energy Information Administration Natural Gas Report will be released, giving an update on natural gas inventories in the United States.

At 3:00 PM EDT, the Farm Prices report for September will be released, giving investors and economists an indication of the direction of food prices in the coming months.

At 4:30 PM EDT, the Federal Reserve will release its Money Supply report, showing the amount of liquidity available in the U.S. economy.

Also at 4:30 PM EDT, the Federal Reserve will release its Balance Sheet report, showing the amount of liquidity the Fed has injected into the economy by adding or removing reserves.

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Recovery: Bottom Up or Top Down?

Doug Gentry — Mon, 12 Sep 2011 13:45:25 +0000

Say’s Law or Keynes’?

If we can peel away the political posturing, there is an important argument in the issue of how best to generate a recovery in our country’s economy. Put simply, the question is whether producers (employers) are the answer and we should do everything we can to encourage them, or whether we should do something to encourage demand for their products.

Jean-Baptiste Say gets naming rights for the law that says that production will encourage demand and thus more production. Proponents of Say’s Law argue that producers can ramp up production which will in turn foster demand for those products, and that demand will flow to greater production elsewhere. The law assumes that business will not hoard capital funds, but will invest them in greater production. In today’s dialogue, when we hear calls to reduce business taxes or relieve business of the uncertainty or burden of government regulation, it is the ghost of Say who is speaking. This position holds that unfettered business will invest in more production and growth, and that will, in turn, generate new jobs and economic opportunity. It is roughly accurate to put the label of supply side economics with this group.

In the other corner is John Maynard Keynes. Keynes argued that the economy depends on the demand for goods and services, and that when necessary the government should encourage that demand through added spending or tax cuts. Keynes felt that encouraging demand, by placing more money in the hands of consumers, would stimulate businesses to ramp up production, which in turn increases employment. Today, Keynesian proponents argue for more government spending, and broad based tax cuts (not the kind of cuts targeted only at businesses).

Both approaches have some grounding in economic theory. The Keynesian approach has a better track record in real life, and there are signs in our current, sluggish recovery, that business is not following the assumptions built into Say’s Law. When President Hoover was faced with the early years of the Great Depression, his advisers followed the main stream economic thinking of the time, which was Say’s Law. In addition, main stream economic thought in the late 1920s/early 1930s felt that the economy was naturally cyclical and would eventually mend itself. Hoover pressed his political base, the producers and manufacturers, to ramp up production. They would have none of it. President Roosevelt took his cue from Keynes’, adding government spending and employment to Federal policy, as a way to pump money into the hands of consumers, which then increased demand for goods and services. For the Great Depression, the Keynesian approach seemed effective while the Say’s approach was not.

Today, many commentators note that corporate America is sitting on large cash reserves, and that they are waiting for consumer demand to strengthen before investing in more production or growth. If that is the case, then more business tax cuts or incentive programs are not likely to speed up the recovery.

As students and citizens, we will do well to consider the conflicting economic theories at work here, and ignore the emotional baggage that hinders civil dialogue.

Economic Events on August 26, 2011

B.P.T. — Fri, 26 Aug 2011 11:40:02 +0000

At 8:30 AM EDT, the preliminary GDP report for the second quarter of 2011 will be announced. The consensus is an increase of 1.1% in real GDP and an increase of 2.3% in the GDP price index. The real GDP estimate is 0.2% lower than the advance value for the second quarter of 2011, and the GDP price index is the same.

Also at 8:30 AM EDT, the monthly Corporate Profits report from the Bureau of Economic Analysis will be released.

At 9:55 AM EDT, Consumer Sentiment for the second half of August will be announced. The consensus is that the index will be at 56.0, which is 1.1 points higher than the value reported in the first half of the month.

At 10:00 AM EDT, Federal Reserve Chairman Ben Bernanke will speak at the Kansas City Fed conference in Jackson Hole, Wyoming on the state of the economy.

Economic Events on June 24, 2011

B.P.T. — Fri, 24 Jun 2011 11:45:11 +0000

At 8:30 AM EDT, the final GDP report for the first quarter of 2011 will be announced. The consensus is an increase of 1.9% in real GDP and an increase of 1.9% in the GDP price index. The real GDP estimate is 0.1% higher than the preliminary value for the first quarter of 2011, and the GDP price index is the same.

Also at 8:30 AM EDT, the monthly Corporate Profits report from the Bureau of Economic Analysis will be released.

Also at 8:30 AM EDT, the Durable Goods Orders report for May will be released. The consensus is that there was an increase of 1.0% from April.

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Economic Events on May 26, 2011

B.P.T. — Thu, 26 May 2011 12:00:57 +0000

At 8:30 AM EDT, the preliminary GDP report for the first quarter of 2011 will be announced. The consensus is an increase of 2.1% in real GDP and an increase of 1.9% in the GDP price index. The real GDP estimate is 0.3% higher than the advance value for the first quarter of 2011, and the GDP price index is the same.

Also at 8:30 AM EDT, the U.S. government will release its weekly Jobless Claims report. The consensus is that there were 404 ,000 new jobless claims last week, which would would be 5,000 less than the previous week.

Also at 8:30 AM EDT, the Corporate Profits report from the Bureau of Economic Analysis will be released.

At 9:45 AM EDT, the weekly Bloomberg Consumer Comfort Index will be released, providing an update on Americans’ views of the U.S. economy, their personal finances and the buying climate.

At 10:30 AM EDT, the weekly Energy Information Administration Natural Gas Report will be released, giving an update on natural gas inventories in the United States.

At 4:30 PM EDT, the Federal Reserve will release its Money Supply report, showing the amount of liquidity available in the U.S. economy.

Also at 4:30 PM EDT, the Federal Reserve will release its Balance Sheet report, showing the amount of liquidity the Fed has injected into the economy by adding or removing reserves.

Economic Events on March 25, 2011

B.P.T. — Fri, 25 Mar 2011 12:05:08 +0000

At 8:30 AM EDT, the final GDP report for the fourth quarter of 2010 will be announced. The consensus is an increase of 3.1% in real GDP and an increase of 0.4% in the GDP price index. The real GDP estimate is 0.3% higher than the preliminary value for the fourth quarter of 2010, and the GDP price index is the same.

Also at 8:30 AM EDT, the Corporate Profits report from the Bureau of Economic Analysis will be released.

At 9:55 AM EDT, Consumer Sentiment for the second half of March will be announced. The consensus is that the index will be at 68.2, which is 0.2 points below the value reported in the first half of the month.

Global Aluminum Demand Rebound is Largest in Nearly 15 Years

Eldon Mast — Tue, 11 Jan 2011 16:28:55 +0000

Aluminum demand rebounded 14 percent in 2010, the biggest increase since at least 1996, according to data compiled by Bloomberg and reported on Monday. The worlds largest aluminum producer, Alcoa also reported that global consumption will likely continue to increase in 2011 — probably by at least 12 percent.

Alcoa also reported its highest profit in nine quarters revealing that the price of its product is now approaching pre-recession levels.

Additionally, Chief Financial Officer Chuck McLane said, “Each of our businesses was able to significantly improve their performance.” Demand strengthened in most of the Alcoa markets and productivity gained.

And the good news for jobs in the industry? The company said it will restore idled production at three U.S. plants in 2011. More evidence that the 2011 labor market is on the mend.