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The Economy This Week: Prior Archive
By John Tuccillo, PhD
Groundhog Day
April 6, 2009
The groundhog came out of the burrow and saw a shadow; we will have six more months of winter. The groundhog here is the number of jobs (665,000) lost in March. This was disappointing, since for this economy to recover, we need to stem the bleeding in the jobs market. Yes, there are good things happening. The president has finally become cheerleader-in-chief, albeit one dedicated to tough love. The massive amounts of stimulus and liquidity being pumped into the economy by the government are beginning to take effect and these effects will grow in the coming months. The Dow is reflecting newfound confidence on the part of investors, although the rally has been too brief to establish whether it's real, or just short term profit taking. Most importantly, the housing market is showing real signs of life, with most indicators up and anecdotal evidence from all parts of the country indicating brisker sales. (Even distressed property sales are a sign of life, because they get inventory off the streets.) But, without some real positive movement on employment, the confidence necessary to take us out of this recession will not be fully there. The key here is for the monthly job change numbers to get less bad. They won't turn positive for several more months, but a slowing of the rate of loss will give a real boost to the economy and make all the other good signs more powerful. The timing? Six months of improving job numbers will be enough for the economy to pull out of its slump.
By John Tuccillo, PhD
Groundhog Day
April 6, 2009
The groundhog came out of the burrow and saw a shadow; we will have six more months of winter. The groundhog here is the number of jobs (665,000) lost in March. This was disappointing, since for this economy to recover, we need to stem the bleeding in the jobs market. Yes, there are good things happening. The president has finally become cheerleader-in-chief, albeit one dedicated to tough love. The massive amounts of stimulus and liquidity being pumped into the economy by the government are beginning to take effect and these effects will grow in the coming months. The Dow is reflecting newfound confidence on the part of investors, although the rally has been too brief to establish whether it's real, or just short term profit taking. Most importantly, the housing market is showing real signs of life, with most indicators up and anecdotal evidence from all parts of the country indicating brisker sales. (Even distressed property sales are a sign of life, because they get inventory off the streets.) But, without some real positive movement on employment, the confidence necessary to take us out of this recession will not be fully there. The key here is for the monthly job change numbers to get less bad. They won't turn positive for several more months, but a slowing of the rate of loss will give a real boost to the economy and make all the other good signs more powerful. The timing? Six months of improving job numbers will be enough for the economy to pull out of its slump.
What's John Thinking: Archive
By John Tuccillo, PhD
Can He Do It?
December, 2008
We are embarking on a significant period of American history. The election of Barack Obama has accomplished three major things:
It's 1929, Not 1985
September 27, 2008
I've been trying to decide whether the current financial meltdown is like 1929, when numerous banks failed and the rest were reluctant to lend, leading to a sharp and prolonged economic slowdown, or like 1985 when a subclass of institutions, savings and loans, failed because of reckless (and in many cases criminal) behavior. The difference between the two will determine the proper policy path. On balance, I think this is 1929. Read More (pdf)
Things Are Better, Why Do I Feel Worse?
September, 2008
The second quarter growth numbers showed a substantial improvement over the previous two quarters. The economy shrunk at the end of 2007 and growth was in effect nonexistent during the first three months of 2008. This jump in the growth rate will be seized upon by those like former Senator Phil Gramm (an economist by training, IÍm embarrasses to say) who believe that the economy is fine and that the people are whiners. The spurt in growth came mainly from two factors: most Americans received their tax rebate checks in the second quarter and a falling dollar boosted exports. Despite the rise in growth, most surveys indicate that more and more Americans feel pessimistic about their current and future economic prospects. Why?
Read More (pdf)
I'm Mad As Hell, And I Won't Take It Anymore!
June, 2008
My apologies to the readers, but the title is the famous tag line from the prophetic movie, "Network", that thirty plus years ago foresaw the explosion of news-as-entertainment, 24-hour surveillance of everybody, and content-free "reality" television. Go back and look at it if you want to be really scared. But, the line also describes the way I'm feeling as the Congress bumbles through the current problems of the real estate sector. So, who am I mad at? Let me count the villains.
Read More (pdf)
Froth and Bubbles, Bubbles and Froth
May, 2008
There are two key ideas in economics that shed a great deal of light on the times we have been experiencing. The first of these says that when too much money chases too few goods, inflation results. No, we are not returning to the bad old days of the early Eighties, although I’ll say more about that later. Rather, we have experienced serial inflation in the price (if not the value) of technological industry stocks, real estate, and now commodities. We have gotten caught up in the last two and forgotten about the others. Yet each of these stems from the axiom stated above: too much money chasing too few goods.
Read More (pdf)
Making Sense of the Current Real Estate Market: Slowdowns, Foreclosures and the Future
March, 2008
It’s a mess. It’s a complicated, expensive, painful mess. And it’s still got a ways to go before it becomes untangled. “It” in this case is the mortgage, housing, economic slump currently weighing down on all Americans. It’s time to step back, see where it came from, figure out what to do about it and try to predict when it will end.
Read More (pdf)
Ignorance
August, 2007
One of the most striking features of this underperforming economy is the redistribution of income from the middle to the rich. Between 1995 and 2005, the share of income accounted for by the highest 20 percent (quintile) of the population (roughly those making above $ 100,000 per year) has increased by almost two percentage points. Thus, by 2006, the highest quintile received a little over half of all income, a record percentage. In contrast, the income share for every other quintile in the income distribution fell. Additionally, hourly wages have been stagnant in real terms. To put the cherry on the sundae, all this has occurred while productivity has grown at an historically high rate.
Read More (pdf)
The Great Meltdown of ‘07
April, 2007
It’s not the end of the world. In fact, you can’t even see the end of the world from there. But it’s pretty darn worrisome. I refer, of course, to the implosion of the mortgage market taking place during this year. The symptoms are patently obvious: mortgage companies failing, foreclosures rising, and Congressional concern (Note to readers: Congress becomes concerned not because there are real problems, but because it receives a lot of letters and e-mails about a particular issue). Could we have seen this coming? Yes. Could we have prevented it? Yes. Can it be solved? Again, yes.
Read More (pdf)
Populist Libertarianism: The Economic Lesson of the Fall Elections
December, 2006
President Bush finally, this fall, lived up to his promise to be a unifier. He single handedly united liberals, social conservatives and fiscal conservatives against him and in the process destroyed his party’s majority. Most of the attention was focused on the role of opposition to the Iraq War as the driving force of the Democrats’ victory and that may be so. But the returns also tell another story, an economic tale of voters rejecting big government (and the corruption it spawns) and globalization. In short, there was a strong tide of populist libertarianism that swept the polls.
Read More (pdf)
Roosting Chickens
November, 2006
There’s a current ad on TV for an anti-cholesterol drug that discusses the causes of high cholesterol. While we know that eating fatty food can raise your levels, heredity also plays a key role. The pitch is that Grandma Minnie can be as responsible for your problems as the quart of ice cream you ate last night. What ails you might have roots in the distant past as much as in your current behavior.
Read More (pdf)
Potted Frogs
August, 2006
There’s an old story about adaptation that concerns a frog and a pot of water. The story goes that if you put a frog into a pot of boiling water, the frog will jump out and scurry away. But if you place the frog into a pot of cold water and raise the heat under it, the frog will adapt to the rising temperature and boil away, yielding frog soup or whatever. I think of this story often when I read the manner in which news is reported. For example, recently the administration trumpeted the fact that that tax collections are up this year, so the Federal deficit will only be about $300 billion. The news reports were virtually breathless at the good news. I never thought I would see the day when we would be glad to see a deficit of only 300 billion! The fiscal conduct of this administration and this Congress has been disgraceful and they have bartered away our childrens’ future. So, we’re happy that the deficit is only $300 billion.
Read More (pdf)
Searching
February, 2006
Sometimes you have to wonder where all this recovery is. The administration tells us often how much better off we are. So maybe it’s in Washington. The Beige Book, the compendium of reports to the Federal Reserve Board from the twelve regional Federal Reserve Banks, continues to be a happy document. It tells of sales growth, employment stability and manufacturing expansion. So, maybe the recovery is to be found in these. But then again, there are other numbers, ones which speak of a different economy. These leave you scratching your head about where and when this economy will reach its full potential.
Read More (pdf)
Opening the Door
December, 2005
The old model of the real estate business was the Realtor as door-opener. The basis for this was that the real estate industry controlled information about properties for sale and anyone wishing to buy or sell would have to pass through the Realtor’s door. That “monopoly” of information was broken with the development of the Internet, so that now most property information is freely accessible to the public. In fact, through its own policy, the National Association of Realtors has accelerated this process.
Read More (pdf)
Eating Our Seed Corn
November, 2005
Consider the things that concern us as a nation, as represented in the news media:
It’s An Ill Wind
September, 2005
The Tragedy of Hurricane Katrina is still with us and is likely to be for a while. The physical devastation and human suffering that the storm caused has eclipsed the Galveston flood of 1900 and the San Francisco earthquake of 1906. It is, simply, the worst natural disaster to affect the United States ever. New Orleans, that great city, has ceased to be what it was, and it’s unclear what it will be in the future. The adjoining gulf coast was equally as devastated. Read More (pdf)
The Economy at Midyear: How the Price of Oil Tells Everything There is to Know about the American Economy
July, 2005
There’s a terrific new book out, Freaknomics, that tells you all you need to know (as if you wanted to) about how economists think. I mention it here because the authors take the approach of relating seemingly unrelated phenomena to answer interesting and off-beat questions. Inspired by this, I’d like to take a look at the economy in midyear using the concept that the price of oil encapsulates all that’s encouraging and troubling about the American economy. Read More (pdf)
Ten Trends That Are Shaping the Real Estate Business: Part II
March, 2005
As you may recall from my last column, I believe there are ten trends that are currently shaping the future of the real estate business. The first five—described in that column—are:
We Are the World—Darn It!
March, 2005
The fact is that the dollar has fallen by over thirty percent against the Euro is of interest to more people than just those traveling to Europe this year. The weaker dollar and the reasons for it are crucial to the fortunes of the entire U.S. economy. In brief, the weaker dollar will push up interest rates, increase inflation and reduce economic growth. Read More (pdf)
Ten Trends That Are Shaping the Real Estate Business: Part I
February, 2005
I’ve written for years about the future of real estate and continually look for new ideas that will determine how the business is done as we go forward. The pace is fast for a variety of reasons, but most of all because real estate is an information business and the way we convey and receive information is continually being remolded by technology and new business practices. In this column and in the next, I describe what I see to be the ten trends that will shape real estate in the next five years. Read More (pdf)
If Wishing Could Make It So
January, 2005
Every pundit, politician and economist has spoken the same litany for the past two years: this economy will grow strongly, employment will be up and prosperity restored by 2005. They look to the declining price of energy, rising corporate profits, expansion plans by American business and the continued stimulus of tax cuts to pull the economy out of the doldrums. Read More (pdf)
By John Tuccillo, PhD
Can He Do It?
December, 2008
We are embarking on a significant period of American history. The election of Barack Obama has accomplished three major things:
- America has its first African-American president;
- The psychological depression that increasingly gripped the country during the Bush administration is over;
- A
It's 1929, Not 1985
September 27, 2008
I've been trying to decide whether the current financial meltdown is like 1929, when numerous banks failed and the rest were reluctant to lend, leading to a sharp and prolonged economic slowdown, or like 1985 when a subclass of institutions, savings and loans, failed because of reckless (and in many cases criminal) behavior. The difference between the two will determine the proper policy path. On balance, I think this is 1929. Read More (pdf)
Things Are Better, Why Do I Feel Worse?
September, 2008
The second quarter growth numbers showed a substantial improvement over the previous two quarters. The economy shrunk at the end of 2007 and growth was in effect nonexistent during the first three months of 2008. This jump in the growth rate will be seized upon by those like former Senator Phil Gramm (an economist by training, IÍm embarrasses to say) who believe that the economy is fine and that the people are whiners. The spurt in growth came mainly from two factors: most Americans received their tax rebate checks in the second quarter and a falling dollar boosted exports. Despite the rise in growth, most surveys indicate that more and more Americans feel pessimistic about their current and future economic prospects. Why?
Read More (pdf)
I'm Mad As Hell, And I Won't Take It Anymore!
June, 2008
My apologies to the readers, but the title is the famous tag line from the prophetic movie, "Network", that thirty plus years ago foresaw the explosion of news-as-entertainment, 24-hour surveillance of everybody, and content-free "reality" television. Go back and look at it if you want to be really scared. But, the line also describes the way I'm feeling as the Congress bumbles through the current problems of the real estate sector. So, who am I mad at? Let me count the villains.
Read More (pdf)
Froth and Bubbles, Bubbles and Froth
May, 2008
There are two key ideas in economics that shed a great deal of light on the times we have been experiencing. The first of these says that when too much money chases too few goods, inflation results. No, we are not returning to the bad old days of the early Eighties, although I’ll say more about that later. Rather, we have experienced serial inflation in the price (if not the value) of technological industry stocks, real estate, and now commodities. We have gotten caught up in the last two and forgotten about the others. Yet each of these stems from the axiom stated above: too much money chasing too few goods.
Read More (pdf)
Making Sense of the Current Real Estate Market: Slowdowns, Foreclosures and the Future
March, 2008
It’s a mess. It’s a complicated, expensive, painful mess. And it’s still got a ways to go before it becomes untangled. “It” in this case is the mortgage, housing, economic slump currently weighing down on all Americans. It’s time to step back, see where it came from, figure out what to do about it and try to predict when it will end.
Read More (pdf)
Ignorance
August, 2007
One of the most striking features of this underperforming economy is the redistribution of income from the middle to the rich. Between 1995 and 2005, the share of income accounted for by the highest 20 percent (quintile) of the population (roughly those making above $ 100,000 per year) has increased by almost two percentage points. Thus, by 2006, the highest quintile received a little over half of all income, a record percentage. In contrast, the income share for every other quintile in the income distribution fell. Additionally, hourly wages have been stagnant in real terms. To put the cherry on the sundae, all this has occurred while productivity has grown at an historically high rate.
Read More (pdf)
The Great Meltdown of ‘07
April, 2007
It’s not the end of the world. In fact, you can’t even see the end of the world from there. But it’s pretty darn worrisome. I refer, of course, to the implosion of the mortgage market taking place during this year. The symptoms are patently obvious: mortgage companies failing, foreclosures rising, and Congressional concern (Note to readers: Congress becomes concerned not because there are real problems, but because it receives a lot of letters and e-mails about a particular issue). Could we have seen this coming? Yes. Could we have prevented it? Yes. Can it be solved? Again, yes.
Read More (pdf)
Populist Libertarianism: The Economic Lesson of the Fall Elections
December, 2006
President Bush finally, this fall, lived up to his promise to be a unifier. He single handedly united liberals, social conservatives and fiscal conservatives against him and in the process destroyed his party’s majority. Most of the attention was focused on the role of opposition to the Iraq War as the driving force of the Democrats’ victory and that may be so. But the returns also tell another story, an economic tale of voters rejecting big government (and the corruption it spawns) and globalization. In short, there was a strong tide of populist libertarianism that swept the polls.
Read More (pdf)
Roosting Chickens
November, 2006
There’s a current ad on TV for an anti-cholesterol drug that discusses the causes of high cholesterol. While we know that eating fatty food can raise your levels, heredity also plays a key role. The pitch is that Grandma Minnie can be as responsible for your problems as the quart of ice cream you ate last night. What ails you might have roots in the distant past as much as in your current behavior.
Read More (pdf)
Potted Frogs
August, 2006
There’s an old story about adaptation that concerns a frog and a pot of water. The story goes that if you put a frog into a pot of boiling water, the frog will jump out and scurry away. But if you place the frog into a pot of cold water and raise the heat under it, the frog will adapt to the rising temperature and boil away, yielding frog soup or whatever. I think of this story often when I read the manner in which news is reported. For example, recently the administration trumpeted the fact that that tax collections are up this year, so the Federal deficit will only be about $300 billion. The news reports were virtually breathless at the good news. I never thought I would see the day when we would be glad to see a deficit of only 300 billion! The fiscal conduct of this administration and this Congress has been disgraceful and they have bartered away our childrens’ future. So, we’re happy that the deficit is only $300 billion.
Read More (pdf)
Searching
February, 2006
Sometimes you have to wonder where all this recovery is. The administration tells us often how much better off we are. So maybe it’s in Washington. The Beige Book, the compendium of reports to the Federal Reserve Board from the twelve regional Federal Reserve Banks, continues to be a happy document. It tells of sales growth, employment stability and manufacturing expansion. So, maybe the recovery is to be found in these. But then again, there are other numbers, ones which speak of a different economy. These leave you scratching your head about where and when this economy will reach its full potential.
Read More (pdf)
Opening the Door
December, 2005
The old model of the real estate business was the Realtor as door-opener. The basis for this was that the real estate industry controlled information about properties for sale and anyone wishing to buy or sell would have to pass through the Realtor’s door. That “monopoly” of information was broken with the development of the Internet, so that now most property information is freely accessible to the public. In fact, through its own policy, the National Association of Realtors has accelerated this process.
Read More (pdf)
Eating Our Seed Corn
November, 2005
Consider the things that concern us as a nation, as represented in the news media:
- Who “outed” CIA agent Valerie Plame, was there a crime committed and – if so — who will be tried?
- Has the earth evolved, or was it created by some sort of superior intelligence?
- Where lies the major blame for bungling the aftermath of Hurricane Katrina?
- Which TV shows will be cancelled this winter?
- Which teams will play in the Super Bowl?
It’s An Ill Wind
September, 2005
The Tragedy of Hurricane Katrina is still with us and is likely to be for a while. The physical devastation and human suffering that the storm caused has eclipsed the Galveston flood of 1900 and the San Francisco earthquake of 1906. It is, simply, the worst natural disaster to affect the United States ever. New Orleans, that great city, has ceased to be what it was, and it’s unclear what it will be in the future. The adjoining gulf coast was equally as devastated. Read More (pdf)
The Economy at Midyear: How the Price of Oil Tells Everything There is to Know about the American Economy
July, 2005
There’s a terrific new book out, Freaknomics, that tells you all you need to know (as if you wanted to) about how economists think. I mention it here because the authors take the approach of relating seemingly unrelated phenomena to answer interesting and off-beat questions. Inspired by this, I’d like to take a look at the economy in midyear using the concept that the price of oil encapsulates all that’s encouraging and troubling about the American economy. Read More (pdf)
Ten Trends That Are Shaping the Real Estate Business: Part II
March, 2005
As you may recall from my last column, I believe there are ten trends that are currently shaping the future of the real estate business. The first five—described in that column—are:
- There are fewer firms
- Commissions are falling
- Falling standards
- Online or out to lunch
- New business models.
We Are the World—Darn It!
March, 2005
The fact is that the dollar has fallen by over thirty percent against the Euro is of interest to more people than just those traveling to Europe this year. The weaker dollar and the reasons for it are crucial to the fortunes of the entire U.S. economy. In brief, the weaker dollar will push up interest rates, increase inflation and reduce economic growth. Read More (pdf)
Ten Trends That Are Shaping the Real Estate Business: Part I
February, 2005
I’ve written for years about the future of real estate and continually look for new ideas that will determine how the business is done as we go forward. The pace is fast for a variety of reasons, but most of all because real estate is an information business and the way we convey and receive information is continually being remolded by technology and new business practices. In this column and in the next, I describe what I see to be the ten trends that will shape real estate in the next five years. Read More (pdf)
If Wishing Could Make It So
January, 2005
Every pundit, politician and economist has spoken the same litany for the past two years: this economy will grow strongly, employment will be up and prosperity restored by 2005. They look to the declining price of energy, rising corporate profits, expansion plans by American business and the continued stimulus of tax cuts to pull the economy out of the doldrums. Read More (pdf)