Sunday, April 19, 2015

Some Sunday news

Here's some stuff to read:

New Deal Demoncrat - weekly indicators. Consumer spending is finally up. Personally I've started spending a lot more money these past couple weeks - bought a pile of new clothes, and am possibly buying a cheap-as-possible tablet for reading this week. It's a good time to go shopping when it's not fucking -20 outside. And I'm a Canadian; those wimp yanks were probably much more beaten down by the cold than I was.

Calculated Risk - existing home sales, Lawler versus consensus. Apparently Tom Lawler is such a good predictor of homes sales figures that the herd tends to revise their predictions whenever his come out; right now he's calling for a large beat in existing home sales. on Wednesday. Personally, I don't see why anyone gets worked up about existing home sales when it's not as if they have any direct impact on the economy. The houses were built a long time ago, remember. But, at least it sets us up for an upside data surprise on Wednesday.

Mark Thoma - are we kidding ourselves about competition? I can't wait to use this in my intro macro class:
Consider a situation where there are 10 firms in a market and they compete with one another. Now suppose that all shareholders — say because they are following the dicta of diversification — allocate their wealth in equal proportion across those 10 firms. That means that each owner of the firm — even if there are thousands of these — cares equally about each firm’s profits.

So ask yourself: when those shareholders vote on the composition of boards or the management of the firm, or, importantly how the management of the firm is compensated, are they going to vote for managers who will care only about the profits of the firm they manage or about the profits more broadly? The answer is obvious: they will look to managers who manage in the interest of shareholders and so that means they care about all firm profits and not just the one of their own firm.

In a world where shareholders can get what they want, we won’t have competition in this outcome but, more likely, a collusive outcome. What is more, the firms won’t have to go to all the difficulty of violating antitrust laws to obtain this outcome, they will do it unilaterally.
Thoma says "this seems implausible to me", but I'd like to know why he thinks so. Personally, I think the authors are mistaken with the mechanism: nobody fucking votes for BoDs! But the company strategy certainly must be informed by a desire to not piss off their shareholders and see them jump ship to the competition. And thus you'd end up with the same collusive outcome anyway.

Mark Thoma - NBER abstracts. Re Barnichon & Figura's paper on declining labour force participation, I'm going to read it tonight and see if they say anything at all about declining real wages. See, I'm one of those leaving the labour force, because it seems capital doesn't want to pay a living wage for a fifteen-year specialist technologist to work in Mississauga or Markham.

Economist - Chinese growth coming down to earth? Weasel question mark added by me, because that's all you get from shitty rags like the Economist. Bill Bishop at Sinocism liked this bit:
When “60 Minutes”, an American television news programme, visited a new district in the metropolis of Zhengzhou in 2013, it made it the poster-child for China’s property bubble. “We found what they call a ghost city,” said Lesley Stahl, the host. “Uninhabited for miles and miles and miles and miles.” Two years on, she would not be able to say the same. The empty streets where she stood have a steady stream of cars. Workers saunter out of offices at lunchtime. Laundry hangs in the windows of the subdivisions.

The new district (pictured), on the eastern side of Zhengzhou, a city of 9m in central China, took off when the provincial and city governments relocated many of their offices there. Then, high schools with university-sized campuses began admitting students, drawing families to the area. Last autumn one of the world’s biggest children’s hospitals opened, a gleaming facility with cheery colours and 1,100 beds. Chen Jinbo, one of the area’s earlier residents, bemoans the lost quiet of a few years ago. “Rush hour is a hassle now.”
And indeed it is quite inconvenient for Whitey to admit that his bullshit hyperbole of a couple years ago was completely wrong, and that Whitey is supremely ignorant of China and should be ignored from now on.

BBC - Australian PM filmed downing a beer in 7 seconds. Here's a quote:
Some may say it is behaviour unbecoming of a prime minister. Others have applauded it.
Here's what they really meant:
Bloody foreigners may say it is behaviour unbecoming of a prime minister. Australians have applauded it.


  1. This whitey bit is really old, whitey.

  2. Mickey Fulps Hong Kong speech. Plus slides:,%20Commodities,%20&%20Mining%20Investment%20150324.pdf

  3. Eric Coffin at Toronto conference