Dan started this, but he has some minor surgery today. Kirk and Bill finished it: CERF released its first United States and California forecast last week. The United States and California forecasts are pessimistic relative to consensus. Why? In part, it is because so many forecasters seem to be using a model with a high… Read more

I tweeted the title of this blog entry the other day and got a bit of pushback. My tweet was in response to this Yahoo! article. It seems that bank regulators want to control bank executives’ salaries as part of a plan to reduce risk taking at banks. Of course, the problem is that the… Read more

Today’s Wall Street Journal has a piece by John Cogan, John Taylor and Volker Wieland. Cogan and Taylor are famous and respected economists. Volker is younger. He was Taylor’s student and at the Fed when I was there. I found him careful, thoughtful, and smart. Their piece is titled “The Stimulus Didn’t Work.” They provide… Read more

The FED’s response to the last year’s financial collapse has drawn criticism from all fronts. We’ve contributed to the criticism in small ways. In particular, we don’t like the idea of too-big-to-fail and were unhappy when companies were saved from the axe of failure in the marketplace. Bernanke, though, has brought real and valuable innovations… Read more

Year-over-year home prices continue to decline throughout California. The weak economy, job losses and lack of available credit are the most cited reasons for the decline. There is another reason that has not garnered a lot of attention. Government intervention, such as foreclosure prevention programs and foreclosure moratoriums, is prolonging the housing slump. There is… Read more

Home ownership rates in the United States continue to decline.  This may seem bad, but it is actually good news for the residential real estate market.  Before the housing market can stabilize the home ownership rate must reach a level the market can support. The U.S. home ownership rate peaked in 2004 at 69.1.  As… Read more

In November of 2008, we substantially revised our forecast of mid-year 2009 United States year-on-year job growth rate from 0.3 to a fall of about four percent. At the time, we felt like we were in the midst of a regime-shift to a different state of economic affairs. This new state was one characterized by… Read more

Today’s news will be dominated by the BLS’s unemployment data release. I’m sure we’ll have more to say on that. Right now, I’d like to discuss a less-publicized data release, one that probably has more information than the unemployment data. Yesterday, the FDIC released bank charge-off data, and it was disappointing and scary. I’ve posted… Read more

Mark Zandi declared “the recession is over” on Tuesday September 1, 2009. All of the economists at CERF would like this to be true. However, we suspect that this is not true. Mark’s declaration was based in part on the ISM manufacturing activity index data release. The economy has benefited from expenditures on vehicles in… Read more

Over the weekend I read this article. It seems that Barney Frank and Ron Paul, normally not allies, have gotten together and proposed a law requiring an audit of the Federal Reserve System and limiting the Fed’s lending options. I tweeted on it, calling it a really really bad idea. I was tempted to say… Read more