The FED has announced the end of its Treasury issue purchase program. Market commentators are speculating that bond rates will rise, potentially delaying or stifling economic recovery. I am not so sure. While it will be true that the FED-demand-factor will go away there are other factors that influence interest rates. Another important factor that… Read more

The November California jobs report showed the unemployment rate subsiding a bit from 12.5 percent in October to 12.3 percent, the result of a declining workforce and not a result of new jobs. The year-on-year job growth comparison showed that non-farm job level was 4.2 percent less than last November, better than the 4.6 percent… Read more

There has been a fair amount of chatter lately saying that the Feds are keeping banks from lending. The story goes something like this: Banks can borrow from the Fed at rates near zero. Then, they can purchase Treasuries for about three percent. Voila, banks have a three percent risk-free return, and no incentive to… Read more

Many economists declared the recession over after the third-quarter GDP release. We at CERF disagreed and pointed out that almost every long recession has had at least one quarter of positive growth during the recession. We also pointed out that many of the reasons for the relatively strong third quarter were temporary. We just didn’t… Read more

Joel Kotkin sent me this link to a Union Tribune editorial. As Arnold would say, it’s fantastic. When asked about the possibility of suspending AB 32 during bad economic times, Arnold asserts that AB 32 is helping economic Growth. Here’s the money quote: “Your question is premised on an unproven assertion that implementation of AB… Read more

The United States employment situation improved substantially in November.  The unemployment rate fell a bit and quarter-on-quarter job losses slowed dramatically, almost to zero.  This welcome news has been greeted with rises in equities and a fall in Treasury bonds.  I have attached four charts below. Are we out of the woods?  No.  Is this… Read more