Forty-six states face budget shortfalls of $112 billion for the fiscal year ending next June. While there are political difficulties in closing these gaps there are also constitutional mandates for doing so. If and when they close these gaps, it is likely that some of it will be constricted expenditures and this will filter down… Read more

We participate in the monthly Macro Markets’ survey of the Case-Shiller housing price index and the June results are online as of today, see the press release link here.  The consensus projection is slightly more pessimistic than our forecast on housing prices. Comments about this month’s survey: First, the consensus as measured by this survey… Read more

Data from the National Association of Realtors shows that existing homes sales in the United States fell 2.2 percent from April to May.  The seasonally adjusted annual rate fell from 5.79 million to 5.66 million.  According to Briefing.com, the consensus estimate for May was 6.10 million existing home sales.  In other words, learned economists and… Read more

A brief update of a blog of about a month ago regarding banking: The FDIC reports that 83 banks have been closed so far this year. While there were 140 bank failures in 2009, we are on track (based on a simple extrapolation of current trends) to experience at least 160 bank failures in 2010.… Read more

The quality of political debate is really amazing. I’m being called a right-wing extremist because a study we did for the California Manufacturers and Technology Association does not fit the “environmentalist” view. It was just a few months ago that I was being called an ivory-tower liberal for discussing the economic benefits of immigrants and… Read more

The commerce department reported today that United States housing starts fell from 659 thousand to 593 thousand from April to May. This was the largest drop in starts since 1991. As well, building permits, which are an indicator of future starts declined to a one-year low. This is bearish news for the United States economy,… Read more

Last year, Oregon citizens approved large increases on business and consumer income.  Now their problem is worse.  The Oregon Business Report has a piece today by Patrick Emerson: The Office of Economic Analysis blog has a nice picture that does a good job describing the torpedo the good ship Oregon took to her hull. This… Read more

United States’ May Retail Sales were $362.5 billion, down 1.2 percent from April. The decline was broad based. Motor vehicles, building materials, gasoline, clothing, and general merchandise all fell significantly. Furniture/home furnishings, electronics/appliances, food, health/personal, and sporting goods/hobby were up but just a bit. Building material purchases dove 9.3 percent following an 8.4 percent jump… Read more

The net wealth of United States households and non-profit institutions rose a bit in the first quarter of 2010, the Federal Reserve reported today. This data release shows that net wealth (assets minus liabilities) increased by about a trillion dollars, from $53.5 trillion to $54.5 trillion. From an asset-class point of view this gain was… Read more

Yesterday I argued that student loans should be dischargable in bankruptcy.  Given that they are not dischargable, an economist would expect to see insurance available, insurance that would pay the loan if students were incapable of paying it themselves. Since we don’t see the insurance, I assume the reason has to do with asymmetrical information… Read more