John Keynes etc.

Earlier today I handed out a rather long paper written by John Keynes, an extremely influencial economist from the early part of the 20th century.  He was born in the UK and wrote extensively in his time.  Some of his books include: 

1. The General Theory of Employment, Interest, and Money
2. The Economic Consequences of Peace
3. The Treatise on Probability
4. Essays in Persuasion

You can find more on his Amazon page:

http://www.amazon.com/John-Maynard-Keynes/e/B001H6SS5A/ref=ntt_athr_dp_pel_1

The piece I gave you, The End of Laissez-Faire, is rebuke against Adam Smith, Hume, and a lot of other social theorists from the 18th and 19th century.  It is almost certainly a rebuke against Marxism as well.  I would hope that you skim the first two parts (I & II) and really bear down into part III, IV, and V.  For a digital copy please see:

http://membres.multimania.fr/yannickperez/site/Keynes%20la%20fin%20du%20laissez%20Faire.PDF

ETC.

The US Chamber of Commerce purchased an entire page of ad space in the WSJ today on A13.  It is intended to serve as an open letter to both Congress and the White House.  Their recommendations are as follows:

1.  Expand trade and global commerce (pass trade agreements with South Korea, Columbia, and Panama)

2. Produce more American Energy (offshore resources in Gulf of Mexico and Alaska, Marcellus Shale, and Keystone XL project)

3.  Speed up Infrastructure Projects

4.  Welcome Tourists and Business Visitors (restore US share of travel market to 2000 levels and create 1.3 million new jobs)

5.  Speed Up Permits and Provide Regulatory Certainty and Relief

6.  Pass Tax Incentives that Create Jobs while increasing revenue.  

See uschamber.com/jobs for all of their information and details.  

Quantitative Easing

Here are some funny, and some not, and somewhat factual inaccurate, videos explaining Quantitative Easing in layman terms.  Enjoy!  There are other videos out there.

http://www.cbsnews.com/8301-504803_162-20024635-10391709.html
http://www.cbsnews.com/video/watch/?id=7120553n
http://www.thedailyshow.com/watch/tue-december-7-2010/the-big-bank-theory

WSJ Business & Finance News

Business & Finance

• Officials working with Libya's new governing authority are examining whether any payments made by France's Societe Generale as part of its business relationship with the Libyan Investment Authority ended up in the hands of people close to Gadhafi's regime.  
• A darkening global economic outlook and deepening fissures over Europe's debt crisis sent international financial markets tumbling.  European banks shares suffered steep drops.  
• After the Dow industrials posted their ugliest August in a decade, investors are buckling up for September, historically the worst month of the year for stocks.  
• GE Chief Immelt begins his second decade in the job with the challenge of proving that the company can post solid growth and that its business model still makes sense.  
• Toshiba is in talks to buy out Shaw Group's 20% stake in nuclear power-plant company Westinghouse, a move that could wipe out any US ownership of the firm.  
• Swiss bankers and politicians tried to deflect growing pressure from US authorities on Switzerland to reveal additional client data in a continuing tax dispute.  
• Workers face slimmer chances of getting a part-time retailing job for the holidays than they have in several years, a survey of 21 store chains found.  
• Spanish 'fast fashioni' company Inditex is starting online sales in the US for its Zara chain this week, challenging Gap on its home turf.  (see: www.zara.com)

Also this week, on Tuesday central bankers in Japan will conclude a two-day meeting, GOP presidential candidates debate in California, and Germany's constitutional court rules on the legality of the government's participation in euro-zone bailouts.  On Wednesday, the European Central Bank and the Bank of English will wrap up policy meetings, Fed Chairman Bernanke will deliver a speech at the Economic Club of Minnesota, and President Obama will address Congress on jobs and the economy.  On Friday, G7 financial officials (USA, Canada, UK, France, Italy, Japan, and Germany) meet in France.  

Finally, Americans are driving less.  They traveled a total of 259.1 billion miles on US roads in June, down 3.8 billion miles, or 1.4% from a year earlier.  That marked the 4th consecutive year-over-year decline.  The reduced driving was probably in large part a response to higher gasoline prices, but a souring economy also may have played a role.  

WSJ Business News 09022011 - and other news

Business & Finance

• The Fed has pushed Bank of America to show what measures it could take if conditions worsen for the lender.  Executives of the bank recently responded to the unusual request with a list of options that includes the issuance of a separate class of shares tied to the performance of its Merrill Lynch unit.
• A new forecast from the White House says US unemployment could persist at its current stubbornly high level around 9% well into 2012.
• Factories around the world are throttling back at a precarious time, further darkening the outlook for a faltering world economy. 
• A global economic slowdown could threaten regions of the US that have managed to outpace the country's sputtering recovery. 
• US stocks opened September on a sour note, snapping a four-day winning streak. The Down industrials fell 119.96 points, or 1%, to 11493.57. 
• The judge in a high-profile copyright case Oracle brought against rival SAP threw out a $1.3 billion jury verdict against the German firm. 
• HP's recent moves have shaken the confidence of some of the tech giant's corporate customers, who say they may put purchases on hold. 
• Greece is likely to miss its budge-deficit targets this year in the face of a deep economic contraction, government officials said. 
• Several major auto makers reported strong gains in US sales for August, lifting confidence that the industry's recovery is continuing. 
• US retail sales rose 4.4% in August but Hurricane Irene, which forced many store closures on the East Coast, hampered back-to-school sales. 
• The Fed announced an enforcement action against Goldman, saying the company's mortgage-servicing unit had engaged in 'a pattern of misconduct.' 
• The New York Mets were searching for new investors to bolster the franchise after talks with hedge-fund manager David Einhorn collapsed. 
• Samsung Electronics has shrugged off early court losses in patent disputes with Apple, apparently able to navigate around them. 
• Even if AT&T wins its fight with the Justice Department over its bid to acquire T-Mobile USA, the deal could still be torpedoed by the FCC. 
• Amazon has put forward a plan that would create thousands of jobs in California in exchange for a reprieve from the state's Internet sales-tax law. 
• Hostess Brands, the baker of Twinkies and Wonder Bread, has once again hired restructuring advisers. 

Construction spending slumped in July. Total spending on construction fell 1.3% from June to $789.5 billion, at an annual rate.  Public construction fell 2.1% while spending on factories, hotels, and other non-residential projects slipped 0.4%.  Residential construction spending fell 1.4% driven lower by a large drop in spending on home improvement and repair. 

Other News

- I saw a Tweet this morning on real estate problems in China, and the construction of a brand new city near Ordos, Inner Mongolia.  Check out the YouTube video, and a Time Magazine photo essay.

http://www.youtube.com/watch?v=0h7V3Twb-Qk

http://www.time.com/time/photogallery/0,29307,1975397,00.html

- The Fed is working on new policy options to spur economic growth, which is estimated to grow at less than 1% in the second half of 2011.  See: http://trunc.it/i81wc

August Jobs Report

Estimates coming out of the US Labor Department today say that the US economy didn't add any new net jobs last month.  Unemployment remains at 9.1%.

If you've got some free time today, turn to Bloomberg TV for additional insight and check out their piece on this important news story:
http://www.bloomberg.com/news/2011-09-02/employment-in-u-s-unexpectedly-stagnated-in-august-jobless-rate-at-9-1-.html

I'm sure all the other financial news agencies have articles posted on this as well.  Have a good break!

Mr. Joy

WSJ Business News 09012011

Business & Finance

• The mortgage industry will take a step toward cleaning up some of its most controversial practices under a deal between a New York regulator and three financial firms, including Goldman.  The pact could provide a blueprint for other regulators.  
• The Justice Department sued to block AT&T's proposed $39 billion takeover of T-Mobile USA, saying the deal would hurt competition and likely raise prises.  
• BNY Mellon CEO Kelly stepped down after being asked by the board to leave, in a sudden shake-up atop the world's largest custody bank.  
• Major stock indexes had their worst August in a decade, with the Dow industrials dropping 4.4%, their fourth straight month of declines.  
• A Goldman strategist has provided hedge-funded clients with a gloomy economic outlook and suggestions for how to take advantage of it.  
• Germany's economy displayed signs of resilience, countering fears the country faces a downturn that could deepen Europe's debt crisis.  
• Euro-zone inflation and unemployment date reinforced the view that the ECB won't need to raise interest rates for some time.  
• China's Wen said stabilizing prices is still Beijing's top priority, signaling that concerns over a global slowdown don't outweigh inflation risks.  
• Exxon Mobil's deal to drill in the waters north of Russia is the latest sign of the energy industry's eagerness to explore above the Arctic Circle.  
• Russian authorities raided BP's Moscow office, seeking documents in a court case related to the oil giant's failed Arctic deal with Rosneft.  
• Solar-panel maker Solyndra said it plans to file for bankruptcy protection, a black eye for a federal guaranteed-loan program.  
• The Swiss government surprised markets by cutting the size of its stimulus package for the nation's economy by more than half.  
• Greek lender Piraeus said it would write down the value of its bond holdings and confirmed it had borrowed from a special central-bank fund.  
• The CEO of Gibson Guitar lashed out at federal authorities who last week raided his factory amid a dispute over ebony imports.  
• UnitedHealth will acquire the operations of a major southern California physician group that includes approximately 2,300 doctors.  
• Facebook is preparing changes designed to make the site a hub for listening to music, watching movies and playing videogames.  

Also, Hiring slowed last month.  According to Automatic Data Processing, the private sector added 91,000 jobs in August, fewer than the 109,000 added in July.  The payroll firm's figures don't reflect the effects of the Verizon strike, although Friday's report from the Labor Department likely will.  Many economist estimate Friday's report will show a net gain of 80,000 jobs.  Small and medium sized firms accounted for almost all the increase.  Larger firms - those with 500 or more workers - added only 3,000 jobs.  

Jobs on WH Agenda

Hi All,
Thank you again for another productive day of class.  Just a reminder that only three of the math problems are due for next Tuesday.  You may of course do all seven for extra credit.  The follow-up Bernanke questions will be due on Wednesday of next week.  Chapter three is an important chapter, and Chapter four is actually a bit on the lighter side.  So I'm leaning toward having Chapter 3 Review Problems be due the following Monday on 9/12.  Those problems are on pgs. and are #1, 2, 3, 4, 5, 7, 8, 9, 11, 13, 14, and 15.  Chapter four (if you are so inclined) is on pg. XXX and will be #1, 2, 3, 6, 7, 8, 10, 11, and 13.  Don't forget that next week is week 3, and our first midterm will be during week 5 (probably Tu or Wed.)

Here is a World News Tonight clip about the plight of the jobless here in the USA from tonight.  It seems like the White House is planning a major address on this situation for next week.  That's probably welcome news for central bankers, who have consistently urged the need to address national and global fiscal problems.  It also gives our discussion before his address all that more relevancy.

I will grade your section 2 work as soon as possible.  Furthermore, Mr. Sharp conjured up your chapter 1 HW (it was in a box in the office I didn't know I had...), so I'll try and have that graded by the end of tomorrow as well.

Thanks for your hard work!  I appreciate it!

Mr. Joy