Friday March 23, 2012
America is becoming more energy independent.
National oil production, which declined steadily to 4.95 million barrels a day in 2008 from 9.6 million in 1970, has risen over the last four years to nearly 5.7 million barrels a day. The Energy Department projects that daily output could reach nearly seven million barrels by 2020.
The mini energy boom is creating a lot of jobs too.
Thursday March 15, 2012
A study of housing seasonality featuring our housing inventory numbers.
March marks the start of the housing season. Prices peak in May, sales in June, and inventories in July. In colder regions, seasonal swings are bigger, and the market peaks later.
Wednesday March 14, 2012
There seems to be something in the air. Within the last day or so, three ex-employees have written about why their feelings have changed about three formerly beloved companies.
Friday March 9, 2012
Remember that rising home prices are not an unambiguous good.
The bursting of the housing bubble presents us with a good opportunity to re-examine the proposition that expensive houses are a good thing. Expensive land is, of course, a benefit to those who own it. But scarce -- and therefore expensive -- houses are a barrier to opportunity. In an economy where tradeable production can take place overseas, or increasingly be done by machines, access to the high-wage, high-productivity labor markets of America's richest cities is more important than ever.
The implication here is that higher home prices and rents prevent more people from living in highly productive economic regions (be it North Dakota or Manhattan). Home affordability is a benefit to the economy in the long run. Matt's book The Rent Is Too Damn High covers this topic in more detail.
Friday March 2, 2012
Tuition rises as states cut money for higher education.
It is this cumulative public divestment — and not extravagances like climbing walls or recreational centers advertised on a few elite campuses — that is primarily responsible for skyrocketing tuitions at state institutions, which enroll three out of every four college students.
Colleges have found ways to hold costs per student relatively steady. Since 1985, the average amount that public institutions spend on teaching each full-time student over the course of a year has barely budged, hovering around an inflation-adjusted $10,000, according to a State Higher Education Executive Officers report. But in the same period, the share of instruction costs paid for by actual tuition — not the sticker price, but the amount students actually pay after financial aid — has nearly doubled, to 40 percent from 23 percent.
This is an important point worth reiterating. Public colleges and universities have traditionally received significant funding from the state. While these colleges and universities have done a fair job of keeping their costs from increasing over the years, the funding they receive from the state has been significantly reduced. The only way to make up this shortfall is to raise tuition.
Thursday March 1, 2012
Mortgage rates are low, but it's tougher to get approved.
Is this what traditional lending standards look like or are we overcompensating after a period of loose standards?
Federal Reserve Chair Ben Bernanke wondered as much during his testimony before the House financial services committee this morning. "There's a lot of concern about the tightness of mortgage standards, even when people qualify for GSEs," he said, referring to loans guaranteed by Fannie, Freddie and other government-sponsored enterprises.
Bernanke cited the Fed's recent white paper on housing that laid out the argument in greater detail, pointing out that tight standards have yet to unwind even for prime mortgages that are eligible for government guarantees. "The extraordinarily tight standards that currently prevail reflect, in part, obstacles that limit or prevent lending to creditworthy borrowers," the paper says. "Less than half of lenders are offering mortgages to borrowers with a FICO score of 620 and a down payment of 10 percent — even though these loans are within the GSE purchase parameters."
