Hi, I’m looking for someone who completes me and… wait, I’m being told that this isn’t an online dating profile. And that I should keep it professional. And put on a shirt.
Born and raised in Tampa, university at Georgetown, and with the exception of a year spent backpacking abroad I’ve been in New York for the past decade. Before joining Alphaville I spent a little more than two years as a reporter at Dow Jones Financial News covering investment banking, asset management, and private equity. Along the way I’ve written freelance pieces on a variety of other topics from behavioural psychology to Muay Thai, the latter also being a personal interest that involves frequently getting kicked in the shins (and torso, and head). When my guard is down I’ll admit to having attended journalism school.
Prior to becoming a journalist, I was an analyst for three years at the JPMorgan Private Bank. I worked for a team that had clients in Mexico and the Southern Cone, and I ran an internal newsletter for other analysts at the bank, overseeing a small staff.
My family is Cuban, and I was brought up in a Spanish-speaking household where everyone forgot about the earlier traumatic migration to a new country, keeping the same daily customs as if it had never happened. (Which was fine, except for the part where I didn’t know any English when I started kindergarten. That was a stressful three or four months until I caught up.)
I tend to write mostly about US macroeconomic issues, with daily excursions into other topics. Find me also on Tumblr and every now and again I’m one of the reporters interviewed on the Marketplace Weekly Wrap.
Lots of talk about the sequester Tuesday, with Obama’s speech and the CBO report assuming that most of the cuts (or compensating cuts of equal amount) will actually take effect.
Long story short: the cuts would add to further budget deficit reduction this year but also contribute to slower economic growth, naturally. Read more
Above is a chart from CreditSights of employment changes by sector since the start of the last recession. Education and health jobs account for roughly 15 per cent of the working labour force, and their number has grown by nearly 11 per cent. Only mining has posted a higher growth rate (17 per cent), but obviously off a much smaller base. Read more
This week on FT Alphaville…
- We made a video asking whether robots would take all the jobs. Read more
Political change in a democratic republic can be painfully slow, and thus even the improved chance of a meagre and incremental positive change is a good enough excuse to celebrate when it comes.
The two immigration proposals that emerged early this week from the Senate and from the President could well meet this standard, though it all depends how the politics shakes out. Read more
Another month, another payrolls number in the 150k range — except this one comes with big positive revisions to the prior two months. The unemployment rate ticked up slightly, but careful with this report, as it includes an updated population estimate in the household survey, and also the annual benchmarking in the establishment survey to reflect a new count of total jobs. Read the explanations at the bottom of the release for detail.
From the BLS: Read more
The top par of the release:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 0.1 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent. Read more
We had a lot of fun making this short video, which is based on a topic that’s been discussed energetically in the blogosphere and elsewhere for a few months, and which has captured Izabella’s fascination for nearly a year. Read more
Some of this meeting’s thunder was stolen by the last meeting, when the Fed moved to the Evans Rule sooner than had been expected.
So nobody is expecting any major policy changes or innovations in the FOMC statement that will be released Wednesday. (There’s no presser until the March meeting.) But in addition to any changes in the economic outlook, a couple of items will be worth watching. Read more
GC repo rates and term (3-month and 6-month) GC futures have fallen in recent weeks. The only mystery is why it took so long.
A decline was largely expected as a result of TAG expiring and the end of Operation Twist. The former had given large risk-averse investors a safe place to stash their money, and the latter had allowed flooded dealer inventories with safe collateral against which slightly less risk-averse investors and MMFs could reverse repo and get a tad extra yield. Read more
Just passing along this chart (click to enlarge) we came across on page 41 of the big ILO global employment report:
Given the boost that Goldman’s economists gave to the nominal GDP level targeting movement when they endorsed the idea near the end of 2011, it’s probably a good idea to listen to them when they write about the subject (whether you agree with them or not).
NGDPLT itself has many more high-profile evangelists now than it did then: the Fed adopting an Evans Rule was the latest shift in its direction, and of course the idea is being openly debated in the UK after Mark Carney suggested it would be more potent than flexible inflation targeting. Read more
It’s no secret that FT Alphaville pays attention to the periodic papers released by the team of Jonathan Wilmot, James Sweeney & Co. Their earlier work on shadow banking and collateral was thoughtful and ahead of its time, and we also agreed with Sweeney’s generally optimistic view of an accelerating US economic rebound led by the knock-on effects of a recovery in household formation, a favourite subject of ours.
Their latest is an extension of a prior piece that looked at the state of global investor risk appetite — and which concluded that although there remain obvious problems in parts of the developed world, overall the global recovery from the trough in early 2009 has actually outpaced previous recoveries, exactly as would be expected given the fall in the output gap this time round. Read more
Neil Irwin of Wonkblog has an excellent preview of what to expect when the Fed releases the transcripts from the 2007 FOMC meetings. (The Fed doesn’t say in advance when they’ll be posted, but we’re expecting them anytime now, possibly even today.) Read more
We still think the minutes of the December FOMC meeting — specifically their revelation that “several” committee members believe asset purchases should be slowed or stopped by the end of this year — were wrongly interpreted by some as a hawkish shift.
Bernanke explained at the September presser that asset purchases, purpose of which he said was “to increase the near-term momentum of the economy”, would continue until the outlook for labour markets had improved “substantially”. Read more
The US retail sales figures for December will be out later on Tuesday and we’ll use the occasion as an excuse to take a look at the wider picture for the American consumer this year.
The image is fuzzy. We already know that the expiration of the payroll tax cuts was an especially damaging outcome of the fiscal cliff negotiations. It will total approximately $125bn less in wage-earners’ pockets, and is showing up immediately in reduced paychecks. As Credit Suisse economists noted: Read more
Greg Ip has the single best post on the economics and logistics of the Platinum Coin option that we’ve come across.
It includes a solution that involves two of our favourite topics from 2012: the expiration of the Transacton Account Guarantee and the safe asset grab (even throwing in a bonus Gary Gorton reference). Read more
We wrote after last week’s US employment report that the seasonal adjustment problems we described in late 2011 and the first half of last year had likely faded.
We’re referring specifically to the distortions in the Census Bureau’s X12 algorithmic process, which is used to make the adjustments to many of the country’s most important economic indicators, rather than new seasonal distortions that have been introduced separately (usually weather-related distortions). Read more
We’ll be talking about the start of US earnings season, AIG chutzpah, preview Thursday’s ECB and BOE meetings, the $1tr Coin [Do we have to - Joseph], and whatever else hits the tape in real time. Same time, usual place. Read more
A lot of people seem to be talking past each other about the Trillion Dollar Coin idea. That sometimes happens on Twitter and the blogosphere, where much of the debate has taken place.
But one place to start a reasonable discussion is to note again that nobody really disagrees with this: Read more
From the abstract of a new paper by New York Fed staff economists:
This paper presents new survey evidence on workers’ response to the 2011 payroll tax cuts. While workers intended to spend 10 to 18 percent of their tax-cut income, they reported actually spending 28 to 43 percent of the funds. This is higher than estimates from studies of recent tax cuts, and arguably a consequence of the design of the 2011 tax cuts. The shift to greater consumption than intended is largely unexplained by present-bias or unanticipated shocks, and is likely a consequence of mental accounting. Read more
If you were in search of some light weekend reading, we’ve got just the thing (click for pdf):
Consider all that has either influenced the US economy or at least made big headlines in the last two years — winter accelerations seemingly crashing into spring slowdowns; a debt ceiling debate coinciding with a debt downgrade; a supply chain disruption caused by the Japanese earthquake; commodity and gas price spikes; fiscal drag at both the federal and state levels; a dramatically evolving monetary policy framework; an election and fiscal cliff battle; a perpetual near-disaster in Europe and slowing emerging market growth.
In that light, the following line in today’s payrolls report is worth a quick remark: Read more
Very close to estimates and roughly in line with the prior two months. The highlights from the report:
Nonfarm payroll employment rose by 155,000 in December, and the unemployment rate was unchanged at 7.8 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in health care, food services and drinking places, construction, and manufacturing. Read more
These minutes are for the meeting at which the Fed announced its switch to a version of the Evans’ Rule. While that change was expected, it wasn’t expected to be made as soon as it ultimately was.
The most interesting bit from the minutes below in bold, followed by some quick commentary. Read more
James Sweeney of Credit Suisse has written one of the more optimistic (and convincing) notes we’ve come across about the near-term trajectory for US housing.
Its optimism is based mainly on its analysis of expected household formation growth, which Sweeney finds has been underestimated by most observers. The note includes a good discussion of the ways in which healthy household formation growth can have powerful multiplicative effects throughout the rest of the economy. We’ve covered much of this ground before, and of course don’t forget to follow Calculated Risk and Karl Smith, who anticipated these trends before anyone else. Read more
A holiday tradition from Citi’s credit strategist, hat tip to Tracy Alloway for passing along:
Walking in a credit wonderland Read more
And by “a few” we mean “fourteen”.
And by “fourteen” we mean “more than fourteen” because each “question” is more like “a bunch of questions” or in some cases “stuff that Gorton and Metrick wonder about but have not actually stated in the form of a question”.
Anyways, we bolded the main bits from each below, and you can find the full paper via NBER Read more
In April we began discussing the possible end of the Transaction Account Guarantee at the end of this year, describing it as a kind of collateral-substitute and as a pseudo-bailout for certain investors (the most extremely risk-averse) in money market funds.
Well, the expiration of TAG increasingly appears inevitable, and today the Wall Street Journal reports: Read more
