Unsettling Presidential Prediction In Election Markets

The Iowa Electronic Markets and the Intrade Prediction Markets trade securities dependent on the outcome of the 2012 US presidential election that when looked at together lead to a disturbing conclusion.

The Iowa Markets security for the majority of popular votes cast for the two major parties shows a greater probability, a higher price, that the Republican presidential candidate will receive a greater number of popular votes than the Democratic presidential candidate.

The Intrade security for the winning presidential party shows a greater probability, a higher price, that the Democratic presidential candidate will win the 2012 presidential election.

Looking at the two securities predictions together leads to the disturbing conclusion that the Republican party candidate will garner more popular votes than the Democratic party candidate, but the Democratic party candidate will receive more electoral college votes and win the presidency.

While it can happen and has happened that a president is elected without the popular vote, I hope in these difficult economic times, the voting for the presidency is not so regional that it leads to a winner that does not receive the greater popular vote. Hopefully as we get closer to election time, the two markets will converge to a single prediction.

Workers' Layoff Fears Higher Under Obama Than Bush And Could Be Cause Of Low Consumer Spending

From The New York Times Economix Blog, "Job Insecurity Remains High" by Catherine Rampell, a chart:

The NY Times/Gallup chart above shows that employees' fears about their work income is higher during the current recession than it was anytime during the last decade. No wonder the economy is in the doldrums.

Increased uncertainty about future employment income, along with the increased length of unemployment, lowers workers' and households' spending. Lower consumer spending obviously means lower consumer demand for goods and services and lower GDP.

The chart shows that job income insecurity doubled during Obama's administration, and well after Bush left office and the start of the recession and financial crisis. Clearly Obama's economic policies, actions and rhetoric are not reassuring to US workers that they will continue to have a job.

Could the fix to our economic problems be as easy as changing the seat holder of the bully pulpit of the presidency to a person whose action and talk would reassure the American public about their economic future, whether that person belongs to the Democratic or Republican party?

Price Of Intrade's Higgs Boson 2012 Discovery Contract Drops 53 Percent

The price of an Intrade contract for the discovery of the Higgs Boson particle before December 31, 2012 dropped from 6.00 to 2.80, a 53 percent decline in price. The market is saying there is just a 28 percent chance that a Higgs Boson will be discovered before the end of the 2012 year.

Krueger Knows Unemployment Economics Better Than Obama

From The Wall Street Journal Opinion, "Krueger vs. Obama: The new chief White House economist on jobless benefits."

President Obama yesterday tapped Alan Krueger of Princeton to be his new chairman of the Council of Economic Advisers....***As early as next week the President is expected to call for another extension of unemployment insurance benefits, which are currently available for 99 weeks, or nearly two years. Here is what Mr. Krueger wrote in a study with Bruce D. Meyer for the National Bureau of Economic Research Working Paper series in 2002:

"This chapter examines the labor supply effects of social insurance programs. . . . The empirical work on unemployment insurance (UI) and workers' compensation (WC) insurance finds that the programs tend to increase the length of time employees spend out of work."

The authors found that the incentive effects of unemployment insurance on recipients to delay finding a job are not insignificant and that "the estimates of the elasticities of lost work time that incorporate both the incidence and duration of claims are close to 1.0 for unemployment insurance."

For people who didn't attend Princeton, this means that paying people not to work increases the incentive not to work and thus tends to encourage longer periods of joblessness. This sounds closer to what critics of endless jobless benefits have been saying than to the White House policy line.

What I Learned From Irene

I will never give up my copper telephone landline!

I accept and do not fear technology. I stream movies and other video directly to my LCD TV. I use a cell phone with internet access and often read my email on my cell. I frequently communicate with my kids by text messages.

In my area, Hurricane Irene's strong winds and heavy rains flooded roads, downed branches and trees. Power lines snapped and electric power was out for almost two full days. Movement was restricted with many roads flooded, blocked by trees, or dangerous due to downed live electrical transmission wires.

Cell phone towers were out of commission. Cell phone and text message services were non-existent at my home and in many adjacent areas.

With two adult kids hundred of miles and hours away in two different compass directions, they were concerned about my well being and safety as I was about their safety.

My plug in copper wire land line phone never ceased working!

I called using my landline and spoke to my kids. They were relieved to hear I was OK and that there was no damage where I lived. Likewise, I was relieved to hear that the storm had had a minimal impact on their areas and homes.

My local friends who switched to internet based phone services lost use of their telephones 2-3 hours after the power went out at the beginning of the strong winds of the approaching storm when the reserve batteries depleted.

Those who used only cell phones also found themselves without telephone services..

Map of NYC Hurricane Evacuation Zones

NYC Hurricane Map

When Free Market Meets Education You Get Khan

When education is unlicensed, unregulated, non-union and not government controlled, you get Salman Khan and the Khan Academy.

The media, politicians, unions and the US Education Department focus on and talked about the pros and cons of charter schools and better teachers. The true paradigm shift in education is Salman's Khan Academy.

Innovation like this could never have come from within the highly regulated, licensed, unionized, government controlled US education system.

Listen to his March 2011 Tedtalk, embedded below, and you will see the future of effective education and it is available now to every school system in the world!

One Third Of New Jobs Created In 11 Of 372 US Metropolitan Areas

From "Eleven Metro Areas Created One Third of All July Jobs" by Lee McPheters, August 22, 2011, Knowledge@W.P. Carey:

Strong labor markets in eleven metropolitan areas accounted for one out of every three jobs created in the nation during the past 12 months.***The greater New York City area (including Northern New Jersey and Long Island) added the largest number of jobs (71,700), followed by Dallas and Houston, each with just over 65,000 new jobs. Boston was in fourth place with 60,100 jobs, and Chicago was fifth, with 33,200.

The next six job gainers included Seattle (32,800), San Jose (29,600), Los Angeles (29,400), Phoenix (22,300), Miami (22,000), and San Diego (20,100).

Read the complete article here.

Common Myths Of Capitalism: Jeff Miron: Video

(HT: Greg Mankiw)

The Evidence Is In That Government Transfer Benefits Reduce GDP And Employment

From The Wall Street Journal, "Keynesian Economics vs. Regular Economics: Food stamps and other transfers aren't necessarily bad ideas, but there's no evidence they spur growth" by Robert J Barro:

The overall prediction from regular economics is that an expansion of transfers, such as food stamps, decreases employment and, hence, gross domestic product (GDP). In regular economics, the central ideas involve incentives as the drivers of economic activity. Additional transfers to people with earnings below designated levels motivate less work effort by reducing the reward from working.***This result does not mean that food stamps and other transfers are necessarily bad ideas in the world of regular economics. But there is an acknowledged trade-off: Greater provision of social insurance and redistribution of income reduces the overall GDP pie.***To figure out the economic effects of transfers one needs "experiments" in which the government changes transfers in an unusual way—while other factors stay the same—but these events are rare.

Ironically, the administration created one informative data point by dramatically raising unemployment insurance eligibility to 99 weeks in 2009—a much bigger expansion than in previous recessions. Interestingly, the fraction of the unemployed who are long term (more than 26 weeks) has jumped since 2009—to over 44% today, whereas the previous peak had been only 26% during the 1982-83 recession. This pattern suggests that the dramatically longer unemployment-insurance eligibility period adversely affected the labor market. [Emphasis added.]

Read the complete opinion piece here.

Robert Barro is an economics professor at Harvard and a senior fellow at Stanford's Hoover Institution.

For Each $1 Of A Vat Tax, The Private Economy Would Lose $2

From The Wall Street Journal, "A Value-Added Tax Fuels Big Government: In Europe the VAT hasn't substituted for income taxation. It's merely added to the tax burden" by Ernest S Christian And Gary A Robbins:

We estimate that each additional $1 trillion of revenue to the government from a VAT would cost the private economy at least $2 trillion, composed of $1 trillion of taxes and $1 trillion of lost GDP.

Read the complete opinion piece here.

Ernest Christian is director of the Center for Strategic Tax Reform. Gary Robbins is the center's chief economist.

In Memory Of Jerry Leiber

"Jerry Leiber, Rock ’n’ Roll Songwriter, Dies at 78" By THE ASSOCIATED PRESS:

US Deregulation Of Nuclear Power Plant Ownership Eliminated 40 Million Tons Of Carbon Emissions

Deregulation of the electricity markets in the 1990s allowed nuclear power plants to become 10 percent more efficient. The increase nuclear energy electricity production decreased carbon dioxide emissions by almost 40 million metric tons.

From "Deregulation, Consolidation, and Efficiency: Evidence from U.S. Nuclear Power" by Lucas W. Davis, Catherine Wolfram, NBER Working Paper No. 17341, August 2011:

For the first four decades of its existence the U.S. nuclear power industry was run by regulated utilities, with most companies owning only one or two reactors. Beginning in the late 1990s electricity markets in many states were deregulated and almost half of the nation’s 103 reactors were sold to independent power producers selling power in competitive wholesale markets. Deregulation has been accompanied by substantial market consolidation and today the three largest companies control more than one-third of all U.S. nuclear capacity. We find that deregulation and consolidation are associated with a 10 percent increase in operating efficiency, achieved primarily by reducing the frequency and duration of reactor outages. At average wholesale prices the value of this increased efficiency is approximately $2.5 billion annually and implies an annual decrease of almost 40 million metric tons of carbon dioxide emissions.

We Work Less to Buy More

US Fails To Spend Tax Revenues Wisely

From The Wall Street Journal, "My Response To Buffett And Obama: Before you ask for more tax money from me, raise the $2.2 trillion you already collect each year more fairly and spend it more wisely" by Harvey Golub:

Governments have an obligation to spend our tax money on programs that work. They fail at this fundamental task. Do we really need dozens of retraining programs with no measure of performance or results? Do we really need to spend money on solar panels, windmills and battery-operated cars when we have ample energy supplies in this country? Do we really need all the regulations that put an estimated $2 trillion burden on our economy by raising the price of things we buy? Do we really need subsidies for domestic sugar farmers and ethanol producers?

Why do we require that public projects pay above-market labor costs? Why do we spend billions on trains that no one will ride? Why do we keep post offices open in places no one lives? Why do we subsidize small airports in communities close to larger ones? Why do we pay government workers above-market rates and outlandish benefits? Do we really need an energy department or an education department at all?

Here's my message: Before you "ask" for more tax money from me and others, raise the $2.2 trillion you already collect each year more fairly and spend it more wisely. Then you'll need less of my money.

Read the complete article here.

Employers Do Not Engage In A Pattern Of Discrimination Against Women For Considering Time Off For Family And Maternity Leave In Giving Promotions And Raises

Employers who use employees' time off for family and maternity leave are not engaged in a pattern of discrimination against women, according to U.S. District Judge Loretta Preska in her decision dismissing an EEOC complaint against Bloomberg LP.

From The Wall Street Journal "U.S. Loses Bloomberg Sex-Bias Lawsuit" by Chad Bray:

In its lawsuit filed in 2007, the EEOC alleged that Bloomberg reduced pay for pregnant women or women who just returned from maternity leave, demoted them, excluded them from management or subjected them to stereotypes about female caregivers in violation of U.S. law.

Judge Preska acknowledged that individuals who decide to spend more time with their families might face hurdles to advancement in the workplace. But, she added, that doesn't necessarily equate to discrimination under the law.

"In a company like Bloomberg, which explicitly makes all-out dedication its expectation, making a decision that preferences family over work comes with consequences," the judge said. "But those consequences occur for anyone who takes significant time away from Bloomberg, not just for pregnant women and mothers."

The judge didn't rule on individual claims of discrimination and asked the parties to inform her how they plan to proceed with those claims. Six women are named as plaintiffs in the lawsuit and the EEOC has identified 78 women in total who have claims of discrimination.

Comment To Casey Mulligan's "Exceptions to Keynesian Theory": Limits To Government Stimulus Spending

A comment I posted to "Exceptions to Keynesian Theory" by Casey B. Mulligan on his blog, supply and demand (in that order) and to the NY Times version of the same post:

Interdependent Independent of incentive concerns, there is often failure to look at the marginal effects of stimulus funding.

When someone loses a job, there their consumption does not drop to zero. The unemployed use their own savings, or rely on friends or relatives for some free meals, temporary living quarters or free services such as a washing machine, etc. Part of this consumption is supplied and purchased by others and increases their demand.

Keynesian stimulus, including unemployment insurance, substitutes for other consumption spending funds.

The same is true on state and municipal levels where part, probably most, of local projected spending will substitute federal stimulus funds for local funds.

To the extent that federal stimulus funds acts as substitute funding, there is no demand increase and economic boost from it.

The part of stimulus funds that replaces other spending has a zero multiplier effect on the economy.

When the extra US government stimulus inefficiencies and delays, as compared to the private sector, are considered, parts of stimulus funding can even have a negative economic multiplier.

The failure to look at marginal spending effects, the failure to consider government inefficiency and the negative incentives mentioned in the blog post are the reasons payments such as food stamps, unemployment insurance and other stimulus spending do not create jobs or provide strong economic stimulus. Stimulus spending, inefficiently and often with negative incentives, substitutes one funding source for another, but does not increase the spending above the baseline amount that would occur without stimulus funding.

Higgs Boson Dec 2013 Intrade Price Jumps Almost 50 Percent

The price for the Intrade contract for the Higgs Boson particle to be observed on/before 31 Dec 2013 jumped on Monday evening from 40 percent to 59.9 percent, a 49.75 percent increase.

State Credit Ratings: Tax Foundation

From the Tax Foundation:
(Click map to enlarge)

Source: Tax Foundation

If Buffett Wrote A Check To Double His Tax Rate, I Would Be More Impressed

From "Stop Coddling the Super-Rich" by Warren E Buffett:

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

Warren should stop preaching and write a $7 million check to the US to put himself at the same average tax rate as his office workers. I am sure many of his rich friends will follow his example of voluntarily raising their own tax rates by donating to the federal government's revenues.

11th Circuit Appellate Court Opinion Upholding Unconstitutionality Of US Health Care Law

The US Court Of Appeals for the Eleventh Circuit in Atlanta Georgia issued a 304-page opinion upholding the lower court finding of the unconstitutionality of the federal health care law. The full appellate court opinion is available here, on Scribd and embedded below.

11th Circuit Opinion of Health Care Law Unconstitutionality

CBO Estimates Deficit Reduction Will Increase GDP By 0.5 To 1.4 Percent

From Congressional Budget Office, "RESPONSE TO QUESTIONS ABOUT THE EFFECTS OF GOVERNMENT SPENDING ON ECONOMIC GROWTH, AUGUST 11, 2011, Letter to the Honorable Tim Huelskamp:"

Therefore, the federal government's budgetary policies affect potential output primarily by affecting the amount of national saving and the incentives for individuals and businesses to work, save, and invest. The nation's capital stock depends both on public saving (the surpluses, if any, of state and local governments and the federal government) and on private saving (by households and businesses). A federal deficit represents a reduction in public saving and, therefore, in national saving. An overall decline in national saving reduces the capital stock owned by U.S. citizens over time through a decrease in domestic investment, an increase in net borrowing from abroad, or both.

Taking those effects into account, CBO estimated that the illustrative policy of deficit reduction described above would increase output and income in the longer run by boosting national saving and investment. At the turn of the decade, from 2019 through 2021, GNP would increase by roughly 0.5 percent to 1.4 percent, CBO estimated, again depending on the year and the assumptions used.

Read the CBO summary here.

Read the complete CBO letter here. [Weblink updated.]

An Almost Fed Reserve Chairman Calls For Reduced Tax Rates And Base Broadening

From The Wall Street Journal, "Tax Reform Is the Swiftest Path to Growth" by R Glenn Hubbard:

Broadening the tax base and sharply lowering marginal tax rates can raise gross-domestic-product growth by a half to a full percentage point per year over a decade, according to an analysis of U.S. tax policy by economists Alan Auerbach and Kevin Hassett. A sustained economic expansion will reduce America's high rate of joblessness.***Tax reform, by reducing or eliminating the double taxation of corporate equity and offering incentives for new business investment, will accelerate the economy's needed turn to investment. And lower business tax burdens increase U.S. competitiveness in exports and trade.***[T]ax reform is a necessary precondition for any serious national discussion of long-term deficit reduction.

Read the complete article here.

Hubbard is dean of Columbia Business School and was chairman of the Council of Economic Advisers under President George W. Bush. Hubbard was considered, along with Bernanke, for nomination as chairman of the Federal Reserve after Greenspan.

And just for fun, a Columbia Business School satire of Dean Glenn Hubbard:

Thoughts On Selling Organs

A comment I posted on orgtheory.net, "organ markets" by Fabio Rojas:

There are additional organ donation concerns in a market price system.

The market will price discriminate based on the expected quality of the organs donated. Additionally, with rights come responsibilities.

Better quality organs will sell for more than poorer quality organs. Much of health correlates with higher socio-economic status, such as richer and more educated. There are also genetic components to quality and healthfulness and these probably align themselves along racial. national origin, religion, and conspicuous physical traits like eye color, etc. Younger organs will also sell for more than older organs.

Will we allow a teenager to sell organs for money? To pay for college? Would we ever allow a parent to sell a child's organs? Always, never or only in exceptional cases?

If a fixed price is established, higher quality organs will be in short supply and poorer quality organs will be available in excess.

If the market determines the price, will society accept that the lower socio-economic groups (which in the US contains a disproportional number of Blacks) will be paid less than higher socio-economic groups (which in the US are disproportionately whites and Asians).

If we force all organs to sell for the same price, we are transferring the social harm of paying the poor less to the buyer and future user of the organ. A user of a donated organ is entitled to the best quality organ they can obtain for their money.

Once society establishes ownership and alienation rights to one's own organs, will society also simultaneously assign the legal obligation to the individual to be responsible for the quality of the organ they are donating or selling?

Just as automobile ownership requires regular inspection and pollution control equipment; will society require individuals to maintain their organs in good health? Will society require annual organ inspections and certifications of good maintenance? Are smokers and alcohol drinkers liable for the decreased usefulness of their organs?

Republican's Odds of Winning 2012 Presidency Greatly Increased: Running Neck And Neck With Democrats

The Intrade odds for a Democratic Party candidate to win 2012 Presidential Election is 50.1 percent. In May 2011, the odds of a Democrat winning the presidency in 2012 were about 64 percent.

The Intrade odds for a Republican Party candidate to win 2012 Presidential Election is 48.8 percent. In May 2011, the odds of a Republican winning the presidency in 2012 were about 35 percent.

The almost 2 to 1 odds in May 2011 in favor of a Democrat winning the 2012 election for US president have narrowed to almost even odds of 1 to 1.

On Intrade, the odds of a Republican controlled US Senate in 2012 are almost 5 to 1 in favor of the Republicans and the odds of a Republican controlled House of Representative in 2012 are about 2 to 1 in favor of the Republicans.

S&P Futures Down About 2 Percent In Early Trading.

S&P 500 Futures are down 23.0 points, or 2.07 percent, to 1,088.30 at 10 PM EDT.

21.8 Percent Probability US Now In A Recession: Atlanta Fed

From the Federal Reserve Bank of Atlanta, the Center for Quantitative Economic Research, "Real Time Analysis of the U.S. Business Cycle" by Marcelle Chauvet, professor of economics at the University of California, Riverside, and research director of the Center for Research on Economic and Financial Cycles:

Current probability of recession

Because of a two-month delay in the availability of the manufacturing and trade sales series, the probabilities of recession are also available only with a two-month delay.***The most recent probability of recession from the DFMS model is for May 2011, which uses information up to August 2011. The probability that the U.S. economy is in a recession as of May 2011 is 21.8 percent. [Emphasis added]

Privacy Today: Noise To Signal

Noise to Signal Cartoon

Evidence Against "Too Big To Fail" Incentive As Cause Of Bank Over Investment In Securitizations

From "Why Did U.S. Banks Invest in Highly-Rated Securitization Tranches?" by Isil Erel, Taylor D. Nadauld and René M. Stulz, NBER Working Paper No. 17269, Issued in August 2011:

This evidence is inconsistent with explanations for holdings of highly-rated tranches that emphasize the incentives of banks deemed “too-big-to-fail”. Further, the evidence does not provide support for “bad incentives” theories of holdings of highly-rated tranches. We find, however, that banks active in securitization held more highly-rated tranches. Such a result can be consistent with regulatory arbitrage as well as with securitizing banks holding highly-rated tranches to convince investors of the quality of these securities. Our evidence supports the latter hypothesis.

S&P Futures Down About 2 Percent In Early Trading.

S&P Futures are down 25.50 points, or 2.13 percent, to 1,172.30 at 7 PM EDT.

S&P's US Debt Rating Report

S&P's report, "Research Update: United States of America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative" on its rationale for lowering the long-term debt rating of the US Government.

S&P's 8-page credit rating document is available here.

CBO's Infographic Of Long Term Social Security Projections

From "CBO'S 2011 LONG-TERM PROJECTIONS FOR SOCIAL SECURITY: INFOGRAPHIC, AUGUST 2011":

Briefly, Intrade Price Showed Republican Presidential Candidate Winning 2012 Election

At around 7:00 PM EDT until about 7:28 PM EDT, the Intrade price for the Republican Party candidate winning the 2012 Presidential Election was higher than the Intrade price for the Democratic Party candidate winning the 2012 Presidential Election.

Democratic Party candidate to win 2012 Presidential Election

Last 5 Trades (last update: Aug 4, 8:35:18 PM EDT)

Aug 4, 7:58:53 PM EDT 1 Lots @ 55.1
Aug 4, 7:16:39 PM EDT 1 Lots @ 56.3
Aug 4, 7:02:09 PM EDT 29 Lots @ 55.1
Aug 4, 7:02:09 PM EDT 100 Lots @ 55.5
Aug 4, 7:02:09 PM EDT 1 Lots @ 55.6

Republican Party candidate to win 2012 Presidential Election

Last 5 Trades (last update: Aug 4, 8:37:19 PM EDT)

Aug 4, 7:48:10 PM EDT 1 Lots @ 46
Aug 4, 7:28:13 PM EDT 1 Lots @ 55
Aug 4, 7:01:03 PM EDT 130 Lots @ 59.9
Aug 4, 7:00:47 PM EDT 1 Lots @ 59.8
Aug 4, 6:56:39 PM EDT 5 Lots @ 50

Rhode Island Law Cuts Retirees' Pensions To Pay Bondholders

From The Wall Street Journal, "Bondholders Win in Rhode Island" by Michael Corkery:

Thanks to a new [Rhode Island] state law that places bondholders ahead of other creditors, Central Falls plans to pay investors the entire $635,000 it owes them in October.

Retired city workers might not be so lucky. Instead of $296,000 in pension checks promised before Central Falls became the second U.S. municipality to seek Chapter 9 protection this year, the retirees could get only $196,000 in payments next month—a 34% cut.

Read the complete article here.

Ocean Microbes Produce 30 Percent Of Atmospheric Nitrous Oxide, A Potent Greenhouse Gas

From ScienceNews, "Marine microbes prove potent greenhouse gas emitters: The unsung climate warmers are single-celled organisms once considered a type of bacteria" by Janet Raloff:

Earth’s oceans emit an estimated 30 percent of the nitrous oxide, or N₂O, entering the atmosphere. Yet the source of this potent greenhouse gas has puzzled scientists for years. Bacteria — long the leading candidate — can generate N₂O, although the seas don’t seem to contain enough to account for all of the N₂O that the marine world has been coughing up. Now researchers at the Woods Hole Oceanographic Institution and MIT offer a more likely candidate: archaea.

Cleveland Fed Predicts 0.8 Percent Yearly GDP Growth And 1.7 Percent Chance Of Recession

From The Federal Reserve Bank of Cleveland, "Yield Curve and Predicted GDP Growth" by Joseph G. Haubrich, Vice President and Economist and Margaret Jacobson, Research Analyst, August 3, 2011:

Projecting forward using past values of the spread [10-year Treasury over 3-month Treasury yields] and GDP growth suggests that real GDP will grow at about a 0.8 percent rate over the next year, down slightly from June’s 1.1 percent, most likely a reflection weak GDP numbers for the first two quarters of this year.***Using the yield curve to predict whether or not the economy will be in recession in the future, we estimate that the expected chance of the economy being in a recession next July is 1.7 percent, even with June’s prediction and up just a bit from May’s 1.3 percent.

Ripe Old Age Comes From Genes Not Lifestyle

From Bloomberg, "Living to 100 May Rely More on Good Genes Than Lifestyle, Researchers Find" by Oliver Renick:

People who live 95 years or more are as likely as the rest of the population to smoke, drink and eat an unhealthy diet, suggesting their survival to that ripe age is based on genetics and not lifestyle, researchers found.

Read the complete article here.

Google+ Reaches 25 Million Visitors In Less Than A Month

From Bloomberg, "Google+ Reaches 25 Million Visitors Faster Than Any Other Social Network" by Brian Womack:

Google Inc. (GOOG)’s new social-networking service drew about 25 million visitors in less than a month, outpacing Facebook Inc. and MySpace in their early days, according to market researcher ComScore Inc. (SCOR)

The Google+ service had 6.44 million visitors in the U.S., its biggest market, through July 24, said Andrew Lipsman, ComScore’s vice president for industry analysis, on a call hosted by Lou Kerner, an analyst at Wedbush Securities Inc. That was followed by India, with 3.62 million, ComScore said. The figures don’t include mobile usage.

CBO Analysis Of Agreed August 1 Final Debt Ceiling Deal

From "CBO ANALYSIS OF AUGUST 1 BUDGET CONTROL ACT" August 1, 2011, Letter to the Honorable John Boehner and the Honorable Harry Reid:

SUMMARY

The Congressional Budget Office (CBO) has estimated the impact on the deficit of the Budget Control Act of 2011, as posted on the Web site of the House Committee on Rules on August 1, 2011. The legislation would:

• Establish caps on discretionary spending through 2021;


• Allow for certain amounts of additional spending for "program integrity" initiatives aimed at reducing the amount of improper benefit payments;


• Make changes to the Pell Grant and student loan programs;


• Require that the House of Representatives and the Senate vote on a joint resolution proposing a balanced budget amendment to the Constitution;


• Establish a procedure to increase the debt limit by $400 billion initially and procedures that would allow the limit to be raised further in two additional steps, for a cumulative increase of between $2.1 trillion and $2.4 trillion;


• Reinstate and modify certain budget process rules;


• Create a Congressional Joint Select Committee on Deficit Reduction to propose further deficit reduction, with a stated goal of achieving at least $1.5 trillion in budgetary savings over 10 years; and


• Establish automatic procedures for reducing spending by as much as $1.2 trillion if legislation originating with the new joint select committee does not achieve such savings.

If appropriations in the next 10 years are equal to the caps on discretionary spending and the maximum amount of funding is provided for the program integrity initiatives, CBO estimates that the legislation—apart from the provisions related to the joint select committee—would reduce budget deficits by $917 billion between 2012 and 2021. In addition, legislation originating with the joint select committee, or the automatic reductions in spending that would occur in the absence of such legislation, would reduce deficits by at least $1.2 trillion over the 10-year period. Therefore, the deficit reduction stemming from this legislation would total at least $2.1 trillion over the 2012–2021 period.

Those amounts are relative to CBO's March 2011 baseline adjusted for subsequent appropriation action. CBO has also calculated the net budgetary impact if discretionary savings are measured relative to its January baseline projections. Relative to that baseline, CBO estimates that the legislation would reduce budget deficits by at least $2.3 trillion between 2012 and 2021.

The complete 11-page CBO analysis is available here.