Can anyone explain the stock prices of Fannie Mae and Freddie Mac, the two government-sponsored enterprises that are supporting our mortgage market? On Friday, Fannie’s common stock closed at $2.04 per share, up 250% since the start of August. That values the company–to be precise, the privately-owned common shares in the company–at more than $2 [...]
Archive for August, 2009
The Fannie and Freddie Anomaly
Posted in Budget, Finance, tagged Fannie Mae, Finance, Freddie Mac, Housing on August 31, 2009 | 2 Comments »
Positive, Normative, and … ?
Posted in Auctions, Economy, Teaching, tagged Auctions, Economics, Teaching on August 27, 2009 | 16 Comments »
Am I the only one who feels unfulfilled by the standard distinction between positive and normative economics? I am gearing up to return to the classroom next week, to teach microeconomics to incoming masters students at the Georgetown Public Policy Institute. Anyone who’s experienced the first day of micro class knows what’s coming. After introducing [...]
The Rubber Room
Posted in Business, Politics, tagged Education, New York City, New Yorker, Unions on August 27, 2009 | Leave a Comment »
Over in the New Yorker, Steven Brill discusses “the battle over New York City’s worst teachers“: These fifteen teachers, along with about six hundred others in six larger Rubber Rooms in the city’s five boroughs, have been accused of misconduct, such as hitting or molesting a student, or, in some cases, of incompetence, in a [...]
Craigslist’s Business Model
Posted in Business, Internet, Technology, tagged Bloomberg, Business, Craigslist, Strategy, Wired on August 26, 2009 | 3 Comments »
The magazine Wired regularly publishes some of the most interesting articles about economics and the modern world. Last month, for example, they had a great article about the antitrust threats looming over Google. The month before, it covered the economics of Somali pirates, which I never found time to write about. And the month before that, [...]
OMB’s 2009 Deficit Estimate Is Likely Too High
Posted in Budget, Data, Finance, Politics, tagged Budget, CBO, Deficit, Fannie Mae, Freddie Mac, GSE, OMB on August 25, 2009 | 6 Comments »
As expected, the new budget projections from the Office of Management and Budget show an estimated deficit of $1.58 trillion in the current year (which ends on September 30). In their coverage of the dueling budget releases, many members of the media are noting that this estimate is almost identical to the $1.59 trillion estimate [...]
More Stimulus Spending Than Originally Projected
Posted in Budget, Economy, Macroeconomics, Politics, tagged Budget, CBO, Macroeconomics, Medicaid, OMB, Politics, Stimulus, unemployment on August 25, 2009 | 1 Comment »
Lots of budget news this morning, with the release of the newest projections from the Office of Management and Budget and the Congressional Budget Office. One headline is that spending on the stimulus will be higher than expected. As reported by Lori Montgomery at the Washington Post (ht EconomistMom): The $787 billion economic stimulus package [...]
President Obama Makes A Great Decision
Posted in Economy, Macroeconomics, Politics, tagged Bernanke, Federal Reserve on August 24, 2009 | 7 Comments »
David Wessel of the Wall Street Journal reports that President Obama will re-appoint Ben Bernanke as Chairman of the Federal Reserve. Excellent decision. P.S. Don’t let this good news distract you from the much-less-good economic news on Tuesday: CBO and OMB are releasing new budget projections that will show trillions upon trillions of coming deficits.
$9 Trillion in Deficits for 2010 – 2019
Posted in Budget, Politics, tagged Budget, CBO, Deficit, OMB, Politics on August 21, 2009 | 7 Comments »
If you have bad news to report in our nation’s capital, Friday afternoon in August is a good time. So what did we learn this afternoon? Well, according to various news services (e.g., Bloomberg and Reuters) the Obama administration is projecting that budget deficits will total about $9 trillion from 2010 – 2019. That figure [...]
The Disconnect Between Oil and Natural Gas Prices
Posted in Energy, Environment, tagged Energy, Natural Gas, Oil on August 21, 2009 | 12 Comments »
Yesterday marked a new record in the divergence between oil and natural gas prices. As noted in a small item in the Wall Street Journal, the ratio of oil prices ($ per barrel) to natural gas prices ($ per million BTU) hit a record 24.5 at yesterday’s close. As you can see from the following [...]
How to Manage $3 Trillion
Posted in Finance, tagged Blackrock, Bonds, Finance, Fortune, Pimco on August 21, 2009 | Leave a Comment »
Shawn Tully at Fortune has a fun article recounting the rapid rise of Blackrock, which will soon be the largest asset manager in the world. He contrasts the firm’s fixed-income investment strategy with other firms (e.g., Pimco) as follows: BlackRock does not invest by forecasting which way interest rates are headed. Instead BlackRock wonkishly focuses [...]
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