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Peter Schiff says home prices are still too high. They would have to decline another 20% just to fit the long term trend line indicated by the Case -Shiller index of an average 3.35% increase each year, based on long term historical data. He says economists underestimate how distorted the housing market has become, and how little it has normalized since 2008. This is based on average increase in home prices of 3.35% per year for the 100 years between 1900 and 2000, as determined by Yale economist Robert Shiller, which is just a bit above the average rate of inflation. Taking the January 1998 10 city index of 82.7 and following the 3.35% annual trend line, he says the index would be at 126.7 in October 2010. Case-Shiller showed that it was 159.0 for October 2010. Schiff uses this to show that the market needs to drop by 20.3% from the current level to get back to the trend line. He says that the home buyers tax credit, record low interest rates, and the increased presence of Fannie Mae and Freddie Mac and the Federal Housing administration have for now put a floor on housing prices. Conditions in the US housing market with high inventories, the high unemployment, savings depletion and debt, point to this overshooting by 5-10% on the downside. See Roubini, who points to housing losses in 2011....

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The Cleveland address and question answer session on July 10, 2011, showed Janet Yellen at her best. She was applauded several times for her answers especially for her emphasis on clarity. One question was about the use of the term"quantitative easing," couldn't the Fed have found a better word? Yellen pointed out that the Fed at the time used "buying of long term assets" as the phrase for that activity, after the media referred to it as "quantitative easing." That term stuck and the Fed ended up accepting the use of the term to refer to the Bernanke Fed's program. Yellen also said the buying of long term assets was intended to raise long term rates, and was different from the effort in Japan of buying short term assets that failed to stimulate the Japanese economy. Throughout Yellen was entirely comfortable making clear what she had in mind. At one point she was asked about the IMF director Lagarde's statement that the U.S. is better off not raising rates in 2015, because of the uncertain economic outlook in Europe, China and other places. Yellen's response was that this was one more view that she considered along with the views of several other Fed governors who had different views and reading of the economic situation. She emphasized that the increase in the rates will be very gradual, a position very consistent with her earlier statements, and this made the long tem path of interest rates more important said Yellen, than the particular time when the Fed first raised rates. For her clarity, empathy, and sound grasp of the economic situation, few Fed chairman have come close to Yellen, as was evident in the audience's grateful response. ...

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Allan Meltzer says a Fed QE III woud be bad monetary policy. He puts several questions to Bernanke- how the Fed and Ben Bernanke can know now what is the right interest rate policy in mid 2013, and what reason can the Fed give for adding excess reserves when U.S. banks have $1.6 trillion in idle reserves at the Fed. Meltzer cautions the Fed and other policymakers not to pay attention only to short term forecasts, which can be susceptible to large errors. And calls for attention to the long term consequences of their actions. One point he emphasizes is that the unemployment problem cannot be resolved with short term policy actions nor can it be resolved in a short time. It will take population growth, falling housing prices and rising rents to create opportunities for new construction. Another change is the transition to a less consumption driven and more export oriented economy. This transition which has started will also take time. He urges the Congress and the administration to focus on: reducing corporate tax rates by closing loopholes, long-term reductions in entitlement spending, a 5 year moratatorium on new regulations, and the Fed adopting an explicit inflation target between 0% and 2%....

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DJT executive orders include one ending birthright citizenship. “It was really meant for children of slaves." DJT is referring to the 14th Amendment that was passed in 1868 by Congress and ratified by 1868 by the states. It came after the Civil War and Emancipation of slaves and was intended without any doubt for one and only one purpose to make slaves citizens of the United States Look at Section 4 of the 14th Amendment which says the United States will not allow any claim for the loss of any slave. "But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void. The only SC decision in US vs Wong Kim that gave citizenship in 1898 to Wong Kim was not intended to go beyond that particular case, it was only meant to make an exception to the Chinese Exclusion Act  of 1882 after which till 1960 (JFK's election) Chinese immigration to the US was stopped, and the same for all Asians. Only immigrant labor allowed in was from Mexico for agriculture till 1960. And in 1954 Operation Wetback wwas conducted by Eisenhower to return about 1 million illegal immigrants to Mexico. DJT says- “It was not meant for everyone to come into our country by airplane, or charging across the borders from all over the world and think they’re going to become citizens.” The millions that came illegally across land border  and the flow of drugs is a new situation that Congress and the Supreme Court are only facing since 2014 a period in which wars in Afghanistan and Iraq took time and resources away from problems at home. ...

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Chancellor Merkel of Germany proposed bilateral or trilateral deals between smaller groups of countries as a temporary solution till some agreement can be reached on immigration. She said "The European Council will not yet provide an overall solution to the migration problem." Hungary, Poland, Slovakia, Czech Republic which have opposed a quota system for asylum seekers did not attend.  Austria, Denmark, and Italy with the new government openly opposing immigration, attended the summit. Merkel said  a "lot of goodwill" was created, and leaders agreed that borders need to be better protected to prevent people from entering illegally, and reducing immigration at its source points in Africa. The migration problem has persisted as an issue long after the huge surge in immigration in 2015 has diminished to a trickle, and after chancellor Merkel has accomodated critics with new policies strictly limiting new immigration. New governments in Denmark, Austria and Italy, and the government in Hungary under Viktor Orban, have kept the issue alive by running on anti-immigration platforms. The European summit in 2018 was used by Merkel to reduce disagreement on this issue by allowing different countries to express their views and working in smaller groups for mutual benefit. It also reduces tension inside her CDP-CSU coalition after Bavaria based CSU decided to run in 2018 state elections on a platform calling for securing borders. ...

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Wilber and Tau of the WSJ report that Special Counsel Mueller in the Russia investigation has impaneled a grand jury to further strengthen his investigation. Mr. Mueller has put together a team of 16 attorneys with long experience as prosecutors. By working with a grand jury Mueller and his team are working only a few blocks from the U.S. federal courthouse where grand juries meet, which helps the team to conduct its investigation. A number of experts consulted by WSJ say this means a vigorous investigation is now being put together.  The U.S. Congress is also acting independently to support Mueller. Legislation being sponsored by Sens. Thom Tillis and Chris Coons on August 3, 2017, make it possible to reinstate Mr. Mueller in a situation where he is fired by the president. Under the legislation a special counsel can challenge his removal and a three judge panel could reinstate him. Separately Sens. Graham and Cory Booker are also putting forward legislation for the same purpose. All Senators are from both parties, the two Republicans are from North and South Carolina. In a rare show of unanimous bipartisan support for Russia sanctions following the involvement in the 2016 U.S. election, the entire U.S. Congress over 500 members voted in favor- except for 5 members. The vote in the House 419 to 3, and in the Senate 98 to 2. Such a level of unanimous support is rarely seen, suggesting how the U.S. Congress views this matter as of the highest importance. ...

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There is a sense from Remainers and Brexiters in the Conservatives and in Labour that Brexit is "acting as a drag on UK growth and limiting its potential" after the pandemic and inflation. Senior members of both parties are meeting in Oxfordshire including David Lamy of Labour and Michael Gove of the Conservatives, and the heads of banks and large business. Gove and Boris Johnson led the campaign for Brexit, and Gove is now interested in ensuring Brexit is not viewed as a failure in the long term. The Office of Budget. Responsibility says Brexit will reduce Britain's per capita GDP  by 4%, over the 15 years from 2016. Labour sees it as a threat to any future Labour government to leave unaddressed the relations with the European Union. In a bipartisan effort what sort of conversation to have with the EU so that Britain's economy benefits? President Biden's effort in working with like minded Republicans for America's renewal may be seen by Labour and the Conservatives as reason for doing the same in Britain to ensure European recovery.   ...

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Fei Fei Lee and John Etchemendy co-founders of Stanford Univeristy's Institute for Human-centred Artificial Intelligence the public sector needs to lead AI development.  Acceptance and advocacy by the people at Stanford University that AI is too important to be left to the private sector. That like space exploration conducted by NASA and the Hoover Dam and Tennessee Valley Authority during the Depression, the Erie Canal in the mid nineteenth century, some work is better done by the public sector. For this to happen Stanford needs to accept its position as one of the many great educational and cultural institutions of this country not what Silicon Valley and the Reagan era hand it to being its preeminent beneficiary and representative. This marks a change at Stanford after thinking long and hard about the dangers to America that have emerged from the Reagan era thought that took in its fold Democrats like Clinton and Obama- the 2009 financial crisis fueled by deregulation and defunding of infrastructure and manufacturing, that laid the seeds for America's downward spiral.  ...

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Robert Lighthizer was one of the early voices on unfair and imbalanced trade with other nations subsidizing their industry at the expense of American jobs in manufacturing long before DJT took up the issue in 2015-2016. Lighthizer as US Trade Representative negotiated the new USMCA that replaced NAFTA agreement for North American trade with Mexico and Canada. 

Lighthizer was seeking a larger role than USTR, either Commerce or Treasury, yet he was reluctant to campaign for this or go to Mar-a-Lago to make his case. As a result says WSJ, he was passed over as Luttnick and Bessent tried to get DJT's attention. Another reason he was passed over is that DJT is  sees the continuing flow of fentanyl and the migrant flows from Mexico, the sourcing from China, as serious issues that require using trade as part of the solution by 2024 if Mexico, Canada and China do not cooperate and hurt US interests.

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Analysts are forecasting an average oil price of $106 for 2011, according to FactSet Research Systems. Brent crude is $110 a barrel in the third week of August 2011. This implies Brent crude has to be at an average of $95 for the remainder of 2011- suggesting a decline of 14% from todays levels. Share prices of European oil companies Royal Dutch Shell, BP, Eni and Total are priced for long term crude oil prices at $75 per barrel, according to Citi.

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The Bank of Japan set a 2% inflation target and committed to follow a "open-ended" moneary easing, with purchases of financial assets and a zero interest rate policy as long as necessary. This acion was taken after apolicy meeting on Jan 22, 2013.

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Boeing's goal is to make 10 Dreamliners a month by late 2013. The current rate is 2 per month, which Boeing hopes to move up to 2.5 a month by November 2011, and 3.5 a month by early Spring. Boeing CEO, McInerney, says it will take a few years before each Dreamliner turns a profit. He expects this will happen before 2020. The large investment during this decade should see returns in terms of an annuity for 25-35 years, said McInerney. The Dreamliner is the first jetliner to be made largely of plastic-composite materials, in place of aluminium. To build the Dreamliner Boeing had to accomplish what McInerney calls "game-changing innovation," and at the same time achieve improvements in production techniques. Jim Albaugh, head of Boeing's Commercial Airplanes division, says the next step is to take what takes an hour and half to assemble and bring this down to 15 minutes. This will help meet a long backlog of orders. Boeing has 820 orders for the Dreamliner as of Sept. 2011. The first Dreamliner was delivered on Sept. 26, 2011, to All Nippon Airways....

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Borchers of the Washington Post reflects on why president Trump gave the long rambling interview in July 2017 to the NYT.  President Trump has  called the NYT both "failing" and "a crown jewel." He particularly respects the reporter Maggie Haberman, a reporter with whom Trump has a long relationship and whose reporting he respects. Haberman is seen by Trump as an influential political reporter, whose view counts, and who can be critical but also seeks to be fair in reporting. During the election campaign the NYT carried reporting critical of Trump, yet it also had reporters who were critical of Hillary Clinton. In many ways both the NYT and the WSJ from different points of view seek a place in the middle with fair reporting, needed particularly in today's politics where ideology sometimes trumps common sense and U.S. traditions of fairness.

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The work of innovation teams that help reduce lost production time and make production more efficient on Boeing's 737 production lines in Renton, Washington. There are 1300 improvement teams at Boeing for commerical jet production. Examples range from conventional improvements such as remapping production arrangements to unconventional ones like the use of hay loaders to put seats on passenger planes. The work requires highly motivated production engineers and Boeing has a long tradition of this. Boeing has increased 737 jet production to 35 a month from 31.5 with the help of such improvements. The goal is to make 42 planes a month by 2014, and 60 by 2017 when the 737 MAX goes into production. Boeing has a large backlog of orders- 3,700 jets of which 2,300 are 737s.

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Thomas Hoenig was Governor of the Kansas City Federal Reserve Bank for 20 years. Here he talks about the dangers of "too big to fail" with Gretchen Morgenson of the New York Times. He is due to retire at the age of 65 in 2011. Hoeinig has stood for conservative safe financial practices for U.S. financial institutions throughout his 20 year old career, and cautioned against extending the government safety net for banks that engage in risky financial activities including derivatives trading. And essential element of safe financial practice and part of necessary market discipline, he has pointed consistently, is the fear that taking on risky activities or acting recklessly has a price- creditors can take out their funds if they see a banks as unsafe, and the financial institution may have to be broken up or closed. He joins Alan Meltzer in his criticism of Federal Reserve policies under first Greenspan and then Bernanke that take on the job of stimulating the economy and creating jobs through a very loose monetary policy after the collapse of a bubble. Hoenig sees the role of the Fed in such situations as a neutral player. The reason say Meltzer and Hoenig is that the Fed has not given enough thought and attention to the long term consequences of its policies. What were the consequences of the low rate policies in 2003 asks Hoenig? It promoted another bubble and the mortgage meltdown of 2008. What were the consequences of QE II asks Meltzer in an op-ed piece in the Wall Street Journal on August 11, 2011, "The Folly of Economic Short-Termism?" It has failed to revive the economy or reduce unemployment. Hoenig also points to questions of fairness and equity that arise when banks are treated differently and farmers, seniors and other groups are asked to make sacrifices....

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Feeding America, a national network of food banks, finds that 37 million, or 1 in 8 Americans, needed emergency food assistance in 2009. Even in affluent suburbs like Long Island it found 280,000 sought assistance for food in 2009. And 39% of these were children under 18. Only 30% of those seeking help received food stamps suggesting that even that program is not reaching everyone that needs help.

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The 1608 foot, 118 story International Commerce Center going up in Hong Kong, will be the tallest in China after the World FInancial Center in Shanghai. Sun Hung Kai Properties , the developer of the ICC, says it is almost completely leased with Credit Suisse and Morgan Stanley taking multi story space because they are shifting from the more costly central district.