The Exchange
  • No One Should Be Surprised By Disappointing Fourth Quarter GDP

    By Aaron Klein

    The news that the U.S. economy contracted in the fourth quarter of last year came as quite a shock. Not a single one of the 24 economists surveyed by Dow Jones to develop the "consensus estimate" predicted an economic contraction. The Federal Reserve’s January Beige Book, which collected data through the end of the year from twelve different regions of the country, characterized, “the pace of [economic] growth as either modest or moderate.”

    Of course, the economic consensus being wrong should come as no surprise. In September 2008, when the nation was in the midst of the worst recession in over 70 years, the Wall Street Journal’s survey of 50 economists expected growth of over 1%, and only 3 of the 50 forecast negative growth.

    A Contracting Economy

    Why was the consensus off again? To answer that we need to start with what turned the economy from a path of growth to contraction. Two main culprits stick out: A decrease in the growth of private inventories, and the sharp

    Read More »from No One Should Be Surprised By Disappointing Fourth Quarter GDP
  • For the gaming sector, the week's gotten even more interesting. A day after a new set of rumors surrounding Microsoft's (MSFT) next Xbox made the rounds, a report originating in Japan was speculating about Sony (SNE) and the PlayStation 4, specifically how much it's going to cost.

    According to The Asahi Shimbun, the starting price of the PS4 game console "has yet to be set, but it is expected to exceed 40,000 yen." The report didn't quote the Tokyo-based electronics seller or sources for that estimate, but at current exchange rates, 40,000 yen would translate to right at $430. Considering where the last iteration began, that would be quite a step down.

    PlayStation 3: Credit Reuters When the current version of the console, the PlayStation 3, reached gamers in November 2006, two versions were available, starting at $499 for the base model in the U.S. and rising to $599 for the more powerful version. [Initial yen pricing was about 59,800 for the PS3, and with the yen around 118 to the dollar then, that would have

    Read More »from Sony PlayStation 4 to Cost … $430?
  • Do Republicans Stand a Chance on Immigration Reform?

    By Ron Haskins

    After its failure to defeat a vulnerable President Obama and to retake the Senate in the 2012 elections, leading Republicans and conservative thinkers have conducted a searching critique of their Party. National Review, Commentary, and the Weekly Standard, three of the most important voices of conservative thinking, devoted nearly entire issues to dozens of penetrating and often scathing critiques of the Party by major right-leaning thinkers.

    Although it would be a stretch to say that a consensus developed about any single factor accounting for the Party’s poor electoral performance, a prominent culprit was what might be called right-wing absolutism. In Rule and Ruin, Geoffrey Kabaservice gives an insider’s view of the cleansing of moderates from the Republican Party since the Goldwater/Johnson presidential election of 1964. The cleansing of moderates has in turn resulted in Republicans who win House and Senate seats being, on average, well to the right of the American

    Read More »from Do Republicans Stand a Chance on Immigration Reform?
  • By Alex J. Pollock

    “As the titans of Wall Street banks gathered…one common worry emerged: who is going to take over when we leave?” says a recent Reuters report on the self-important Davos meetings. Such a worry is a remarkable example of the illusion of one’s own inexpendability. In fact, we are all expendable. “After you’ve gone,” as an old banking colleague used to say, “we will all miss you for at least two weeks.”

    “Some of the most ambitious minds in finance are leaving the industry,” Reuters goes on. Well, one of the essential elements in the success of market economies is the movement of the factors of production, including labor and human capital, among competing uses and sectors. It has often been not unreasonably argued that the American economy made an overcommitment of resources to financial activities, as it obviously did to housing—the two being closely tied together in the great 21st century bubble.

    The Best and the Brightest

    During the bubble years, among these most

    Read More »from Wall Street Heads for the Exits

Pagination

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