June 2012

Real Personal Consumption Increased 0.1% for May 2012

Consumer spending was unchanged from last month, but after taking price increases into account, shows a 0.1% increase. Personal consumption expenditures are often called consumer spending by the press. Real Personal Consumption Expenditures, or PCE, are about 71% of GDP. Real means chained to 2005 dollars, thus adjusted for inflation. Below is a graph of real PCE. This is not good news for Q2 GDP.

Case-Shiller Index Shows Home Prices Off Record Lows for April 2012

The April 2012 S&P Case Shiller home price index shows a -1.9% decline from a year ago for over 20 metropolitan housing markets and a -2.2% decline for the top 10 housing markets from April 2011. Home prices are now comparable to May 2003 levels for the composite-20 and March 2003 for the composite-10, but up for the month.

Immigration Banter Leaves U.S. Workers in the Dust

cheap labor flowsHouston, we have a problem. We need jobs. The never ending political banter on immigration is a droning inane brew of special interests. One thing always is constant. At the back of the pack is America's middle class. We even have various groups supposedly representing U.S. labor who seem to be interested in illegal immigrants instead. Even worse, we have numerous lobbyists spinning out economic fiction, trying to claim offshore outsourcing is good for America or displacing U.S. workers with foreigners is somehow good economically. Neither is true. Worker displacement is worker displacement and if anyone is alive these days, the employment statistics say it all. Indeed we saw the foreign born getting majority of the jobs from 2008-2010. We need jobs for U.S. citizens, American workers. We also need a big legal rubber stamp proclaiming U.S. workers are preferred for all jobs within our shores.

The Copious Copula Blame Game

Seems the infamous mathematical probability distribution function, the Gaussian Copula, is at the forefront of controversy once again. It seems those financial engineers, the Quants, the ones who use advanced probability and statistics to model financial markets, upon whose work many derivatives are based, knew the use of Gaussian Copulas was fundamentally flawed.

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