Recession Watch

The Atlanta Fed's GDPNow estimates that Q4-2015 GDP will come in at +0.7%. We get the first official estimate on Friday, January 29. I hope the whole world is not sitting down when they hear it. It's better to be sitting on the floor when they hear it because you can't get hurt from falling off your chair. Last week's Empire State Factory Index took a nosedive and there hasn't been anything positive since.

I wonder how many members of the Fed bought Powerball tickets in the recent $1.4 billion jackpot. Every statistician and economist says it's stupid, but I bet some of them had tickets in a secret place and hoped they were winners. The Wall Street Journal had an amusing piece about why an economist plays Powerball.

The International Monetary Fund released its forecast of the world economies. I bet they're thinking they should have lowered their forecasts more than they did. Read the summary and download the report.

Buybacks are Bad: I've Always Said It

One of the worst uses of capital is buybacks, an admission of a lack of business opportunities. Those buybacks have done a lot of good in this downdraft of stock prices: the money just evaporated. MarketWatch had a good article about how buybacks can weaken companies and their ability to withstand economic problems. A certain press company made a big buyback a decade ago and their stock is now about 1/20th of the price they bought it at. I can understand holding some cash aside for times like these when stock prices are generally tanking and the world is panicking, selling things without regard to the value of the underlying business. Give the money directly to stockholders. Do not pass “go.” Do not collect $200. (For those who don't know the board game Monopoly, you won't understand what I just typed).

Sniglets for the Digital Age, Courtesy of Mr. Tree

Some of you are old enough to remember the HBO series “Not Necessarily the News” where comedian Rich Hall gave us words that didn't exist but should, called “sniglets.” You can see a segment at YouTube.

One of our favorite bloggers is the always entertaining and dependably interesting D. Eadward Tree anonymous persona who writes at the Dead Tree Edition. His recent column at Publishing Executive gives us words that describe the 2016 publishing industry. His lineup is as follows: temporarely, statnastics, datarrhea, prigital, reshrinkence, g-plussing, maywall, nomotion, ad blockheads, nontroversy, cloudsourcing, listickler, click magnets. Our favorites are datarrhea and cloudsourcing. 

Duh! Tax Rates Make a Difference!

When I saw the headline “NBER Paper Finds Corporate Taxes Affect Risk-Taking” I knew someone is up for tenure. Here's the finding: tax rates affect the selection of new corporate initiatives. It turns out that some of the most creative and big potential payoff, but high risk ventures look don't get funded. Wonder why the economy feels flat? Because low risk more dependable projects get the money. The Tax Foundation issued a summary, the paper can be downloaded for a small fee from NBER, and a similar study can be downloaded at no charge.

Get ready to hear NBER's name bandied about as that's the organization that tell us when we're in recession. Last time they told us 11 months after it started. How nice of them.