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Posts Tagged ‘Dan Gross’

Chinese GDP: Apparently Its A Game

December 20, 2005 | 12:01 am |

I have been meaning to post this since last week but I’ve been trying to squeeze in my holiday shopping…

Daniel Gross, in his excellent MoneyBlog observes that the Chinese economy grew 15% overnight

This is particularly disturbing since we are looking long and hard at Chinese GDP and wondering what affect the Chinese economy is going to have on mortgage rates in the US next year.

In Richard McGregor’s article China to up GDP estimate by 20% [FT]:

“The revision is set to restate the size of its economy, in effect adding on the equivalent of Turkey and gaining the rank of the world’s fourth-largest economy.”

And here’s an amazing statement:

Zhou Xiaochuan, governor of the central bank, said this week: “The figures we used in the past have all been changed.”

Can you imagine if Greenspan or Bernanke had done this? Bedlam would ensue in the financial markets.


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Its More Than Shelter: Nearly 1 Out Of 10 Jobs Related To Real Estate

November 20, 2005 | 8:41 pm |

Daniel Gross wrote an excellent article on potential job loss caused by the cooling of the real estate market called As the McMansions Go, So Goes Job Growth [NYT]. The decline in housing starts and building permits are perhaps an indication that the housing market is cooling and with that, the jobs they have provided may be affected.

Source: NYT

Since the last recession in 2001, the real estate industry has provided 36% of all private-sector payroll job growth or 836,000 jobs. Real estate provides 9.7% of total domestic employment. There has been an unprecedented surge in membership to the National Association of Realtors over the past year as people try to make their fortunes as brokers in the housing boom [Matrix].

If we actually lose a few hundred thousand real estate related jobs and the Fed drops its concern about inflation with a weakening economy, it may be plausible that mortgage rates could actually trend downward as a result.


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Fraudulent Accounting Creates Jobs: Are We More Productive Or Not?

September 11, 2005 | 1:56 pm |
Source: NY Times

For the last 4 years, employment recovery has been weak. [NY Times]

The usual suspects have been: outsourcing, competition from China, high health care costs and lower work-force participation.

Daniel Gross‘ article has a different take using a research paper by the National Bureau of Economic Research: The Economics of Fraudulent Accounting “During periods of suspicious accounting (ie Enron, Worldcom, Adelphia, Halliburton, Arthur Anderson, Xerox, etc.) insiders sell their stocks, while misreporting firms hire and invest like the firms whose income they are trying to match. When they are caught, they shed labor and capital and improve their true productivity.” Removing the jobs lost from companies that restated their earnings would account for a large portion of total jobs lost. Enron was the poster-child for this sort of behavior.

So, what? How does this affect real estate?

Well, the Fed watches for employment patterns in its assessment of inflation risks. Inflation influences mortgage rates. For the past several years, productivity gains have been a plausible reason for limited gains in employment. Companies get more productive, then they need less employees. Now that theory is thrown a curve since a significant portion of the unemployment increase was from layoffs of firms that restated their earnings. Maybe things weren’t that bad?


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Lies, Damn Lies, And Government Statistics: Part II

August 21, 2005 | 12:07 pm | |

Go to the prequel of this post Lies, Damn Lies, And Government Statistics: Part I

And here is another post of the same topic concerning PPI Well, Maybe The Inflation Threat Is Not That Bad After All?

…After I finished my post on this topic last Friday, I came across yet another significant statistic that we should be uncomfortable with. Daniel Gross wrote an excellent article on productivity stats that suggests that the stats have even confounded Greenspan.

productivity
Source: New York Times


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