Lunes 24/09/11 Ventas de casas nuevas

[admin]

THE WEEKEND INTERVIEWSEPTEMBER 24, 2011
Chicago Economics on Trial
Nobel-winning economist Robert Lucas on the high cost of the welfare state, why he voted for Barack Obama, and how Milton Friedman changed his life.

By HOLMAN W. JENKINS, JR.

Let's face it, the "Chicago School" of economics—the one with all the Nobel Prizes, the one associated with Milton Friedman, the one known for its trust of markets and skepticism about government—has taken a drubbing in certain quarters since the subprime crisis.

Sure, the critique depends on misinterpreting what the word "efficient" means, as in the "efficient markets hypothesis." Never mind. The Chicago school ought to be roaring back today on another of its great contributions, "rational expectations," which does so much to illuminate why government policy is failing to stimulate the economy back to life.

Robert E. Lucas Jr., 74, didn't invent the idea or coin the term, but he did more than anyone to explore its ramifications for our model of the economy. Rational expectations is the idea that people look ahead and use their smarts to try to anticipate conditions in the future.

Duh, you say? When Mr. Lucas finally won the Nobel Prize in 1995, it was the economics profession that said duh. By then, nobody figured more prominently on the short list for the profession's ultimate honor. As Harvard economist Greg Mankiw later put it in the New York Times, "In academic circles, the most influential macroeconomist of the last quarter of the 20th century was Robert Lucas, of the University of Chicago."

Mr. Lucas is visiting NYU for a few days in early September to teach a mini-course, so I dash over to pick his brain. He obligingly tilts his computer screen toward me. Two things are on his mind and they're connected. One is the failure of the European and Japanese economies, after their brisk growth in the early postwar years, to catch up with the U.S. in per capita gross domestic product. The GDP gap, which once seemed destined to close, mysteriously stopped narrowing after about 1970.

The other issue on his mind is our own stumbling recovery from the 2008 recession.

For the best explanation of what happened in Europe and Japan, he points to research by fellow Nobelist Ed Prescott. In Europe, governments typically commandeer 50% of GDP. The burden to pay for all this largess falls on workers in the form of high marginal tax rates, and in particular on married women who might otherwise think of going to work as second earners in their households. "The welfare state is so expensive, it just breaks the link between work effort and what you get out of it, your living standard," says Mr. Lucas. "And it's really hurting them."

Enlarge Image

Terry Shoffner
Turning to the U.S., he says, "A healthy economy that falls into recession has higher than average growth for a while and gets back to the old trend line. We haven't done that. I have plenty of suspicions but little evidence. I think people are concerned about high tax rates, about trying to stick business corporations with the failure of ObamaCare, which is going to emerge, the fact that it's not going to add up. But none of this has happened yet. You can't look at evidence. The taxes haven't really been raised yet."

By now, the Krugmanites are having aneurysms. Our stunted recovery, they insist, is due to government's failure to borrow and spend enough to soak up idle capacity as households and businesses "deleverage." In a Keynesian world, when government gooses demand with a burst of deficit spending, the stick figures are supposed to get busy. Businesses are supposed to hire more and invest more. Consumers are supposed to consume more.

But what if the stick figures don't respond as the model prescribes? What if businesses react to what they see as a temporary and artificial burst in demand by working their existing workers and equipment harder—or by raising prices? What if businesses and consumers respond to a public-sector borrowing binge by becoming fearful about the financial stability of government itself? What if they run out and join the tea party—the tea party being a real-world manifestation of consumers and employers not behaving in the presence of stimulus the way the Keynesian model says they should?

Mr. Lucas and colleagues in the early 1960s were not trying to undermine the conventional prescriptions when they began to think about how the public might respond—possibly in inconvenient ways—to signals about government intentions. As he recalls it, they were just trying to make the models work. "You have somebody making a decision between the present and the future. You get a college degree and it's going to pay off in higher earnings later. You make an investment and it's going to pay off later. Ok, you can't do that without this guy taking a position on what kind of future he's going to be living in."

'If you're going to write down a mathematical model, you have to address that issue. Where are you supposed to get these expectations? If you just make them up, then you can get any result you want."

The solution, which seems obvious, is to assume that people use the information at hand to judge how tomorrow might be similar or different from today. But let's be precise, not falling into the gap between "word processor people" and "spreadsheet people," as Mr. Lucas puts it. Nothing is assumed: Data are interrogated to see how changes in tax rates and other variables actually influence decisions to work, save and invest.

Mr. Lucas is quick to credit the late John Muth, who would later become a colleague for a while at Carnegie Mellon, with inventing "rational expectations." He also cites Milton Friedman, with whom Mr. Lucas took a first-year graduate course.

"He was just an incredibly inspiring teacher. He really was a life-changing experience." Friedman, he recalls, was a skeptic of the Phillips curve—the Keynesian idea that when businesses see prices rising, they assume demand for their products is rising and hire more workers—even if the real reason for higher prices is inflation.

"Milton brought this [Phillips curve] up in class and said it's gotta be wrong. But he wasn't clear on why he thought it was wrong." In his paper for Friedman's class, Mr. Lucas remembers reaching for a very rudimentary notion of expectations to try to explain why the curve could not operate as predicted.

Growing up in the Seattle area, Mr. Lucas recalls a road trip he took as a youngster that terminated in Chicago, a city with two baseball teams! Chicago, in his mind, became "the big city," a gateway to a wider world. That, and a scholarship, is how he would end up spending most of his career at the University of Chicago.

We are sitting in an inauspicious guest office at NYU. A late summer sprinkle dampens the city. Mr. Lucas describes his parents as intelligent, reading people, neither of whom finished college—he suspects the Great Depression had something to do with it. "They got into left-wing politics in the '30s, not really to do anything about it, but to talk about. That was our background—me and my siblings—relative to our neighbors and relatives, who were all Republicans." In a community not noted for its diversity, his parents were especially committed to civil rights, his mother giving talks on the subject.

I ask about a report that he voted for Barack Obama in 2008, supposedly only the second time he had voted for a Democrat for president. "Yeah, I did. My parents are dead for a long time, but my sister says, 'You have to vote for Obama, for what it would have meant for Mom and Dad.' I felt that too. It's a huge thing. This [history of racism] has been the worst blot on this country. All of a sudden this charming, intelligent guy just blows it away. It was great."

Related Video


Steve Moore and Mary O'Grady discuss the week's economic news.

A complementary consideration was John McCain's inability to say anything cogent about the financial crisis then engulfing the nation. "He didn't have a clue about the economy. I just assumed the guy [Obama] could do it. I thought he was going to be more Clinton-like in his economics and politics. I was caught by surprise by how far left the guy is and how much he's hung onto it and, I would say, at considerable cost to his own standing."

Refreshing, even bracing, is Mr. Lucas's skepticism about the "deleveraging" story as the sum of all our economic woes. "If people start building a lot of high-rises in Chicago or any place and nobody is buying the units, obviously you're going to shut down the construction industry for a while. If you've overbuilt something, that's not the problem, that's the solution in a way. It's too bad but it's not a make-or-break issue, the housing bubble."

Instead, the shock came because complex mortgage-related securities minted by Wall Street and "certified as safe" by rating agencies had become "part of the effective liquidity supply of the system," he says. "All of a sudden, a whole bunch of this stuff turns out to be crap. It is the financial aspect that was instrumental in the meltdown of '08. I don't think housing alone, if it weren't for these tranches and the role they played in the liquidity system," would have been a debilitating blow to the economy.

Mr. Lucas believes Ben Bernanke acted properly to prop up the system. He doesn't even find fault with Mr. Obama's first stimulus plan. "If you think Bernanke did a great job tossing out a trillion dollars, why is it a bad idea for the executive to toss out a trillion dollars? It's not an inappropriate thing in a recession to push money out there and trying to keep spending from falling too much, and we did that."

But that was then. In the U.S. at least, the liquidity problems that manifested themselves in 2008 have long since been addressed. To repeat the exercise now with temporary tax and spending gimmicks is to produce the opposite of the desired effect in consumers and business owners, who by now are back to taking a longer view. Says

Mr. Lucas: "The president keeps focusing on transitory things. He grudgingly says, 'OK, we'll keep the Bush tax cuts on for a couple years.' That's just the wrong thing to say. What I care about is what's the tax rate going to be when my project begins to bear fruit?"

Mr. Lucas pulls up a bit when I ask him what specific advice he'd give President Obama (this is before Mr. Obama's two back-to-back speeches, one promising temporary tax cuts and the other permanent tax hikes, which mysteriously fail to levitate the economy). Unlike many of his colleagues, Mr. Lucas has not spent stints in Washington advising politicians, or on Wall Street cashing in on his Nobel laureate reputation. "No, that doesn't interest me at all," he says. "Now I've taken a salary cut. I don't go to faculty meetings. I don't teach undergraduates. I just write papers. It's great. I feel lucky about this."

Still, an answer comes. Mr. Lucas launches into a brisk dissertation on the work of colleagues—Martin Feldstein, Michael Boskin, others—whom he credits with disabusing him and fellow economists of a youthful assumption that taxes have little effect on the overall amount of capital in society. A lesson for Mr. Obama might be: If you want to stimulate growth in investment, productivity and income, cut taxes on capital.

Alas, don't look for this idea to feature in the next Obama speech on the economy, due any minute now.

Mr. Jenkins writes the Journal's Business World column.

[admin]

Israel ofrece paz - de nuevo

Palestina puede ser un estado si acepta la existencia del estado judio.

Israel Offers Peace—Again
By Michael Oren
By accepting a Jewish state, Palestinians can have their own.


By MICHAEL OREN

The Palestinian Authority, which has already made a pact with the Hamas terrorist organization, now seeks recognition for a unilaterally declared state at the United Nations. President Barack Obama, though deeply committed to Palestinian statehood, declares his intention to block that scheme, even by exercising an American veto in the Security Council. Congress, for its part, threatens to cut off aid to the Palestinian Authority if it breaches its commitment to direct talks with Israel and pursues unilateralism.

American mediators, meanwhile, lobby other members of the Middle East Quartet—the U.S., the European Union, the U.N., and Russia—in an attempt to forge a new framework for renewing Israeli-Palestinian negotiations. And Israel's Prime Minister Benjamin Netanyahu waits for the Palestinians to rejoin him at the negotiating table.

Enlarge Image

Reuters
Palestinian President Mahmoud Abbas with a copy of the letter requesting full U.N. representation during his address before the General Assembly on Friday.

Sound confusing? Indeed it was for many observers of this past week's dizzying diplomacy in New York. They asked themselves what exactly had transpired at the U.N., and why? What had spurred the Palestinians to turn their backs on a sympathetic U.S. president and a strong Israeli statesman capable of leading his skeptical people to peace? How could the Palestinians risk all they had achieved in recent years—a thriving economy, restored law and order, and significant U.S. aid—in a reckless bid to snatch the statehood that they could easily have earned?

Confusing, perhaps, but the answer is simple. The Palestinians came to the U.N. to get a state, but without giving Israel peace in return.

Understanding the Palestinians' decision requires a review not only of this past week's events but of one that occurred nearly 64 years ago at the same U.N. On Nov. 29, 1947, the General Assembly voted to partition British-controlled Palestine into two states, one Arab and one Jewish, that would live side-by-side in peace. The Jews accepted the agreement, but the Palestinians rejected it and joined with five Arab armies in an ultimately thwarted attempt to destroy the Jewish State of Israel.

Forty six years later, in 1993, the Palestinians received another chance to accept the two-state solution. In the Oslo Accords, which the U.S. co-signed, Palestinians and Israelis pledged to resolve all outstanding issues through face-to-face negotiation and to achieve an historic peace. In fact, these discussions produced two Israeli peace proposals, in 2000 and 2008, that met virtually all of the Palestinians' demands for a sovereign state in the areas won by Israel in the 1967 war—in the West Bank, Gaza and even East Jerusalem.

But Palestinian President Yasser Arafat rejected the first offer and Mahmoud Abbas ignored the second, for the very same reason their predecessors spurned the 1947 Partition Plan. Each time, accepting a Palestinian State meant accepting the Jewish State, a concession the Palestinians were unwilling to make.

In between Israeli peace offers, the Palestinians waged a terror war that killed and maimed thousands of Israelis. When Israel uprooted all of its settlements from Gaza in 2005, the Palestinians failed to create a peaceful enclave and instead created a Hamas terrorist stronghold that fired thousands of rockets at Israeli civilians. Yet, in spite of their rejection and trauma, Israelis continued to uphold the vision of two peaceful adjacent states.

That goal was embraced by Mr. Netanyahu, leader of the Likud Party, in a speech at Bar Ilan University in June 2009. Turning to "our Palestinian neighbors," he declared, "let's begin negotiations immediately without preconditions." But Mr. Abbas refused to negotiate. Nevertheless, Mr. Netanyahu ordered the removal of hundreds of checkpoints in the West Bank, facilitating remarkable economic growth and dramatically increased transport in and out of Gaza. When President Obama asked him to freeze construction in West Bank settlements, Mr. Netanyahu announced an unprecedented 10-month moratorium. But over the course of two and a half years, Mr. Abbas negotiated for a total of six hours, and then refused to discuss Israel's security needs.

Those needs have grown immensely in the wake of the upheaval in the Arab world, the rise of Iranian proxies, and the deployment of tens of thousands of terrorist rockets on our borders. Though doubtful of the Palestinians' readiness for genuine peace, Israelis retain the hope of a two-state solution. Mr. Netanyahu championed that hope and even brought it to the U.N. this week. "I am extending my hand, the hand of Israel, in peace," he told Mr. Abbas—and the world—on Friday. "I hope you will grasp that hand."

Unfortunately, Mr. Abbas did not come to New York to shake Mr. Netanyahu's hand but to grab a state which, he wrote earlier this year, "will pave the way for the internationalization of the conflict" and "pursue claims against Israel at the United Nations."

The U.S. and other principled nations are standing strong, though, and Mr. Netanyahu is ready to negotiate today—if only Mr. Abbas is willing. While the circumstances have changed since 1947 and even 2008, the formula for peace remains unaltered. By accepting the Jewish State, the Palestinians can have their own.

Mr. Oren is the Israeli ambassador to the United States.

[admin]

Los futures del Dow Jones esta 97 puntos al alza, el oro y el petroleo al alza.

Los futures suben ante la especulacion de que los lideres Europes anunciaran medidas para contener la crisis debido a la presion de US, China, etc.

U.S. Stock Futures Advance as Leaders Meet
By Rita Nazareth - Sep 25, 2011 7:31 PM ET .
...U.S. stock futures rose, following the biggest weekly drop since October 2008 for the Dow Jones Industrial Average, on speculation European policy makers will announce steps to contain the debt crisis as foreign counterparts lobby for action.

Standard & Poor’s 500 Index futures expiring in December advanced 1.2 percent to 1,143.40 at 8:30 a.m. Tokyo time after falling as much as 0.7 percent. Dow futures gained 108 points, or 1 percent, to 10,805.

U.S. Treasury Secretary Timothy F. Geithner warned at the annual meeting of the International Monetary Fund in Washington that failure to combat the Greek-led turmoil threatened “cascading default, bank runs and catastrophic risk.” Billionaire investor George Soros said “something needs to be done” to safeguard Europe’s banks because Greece may be unable to avoid default.

“It’s not a surprise that we didn’t see anything concrete out of Europe this weekend,” Jack Ablin, who helps oversee $55 billion as chief investment officer for Chicago-based Harris Private Bank, said in a telephone interview. “The market is already pricing in a Greek default. If we don’t see any chips falling, investors will be pleased. This market is starting to get cheap.”

U.S. stocks fell last week as the Federal Reserve said risks to the economy have increased and concern grew that policy makers will fail to spur growth. Equities rebounded on Sept. 23, following a four-day rout that drove the S&P 500 down 7.1 percent, amid speculation European governments will act to prevent a financial crisis.

Alcoa, FedEx
For the week, Alcoa Inc. and DuPont Co. tumbled more than 14 percent to lead losses in the Dow. Materials companies in the S&P 500 slipped 12 percent for the biggest drop among 10 industries as every group declined at least 1.6 percent. Bank of America Corp. slumped 13 percent, while FedEx Corp. tumbled 12 percent after cutting its profit forecast.

The Morgan Stanley Cyclical Index of companies most-tied to economic growth lost 11 percent last week as all 30 of its stocks retreated. The Dow Jones Transportation Average, also considered a proxy for the economy, slumped 9.6 percent. Both gauges fell the most since March 2009.

“When you look at Europe, the solutions are not going to be implemented any time soon,” Stephen Wood, who helps oversee about $163 billion as the New York-based chief market strategist for Russell Investments, said in a telephone interview. “That means the market volatility is going to continue.”

‘Firewall’
Geithner said over the weekend that governments must unite with the European Central Bank to “create a firewall against further contagion” and defuse the “most serious risk now confronting the world economy.” European policy makers are under pressure to further boost the ammunition of their regional rescue fund even as parliaments focus on ratifying a July plan to broaden its powers.

Last week’s rout erased $1 trillion from U.S. equities amid concern Greek insolvency is inevitable and Europe can’t contain the damage. The S&P 500 slumped 17 percent between April 29 and Sept. 23. The index’s gain since March 2009, when the last bear market ended, has been cut to 68 percent. The benchmark gauge for American common equity is trading at 12.4 times earnings in the past 12 months, 4.4 percent below its average valuation at the lowest point during the last nine bear markets, according to data compiled by Bloomberg.

‘Scapegoat’
Greek Finance Minister Evangelos Venizelos said his country will do “whatever it takes” to meet its budget goals and cautioned against making it a “scapegoat” for the global economy. Greece has yet to secure a second international bailout amid questions about whether it can satisfy the terms for aid. Economists at Citigroup Inc. say they expect the country to begin restructuring its debt as soon as December.

Stocks are having the worst quarter on record relative to U.S. Treasuries and gold, which may force investors to buy equities to rebalance their allocations, JPMorgan Chase & Co.’s Marko Kolanovic said. U.S. and emerging-market equities have returned 43 percentage points less, the most during a quarter since at least 2002, according to data compiled by Kolanovic, whose analysis is based on a model portfolio composed of stocks, bonds and gold.

“This underperformance may trigger significant quarterly rebalance flows into equities and out of Treasuries at the end of next week,” Kolanovic, the New York-based global head of equity derivatives strategy at JPMorgan, wrote in a note to clients last week.

To contact the reporter on this story: Rita Nazareth in

[admin]

Treasurys Price Chg Yield %
2-Year Note* -2/32 0.231
10-Year Note* -1 2/32 1.839
* at close

7:42 p.m. EDT 09/25/11Futures Last Change Settle
Crude Oil 80.74 0.89 79.85
Gold 1648.4 8.6 1639.8
E-mini Dow 10807 110 11007
E-mini S&P 500 1143.50 13.75 1155.75

7:52 p.m. EDT 09/25/11Currencies Last (bid) Prior Day †
Japanese Yen (USD/JPY) 76.65 76.58
Euro (EUR/USD) 1.3507 1.3499
† Late Friday in New York.

[admin]

Euro up 1.3509

Los futures del S&P 500 1% al alza.

+93

Yen down 76.65

[admin]

Hubieron rumores de que Christie, el gobernador republicano de New Jersey lanzaba su candidatura a la presidencia. No es cierto.

[admin]

El-Erian de Pimco dice que Europa caera en recesion y los paises desarrollados crecera menos el proximo anio. El crecimiento sera nulo o muy poco el proximoa anio. Europa se contraera 1% o 2%. El mundo crecera 2.5% en promedio, eso es diferente del 4% que el pronostico del IMF.

[admin]

Merkel con presion alta.

[admin]

FMI: Perú registrará los niveles más bajos de inflación de la región
Presentaría una tasa inflacionaria de 3,1% en el 2011 y 2,4% en el 2012. Argentina y Venezuela se mantendrían en dos dígitos por sus políticas expansivas

Domingo 25 de septiembre de 2011 - 05:00 pm 3 comentarios
El Fondo Monetario Internacional estimó que el Perú registrará la inflación más baja de la región este año y el 2012, tendrá niveles de 3,1% y 2,4% respectivamente. Mientras tanto, Chile, Colombia, Ecuador y Brasil registrarían este año inflaciones de 3,1%, 3,3%, 4,4% y 6,6%, en cada caso.

De acuerdo a Perspectivas de la Economía del FMI, informe presentado la semana pasada, Uruguay, Paraguay, Bolivia, Argentina y Venezuela presentarían inflaciones de 7%, 8,7%, 9,8%, 11,5% y 25,8%, respectivamente, informó Andina.

Pronósticos para el 2012: Chile (3,1%), Colombia (2,9%), Ecuador (4,9%), Brasil (5,2%), Uruguay (6,5%), Paraguay (7,8%), Bolivia (4,8%), Argentina (11,8%) y Venezuela (24,2%), estas dos últimas se mantendrían en dos cifras debido a sus políticas expansivas.

[admin]

Exxon Mobil estaría por retornar a Perú
25 de septiembre de 2011 | 10:42 a.m.Redacción multimedia - web@epensa.com.peLima - El regreso de Mobil (hoy Exxon Mobil) al Perú estaría muy cerca. Voceros del sector hidrocarburos informaron a Correo que la firma está muy interesada en asociarse con una o más empresas que están operando en la cuenca Marañón (abarca, entre otras regiones, Loreto) y en este propósito estaría próxima a concretar un desarrollo comercial, pues "las conversaciones han sido bastantes buenas".

Sin embargo, en la eventualidad de que no logre un acuerdo final, estará a la espera de la próxima licitación de lotes, aunque "prefiere lograr un acuerdo con una empresa ya en operaciones.

En 1998, Mobil, que estaba asociada con la holandesa Shell para ejecutar el Proyecto Camisea, decidió no entrar a la segunda etapa, paso previo a la explotación del Lote 88, porque no llegó a un acuerdo con el gobierno de la época en el punto referido a la exportación de gas natural, considerando que entonces no había un mercado que comprara este combustible.

La cuenca Marañón posee grandes reservas de petróleo pesado (no muy comercial porque su refinación cuesta mucho). Expertos indican que para hacer viable su explotación sería necesario que las empresas unan esfuerzos y apuesten por un ducto, cuya construcción demandaría más de $890 millones.

[admin]

Reemplacen la azucar por la miel de abeja.

------------

Apicultores vendieron miel de abeja por 330 mil soles durante Mistura 2011
25 de septiembre de 2011 | 05:45 p.m.Walter Serquén - wserquen@epensa.com.peLambayeque - Un ingreso de 330 mil nuevos soles generó la venta de miel de abeja orgánica y convencional procedentes de los bosques secos lambayecanos, en la cuarta edición de la feria gastronómica "Mistura 2011" que culminó el pasado 18 de setiembre en Lima.

Víctor Abad Custodio, presidente de la Asociación de Productores Apícolas Orgánicos de la región Lambayeque, sostuvo que fueron 54 productores de los distritos de Mórrope y Mocupe los que lograron vender 15 mil kilos de este alimento natural, la que se ofreció a razón de 22 soles el kilo.

El dirigente refirió que debido a la variedad de microclimas que registra Lambayeque, la miel lambayecana tuvo gran demanda para ser utilizada en repostería, en la industria de panificación.

[admin]

El Nikkei -0.9%

Au up 1,658

Euro down 1.3478

Oil up 80.35

Yields igual 1.83%

[admin]

Ag down, cu down 3.27

[admin]

Gasolina baja. 3.54 en US

[admin]

Korea +0.05%, Australia +0.94%