MacroScope

New drama casts American Dream in a cold light

The American Dream distorted almost beyond recognition by mass foreclosures, women working on straight commission, men not working at all, and an alleged “higher power” who wants you to be rich beyond your wildest dreams, is the subject of the Women’s Project Theater’s production of “Bethany,” a new play by the young playwright Laura Marks.

The central character, Crystal, (played by America Ferrera, star of the “Ugly Betty” television series) is trying to regain custody of her daughter, Bethany, who has been placed in foster care because foreclosure has left her mother homeless.

Crystal is a victim of the American Dream, portrayed in this work as little more than an elaborate con game where honest, frantic people run like rats on a wheel – with firmer, secure ground hopelessly out of reach.

To fulfill the requirements of a social worker’s check list, played pitch perfectly by Myra Lucretia Taylor, Crystal is busy constructing her own small con game in a determined attempt to outwit the larger one that has trapped her.

To persuade the social worker she has a suitable home for her daughter,Crystal sneaks into a foreclosed house and forges a lease. But she soon finds she is not alone on this property. She’s been preceded there by Gary (Tobias Segal), a slightly paranoid survivalist of sorts who is living “below the radar,” but who is also the moral compass of the play.

The wider point about Britain’s “triple-dip” recession threat

Britain’s economy shrank an estimated 0.3 percent at the end of 2012 and every major media outlet says it points to a big risk of a triple-dip recession.

And equally predictably, some economists have already pointed out it’s a preliminary report, so maybe the economy isn’t as weak as the stats show. Negative figures have been revised away in the past.

While both points may well be true, they really amount to a squabble over whether your football team is going to go 4-0 down or 5-0 down. As Markit Economics pointed out, Friday’s figures mean that UK GDP remains some 3.2 percent lower than the peak of Q1 2008.

U.S. housing recovery running out of steam? Not so fast, says Coldwell Banker CEO Huskey

U.S.home resales unexpectedly fell in December, but the drop was not large enough to suggest the recovery in the housing sector is running out of steam.

The National Association of Realtors said on Tuesday that existing home sales dropped 1.0 percent last month to a seasonally adjusted annual rate of 4.94 million units.

Reuters television’s Conway Gittens interviews Budge Huskey, CEO of Coldwell Banker.

Interview with IMF Managing Director Christine Lagarde

IMF Managing Director Christine Lagarde sat down for an interview with Thomson Reuters Editor of Consumer News Chrystia Freeland to discuss the European debt crisis and U.S. fiscal problems.

Lagarde also outlined the Fund’s agenda for 2013 at a news conference following the release of a $4.3 billion tranche of aid to Greece, which she said is moving in the right direction with reforms.

From one Fed dove to another: I see your logic

Narayana Kocherlakota, the head of the Federal Reserve Bank of Minneapolis, has made a habit of turning economists’ heads. In September, the policymaker formerly known as a “hawk” surprised people the world over when he suddenly called on the U.S. central bank to keep interest rates ultra low for years to come. This week, Kocherlakota arguably went a step further into “dovish” territory, saying the Fed needs to ease policy even more. He wants the Fed to pledge to keep rates at rock bottom until the U.S. unemployment rate falls to at least 5.5 percent, from 7.8 percent currently – despite the fact that, just last month, the central bank decided to target 6.5 percent unemployment as its new rates threshold.

Kocherlakota’s bold policy stance is probably even more dovish – ie.  more willing to unleash whatever policies are needed to get Americans back to work – than even those of Chicago Fed President Charles Evans and Boston Fed President Eric Rosengren, until now considered the stanchest doves of the central bank”s 19 policymakers.

So in an interview on Tuesday, Reuters asked Rosengren what he thought of Kocherlakota’s plan. Here’s what he had to say:

Who said what, when? An unofficial guide to Fed speak on QE3

U.S. Federal Reserve policymakers, fresh from a December decision to ramp up asset purchases to help push down borrowing costs, will this year train a sharp eye on jobs.

A “substantial improvement” in the labor market outlook is a prerequisite for ending the bond-buying program, known as QE3 because it is the Fed’s third quantitative easing program since the Great Recession.

Below is a look at top Fed officials’ views on the asset-purchase program, currently at a monthly $85 billion, as well their take on the Fed’s new vow to keep rates low until unemployment falls to at least 6.5 percent, as long as inflation does not threaten to breach 2.5 percent.

Trade entrails

An exercise in divination using the entrails of last week’s U.S. international trade report shows signs of a move with larger implications than just the gaping deficit that caught analysts wrong-footed: the possibility of a persistent burden on the American economy caused by Japanese and German imports, like in the 80s.

The U.S. trade deficit widened 16 percent in November to $48.7 billion, the Commerce Department said on Friday, above the $41.3 billion expected. The negative surprise prompted economists to cut hastily their U.S. gross domestic product estimates for the last quarter to a negligible rate. The stock market took a hit.

The disappointment was limited, however, as analysts attributed the bulky import bill behind the deficit increase to a resumption of merchandise flows into the U.S. after Hurricane Sandy paralyzed port activity in the East Coast the previous month. Some economists still on yuletide mode are, apparently, missing the big picture.

On fiscal ledge, corporate gain may be household’s pain

It doesn’t sound sustainable but, at least in coming months, businesses look set to keep booming even as consumers come under pressure – in line with the recent trend. That’s because the economic hit from the partial deal on the fiscal cliff will hurt salaried workers disproportionately, says Steven Ricchiuto, chief economist at Mizuho.

He writes:

Although the worst of the fiscal cliff has been avoided, the compromise is not macroeconomic neutral. Our calculations, in fact, suggest that the drag created by the reversal of the payroll tax cut and the various tax hikes on upper income households will cut real GDP by upwards of 0.5% to 1% from our preliminary 1.5% to 2% forecast.

Real GDP in the range of 0.5% to 1.5% this year implies that corporate profit growth will come at the expense of the wage earner. Moreover, the earnings focus assures a larger share of national income will accrue to the corporate sector. This implies another year of limited employment gains.

Japan finally takes Bernanke-san’s advice – 10 years later

This post was based on reporting by Leika Kihara in Tokyo

Japan has crossed the monetary rubicon: the government is actively intervening in the affairs of the central bank, pressuring it to more aggressively tackle a prolonged bout of deflation and economic stagnation. The Bank of Japan is expected to discuss raising its inflation target from the current 1 percent level during its next rate decision on January 21-22.

Overnight, a Japanese newspaper reported the finance ministry and the central bank were considering signing a policy accord that would set as a common goal not just achieving 2 percent inflation but also steady job growth.

Key Japanese policymakers played down the prospect of making the BOJ responsible for stable employment like the U.S. Federal Reserve, but said a 2 percent inflation target will be at the heart of a new policy accord with the central bank.

Will bank lending finally start to rise?

Big news over the weekend was the world’s banks being given an extra four years to build up their cash piles, and given more flexibility about what assets they can throw into the pot. This is a serious loosening of the previously planned regime and could have a significant effect on banks’ willingness to lend and therefore the wider economy.

For over two years, banks have complained that they can’t oil the wheels of business investment and consumer spending while being forced to build up much larger capital reserves to ward off future financial crises. That contradiction has now been broken (a big win for the bank lobbyists) and the impact on economic recovery could be profound.

However, there are no guarantees. Banks, in Europe at least, have also insisted that lending has remained low because there isn’t the demand for credit from business and households. If that’s true, increased willingness to lend might not be snapped up.