Tuesday, December 18, 2012

What is Chained CPI?

What is chained CPI (Consumer Price Index)?

Well, it is a proposed difference in how we measure inflation and cost of living - which has implications for social security payments and probably a lot more real world stuff. 

Economists assume that when prices rise on a product, people turn to a less expensive alternative. Substitute chicken for beef, for example. In the past, the rise in beef prices would be counted as inflation.

Under chained CPI they wouldn't be. The reasoning is that lower cost alternatives are available so inflation won't affect you. 

Translation: Since you cannot afford to buy it, there is no inflation. 

Here's a very detailed article from the National Journal.

Here's a summary from the Washington Post.

Monday, December 3, 2012

Tax Incentives for Large Corporations in Texas

Here's an article that details the tax incentives/corporate giveaways (depends on your perspective) to such companies as Amazon, Apple, and Samsung in Texas.

Texas has produced a lot of jobs, but they are not high quality, high paying jobs (which can disappear at a moments' notice). State infrastructure is also not growing along with population growth, implying that tax revenues are inadequate.

So the question for you is: is this is worthwhile tradeoff?

Wednesday, November 28, 2012

The Chicago Plan (Update to An Earlier Post)

Who should own money? What does money represent? Where does money come from? 

The Chicago Plan - a paper making the blogosphere rounds - delves into this. It's a must read.

Looks like I missed the real point of the Chicago Plan in my previous entry. Amazing what some vacation time to read will do!

Seems the real point is to have the government stop borrowing money at interest and instead issue (aka printing) their own cash at 0% interest.

This would be "good" because interest wouldn't have to be paid. The idea is that money should be a public good/policy tool/utility and taken away from the banks. Banks should be forced to keep 100% reserves - making commercial loans problematic IMO. None of this apparently matters because money is not real - just a perception.


All of this is part of something you are going to see A LOT of.

It's called Modern Monetary Theory.

It's the next big thing. 

And that will get its own post.

Thursday, November 15, 2012

Finding Books at the Library

A nice little video that shows you how to use the library catalog to look up books, e-books, DVDs and more!

Friday, November 9, 2012

Rich Dad Poor Dad Author Files for Bankruptcy

Let me give you some more information about Robert Kiyosaki, the financial guru who wrote Rich Dad, Poor Dad.

He's been in the news - because he had to declare for Chapter 7 bankruptcy after losing a judgement.

A judge agreed he had stiffed business partners out of millions. Not a good sign of trustworthiness or character.

Kiyosaki's system is somewhat vague. It mostly involves buying on credit, moving assets around  under shell corporations and insane amounts of leverage.

Here's a more detailed critical view here.

I recommend you follow the link and put in your time doing your research if you're thinking about following his advice.

By the way, Kiyosaki's net worth is at best $70 to $80 million. That's not really master of the universe territory.

A real master of the universe would be billionaire real estate mogul Sam Zell. If you really want to know how to make money in real estate, I suggest you start by researching his career (follow the link for a typical profile). 

Do Banks Create Money? The Chicago Plan Says Yes

The Chicago Plan Revisited is an IMF paper that tackles the age old question: do banks create money? Traditional economists say no - see an exchange that lays this out here. 

However, this paper suggests that banks do, in fact, create money in a disguised way: through loans (which amount to more than the actual cash the bank has) and issuance of credit.

In effect, the banks create a great deal of the money supply in the world, leading to inflation and instability. What if that ability were regulated in order to mitigate the magnitude of booms and busts?

That's what this paper is about. 

Monday, October 29, 2012

Start Your Research Tutorial

Made a tutorial about Start Your Research - that's the central blank on the main library page that allows you to search a lot of different sources at once.

Tutorial covers keyword search ideas, limiting to a specific kind of source (like journal articles) and advanced search features like image search.

Friday, October 19, 2012

Tutorial: Best Introductions to Foreign Countries

We've written earlier about the best way to get high level economic introductions to countries. 

Let's say you need to quickly get a read on Argentina's recent economic history, look at its exports, and see which laws govern international trade.

You'd use CountryWatch, EIU, Doing Business In, or EUROPA for that.

Now we have a tutorial:

Monday, October 15, 2012

Beer, Wine and Alcohol Industry

This is the one of the biggest industries in the world. Here's how to do research (actually, the process works for many other subjects.)

Industry Trends (market size, shares, leading companies, analysis and more):

Marketline Advantage

Marketline Advantage Beer Industry Radar Chart Example:

Market Sizes and Shares:

Simply Map is a great place to get local (anywhere in US) wine and alcohol consumption patterns and compare them with national averages.


Watch the Simply Map tutorial video to find out how.

Wednesday, October 3, 2012

Tuesday, October 2, 2012

Updated MRI + Tutorial

MRI + is a neat database where you look up consumer profiles for a variety of Brands, products and services. If you need to know what kind of person leases a Honda Accord, goes camping, buys a PlayStation or vacations in Texas, this database will give you a composite national consumer profile.

Monday, September 24, 2012

InterviewStream Database Lets You Practice Interviewing

Here's a new database - InterviewStream - that records an interview, plays it back and then gives you feedback on your communication and nonverbal communication. Select a question set, watch expert commentary on interviewing, how to answer certain questions and more.

After a quick and free signup, it's ready to go!

Tuesday, September 18, 2012

Best Introductions to Foreign Countries

There are two great ways to get a quick but thorough overview of a foreign country's economy and history. These reports are more than just population numbers and dates of independence; there's some good detail about economics.

I recommend Europa and Marketline Advantage.

Europa is intuitive to use.

With Marketline Advantage, you can simply search the name of your country and scroll down to view your report (select the countries tab at the tab - see picture below).


You can click 1) Geographies and then choose 2) the blue tab marked Countries at the top.
And read yer report.

Written to be highly informative about history and that country's economic picture.

Make sure you open the PDF report! Otherwise you just get a statistical overview.

Monday, September 17, 2012

Future Factories in Your House: 3D Printing and Mini-Factories

As globalization winds down due to high transportation and energy costs, plus political conflict,do-it-yourself manufacturing looks like it could take off.

There's 3D printing. A machine builds up an actual object one layer at a time using a plastic like material.

Need something stronger or more complex than plastic? Get a factory in a box. This company makes fairly complex factories that fit in a 20-foot shipping container.

By the way, as unemployment remains high, this is a promising way to make a life outside the system.

The implications for manufacturing and design are staggering.

Tuesday, September 11, 2012

BitCoin Heist

You knew this was coming: Hackers have stolen some bitcoins.

Bitcoins (which I previously discussed here) are private units of currency completely stored and traded on a computer. They were invented as a response to the weakening of fiat currency during the current financial crisis.

Supposedly they were completely secure and could not be counterfeited.  Well, it didn't take long to discover that what one monkey can create another monkey can steal.

Anyone who believes in the sanctity of digital-only info is naive.

This is why it's so dangerous to digitize property records - as we discussed here.

Tuesday, August 21, 2012

Free Economic Inquiry Under Attack Worldwide

Freedom of speech regarding debt, economics and national solvency is under international assault. 

Here's a great overview of the situation in Europe. If you recall, independent ratings agencies (like Fitch) evaluate the quality of debt. Using that rating, central banks, insurance companies, pensions and other organizations make investment decisions based on that rating. These agencies, using tried and true methods, are downgrading debt (there's too much of it and not enough growth, making payback less likely) and this is upsetting people. 

For example, Italian police raided the office of a rating agency that downgraded Italian on a minor pretext (that story is in article link above).

The European Central Bank is also contemplating rating the quality of its own debt and is making noises about limiting the ability of others to comment on the bank's solvency.

In America, Egan Jones (a mid-sized rating firm) was lowered its ratings on American debt.  Immediately following this downgrade, the SEC coincidentally(?) started a harsh investigation of Egan Jones based on a minor technicality and threatened to revoke its ability to issue ratings on government debt.

Not government debt per se, but on the subject of free commentary on economics:

In Argentina, the government has threatened to exorbitantly fine economists who question official inflation numbers.

Read the articles and decide what this means for yourself.

Tuesday, August 7, 2012

Book Review: Other People's Money

Louis Brandeis's Other People's Money and How the Bankers Use It is a classic critique of the power Wall Street and financiers can wield.

The populist lawyer and later Supreme Court justice often critiqued and identified concentrated power as harmful to democracy.

In Other People's Money, Brandeis lays out his argument against the banks and Wall Street.

Brandeis claims that a small number of bankers use the people's own money deposits as the basis to control industry and finance. This power is then used to create non-competitive oligarchies that stifle creativity, competition and thus lower prices. In addition, many businesses run by financiers are not run as operational businesses producing goods and services, but more as cash cows to be mined, stripped and then discarded.

As evidence, Brandeis examines the connections of shell and dummy corporations, together with massive amounts of capital stock, that allow a small number of people to control so much wealth and direct activity.

His solution is creating financial institutions and marketplaces controlled by the people - credit unions and cooperatives.

While presenting one perspective to be sure, Other People's Money will be a much needed re-introduction to America's sometimes sordid financial past.

Friday, August 3, 2012

Analysis Reports in Passport GMID and Marketline Advantage

We previously discussed industry reports available in our databases.

But there's also analysis of situations, demographic economic behavior, and reactions to economic developments.

Located in Passport GMID.and Marketline Advantage. You'd select out analysis instead of industry reports.

Here are some examples of typical reports:

Wednesday, July 25, 2012

Industry Surveys

You gotta know your industry.

Is an industry growing, consolidating or emerging? Or is there declining demand for their products? Do people want different things from that industry - say, less white bread and more whole wheat? Are their raw materials and labor costs going up or down? Who has the biggest market share? Are demographics affecting the industry in any way? Is someone way out front with a killer product or service?

Our industry surveys are located in these databases:

Business Source Complete
Marketline Advantage
Market Research
Standard and Poor's (industries tab is at the top of the screen)

Tuesday, July 24, 2012

Book Review: Jane Jacobs's The Economy of Cities

Jane Jacobs was a fascinating thinker, economist, urban studies and public policy theorist. Her work addresses the growth of cities and their economies.

Here are some interesting ideas she poses in her work The Economy of Cities.

Why adding new work to old work is crucial to growing an economy (instead of merely dividing existing work more)

Why loosely structured and inefficient economies are better suited to survive change.
Why cities predated agriculture as we know it.
How cities can replace imported goods with their own industries.
Why some villages grow into cities and some do not.
How the design of urban spacies can either promote order or hinder it.

If you are studying urban studies, public policy or economics you need to read her.

 For some reason, she has two entries in the catalog. One here, the other here

Wednesday, July 18, 2012

Austin-Round Rock-San Marcos Average Wages

Look up what different professions make in the Austin-Round Rock-San Marcos Metro Area here.

Office managers, financial professionals, health care workers, construction, lots of other professions' average local salary here.

Thursday, July 12, 2012

Consumer Prices: We Spent How Much on That?

Find out how much the American consumer spent on different categories of products. Pretty good product details - florists, lotteries, eyeglasses, sewing, taxicabs - to give you an idea of the level of coverage here. 

Once you're there:

1. Go to Section 2
2. Choose Table 2.4.5U

Tuesday, July 10, 2012

Options in Valueline

Valueline is a good database that has commentary and recommendations for buying or selling options. Plus all the numbers you need: strike prices, expiration dates, bid prices and more.

1. Go to Valueline
2. Choose Research Hub
3. You have many options about options to choose from - including the Options Survey with the lock next to it!  It WILL let you in.

Friday, July 6, 2012

Investing Research Guide is Up

The Investing Research Guide is now up! Contains both print and online resources.

Everything you need to know about interpreting financial statements, technical analysis of stock patterns, bonds, getting industry analysis, understanding economic history and more.

I think you will appreciate using some of these deep resources!

Friday, June 29, 2012

Austin and San Antonio Business Journal

Austin Business Journal

Find local Austin business information news in this journal: new businesses, expansion, openings and closings, and interviews with local entrepreneurs.

Plus job openings and business seminars and events are listed too. Oh yeah, and bankruptcies, liens, building permits and commercial real estate transactions.

Austin Business Journal on the web.

We also have it in library in dead trees, all the way back to 2001.

San Antonio Business Journal

The San Antonio Business Journal has great articles about current events in San Antonio. Both small and large businesses are covered. Read about partnerships, expansions and success stories. Plus there's interviews with local business people and job listings.

There's also information about tax liens, bankruptcies and commercial real estate transactions.

See what businesses are starting or succeeding and why that is.

Tuesday, June 19, 2012

Research Tip: Read The Owners' Manuals to Your Theories

It's important to deconstruct the concepts and measurement tools used in your field. By reading Adam Smith, Ludwig von Mises, Keynes, Milton Friedman, Baumol and more you'll understand where journal articles and concepts are really coming from. Never take an idea, concept, measurement for granted! Find out who thought it up and what it measures and equally, what it ignores!

Saves time and illuminates problems better.

Heck, I'll let the avatars explain it. (link to the book referenced in the video here)

Monday, June 18, 2012

Doing Business in Different Countries

Here's a great website: Doing Business from The World Bank

Choose your country, region or topic. Be sure to scroll down and download the PDF document.

The reports break down regulations and laws governing business in that country. They also have some economics statistics (like income) as well as estimations on topics like getting electricity, corruption, ease of doing business, registering property and more. 

Covers major and smaller countries.

In addition, please check out my International Business libguide for more resources organized by topic. We have databases on financial statistics, industry reports, important books, and more.

Monday, June 11, 2012

Milton Friedman and the Famous Helicopter Money Drop

The next time we have a depression, we should print a lot of money to stabilize prices and prevent deflation. Fiscal stimulus - in which the FDR New Deal famously hired people to build dams and schools, etc... -  actually prolonged the depression.

At least that's what University of Chicago professor Milton Friedman theorized.

This is his book-length retort to Keynesian/New Deal fiscal stimulus: Monetary History of the United States. 

All Milton Friedman books here.

Published in 1963, Friedman's economics eventually carried the day in academe. Fed Chairman Ben Bernanke explicitly makes this clear and later quoted Friedman's own words about throwing money out of a helicopter to stimulate growth.

It is important to point out that Friedman wrote after the Great Depression and that his theories were never actually tried during the Depression. In addition, the modern world's electronic money, the expansion of credit, and derivatives may mean that theory and reality are once again, two different animals.  

So understand the difference between fiscal and monetary stimulus.

Friday, June 8, 2012

Researching Banks' Balance Sheets

Here's how to research a bank's, credit union's, or other financial institution's deposits, loans, credit card loans, home loans and more. You'll see several years' worth of data and get to compare it to other factors like equity, book value of loans and more. 

The best database for this is Mergent - at least for large public financial corporations like Bank of America or Capital One. You can see detailed breakdowns of their financial assets.

American Financial Directory is also good. Less detail, and it's in print, but it does have some numbers on loans, liabilities and assets. Particularly good for smaller banks, privately-held banks, and credit unions.

Now, this one is pretty amazing indeed: Federal website where you can check your local bank's deposits, loans, mortgage, etc... figures

Tuesday, June 5, 2012

Research Industry Clusters

Here's an interesting site: Harvard Competitive Data for researching clusters of industry by state or metro area.

For example, you can find out where the automotive industry is clustered, average wages, patents per employee, and employment growth, among other variables. 

Much of the data is from publicly available sources, but it is combined in interesting ways here.

Friday, June 1, 2012

Understand Bonds, Treasuries and Credit Risk

Frank Fabozzi's Bond Markets, Analysis and Strategies is probably the best advanced introduction to bonds and other securities around.  You get both expert introductions to complex topics (like valuing convertible bonds) and very detailed mathematical formulas.

Covers municipals, treasuries, international public and private bonds, mortgage securities and more.

If you're a Bloomberg Terminal User, this book is great because it has Bloomberg screenshoots.

Here's the actual chapters:

Pricing of bonds -- Measuring yield -- Bond price volatility -- Factors affecting bond yields and the term structure of interest rates -- Treasury and federal agency securities -- Corporate debt instruments -- Municipal securities -- International bonds -- Residential mortgage loans -- Agency mortgage pass-through securities -- Agency collateralized mortgage obligations and stripped mortgage-backed securities -- Nonagency residential mortgage-backed securities -- Commercial mortgage loans and commercial mortgage-backed securities -- Asset-backed securities -- Interest-rate models -- Analysis of bonds with embedded options -- Analysis of residential mortgage-backed securities -- Analysis of convertible bonds -- Corporate bond credit analysis -- Credit risk modeling -- Bond portfolio management strategies -- Bond portfolio construction -- Liability-driven strategies -- Bond performance measurement and evaluation -- Interest-rate futures contracts -- Interest-rate options -- Interest-rate swaps, caps, and floors -- Credit default swaps.

Of course, the math formulas do presume a bit of perfect knowledge.

Still, a great book.

Book Cover

Wednesday, May 30, 2012

Book Review: American Nightmare by Richard Lord

Before it was cool, Richard Lord's American Nightmare: Predatory Lending And The Foreclosure of the American Dream looked at the scourge of predatory home mortgages and lending programs aimed at fleecing the declining American lower middle class.

This is a slice of life book that examines the experiences of ordinary people in Lord's hometown of Pittsburgh in the 1990s. Each person needed a little money to live in retirement, start a business or pay medical expenses.

They ended with loans with impossible to pay off balances, opaque contracts that turned into something else, banks that turned a deaf ear, and ultimately lost their houses and went bankrupt.

There are two lessons here:

1) don't assume the financial system is safe or ethical. The country has recently stripped away of decades-worth of regulations designed to protect people. You can and will be taken to the cleaners and it's all legal.  

2) learn when to say no to money and loans. A lot of the people in this book really, really wanted a house or home improvements and let that cloud their judgement.

Book Cover

Thursday, May 24, 2012

Book Review: Debt and Economic Renewal in the Ancient Near East

I've been thinking a lot about the implications of debt so I turned to financial history.

So I found this book Debt and Economic Renewal in the Ancient Near East. It's a collection of well-written essays about debt in (mostly) Mesopotamia. The ideas of credit, debt, and private ownership of land (obviously related to the first two ideas) were just getting started.

If you invent debt, then un-repayable debt will soon follow. Mesopotamia dealt with this problem with the concept of the debt jubilee - the forgiveness of debt by the king, usually the first act of the new king to engender goodwill.

But was it an altruistic gesture? We can never know, but scholars speculate that jubilee was more about keeping men available for army service instead of forever laboring on their debt.

The main heading for our books on debt is located here.  Features research on the history of debt and primary resources.

Tuesday, May 15, 2012

Regulatory Capture

Regulatory Capture is the idea that powerful interests co-opt the regulatory agencies assigned to police them. Instead of an adversarial relationship, a clubby friendship results.

The public gets stuck with uncompetitive practices written into law and reform turned into a byword for legalizing shady practices. Too often, the cycle is kept going by the promise of lucrative positions in private industry for the same government bureaucrats that are supposed to be on the public's team. 

There are two GREAT detailed summaries of this concept in these print resources (both are located in the reference section on the main floor):

Friday, May 11, 2012

Debt and Economic Growth: NBER Working Paper

Came across this fascinating working NBER paper from heavy hitters Carmen Reinhart, Vincent Reinhart and Kenneth Rogoff entitled "Debt Overhangs: Past and Present."

The authors examine if high levels of debt impact economic growth. The answer is yes, making it hard to grow out of debt. You either take 20 years of stagnation to come out of the debt hole or there is a  cataclysmic event (probably related to the failure of the previous status quo) such as war or collapse that resets the system.

The authors use data from several advanced economics, tracking the amount of debt relative to GDP and how long subpar economic growth persisted.

By the way, we have the NBER database of working papers available here. Can't get it for free on the internet.