While the pinstripe crowd fixates on troubled assets, a stalled stimulus and mortgage remedies, it turns out that a more sure-fire financial fix is within our grasp -- and has been for years. New research says a healthy dose of estrogen may be the key not only to our fiscal recovery, but also to economic strength worldwide.

The sexy new discussion in policy circles around the world, thanks to the recession, is whether a significant shift of power from men to women is underway -- or whether it should be. Accounting giant Ernst & Young pulled out charts and graphs at a recent power lunch in Washington with female lawmakers to argue a provocative bottom line: Companies with more women in senior management roles make more money. The latest issue of Foreign Policy magazine sweepingly predicts the "death of macho." Economists at Davos this year speculated that the presence of more women on Wall Street might have averted the downturn. Adding to this debate is the fact that the laid-off victims of this recession are overwhelmingly men.

All those right-brain skills disparaged as soft in the roaring '90s are suddenly 21st-century-hot, while cocky is experiencing a slow fizzle.

Most of Wall Street, and America, is still waiting for an economic recovery. Then there is Goldman Sachs.

Up and down Wall Street, analysts and traders are buzzing that Goldman, which only recently paid back its government bailout money, will report blowout profits from trading on Tuesday.

Analysts predict the bank earned a profit of more than $2 billion in the March-June period, because of its trading prowess across world markets. If they are right, the bank's rivals will once again be left to wonder exactly how Goldman, long the envy of Wall Street, could have rebounded so drastically only months after the nation's financial industry was shaken to its foundations.

The obsessive speculation has already begun, along with banter about how Goldman's rapid return to minting money will be perceived by lawmakers and taxpayers who aided Goldman with a multibillion-dollar cushion last fall.

Job losses across the European Union continue to outnumber job gains, with the highest number of announced lay-offs recorded in June in France and Britain, a fresh EU report showed.

The situation in the labour market in the 27-member bloc keeps deteriorating, according to a monthly monitor conducted by the European Commission and published on Friday (10 July).

Half of the total job losses across Europe since last September were recorded in manufacturing

The report points out that between September 2008 and June of this year, some 640,000 jobs disappeared while 219,000 posts were created. Last month alone there were 87 cases of restructuring-related job losses, which led to 50,000 workers being put out of work.

France with 19,625 announced lay-offs and Britain with 11,528 jobs to go, topped the June list of EU countries with the highest number of restructuring cases in the labour market, followed by the Czech Republic (3,070), Poland (2,310), Germany (1,960) and (1,950).

Germany has been suffering its worst recession since World War II. But the dark clouds could soon be lifting as the country looks like avoiding another quarter of negative growth.

Is the German economy on the road to recovery? The recession is over in Germany. That at least is the conclusion of the Economy Ministry in Berlin. In their internal report on economic growth in the second quarter, seen by SPIEGEL, the ministry's experts have come to the conclusion that growth was exactly 0 percent for the three-month period in question.

This modest but unexpected figure is welcome news. The German economy has been shrinking since the second quarter of 2008, marking the worst recession in the country since World War II. The experts base their calculations on the data available for April and May 2009 and coupled them with estimates for June. The official growth figures will only be announced by the Federal Statistics Office in August.

British Airways pilots have overwhelmingly accepted 2.6 per cent pay cuts as part of a package of measures to save the airline £26 million, it was announced today.

The British Airline Pilots Association (Balpa) said its members voted by more than nine to one in favour of the pay cut, as well as a reduction of 20 per cent in some allowances.

Balpa said the turnout in the ballot was 83 per cent, with the result announced ahead of BA's annual meeting tomorrow.

This graph...compares the BLS reported monthly unemployment rate (in red) with the Obama economic forecast from January 10th: The Job Impact of the American Recovery and Reinvestment Plan

Geithner is correct about the stimulus kicking in during the 2nd half of 2009, and Delong agrees. But Delong is pointing out that the economy is in much worse shape than originally expected, and he argues if the Obama Administration knew in January what we know today, the package would have been much larger. Maybe. But thinking back - there was a huge political problem with the word "trillion" - so a much larger package would have been very difficult (although the composition could have been different).


As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

California's property tax burden has gradually shifted to homeowners because commercial and industrial property doesn't change hands as often as homes and the sales can be easily disguised.

A sale is a pretty straightforward transaction for a home. That's not the case for commercial or industrial property, where a sale can be disguised in an almost infinite number of ways.

"The whole system is completely unenforceable," says Lenny Goldberg, a Sacramento lobbyist who, as director of the California Tax Reform Assn., has been pressing for years to institute a "split roll" -- that is, to tax commercial and industrial property differently from residential.  The idea is to reverse what has been a shift in California's property tax burden onto homeowners from business owners under Proposition 13.

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Goldberg calculates that Disneyland, which hasn't had a reportable change of ownership since, well, forever, is currently taxed at an average of about a nickel per square foot. For comparison, a median California home bought last year out of foreclosure, measuring 1,600 square feet and selling for about $330,000 (these are averages from the California Assn. of Realtors), would incur property tax of about $3,300 per year, or $2.06 per square foot.

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An effort by public employee unions to get a split-roll initiative on the ballot in 2006 didn't even make it past the signature-gathering stage. But those were different times. Maybe, just maybe, the voters of this financially spavined state aren't still so reluctant to close a big loophole.

Ya think?


As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

Almost every holder of a PhD in economics who works for a formal economic body like the Treasury, the RBA or the OECD has been deeply schooled in "neoclassical" economics, often without knowing that there is any other way of thinking about how the economy functions. They think they are simply "economists", and anyone who objects to their analysis or models must be uneducated about economic theory.

In contrast, virtually all University Departments of Economics contain at least one economist who rejects neoclassical economics, and instead subscribes to a rival school-like Austrian, Marxian, Post Keynesian, or Evolutionary Economics.  These contrarian academic economists often disagree amongst themselves, sometimes vehemently-you couldn't get two more opposed points of view than Austrian and Marxian economics, for example-but they tend to be united in regarding neoclassical economic theory as pompous drivel.

There are probably many reasons for this dichotomy between University economics departments which almost always have a handful of dissidents, and official economics bodies like the OECD and Treasury that are almost exclusively staffed by neoclassical economists. But I suspect the main reason is tenure: universities offer it, while formal economic advisory bodies don't.

As a result, academic economists who "turn feral" and reject neoclassical economics can still teach and publish and hang on to their jobs, even if their neoclassical Department Heads wish they would go away. OECD and Treasury economists who do the same thing probably find their employment coming to an end-because they don't have tenure.

So anything published by a formal economic body like the OECD will be the product of a neoclassical economic model-and therefore, in my opinion and that of a sizable minority of academic economists, drivel (there was one exception-the Bank of International Settlements while Bill White, a supporter of Hyman Minsky's "Financial Instability Hypothesis", was its its Economic Adviser).

Our analysis is as follows. First, debt and leverage cause fragility; they leave less room for errors as the economic system loses its ability to withstand extreme variations in the prices of securities and goods. Equity, by contrast, is robust: the collapse of the technology bubble in 2000 did not have significant consequences because internet companies, while able to raise large amounts of equity, had no access to credit markets.

Second, the complexity created by globalisation and the internet causes economic and business values (such as company revenues, commodity prices or unemployment) to experience more extreme variations than ever before. Add to that the proliferation of systems that run more smoothly than before, but experience rare, but violent blow-ups.

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Third, debt has a nasty property: it is highly treacherous. A loan hides volatility as it does not vary outside of default, while an equity investment has volatility but its risks are visible. Yet both have similar risks. Thus debt is the province of both the overconfident borrower who underestimates large deviations, and of the investor who wants to be deluded by hiding risks. Then there are products such as complex derivatives, which in the name of "modern finance" make the system even more fragile.