South By North Strategies, Ltd.

May Job Openings

Around The Dial – July 14

Economic policy reports, blog postings, and media stories of interest:

• Economix discusses the pros and cons of federal aid to states.
• Calculated Risk analyzes the new national trade data.
• Macroblog wonders how close we are  to deflation.
• The Washington Post reports on long-term unemployment.
• Robert Reich describes the roots of economic fragility.

Strategic Defaulters As Welfare Queens

Naked Capitalism asks why the issue of “strategic” housing defaults has been blown out proportion.

So why all this hysteria about strategic defaulters? If I were conspiracy-minded, I’d say this is a very clever push to stoke jealousy among what is left of the middle class to keep the focus off the way the banksters wrecked the economy, got lots of cash and prizes, and have every reason to repeat that profitable exercise. So focus public ire instead about the commies in our midst, um, the new welfare queens, aka various forms of alleged housing deadbeats. The immediate reason is that the more people are made to resent the breaks they fantasize their neighbors are getting, the more they will oppose deep principal mods, which historically is what banks always did when they had a borrower get in trouble who still had a remotely viable income.
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Why would the banks oppose principal mods? It will force an end to extend and pretend, and when THAT happens, a lot of financial firms will be shown to be undercapitalized and in need of rescue or resolution (as we and others have pointed out repeatedly, Mike Konczal’s conservative analysis of second mortgage portfolios at the four biggest US banks, Bank of America, JP Morgan, Citigroup, and Wells Fargo, shows that they probably need another $150 billion in equity among them, and others contend the writedowns on seconds should be much more aggressive than Konczal assumed).

In The News: North Carolina’s Economy

Two recent articles in the Triangle Business Journal featured the work and perspectives of South by North Strategies, Ltd.

The first piece featured South by North Strategies’ midyear review of North Carolina’s economy.

“The idea of a recovery itself was way overblown,” says John Quinterno, the report’s author. “We hit a point last summer where the free-fall stopped, but that’s not the same as a rebound.” Looking back over the downturn, Quinterno says the state lost 254,000 jobs, or 6.1 percent of the payroll job base, between December 2007 and May 2010. Between April 2009 and April 2010, the Triangle lost 0.8 percent of its job base. The Triangle base stood at 629,300 as of April 2010.

The second article reported on potential areas of growth in the Research Triangle’s economy.

“Manufacturing activity has stabilized, but we really haven’t seen that much growth,” says John Quinterno, an economist with South By North Strategies in Chapel Hill.
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Quinterno points out that North Carolina needs to add some 5,500 positions per month to keep pace with growth in its work force. “If one considers the jobs that should have been created during the recession but were not, the actual gap facing the state is 422,000 positions,” Quinterno wrote on his blog.

Around The Dial – July 13

Economic policy reports, blog postings, and media stories of interest:

• Ross Douthat opines about “the class war we need.”
• Elizabeth Warren discusses the unfinished business of financial reform.
• Naked Capitalism says “don’t let Goldman be Goldman.”
• Economix compares unemployment rates by country.