Good morning, all. I'm back with some interesting reads from the world of money (and politics) to start the week.
How to get to the Fed's 7 percent solution
Federal Reserve Chairman Ben Bernanke has said he expects quantitative easing to be wrapped up by the time the U.S. unemployment rate hits 7 percent sometime in mid-2014. Neither the date nor the rate is carved in stone. But if you want to do some calculations of your own, check out the Atlanta Fed's jobs calculator, as discussed in research director Dave Altig's latest Macroblog. You can plug in your own assumptions about monthly non-farm payrolls, labor-force growth and the participation rate. Don't miss the cool labor-market spider chart as well (link provided in Altig's post).
Forward guidance is all the rage among the central bank set
On Wednesday, Bank of England Governor Mark Carney gets his first chance to bring his signature style of communication to the other side of the pond. Carney, a recent import from the Bank of Canada, is a long-time advocate of forward guidance. Some members of the BOE's monetary policy committee are on record as opposing more hand-holding or talk therapy -- whatever you want to call it. Should Carney win over the doubters, he should hope for more success than Bernanke's repeated assurances that the Fed's benchmark rate will stay at zero for a couple of more years.
What's so special about $85 billion?
That's the amount of bonds the Fed has been buying each month in an initiative known as quantitative easing. Economist Paul Kasriel wonders if that number was picked out of a hat. I haven't heard any reporter question Bernanke on the size of QE; only the likelihood and timing of a reduction. It would be far better to use a credit target (Kasriel favors the sum of credit created by the Fed and depository institutions) than a securities purchase target if the Fed is trying to achieve a certain level of nominal gross domestic product.
Nancy Pelosi was right about Obamacare
House Minority Leader Nancy Pelosi took a lot of flak for saying Congress would have to pass the Accountable Care Act to find out what was in it. How right she was. Harvard economics professor Greg Mankiw, author of a best-selling economics text, shares an e-mail he received from a part-time faculty member teaching economics at various colleges and universities in Indiana. It seems the health-care law is starting to claim victims in academia, the impact of which will be borne by the students.
The weather isn't great, but August is a good time to visit the nation's capital
Come September, the you-know-what hits the fan. A recalcitrant Congress will be asked to fund the government for fiscal 2014, which begins Oct. 1. The debt ceiling will have to be raised before the end of the year as well. And if you think congressional shenanigans leave room for any kind of "grand bargain," you may want to lower your expectations.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)