Understanding Political Futures Markets
Posted on August 22, 2008 - Filed Under Markets | Leave a Comment
At typical financial markets, traders make a market in financial instruments, such as corporate equity, government bonds and currencies. But there are markets in many other items ranging from commdities (such as wheat and frozen pork bellies) to more conceptual items such as hurricanes or the number of jobs reported on the monthly Employment report. [...]
Read More..>>Understanding Personal Consumption Expenditures (PCE)
Posted on August 20, 2008 - Filed Under Economy | Leave a Comment
The U.S. is a consumption driven economy; personal consumption expenditures (PCE), that is consumption by households and nonprofits represent approximately 70% of GDP; in comparison, Japanese private consumption is a bit less than 60% of GDP (Japanese GDP data are available here) and German final consumer expenditure is around 57% (see here for German GDP [...]
Read More..>>Understanding Data Announcements
Posted on August 14, 2008 - Filed Under Economy | Leave a Comment
If you look at a data calendar (see here for a calendar and here for my essay) you can find out when certain data are released (for example, the Employment Report is typically released on the first Friday of the month at 8:30 am Eastern Time). The Employment Report essay (here) explains how the Bureau [...]
Read More..>>Understanding the U.S. GDP
Posted on August 12, 2008 - Filed Under Economy | Leave a Comment
This essay will provide an overview of the Gross Domestic Product (GDP) of the United States, Subsequent essays will provide more detail on the components of U.S. GDP.
The GDP is an attempt by the Bureau of Economic Analysis (BEA) to measure the value of final goods and services produced in the US in a [...]
Understanding Stock Market Indexes (and Index Trading)
Posted on August 6, 2008 - Filed Under Markets | Leave a Comment
Thousands of individual stocks trade every day on various stock markets around the world. There are a number of stock indexes that track the movements of stock markets.
The simplest stock indexes (for example, the Dow Jones Industrial Average (DJIA) in the US) are price-weighted indexes. To calculate the value of the index you add up [...]
Understanding the Twin Deficits
Posted on August 4, 2008 - Filed Under Economy | Leave a Comment
“Twin deficits” (occasionally also called the double deficits) is a shorthand summary for two related economic problems, the government budget deficit and the current account (or international trade) deficit. The government budget deficit is the difference between government revenue (mostly taxes) and government spending; the current account deficit is the difference between exports and [...]
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