Economy

While the impact of falling stock prices on older workers' retirement decisions has received a lot of attention this downturn, the more important driver of retirement rates appears to be unemployment, according to new research by Courtney Coile and Phillip Levine. (Sorry, pay-version only.) Using 30 years of data on changes in home and stock prices and labor market conditions, they conclude: When the unemployment rate rises, more workers between ages 62 and 69 retire, particularly those with less education.

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This probably isn't the most original observation, but this graf from yesterday's Times piece on the state of play in health care reform really clarified some tactical imperatives for me:  While Congressional leaders say they want to curb the explosive growth of health costs, it is unclear whether the final bill will make a serious effort to do so.

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I'm only an imtermittent visitor to the financial blog Zero Hedge. But between my occasional perusals, and Joe Hagan's interesting profile of the blog (and its proprietor Dan Ivandjiiski) in last week's New York magazine, I can't help thinking it has a lot in common with the political blog Daily Kos. Both have an aggressively anti-establishment, semi-conspiratorial worldview and are constantly fulminating against the powers that be (big Wall Street firms in the first instance, sellout Washington Democrats and their corporate overseers in the second).

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Ryan Lizza has some fascinating biographical details in his must-read profile of Summers in the forthcoming New Yorker. First, he solves a mystery I'd chewed over but never figured out when profiling Summers myself:  M.I.T. hired him as a professor in 1979, then Harvard offered him tenure in 1982, when he was just twenty-seven. He was one of the youngest people to receive tenure in the university’s history.

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At the height of the financial panic last fall Goldman Sachs became a bank holding company, which enabled it to borrow directly from the Federal Reserve. It also became subject to supervision by the Federal Reserve Board (with the NY Fed on point)--hence the brouhaha over Steven Friedman’s shareholdings. Goldman is also currently engaged in private equity investments in nonfinancial firms around the world, as seen for example in its recent deal with Geely Automotive Holdings in China (People’s Daily; CNBC). U.S.

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Worth Reading

Labor Dept. model might have undercounted job cuts by 824,000. Education sector job losses are biggest on record. Further evidence that monetary policy was tight late last year. More bank losses could be on the way. Why we can't create a liquid housing derivatives market.

Despite the ugly headline numbers, there were at least a couple of rays of hope in other details of this morning's jobs report.

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So I was anticipating this post from the moment Felix Salmon sat down in front of me during Alan Greenspan's talk at today's Aspen Institute/Atlantic conference in Washington. And he doesn't disappoint, particularly on the subject of derivatives. Greenspan said that, yes, there were problems with credit default swaps (basically, insurance on bonds and bundles of mortgage-backed securities--the kind of thing that brought down AIG Financial Products).

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There's a bit of a riddle in today's unemployment release from the Labor Department. The release notes that government payrolls were down 53,000 in September, about one-fifth of the total jobs lost last month (which helped drive the unemployment rate up a tenth of a point to 9.8 percent). Now, as it happens, the cracker jack economists at Goldman Sachs actually anticipated this development yesterday, en route to almost perfectly nailing the overall job-loss figure.

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Worth Reading

Greenspan says taxes must rise. Bernanke backs council of regulators proposal. Gwyneth Paltrow offers some investment advice. Fiscal multipliers in U.S. have dropped sharply since 1980. Leonhardt: Let's stop arguing about the opt-out revolution.

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