sunday beach picnic

The sea does not reward those who are too anxious, 

too greedy, or too impatient. 

One should lie empty, open, choiceless as a beach 

- waiting for a gift from the sea.

Anne Morrow Lindbergh

ciao! Fabiana

A Mini Sim & A Simster For Sale

Not only are these two handsome devils up for sale, they're a total one off bargain too. Both the classic mini Sim family, EPS, shaped by Hank Warner glassed by Pendo. The Sim is 5'3" and $750, the Simster is 5'7" and $800. Email info @ foamandfunction.com for details, and if those aren't the dims you want we can always set up a custom....

A few thoughts on GDP

Today's revision to the first quarter GDP report didn't contain any new news. The stock market is still (uncomfortably for many who worry that falls typically follow rises) near its all-time highs, both nominally and in real terms, and Treasury yields are still close to their all-time lows. It's a mixed bag, full of worry and caution.

The relatively small decline in first quarter GDP is hardly more than a blip on the long-term chart (above).

 Over the past two years, GDP has grown at an annualized pace of about 2.4%, which is the same rate of growth that has prevailed for the duration of the current expansion. Nothing has changed. The real yield on 5-yr TIPS is priced to continued weak economic growth.

Weak quarters happen every now and then. They don't necessarily precede recessions, nor do they make recessions more likely. It's quite likely that growth will bounce back in the current quarter—such are the vagaries of GDP accounting.

After-tax corporate profits continue to grow, and they remain very strong relative to GDP. Yet PE ratios are only moderately above their long-term average. This suggests the market is still very skeptical that profits can continue to rise.

Both the National Income and Products Accounts and the reported earnings of the S&P 500 appear to be growing at about the same pace. By both measures, profits are at an all-time high.

Using NIPA after-tax corporate profits as the "E" and the S&P 500 index as the "P", PE ratios are moderately above their long-term average. Nothing unusual at all about this. The market was quite exuberant in 2000 by this measure, but is still relatively cautious today—considering how strong profits are relative to GDP.

Blogging may be light for the next week or so, as we are embarking on a trip to Italy in a few hours.

Ruddy Turnstone

This beautiful Ruddy Turnstone (Arenaria interpres) was one of several feeding at Stratford Point this morning along with a small group of Semipalmated Sandpipers. Migrant shorebirds are still moving north through the state, and it is hard to believe that in two months we will have many flying south!

 
Please keep sharing any Connecticut eBird checklists with shorebirds, terns or long-legged waders with us at ctwaterbirds@gmail.com, thanks!

Letting the waves do the hard work

I was too busy to go out metal detecting over the memorial day weekend, so I got a jump start on the upcoming weekend. 
Two hours high tide hunting late this afternoon with my CTX 3030, on a busy tourist beach without another person metal detecting in sight. 
That is often the story on south Florida beaches when it is high tide, but my take is you have just as much chance of finding jewelry at high tide than you have two hours before low tide. 
I figured after a busy three day weekend and a few days of rough surf, I would let the waves do the hard part of dumping lost jewelry back on the beach for me to find. 
From past experiences with busy weekends and rough surf, I have found the best times to search on the beach are after a few days have passed because that is when the big "Sandy conveyor belt" starts to kick in. 
This often happens after a beach has suffered major beach erosion, the beach may be quiet until the next high tide moves jewelry and coins ashore. 
My first good find this afternoon was an 18K white gold ladies ring with 14 diamonds and a nice emerald. 

A piece of 18K yellow gold followed not long after, both pieces of gold jewelry were trapped in the wet sand between a rocky outcrop on the beach and the water. 
Rocky areas on beaches act as natural catch areas for jewelry and coins, this area happened to be away from the main heavily hunted area that is more popular with a younger crowd. 
A few years ago at high tide I found a beautiful 18K gold chain with a diamond cross,  high end stuff compared to the 10K & 14K jewelry that you are more likely to recover along the main detecting drag.
If you are a beach hunter reading this blog, come over to the dark side and go detecting at high tide. 
You may not think your beaches are so heavily hunted when you hardly see another person metal detecting at high tide. 
You also stand a good chance of returning home with gold,  if you search away from the main detected areas of the beach. 

a visit to Peinture Studios

This sweet little vintage table was a hand-me-down from my in-laws.  I had spray painted it a few years ago, but now I felt it needed some love.  With the help of owner, designer Deborah Waltz of Peinture Studios, I was able to transform this little table into a lovely heirloom piece that feels right at home in my living room.  Deborah suggested a combination of chalk paint, 2 kinds of soft wax, gorgeous gilding wax and new Annie Sloan stencils, and gave me great pointers to on how to complete my project.         

I love a little paint project, but I especially love the instant gratification you get by updating a piece of furniture with paint.  No paint is easier to use than Annie Sloan Chalk Paint.  It requires no sanding so you can skip all that prep work and just get right into painting.  

We chose to start with Old White as the base.  Deborah has a fabulous display wall in her studio that features every color of Annie Sloan Chalk Paint, each on a unique vintage chair.  The chairs are hung up on the wall by rope in a really creative display.  It’s a great visual to actually see what the color looks like on a piece of furniture.       

We stepped into the workshop of Peinture Studios to assess my table and what fun techniques I could use on it to enhance pretty shape of the table.  Deborah teaches beginner and advanced classes here in her workshop several times a month.    

To start, Deborah suggested I place the piece upside down.  That way all the surfaces would be covered, and I could finish off painting it right-side up to get a nice clean look on the top of my table, which is the most visible.  Here‘s the table back at home, with its first coat of Old White.  (It took two coats to evenly paint the piece.  The paint dries quickly, so I was able to work fast.)   

Next, I applied the Annie Sloan clear soft wax on the entire table.  I then went in and accentuated all the grooves of the table with the dark wax.  All I needed was just a little in the cracks and then it was rubbed off immediately with a soft cloth.  A little of the colored wax goes a long way.  If too much is applied, it can be removed with clear wax.  This tip from Deborah was really important, because it’s really fun to play with the different depths of color, and too much can be easily removed with this method.  Using painters tape, I positioned the first stencil in place, the nymph.  With a really soft touch of my finger and a small stencil brush, I applied the beautiful brass colored gilding wax within the stencil, being careful not to glop too much on near the edges.  I did the same with the branchesstencil.  (I immediately washed my hands after applying the wax.)

The branches stencil was pretty intricate, so I found that using a Q-tip dipped in clear wax easily removed any excess gilding wax that was not within the design of the stencil.  

The Annie Sloan stencils are an exciting and new addition to the Annie Sloan product line.  Peinture Studios has an exclusive collection of them at the moment.

I love how the curvatures of my table are accented with these paint techniques.  I even applied the gilding wax to the little metal claw feet of the table for an extra, but subtle little added shine.

This is how the table turned out, and I couldn’t be happier!  It’s found a great spot next to a comfy cane-backed chair in my living room, and it's now the perfect place to enjoy a little tea or coffee. 

Visit Peinture Studios at SoCo in Costa Mesa for more inspiration, supplies and great creative workshops.  The workshops are so fun!  You get to bring in a piece of furniture and you leave with a custom painted creation made by you!  I'd love to hear about your projects. Share your Annie Sloan projects with me on my facebook page and tag them #ciaopeinture.  

ciao! Fabiana

sharing with  french country cottage

AAfCW 2015 Volunteer Update #8

This is the eighth weekly update by the Audubon Alliance for Coastal Waterbirds (AAfCW) for the 2015 season. Today's update includes reports of Piping Plover, American Oystercatcher, Least Tern and Common Tern from May 18 through 4:00 p.m. on May 26 with sightings of birds by volunteers and staff spanning that period.

Informational updates:

Thank you to all of the monitors who spent extra time out on the beach this holiday weekend! We educated and spoke to hundreds of beachgoers in the warm beach weather. We discovered the first Piping Plover hatchlings of 2015 at Milford Point and Sandy/Morse Points, as well as American Oystercatcher hatchlings at Milford Point. This will pick up very rapidly now with many young emerging in the next couple of weeks as our terns begin to nest as well. Please monitor as much as you can in this critical time! There is no more important point of the year as this is when the young birds are the most vulnerable.

For those of you who are wondering about access to beaches or parking, please use your monitor ID badges and explain that you are there to conduct volunteering monitoring to be granted free entry to any of our sites. If you ever encounter a problem with this please email us immediately and we will assist you and contact the municipality and/or park. Thank you again for all of your help.

Survey and monitoring updates:

Piping Plover
9 adults at Sandy/Morse Points on 5/18
10 adults, 4 nests at Sandy/Morse Points on 5/19
1 adult at Long Beach on 5/20
4 adults, 3 nests at Sandy/Morse Points on 5/22
6 pairs, 4 adults, 6 nests at Milford Point on 5/22
1 pair, 1 nest at East Broadway Milford on 5/22
6 pairs, 5 nests at Sandy/Morse Points on 5/22
6 pairs, 6 nests at Milford Point on 5/22
2 pairs, 1 nest at Short Beach on 5/22
3 pairs, 3 nests at Long Beach on 5/22
6 adults, 2 nests at Sandy/Morse Points on 5/22
2 pairs, 1 nest at Short Beach on 5/23
4 pairs, 1 adult, 3 nests at Long Beach on 5/23
6 pairs, 6 nests at Milford Point on 5/23
3 pairs, 4 adults, 1 hatchling, 4 nests at Sandy/Morse Points on 5/23
5 adults, 4 nests at Milford Point on 5/23
1 pair, 7 adults at Sandy/Morse Points on 5/23
1 adult at Silver Sands State Park on 5/23
1 adult, 1 nest at Long Beach on 5/23
1 pair, 9 adults, 2 nests, 2 hatchlings at Sandy/Morse Points on 5/25
2 adults at Long Beach on 5/25
1 pair at Short Beach on 5/25
5 adults, 1 nest at Sandy/Morse Points on 5/26
4 adults, 2 nests at Long Beach on 5/26

American Oystercatcher
4 adults at Fayerweather Island on 5/18
1 pair at Sandy/Morse Points on 5/18
2 adults at Stratford Point on 5/19
4 adults at Sandy/Morse Points on 5/19
3 pairs, 1 nest at Sandy/Morse Points on 5/20
3 adults at Long Beach on 5/20
1 pair, 3 hatchlings at Tuxis Island on 5/21
1 adult at Stratford Point on 5/21
2 pairs, 1 nest at Sandy/Morse Points on 5/22
3 pairs, 3 nests at Milford Point on 5/22
3 pairs, 2 nests at Sandy/Morse Points on 5/22
2 pairs at at Sandy/Morse Points on 5/22
2 pairs at Long Beach on 5/23
3 pairs at Milford Point on 5/23
2 pairs, 2 hatchlings at Milford Point on 5/23
3 pairs, 1 nest at Sandy/Morse Points on 5/23
2 pairs, 1 adult at Sandy/Morse Points on 5/23
2 pairs at Milford Point on 5/23
5 adults at Sandy/Morse Points on 5/25
1 pair at Stratford Point on 5/26
2 pairs, 2 nests at Sandy/Morse Points on 5/26
1 pair at Long Beach on 5/26

Least Tern
1 pair at Sandy/Morse Points on 5/18
9 adults at Stratford Point on 5/19
30 adults at Sandy/Morse Points on 5/19
6 adults at Stratford Point on 5/20
3 adults at Long Beach on 5/20
9 adults at Stratford Point on 5/21
13 adults at Griswold Point on 5/21
1 pair, 6 adults at Sandy/Morse Points on 5/22
8 adults at Stratford Point on 5/22
20 adults at Milford Point on 5/22
4 adults at East Broadway Milford on 5/22
8 adults at Sandy/Morse Points on 5/22
2 pairs, 4 adults at Silver Sands State Park on 5/22
2 pairs at Short Beach on 5/23
4 pairs, 17 adults at Milford Point on 5/23
1 pair, 30 adults, 6 nests at Milford Point on 5/23
3 adults at Stratford Point on 5/24
4 adults at Stratford Point on 5/25
2 adults at Sandy/Morse Points on 5/25
4 adults at Short Beach on 5/25
1 pair, 11 adults, 1 nest at Sandy/Morse Points on 5/26
2 pairs, 1 adult at Long Beach on 5/26
3 adults at Stratford Point on 5/26

Common Tern
1 adult at Sandy/Morse Points on 5/18
15 adults at Stratford Point on 5/19
3 adults at Sandy/Morse Points on 5/19
6 adults at Stratford Point on 5/20
26 adults at Stratford Point on 5/21
18 adults at Stratford Point on 5/22
1 pair, 2 adults at Silver Sands State Park on 5/22
5 adults at Stratford Point on 5/24
3 adults at Stratford Point on 5/25
1 pair at Long Beach on 5/26
5 adults at Stratford Point on 5/26

This concludes update #8 through 5/26/15 as of 5:00 p.m.

Housing still a bright spot in an otherwise dull economy

According to the BEA's first estimate, the economy grew at a miserable 0.2% annualized rate in the first quarter of this year. The current consensus of opinion holds that this will be revised down to -0.9%. However, we've seen this movie before (e.g., last year's first quarter growth was miserable too), and what happens is that growth bounces back in the second quarter. The GDP numbers are notoriously volatile, much more so than the actual economy, which has considerable "momentum."

Most of the data I've seen over the past few months suggests that the economy continues to grow at a relatively slow pace. Most importantly, there are none of the classical warning signs of deterioration. Swap spreads continue to be very low and relatively stable. Credit spreads are relatively low, and have come down somewhat from their January highs—most of the damage in the credit sector has occurred in the energy and oil-related space, and even there spreads have tightened in recent months. Monetary policy continues to be accommodative, and the nominal and real yield curves are still positively sloped. Real borrowing costs are very low or negative for most borrowers. Commodity prices are down on the margin, but are still much higher (about 40% higher) than they were a decade ago. Fiscal policy could be much more pro-growth, but it's quite unlikely to take a turn for the worst; in fact, it's not unreasonable to think that tax and regulatory burdens are more likely to ease in the future than increase. 

One notable exception, however, is the recent trend in cities like Los Angeles and San Francisco to jack up minimum wages. This is like slapping small businesses with a big new tax, as Mark Perry points out, and that is very likely to hurt growth in the affected local economies. The economic ignorance and willingness to pander of politicians apparently knows no bounds. As a reminder, I noted a few months ago that only about 1% of those who work actually earn minimum wage or less. The ones hurt the most from higher minimum wages will be the young and the poor who find that it's much harder to find that first job. The vast majority of workers—and the lion's share of the economy—will not be much affected.

Today's economic releases show that the housing market continues to recover at a fairly impressive pace. According to Case-Shiller, U.S. home prices are up over 30% since early 2012, and are only 13% below their all-time highs of 2005. In real terms, prices are still about 25% below their 2006 highs, so we're likely years away from another housing "bubble." Meanwhile, April New Home Sales were up a very strong 26% from year-ago levels.

Charts and commentary follow:

The two charts above show the nominal and real level of housing prices as measured by Case-Shiller. Both show that prices have been moving steadily higher for more than three years.

As the chart above suggests, the ongoing rise in home prices (which are up 4.7% in the past year), is likely to contribute positively to the CPI over the next year or so. Higher home prices mean higher future rents, and rents make up about 25% of the CPI.

April New Home Sales were stronger than expected (517K vs. 508K), and were 26% above year-ago levels. There is still plenty of upside potential here.

April Capital Goods Orders were also stronger than expected (+1.0% vs. +0.3%), but they remain quite sluggish. I prefer to look at a 3-mo. moving average of capex, and by that measure orders were on the weak side and haven't increased at all since early last year. In real terms, capex hasn't increased at all for the past two decades! This is the least impressive part of the economy, since it reflects a dearth of business investment, and that limits the economy's future potential growth. As a consequence, while it's quite likely that GDP growth will be much stronger in the second quarter than it was in the first, that won't change the underlying fundamentals, which continue to point to growth of roughly 2-3%, with a large (about 10%) and growing "output gap" that I estimate to be about $2 trillion. 

Is There Free College Tuition for All in the Future?

As I am set to embark on a 3-day, 6-college tour of some of the more selective private colleges in New England, I came across this article from USA Today. Recently, Senator Bernie Sanders of Vermont officially introduced a new bill, titled the "College for All Act", which would eliminate undergraduate tuition at all 4-year public colleges and universities. Also, for all of those people who have graduated from college and are currently swimming in debt, the bill would also decrease interest rates on student loans, from 4.32 to 2.32%.

This article describes how the bill would work, and the benefits for everyone. Please check it out, and let's all hope that this bill is a reality one day, or at least that the price of college gets under control. Enjoy the article, and as always, happy searching!

Joseph D. Korfmacher, MA

Using low discrimination settings.

This time last week I was searching along the banks of the Mississippi river, you just cant keep me away from the water no matter where I go. 
The axe head in the photo is from the early 1900s, and as you can probably tell by the iron find I was not using any discrimination. 

I always prefer to use little to no discrimination when searching around inland rivers and lakes, even though iron objects lost around freshwater do not corrode as fast as iron objects lost around saltwater. 
At Florida saltwater beaches I prefer to use a little discrimination to help me identify "Iffy" targets on very trashy beach sites. 
For example, the Discrimination setting of three on the Minelab Excalibur is low enough to help identify corroding bottle caps but not too high that you miss 10K gold rings. 
On the new Minelab Go-Find 40 and 60,  removing the iron icon allows you to avoid digging corroding bottle caps, but not miss 10K gold rings. 
The amount of discrimination you choose to use is up to you, but on every VLF metal detector I have used the 10K gold drop out level is the maximum level I will set the discrimination to. 
I always advise people to choose a metal detector and a search mode ( all metal or discrimination) that best suits the beaches they metal detect at. 
Sometimes, there are certain beach or water hunting situations where you can use both search modes. For a beach or water hunter who spends the majority of their time metal detecting at touristy beaches, its a no brainer to use the 10K gold ring drop out discrimination level. 
Set your metal detector discrimination control to slightly under that 10K gold ring, if you still worry about missing a good target. 
Using a slightly elevated discrimination control setting, will also allow you to find hot spots on the beach or pick up a coin line faster.  
A slightly elevated discrimination setting works for me and it could work for you, it all depends on the beaches you metal detect at. 
On heavily hunted beaches, every iffy or bad target you can positively ID through experience using your metal detector and not dig, puts you one step closer to finding those good targets you want to dig. 

apple green and cobalt

Bright and cheery, elegant and playful!  The color combination of apple green and cobalt blue is one of my favorite looks for this season.  Mix and match fabrics, pillows, tableware and plants in your own unique style, and it’s sure to be a hit!  Here are a couple of great examples put together by Roger’s Gardens here in Newport Beach.    

ciao! Fabiana

We Have Reached Peak Hipster......

Excuse this digression into humour, but after this week and dealing with the state of insanity that is the 5 freeway and realising that driving to San Diego to collect surfboards now takes twice as long as it did a couple of years ago, I need it. This is all courtesy of the truly mighty Sideburn magazine blog. Aside from producing one of the most consistently brilliant magazines out there, the Sideburn dream team have one of the most constantly brilliant blogs and some of the most consistently brilliant readers, including the gent who sent this shot of a dapper copper at a UK demo. Better yet, another Sideburn aficionado (who remains anonymous) has created an ongoing series of 'P.C. Hipsta' cartoons that are entertaining me greatly. Thank you gentlemen, thank you. Now move along then......

weekend thoughts...

"I'm an introvert... I love being by myself, love being outdoors, love taking a long walk with my dogs and looking at the trees, flowers, the sky."

--Audrey Hepburn

ditto! Fabiana

Three day weekend beach and water hunting tips

Memorial day weekend in Florida usually means packed beaches and a lot of people having the misfortune of losing jewelry at the beach.
No doubt, tomorrow many beach and water hunters will be grabbing their metal detectors with the hope of finding some of that lost jewelry. 
I intend to do get out there myself and see if I can recover some of that lost booty, but I will not racing out the door first thing in the morning. 
That is a perfect lead into my first three day weekend metal detecting tip,  wait for the three day weekend to get started before you go detecting. 
You have more chance of finding something good if you have the patience to wait until Sunday or Monday to hit the beach. 
Second tip, leave your pulse induction metal detector at home and use a little discrimination. 
You are looking for fresh dropped jewelry, not deep targets so discrimination is more important than depth. 
Third tip, leave the heavily hunted places alone, you know where the competition is probably going to be because you see them there every week. 
The fewer people using metal detectors in an area, the more your chances of recovering jewelry increase. 
This was my haul from one water hunt and one dry sand hunt three years ago on a busy three day memorial day weekend in south Florida using my CTX3030. 

I had company at the first tourist beach I visited, so I ignored the obvious mid and high tone coin signals and just dug the low tones. 
Three pieces of gold roundness ended up in my finds pouch before I left for another beach. 
The sweet gold rope chain and locket came off the second beach, just above the high tide line at one of favorite out of the way beach sites. 
I usually hit the dry and wet sand on the lower beach, before getting in the water. 
Now hands up how many people are only going to hit one of those three areas at the beach this weekend? 
Fourth tip, do not sell your jewelry hunting chances short this three day weekend, by only searching one area at the beach. 
I have found far too many nice pieces of jewelry to be a one dimensional jewelry hunter. 
Check out my finds page on my website, jewelry can be lost and found anywhere at the beach.

favorite red, white and blue tables

a little bit of red, white and blue

inspiration for the weekend,

from pinterest, of course!  

{sources below}

Mix and match patriotic paper goods for an easy custom look!

1 | 2 | 3 | 4

ciao! Fabiana

healthy snacks for the long weekend

Getting ready for the weekend with my new favorite snack, yummy gourmet flavored Gaslamp Popcorn and my red, white and blue tableware.

ciao! Fabiana

Treasury yields are very low relative to inflation

Volatile oil prices have distorted the Consumer Price Index; removing them reveals that inflation has been running at a relatively stable 2% rate for the past 12 years. No one—especially the Fed—needs to worry that inflation is too low. If anything is too low, it is Treasury yields.

As the chart above shows, the year over year change in the headline CPI has been unusually volatile in the past decade. Core inflation (ex-foor and energy) has been much more stable. The main difference between these two measures of inflation is oil prices.

The chart above plots the CPI index ex-energy on a semi-log scale to show that it has been increasing at a 2% annual rate, on average, since 2003. There is no indication at all that the underlying rate of inflation today is any more or less than it has been for over a decade. For all intents and purposes, inflation is only slightly less than 2%, which is precisely what the Fed has been aiming for.

The chart above compares the year over year change in the Core CPI to 5-yr Treasury yields. Yields tracked inflation trends fairly closely from 2003 through early 2011. Beginning around mid-2011, the PIIGS crisis began to erupt, pushing the Eurozone economy into a recession, which in turn raised concerns that the U.S. economy was vulnerable to a double-dip recession as well. Strong demand for the safety of Treasuries, fueled by risk aversion, has kept sovereign interest rates abnormally low—relative to underlying inflation—for the past four years.

Fears of a Eurozone credit crisis sparking another financial collapse also drove gold prices to $1900 in September, 2011, while strong demand for the safety of 5-yr TIPS drove real yields deep into negative territory. The world was terribly concerned that economic growth was going to be miserable and financial markets were at risk. Demand for the safety and security of gold, Treasuries, and TIPS was intense. As the chart above shows, demand for gold and TIPS eased measurably in 2013, but remains relatively strong: risk aversion has eased somewhat but it is still very much with us today.

The chart above shows the real yield on 10-yr Treasuries (using the Core measure of CPI) since 1960, during which time real yields by this measure have averaged 2.4%. Today's level of real Treasury yields is clearly abnormally low from a long-term historical perspective. The reason for this, I believe, is the persistence of risk aversion and an enduring skepticism about the prospects for economic growth.

If economic policies were to become more growth-oriented, and if regulatory burdens were to decline, it's reasonable to think that Treasury yields could almost immediately rise by 150-200 bps or so, thus restoring real yields to more historically "normal" levels.

Claims keep falling, but risk aversion is still the problem

This continues to be the weakest recovery in modern times, but it has set a record for the lowest rate of layoffs.

Using a 4-week moving average, initial claims for unemployment last week fell to their lowest level in 15 years. 

Relative to the number of people working, claims are now at their lowest point in recorded history. The average worker has never been so little at risk of losing his or her job.

Meanwhile, after-tax corporate profits have never been so strong.

Nevertheless, despite record-setting profits, business investment has been quite weak. In real terms, capital goods orders, a good proxy for business investment, are at the same level today as they were 20 years ago, even though the economy has grown by over 60% in that time! 

The problem today is not layoffs and unemployment, it's a lack of investment. Animal spirits are lacking, and risk aversion is still high.

Sovereign yields in developed countries are very near their all-time lows. That is the best proof that animal spirits are lacking and risk aversion is still high. The world is willing to pay extraordinarily high prices for the safety and security of sovereign debt. Why? Because the world is very afraid of the alternatives, even though they yield substantially more.

As the chart above shows, the earnings yield on the S&P 500 has rarely been so high relative to the yield on 10-yr Treasuries.

Weak investment and tepid jobs growth have created a $2 trillion annual shortfall in GDP (by my calculations, the so-called output gap is about 10% of GDP).

Even a massive increase in government spending and transfer payments couldn't boost the economy. Indeed, it's quite likely that it was the big increase in government spending and transfer payments that weakened the economy.

The solution to this dilemma is straightforward. We don't need more attempts at government stimulus. What we desperately need is more incentives for private investment. We need lower marginal tax rates and we need reduced regulatory burdens.