Recently in Economics Category

I am not surprised - lumber prices

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Recently moved all my money out of stocks (Vanguard index funds) and back into Bonds.
Good timing - from Russia Today:

Global banks bracing for losses amid US hedge fund collapse
World banks may lose over $6 billion from the downfall of the US investment firm Archegos Capital, sources told Reuters. Regulators are closely monitoring the situation as panic spreads about the possible scale of the fallout.

The sudden liquidation of the New York-based billionaire Bill Hwang’s Archegos Capital Management ignited a fire sale of more than $20 billion in assets that has left some of the world’s biggest investment banks bearing billions of dollars of losses.

According to billionaire investor Mike Novogratz, the collapse of Hwang’s Archegos fund could turn out to be “the most spectacular personal loss of wealth in history.”

The problems started last week when a disappointing stock sale by media giant ViacomCBS triggered devastating bank margin calls for Archegos, three people familiar with the matter said. Shares in ViacomCBS plummeted 23% last Wednesday after the media company sold shares at a price that diluted its value. The shares continued to decline, setting off alarm bells at Archegos’ prime brokers and prompting them to offload stock in all of Archegos’ investments.

Just love love LOVE that last paragraph. ViacomCBS owns Paramount Pictures, CBS, Nickelodeon, Miramax, BET, MTV, Showtime. Looks like people are not into "big media" very much these days.  Maybe, just maybe if they produced something that we wanted to watch... Not watching WOKE TV - that is for sure.

In other words - job numbers? Shut Up. From Breitbart:

Joe Biden: It Will Take Ten Years to Get Full Employment at Current Job Growth Rate
President Joe Biden sounded a dark note on the future of the economy Friday, after a bleak jobs report came out.

The United States economy added 49,000 jobs in December with only 6,000 jobs in the private sector, according to the latest report released Friday morning.

“At that rate, it’s going to take ten years to get back to full employment,” Biden said. “That’s not hyperbole, that’s a fact.”

Gee - the previous guy did pretty well.  What's up with the Democrats? Pretty lackluster performance given all their hype and rhetoric.

Wonder how much is coming in these days - another sure way to crash the economy and create a crisis.
From the U.S. Customs and Border Protection:

Two Packages, $136K of Counterfeit Currency CBP Officers in Chicago Seize Shipments Containing Funny Money
At Chicago’s International Mail Facility (IMF) U.S. Customs and Border Protection (CBP) officers recently seized two parcel arriving from China that held different denominations of counterfeit currency totaling more than $136,000.Bogus Money

On January 28, officers at the IMF held two parcels for inspection that were arriving from the same shipper in China. The officers inspected the shipments to determine the admissibility of the parcels and its contents. The first shipment contained 957 counterfeit $100 dollar bills and 44 counterfeit $50 dollar bills totaling $97,900. In the second shipment were 384 counterfeit $100 dollar bills. In total, $136,300 of counterfeit currency was seized under Counterfeit U.S. Currency, Coins or Government Securities.

Like I said - is this the tip of the iceberg? Flooding the nation with counterfeit currency would be a sure way to force us to use digital currency for any and all payments.  Which is exactly what they want as cash payments can not be traced. Cards can.

And another one bails - California

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California is losing tax revenue hand over fist. From CNBC:

Tesla CEO Elon Musk has told friends and associates he plans to move to Texas
Tesla CEO Elon Musk put his California houses on the market this year while he was sparring with state lawmakers over Covid-19 restrictions. He’s simultaneously been expanding operations in Texas and cozying up to Republican Gov. Greg Abbott.

Now, several of his close friends and associates say that Musk has told them he’s planning to move to the Lone Star State. The people with knowledge of his plans asked not to be named because their conversations were private.

California has the highest state income tax in the nation.  Texas has no income tax at all. Tesla is not the first.
From FOX Business:

Hewlett Packard leaves California for Texas in headquarters jump
Hewlett Packard Enterprise is kissing California goodbye as it prepares to move its headquarters to Houston, Texas.

And this report from Business Journals:

Bay Area exodus accelerates at year-end as some seek to avoid tax hikes in 2021
The Bay Area exodus, which accelerated amid Covid, appears to be gaining more steam in the final months of 2020. Moving out of the state by year-end could help those leaving avoid being hit by a California income tax increase next year that might be retroactive to the start of 2021.

“I’m seeing an acceleration of clients — not to mention friends and neighbors — leaving California,” Paul Bleeg, a partner with accounting firm EisnerAmper in San Francisco, told me Tuesday. “The destinations vary: Montana, Nevada, Tennessee, Florida, Texas, Utah and elsewhere.”

The ruling class is unaware of the basic facts - raising taxes results in less revenue.  Art Laffer had this down to a science 46 years ago. Basic economic fact.

China and Taiwan

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We are getting friendlier with Taiwan - this is a good thing. China is not happy.
From the South China Morning Post:

China tells US to stop building relationship with Taiwan after economic dialogue announcement
Beijing on Tuesday asked the US to stop upgrading its unofficial diplomatic relations with Taiwan, after Washington’s announcement of a new economic dialogue with Taiwan.

“We called on the US to ... stop official interaction with Taiwan in all forms,” said Hua Chunying, spokeswoman of China’s Ministry of Foreign Affairs on Tuesday.

Hua described the US Taiwan Relations Act, which allows for de facto diplomatic relations, as “illegal” and “invalid”, adding that it violates the one-China principle.

On Monday, US assistant secretary of state David Stilwell said that the United States and Taiwan would establish a new economic dialogue focused on semiconductors, health care, energy and other technology sectors.

I like Taiwan - got the chance to visit there once and really enjoyed myself. My favorite tool store (Grizzly) imports machine tools from China and from Taiwan (also India) and the quality of the Taiwanese and Indian tools is significantly better than the best from China. Fit and finish, precision, quality of materials. All around better.

Good that we are establishing better ties with them - they are a bastion of freedom in a section of the world that needs it. China not happy? Boo hoo. So sad, too bad.

So so true

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"The fact that the market is not doing what we wish it would do is no reason to automatically assume that the government would do better."
--Thomas Sowell

From Yahoo/Reuters:

Samsung Electronics to halt production at its last computer factory in China
Samsung Electronics Co will halt operations of its last computer factory in China, the South Korean tech giant said on Saturday, the latest manufacturer to shift production from the world's second-biggest economy.

Companies are rethinking their production and supply chains amid rising Chinese labour costs, a U.S.-China trade war and the blow from the COVID-19 pandemic.

Around half the 1,700 employees on contract at Samsung Electronics Suzhou Computer will be affected, excluding those involved in research and development, the South China Morning Post reported on Friday, citing a notice to Samsung staff.

The factory shipped $4.3 billion worth of goods out of China in 2012, a figure that had sunk to $1 billion by 2018, the Hong Kong newspaper said.

The world bent over backwards to give China some very favorable trade conditions and they failed to reciprocate. Time to pay the piper.

Elon is on a roll

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Sitting here chortling. Elon Musk's twitter account:

The guy is no dummy.

Nails it perfectly

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Could not be more succinct:


New York City in fact. From the Foundation for Economic Education:

New York City’s Pension Debt Is Driving It to Bankruptcy
New York City is in dire straits. You might not know it, but the city is staring bankruptcy in the face. Stakeholders are scrambling for answers to this issue, but there’s been little talk about one of the main causes of the city’s growing debt: public employee pensions. As of today, nearly 75 percent of the city’s $197.8 billion deficit is due to pension and other retirement liabilities.

What will happen if the city goes bankrupt?

Pension and Public Service
Currently, NYC offers five different pension plans to its municipal employees, from teachers to members of the school board. These pensions serve as a source of retirement income to former city employees and are defined benefit plans, meaning that benefits are guaranteed by the employer. The employer is making investment decisions and managing investments for the plan so that when employees retire, they receive the promised benefit. For that to happen, all the actuarial assumptions need to be correct in their predictions about investment returns, demographic trends, and other variables.

Much more at the site. A good analysis. The unions seriously misjudged the rate of return on the principal. Asking Uncle Sam for a bail-out in 3... 2... 1...

Heh - some good numbers

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What recession. From Don Surber who also writes the quote of the month:

Trump ended the Fake Recession
The National Bureau of Economic Research sure was quick to declare a covid-19 recession on June 8. It cited an increase in unemployment, a decrease in retail sales, and a drop in economic activities -- lasting more than a few months.

Don then cites the NBER:

In a January 13, 2003, letter, the NBER noted, "A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades."

And yes, we have had three months of economic decline caused by the Wuhan COVID lockdown but:

"The U.S. government reported a record 17.7% increase in retail sales for May. Economists polled by Dow Jones expected a gain of 7.7%."

The 17.7% gain in retail sales was more than double the expected 8.4% rise.

The economy is roaring back like gangbusters. Unemployment is way down and now? Retail sales are way up.

Don's quote?

The surest sign that the economy has recovered is Barack Hussein Obama is taking credit for it.

His minder, Valerie Jarrett, said, "The unemployment rate for the African-American community started coming down as a result of the steps that President Obama did to right our economy back in 2009. President Trump has benefited from those steps and created the spur that got our economy going in the right direction."

Sure, sweetie, sure.

I love it: "The surest sign that the economy has recovered is Barack Hussein Obama is taking credit for it"

Obama did not build that. He is mentally and physically incapable of building anything remotely close.

Quote of the month

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The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. Never under any circumstances admit that your own failure may be owing to your own weakness, or that the failure of anyone else may be due to his own defects - his laziness, incompetence, improvidence, or stupidity.
Henry Hazlitt

Hazlitt wrote this: Economics in One Lesson which is one of the best short primers on how economics actually works in the real world.
Do yourself a real favor and spend the time to read it - an hour or so. You will be much improved by doing this.

Dementia is a horrible disease but it happens and, it appears that Joe Biden is suffering from it. He is being "handled" by a cabal of leftists and they are assembling a wish-list of socialist dreams for America. The latest from The Washington Free Beacon:

Biden Taps Top Bernie Allies to Craft Economic Agenda
Presumptive Democratic nominee Joe Biden has called on two of socialist senator Bernie Sanders's (I., Vt.) top allies to help lead an economic advisory group tasked with shaping the party's 2020 agenda.

The Biden campaign tapped top Sanders allies Stephanie Kelton and Sara Nelson to join a "unity task force" focused on developing the Democratic platform on the economy. An economist at Stony Brook University, Kelton served as an economic adviser to Sanders's failed presidential campaigns in 2016 and 2020. She has argued that the government can pay for expensive programs, including the $94 trillion Green New Deal, by printing more money. Nelson, who is president of the Association of Flight Attendants, was Sanders's guest to President Donald Trump's State of the Union address in February. She has been floated as the progressive pick to replace AFL-CIO leader Richard Trumka in 2021, tying her candidacy to the implementation of far-left values in the labor movement.

Much more at the site - I can not begin to outline just how bad this would be for our Nation. These people are innumerate. They are pushing an idea based on no economic theory anywhere. It will not work and will lead to starvation and bread-lines. I read the entire article and threw up a little bit in my mouth - there are people out there who think that this is a good idea. That there would be no bad repercussions to "just printing more money". They do not know the history of the Wiemar Republic, of Zimbabwe, of Venezuela. They want to bring this to We The People.

A lot worse than most people realize

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Talk about unintended consequences - I know I am preaching to the choir but this is a very well-written and succinct essay. From The Mises Institute:

How Shutdowns Will Keep Killing the Economy, Even When They're Over
Imagine what it is like right now to plan for the future as a business owner. The owner doesn't know if he or she will even be allowed to be open for business two weeks from now, or a month from now.

Indeed, politicians and their unelected (and unaccountable) health advisors keep insisting that they might elect to close down businesses or impose new restrictions on large portions of the economy at any time.

The uncertainly associated with all this is immense. Consider some examples: thanks to moratoria on evictions in many cities, renters who can't pay rent — thanks in part to government-forced lockdowns — can stay in their rental units indefinitely. Landlords have no idea when they will next be able to actually collect revenues again from paying customers. Meanwhile, "elective" healthcare services like eye care and dental care have been deemed "unessential" by bureaucrats and governors in many states. These offices will be closed and collecting little-to-no revenue. Restaurants, of course, aren't permitted to do business beyond take-out service in places with lockdowns. (Although these restaurants still have to pay rent for their dining rooms.)

Even beyond the short term, business owners have no way to plan. If a business owner is allowed to actually conduct business during the summertime this year, it may still be that politicians will later elect to shut businesses whenever it is decided the risk of spreading viruses demands another "shutdown." We're even told this could go on for years.

One would have to be impressively naive and deeply ignorant about how businesses work to think that commerce, investment, and entrepreneurship would just continue as usual under these conditions. In reality,  the threat of a government-mandated lockdown hanging over the heads of countless business owners and entrepreneurs will mean there will be far less willingness and ability to invest in businesses, offer products and services, or employ people.

Much much more at the site. The author cites economic historian Robert Higgs:

Specifically, Higgs has illustrated that regime uncertainty was a significant factor in making the Great Depression such a long and unpleasant affair. The Roosevelt administration's numerous and enormous changes to the legal regime — through new taxes, regulations, and labor laws — made the Depression far worse than it needed to be. Higgs explains how thanks to a multitude of state interventions during the Depression:

the Roosevelt administration “abruptly and dramatically altered the institutional framework within which private business decisions were made, not just once but several times” ... with the result that regime uncertainty was heightened and recovery substantially retarded.

As one investor at the time observed:

Uncertainty rules the tax situation, the labor situation, the monetary situation, and practically every legal condition under which industry must operate. Are taxes to go higher, lower or stay where they are? We don’t know. Is labor to be union or nonunion?... Are we to have inflation or deflation, more government spending or less?... Are new restrictions to be placed on capital, new limits on profits?... It is impossible to even guess at the answers.

The result was "the New Deal prolonged the Great Depression by creating an extraordinarily high degree of regime uncertainty in the minds of investors."

The recovery was slowed, of course, because investing, building businesses, and engaging in innovation became far riskier and unpredictable thanks to the chances that governments might once again impose draconian new restrictions on businesses. This changed the calculus completely.

And the media pundits are talking about how we need a New New Deal to get back up and running not realizing that the original New Deal stalled recovery for many years. Not entirely happy with President Trump's choice of Steven Mnuchin as Sec. Treasury - I would prefer someone more from the Austrian school - Hayek, Mises - those guys.

J. M. Keynes has been wrong on so many real-world counts that his popularity today is really questionable. That whole "locus of control" issue I talked about earlier here. More here (really good reading) including this chart:


Classic video from the Obama recession:

More from these people here - excellent stuff.
The same people also did this video - available on Netflix and will be watching it soon.

Wise words - economics and politics

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Words to take to heart:

"The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics."
--Thomas Sowell

This guy is so wrong on so many things I still find it stunning that he was awarded a Nobel Prize in Economics.
From the NY Times of 03/16/2020:

Step Aside for Powell and Pelosi
Republicans, it turns out, can’t do economic policy

America’s catastrophically inadequate response to the coronavirus can be attributed largely to bad short-term decisions by one man. And I do mean short-term: At every stage, Donald Trump minimized the threat and blocked helpful action because he wanted to look good for the next news cycle or two, ignoring and intimidating anyone who tried to give him good advice.

OK - we get it. Orange Man is BAD. Seriously, his Trump Derangement Syndrome is getting worse as time goes on. He needs to think about getting treatment  before it is too late. President Trump's second four years of winning is going to send poor Paul over the edge.

 - yadda - yadda - yadda -

Trump disbanded the National Security Council’s pandemic response team in 2018, although he now, with his characteristic refusal to accept responsibility for anything, says that he knew nothing about it. And he has in general staffed his administration with obsequious toadies who never tell him anything he doesn’t want to hear.

BZZZZTTT!  Absolutly wrong. The team was re-organised, not disbanded. The FAKE "story" was started by one person from the team who lost their job in the re-org. It was picked up by Jeff Bezos' Washington Post in 2018. Fast forward to today where they recant their story - from Red State:

WaPo Opinion Piece Debunks Another False Story: No, Trump Didn’t ‘Eliminate’ the Pandemic Response Office
Democrats and media have told multiple lies about the response by the Trump administration to the Wuhan coronavirus. They falsely claimed that Trump cut the CDC when the budget was actually increased. Democrats including Joe Biden claimed that he was muzzling scientists from talking about the virus response even as those same scientists like Dr. Anthony Fauci were very visible giving advice and information in press conferences.

Perhaps one of the biggest lies was saying that President Donald Trump had called the virus a hoax when in fact he said no such thing. What he said was their lies about his response, like the ones I just mentioned in the prior paragraph, were a “hoax.”

But there was another story that has gotten a lot of traction and really wasn’t debunked until today, although it should have been debunked by media earlier, if they had really been concerned about accuracy – that is that the Trump administration eliminated the “pandemic team” from the NSC in 2018.

One place in which it was pushed was the Washington Post, who pushed the claim in an opinion piece on Friday by Elizabeth Cameron, who ran the office under President Obama.

The person promoting the FAKE NEWS was the person who ran the org under the Obama administration and who was shown the door during its reorganization. No agenda there. The WaPo owned up to it a few days ago with this "opinion" piece.

Back to Mr. Krugman:

What’s now becoming clear is that when it comes to dealing with the economic fallout from Covid-19, the situation may be even worse. There are still some competent professionals holding senior positions at federal health agencies, who could give Trump good advice if he were willing to listen. But serious economic thinking has effectively been banned from this administration, if not the whole Republican Party. As far as I can tell, the Trump team is utterly incapable of formulating a coherent response to the gathering economic crisis.

And from here on, poor Paul goes off the rails. This is pure narrative. When you have no facts, push the narrative. They have nothing except the narrative and they are refusing to learn. They are shutting their eyes and ears and just wishing that the Bad Orange Man will just go away. Guess what, there are a lot more Bad Orange Men stacked up behind President Trump wanting our America to be out of the hands of the progressive globalists. The pendulum is swinging back again and our Nation is becoming better and stronger.

Go and read the rest of it if only from morbid fascination.

Buy cheap, sell dear

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Meanwhile, as the Wuhan Virus is occupying people's thoughts, there is an oil war going on. President Trump is on it.
From Breitbart:

Trump Orders Department of Energy to Replenish U.S. Strategic Petroleum Reserve in Coronavirus Era
President Donald Trump announced during his press conference on Friday on the coronavirus outbreak that the United States will be replenishing its Strategic Petroleum Reserve (SPR) to ensure the nation’s energy security.

“Based on the price of oil, I’ve also instructed the Secretary of Energy to purchase at a very good price large quantities of crude oil for storage in the U.S. strategic reserve,” Trump said at the press conference in the White House Rose Garden.

“We’re going to fill it right up to the top, saving the American taxpayer billions and billions of dollars, helping our oil industry [and furthering] that wonderful goal — which we’ve achieved, which nobody thought was possible — of energy independence,” Trump said.

Trump’s announcement follows market turmoil in the international market when Russia and Saudi Arabia’s negotiations recently broke down and the Saudis announced they were increasing production.

The Saudis do not like that the US is now a net exporter of oil so they are artificially lowering their price to below what it costs our frackers to produce. Fortunately, our government has stepped in with cheap loans - this war is not sustainable for anyone and the Saudis have to blink sometime. Meanwhile, we are taking advantage of the glut of cheap oil to top off the tanks. National security is a fantastic thing...

From the Washington Examiner:

Economy defied early coronavirus fears in February with 273,000 new jobs, unemployment ticked down to 3.5%
Employment growth in February beat expectations, as 273,000 workers were added to payrolls, the Bureau of Labor Statistics reported on Friday. The unemployment rate was 3.5%, versus 3.6% in January.

Forecasters had expected about 175,000 jobs.

The job growth numbers for December and January were also revised up, by a combined 85,000.

Under the previous administration, unemployment numbers peaked at 10%. Yes, he inherited the housing bubble but still, President Trump's turn-around could have been accomplished ten years ago just as easily. All it took was the ability to see outside the Washington D.C. bubble and to have some business experience.

Because - experts

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From The New York Times - 2016

Paul Krugman: The Economic Fallout
It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover?

Frankly, I find it hard to care much, even though this is my specialty. The disaster for America and the world has so many aspects that the economic ramifications are way down my list of things to fear.

Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never.

Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news. What makes it especially bad right now, however, is the fundamentally fragile state much of the world is still in, eight years after the great financial crisis.

And today - three years later. From CNBC:

Trump stock market rally is far outpacing past US presidents
President Donald Trump’s stock market stacks up well against the majority of his presidential predecessors.

The S&P 500 has returned more than 50% since Trump was elected, more than double the 23% average market return of presidents three years into their term, according data from Bespoke Investment Group dating to 1928.

The bellwether index gained more than 28% this year, well above the average 12.8% return of year three for past U.S. presidents.

Krugman won the Nobel Prize for economics but he has never been right in any published prediction. He does toe the narrative line though - useful for that.

From CNN:

CNN Poll: US economy receives its best ranking in nearly 20 years
As 2019 comes to a close, the US economy earns its highest ratings in almost two decades, potentially boosting President Donald Trump in matchups against the Democrats vying to face him in next year's election, according to a new CNN poll conducted by SSRS.

Overall, 76% rate economic conditions in the US today as very or somewhat good, significantly more than those who said so at this time last year (67%). This is the highest share to say the economy is good since February 2001, when 80% said so.

And there is the 2020 election wrapped up with a pretty bow for you. I'm good with that.

Good news from FORD

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Always liked Ford - driven their trucks, currently own one of their vans. From The Detroit News:

Ford gets incentives to invest $1.5 billion in Metro Detroit, add 3,000 jobs
Ford Motor Co. CEO Jim Hackett's vision for a mobility corridor stretching along Michigan Avenue from Detroit's Corktown neighborhood to Ann Arbor is growing to include the production of future vehicles.

The Dearborn automaker on Tuesday received approval for up to $35.3 million in incentives from the state of Michigan to invest more than $1.45 billion in Wayne County manufacturing facilities that would add 3,000 jobs — a piece of the $6 billion, 8,500-job commitment Ford made in its contract with the United Auto Workers ratified last month.

The investments into the manufacturing of new vehicles, including the Ford Bronco SUV, autonomous and electric vehicles — and their battery packs — will complement research being done in those sectors at Ford's future Corktown campus anchored by Michigan Central Station and its Dearborn headquarters, which is set for a redesign, officials said.

"This solidifies Ford’s presence in Michigan for both the electrification of their future vehicles as well as their autonomous vehicle operations," said Jeff Mason, CEO of the Michigan Economic Development Corp., whose governing body approved the state incentives. "We think it was critical to make Michigan the center of that."

FORD was the one manufacturer to not take the Obama government bailouts. They are a well-run company and make a good product and were not in need of them. Love my Highlander but I think my next vehicle will be an Explorer.

Excellent excellent observation

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From the Master:

"Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all."
--Frédéric Bastiat

I have never had a problem with people getting a hand up in life - food, some money to get a car, stuff like that.

My complaint is that this needs to start at the grass-roots level with community groups, then maybe the city. Then maybe the individual state and only then, the federal government. The idea that the federal government can manage any number of interlinking agencies that hand out money to someone who claims poverty is just asking for gross negligence and inefficiency. We see it time and time again but we still keep doing it. Keeps the unelected bureaucrats in power.

They don't want anyone messing around with their rice bowl.

It's the economy

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From Brickmuppet:

A Few Christmas Anecdotes
I've been an employee at U.P.S. for 27 years. In all that time I've never seen a Christmas like this one. I've seen it get heavy, but I'd never seen every day for over a week be higher than our peak day last year, nor heard the belts grinding from too much volume all day for three days. I have never, ever, until Tuesday, seen a 53 foot trailer come onto our lot bulging like a can with botulism. The other day one of the drivers from one of the big sort hubs came in to help after dropping off a load. He said that the hub was so packed that it took him 25 minutes to get from the bay door where the trailer was parked to the guard shack at the gate.

I honestly don't think I've been this sore every day since basic training.

Frankly, this is not any failure on the company's part, we're just experiencing the biggest Christmas EVER and our physical plant wasn't designed for an economy this good. It does bring a smile to my face to see all the Amazon packages coming through though. It seems that after declaring that they didn't need us and were never going to ship with us again...well... it looks from my modest vantage point that the Bezos brigade completely choked, as we've been getting trailer upon trailer of Amazon boxes that Amazon couldn't handle, and, despite this unexpected surfeit of cardboard, at least at my building, we haven't rolled anything over to the next day yet. Everything's gotten delivered. The hours are quite insane though.A few years ago I worked some double shifts and still didn't make as much overtime as I have this week. Today was odd, we actually finished early, however, as a result Monday's start time has been moved up to Sunday.

Monday's gonna suck.

On the other hand, I've lost 13 pounds and my pants are threatening to fall off.

Sights and sounds of a very good and very strong economy. Thank you President Trump and Merry Christmas to you and your family.

So true - wealth redistribution

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In one meme:


Strong economy - black friday

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From CNBC:

Shoppers have already spent a record $5.4 billion online on Black Friday: Adobe Analytics
Consumers aren’t waiting until Cyber Monday to shop online this holiday season.

Spending online on Black Friday, as of 9 pm ET, hit a new record of $5.4 billion, up 22.3% from a year ago, according to data pulled from Adobe Analytics, which measures transactions from 80 of the top 100 U.S. online retailers.

This comes as foot traffic appeared to be lighter at shopping malls across the country on Friday, a day that traditionally has been reserved for people to line up outside of big-box retailers and department stores to score doorbuster deals.

Total spending online on Black Friday is still forecast by Adobe to hit $7.6 billion, which would make the day the second-biggest online sales day ever, after Cyber Monday in 2018, where $7.9 billion was spent.

However, Adobe is still expecting spending on Cyber Monday this year to hit an even bigger record $9.4 billion, an 18.9% jump from a year ago.

Two factors - #1) - people have more money and #2) - people think that the future is going to bring more of the same. There is no uncertainty so they are not hoarding their money against a future downturn.

Thank you President Trump for this.

Life in the United States

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Pretty good actually - two headlines:

You do not get hired as CEO at Chase if you are stupid and innumerate. Bernie would never make the grade.
Moore is no slouch either:

Stephen Moore is a senior fellow at the Heritage Foundation, an economic consultant with FreedomWorks and a contributor.

Laissez les bon temps roulez

So true - socialists and food production

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Yes, they are just that unaware:


Yikes - some numbers

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They simply can not be serious about this - it would be political suicide. Are they living in a bubble? The answer should be obvious. From Yahoo Finance:

The Democratic plan for a 42% national sales tax
If you’re a Democrat who supports “Medicare for All,” pick your poison. You can ruin your political career and immolate your party by imposing a ruinous new sales tax, a gargantuan income tax hike or a surtax on corporate income that would wreck thousands of businesses.

This is the cost of bold plans.

Supporters of Medicare for All, the huge, single-payer government health plan backed by Bernie Sanders, Elizabeth Warren and several other Democratic presidential candidates, say it’s time to think big and move to a health plan that covers everyone. Getting there is a bit tricky, however. A variety of analyses estimate that Medicare for All would require at least $3 trillion in new spending. That’s about as much tax revenue as the government brings in now. So if paid for through new taxes, federal taxation would have to roughly double.

A long but well researched article - basically, to pay for what the Democrats are promising, we would need to raise taxes that much. Taxing the ultra-welathy simply would not generate enough money to fully fund their plans. Bill Whittle and Iowahawk ran the numbers back in 2011 and their research is still accurate - nine minutes of your time:

The money to impliment these plans simply is not there - the Democrats need to be honest and show their math.

From Western Journal:

Mike Rowe Brilliantly Sums Up Lunacy of Democratic Primary Fight
In the countless words and column inches that have been spilled on the Democratic primary process so far, author and former television host Mike Rowe has offered one of the most succinct descriptions yet.

And it more or less perfectly sums up the inanity — and inherent hypocrisy — of the gaggle of demagogues vying to become the next Democratic nominee for president:

“You’ve got millionaires arguing with millionaires over who hates the millionaires the most,” Rowe said Wednesday in a “Fox & Friends” interview.

Meanwhile, the middle class is getting more and more prosperous and the poor are pulling themselves up.

San Francisco in the news - from Market Watch:

This 57-year-old said ‘screw this’ to San Francisco — and retired to ‘delightful’ Albuquerque, where she slashed her expenses by 70%
When Roberta Reinstein moved to the Bay Area roughly 30 years ago to go to law school, it felt to her like a different place than it does now.

“It was possible for a student to live there…it was filled with artists,” she says. But Reinstein, 57, watched as real-estate prices skyrocketed (in just the past decade or so, home values have nearly doubled, according to Zillow) and many artists and less wealthy people had to move out. Nowadays, “San Francisco is only for the wealthy — the super wealthy — unless you’re willing to live with five roommates,” she jokes.

A bit more:

Though it’s perhaps best known for its annual hot-air balloon festival and being the setting for AMC’s hit show “Breaking Bad”, ABQ — which has a population of roughly 550,000 — has a lot more going for it than that. “Albuquerque is a delightful, quirky hidden gem,” says Reinstein.

It’s an artsy spot — there are hundreds of galleries and art studios; monthly art crawls, and a robust performing-arts scene — and a city where outdoor enthusiasts flock to. That’s helped along by the miles of hiking and biking trails in the adjacent Sandia and Manzano Mountains, as well as the roughly 300 days of sunshine. (Though January average lows are in the mid-20s, and July highs hit the low 90s.) And Reinstein tells MarketWatch she loves that it’s a diverse city with its own unique cuisine and celebrations.

Yeah - a nice small-ish city. I enjoyed my time there. Went there to visit the Trinity Site and take in some of the nuclear museums.

Great quote - people v/s the state

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"Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone."
--Frederic Bastiat

Party like it's 2008 - financial crisis

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Looks like the home mortgage market is going to go pear-shaped AGAIN... From Wolf Street:

Fuel for the Next Mortgage Bust?
For a moment this morning, I thought I was back in 2005 or early 2006, when I listened to a dazzling radio show, hyping cash-out refinancing of your mortgage.

The show was funded by a shadow-bank specializing in mortgage lending. They were promoting their efficient service, that didn’t involve the normal hoops to jump through, and it was a fantastic deal, to not only refinance your mortgage to capture the lower mortgage rates currently available – the lowest since November 2016 – but also to use the home as an ATM once again to cash out the equity that the home had accumulated, due to years of sharp price increases.

That this date of November 2016 keeps popping up is interesting by itself, because on November 10, 2016, according to Freddie Mac data, the average conforming 30-year fixed rate mortgage had an interest rate of about 3.6%, same as now. But six weeks later, December 22, 2016, that average mortgage rate had jumped to 4.3%. That was a jump of three-quarters of a percentage point in just six weeks. Mortgage rates can get very jumpy when the market figures out that they’d been mispriced.

The promo this morning acknowledged this jumpiness and pushed listeners to act now on a cash-out refi at these ultralow mortgage rates, or miss out forever.

Needless to say, there are two issues at play:

#1) - there is much more at the site. Go and read the whole thing if you are thinking about this  -and-

#2) - the 'folks' offering you this great deal are blowing smoke up your ass and calling it magic.

In those immortal words: "caveat emptor"

Great quote - Milton Friedman

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"The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another."

Milton Friedman was an economist. Won the Nobel Prize for it - he was that good. Big fan of Capitalism.

That last link for Capitalism has a great quote:

"As socialists, we are opponents of the Jews, because we see in the Hebrews the incarnation of capitalism, of the misuse of the nation’s goods." -- Joseph Goebbels

A nation does not have "goods". A nation has people. People have "goods". Yes, the Nazi's were pure and totally socialist. Their very name is: Nationalsozialistische Deutsche Arbeiterpartei or National-Socialist German Workers' Party
'Nuff said...

Two political paths: Lurching towards socialism and heading towards capitalism. Two news stories:

First, from Associated Press:

Economic twilight zone: Bonds that charge you for lending
Imagine lending money to someone and having to pay for the privilege of doing so. Or being asked to invest and informed of how much money you’ll lose.


On Wednesday, for the first time ever, the German government sold 30-year bonds at a negative interest rate. The bonds pay no coupon interest at all. Yet bidders at the auction were willing to pay more than the face value they would receive back when the bonds mature.

I could see short-term loans at negative interest. Great (if expensive) place to stash some cash but 30 year bonds? Not a lot of consumer confidence there...

Second, from The Telegraph:

Sterling soars as Brexit deal hopes rise: as it happened
Undoubtedly, there’s been some good money made on the currency markets over the last week. Short interest in the pound dropped last week, and anyone who cashed out a bet against sterling should be feeling smug now.

The pound is riding high against other currencies — marginally up, and probably worth a few euros if you’ve waited until the last minute to take a trip to the continent this summer.

What is good for business is also good for the nation. Go Brexit!

Question the messenger

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Shot - Fox News:

'Great Recession' to hit US, jeopardize Trump's reelection hopes: Peter Schiff
The U.S. economyOpens a New Window. is heading into a free fall that will be worse than the Great Recession of 2008, according to Euro Pacific Capital CEOOpens a New Window. Peter Schiff.

The economic forecaster is predicting the Federal ReserveOpens a New Window. will cut interest rates to zero and launch quantitative easing, a monetary policy where the central bank purchases Treasuries from financial institutions to stimulate the economy.

“The dollar is going to go through the floor and it’s going to take the bond market with it and the next crisis, it’s not subprime mortgages, it’s going to be in the Treasury market,” he said on “After the BellOpens a New Window.” on Wednesday.

Chaser - Foundation for Economic Education:

5 of the Worst Economic Predictions in History
Uncertainty makes human beings uncomfortable. Not knowing what’s going to happen in the future creates a sense of unrest in many people. That’s why we sometimes draw on predictions made by leading experts in their respective fields to make decisions in our daily lives. Unfortunately, history has shown that experts aren’t often much better than the average person when it comes to forecasting the future. And economists aren’t an exception. Here are five economic predictions that never came true.

And closing the list at #5:

5. Peter Schiff and the End of the World
Financial commentator Peter Schiff became famous in the aftermath of the 2007-2008 Financial Crisis for having foreseen the housing crash back in 2006 (even a broken clock is right twice a day). Since then, he has been predicting economic catastrophes every other day, with very limited success. There are many examples of failed predictions from which to draw upon. For instance, in a 2010 video (see below), Schiff foretold that Quantitative Easing (the unconventional monetary policy undertaken by the Fed between 2008 and 2014) would result in hyperinflation and the eventual destruction of the Dollar. Unfortunately for Schiff, the average inflation rate per year since the onset of QE has been 1.68%, slightly below the 2% target of the Fed.

And Schiff is keeping some great company in this list - go and read four more spectacular failures.

Schiff gets on the air because he promotes the narrative: Orange Man Bad. His track record is actually lousy.

Building skills at home

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Better jobs - great news from FOX Business:

US manufacturers pledge to train 1.2M workers amid skilled labor shortage
Manufacturers are promising to upskill nearly 1.2 million workers, a major training commitment that comes as U.S. companies prepare to try to fill millions of open positions over the next decade amid a labor shortage.

The National Association of Manufacturers, which counts Caterpillar, Merck, Salesforce and Boeing as members, is poised to make the announcement during an event at the White House on Thursday.

“Manufacturers proudly make this pledge to the American worker: we will continue to invest in our workforce and provide 1,186,000 Americans with the opportunity to receive training and development that will enhance their skills and prepare them for the next step on their career journey,” said CEO Jay Timmons.

No need to go deep in hock for a useless degree. Learn a skill or improve the one you have. Your potential to earn a living wage goes up substantially. I am going to a local college for some specific welding classes this fall. Looking forward to it.

Capitalism in the news - India

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From The Hindu:

India lifted 271 million people out of poverty in 10 years: UN
India lifted 271 million people out of poverty between 2006 and 2016, recording the fastest reductions in the multidimensional poverty index values during the period with strong improvements in areas such as “assets, cooking fuel, sanitation and nutrition,” a report by the United Nations said.

The 2019 global Multidimensional Poverty Index (MPI) from the UN Development Programme (UNDP), the Oxford Poverty and Human Development Initiative (OPHI) was released on Thursday.

The report said that in the 101 countries studied — 31 low income, 68 middle income and 2 high income - 1.3 billion people are “multidimensionally poor”, which means that poverty is defined not simply by income, but by a number of indicators, including poor health, poor quality of work and the threat of violence.

Some numbers:

In 2005-2006, the population in India living in multidimensional poverty stood at about 640 million people (55.1%) and this reduced to 369 million people (27.9%) living in poverty in 2015-16. India saw significant reductions in number of people who are multidimensionally poor and deprived in each of the 10 indicators over this time period.

India reduced deprivation in nutrition from 44.3% in 2005-06 to 21.2% in 2015-16, child mortality dropped from 4.5% to 2.2%, people deprived of cooking fuel reduced from 52.9% to 26.2%, deprivation in sanitation from 50.4% to 24.6%, those deprived of drinking water reduced from 16.6% to 6.2 %.

Further more people gained access to electricity as deprivation was reduced from 29.1% to 8.6%, housing from 44.9% to 23.6% and assets deprivation from 37.6% to 9.5%.

Cutting the number of poor people in half in just ten years. Socialism would never do that - it requires a large central government. What we are seeing is capitalism spread throughout the entire system. The corner store, the cook with a food cart, the shoemaker getting a new sewing machine. The rising tide floats ALL boats.

From CNBC:

Deutsche Bank will exit global equities business and slash 18,000 jobs in sweeping overhaul
Deutsche Bank announced Sunday that it will pull out of global equities sales and trading, scale back investment banking and slash thousands of jobs as part of a sweeping restructuring plan to improve profitability.

Deutsche will cut 18,000 jobs for a global headcount of around 74,000 employees by 2022. The bank aims to reduce adjusted costs by a quarter to 17 billion euros ($19 billion) over the next several years.

The German bank’s decision to scale back investment banking comes just two days after investment banking chief Garth Ritchie stepped down by “mutual agreement.”

Deutsche expects its restructuring plan to cost 7.4 billion euros by the end of 2022. The German bank may report a net loss of 2.8 billion euros in the second quarter of 2019. It will release second quarter results on July 25.

18,000 jobs is massive - almost a quarter of their workforce gone. Poof. Actual percentage is 24.32% to pick nits.

Wonder what is up over there - the German economy was supposed to be solid...

A nice perspective from Leslie Eastman at Legal Insurrection:

U.S. plans to refine its way out of potential “rare earths” crisis
There was once a time that the American economy was threatened by OPEC (Organization of Petroleum Exporting Countries) because we were an importer of petroleum products.

The Americans got busy, started frackingbuilding pipelines, and developed new technologies. We are now producing “molecules of freedom” in abundance.

Now, after China threatens to cut our supply of rare earth elements essential for certain products, American entrepreneurs are coming to the rescue.

Rare earth elements are used every day. They are metals that are used in everything from cell phones to cars, televisions, military jet engines and medical devices.

However, the tit-for-tat trade Opens a New Window. war between the U.S. and China, Opens a New Window. may present a challenge to the industry which heavily relies on China. The retaliatory tariffs from China on $60 billion worth U.S. goods goes into effect this weekend.

Blue Line Corp., a chemical company based in Texas, is the first and only company outside of China that can process small batches of rare earth. They just partnered with Australian rare earths mining company Lynas to build a processing facility in the U.S.

According to a 2019 minerals commodity summary, approximately 80% of the nation’s rare earth elements and compounds were imported from China.  A view of this situation is summarized by the US Geological Survey:


China is going to rue the day they decided to use rare earth minerals as a bargaining chip. They need a reliable flow of hard cash into their economy and that was a major one.

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