Free Markets, Free People

Dale Franks

Dale Franks’ QandO posts

Economic Statistics for 26 Sep 11

Today’s economic statistical releases:

New home sales fell to a 295,000 annual rate, compared to 302,00 in July. This is a nine-month low for new home sales. Of course, without any serious mortgage lending by banks, we can expect home sales to remain depressed.

The Dallas Fed’s Texas Manufacturing Outlook Survey index of general business conditions slipped to -14.4 from last month’s -11.4. The production index rose, however, from 1.1 to 5.9 as factory activity increased.

The Chicago Fed National Activity index fell to minus 0.43 in August from plus 0.02 in July. Employment-related indicators fell to -0.08, and consumption & housing slipped to -0.35.

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Dale Franks
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Observations: The QandO Podcast for 25 Sep 11

In this podcast, Bruce Michael, and Dale discuss the Republican presidential field, and the apparently inevitable Greek default,

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

The Deniers rear their ugly heads again

Researchers at CERN, the big European physics laboratory, have released some interesting findings that, if true,would  cast doubt on a fundamental conclusion made by Einstein’s theory of relativity.

From 2009 through 2011, the massive OPERA detector buried in a mountain in Gran Sasso, Italy, recorded particles called neutrinos generated at CERN arriving a smidge too soon, faster than light can move in a vacuum. If the finding is confirmed by further experiments, it would throw more than a century of physics into chaos.

For over a century, since Albert Einstein published the Special Theory of Relativity (SRT)—buttressed further in 1916 by the General Theory—it has been settled science that the speed of is nature’s ultimate speed limit.  As an object approaches the speed of light, its mass increases. At the speed of light—were it possible to reach it—the object’s mass would be infinite. That would require, of course, an infinite amount of energy to propel the object.  Hence, moving faster than the speed of light is a physical impossibility.

Since 1905, through direct experimentation, mathematical modeling, and, later, measurements taken during the space program, as well as computer models, science has time and time again proved that the Special Theory of Relativity does, in fact, accurately model the way the universe works. The entire foundation of modern physics is built upon SRT. It has been proven correct over and over again. Clearly, SRT is settled science. An attempt to overturn it is, essentially, an attempt to overturn the entire body of physics that has been so painstakingly established over the past century.

Obviously, SRT is true.  Its conclusions are beyond questioning. Again, the science is settled, and there is almost universal scientific consensus about the truth of SRT.

Since that is so, one wonders what purpose the experiments at CERN might be. SRT needs no further validation, so there must be other motives. Who is funding this experimentation? Why are they so interested in denying SRT? If SRT is overturned, the implications throw cosmology in general into disarray. Out would go the Big Bang theory. Is this new experiment real science, or is it just another ploy of Big Plasma to overturn the settled view of cosmology?

These "scientists" at CERN say that more experimentation is needed to validate these results. But, they are so clearly wrong, it’s difficult to see what purpose further experimentation along these lines would serve. This transparent attempt to return physics to the limited and primitive world of physical experimentation, rather than the modern use of sophisticated mathematical models, is deeply subversive.

Now, there are calls for trying to replicate this experiment—at US taxpayer expense—at the Fermilab, here in the US. I see no reason to risk the scientific integrity of our premier physics laboratory pursuing the dreams of these SRT deniers at CERN.

SRT’s proof is incontrovertible, and any attempt to prove otherwise is a perversion of science. The science is settled. Consensus is almost universal. So, let’s not pursue these silly, pointless experiments. The important thing to remember about science is that, once you question the received wisdom proven repeatedly in the past, the result is chaos. It is vitally important that we do not throw all of modern physics and cosmology into disarray over some odd experimental results that really have no real-world application.

That would just be silly.

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Dale Franks
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Economic Statistics for 22 Sep 11

Today’s economic statistical releases:

Well, this really isn’t a statistic, as such, but the Dow slipped -300+ at the open, on a pessimistic economic outlook for the US and EU, weak data for the euro zone,  and a negative outlook on the US economy from the Federal Reserve. Why the markets are reacting as if any of this is a surprise is beyond me.

Initial claims for unemployment fell -9,000, to a still-unpleasantly-high 423,000. Meanwhile, last weeks claims were revised upward by another 4,000.

The Bloomberg Consumer Comfort Index dropped to –52.1,  the worst since the recession "ended" in June, 2009. Note the scare quotes around the word "ended".

The Index of Leading Indicators rose 0.3% last month, though mainly on money supply gains as investors bailed out and went to cash. Which actually isn’t a good sign.

The FHFA home price index in July rose 0.8%. That’s the fourth month in a row the index has risen, so not everything is a complete disaster. We take our good news where we can find it, I guess.

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Dale Franks
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Economic statistics for 21 Sep 11

Today’s economic statistical releases:

The market was shocked into stupefaction at an Existing Home Sales release that was stronger than expected. Sales rose by 7.7% to an annual rate of 5.03 million. On a year-over-year basis, sales were up 18.6 %.

The Mortgage Bankers Association reports that purchase applications fell –4.7%, while re-fi apps rose by 2.2%, resulting in a composite index up by 0.6%.

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Dale Franks
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Economic statistics for 20 Sep 11

Today’s economic statistical releases:

ICSC-Goldman reports that retail sales fell by –1.2% for the latest week, though the year-on-year rate is on trend at 3.4%. Meanwhile Redbook’s same-store year-on-year sales came in at the low end of the trend at 4.1%.

Housing starts fell -5.0% in August to a lower-than-expected annualized pace of 0.571 million. But, building permits increased by 3.2%, signaling a bit more health in the future. Overall, housing still remains a drag on the larger economy.

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Dale Franks
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Economic Statistics for 19 Sep 11

Today’s economic statistical releases..well, "release", actually…is the Housing Market Index, which fell one point to 14. It’s been stuck around this level since the Home Buyer Tax Credit expired last June. Even the decline in mortgage rates over the last year hasn’t helped at all.  This is also an index where the break-even point is 50, i.e, anything above that is an expansion, while below it is contraction. So, 14 is…bad.

Of course, part of the problem is that, not matter how low mortgage rates are, that doesn’t really help if the bank is demanding to see $200k in cash as security before they give you a $200k loan. Being unable to get a loan, unless you’re so credit-worthy that you don’t need a loan kind of defeats the purpose of mortgage lending.  Foreclosures are still high, so banks are still scared to loan money.

Welcome to the world of bad debt overhang.

Note to progressives:  Taxing The Rich™ won’t solve this problem. In case you were wondering.

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Observations: The QandO Podcast for 18 Sep 11

In this podcast, Bruce Michael, and Dale discuss Solyndra affair, and some troubling news from Turkey.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

Solyndra applied for a 2nd loan

The Daily Caller is reporting that Solyndra, famed for going belly up and putting the taxpayers on the hook for half a billion dollars, applied for an additional DOE loan for $469 million.

Failed solar panel maker Solyndra’s Securities and Exchange Commission filings show that seven months after the Obama administration’s Department of Energy approved a $535 million federal loan guarantee, Solyndra applied for a second one valued at $469 million.

“On September 11, 2009, we applied for a second loan guarantee from the DOE, in the amount of approximately $469 million, to partially fund Phase II,” Solyndra wrote in a report it filed with the SEC on December 18, 2009. “If we are unable to obtain the DOE guaranteed loan in whole or in part, we intend to fund any financing shortfall with some combination of the proceeds of this offering, cash flows from operations, debt financing and additional equity financing.”

This application went in right after it received the original $535 million from the DOE. So, the question is, what happened to that application? Well, so far, it seems that no one can say.

It’s unclear if the now-bankrupt and scandal-embroiled green energy company actually received a second loan. Department of Energy officials did not immediately respond to The Daily Caller’s request for comment, and the company’s SEC filing left the question open.

So, did Solyndra get that second loan or not? Are we on the hook for more than a billion dollars? It seems like if the answer was "no", the DOE or Obama Administration would be fairly keen on letting us know that.

I’m really curious about this now.

(H/T: Ace)

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Dale Franks
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