Questions and Observations

Free Markets, Free People

Economic Statistics for 25 Feb 16

Durable goods orders jumped 4.9% in January, while non-transportation orders rose 1.8%. Core capital goods rose 3.9%. On a year-over-year basis, orders are up 1.8% overall, but ex-transportation orders are down -0.6%, and core capital goods down -2.8%.

The FHFA House Price Index rose 0.4% in December, up 5.7% on a year-ago basis.

The Kansas City Fed Manufacturing Index slipped deeper into negative territory, coming in at -12 for February.

Initial weekly jobless claims rose 10,000 to 272,000. The 4-week average is also at 272,00. Continuing claims fell 19,000 to 2.253 million.

The Bloomberg Consumer Comfort Index held steady at 44.2 in the latest week.

The Fed’s balance sheet rose $6.2 billion last week, with total assets of $4.490 trillion. Reserve bank credit fell $-11.4 billion.

The Fed reports that M2 money supply rose by $48.8 billion in the latest week.


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Watching Twitter’s self destruction

And enjoying it (frankly, I’ve never been a fan of Twitter).

First and foremost I want to make it clear that Twitter’s decision to shadow ban and outright ban certain users has absolutely nothing to do with the right to free speech.  It’s a private company and they can ban and shadow ban anyone they want too.  Of course, being a private company and depending on “customers” they can screw the pooch anytime they want to as well, and that’s what they are in the middle of doing.

I say, “more power too them”.  They have to compete in a market with alternatives, unlike government, and they have to suffer the consequences of their decisions … also, for the most part, unlike government.

So, yeah, they’re not allowing certain conservative users to post on Twitter anymore.

Cool.  It’s not like Twitter didn’t have enough problems before this decision to monitor and ban users for arbitrary and biased reasons.  They were already under pressure to find a way to stop the declining numbers of users.

And their reaction?  Well, let’s put a “Trust and Safety Council” together to monitor what users say.  Oh, and let’s put a harpy from the extreme left wing of the political spectrum in charge and let her decide who can and can’t say “controversial things”.

How Orwellian can one get?  Well, the degree is still up for debate, but the hypocrisy isn’t.  Here’s Biz Stone, a Twitter co-founder in 2011:

[F]reedom of expression is essential. Some Tweets may facilitate positive change in a repressed country, some make us laugh, some make us think, some downright anger a vast majority of users. We don’t always agree with the things people choose to tweet, but we keep the information flowing irrespective of any view we may have about the content.

Except for now, when Twitter has decided that its “view” (or at least that of the “Truth and Safety Council”) is more important than the content.

Well done, Twitter.  You deserve everything you are now suffering.  It was all brought about by your policies and the decision that your customers weren’t the most important thing to your company.

That’s the beauty of markets.  They will speak.  And Twitter is presently being spoken too … harshly.

~McQ

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Foreign affairs – How bad is it?

This bad:

Secretary of State Kerry worked for three months to get the warring parties to a negotiating table under the auspices of the United Nations — moderate rebels, representatives of the regime, Iranians, Saudi Arabians and Russians. But Moscow then turned around and launched its offensive right as the talks began. Within 48 hours, the Russian air force carried out 320 airstrikes in northern Syria alone. It was no coincidence that the storm on Aleppo began at that exact moment. The aim was that of destroying any possibility that the opposition would have a say in Syria’s future.

Yes, that’s right, the Russians had no intention of working within the process and were simply setting up an opportunity to embarrass the United States.

I know, you’re shocked, aren’t you?

Secretary of State John Kerry conceded that his much-touted ceasefire in Syria, set to take effect Saturday, “may be” little more than what a Democratic senator called a “rope-a-dope deal.”

With Washington as the dope.

“I’m not going to vouch for this,” said Kerry. With good reason: It doesn’t cover ISIS, the al Qaeda-affiliated Nusra Front and other terrorist groups — nor anyone who cares to fire at them. For months, Russia’s been bombing anyone it wants to while claiming to be targeting ISIS.

One off?  Hardly:

In a move likely to further increase already volatile tensions in the region, China has deployed fighter jets to a contested island in the South China Sea, the same island where China deployed surface-to-air missiles last week, two U.S. officials tell Fox News.

The dramatic escalation came as Secretary of State John Kerry hosted his Chinese counterpart, Foreign Minister Wang Yi, at the State Department.

It would be hilarious if it wasn’t so dangerous.  The disrespect toward Kerry is much deserved, but it is primarily being shown to Obama. Kerry is just the proxy.  These two states, among many others, simply have no respect or fear of Obama.  None.  And while they’ll play the diplomatic game, they’re two realpolitik states.  When the former leader of the West shows weakness, they exploit it.  Kerry just is the guy they choose to embarrass directly.

Oh, and speaking of ISIS, have you been monitoring its growth in Libya?  You know Libya, the other foreign policy triumph of the Obama administration.  Different Secretary of State, same disastrous result.  And what is Obama doing?  Well he’s considering a solution much like his Syrian solution.  No boots on the ground and train some “good guys” to oppose ISIS.

So what does that tell adversaries?  A) He hasn’t a clue.  He’s in the middle of doubling down on failure.  B) He will not commit to the effective use of American force.  Yeah he may throw a few cruise missiles and air strikes at the place, but he really doesn’t plan to do much.  And C) he’s the lamest of lame ducks and will likely do what he’s done for 7 years if either China or Russia act aggressively – talk big and carry no stick.

Where does that leave this situation?

The Russians made clear that they were also coming in to help deal with the threat of the so-called Islamic State in Syria. It soon became apparent, however, that the Russian targeting strategy was less concerned with ISIS than tilting the balance of the civil war in favor of Assad and that Russian forces are now using tanks to target rebel strongholds in and around Aleppo.

Saudi Arabia has now moved fighter jets to Turkey with the aim of carrying out strikes inside Syria and has agreed to deploy special forces coming into Syria via Turkey.

Turkey is making it clearer by the day that it may feel it necessary to move from shelling mainly Kurdish positions inside Syria to moving troops and tanks into Syria. Meanwhile, concerns are being raised about Turkey invoking Article 5 of the NATO treaty, if Turkish forces were to be attacked by Russia or Syria.

NATO has every right to advise caution on Turkey, its fellow NATO member. But in these circumstances, following the Russian intervention — now that its full nature is revealed — it is very hard to argue that that it is not unreasonable for both Saudi Arabia and Turkey to contemplate such action.

NATO needs to establish two clear positions:

  1. That it will not become embroiled as an alliance in fighting on the ground in Syria.

  2. It will, however, respond to any attack that threatens the territorial integrity of Turkey.

Most people who know anything know that as the US goes, so goes NATO.

Anyone – do you really believe the so-called “commander-in-chief” would heed Turkey’s invocation of Article 5 and confront the Russians?

Two days before Christmas, as American policymakers were settling into the holidays, Russia quietly signed a sweeping air defense agreement with Armenia, accelerating a growing Russian military buildup that has unfolded largely under the radar. It was the most tangible sign yet that Putin is creating a new satellite state on NATO’s border and threatening an indispensable U.S. ally.

The buildup in Armenia has been glossed over in Washington, despite being a key piece of Vladimir Putin’s plan to dominate the region — along with its proxy Syria and growing military ties with Iran. Most importantly, Armenia shares an approximately 165 mile border with Turkey, a NATO member and the alliance’s southern flank. 

And now Russia has 8,500 military personnel, 600 artillery pieces, 200 warplanes and 50 warships in the area.

Does that smell like “fear” to anyone?

If so, it’s probably emanating from DC.

~McQ

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Economic Statistics for 23 Feb 16

The Case-Shiller Home Price Index rose 0.8% in December, and is up 5.7% on a year-to-year basis.

Existing Home Sales rose 0.4% in January to a 5.47 million annualized rate. Sales were up 11.0% from a year ago.

Richmond Fed Manufacturing Index turned negative in February, falling from 2 to -4.

The State Street Investor Confidence Index slipped from 108.8 to 106.5 in February.

February’s Consumer Confidence Index fell sharply, dropping -5.9 points to 92.2.

Redbook reports that last week’s retail sales rose to a still weak 1.2% on a year-ago basis, from the previous week’s 0.7%.


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Identity politics and the new segregation

I remember the Civil Rights era very well.  I was a teenager then and I remember the giants of the movement pushing the society they lived in to be treated as equal citizens.  They wanted “desegregation” and they wanted, as Martin Luther King Jr. famously said, to be judged by the content of the character, not the color of the skin.  They wanted to be a part of mainstream America, not “separate but ‘equal'”.

And that’s, deservedly, what they finally won.

Until recently:

Racial segregation is back. That scourge of the 20th century, with its racialised drinking fountains and buses with whites-only seats, is staggering back to life, zombie-like. Only now its loudest cheerleaders are not old-fashioned racists with a Bible in one hand and lit torch in the other. No, it’s the right-on, small-l liberals, those who, in a serious abuse of the English language, call themselves “progressive”. Welcome to the era of PC segregation.

The question you have to have is “why”?  Why would those who supposedly were in the vanguard of destroying racial segregation now be a proponent of reestablishing it?  How in the world do you justify using skin color to segregate certain elements of our citizenry?

What we’re witnessing, not only in Australia but in other Western nations too, is the reawakening of the segregationist mindset. Segregationism has been given a makeover, turned from something that once made us wince — try looking at photos of an American “Coloured Drinking Fountain” without feeling horrified — to something that is treated as acceptable, even good: a “special measure” that can benefit certain groups.

The fashion for PC segregation is especially strong on Western campuses. In the US, students who think of themselves as decent, right-minded, left-of-centre people are openly demanding segregated spaces.

At Oberlin College in Ohio, student protesters are agitating for “safe spaces” for “Africana-identifying students”. At New York University, a student campaign is underway to create “an entire floor of the mixed-use building… to be dedicated to students of colour.” Students at UCLA want a floor of the student union building to be made African-American-only, on the basis that there needs to be a “safe space for black students”.

Ah, yes … dependency.  The plantation beckons. These delicate snowflakes need “protection”.   And segregation is the answer (as is historical illiteracy).  Separate them and wall them off.  Bull Conner and the boys would heartily agree with this approach.

So what happened to flip the focus from the content of one’s character back to the color of one’s skin (or gender, or culture, or ethnicity, sexual orientation, etc)?

Why?  Identity politics as pushed by the new Red Guard of “progressives” on campus:

This is what the politics of identity has wrought. As the old left-right divide has become emptied of real meaning, and as we enter what some refer to as a post-ideological era, more and more of us are defining ourselves by our race, gender or sexuality rather than by our moral convictions. And this has nurtured a really divisive dynamic.

Where once progressive politics was about “the common man”, about the shared interests of people of various colours and of both sexes, now it’s about the apparently different experiences and outlooks of whites, blacks, gays, women, trans people, and so on. Universal ideals are being subsumed by the relentless rise of a deeply sectional politics of identity.

The end result? Segregation. Although now it’s dolled up as a “safe space”. How long before we create a blacks-only zone on buses in the name of having a “safe space for black people”? We must fight anew against racial thinking, and restate the case for character being the only criterion on which we should judge our fellow humans.

This deeply divisive concept has fragmented a society, or is at least in the process of doing so, that was learning to pull together.  Make no mistake, identity politics is a child of multiculturalism which is entirely from and embraced by the left.

So we now have a complete reversal of what was a laudable goal … desegregation and equal treatment/opportunity for all Americans.

What is to become of these delicate snowflakes on campus that must have segregated “safe spaces” to survive?

The world is a cruel place; it’s impossible to make it through life without hearing something that offends every fibre of your being. It’s impossible to make it through without your feelings being hurt, without something piquing your anxiety, and without strongly disagreeing with other people’s ideas. Outside the comfort of your campus safe space, there are people who will inevitably trample all over your delicate sensibilities, and most of them won’t care. There will be no counselor to baby you through the sexist joke you overheard your coworker telling, and no place for you in the company should you require time off to address your mental state every time your boss doesn’t use the correct gender pronouns. You will find yourself unemployed and unable to afford anything when you decide activism is more important than being an adult and making smart decisions.

They are going to fail miserably.  And it will be your fault, because society, outside of academia is systemically (pick your favorite “ist” description concerning race, gender, sexual orientation or ethnicity and insert here) and no one cares about their delicate feelings.

Well, yeah, that’s right about the lack of caring.  When you’re a 21 year old adult, you’re going to be treated like one and expected to be tough enough to endure the uncompromising reality presented by “the real world”.  This isn’t the dorm, you’re no longer in the echo chamber and not everyone agrees with your take on life, or your sentiments concerning segregation, safe spaces or race and gender.  “The real world” doesn’t much care what you think about these things, it expects you to produce and earn your way.  If you can’t or won’t then they don’t want you.  And no, it most likely won’t be because you’re whatever race, gender or sexual preference you are.  It’ll be because you have no skills, are immature and have no concept of what is required by “the real world” to survive.

Of course, there’s always academia to fall back upon.  Go back and infest the hallowed halls with your nonsense, only this time as part of the establishment.  And wait for the next generation of special snowflakes to show up and do to you exactly what you’re doing to this generation of “establishment” progressives in those ivy covered halls.

There is an alternative, however.

You could just grow up.

~McQ

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Oil production as a weapon

Just an interesting thought.

Saudi Arabia, among others in the middle east, have been getting rich off oil for decades.  So has Russia.  The Saudis, for one, have used these riches to spread a radical version of Islam through  out the world.  Russia has used its money to begin to rebuild its empire (and military) again and bully its neighbors.

What if the flow of oil money could be cut to a fraction of what it once was?  Wouldn’t that have the effect of at least slowing the ability of these nations to act as they are now?  While I have no idea the level of the effect, it can’t help but have some.

So why aren’t we, as a country, exploiting this?

Oil production in the United States will reach a record high by 2021 as efficiency gains help domestic producers to combat the low prices that are likely to force hefty output cuts this year and next, the International Energy Agency (IEA) said on Monday.

After an initial dip this year and next, U.S. output is expected to climb to 14.2 million barrels per day (bpd), the IEA said in its medium-term outlook, citing the “free-for-all” that has come to characterize today’s oil market.

Because, let’s face it, this is good news for the US and especially for the US consumer.  For one thing it seems to be breaking the OPEC cartel’s stranglehold on pricing.

An agreement this month between major OPEC and non-OPEC producers to freeze output at January’s levels to bolster the oil price was viewed as unlikely to have any significant short-term impact.

Again, a positive.  The day of sheiks dictating how much oil you’ll get and how much you’ll pay seem, if this report is true, to be over.

The pain of oil prices falling to about $30 a barrel — their lowest since 2003 — has been widespread, but it has hit OPEC countries particularly hard.

At current crude prices the IEA estimates that oil export revenue for OPEC as a whole will drop this year to $320 billion from a peak of $1.2 trillion in 2012 and $500 billion last year.

So good old American know-how and efficiency developed in the private sector has made it worthwhile to pump shale oil at a profit.  And that is having a fantastic effect for the consumer in the market as well as helping to cut funds to those who would use them to act aggressively in the world.

Seems to be a win-win to me.

But then, if we had a government that actually was on the ball and saw the advantage to this, we wouldn’t have a president who is proposing a $10 a barrel tax on oil would we?

~McQ

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