Questions and Observations

Free Markets, Free People

Economic Statistics for 19-20 Dec

The Bloomberg Consumer Comfort Index moved into the minus 20s for the first time in 10 weeks, at -29.4.

Initial jobless claims rose 11,000 last week, to 379,000. The 4-week moving average rose 14,750 to 343,500. Continuing claims rose 94,000 to 2.884 million. These are all holiday numbers, though, so the week-to-week number is pretty volatile.

The Philadelphia Fed Survey’s General Business Conditions Index rose 0.5 points to 7.0 in December.

Existing home sales fell a sharp -4.3% in November, to a 4.9 million annual rate.

The Conference Board’s index of leading indicators rose 0.8% in November.

The Commerce Department’s final GDP revision for the 3rd Quarter was revised sharply upwards to a 4.1% annual rate. The GDP Price Index remained unrevised at 2.0%. Much of the revision came from increases in personal consumption expenditures, higher exports, and lower imports.

3rd Quarter corporate profits were revised upwards to $1.869 trillion vice the initial estimate of $1.872 trillion.

The Atlanta Fed Business Inflation Expectations Survey was unchanged at 1.9% in December.

The Kansas City Fed Manufacturing Index fell sharply in December to -3 from last month’s 7.

The Fed’s balance sheet rose $14.1 billion last week, with total assets of $$4.008 trillion. Reserve Bank credit increased $53.0 billion.

The Fed reports that M2 Money Supply increased by $17.5 billion last week.


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We share the same climate as … the Romans?

What climate alarmists will swear to is a) today’s climate is unprecedented in human history and b) is a result of human action (specifically, industrialization).

But what if these conditions have existed prior to now during another era?  Wouldn’t that put the end to both “a” and “b”?  Well you’d think the Medieval Warm Period would have done that, but alarmists have all but handwaved that away as an “anomaly” if they admit it existed at all.

However, a study has found another era that seems to have shared our climate:

A Swedish study found that the planet was warmer in ancient Roman times and the Middle Ages than today, challenging the mainstream idea that man-made greenhouse gas emissions are the main drivers of global warming.

The study, by scientist Leif Kullman, analyzed 455 “radiocarbon-dated mega-fossils” in the Scandes mountains and found that tree lines for different species of trees were higher during the Roman and Medieval times than they are today. Not only that, but the temperatures were higher as well.

Oh, my.  Those industrialized Romans must have been the blame.  Right?  I mean if you choose to be consistent about your argument, wouldn’t you have to at least consider that as a claim to why the Roman era was even warmer than now (burning that fossil fuel, huh)?  I mean, if you’re sure it is human action leading to the rise in temperatures and, specifically, industrialization?

Yeah, that’d be the logical approach, wouldn’t it?  So this new data (among all the other “new” data that is so roundly ignored by so-called scientists who are pushing the alarmist line) is very inconvenient.  And, in reality, the study points out that 5,000 to 9,000 years ago, without any real human action or industrialization, the global temperature was even higher than it was during the Medieval Warm Period and the Roman era:

“Historical tree line positions are viewed in relation to early 21st century equivalents, and indicate that tree line elevations attained during the past century and in association with modern climate warming are highly unusual, but not unique, phenomena from the perspective of the past 4,800 years,” Kullman found. “Prior to that, the pine tree line (and summer temperatures) was consistently higher than present, as it was also during the Roman and Medieval periods.”

Kullman also wrote that “summer temperatures during the early Holocene thermal optimum may have been 2.3°C higher than present.” The “Holocene thermal optimum was a warm period that occurred between 9,000 and 5,000 years ago. This warm period was followed by a gradual cooling period.”

According to Kullman, the temperature spikes were during the Roman and Medieval warming periods “were succeeded by a distinct tree line/temperature dip, broadly corresponding to the Little Ice Age.”

So what’s a skeptic to do when he see’s this data which directly contradicts the alarmist claims?

That’s easy … remain very skeptical of the “science” underlying the alarmist nonsense and make sure that politicians don’t try to cash in on bad science by taxing you for something that just isn’t your problem.

~McQ

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Economic Statistics for 18 Dec 13

The Federal Open Markets Committee ended their meeting today. They announced that they would start a modest tapering on Quantitative Easing III in January starting with a $10 billion cut. They left interest rates unchanged, with the Fed Funds rate at a targeted 0% to 0.25%. Their December projections for GDP remain in modest—which is to say, below-trend territory: 2013: 2.2 to 2.3%; 2014: 2.8 to 3.2%; 2015: 3.0 to 3.4%; 2016: 2.5 to 3.2%; longer run: 2.2 to 2.4%.

Housing starts in November jumped 22.7% to a 1.091 million annual rate.

The MBA reports that mortgage applications fell -5.5% last week, with purchases down 6.0% and refinancings down 5.0%.


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It took almost 6 years, but Peggy Noonan is finally waking up …

Seriously, if I were her, I’d be embarrassed to write this:

Everyone is doing thoughtful year-end pieces on President Obama. Writers and reporters agree he’s had his worst year ever. I infer from most of their essays an unstated but broadly held sense of foreboding: There’s no particular reason to believe next year will be better, and in fact signs and indications point to continued trouble.

I would add that in recent weeks I have begun to worry about the basic competency of the administration, its ability to perform the most fundamental duties of executive management. One reason I worry is that I frequently speak with people who interact with the White House, and when I say, “That place just doesn’t seem to work,” they don’t defend it, they offer off-the-record examples of how poorly the government is run.

“Have begun to worry?!”  Really?!  Just now?!

The guy has been clueless since the beginning and Peggy Noonan is just now beginning to worry.  My goodness where has she been?  We’ve watched a raft of failures in both domestic and foreign policy, an economy and job market that continue to suck, and an imperial presidency in which the incumbent prefers to rule by decree rather than as the Constitution outlines.  And then there’s his signature law – ObamaCare.

And Noonan is just now starting to worry.

Lord save us from the chattering class.  Blinders firmly in place, they’ve ignored this incompetence for all these years and now, when it is sort of safe to actually point it out, they’re “discovering” it.

They’re as clueless as this president.

~McQ

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Economic Statistics for 17 Dec 13

In weekly retail sales, Redbook reports a weak 2.9% increase from the previous year. ICSC-Goldman reports a weekly sales increase of 4.8%, but a weak a 2.0% increase on a year-over-year basis.

Consumer prices were unchanged in November, with a core CPI increase of 0.2%. Annually, the CPI is up 1.2%, and up 1.7% less food and energy.

The Housing Market Index surged 4 points to 58 in December.

The nation’s current account deficit narrowed slightly in the 3rd Quarter, to $-94.8 billion.


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Economic Statistics for 16 Dec 13

The NY Fed’s Empire State Manufacturing Survey rose from -2.21  to 0.98 in December.

The December revision to Q3 productivity shows a 3.0% annualized rate of productivity growth, while unit labor costs fell -1.4%.

The Markit Economics PMI manufacturing index flash for December rose 0.1 points to 54.4.

Foreign net demand for US long-term securities rose $35.4 billion in October.

Industrial production for December rose a sharp 1.1%, while capacity utilization in the nation’s factories rose 0.9% to 79.0%.


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Gridlock: It’s a feature, not a bug

No one said it would go smoothly or that compromise was a requirement in Congress.  For whatever reason, “progress”, for some, is defined in the number of new laws passed and hours worked in Congress.  NBC News for instance in their daily email newsletter this morning:

By now, we’ve told you how unproductive the 113th Congress has been so far, now passing just 57 bills into law (compared with 67 passed at this same point in time by the previous 112th Congress, which then was the least productive modern Congress on record). But here’s another way to measure how unproductive the Congress has been — in terms of hours worked. “According to data analyzed by The New York Times, the House of Representatives, which ended its business for the year last week, left town with the distinction of having been at work for the fewest hours in a nonelection year since 2005, when detailed information about legislative activity became available. Not counting brief, pro forma sessions, the House was in session for 942 hours, an average of about 28 hours each week it conducted business in Washington. That is far lower than the nearly 1,700 hours it was in session in 2007, the 1,350 hours in 2005 or even the 1,200 in 2011.” We know members of Congress do much of their work with constituents back home. But the TV ads here kind of write themselves. Who wouldn’t want a 28-hour work week? Expect every incumbent to get dinged with that “28 hour work week” hit while “you at home struggle to make ends meet working 40 or 50 hours” yada yada.

Yada, yada indeed.  We ought to give them medals for not intruding any further on our freedoms.  OK, not really.  But apparently it is forgotten that Congress was supposed to be a part-time job (thus the two sessions) and that only laws of necessity (as outlined in the Constitution) were to be passed.   Now, apparently, Congress is only “productive” when it is engaged in stepping on everyone’s freedoms by passing dozens upon dozens of new laws, many of which are unnecessary or are designed to reward one constituency at the cost of another.

And we’ve developed a ruling class via career politicians and their heirs.  I’ve never been so tired of the names Clinton, Bush, Kennedy, Cuomo, etc.  Political power isn’t hereditary … or wasn’t supposed to be anyway.

Why do people feel the way NBC does?  Because they don’t pay attention and they have no sense of history or how this nation was formed.  They’ve totally bought into the mind drugs that purveyors like NBC and the NY Times offer every day. According to them, a “productive” Congress is a Congress engaged in finding new ways to run your life. As Dale said last night we’re finally to the stage that most of the country believes they belong to the state.

American exceptionalism isn’t a figment of anyone’s imagination. It is, or was, a product of our founding. And as long as we stuck to the principles of our founding, we remained an exceptional country. Now it seems we’re headed toward the mediocrity of any number of other countries simply by trying to fix something that wasn’t broken. We’ve fallen for the siren song of “free” stuff, and there are enough Americans benefiting from the state robbing others to give to them that they see no reason to change that slide into the abyss. As long as the free stuff continues to come their way while they live, well, that’s just fine.

And the NBCs of the world are just fine with helping us along to that unexceptional, over-regulated, nanny-state existence that they apparently think is best for us and our country.

~McQ

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Observations: The QandO Podcast for 15 Dec 13

This week, in the last podcast of the year, Bruce, Michael and Dale talk about Iran, government, and Obamacare.

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.

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Economic Statistics for 13 Dec 13

Initial jobless claims rose 68,000 to 368,000. The 4-week average rose 6,000 to 328,750, while continuing claims rose 40,000 to 2.791 million. It’s the holiday period, though, so a lot of this wild swing probably comes from wonky seasonal adjustments.

Retail sales rose 0.7% in November. Less autos, sales were up 0.4%, and up 0.6% less autos and gas.

Export prices rose 0.1% in November, while import prices fell -0.6%. On a year-over-year basis, export prices are down -1.6% and import prices have fallen -1.5%.

The Bloomberg Consumer Comfort Index rose to -30.9 in the latest week, having risen 7 points since November.

Business inventories rose 0.7% in October, while a 0.5% increase in B2B sales left the stock-to-sales ratio unchanged at 1.29.

Information services revenue rose 1.1% in the 3rd quarter, and is up 4.9% on a year-to-year basis.

The Producer Price Index fell -0.1% in November, and rose 0.1% less food and energy. On a year-over-year basis, the PPI is up 0.7%, and up 1.3% less food and energy.

The Fed’s balance sheet rose a sharp $61.3 billion last week, with total assets of $3.994trillion. Reserve Bank credit increased $21.1 billion.

The Fed reports that M2 money supply rose by $1.7 billion in the latest week.


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