A light week of economic stats starts with the Housing Market index, which rose 2 points to 64 in October.
September housing starts rose a much stronger than expected 6.5% to a 1.206 annual rate, but permits were weak, falling -5.0% to 1.103 million, annualized.
Redbook reports that last week’s retail sales improved to 1.3% on a year-ago basis, from the previous week’s 1.1%. Still weak, though.
Essentially three reasons – youth, “progressive” leftists and economic illiterates. And, yes, they can be all three. But not necessarily.
Back in May as Sanders was emerging as a presidential candidate, many were caught by surprise that an avowed socialist could pile up the numbers he was getting.
Bernie Sanders, a Senator for Vermont and currently the only declared challenger to Hillary Clinton for the 2016 Democratic presidential nomination, is the only member of Congress to describe himself as a socialist. For much of the Cold War socialism evoked images of military parades in Moscow’s Red Square, but for Sanders, and many of America’s self-declared socialists, their aim isn’t to bring revolution to America but to make America more like Sweden and Norway.
And, of course, that’s precisely what we’ve seen Sanders continue to do – tout the European model to hide the well-deserved reputation that socialism really has among the historically literate. Apparently it has worked. YouGov did a poll at that time and discovered the source of Sanders support. While 52% of Americans have a favorable view of capitalism, only 26% have such a view for socialism. Where is that favorable view to be found?
Among younger Americans, however, attitudes are a lot more divided. 36% of under-30s have a positive view of socialism, while 39% have a positive view of capitalism.
Among older Americans, who actually lived through the era of socialism and watched its pernicious effects, only 15% view it favorably while 59% view it negatively. So we have a whole generation growing up who have no experience seeing the reality of socialism played out in front of them. Instead they’re pointed to a couple of socialist Potemkin villages and told that’s how it can be. Don’t expect them to read the recent trashing of the Nordic model that is so obvious to those who have even an inkling of economic savvy.
Of course, we shouldn’t be surprised, as the Democratic party continues to move further left, that they support socialism more and more.
Democrats (43%) are also much more likely than either independents (22%) or Republicans (9%) to have a favorable view of socialism. Democrats, in fact, are as likely to have a favorable view of capitalism (43%) as socialism. While only 9% of Republicans see socialism in a positive light, 79% have a good view of capitalism.
History, apparently, has no relevance with the left. Nor do facts or economic laws. They’re sure that the only reason the magic of socialism hasn’t been successful and produced the utopia they’re sure it promises is it just hasn’t been done right … yet.
To a good portion of them, Bernie is the man to make that happen.
And, probably just as important is this is the same contingent that helped put our current occupant in the White House and keep him there for 2 terms.
Solar energy has been touted by those who support its wide use as a completely “clean” way of producing electricity.
But reality gives lie to that claim. Take the Ivanpah plant in the Mojave Desert for example. It sits on 5.6 square miles of mostly undisturbed public land that was home to desert tortoises, a species threatened with extinction, among other wildlife. It fries birds in flight regularly. Environmentalists concerns were ignored.
Why? Because it was an Obama administration priority, whether it is important to anyone else or not.
“With projects like this one, and others across this country, we are staking our claim to continued leadership in the new global economy. And we’re putting Americans to work producing clean, home-grown American energy that will help lower our reliance on foreign oil and protect our planet for future generations.”
Except it not only doesn’t lower our “reliance on … oil”, it is a large user of fossil fuel. Yes, that’s right – it has a huge carbon footprint.
Data from the California Energy Commission show that the plant burned enough natural gas in 2014 – its first year of operation – to emit more than 46,000 metric tons of carbon dioxide.
That’s nearly twice the pollution threshold for power plants or factories in California to be required to participate in the state’s cap-and-trade program to reduce carbon emissions.
The plant, the recipient of $1.6 billion in federal loan guarantees as well as $600 million in tax credits, uses natural gas to preheat water for steam. It is only after the water is preheated that the solar energy is applied to finally produce the steam to turn the generators. And on cloudy days? Yes, all natural gas and nothing but natural gas.
And the enviros? Well, David Lamfrom, desert project manager of the National Parks Conservation Association, is pretty sure this isn’t what they signed up for. He points out that this isn’t a solar project but instead a hybrid project which uses both solar and fossil fuel to generate electricity.
“It feels like a bait and switch,” Lamfrom said. “This project was held up as a model of innovation. We didn’t sign up for greener energy. We signed up for green energy.”
The Obama administration lied about the project? My goodness – the next thing you’ll tell us is “if we like our health insurance we won’t be able to keep it”.
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US industrial production declined by -0.2% in September, while capacity utilization in the nation’s factories fell -0.1% to 77.5%.
Job openings fell to 5.370 million in August, from 5.668 million in July.
The University of Michigan’s Consumer Sentiment Index rose nearly 5 points to 92.1 for the preliminary October reading.
The Atlanta Fed Business Inflation Expectations reading rose from 1.7% to 1.8% for October.
Foreign demand for long-term U.S. securities rose a moderate $20.4 billion in August, up from July’s $7.7 billion.
Apparently not. Looking at the operations in Syria, the NYT says:
Taken together, the operations reflect what officials and analysts described as a little-noticed — and still incomplete — modernization that has been underway in Russia for several years, despite strains on the country’s budget. And that, as with Russia’s intervention in neighboring Ukraine, has raised alarms in the West.
In a report this month for the European Council on Foreign Relations, Gustav Gressel argued that Mr. Putin had overseen the most rapid transformation of the country’s armed forces since the 1930s. “Russia is now a military power that could overwhelm any of its neighbors, if they were isolated from Western support,” wrote Mr. Gressel, a former officer of the Austrian military.
Of course we’ve been advised, for years, that the Russian military was only a shadow of its former self under the USSR. And while it certainly isn’t as potent as when Russia was the USSR, it is apparently vastly more potent than we’ve been led to believe.
Another factoid from the article:
Russia’s fighter jets are, for now at least, conducting nearly as many strikes in a typical day against rebel troops opposing the government of President Bashar al-Assad as the American-led coalition targeting the Islamic State has been carrying out each month this year.
The bottom line, of course, is we still have a much more powerful military – but we’re in the middle of cutting back on it both in manpower and spending. And, of course, that sort of power is only important if your potential enemies know you’re willing to use it. Russia is demonstrating that willingness.
Russia is also “field testing” its equipment and it is “blooding” its troops.
Not to mention rallying “allies” to the Russian cause. China has sent forces to Syria. And the latest?
On Wednesday, a U.S. official confirmed to Fox News that Cuban paramilitary and special forces units are on the ground in Syria, citing evidence from intelligence reports. The official, who spoke on condition of anonymity, said Cuban troops may have been training in Russia and may have arrived in Syria on Russian planes.
Isn’t normalization with Cuba wonderful? Isn’t that reset with Russia working out well? It sure has been rewarding so far.
Consumer Prices fell -0.2% overall in September, while the core rate, less food and energy, rose 0.2%. The CPI is unchanged on a year-over-year basis, though the core CPI is up 1.9%.
The Empire State manufacturing survey improved slightly in October, though still coming in at a poor -11.36 from -14.67.
The Philadelphia Fed Business Outlook Survey stayed in negative territory rising to only -4.5 in October from -6.0.
With the 2015 US Government Fiscal Fear complete, a $91.1 billion surplus in September leaves the annual deficit down by 9.2% to $438.9 billion for the year. The annual budget deficit was 2.5% of GDP, versus 2.8% in FY2014.
Initial weekly jobless claims fell 7,000 to 255,000. The 4-week average fell 2,250 to 265,000. Continuing claims fell 22,000 to 2.201 million.
The Bloomberg Consumer Comfort Index rose 0.4 points to 45.2 in the latest week.
The Fed’s balance sheet rose $18.5 billion last week, with total assets of $4.505 trillion. Reserve bank credit rose $4.6 billion.
The Fed reports that M2 money supply rose by $2.1 billion in the latest week.
Noting the obvious, Vladimir Putin pointed out that the US is in a very weak position concerning Syria:
Russian President Vladimir Putin continued a war of words with the U.S. over Syria, calling its policy weak and lacking in objectives as his air force carried out fresh bombing raids in support of Syrian leader Bashar al-Assad.
“I don’t really understand how the U.S. can criticize Russia’s actions in Syria if they refuse to have direct dialogue,” Putin told reporters Thursday during a visit to Astana, Kazakhstan. “The basic weakness of the American position is that they don’t have an agenda, though we’re keeping the door open” for high-level discussions with Washington, he said.
Of course, the administration had an answer:
“We’ve said that we’re not interested in doing that as long as Russia is not willing to make a constructive contribution to our counter-ISIL effort,” White House press secretary Josh Earnest told reporters Wednesday, using an acronym for Islamic State. “Russia has their own agenda and it’s an agenda right now that they’re pursuing on their own.”
I suppose that’s so … but so does the US and it is apparent there really isn’t any desire for “dialogue” unless the US can have its way. And it is a basic understanding in negotiations that the weaker party doesn’t have as many choices (if any) than the stronger party. The US is certainly in the weaker position having ceded control of the Syrian conflict to Russia. Also, don’t forget that the US withheld military aid to Iraq until Iraq made political changes it wanted to see happen. What did Iraq do? Well, it bought its fighter aircraft from Russia instead (likely with US money).
As for the possibility of talks. Well, it seems that NATO partner Turkey has figured out a way to have them:
Russia and NATO member Turkey are establishing “lines of communication between our militaries in connection with events taking place in Syria” amid tensions over violations of Turkish airspace, Russian Deputy Foreign Minister Aleksey Meshkov told a conference in Moscow on Thursday, Interfax reported. Turkey and Russia can find consensus on Syria, Umit Yardim, the Turkish ambassador to Moscow, said at the same meeting.
Interesting and telling.
Foreign affairs, for this administration, is a disaster. And they seem determined to make it worse instead of better.
The MBA reports that mortgage applications fell -27.6% last week, with purchases down -34.0% and refis down -23.0%. This is the second week after the new disclosure rules were imposed. Last week, apps skyrocketed, so this week’s free-fall actually reflects a return to normalcy.
Producer Prices for Final Demand continued to fall by -0.5% in September, sparking new fears of deflation. Prices ex-food and -energy fell-0.3%, as did prices ex-food, -energy, and -trade services. On a year-over-year basis, PPI-FD is down 01.1% overall, but pieces ex-food and -energy are up 0.8%, and prices ex-food, -energy, and -trade services are up 0.5%.
Retail sales for September rose only a weak 0.1%. Sales less autos fell -0.3%, while sales less autos and gas were unchanged.
Business inventories were unchanged for a second month in August, while sales fell 0.6%, sending the stock-to-sales ratio up to 1.37.
The Fed’s most recent Beige Book on the economy reports that only 3 Fed districts reported “moderate” growth, with 6 reporting “modest” growth, 3 with “slowing” growth, and the Kansas City district reporting economic contraction.