Questions and Observations

Free Markets, Free People

Economic Statistics for 3 Mar 16

Chain stores that still report monthly sales growth are mostly reporting stronger rates of year-on-year sales in February than January.

Non-farm productivity for the 4th quarter of 2015 was revised upwards to -2.2%, and labor cost increased were revised down to 3.3%.

Factory orders rose a strong 1.6% in January thanks to wide strength in durable goods. Core capital goods orders rose 3.4%.

Markit’s PMI Services index for February fell to a contractionary 49.7 from 53.2. The ISM Non-Manufacturing index held steady, down only -0.1 point to 53.4.

The Challenger Job-Cut Report came in at 62,599 layoffs announced in February.

The Gallup Good Jobs rate in the U.S. was 44.6% in February, down just -0.1% from the previous month.

Initial weekly jobless claims rose 6,000 to 278,000. The 4-week average fell 1,750 to 270,250. Continuing claims  rose 3,000 to 2.257 million.

The Bloomberg Consumer Comfort Index fell -0.6 points to 43.6 in the latest week.

The Fed’s balance sheet fell $-11.3 billion last week, with total assets of $4.479 trillion. Reserve bank credit fell $-8.5 billion.

The Fed reports that M2 money supply rose by $34.2 billion in the latest week.


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Dilemma

Thomas Sowell observes:

The “Super Tuesday” primaries may be a turning point for America — and quite possibly a turn for the worse. After seven long years of domestic disasters and increasing international dangers, the next President of the United States will need extraordinary wisdom, maturity, depth of knowledge and personal character to rescue America.

Instead, if the polls are an indication, what we may get is someone with the opposite of all these things, a glib egomaniac with a checkered record in business and no track record at all in government — Donald Trump.

If so, the downward trajectory of America over the past seven years may well continue on into the future, to the point of no return.

Donald Trump is the wrong guy at the right time (much like Obama in 2008) and that, at least to me, is what is so dangerous about this manifestation of anger that is suddenly sweeping the country, at least on the right.  We get another 4 years, at least, of incoherence and dangerous ineptness.  About the only hilarity would be the Republicans initiating impeachment proceedings on a “Republican” president … and I could actually see that happening.  So watch who Trump names as VP if he’s the nominee. By the way, I’m fine with the anger and like the movement, just not happy with the choice of “candidate” to represent it.

Not that the alternative is any better.  If you want a high level grifter in the White House,  Clinton fills the bill.  In Clinton’s case it’s influence peddling among many other things:

In June 2009, Clinton emailed Neera Tanden, a former Clinton campaign operative, then a top aide to Health and Human Services Secretary Kathleen Sebelius, and now the president of the Center for American Progress.

Clinton wanted Tanden to arrange a meeting between three doctors and Nancy Ann DeParle, the White House official leading its health care reform efforts.

“I can arrange it, no worries,” Tanden assured her. “I know Dean Ornish from the Obama campaign,” Tanden said, referring to one of the trio.

Ornish is a high-dollar Democratic donor. According to federal campaign finance records, he’s given more than $700,000 to Democratic campaigns, party organs, and outside groups since the 1990s.

His organization, the Preventive Medicine Research Institute, previously received $3.5 million in earmarks courtesy of then-House Majority Leader Nancy Pelosi (D., Calif.), one of the recipients of his political contributions.

Ornish has donated to both of Clinton’s presidential campaigns, and co-hosted a fundraiser for the campaign in 2007. He is also a high-dollar donor to the Clinton Foundation, having given between $100,000 and $250,000, according to the Foundation’s website.

Tanden apparently arranged the meeting between Ornish and DeParle. “Thanks for following thru,” Clinton wrote five days later.

We’ll be back to selling the Lincoln bedroom, and why not?  They got away with it the last time.

What’s interesting is not that the two probable choices are so awful and are likely to do irreparable harm, but that on the right, there’s an open revolution going on and on the left it is the blessing and intrenchment of machine politics designed to “win” at any cost and certainly ignoring any moral problems with their candidate.  The right is so mad they’ll take anyone who spits in the establishment’s face and the left is committed to fixing the establishment even more firmly in Washington DC.

~McQ

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Economic Statistics for 2 Mar 15

The Fed’s Beige Book characterizes the economy as relatively flat, with most districts reporting modest to moderate growth.

February’s ADP Employment Report indicates that 214,000 new private sector jobs were created during the month.

The Gallup US Job creation Index was unchanged at 29 in February.

The MBA reports that mortgage applications fell -4.8% last week, with purchases down -1.0% and refis down -7.0%.


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Summing up the state of America

Zero Hedge sums up both the “Super Tuesday” results and the broader political and policy situation in the US very well:

Negative interest rates. The war on cash. More quantitative easing. Monetary policy described as a “helicopter drop”. An avowed socialist running for President – and competing well. Another candidate under investigation by the FBI for mishandling classified information. A debate that featured a candidate begging for someone to attack him so he could get some air time. One candidate accusing another of stealing from the party and calling another a liar. The closed captioning for most of the debate reading “unintelligible yelling”. An accomplished, serious-minded governor getting drowned out by three buffoons competing to see who can get the biggest guffaws from a crowd that makes the audience at a professional wrestling match look reserved and intellectual.

It’s getting weird and the market is having a tough time figuring out what to take seriously, what to ignore, what to laugh nervously about and what to just laugh at. Are we really about to put up our very own American version of Silvio Berlusconi as the Presidential candidate of a formerly serious political party? Is the other party really having a competitive race with one candidate running on an overtly socialist agenda that is barely distinguishable from his opponent’s? Who doesn’t claim to be a socialist? Are central banks actually considering pushing interest rates more negative after getting basically no positive response from the initial push below the previously sacrosanct zero bound? Has the Federal Reserve actually told banks to prepare for negative interest rates here in the US right after raising rates for the first time in years? Are serious economists actually have a debate about whether it is a good idea to just print up cash and pass it out? Is that really monetary policy? Are governments really talking about banning actual currency, the very money created by that government? Money that depends, oh by the way, solely on people’s trust that the government will stand behind the money they are about to outlaw? Has everyone lost their freaking minds?

My sentiments to a tee.  This is probably the most awful domestic political climate I’ve seen in my lifetime.  I’ve can’t remember having such a horrible “choice” before.  And for me, there really isn’t a choice given who is likely to win on either side.

Yes, there’s anger out there on both sides toward the political establishment.  They took a great country and have run it into the ditch.  Got it and agree with the anger.  But what this is boiling down to is the white version of Obama and a crook that makes Nixon look like an altar boy in comparison.  The voting public obviously wants some sort of political change but it also seems to be demanding change that will make a bad situation worse.

The pregnant question is “how did we get here?”  The Republican party obviously got here by a fairly conventional route – promise them anything to get elected and then, basically, ignore them.  The “them” being the GOP faithful.  So how did Trump become the answer, unless you’re a low information voter who is content to let a more unstable version of the current resident of the White House call the shots? How can anyone spend anytime researching the guy and come away with a positive feeling about what he’d do if he were in the Oval Office?  I’m sorry, but this bombastic political chameleon, who has duped and used people his whole life, will be as large if not a larger disaster than Obama has been.

And as for the crook on the other side, if anyone wants to firmly establish corruption at the highest levels of the country just to say we have a “woman president”, then you deserve to be horsewhipped.  Machine politics will survive and become even more pervasive and controlling.  Is this what everyone wants?   The Democrats are sliding hard left.  Sanders is popular because he too has a vast support group that is willfully (or not) ignorant and wants “free” stuff.

For goodness sake this is about what is best for the country, not some ideological check mark.  Certainly a woman should be our chief executive at some time.  But Clinton?  As a whole, those who voted for Obama willfully ignored the glaring and obvious reasons not to elect him to make sure the race check mark was made.  And what did it give us?  The worst president in my lifetime.  Now, it seems, the voting public is going to double down and make him the second worst president in my lifetime regardless of who wins in November.

 

“The main problem in any democracy is that crowd-pleasers are generally brainless swine who can go out on a stage & whup their supporters into an orgiastic frenzy—then go back to the office & sell every one of the poor bastards down the tube for a nickel apiece.” – Hunter S. Thompson, Fear and Loathing on the Campaign Trail ’72

That’s where we’re headed.  Those that want to see it “all burn down” may be in the middle of seeing just that.

~McQ

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Economic Statistics for 1 Mar 16

Motor Vehicle Sales were strong in February,  at a 17.5 million annualized pace overall, and 14.1 million for NorthAmerican models. 

Construction spending rose a strong 1.5% in January, with a year-on-year increase of 10.4%.

The ISM Manufacturing Index rose 1.3 points to a still-slightly-contractionary 49.5 in February. Meanwhile, the PMI Manufacturing Index held steady at 51.3.

Gallup’s economic confidence index averaged -13 in February. This is significantly below the reading of +1 recorded in February, 2015.

Retail sales weakness continues, as Rebook reports that last week’s retail sales fell to 0.6% on a year-ago basis, from the previous week’s 1.2%.


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The useless and predatory UN

Useless you say?  How is it “useless”?

Well there are a myriad of things one could point too, but perhaps the latest from the UN’s “elections”:

UN Watch instead is calling on Ban Ki-moon, U.S. Ambassador Samantha Power, and the EU’s UN ambassadors to condemn the world body’s “absurd and morally obscene” election just of Syria and Venezuela to senior posts on a decolonization committee that is charged with upholding fundamental human rights in opposing the “subjugation, domination and exploitation” of peoples — a propaganda victory that—like before—is already being trumpeted by the Assad regime.

Yet the UN wants to be taken seriously as some sort of world governing body that looks out for the interests of the oppressed and the subjugated by putting members of two of the most oppressive regimes on this committee.

Uh huh.

By the way, the 17 territories still held as “colonies” are as follows:

The 17 territories still listed as colonies by the committee are American Samoa, Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, the Falklands, French Polynesia, Gibraltar, Guam, Montserrat, New Caledonia, Pitcairn, Tokelau, Turks and Caicos, St. Helena, the U.S. Virgin Islands and Western Sahara.

Most of those on the list want nothing to do with disassociation with their “colonist”. In reality, this is just another in a long line of committees the UN uses for lavish boondoggles:

The committee is notorious for its habit of holding regional seminars in tropical islands—”alternately in the Caribbean and the Pacific”—at considerable expense. Madeleine K. Albright, as U.S. representative at the United Nations in the late 1990s, called these expenditures ”frivolous and unneeded.”

At the time, activities of the committee were investigated by the United Nations inspector general, Karl T. Paschke, who concluded that money was being squandered.

And, as usual, you (among many others) pay for it.

In other UN news, much more serious than the above:

“A horrible thing,” says an elfin 14-year-old girl, who describes how a Burundian soldier dragged her into his barracks and raped her, leaving her pregnant with the baby boy she now cradles uncomfortably.

The allegations come amid one of the biggest scandals to plague the United Nations in years. Since the U.N. peacekeeping mission here began in 2014, its employees have been formally accused of sexually abusing or exploiting 42 local civilians, most of them underage girls.

U.N. Secretary General Ban Ki-moon has called sexual abuse by peacekeepers “a cancer in our system.” In August, the top U.N. official here was fired for failing to take enough action on abuse cases. Nearly 1,000 troops whose units have been tied to abuses have been expelled, or will be soon. Among them is the entire contingent from the Democratic Republic of the Congo.

Yes, it is a “cancer” in the UN’s “system, but the UN does nothing about it.  It certainly isn’t a new problem:

In Bosnia in the 1990s, peacekeepers were accused of soliciting sex from women who had been trafficked and virtually enslaved in local brothels. In the Democratic Republic of the Congo in the early 2000s, more than 150 allegations of abuse and exploitation were registered against peacekeepers, and U.N. investigators found that many of the alleged victims were orphans. U.N. missions in Kosovo, Haiti, Liberia and other places also have been tarnished by such allegations.

The UN was supposedly a noble idea whose time had come when it was first begun.  Now it has devolved into a third world debating and boondoggle club with a little rape on the side for “peacekeepers”.

If I was in one of the countries the UN has attempted to “help” and I saw a blue helmet, I’d get as far away from the person wearing it as I could.

They’re useless in a real sense, but certainly predatory if you have any females in the area … no matter how young.

~McQ

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Economic Statistics for 26 Feb 16

An upward revision to inventories moved the 1st revision of Q4 GDP to 1.0% annualized, while the GDP price index rose a tick to 0.9%.

January’s international trade in goods came in at a deficit of $-62.2 billion, as exports fell -2.9% and imports fell -1.5%.

Both personal income and spending rose 0.5% in January. The PCE Price Index rose 0.1% overall, and 0.3% at the core. On a year-over-year basis, the PC Price index is up 1.3% at the headline level, and 1.7% ex-food and -energy.

The University of Michigan’s Consumer Sentiment Index rose 1.7 points to 91.7 in February.


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Stray Voltage

Professor Melissa Click, recently the face of the ugly left during the recent University of Missouri protests, has been notified by the Board of Curators that they’re terminating her employment there.  Click, you may remember, was charged with assault when she confronted a student reporter and grabbed his camera while calling for “some muscle” to help her force him to leave.  Interestingly, the Board of Curators also cited her actions at the Homecoming Parade a month before as grounds for dismissal as well.  You can read the whole investigation here.  So much for her tenure hearing … ain’t gonna happen.  You can read the whole investigation and the letter for the Board here.  I did last night.  Very interesting.  I can’t say she didn’t deserve what she got, and, frankly, it’s good to see bad actions ending up having consequences.  Apparently she thought and admission and apology were sufficient.  The Board did not.

Speaking of the SJWs, those at Brown University simply can’t get over the fact that they’re being required by professors to turn in class assignments on time after their activism has totally exhausted and drained them emotionally:

Liliana Sampedro, one of the students who compiled the diversity ultimatum, argued that refusal to grant such accommodations “has systemic effects on students of color,” who she said may sometimes feel obligated to prioritize their activist work over their studies.

“I remember emailing the professor and begging her to put things off another week … I hadn’t eaten. I hadn’t slept. I was exhausted, physically and emotionally,” Sampedro recalled. The professor nonetheless insisted that she submit a previously-assigned research presentation on time, which she claims forced her to stay up late to finish the project after having already spent hours working on the list of demands.

Because that’s why they went to Brown – to “prioritize their activism work over their studies”.  I know a bunch of folks at my college who “prioritized their partying over their studies” and they got no break from professors.  All kidding aside – this is our special snowflakes getting just a inkling of what is in store for them when they finally leave the protection and “safe space” that is Brown.

Some leftists/SJWs are figuring it out:

Speaking of Fascism, there is also a disturbing trend on the left nowadays that involves rejecting free speech/freedom of expression as a core value, because that speech could possibly be hurtful to someone, somewhere. This is not only dangerous but it also works against us, because as leftists we are often labelled as threats by the state and at the very least, we are unpopular by society in general. Does this not mean that freedom of thought and expression are crucial to our struggles?

Of course, at this point, not enough of them are doing so and there’s no indication that this is really a trend, however, it’s hopeful.  Read the whole thing.

Camile Paglia is a Bernie supporter, for one reason, because he is offering “free” college.  But she is not a Hillary supporter in the least.  And before she heads off on a riff about “free” college, she blasts the “establishment” Democrats in general and Hillary Clinton specifically (also taking a shot at the establishment media):

Democrats face a stark choice this year.  A vote for the scandal-plagued Hillary is a resounding ratification of business as usual–the corrupt marriage of big money and machine politics, practiced by the Clintons with the zest of Boss Tweed, the gluttonous czar of New York’s ruthless Tammany Hall in the 1870s.  What you also get with Hillary is a confused hawkish interventionism that has already dangerously destabilized North Africa and the Mideast.  This is someone who declared her candidacy on April 12, 2015 via an email and slick video and then dragged her feet on making a formal statement of her presidential policies and goals until her pollsters had slapped together a crib list of what would push the right buttons.  This isn’t leadership; it’s pandering.

Thanks to several years of the Democratic party establishment strong-arming younger candidates off the field for Hillary, the only agent for fundamental change remains Bernie Sanders, an honest and vanity-free man who has been faithful to his core progressive principles for his entire career.  It is absolutely phenomenal that Sanders has made such progress nationally against his near total blackout over the past year by the major media, including the New York Times.  That he has inspired the hope and enthusiasm of an immense number of millennial women is very encouraging.  Feminists who support Hillary for provincial gender reasons are guilty of a reactionary, reflex sexism, betraying that larger vision required for the ballot so hard-won by the suffrage movement.

While I usually don’t agree on a lot of what she says, I love the way she says it.  In this case, I’m with her about Clinton.

Speaking of “free college”,  in case you missed it, Louisiana tried that.  And, guess what?  It worked about as well as “free health care”:

A person receiving “free” tuition may not see it (or even care), but subsides actually raise the total cost of an education. The core problem is that they remove the paying customer—in this case the student—from the equation.

Without the subsidy, the paying customer receives the direct benefit for the service and bears the direct cost. If that person doesn’t think the cost is worth it, they don’t pay.

Louisiana’s program replaces this paying customer with groups of government officials. These officials neither receive the direct benefit nor endure the direct cost of obtaining an education. These groups do, however, benefit a great deal from obtaining more of your tax dollars.

And they rarely bear any direct cost from either increasing your taxes or delivering a substandard education product. (The incumbency rate is fairly high for politicians.)

Works great for government (bigger, more government jobs, more taxes) but not so hot for the taxpayer – as usual.

Socialism?  Heck yeah.  Why look at how well Venezuela is doing:

And now, the announcement of the “nutritional emergency” makes it official. Venezuela is out of food, and it’s only a matter of time before Venezuelans are quite literally starving due to a long series of terrible decisions by their leaders.

That’s right, it’s no longer about not having diapers and toilet paper.  Nope, the socialist government has run the country out of food as well.  Feel the Bern!

Peggy Noonan approaches the popularity of Trump, and for that matter, Sanders in the presidential race with a little different take.  Instead of talking about the elite, I think she makes a differentiation that better explains why those two have any political viability at all:

There are the protected and the unprotected. The protected make public policy. The unprotected live in it. The unprotected are starting to push back, powerfully.

The protected are the accomplished, the secure, the successful—those who have power or access to it. They are protected from much of the roughness of the world. More to the point, they are protected from the world they have created. Again, they make public policy and have for some time.

I want to call them the elite to load the rhetorical dice, but let’s stick with the protected.

They are figures in government, politics and media. They live in nice neighborhoods, safe ones. Their families function, their kids go to good schools, they’ve got some money. All of these things tend to isolate them, or provide buffers. Some of them—in Washington it is important officials in the executive branch or on the Hill; in Brussels, significant figures in the European Union—literally have their own security details.

Because they are protected they feel they can do pretty much anything, impose any reality. They’re insulated from many of the effects of their own decisions.

One issue obviously roiling the U.S. and western Europe is immigration. It is THE issue of the moment, a real and concrete one but also a symbolic one: It stands for all the distance between governments and their citizens.

I think it gets us closer to the discontent felt by much of the country.  It has become clear that the “protected” are feathering their nests at the expense of the unprotected and, as Noonan says, will never suffer the effects of their policies because they’ve protected themselves from such an occurrence – or at least tried to.  Yes, it’s a bit oversimplified.  There’s much more going on, but it helps explain what no one has satisfactorily explained to this point.

On the other hand, I can’t help feeling I’m living in Weimar Germany.

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Hope everyone has a great weekend!

~McQ

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