Crazy Nut Job

This note is [no longer] legal tender for all debts, public and private

Fri, 21 Oct 2011 20:42:00 -0400

This note is [no longer] legal tender for all debts, public and private:

Reminds me that Greece recently banned cash transactions over €1500 and Italy recently banned cash transactions over €5000.

And if the thought “Wouldn’t it have been easier to take financial jobs and divide by...

Mon, 17 Oct 2011 01:56:00 -0400

And if the thought “Wouldn’t it have been easier to take financial jobs and divide by the total population?” crosses your mind, you obviously haven’t had enough to drink.

If you are curious, though, it’s still 2%-ish (7.6m / 311m).

Also, I’m part of that 2% I just calculated. Not part of the top 1%, though.

Mon, 17 Oct 2011 01:52:01 -0400

Also, I’m part of that 2% I just calculated. Not part of the top 1%, though.

Who Are The 1%?

Mon, 17 Oct 2011 01:50:42 -0400

Who Are The 1%?:

They’re mostly pissed at 13.9% of the top 1%. Realistically, I think it’s 5.7% (financial jobs) of the 90.9% (percent employed) of the 64.2% (labor force participation rate) of the 66% (working age Americans). And note that I’m not going to try to factor out the portion of the top 1% and worry about claims of double-counting. (NB: the 5.7%, 90.9%, and 64.2% number just comes from the financial sector of the BLS Employment Situation report. The 66% was based on a series of questions to Wolfram Alpha). If you are mad at the wives and children of bankers, you probably should just ignore the last two percentages. SCREW YOU, 2%!

And yes, I did that just to check whether the protester in the video who yelled “You’re part of the 1%!” to the bank branch manager (who is not part of the top 1%) was way off. Turns out, she wasn’t too bad, assuming she’s angry at this particular population segment (people employed in the financial services industry).

As Many as 24 People Arrested for Trying to Close Accounts at Citibank

Mon, 17 Oct 2011 01:24:00 -0400

As Many as 24 People Arrested for Trying to Close Accounts at Citibank:

I found this interesting. This was followed up later with this link. (I half-heartedly suggest following the last link. The bongos and chanting really make the video for me—Santa Cruz and protesters and drums? Isn’t that like salt and pepper and cumin? I’m surprised the 99% don’t find the drums annoying.)

Oral Sex May Cause More Throat Cancer Than Smoking in Men, Researchers Say

Tue, 04 Oct 2011 20:25:00 -0400

Oral Sex May Cause More Throat Cancer Than Smoking in Men, Researchers Say:

Most read headline in Bloomberg on a day with 400 point Dow swings.
Oral sex causes smoking in men?
Anti-HPV Vaccine: Who knew it could be this easy to be homophobic and a slut-shamer?
This gives me new ways to propose a “…because cancer sucks” ad campaign for Gardasil.

Actually, that last bullet makes me want to point out the following from the article:

Pamela Eisele, a spokeswoman for Merck, said the company decided not to move ahead with a big oral cancer study “due to competing research and business priorities.” GlaxoSmithKline Plc (GSK) has “no plans” to study the company’s competing vaccine Cervarix outside of cervical cancer, Jennifer Armstrong, a company spokeswoman, said in an e-mail.

So, uh… just die.

Bank of America to charge debit card use fee

Fri, 30 Sep 2011 02:42:00 -0400

Bank of America to charge debit card use fee:

Remember how consumers were going to be protected?

Bank of America has a great defense for many of these fees. Our GDP reports include consumer spending numbers for things that aren’t actually paid for, like the value of free checking accounts. If the US government says such accounts are worth more than people actually pay, why shouldn’t banks charge more?

But seriously, time to join your local credit union.

US Debt Maturity Profile, AKA When do we have to pay for all...

Mon, 29 Aug 2011 22:31:36 -0400

US Debt Maturity Profile, AKA When do we have to pay for all this?

I’ll preface the body of this post with a reminder that the US debt downgrade by S&P didn’t come until after the collection of this data, and that our interest rates have fallen in the aftermath of that downgrade. This is important, because if you took that event in isolation, it would appear as if the US debt market started to take a turn for the worse, but rapidly recovered when the S&P downgrade instantly restored everyone’s faith in the credit of the US government. Of course this would fit with the absurdity that is reality: it wasn’t too long ago that S&P maintained a AAA rating on a particular set of bonds until after they were defaulted on. S&P: quality contrarian indicator?

For July, the near-term roll risk hasn’t increased substantially. The longer maturities, particularly 6 and 8 years, have seen increased issuance. This is because the 7-year issuance has increased in the recent past and the 10 year increased a bit over a year ago only to have the rate of issuance maintained. As an aside, if we didn’t have the benefit of previous charts, we wouldn’t be able to distinguish between this scenario and one where some non-QE Fed operations were used to significantly alter the maturity profile (double-aside: QE didn’t alter the profile because the debt owned by the Fed is kept on this chart).

Our average interest rate improved on a year-over-year basis, but showed some substantial weakness on a month-to-month basis. We know that this has so far proven to be a temporary blip.

(July treasury data here)

"Having only two parties makes sense, I guess, because if you believe that school districts should be..."

Tue, 16 Aug 2011 10:23:40 -0400

“Having only two parties makes sense, I guess, because if you believe that school districts should be able to fire grossly negligent kindergarten teachers, then of course you also believe that militias should be able to stock up on semiautomatic weapons at the nearest strip mall.”

- jakke

Only semi-automatic?

BNY Mellon to Cut 1,500 Jobs, 3% of Workforce

Wed, 10 Aug 2011 10:24:19 -0400

BNY Mellon to Cut 1,500 Jobs, 3% of Workforce:

This goes with the headlines today saying “Banks lead the way.”

Just returned from Pismo Beach, where we booked a room at the Sea Venture. Good place. Hot tubs on...

Mon, 08 Aug 2011 00:38:48 -0400

Just returned from Pismo Beach, where we booked a room at the Sea Venture. Good place. Hot tubs on balconies overlooking the beach while still providing enough privacy for that punchline to that lightbulb joke. They had an anniversary special. In addition to a nice rate, they dumped rose petals on our entry way, gave us chocolate-covered strawberries, and delivered a bottle of champaign.

Taken from the hot tub on the balcony of our room.

Mon, 08 Aug 2011 00:22:00 -0400

Taken from the hot tub on the balcony of our room.

Unemployment: 9.1%

Fri, 05 Aug 2011 10:18:00 -0400

The unemployment rate dropped to 9.1% according to the July Employment Situation Report. The headline jobs number was +117,000 vs a Bloomberg consensus range of 25,000 to 125,000. Without the seasonal adjustment, things look substantially worse. 1.32 million people lost their jobs in the month of July. These job numbers are highly focused into a single industry that undergoes a rather pronounced phase transition between June and July: public schools.

The largest seasonal factor was government, which tends to shed only slightly fewer than the 1.22 million jobs it shed in July. This translated to only -37k after the seasonal adjustment. But by far the greatest share of these jobs are in the local government sector, in education.

The biggest gains on a seasonally adjusted basis were made in Education and health services (+38k). This is followed by Professional and business services (+34k). The biggest loser was Government (-37k), which was followed by Financial activities (-4k).

Table A15 provides alternative measures of labor underutilization. U-6, the broadest measure (frequently called the “real” unemployment rate), dropped from 16.2% to 16.1% (unadjusted it increased from 16.3% to 16.5%, though this also included a revision from 16.4%).

For those interested in the Birth/Death model, it subtracted 18k jobs to the unadjusted number. Once again, the seasonal adjustment factor is on total jobs.

This was somewhere between a good and mediocre report, depending on who’s estimates for sustainable employment rate growth you use. As a reminder, depending on who you listen to, we need between 100k and 175k jobs just to maintain the unemployment rate with our current demographics at a constant participation rate.

Unemployment: Celebration Ends

Thu, 04 Aug 2011 16:37:39 -0400

Crossing below the 400k new claims barrier is something worth celebrating. We celebrated. The celebration ends. Today’s Unemployment Insurance Weekly Claims Report gave us a headline number of 400k. Last week’s number was revised up 3k to 401k. From the report:

In the week ending July 30, the advance figure for seasonally adjusted initial claims was 400,000, a decrease of 1,000 from the previous week’s revised figure of 401,000. The 4-week moving average was 407,750, a decrease of 6,750 from the previous week’s revised average of 414,500.

The advance seasonally adjusted insured unemployment rate was 3.0 percent for the week ending July 23, unchanged from the prior week’s revised rate of 3.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending July 23 was 3,730,000, an increase of 10,000 from the preceding week’s revised level of 3,720,000. The 4-week moving average was 3,729,750, an increase of 4,500 from the preceding week’s revised average of 3,725,250.

Remember that the current seasonal adjustments are quite sensitive to the exact weeks of manufacturing industry retooling. For that reason it is worth looking at the smoothed data (the 4-week adjusted moving average above), and the unadjusted data. The unadjusted numbers show substantial improvement:

The advance number of actual initial claims under state programs, unadjusted, totaled 339,348 in the week ending July 30, a decrease of 29,939 from the previous week. There were 402,140 initial claims in the comparable week in 2010.

The advance unadjusted insured unemployment rate was 2.9 percent during the week ending July 23, a decrease of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,663,134, a decrease of 89,947 from the preceding week. A year earlier, the rate was 3.5 percent and the volume was 4,438,886.

The total number of people claiming benefits in all programs for the week ending July 16 was 7,570,439, a decrease of 75,192 from the previous week.

In other news, other economic indicators have shown slowdown starting in April/May (starting with softer petroleum consumption). The ISM numbers for July crossed below the points associated with stronger employment growth (I generally suggest pretending the non-manufacturing numbers have huge error bars, though). Expectations for tomorrow’s Employment Situation Report are soft (but positive).

This was a bad report. Also significant is the fact that we just saw one of our two good reports revised back into bad territory. Aside from the return to school (which won’t help headline numbers due to the strong seasonal factor), there’s not much to look forward to on the unemployment front. The European liquidity crisis seems to be starting to impact foreign demand. I have some short-term hope, but I can’t provide a good justification other than looking at the chart of the new claims 4-week moving average (the trend change away from good has not been confirmed).

When nobody you know can afford a house, it’s a housing bubble. You hear that Vancouver?

Tue, 02 Aug 2011 23:31:30 -0400

When nobody you know can afford a house, it’s a housing bubble. You hear that Vancouver?

"By now it should be obvious to anybody who is not a banker or a real estate agent that Australia is..."

Tue, 02 Aug 2011 23:30:26 -0400

“By now it should be obvious to anybody who is not a banker or a real estate agent that Australia is in the grip of a substantial housing bubble.”

- Philip Soos at The Conversation: Should we be bracing for an inevitable housing bubble bust?

Ha! I had a real-estate agent tell me last week that the market, which is in an obvious stagnation in my area, would experience “another boom” in the next six months. Six months was, coincidentally, when I told him that my wife and I would be looking to buy.

Also, there’s this:

Current tax policies and programs have distorted the residential property market substantially. A Senate report on housing affordability aggregates the assistance provided to Australian property owners: $53 billion per year. This is five times the amount that is spent on public housing and rent assistance to the low-income earners.

Well done, governments of both stripes going back 20 years!

(via benkraal)

Wait...

Tue, 02 Aug 2011 19:44:14 -0400

As a result of the debt deal, the Federal Government is going to spend more this year than last year. They are going to spend more next year than this year. This is true for both military and non-military spending. So why is John McCain is crying over military cuts? When you spend more than the prior year, I don’t think you really get to complain about cuts. If your favorite program has less money than last year, don’t fund one of your new programs. Or wind down one of the programs that have been dragging along since the cold war.

Ok, I’ll be back to hating on Democrats when they say something equally stupid. Note: “Satan Sandwich” doesn’t count. That’s gold. The Dems do get a partial reprimand for complaining about cuts while we continue to spend more year-over-year (stop funding stupid stuff at the expense of things you care about). But nobody said anything as dumb as McCain.

robot-heart-politics: brooklynmutt: Yeah, who needs government...

Mon, 01 Aug 2011 21:25:17 -0400

robot-heart-politics:

brooklynmutt:

Yeah, who needs government spending?

It always blows my mind that people seem to have forgotten this so quickly…

I think this is a good illustration of why we don’t need more government spending. How many trillions of dollars are spent on useless crap while genuinely useful infrastructure projects are passed over? We’ve designed destroyers only to scrap them, only to redesign them, only to scrap them again… and again. We’ve invaded countries posing no threat to US interests. We spend money to prop up murderous dictators. We spend money to spy on our own people. We spend money on ridiculous security theater, spend money on studies to prove that such spending was ridiculous, and continue to spend money after we’ve been shown how ineffective the spending is. We spend money to kill ourselves with simple tobacco and HFCS subsidies. We subsidize the construction of communities in flood zones. But we passed on that bridge. We passed on the Sacramento levees. We passed on about 3,000 dams at risk of failing.

We will continue to spend money on such things because such spending has a better return on investment for what really matters to those making the decisions: votes. It creates far more jobs to fund a bullet train that will never get built than to maintain the infrastructure we have… well, until it fails, at which point we’ll brag about how many jobs the rebuilding effort produces just to bring us back to where we were.

Infrastructure is not failing due to lack of funds, it is failing due to funds misspent. Why on earth would you allow a group that is so clearly irresponsible with funding priorities take on more decision-making power? Every single critical infrastructure project could have been reduced to a simple isolated vote. But if congress prioritized their spending like that, kept it simple, there wouldn’t be any political deals to get made. If they funded the important stuff first, people might not be willing to fund the crap that benefits the few at the expense of the many. Instead, something important falls apart, and everyone cries about how much more money we need to spend.

HSBC Says It Will Cut 30,000 Jobs by 2013

Mon, 01 Aug 2011 05:35:29 -0400

HSBC Says It Will Cut 30,000 Jobs by 2013:

I thought we were done with the massive job cut headlines.

Unemployment: New Claims Below 400k

Thu, 28 Jul 2011 16:37:45 -0400

A toast to small victories, easily celebrated. Today’s Unemployment Insurance Weekly Claims Report greeted us with a headline number of 398k. Last week’s number was revised up 4k. Compare this to the Bloomberg consensus range of 405k to 436k and you can find multiple reasons to celebrate. No special factors were cited in today’s report. Speaking of which:

In the week ending July 23, the advance figure for seasonally adjusted initial claims was 398,000, a decrease of 24,000 from the previous week’s revised figure of 422,000. The 4-week moving average was 413,750, a decrease of 8,500 from the previous week’s revised average of 422,250.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending July 16, a 0.1 percentage point decrease from the prior week’s revised rate of 3.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending July 16 was 3,703,000, a decrease of 17,000 from the preceding week’s revised level of 3,720,000. The 4-week moving average was 3,721,000, a decrease of 5,250 from the preceding week’s revised average of 3,726,250.

There is some uncertainty in the adjustment due to the slight differences in the auto industry retooling periods from one year to the next (meaning there’s a potential for a slightly worse headline number next week if the offset came too soon). If the trend numbers look good to you, then you’ll have a bit of appreciation for the numbers that correspond to actual people. Quite a swing here:

The advance number of actual initial claims under state programs, unadjusted, totaled 366,578 in the week ending July 23, a decrease of 103,503 from the previous week. There were 413,679 initial claims in the comparable week in 2010.

The advance unadjusted insured unemployment rate was 3.0 percent during the week ending July 16, unchanged from the prior week’s unrevised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,735,896, a decrease of 47,420 from the preceding week. A year earlier, the rate was 3.6 percent and the volume was 4,554,316.

The total number of people claiming benefits in all programs for the week ending July 9 was 7,645,601, an increase of 320,152 from the previous week.

This was a good report. Lower volatility in the labor market is an indicator of strength, even if it proves to be temporary. Other growth indicators aren’t looking too good, so temporary may be the best we can hope for. The GDP revision tomorrow was either leaked or I’ve received some draft emails that shouldn’t have been sent out. If the former, we’re expecting a 10 basis point boost to the prior estimate (1.8% to 1.9%, hitting expectations). If the latter, we’re quite confused. Without a tremendous upside surprise, things are too sluggish to hope for much in the immediate future for the labor market.