Tuesday, November 16, 2010

Human Development: Mississippi Ranks Above Italy

The chart above is from The Economist, and shows that in terms of "human development" (heath, education and wealth), many U.S. states (Connecticut, NY, Wyoming, California, Illinois and Florida) rank ahead of Australia, Switzerland, Canada and Japan, and even more amazing is that Kentucky ranks ahead of France, Arkansas ranks ahead of the U.K., and Mississippi ranks ahead of Italy. 

Perks and Company Parties Stage a Comeback

1. Company parties stage a comeback as economy recovers and dark mood easesSource.

"With growing signs of an economic recovery, Chicago employers are again warming up to holiday parties. After two years of cutbacks, layoffs, bailouts and outright bankruptcies, the return of this annual ritual signals that corporate managers are more confident about business prospects and feel a need to invest again in morale, reward and recognition."

2. Perks at work are reappearing.  Source.

"Miss the free office soft drinks, commuter subsidies — and yes, even those year-end holiday parties? Don't despair. The workplace perk is beginning to make a comeback. During the recession, many cost-conscious companies furloughed fringe benefits such as holiday fetes, bonuses and free snacks. But now that the economy is improving, some perks are slowly being reinstated."

 HT: Steve Bartin 

Quote of the Day

“Capitalism without failure is like religion without sin—it doesn’t work.”

Freight News: Lots of Positive Signs

1. Passenger traffic at Los Angeles International Airport (LAX) increased by 4.1% in September above last year, and 5.2% above September 2008.  The 4.7 million passenger count in September was the highest for that month since the 4.8 million passengers in September 2007.  

Freight traffic at LAX in September was 8.1% higher than last year, and 10.3% above the same month in 2008.  The 157,466 tons of air freight this year was 8.6% below the 172,238 tons in the pre-recession month of September 2007. 

2. "The volume of containers handled by the Port of Savannah in October increased 16.7 percent to 273,296 20-foot equivalent units compared to the same month last year.The overall total of freight handled by all Georgia ports reached a new monthly record of 2,347,260 tons, which represented an increase of 9.8 percent compared with last October."

3.  The ports of Los Angeles and Long Beach recorded strong growth again in October, indicating that the peak-shipping season in the trans-Pacific this year had some staying power.  Containerized imports in Long Beach were up 33.5 percent compared to October 2009. Imports were up 5 percent over September 2010.  Imports in Los Angeles increased 3.19 percent compared to October 2009, which was the strongest month for imports last year. Imports in Los Angeles were down 7 percent from September 2010. 

October was the busiest month of the year so far for exports from Long Beach. Exports increased 26.3 percent compared to October 2009, and they were up 9 percent over May, which was the previous high point in 2010. Exports in Los Angeles were flat compared to October 2009, but exports were up 8 percent from September 2010.  See related post here by Scott Grannis.

4. Shipping volume at the Port of Seattle was up by 18.5% in October compared to the same month last year, following double-digit percentage gains in every month this year.  The number of fully loaded outbound containers in October of 55,552 was the highest for the year, and the highest in a single month going back to at least 2008. 

5. Total tonnage at the Port of Portland increased in September by 14% above last year, and year-to-date total tonnage at Portland is 36% above last year.

Monday, November 15, 2010

Oct. Retail Sales Back Close to Pre-Recession Levels

Given the strong increases in year-over-year sales tax collections in October for many states like Virginia (6.5%), Georgia (7.4%) and Texas (6.6%), it shouldn't be surprising that retail and food sales increased by 7.3% in October above last year (see bottom chart above).  The October increase in retail sales follows a similar 7.4% increase in September, suggesting that consumers are gradually gaining confidence and starting to spend again.  

Compared to a year ago, spending in all major categories have improved, with especially large gains in motor vehicles (14%), building materials (12.2%) and sporting goods (6.7%).  The $373 billion in consumer spending in October was the highest monthly total since August of 2008, more than two years ago (non adjusted for inflation).  October retail sales were only 2% below the $380 billion peak in November 2007 before the recession, and at this pace, retail sales will be above pre-recession levels within the next few months.     

Markets in Everything: Handwritten Notes for $3

You knew this was inevitable....

Handwritten thank you notes are truly remarkable in this age of IMs and emails. But who has time to sit down and write them? The ThankThank company helps busy professionals send handwritten notes to customers efficiently for $3 per note (see sample above). 

Schumpeterian Creative Destruction: 10 Products, Businesses Being Destroyed by the Smartphone

1. PDAs
2. Flip video cameras
3. MP3 Players
4. Digital cameras
5. Handheld video games
6. GPS
7. Regular cell phones
8. PCs
9. Watches
10. Remote controls

The Pending 26% Tax Hike on the Middle Class

In today's "The Gartman Letter" Dennis points out what will happen if the "Bush Tax Cuts" expire:

1. All income tax rates will go higher with the bottom rate moving up from 10% to 15% while the top rate shall go up from 35% to 39.6% (see chart above comparing 1999 and 2008 tax rates).

2. The tax credit for children will drop from $1000/child to $500. 

3. The standard deduction for married couples will be cut. 

4. Capital gains taxes will go up from 15% to 20%.

5. Dividends, which now are taxed at a lower rate than earned income will rise to that same level. 

6. The one year “exemption” in estate taxes ends but with a $1 million exemption, and the tax rate goes to 55%.

The chart below is from The Tax Foundation and compares annual individual income taxes paid before and after the "Bush tax cuts" by various income groups:

Despite all of the political rhetoric about "tax cuts for the rich," this analysis shows that federal income taxes have fallen for groups at all income levels as a result of the Bush tax cuts, compared to the 1999 tax rates under Clinton.  And therefore, taxes for all groups would go up if the current tax rates expire at the end of the year (see percentage increases in taxes for each group above). 

And in fact, the group in the chart above that would experience the largest percentage increase in taxes would be the married taxpayers with $50,000 of household income (clearly middle class by most definitions) - they would pay 26.7% more in taxes if the Bush tax rates expire. By contrast, "rich" single taxpayers with income of $125,000 would pay only 10% more in taxes. In other words, some middle-class taxpayers received twice the tax cut on a percentage basis as some of "the rich" under the Bush tax rates, and that group would suffer the most with higher taxes if the current federal income tax rates expire.  

Sunday, November 14, 2010

Consumer Greed Causes Trade Deficit With China

"What about the argument that American producers are undercut by cheap goods imported from low-wage countries like China? Whose fault is this? The answer is easy. If American consumers refused to buy goods produced in China, there would be no Chinese-made goods on store shelves. 

American consumers who prefer lower prices to higher prices are the true enemy of American companies and their unions whining about "free but fair trade." They should show up in front of Walmart and other sellers of foreign products and denounce American consumers who buy foreign-made products. That would be honest. The "free trade but fair trade" lobby finds it more effective to pursue their agenda by stealth — namely intimidate and bribe congressmen into enacting tariffs and quotas."

From the CD Comments: "Grammar Hall of Shame"

Here's some background, here's the rule:

1. The State of Maine has decided it must insure that all of it's dairies make a profit.

2. India's inflation rate is about 14% and it's agricultural tariffs average 32%.

3. When Apple moves it's $4 production cost to Vietnam… 

4. They’ve just released a fantastic report on China and it’s emerging cities.

5. It may not make sense, but a country that can print it's own money should never default on it's debts.

6. ….recognizing it's shortcomings would serve us all well.

7. Nuclear has it's own set of disposal issues….

8. Vast land areas would have to be converted to it's growth to replace any meaningful amount of gasoline…

9. China has no "communist" system today.  It's Communist Party is that in name only.

10. Nearly all technology is highly dependent on public funding for it's existence.

What's up with the "growing misuse of that puny piece of punctuation," which Arianna Huffington called "America's Apostrophe Catastrophe?"

Quantitative Easing Explained

HT: Mike Carlson

Saturday, November 13, 2010

Successful Bakken Drilling Technology May Start to Go Global: That's Why "Peak Oil" is "Peak Idiocy"

I reported earlier today on the ongoing oil boom in North Dakota's Bakken region, which has set fresh oil production records in six out of the last seven months and now produces 6% of America's crude oil.  And all of this is taking place in an area that was never expected to produce so much oil, despite the 4.3 billion barrel estimate of reserves there, because the dense, nonporous rock in the Bakken region makes extraction extremely difficult and costly.

That all changed when advanced horizontal drilling and hydraulic fracturing techniques started successfully tapping Bakken oil two miles below the surface in 2006.  After some initial success with the new technology, the original estimates were for peak Bakken production of only 220,000 to 280,000 barrels per day, but daily production went above 280,000 in April this year by September had reached 341,384 barrels.  Oil production is expected to hit 400,000 barrels per day by next year, and remain at that level or higher for the next 10-15 years.

"Know-how gained from North Dakota's once-perplexing Bakken shale formation is being used to exploit other onerous oil plays across the globe.  Oil companies and countries a world away have taken notice of North Dakota's success, said Lynn Helms, director of the state Department of Mineral Resources.

Companies say they are aiming to apply technology learned from the Bakken to geologically similar shales in China, France, Poland, Canada and in some U.S. states, including Wyoming, Utah and Colorado. Companies already have used Bakken technology to successfully tap the rich Three Forks-Sanish formation, directly below the Bakken."

MP: New, advanced techniques for drilling oil have revolutionized the domestic oil industry in North Dakota in ways that couldn't have even been predicted just a few years ago, and will likely also open up new oil production in other parts of the world in the near future (like the Alberta Bakken in Canada) that also would have been unimaginable before this year. That's one reason that "peak oil" is peak idiocy: it always underestimates the ultimate resource - human capital (i.e. human ingenuity and the resulting innovation, advances, new technology) - which is endless and boundless, and will never peak.

World Stock Markets Set Record Three-Month Gain

For the third month in a row, the World Federation of Exchanges reported a significant gain in world stock market capitalization for the month of October, with a $1.6 trillion increase that pushed the total value of world stocks to $51.8 trillion (see chart).  The October increase follows gains of $2.8 trillion in August and $3.8 trillion in September, for a cumulative three-month gain of $8.2 trillion from August-October, one of the largest three-month gains ever.  From the cyclical low of $26.6 trillion in February 2009, the world stock valued has almost doubled to just under $52 trillion last month, and provides further evidence of a worldwide economic recovery and global bull market rally.   

Sept. Bakken Boom: ND Sets Another Oil Record

North Dakota pumped another record amount of oil in the month of September, producing more than 10 million barrels in a single month for the second month in a row and beating the previous record set in August by almost 50,000 barrels (see chart above, data here). Compared to September of last year, oil production has increased by 43.4%, and oil production in North Dakota has doubled in a little more than two years - from slightly fewer than 5 million barrels in June of 2008 to more than 10 million barrels in both August and September this year.  North Dakota's rich oil fields now produce 6% of America's domestic crude oil production, up from less than 2% in 2006 (data here).  

Partly because of its ongoing oil boom in the Bakken area, North Dakota continues to lead the nation with the lowest unemployment rate at 3.7% in September, almost 6 full percentage points below the nation's average 9.6% rate. The oil boom has fueled an employment boom for oil workers in North Dakota (data here) - the number of oil-related jobs has grown from fewer than 4,000 at the beginning of 2005 to almost 9,000 in September of this year.

Through September of this year, North Dakota has already produced more oil (81 million barrels) than all of last year (79.7 million barrels), and is on a pace to produce about 112 million barrels in 2010, which would be almost twice as much as 2008 (62.8 million barrels) and almost three times as much as 2007 (45.1 million barrels).  In recent years, North Dakota has surpassed oil production in Oklahoma, Louisiana, New Mexico and Wyoming, and North Dakota, and has gone from the 9th highest producing oil state to the #4 rank now, behind only Texas, California and Alaska.

Virginia's Tax Collections Improve 3.7% in October

"Virginia Gov. Bob McDonnell announced Friday that October revenue collections increased by 3.7 percent over the prior year.  This is the seventh month out of the last eight in which state revenue collections exceeded the previous year’s amount. The revenue increase was primarily driven by individual withholding (+4 percent) and sales tax (+6.5 percent) collections."

McDonnell notes, “We have now seen seven of the last eight months feature increases in revenue collections, and this has occurred in tandem with a slight decrease in our unemployment rate. Clearly, these are signs of a modest turnaround in Virginia’s economy."

Other highlights: It was the first time in three years that Virginia's tax revenues have grown three months in a row, and the first time since April 2008 that income tax withholding taxes have increased for six consecutive months (source).

Friday, November 12, 2010

Chinese Workers Build 15-story Hotel in Just 6 Days

Yahoo! News -- "A construction crew in the south-central Chinese city of Changsha has completed a 15-story hotel in just 6 days. The work crew erected the hotel -- a soundproofed, thermal-insulated structure reportedly built to withstand a magnitude 9 earthquake -- with all prefabricated materials. In other words, a crew of off-site factory workers built the sections, and their on-site counterparts arranged them on the foundation for the Ark Hotel project.

Despite the frenetic pace of construction, no workers were injured -- and thanks to the prefab nature of the process, the builders wasted very few construction materials. Above is a time-lapse video that shows the hotel being built from the ground up in less than a week."

HT: My co-author Seyed Mehdian, who asks "Would this have been possible under central planning and communism?"

From Darren in the comments: "I see this as a testament to how well capitalism has worked. Does anyone doubt that the technology to enable such a thing was created through a free market system that rewards innovation? The fact that a totalitarian regime has embraced capitalism at a pace and degree to which no one 10 years ago would have predicted just reinforces the power of free markets."

Making the Case for More Nuclear Power

From yesterday's Detroit News:

To be sure, we also need to consider all forms of renewable energy as they become cost-effective, but the unavoidable truth is that nuclear plants occupy a small fraction of the land required for solar and wind power. And while nuclear plants produce electricity about 90 percent of the time, wind turbines generate power, on average, only 30 percent of the time and require back-up electricity from fossil fuel turbines on days when the weather isn't cooperating. Solar energy is less efficient, providing electricity only 20 percent of the time.

Nuclear power, therefore, must play a larger role in maintaining our nation's energy security and reducing atmospheric pollution and acid rain. Nuclear power also has economic benefits, as it provides a stimulus for new jobs and revenue.

The Saudis can build nuclear plants. The Turks can build nuclear plants. We can, too. The enormous power at the heart of the atom promises to benefit economies worldwide.

Toast Yourself

Upload a photo and toast yourself.

6 Blogs That Will Help You Understand Economics


Five Ways the Cell Phone Is Changing the World

From Newsweek:

1. Exposing state secrets in repressive regimes like N. Korea.

2. Advancing democracy in places like Iran and China.

3. Enabling commerce in many African countries and in India.

4. Distributing medicine and helping to identify which critical medicines (penicillin, anti-malaria medicine) are out of stock in isolated clinics in Africa.

5. Waging war - both NATO forces and the Taliban are strategically using cell phones  in Afghanistan .   

This website adds a few more ways the cell phone is changing the world, including profoundly improving the lives of millions of deaf people.  

Thursday, November 11, 2010

Five More States Report Improvements in October

1. Georgia's economy continued to show signs of improvement as state tax collections rose in October, the fifth straight month they have climbed.  Tax collections for the month are up 8.2 percent from the same month a year before, an increase of almost $93 million. Individual income tax collections -- considered an important economic indicator -- rose 4.1 percent. Sales tax collections jumped 7.4 percent. Corporate income taxes dipped 10.5 percent. Motor fuel taxes increased 14.1 percent.

2. Kentucky's general fund tax collections rose 8.1 percent in October from the same month a year ago, the best monthly improvement in two years but one that the state's budget director says isn't sustainable. Thanks in part to last month's strong performance, revenue collections have risen 5.3 percent for the first four months of the fiscal year. The 8.1 percent revenue upswing was the state's best monthly improvement since April 2008.

3. Texas sales tax receipts grew 6.6 percent in October compared to the same month a year ago. The $1.6 billion jump marks the seventh consecutive month of growth following a 14-month slump.

4. Tennessee's tax revenue grew 6.4 percent in October compared to the year before, a sign that the state may be starting to feel an economic recovery. It was the third straight month of year-over-year gains.
5. October tax collections for Minnesota were $46 million ahead of earlier projections, as the individual income tax, sales tax and corporate tax were all better than expectations.

Wednesday, November 10, 2010

Is The U.S. A Currency Manipulator?

The U.S. dollar has depreciated by about 30% over the last 8 years, and during that time period U.S. exports as a share of GDP increased from about 9% in 2002 to 13.2% in mid-2008, and then fell through early 2009 as a result of the recession and a stronger dollar (see chart).  Since early 2009, the dollar's decline has continued, and exports as a share of GDP have been increasing. Is the U.S. guilty of manipulating its currency to increase exports? 

Note: The chart has been updated to reflect U.S. exports as share of GDP on a quarterly basis.  I previously divided quarterly exports by annual GDP, and have corrected the data and chart above.  Thanks to Scott Grannis. 

Protecting Toads To Keep Private Land Private

NPR -- "A small environmental miracle has occurred in Beatty, Nev., a former mining town that sits on the eastern edge of Death Valley between Jackass Flats and Sober Up Gulch. The people of Beatty have helped revive the Amargosa toad, a warty, speckled, palm-sized creature that's unique to the area and, just a few years ago, seemed headed for extinction. But this is not your typical story of environmental action — the toad owes its comeback to an unlikely coalition that includes ranchers, miners, off-road racers, opponents of big government and the local brothel.

"What you're seeing tonight are the results of active land management, active habitat management," says rancher David Spicer. He has run miles of underground pipe around his property to create breeding pools and wet habitat for the toads. Spicer grew up with the toads and wants to preserve them, he says. But here's the surprising thing: Another reason, and perhaps the major reason Spicer has gone to such lengths is because he really, really does not like the Endangered Species Act.

"Nobody trusts the government anymore," Spicer says. "Nobody wants to work with the government. The government always wants to take something from you." So Spicer got worried more than a decade ago when some scientists declared that there were only a few dozen Amargosa toads left. Soon after that, when a group petitioned the federal government to add the toad to the endangered species list, Spicer came up with a plan.

Spicer feared the government would try to protect the toads by telling him he couldn't raise cattle or ride off-road vehicles on his own property. So he helped start a group called STORM-OV, which stands for Saving Toads thru Off-Road Racing, Mining and Ranching in Oasis Valley.

It's a quirky kind of environmentalism. But it seems to be working. This year's toad counts show that their numbers remain in the thousands. And earlier this year, the U.S. Fish and Wildlife Service rejected the latest petition to place the Amargosa toad on the endangered species list."

Jobless Claims (4-Week Avg.) Fall to Two-Year Low

(Reuters) - "Claims for unemployment benefits fell more than expected and a moving average fell to a two-year low, pointing to some relief in the weak jobs market, a government report showed on Wednesday. Initial claims for state unemployment benefits fell to a seasonally adjusted 435,000 in the week to November 6 from a revised 459,000, the Labor Department said. Analysts were expecting claims to slip to 450,000 from an initially reported 457,000. The four-week moving average of claims, considered a better measure of underlying market trends, eased to 446,500, the lowest since September 2008 (see chart)."

Highly Paid Federal Workers Making $150,000 Or More Increases More Than 10 Times In Just 5 Years

"The number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office, a USA TODAY analysis finds (see chart above).  Federal workers earning $150,000 or more make up 3.9% of the workforce, up from 0.4% in 2005.

The fast-growing pay of federal employees has captured the attention of fiscally conservative Republicans who won control of the U.S. House of Representatives in last week's elections. Already, some lawmakers are planning to use the lame-duck session that starts Monday to challenge the president's plan to give a 1.4% across-the-board pay raise to 2.1 million federal workers."

Tuesday, November 09, 2010

Illinois Loses 1,000 More Union Jobs, and Another Manufacturing Plant to Right-to-Work Mississippi

EAST ALTON, ILLINOIS -- "Some union workers were making plans Wednesday to hit the bricks to look for new jobs after Olin Corp. announced it will move its Winchester Centerfire Operations and 1,000 jobs from Illinois to Oxford, Miss.  The company made the announcement one day after members of District 9 of the International Association of Machinists (IAM) and Aerospace Workers rejected a contract that would have frozen wages for seven years.

The company told the union leaders in August that it was considering relocating to Mississippi to make the operation more competitive. The company and union leaders negotiated a concession deal for two months.

"Our focus always has been on ensuring that we continue producing high-quality products for our customers in an increasingly competitive marketplace," said Joseph D. Rupp, chairman, president and chief executive officer of Olin Corp.

"While I am disappointed that employees represented by IAM chose to reject a proposal that would have allowed us to remain competitive in East Alton, we look forward to expanding our existing operations in Mississippi," Rupp said."

Even The Michigan Economy is Coming Back

DALLAS/November 9, 2010 – "Comerica Bank’s Michigan Economic Activity Index rose two points in September to a level of 89, the highest Index reading since June 2008. September’s reading is up 14 points from the year-ago level, and up 18 points, or 25 percent, from the Index cyclical low (see chart). September marks the seventh month of consecutive double digit year-on-year increases in the Index. Year-to-date the Index has averaged 11 points, or 15 percent, above the Index average for all of 2009."
“Over the three months through September, our Index showed a renewed uptrend after having stalled from February through June,” said Dana Johnson, Chief Economist at Comerica Bank. “My sense is that Michigan’s economy was re-accelerating along with the national economy as the summer drew to a close. Looking ahead, the Michigan economy should continue to make modest gains over the last quarter of 2010, against a background of sluggish but sustained national growth.”

MP: In another sign that the Michigan economy is slowly coming back, average statewide home prices increased in September by 6.9% compared to last year, and year-to-date home prices through September have increased by 9.3% compared to 2009.   

Another Company That Might Leave California

158 companies have left California this year to relocate to other states, and here's a new story about another one that is seriously considering leaving after evaluating six key issues of concern. 

Debunking Pro-Tax Increase Propaganda

Oct. Monster Employment Index Europe Up By 23%

The Monster Employment Index Europe increased by 23% on an annual basis to a level of 122 in October, a strong improvement from the 99 index level last October, and an increase from the 21% gain in September.  There was relatively strong online recruitment activity across most European Union countries, with especially strong growth in Germany (30% growth in October, the largest gain in online recruitment demand since late 2005), Sweden (36% annual gain in hiring activity). By sector, transportation (+50%), manufacturing (+44%), tourism (32%) and automotive (30%) registered the largest annual gains in hiring activity.  

Overall, a very positive report for a steadily improving European labor market that is gaining strength and momentum as the European economies recover. In related news, Reuters reported recently that German unemployment in October fell to its lowest level (2.945 million) in 18 years (since October 1992).  

Monday, November 08, 2010

Sneaky Trick Football Play

Markets in Everything. Or Not: Criminal Barbering

Orlando Sentinel -- "As many as 14 armed Orange County deputies, including narcotics agents, stormed Strictly Skillz barbershop during business hours on a Saturday in August, handcuffing barbers in front of customers during a busy back-to-school weekend.

It was just one of a series of unprecedented raid-style inspections the Orange County Sheriff's Office recently conducted with a state regulating agency, targeting several predominantly black- and Hispanic-owned barbershops in the Pine Hills area.

In "sweeps" on Aug. 21 and Sept. 17 targeting at least nine shops, deputies arrested 37 people — the majority charged with "barbering without a license," a misdemeanor that state records show only three other people have been jailed in Florida in the past 10 years."

HT: Stuart Anderson

NY Fed Reports Q3 Declines in Consumer Debt, Delinquency Rates, Foreclosures and Bankruptcies

Some highlights from the NY Fed's quarterly report on "Household Debt and Credit," released today with third quarter updates:

1.  Aggregate consumer debt continued to decline in the third quarter, continuing its trend of the previous seven quarters. As of September 30, total consumer indebtedness was $11.6 trillion, a reduction of $922 billion (7.4%, and almost $1 trillion) from its peak level at the close of 2008Q3.

2.  Total household delinquency rates declined for the second consecutive quarter in 2010Q3. As of September 30, 11.1% of outstanding debt was in some stage of delinquency, compared to 11.4% on June 30, and 11.6% a year ago. Compared to a year ago, delinquent balances are down 8.2%, and serious delinquencies have fallen 4.6%.

3. About 457,000 individuals received home foreclosure notices on their credit reports between July 1 and September 30, 2010, a 5.5 percent decrease from the second quarter and a 6.4 percent drop from a year earlier.

4. The number of new bankruptcies noted on credit reports fell 16 percent from the previous quarter (from 621,000 to 522,000), but is 1 percent higher from a year earlier.

5. The proportion of current mortgage balances that transitioned into delinquency rose slightly from 2.6 percent to 2.7 percent, after about a year of decline. Given the similar pattern observed in the third quarter of 2009, one might suggest this is a seasonal effect.

MP: Except for the slight, seasonal  uptick in mortgage delinquencies, there are a number of positive trends reported for household debt and credit in Q3 that provide further evidence of an economy that is gradually recovering.   

One Vote Can Decide Outcome

A "wet-dry" vote in Alabama was decided by a single vote: 219-218. 

HT: Division of Labour

Percent of Population on Facebook By State

Via Google Fusion Tables, showing that the percent of state populations on Facebook ranges from 16.04% in New Mexico to 40.45% in Kansas.

Saturday, November 06, 2010

Chart of the Day: The True Size of Africa

The land area of Africa would include the entire U.S., China, India, Japan, U.K., Eastern Europe and much of Western Europe, see chart above (click to enlarge), link here.  

Global Stock Market Rallies to 25-Month High

The MSCI World Stock Market Index closed at a 25-month high on Friday of 1,264.73, which was the highest level for world stock markets since late September 2008.  Emerging markets have been doing especially well lately, with one-year returns 72.5% in Thailand, 67% in Colombia, 56% in Chile, 57.5% in Turkey, 48% in Indonesia, and 47.8% in the Philippines.  

Friday, November 05, 2010

Why Can't Chuck Get His Business Off the Ground?

From the Institute for Justice.  

More Than 1 Million Jobs Added So Far This Year, Strongest 10-Month Gain in More Than 3 Years

Private-sector payroll jobs increased in October for the 10th straight month, as private employers have added 1,115,000 jobs so far this year, according to today's BLS report (see chart above). The last time there were 10 consecutive months of private employment gains was in the 2006-2007 period before the recession started, which was also the last time that more than 1 million jobs were added in a 10-month period.   

The Pickup Truck Indicator: The Recovery is Real

In October, overall vehicle sales increased by 13.4% compared to October 2009, but that increase was largely because light truck sales increased by 23.5%, more than six times the 3.9% increase in passenger car sales.  Year-to-date, truck sales are up by 16.7%, more than three times the 5.3% increase in passenger car sales so far this year.

What does that signal? The economic recovery is real.  Here's some background: 

AutoNation Chairman and CEO Mike Jackson (featured on a CD post in June): "I've always said, when you want to know when this economy is going to turn, just watch the pickup sales.  All those sales are small businesses and entrepreneurs, and when they see the prospect for better business, they're going to go out and finally buy a new pickup truck. So this is a key indicator of what's going on in the U.S. economy.  This is small business America saying that the worst is over, I see opportunities in the future, I feel confident enough to go out and buy a new truck.    

Pickup trucks are bought by small business entrepreneurs who have their finger on the pulse of the U.S. economy. It's an expression of confidence in future of economy. They don't buy until they see the prospects for business are brighter."

"Trucks outsold cars by the highest margin in nearly five years in October, a sign the economy may be starting to improve. These trucks aren't the tractor-trailers that haul freight. They're pickups, SUVs, minivans and smaller SUVs. The category — known as light-duty trucks — made up 54 percent of all new U.S. vehicle sales last month, compared with 46 percent for cars, according to industry tracker J.D. Power and Associates. 

It's the biggest difference since December 2005, when trucks accounted for 56 percent of sales. Strong truck sales make economists giddy because they mean people are willing to spend money again. Small business owners feel comfortable enough to buy a new pickup truck or delivery van for their company; and regular folks are confident enough in their jobs and finances to take on beefy SUV payments."

HT: John Jarrard.  

Thursday, November 04, 2010

Bull Markets: Taxi Medallions and Fine Art

1. Taxi medallions in New York City reached an all-time record high of $614,000 in October for indvidual licenses. 

2. Reuters -- "Less than two years after a precipitous fall, the art market is flexing its muscles again, emboldened by recent auction records and an influx of determined international collectors rich with cash. Hordes of wealthy new buyers, ready to spend and anxious to build collections, are injecting life into a market hard-hit by the global financial crisis, experts said.

"The whole market has changed," said Philip Hoffman, chief executive of The Fine Art Group, a London-based art investment house. "There's a huge new group from six or seven countries who are shifting the market." New collectors from Russia, India, China and Hong Kong, and Mideast wealth centers such as Qatar and Abu Dhabi have made fortunes in oil, gas or commodities such as gold, he said."

Emerging Markets Rally to 29-Month High

Bull Market Rally for the Emerging Markets: The MSCI Emerging Markets Index reached a 29-month high today of 1151.08, the highest level since early June 2008 (see chart). 

Coming Soon to a Pharmacy Near You: The “Retailization” of the Nation’s Health Care System

"Walgreens chief executive officer Greg Wasson this morning said the drugstore chain will step up investments in services to help Americans manage chronic diseases, saying the company wants to capitalize on what he called the “retailization” of the nation’s health care system.

The Deerfield, IL.-based pharmacy giant, meeting with Wall Street analysts and investors, said it wants to continue to expand its network of medical care providers and the services they provide. Walgreens increasingly has been lobbying to give pharmacists a greater role in medical care such as providing immunizations in its stores as well as establishing retail health clinics staffed by nurse practitioners. 

Wasson and his team say they see a booming market of aging baby boomers, citing one in three Americans who will turn 65 in the next decade. He said Walgreens pharmacies are trying to establish their pharmacists and other health professionals as an option to help provide certain primary medical care service amid a national shortage of primary care doctors.

Walgreens pharmacists, he said, can help patients “manage” their chronic conditions like diabetes, hypertension and high cholesterol. The health care overhaul law will bring more than 30 million Americans coverage in the next four years and therefore give these uninsured people money to buy Walgreens services."

Weekly Rail Traffic Continues To Improve

WASHINGTON, D.C. – "The Association of American Railroads (AAR) today reported that weekly rail traffic continues to gain over 2009 levels with U.S. railroads originating 292,884 carloads for the week ending Oct. 30, 2010, up 6.3 percent compared with the same week last year. AAR will no longer report 2010 weekly rail traffic with 2008 weekly comparison data since October 2008 marked the beginning of the recession-related downturn in rail traffic.

Intermodal traffic for the week totaled 232,717 trailers and containers, up 14.2 percent compared with the same week a year ago, with container volume up 15.7 percent and trailer volume up 6.5 percent."

Hayek vs. Keynes Sequel Sneak Peak Preview

Passengers at Dulles in Sept. Highest Since 2006

In the month of September, 1,958,511 passengers traveled through Dulles Airport, which was 4.5% above passenger traffic in the same month last year, and marked the highest monthly passenger count for the month of September since 2006.  Cargo traffic at Dulles in September was 5.6% above last year.
Over the 12-month period from October 2009 to September 2010, passenger traffic at Dulles has improved by 1.2% compared to the same period a year ago, and cargo traffic is up by 17.6%. 

Monster Employment Index: 9th Mo. of Annual Gain

"The U.S. Monster Employment Index annual growth rate continued to be positive with a 13 percent increase year-over-year, although at a slower rate compared to early summer (see chart above). The Index dropped two points (1 percent) on a monthly basis, as online job demand continued to fluctuate within a two-point margin for the fourth consecutive month.

“Despite the contraction in the annual growth rate, expansion continues in a sustained manner for several large industries and markets over the long term,” said Jesse Harriott, senior vice president and chief knowledge officer at Monster Worldwide. “Conditions also continue to be favorable across the country, with opportunities rising above the levels they were last year in all major metro markets monitored by the Index.”

Highlights include:

1. Compared to year-ago levels, 17 out of 20 industries are showing positive growth trends, with a majority of the industries recording accelerated growth from September. 

2. October marks the ninth consecutive month of positive annual growth rate in online job demand, and marks the seventh consecutive month of double-digit growth staring in April  

3. All major metropolitan markets tracked by the Index are exhibiting positive annual growth compared to last October.

Wednesday, November 03, 2010

U.S. Car Sales Top 12 Million Units in October for the First Time in Two Years, Except for CFC Month

Except for the "cash for clunkers" jolt that boosted car sales in August 2009 to an artificially high 14.17 million units (on a seasonally adjusted annual rate basis), auto sales in October reached a two-year high in October of 12.26 million vehicles.   That was the strongest month for auto sales since September 2008 when 12.52 million vehicles were sold.  Chrysler and Ford helped fuel strong October car sales with two of the largest year-over-year gains of 37% and 19.3% respectively.  As a whole, the industry registered sales gains of 17.5% in October compared to last year, following a September gain of 25.4%. Year-to-date car sales are ahead of last year's sales by 10.6%.   

Although there still's a long way to go before car sales reach the pre-recession levels of  16-17 million units per year, there's been a lot of progress in the last 20 months - October sales of 12.26 million car sales were more than 3 million units above the cyclical low of 9.14 million autos sold in February 2009. 

Wikio: Top 20 Business Blogs in October

1.The Conscience of a Liberal
2.The Big Picture
3.DealBook - New York Times blog
5.Calculated Risk
6.Grasping Reality with Both Hands: Brad DeLong's Se
7.naked capitalism
9.Company Town - L.A. Times
10.Seth Godin's Blog
12.Freakonomics - New York Times Blog
13.Economist's View
14.Greg Mankiw's Blog
17.Mish's Global Economic Trend Analysis
18.The Baseline Scenario
20.A VC

From Wikio.

ISM Business Activity Index for Services Shows Expansion for the 11th Straight Month in October

"ISM's Non-Manufacturing Business Activity Index in October registered 58.4 percent, an increase of 5.6 percentage points when compared to the 52.8 percent registered in September (see chart above). Ten industries reported increased business activity, and three industries reported decreased activity for the month of October. Five industries reported no change from September."

Comments from respondents include: "Continued strength in core businesses and capital expenditures for balance of 2010" and "Increase in service calls/requests for service."

MP: The 5.6 point increase in October was the largest monthly gain in the Business Activity Index since a 10.6 point jump in February 2008, and the third highest gain in the last decade. October marked the 11th consecutive month of expansion in business activity in the service sector of the U.S. economy.   

Two More States (AR and OK) Are Reporting Double-Digit Tax Revenue Gains for October

1. "October's sales tax report for Oklahoma continued an encouraging trend, prompting some cautious optimism Tuesday from Oklahoma City officials. Sales tax revenue was up 16.7 percent over expectations and 19.2 percent over last year's collections for the same period. It is the sixth straight month of sales tax growth over the previous year."

2.  "Arkansas tax collections for October were above the monthly forecast and above collections from a year ago, the state’s top fiscal officer said today.October marked the sixth consecutive month that gross receipts, mostly from sales tax revenue, topped collections from a year ago.Net available general revenues in October were $354.5 million, up 41 million, or 13.1 percent, from last year and $4.2 million, or 1.2 percent, above the monthly forecast."

Tuesday, November 02, 2010

Elections and Blood Tests

Earlier today, I made the case for low voter turnout and argued high voter turnout is overrated, wasteful and inefficient because we would almost always get the same exact election results with a significantly lower voter turnout.  I compared elections to a blood test - in both cases you only need a small sample, and the results won’t change with a larger sample.

Here's a good quote I found today to help illustrate the point:

“Next time someone tells you they don’t believe a small sample poll can possibly tell you anything, just say to them ‘OK, then. Next time you have to have a blood test, why don’t you ask them to take the whole lot?’”

British opinion pollster Nick Moon, in Significance, March 2010

ASA Staffing Index: Highest Level Since Dec. 2007

"During the week of Oct. 18–24, 2010, temporary and contract employment increased 0.75%, pushing the ASA Staffing Index up one point to a value of 101.  At a current index value of 101, U.S. staffing employment is 46% higher than the level reported for the first week of the current year and is 22% higher than the same weekly period in 2009 (see chart)."

MP: The 101 index reading for the Week 43 matches the same level for two weeks in March 2008, and reflects the strongest demand for contract, freelance and temporary employment since December 2007.  As a leading indicator of nonfarm employment, the ongoing improvements in the nation's key barometer of temporary help signal future gains in permanent employment opportunities. 

Is Obama A Keynesian?

October State Tax Revenues Coming In Strong

State tax revenues for October are starting to get reported, and like September, are showing improvements in economic conditions around the country, here are some examples:

1. "State revenues in Massachusetts for the month of October were up $117 million, or 9.5 percent, from the same period a year ago, a sign of an improving economy, the state Revenue Department said today."

2. "The state of West Virginia has collected nearly $96 million more than it thought it would through the first four months of the fiscal year. State Deputy Revenue Secretary Mark Muchow says several key areas showed growth in October. There was growth in income taxes, growth in sales taxes, growth in severance tax."

Making The Case for Low Voter Turnout

People often complain about low voter turnout in the U.S., which has declined over time and is much lower than voter turnout in other countries. Notice at the first link that voter turnout in the U.S. has generally decreased over time, from greater than 60% in every presidential election year during the 1960s, to less than 60% in every presidential election since, and below 50% in 1996. The pattern is the same for midterm elections - voter turnout was close to 50% in the 1960s, and fell to below 40% starting in the 1970s.  The second link shows that the U.S. ranks #120 (with 66.5% turnout) out of 169 countries in an international voting comparison by International IDEA

Many people are upset by low U.S. voter turnout, but maybe they shouldn't be, and here's why: In almost all cases, higher voter turnout would NOT have changed the outcome of the election, and we therefore get the same election results at a lower cost to society, measured in the opportunity cost of our time.

Those who complain about low voter turnout almost never make the argument that higher voter turnout would CHANGE the outcome of the election; their position is usually that more people should vote for other reasons: to exercise our right to vote, to fulfill our civic duty, or to participate in democracy. But I have never heard anyone say "More people should vote because low voter turnout leads to unreliable results," or "more people should vote because that would change the outcome of the election."

Mostly, I think people would simply "feel better" with a 90% turnout, compared to having the same election results with only 40% turnout.  But think about this - would you feel any better about a blood test if they took two pints of your blood instead of just 20 ccs?  Probably not.

There are about 160 million registered voters in the U.S.  From statistics, we know that a sample size of 16,639 would accurately and reliably represent the entire population of 160 million at a 99% confidence level, with an error of only 1%.  What this means is that if the first 16,000 people who vote when the polls first open in the morning are random voters who represent the population of voters, almost all elections are already decided by 9 a.m. or so in the morning.  The rest of the voters are really just wasting their time, in the sense that their votes will not affect the outcome of the election. It is like a blood test - the results won’t change with a larger sample.

Voting is expensive when measured in its full cost: our time. An hour spent researching the candidates, attending or watching debates, and waiting in line to vote at the poll (see photo above), is an hour lost forever doing something else. Therefore, a case can be make for low voter turnout, because the election results are almost always exactly the same as an election with high voter turnout.  Low voter turnout saves our most precious non-renewable resource: our time, and therefore it is socially more efficient than high voter turnout.  We should be proud of, not ashamed of America’s international ranking at #120 for voter turnout - it shows we're serious about conserving scarce resources. 

Monday, November 01, 2010

ISM Manufacturing Index: Economic Recovery is Real, and Consistent With Real GDP Growth of 5.2%

"Economic activity in the manufacturing sector expanded in October for the 15th consecutive month, and the overall economy grew for the 18th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business":

Highlights include:

1. The last time the ISM Manufacturing Index (PMI) remained above 50% (signaling expansion) for 15 straight months was back in the 2005-2006 period (see chart above).

2. Compared to the 16-months following the 2001 recession, the recovery of the manufacturing sector has been much stronger in the recent 16-month period from June 2009 to October 2010 (see chart above).  The ISM Index has now been at a level of about 54 or above for the last 12 months, and that marks the strongest 12 month expansion in manufacturing since 2004.

3.  ISM's New Orders Index was 58.9 percent in October, an increase of 7.8 percentage points compared to the 51.1 percent in September. This is the 16th consecutive month of growth in the New Orders Index and the largest month-over-month improvement in almost two years.

4. ISM's Employment Index was 57.7 percent in October and 1.2 percentage points higher than the 56.5 percent in September. This is the 11th consecutive month of growth in manufacturing employment.

5. The past relationship between the ISM Index and the overall economy indicates that the average index for January through October (57.4 percent) corresponds to a 5.2 percent increase in real GDP. In addition, if the index for October (56.9 percent) is annualized, it corresponds to a 5 percent annual increase in real GDP.