Monday, May 12, 2008

WSJ India: Indian Billionaires

India has more billionaires than ever before. But are they robber barons or national heroes?

Find out here.

Foretelling the Future: Online Prediction Markets

ABC 20/20 Report (watch video here)--As a result of the collective intelligence of more than 77,000 bettors on Ireland's Intrade.com, the prices on the site may be a good way to predict the outcome of current events -- more accurate than some polls and pundits.

How accurate?

In 2004, the market odds on Intrade predicted the presidential vote of every state but Alaska. In 2006, the odds correctly indicated the outcome of every Senate race.


Note: Although most U.S. states sponsor legalized betting through state lotteries (with the worst possible odds), electronic prediction markets are illegal in the U.S.

Smoking: Greece is #1

The Economist

Assorted Energy Links

1. "Wind ($23.37) v. Gas (25 Cents)," in today's WSJ: There is a reason fossil fuels continue to dominate American energy production: They are extremely cost-effective.

2. "Democrats Windfall Tax—On You," Investor's Business Daily: The last time the U.S. had a windfall profits tax on oil companies, the results were disappointing: 1) Domestic oil production decreased, as oil companies produced less oil, not more, b) The level of imported oil increased due to the huge tax advantage we gave foreign oil companies, and c) Revenues from the windfall tax were far less than expected, because domestic producers pumped less and nontaxed imports flooded our market.

3. "How to Use the Strategic Petroleum Reserve (SPR)," WSJ: Over the last 8 months, the government purchased more than 10 million barrels of oil for the SPR as the price rose $40 to above $120. This is not sensible. It puts upward pressure on oil prices at the worst possible time. It is a waste of taxpayer money. It gives aid and comfort to unfriendly nations. And it is an insurance policy that, for the most part, is no longer needed. In fact, we should be selling oil from the SPR at $120. Doing so could be a powerful tool for U.S. energy policy.

HT: NCPA

Inspirational Message

I don't often pass along inspirational stuff, as I do not want to offend or "preach," but this one got to me. We can all use a single image that speaks to us of love, harmony, peace, prosperity and joy. All I ask is that you take a moment to reflect upon it.

Click here to see image.

The Taxi Cartel and Their Government Enforcers

Government Crackdown on Good Samaritans II

MIAMI GARDENS, FL.--A man who said he thought he was just helping a woman in need is accused of running an illegal taxi service and Miami-Dade County's Consumer Services Department has slapped him with $2,000 worth of fines.

The 78-year-old said he was walking into a Winn-Dixie to get some groceries when he was approached by a woman who said she needed a ride. Rosco O'Neil told the woman if she was still there when he finished his shopping, he would give her a ride. She was, so he did. As it turned out, the woman was an undercover agent with the consumer services department targeting people providing illegal taxi services.

MP: Taxi Cartel membership has its privileges, doesn't it? See a related post here "Government Crackdown on Good Samaritans."

Sunday, May 11, 2008

I Had A Dream........ (IN CAPS)

DETROIT FREE PRESS--Congressional Democrats, including Michigan Sen. Carl Levin, increased their calls Thursday for an energy bill (FIRST CLASS MAIL BILL) aimed at lowering record oil and gasoline prices (STAMP PRICES) – and putting OPEC (UNITED STATES POST OFFICE) under U.S. antitrust laws.

Leven denounced OPEC’s (UNITED STATES POST OFFICE's) role in setting world (U.S. STAMP) prices. “OPEC (UNITED STATES POST OFFICE) is a monopoly. They have squeezed the American people and consumers,” Levin said. “Whenever they want to increase or reduce supply (INCREASE STAMP PRICES), they do it. If (SINCE) they were (ARE) an American outfit they’d be (SHOULD BE) in jail for monopolistic practices.”

And You Thought Gasoline Prices Were High? The U.S. Postal Monopoly Has Its Privileges

Unconscionably Excessive Stamp Prices?
Over the last 89 years, the average retail price of gasoline has increased almost 14X, from 25.5 cents per gallon in 1919 to $3.517 per gallon in 2008, according to annual price data from the EIA. Over the same period, the price of a first-class stamp in the U.S. has increased 21X, from 2 cents in 1919 to 42 cents in 2008 (starting Monday, May 12), according to historical stamp price data available here. The chart above compares the two prices using an index that is equal to 100 in 1919 for both series.

If stamp prices had increased over time at "only" the rate of gas prices, a first-class stamp would only cost only 27.6 cents today instead of 42 cents.

When gas prices rose last year, Rep. Bart Stupak (D.-MI) introduced "The Federal Price Gouging Prevention Act," which would make it a crime to "sell crude oil or gasoline at a price that is unconscionably excessive." Shouldn't we now investigate "unconscionably excessive stamp prices"?
Monopoly has its privileges.

Saturday, May 10, 2008

Drivers Making Big Adjustments to High Gas Prices?

The chart above shows the annual vehicle traffic volume, measured in billions of miles traveled in the U.S., on a moving 12-month basis through February 2008 from the Federal Highway Administration. The flat trend in traffic volume over the last year or more, along with the declines in each of the last four months through February 2008, appears to be the most significant adjustment to traffic volume in any comparable period during the last 25 years. High gas prices appear to be having an effect on driving habits.

Proximity and Power: The Teachers' Union is #1

Of the 25 most influential interest groups, the teachers’ union is the closest to the capitol in 14 of the 50 states. By contrast, the AFL-CIO is the closest in seven states. The American Association of Retired Persons (AARP) and the National Federation of Independent Business are the closest in five states, each. The American Association for Justice (AAJ)—the leading organization of U.S. trial lawyers, formerly known as the Association of Trial Lawyers of America, or ATLA—is the closest in four states.

Why do the headquarters of state teachers’ unions tend to be so close to state capitol buildings?


The teachers’ unions don’t strive to be the closest because of the extra time it takes to walk or drive a few more blocks. They strive to be the closest because it is a visible display of their power and influence. It is a symbol of the connections and resources they can devote to something as trivial as having the closest office, just like the status obtained from having the best seats at a concert or a sporting event.

Read more here.

Gas Price Map of USA

From GasBuddy (click to enlarge).

January Traffic Volume Drops By -1.7%, The Largest Percentage Decline Since At Least 1992

According to the most recent report on traffic volume trends from the Federal Highway Administration (Dept. of Transportation), "Travel on all roads and streets changed by -1.7% for January 2008 compared with January 2007. Travel for the month is estimated to be 226.7 billion vehicle miles."

The January 2007 to January 2008 decline of -1.7% in miles driven was the largest percentage drop in January traffic volume in at least 16 years (see chart above, data available here and here, back to 1992). One explanation could be that consumers are responding to higher gas prices by driving less. The biggest declines in January traffic volume were in the West (-2.9%) and the South Atlantic (-3.1%), see map below.

Thanks to Bobble for data source in a comment on a CD post.

Cartoon of the Day



Friday, May 09, 2008

Greyhound Buses Get a Makeover

Greyhound’s image hasn’t changed much over the years – until now. In a bid to add a little snazz to its operation, Greyhound is biting back, unleashing its secret weapon – a new luxury service called the BoltBus that operates between New York and Washington, Boston and Philadelphia.

So, what’s so special about this BoltBus, you may ask. Well, apart from a paint job that makes it look like Ziggy Stardust’s tour bus, its two big draws are extra legroom and free on-board WiFi.

Continue reading here.

Looking for An Angel? Go to RaiseCapital.com

RaiseCapital.com is an online community, where entrepreneurs can display their business ideas and capital needs to investors. Whether your venture is a start-up or existing business, RaiseCapital.com is the perfect vehicle for entrepreneurs seeking capital.

Example:
utvchina.com is a Chinese youtube like website (see graphic above). It launched in spring 2007. We have enjoyed the rapid growth within one year. Current daily IP is around 350,000. Alexa ranking 3500. We are the only company with a commerical and entertainment site. Operating two versions English and Chinese drawing hits from more than 160 countries in over 40 languages. We are seeking a partner and funding to move to the next level.

55% of Oil Execs Says See $100 Oil By End of '08

HOUSTON (AP)Even as oil prices ascended to new highs of more than $124 a barrel this week, many oil and gas industry executives say they expect the price to fall significantly by year's end, a new survey shows. Fifty-five percent of 372 petroleum industry executives surveyed by KPMG LLP said they think the price of a barrel of crude will drop below $100 by the end of the year. Twenty-one percent of respondents predicted a barrel of oil will end the year between $101 and $110, while 15 percent forecast the year-end price to be between $111 and $120 a barrel.

Thursday, May 08, 2008

Mexican Peso Rallies, Return of King Dollar?

Over the last 12 trading days since April 22, the US Dollar has increased by 1.67%, as measured by the Fed's Broad Trade-Weighted Dollar Index (data here and here), to 99.4439, the highest level since February 26, 2008 (see chart above). The 1.67% dollar appreciation is the largest 12-day gain in more than 3 years, since the 1.7% 12-day gain through April 4, 2005!

More evidence here: The USD is selling at a one-year forward premium against 23 out of 32 currencies, including a one-year 2.4% forward premium for the British pound ($1.9564/BP spot vs. $1.9099 one-year forward) and a one-year 1.7% forward premium for the Euro ($1.5421/EUR vs. $1.5161/EUR one-year forward).

Kudlow & Company!

Here's the link to one of my segments tonight (at 7:00 of the 11:21 minute segement) on CNBC's "Kudlow & Company."

The Ethanol Bubble: Is It Starting to Burst?

Judging by recent financial results, the big villains in the ethanol story—the American companies that are responding to government mandates by buying about 20% of the U.S. corn harvest and processing it into fuel—aren't exactly thriving. In fact, their bottom lines and stock prices are suffering pretty badly.

What gives? In theory, business should be gangbusters in the ethanol patch. Government policy has mandated consumption of the fuel, thus stimulating investment (and record high levels of production, see chart above).

But just because the government forces people to buy your product doesn't mean it's a surefire win. The combination of high oil prices, tariffs that protect domestically produced ethanol from imports, and tax credits for companies that blend ethanol into gasoline has stimulated something of an ethanol bubble. And as always happens during a bubble, excess capacity—and the vicious competition it creates—winds up eroding margins.

From Slate.com's Daniel Gross' article "Corn Dogs"

Canada's U.S. Baby Boom: Where's Michael Moore?

Globe and Mail (Canada's "Newspaper of record")--More than 100 Canadian women with high-risk pregnancies have been sent to United States hospitals over the past year – in what a doctors' group attributes to the lack of a national birthing plan.

The problem has peaked, with British Columbia and Ontario each sending a record number of women to U.S. neonatal intensive care units (NICUs). Specifically, 80 B.C. women have been sent to U.S. hospitals since April 1, 2007 (about 1 every 5 days); in Ontario, 28 have been sent since January of 2007, according to figures from the respective health ministries.

Canada, once able to boast about its high rank in the world for low infant-mortality rate – sixth place in 1990 – saw its rank plummet to 25th place in 2005, according to figures published this year by the Organization for Economic Co-operation and Development. Specifically, Canada's infant mortality rate of 5.4 deaths per 1,000 live births is tied with Estonia's and more than double Sweden's rate of 2.4.

Via NCPA.

Economists Blast US Corn Ethanol Program, The "Nicorette Gum of America's Oil Addiction"


VOANews--The U.S. program subsidizing the use of corn for the production of fuel ethanol came under sharp criticism at a Senate hearing Wednesday. Economists told the panel the program leads to higher food prices.

Twenty percent of the U.S. corn crop goes into ethanol production, and corn prices worldwide have increased by 50% over the past year (see chart above, corn prices have increased 3.5 times since 2005, from $1.61/bu. to $5.59/bu.). John Sununu, a Republican senator opposed to farm subsidies, says corn prices have risen in part because America is using increasing amounts of corn to produce fuel for automobiles.

Calling the U.S. ethanol program a disaster, Sununu said it is replete with taxpayer subsidies as both farmers and ethanol producers receive tax breaks from the government. In addition, he said, imports of cheaper sugar-based ethanol are blocked by high tariffs.


Related article from Forbes, "The Ethanol Industrial Complex"

Ethanol, once heralded as the homegrown Nicorette gum of America's oil addiction, is getting a second look from lawmakers suddenly concerned about the unintended consequences of merging the fuel and food markets.

MP: What a great sentence....


Could Be A Lot Worse. It Is A LOT Worse in Europe.

Retail Gas Prices

Wednesday, May 07, 2008

Is The U.S. Peso Making a Comeback?

Through today, May 7, the broad dollar index from the Fed (data available here and here) reached 96.32, the highest level in more than 10 weeks, since February 26. Over the last 11 trading days since April 22, the dollar index increased by 1.55%, the biggest 11-day gain in almost two years, since January 20, 2006 when the dollar gained 1.59% in 11 trading days.

Chinese Firms Outsourcing, Bargain Hunting in U.S.

Chinese businessman Liu Keil spent about $500,000 for seven acres in Spartanburg, S.C. -- less than one-fourth what it would cost to buy the same amount of land in Dongguan, a city in southeast China where he runs three printing-plate plants. U.S. electricity rates are about 75% lower, and in South Carolina, Liu doesn't have to put up with frequent blackouts. About the only major thing that's more expensive in Spartanburg is labor. Liu is looking to offer $12 to $13 an hour there, versus about $2 an hour in Dongguan, not including room and board. But Liu expects to offset some of the higher labor costs with a payroll tax credit of $1,500 per employee from South Carolina.

Liu is part of a growing wave of Chinese entrepreneurs expanding into the U.S. From Spartanburg to Los Angeles they are building factories, buying companies and investing in business and real estate.

Read more of the LA Times story here.

Gas Prices. It Could Be Worse. A LOT Worse.

About 2.5X worse to be exact, in the Netherlands. See retail gas prices above in selected European countries from late April 2008, data available here from the EIA.

Why Captain Capitalism Hates Blackberries

  • To keep track of you when you're not at work.

  • To give you more work when you're not at work.

  • To give you something that tries to be both a phone and a mini-laptop but accomplishes neither.

  • To piss you off when you have to type on those freaking little keypads.

  • To give you something to make you look important when in actuality you're just telling the world, "Hey, my company just pissed away $500 on this thing that frankly doesn't do much that my laptop and cell phone can't."

Amen, Captain. Reminds me of the 1960s Amphicar (pictured above), which wasn't a very good car, and wasn't a very good boat.


Gas At $3.56 Per Gallon Is A Bargain, Adjusting for The 71% Increase in Fuel Efficiency Since 1973

From an anonymous comment on this CD post about gas prices as a percentage of income:

"You should further adjust the data for increased fuel efficiency per mile travelled and average mile driven per auto. 1000 gallons of use in 2008 moves an auto at least 50% further than in 1980."

In response, the chart above shows the average annual miles per gallon for passenger cars, from 1949 to 2005 (EIA data available here LINK NOW WORKS). From a low of 13.4 m.p.g. in 1973, fuel efficiency increased by 71% to 22.9 m.p.g in 2005 (most recent year available), and by 43% since 1980 (14 m.p.g.).

Bottom Line: Adjusting for both increased fuel efficiency and the significant increases in income since 1980, gas today is a bargain, even at $3.56 per gallon (price I paid today in Michigan).

The Ongoing Expansion of Retail Healthcare Clinics

DENVER--Take Care Health Systems, one of the largest managers of convenient care clinics and a wholly-owned subsidiary of Walgreens (NYSE, NASDAQ: WAG), has opened three Take Care Health Clinics at Walgreens drugstores in the Denver area. The clinics are walk-in, professional health care centers open seven days a week with extended evening and weekend hours.

Denver is the first Colorado market to have Take Care Health Clinics. Additional locations will open in the Denver area soon. Future expansion is planned for the state later this year. Take Care Health Systems plans to open more than 400 clinics at Walgreens drugstores by the end of 2008.

Comment: While politicians in Washington and the three presidential candidates dream up the next grandiose government healthcare reform to address rising healthcare costs, the most effective, affordable and convenient market-based healthcare solutions might be right around the corner, at your local Walgreens. Let a 1,000 retail healthcare clinics bloom. No, make that 10,000.

Wal-Mart Opens First Hispanic Community Store

In Garland, Texas today, Wal-Mart opened its first superstore designed from the ground up to meet the needs of Hispanic shoppers.

According to Wal-Mart, "We paid attention to the shopping patterns and preferences of our customers and designed the store to reflect the local community. As a result, the store will make fresh corn and flour tortillas and chips daily. The deli will also offer fresh-baked bolillo and pandulce, and the produce department will include an expanded selection of bananas, plantains, chilies and spices. Customers can pick up bulk packages of specially marinated meat, rice and beans. Near the entrance, shoppers will find a La Micha juice bar and a special shop with merchandise for the latest holiday or upcoming sporting event."

Read a Dallas Morning News article
here.

Read a
CD post here on an Arab Wal-Mart store in Dearborn, Michigan.

And
here's the case for why Wal-Mart deserves the 2008 Nobel Peace Prize for the retail giant's significant contributions to society, including tailoring its stores to local demographics. "One can plausibly argue that Wal-Mart's innovations and the resulting "Everyday Low Prices" are nothing short of a miracle." When it comes to serving consumers, nobody does it better than Wal-Mart.

Gas At Historical Highs? Not Even Close When Considering Income is Also at Historical Highs

We hear a lot these days about how gas and oil prices are at historical highs. But what we don't hear much about is how personal income is also at historical highs. Per-capita personal income has almost doubled in the last 15 years, from about $20,000 in March of 1993 to almost $40,000 in March of 2008 (personal income data available here, and population data available here).

The chart above (click to enlarge) shows the cost of 1,000 gallons of gas at average retail prices (data from EIA available here) as a percent of per-capita personal income, on a monthly basis from January 1980 through March 2008. Measured this way, gas prices through March 2008 aren't even close yet to the historical highs of the early 1980s, when 1,000 gallons of gas cost between 10-13% of per-capita personal income for 36 consecutive months, much higher than the 8.2% of per-capita income in March 2008.

The peak price of gas as a percent of income was in March 1981, when 1,000 gallons of gas cost 13% of per-capita disposable income. Gas today would have to reach a price of about $5.13 per gallon, before it would be an historical high adjusted for income.

Maybe We Should Sell T-Shirts?

"The media promised a depression and all we got was yet another lousy quarter of economic expansion."

~Comment from Ken Braun

Tuesday, May 06, 2008

Great Depression of 2008 = Great Disappointment

Whatever happened to the Great Depression? Not the real one from 70 years ago, the lost decade of unimagined misery and Steinbeckian angst, the worst period in the history of modern capitalism. I mean the replay we were promised this year.

I don’t know about you but I feel a bit cheated. There we all were, led to believe by so many commentators that the sub-prime crisis was going to force the United States into a new era of dust bowls and breadlines, a slump that would call into question the very functioning of the capitalist system in the world’s largest economy. Carried away on the surging wave of their own economically dubious verbosity, the pundits even speculated that this unavoidable calamity might presage some 1930s-style global political cataclysm to match.

Well, it’s early days, to be fair, but so far the Great Depression 2008 is shaping up to be a Great Disappointment. Not so much The Grapes of Wrath as Raisins of Mild Inconvenience. Last week the Commerce Department reported that the US economy – battered by the credit crunch, pummelled by a housing market collapse and generally devastated by the wild stampede of animal spirits – actually grew in the first three months of the year.

From "Steinbeck’s Grapes Lack Wrath This Time Around"

How the Housing Bust Is Boosting Newspapers

As the newspaper industry—and print media in general—struggle to survive in the age of digital news, the business has found an unlikely ally: the nation's gravest housing crisis in recent memory.

While newspaper executives have for years complained that online resources—like Craigslist—are cutting deep into their classified advertisement revenue, the foreclosure crisis has created a much-needed revenue stream for at least one struggling newspaper.

Find out more here and here about how "foreclosure notices are filling in where condo sales and auto deals once held sway."

Hollywood's Passage To India

Post-production movie work — everything from complex digital effects (such as the talking armoured polar bears that appeared in The Golden Compass, one of which sported a fur coat with seven million individually rendered hairs) to basic colour grading (making sure shades stay consistent throughout a film) — is steadily migrating from traditional centres such as LA to low-cost locations in India.

Quote of the Day: Grievances, Economic Realities

"In the real world, a sense of grievance or entitlement, as a result of the mistreatment of your ancestors, is not likely to get you very far with people who are too busy dealing with current economic realities to spend much time thinking about their own ancestors, much less other people's ancestors."

~Thomas Sowell in his column today "Random Events"

Cartoon of the Day



Monday, May 05, 2008

Recession Odds: From 70% to 25% in 18 Days

Based on futures trading on Intrade.com (see chart above, click to enlarge) for the most "predicted recession in U.S. history that will never come to pass" (First Trust Advisors).

Commencement Advice You're Unlikely to Hear Elsewhere

But you'll hear it here, from P.J. O'Rourke:

1. Go out and make a bunch of money! Here we are living in the world's most prosperous country, surrounded by all the comforts, conveniences and security that money can provide. Yet no American political, intellectual or cultural leader ever says to young people, "Go out and make a bunch of money." Instead, they tell you that money can't buy happiness. Maybe, but money can rent it.

There's nothing the matter with honest moneymaking. Wealth is not a pizza, where if I have too many slices you have to eat the Domino's box. In a free society, with the rule of law and property rights, no one loses when someone else gets rich.

2. Don't be an idealist! Idealists are also bullies. The idealist says, "I care more about the redwood trees than you do. I care so much I can't eat. I can't sleep. It broke up my marriage. And because I care more than you do, I'm a better person. And because I'm the better person, I have the right to boss you around."

3. Get politically uninvolved! All politics stink. Even democracy stinks. Imagine if our clothes were selected by the majority of shoppers, which would be teenage girls. I'd be standing here with my bellybutton exposed. Imagine deciding the dinner menu by family secret ballot. I've got three kids and three dogs in my family. We'd be eating Froot Loops and rotten meat.

4. Forget about fairness! I am here to advocate for unfairness. I've got a 10-year-old at home. She's always saying, "That's not fair." When she says this, I say, "Honey, you're cute. That's not fair. Your family is pretty well off. That's not fair. You were born in America. That's not fair. Darling, you had better pray to God that things don't start getting fair for you." What we need is more income, even if it means a bigger income disparity gap.

Via Cafe Hayek.

The US Peso Rallies: The Comeback of King Dollar?

Over the last eight trading days, from April 22 to May 2, the U.S. Dollar increased by 2.57% (from 69.7218 to 71.5147), as measured by the Federal Reserve's Trade Weighted Dollar Index for Major Currencies, data available here.

This is the largest 8-day percentage increase in the dollar in more than 3 years, since January 7, 2005, when the dollar increased by 2.74% over an 8-day period.

Index of Entrepreneurial Activity Rises in 2007

Related to the post below on taco trucks in LA:

Latinos experienced a large increase in the entrepreneurial activity rate in 2007. The entrepreneurial activity rate increased from 0.33% in 2006 to 0.40% in 2007. Non-Latino whites and African-Americans experienced slight increases in entrepreneurial activity rates, and Asians experienced a decline in rates (see top chart above).

A related finding is that the rate of entrepreneurial activity among immigrants, already high relative to the native-born, increased substantially between 2006 and 2007. From 2006 to 2007, the entrepreneurial activity rate among immigrants increased from 0.37% to 0.46%, considerably higher than the native-born entrepreneurial activity rate of 0.27% (see bottom chart above).

From the Kauffman Index of Entrepreneurial Activity, the only annual study to measure business startup activity for the entire United States adult population at the individual owner level. In 2007, 495,000 new businesses per month were started, with 0.30% of the adult population (or 300 out of 100,000 adults) involved in the startup process. This entrepreneurial activity rate is a slight increase over the 2006 rate of 0.29%.

"At a time when the nation is concerned about the economy, it is heartening to see that entrepreneurial activity continues to rise," said Carl Schramm, president and chief executive officer of the Ewing Marion Kauffman Foundation. "The entrepreneurial sector is a critical factor in our nation's economic growth. Even during times of recession, new firms have been responsible for the bulk of new jobs and innovations in America. That is why it is vital to track startup trends like we track other economic indicators."

Historic Change: Cuba Ends Computer Ban


HAVANA (AP) -- Cubans are getting wired. The island's communist government put desktop computers on sale to the public for the first time Friday, ending a ban on PC sales as another despised restriction on daily life fell away under new President Raul Castro.

A tower-style QTECH PC and monitor costs nearly US$780 (505 euros). While few Cubans can afford that, dozens still gawked outside a tiny Havana electronics store, crowding every inch of its large glass windows and leaving finger and nose prints behind (see picture above).

Via Buyer Behaviour

"Evil Wal-Mart" Continues to Offer Healthcare Solutions and Save Consumers Millions of Dollars

BENTONVILLE, Ark. – May 5, 2008 – While health care costs continue to be a top concern for consumers, Wal-Mart Stores, Inc. (NYSE: WMT) is furthering its efforts to help customers save money by driving down prescription medication costs and providing ongoing savings through its pharmacy offerings.

Expected to save Wal-Mart customers millions annually, today’s announcement is phase three of Wal-Mart’s $4 Prescription Program, which now covers a 90-day prescription for $10, additional women’s health medications and a new $4 over-the-counter (OTC) offer. The 90-day option gives more choices to customers and physicians who may have been limited to mail order prescriptions in the past.

Up to 95 percent of the prescriptions written in the majority of therapeutic categories are included in the $4 Prescription Program available at Wal-Mart, Neighborhood Market and Sam’s Club pharmacies nationwide. The affordable prices for these prescriptions are available for commonly prescribed dosages for up to 30-days or 90-days.

Free Market Reforms in Peru = Economic Growth

Peru has been experiencing fast growth – better than 6% annually – for almost seven years (see chart above of real GDP growth).
High growth rates – averaging 11% a year from 1990-2002 – have occurred in sectors that make china, porcelain, knitted fabrics, plastic products and basic chemicals, to mention a few.
The story of the "cluster" of small metallurgical companies that has emerged in Lima is especially compelling. In recent years, these entrepreneurs have been competitive in bidding for work that was previously dominated by important international firms. They have also become exporting powerhouses.

The agricultural sector on the coast has also revived, in part because private-property rights there (though not in the interior) have replaced the collectivized system of the 1970s. As a result, investment has poured in. Modern farming has put the coast on the map as a global supplier of asparagus, grapes, sweet yellow onions, mangos and organic bananas. All of this has been supported by the deregulation and privatization of key sectors like telecom and banking. And the biggest beneficiaries of openness have been consumers.

From today's
Wall Street Journal

Who Knew?

They still have penmanship contests? Actually I wasn't ever aware of this competition. But a small private school in my hometown of St. Paul, MN with only 157 students, has had nine state champions in the past three years — more than double the number of any other school — and 21 state champions since 2001.

Read
about it here.

HT: Joyce Howe

Taco Truck Battle Heats Up in Los Angeles




Pulitzer-prize winning restaurant critic Jonathan Gold gets paid to eat wherever he wants. And yet, several times a week he chooses to pull over to the side of the road and eat food served on a paper plate — out of a truck.

"I've probably been to 3,000 trucks in my life," says Gold, who writes for the alternative newspaper LA Weekly. "It's a hobby, you might say." Many Angelenos share Gold's love of the quick and inexpensive meals, with blogs and online maps dedicated to the quest for the perfect taco.

Not everyone is so enamored, however.
Los Angeles County officials recently passed a law that makes it a misdemeanor to park a taco truck in the same place for more than an hour. Violators face fines of up to $1,000 or six months in jail.

Who would object to cheap street tacos? Certainly not consumers, they love the taco trucks, and LA food critic Gold describes a great street taco as "happiness translated into the language of warm tortillas, finely chopped onion and a hot sauce that brings you to your knees." It's probably obvious, but find out here who doesn't like taco trucks and would love to put them all out of business.

Watch a slideshow on LA taco trucks here.

Sunday, May 04, 2008

Many Consumer Prices Are Falling, Not Rising


Interesting graphic above from yesterday's NYTimes (click to enlarge), showing the percentage breakdown of consumer spending in 2008 (15% on food and beverages [vs. 46.4% in 1901!], 18% on transportation, 42% on housing, etc.), and the percentage change in the components of the CPI over the last year from March 2007 to March 2008.

Notice all of the components above in blue, showing the more than 30 goods that have FALLEN in price over the last year (the NYTimes graph is interactive - move your cursor around to see specific items and price changes), including even many food items, such as:

Citrus fruits: -9.5%
Lettuce: -3.2%
Pork chops: -1.3%
Ham: -1.3%
Sugar: -1.7%
Bedroom furniture: -2.3%
New cars: -1.1%
TVs: -18.3%
Clocks, lamps, decorations: -7.5%
Computers: -12%
Women's suits: -6%
Men's shirts: -3.4%
Girl's clothes: -9.4%
Watches: -2.3%
Software: -5.3%
Toys: -5.2%
Phones: -5.3%
Outdoor equipment: -2.5%
Cameras, film: -6.1%

Foreclosures on Subprime Fixed Below 1999-2004

The chart above (click to enlarge) is from a new study by the CBO, showing foreclosures by type of mortgage through QIV 2007. As the chart indicates, the real mortgage problem is pretty much contained to subprime ARMs only, which make up less than 5% of the 75 million homes in America. Although foreclosures increased for Subprime Fixed mortgages in 2007, the 1.5% rate in late 2007 was actually at or below the peak levels from 1999 to 2004. Prime ARM foreclosures increased in 2007, but reached a level of only about 1% by the end of 2007.

An Unreasonable, Unconscionably Ridiculous Idea

Profit Margins by Industry, click to enlarge
"While Hillary Clinton may have failed ECON 101 along with John McCain, it appears as if Rep. Paul Kanjorski (D-PA) may been enrolled in Marxism 450 at the time," according to The Tax Foundation. Reason?

Exhibit A: Kanjorski's House Resolution 5800, the "Consumer Reasonable Energy Price Protection Act of 2008," which would:
  • Tax the oil industries’ "windfall profits."
  • Set up a "Reasonable Profits Board" to determine when the oil companies’ profits are in excess, and then tax them on those windfall profits.
  • As oil and gas companies’ windfall profits increase, so would the tax rate for those companies.

In this news article, Kanjorski said his legislation will encourage oil companies to lower prices to prevent them from receiving higher tax rates.

A few Questions/Comments:

1. Oil companies don't set oil and gas prices, global market forces do. The fact that oil and gas prices change daily demonstrate very clearly that oil companies are at the mercy of market forces of supply and demand.

2. If you tax something (oil), you get less of it. If you get less of something (oil), prices go up, not down.

3. How does Rep. Kanjorski know what "reasonable profits" are? He might start by having Congress investigate the 57 industries listed above (click to enlarge, data available here and here) that already have higher profits than the average 9.6% profit margin of the "Major Integrated Oil and Gas Industry" (which includes Exxon, Chevron, ConocoPhillips, BP, Royal Dutch Shell, etc.)


Where's Michael Moore?

LONDON/THE SUN -- Illegal immigrants are sneaking OUT of Britain because they are sick of our weather and hospitals.

Chief immigration officer Les Williams said: “We have recently noticed people trying to leave the country. Some said they wanted to go to a warmer country as they are fed up with the English weather and their treatment from the National Health Service.”

He said: “They were sick of the rain and cold and wanted to go somewhere with a bit more sun. They also complained they could not get appointments to see a doctor or a dentist.”

The Sun revealed in December how pregnant Polish immigrants were heading home to give birth because prenatal care was better in Poland.

Saturday, May 03, 2008

Good Question: These Folks Want to Be President?

Politicians want lower gas and oil prices but don't want more production to increase supply. They want oil "independence" but they've declared off limits most of the big sources of domestic oil that could replace foreign imports. They want Americans to use less oil to reduce greenhouse gases but they protest higher oil prices that reduce demand. They want more oil company investment but they want to confiscate the profits from that investment. And these folks want to be President?

~"Windfall Profits for Dummies" in today's WSJ

IQ and The Wealth of Nations

GDP per capita vs. IQ
Top 20 Countries for Average IQ

IQ by country, click on map above to enlarge (green is highest, yellow is second-highest).

Source: "IQ and The Wealth of Nations" entry
on Wikipedia

The Energy Efficient Economy Can Handle $112 Oil

Compared to the early 1970s, the U.S. economy is now twice as energy efficient, requiring only about 1/2 of the energy consumption per dollar of real GDP in 2007 (8.78 BTUs per dollar of real GDP) as in 1973 (17.44 BTUs per dollar of real GDP), according to data just released by the Energy Information Administration.

Bottom Line: The energy-efficient economy of today is much better able to absorb higher energy prices than in the past. Although high oil prices crippled the economy in the 1970s and early 1980s, and contributed to three serious recessions between 1973-1982, the energy-efficient Goldilocks Economy of the 21st Century just keeps humming along, recession-free.

Intrade: Recession Odds Plunge From 60% to 30%

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In just the last 10 days, the odds of a recession have fallen from 60% to 30%, based on futures trading on Intrade.com (see chart above, click to enlarge). Goldilocks rocks!!

Friday, May 02, 2008

Chart of the Day: Monetary Base Growth Only .70%

The chart above (click to enlarge) shows the percent change (from a year ago) in the Adjusted Monetary Base. It's now growing at an annual rate of only 0.70% through April 23, down from 10% in 2002, and the lowest rate in more than 7 years.

Right-to-Work States: 7, Forced-Union States 0

What are the main economic differences between right-to-work states and forced-union states (see map above)?

Not much really, except that compared to forced-union states, right-to-work states have had faster economic growth, lower unemployment rates, greater employment growth, higher state real GDP growth, greater growth in personal income, higher population growth, and greater home price appreciation. That's all.

James Hohman at the Mackinac Center has the data.

Household Survey: 362,000 Jobs Added in April

From today's BLS employment report, here's what probably won't get reported:

According to the more comprehensive Household Survey Data (which unlike the establishment data, includes the self-employed, unpaid family workers, agricultural workers, and private household workers), there were 146.331 million Americans employed in April (see chart above), which is: a) 618,000 higher than April of last year (145.733 million jobs), and b) 362,000 higher than March of 2008 (145.969 million).


Note also what happened to employment levels for both measures during the 2001 recession. Much different than 2008. No recession.


Update: Also, as Brian Wesbury points out, the actual, unrounded unemployment rate is only 4.952%, very, very close to being reported as 4.9% instead of 5%!


Beer Prices in 182 Countries

Check out The Price of a Pint database of World Beer Prices in 182 countries, priced in USDs, BPs, Euros, $CAN and $AUD, including a list of the most expensive countries (#1 is Monaco - $11 for a pint) and most affordable countries (#1 is Congo - 15 cents for a pint).

Thursday, May 01, 2008

Exxon Paid Almost $3 in Taxes for Every $1 Profit


Actually, income taxes of $9.3B are only about 1/3 of Exxon's total tax liability of $29.3B for the first quarter of 2008, according to this press release (see top chart above). Further, Exxon paid close to $3 in taxes ($2.69) for each $1 it earned in profits.

2008 Job Market Looks Good for College Grads


CNN--The average starting salary offer is 4% higher for 2008 graduates than last year's alumni, according to a recent study by the National Association of Colleges and Employers. Additionally, hiring is expected to increase by 8%. (Chart above show average starting salaries by discipline.)

Via Club for Growth.

CD Exclusive: Exxon's Record Tax Payment

Exxon's income taxes of $9.32 billion ($9,320,000,000) in the first quarter 2008 sets a new all-time record for the highest amount of income taxes ever paid by a U.S. corporation in a single quarter, and tops the previous record amounts of income taxes paid by Exxon last year (see chart above).

Amount of taxes Exxon paid in the first quarter 2008:

Daily: $103,500,000

Hourly: $4,300,000

Every minute: $72,000

Every second: $1,200