Harley-Davidson: +140%; Winnebago: +170%

The chart above (click to enlarge) shows the two-month returns for Harley-Davidson and Winnebago, compared to the S&P500 Index, from March 9 through today (May 7). The S&P500 Index is up by 35% since early March, but Harley Davidson is up by almost 140% (4 times the S&P500 return) and Winnebago is up by about 170% (almost 5 times the S&P500 return).

Bottom Line: If the stock prices of companies like Harley-Davidson and Winnebago selling luxury, discretionary items like $35,000 motorcycles (pictured above) and $140,000 RVs (see picture above) are rebounding by +100% over a two-month period, at 4-5 times the increase in the S&P500 Index, does that suggest that the recession must be over?

HT: Comment by LaDolceVita about Thor Industries.

April Retail Rebound: Wal-Mart +5%, Target +4.5%

May 7 (Bloomberg) -- Wal-Mart Stores, the world’s largest retailer, reported comparable-store sales for April that rose more than analysts expected. Revenue from U.S. stores open at least a year increased 5%, excluding gasoline sales, in the four weeks through May 1, the Bentonville, Arkansas-based company said today in a statement. That exceeded the 3% average estimate compiled by Retail Metrics Inc., a Swampscott, Massachusetts-based consulting firm.

U.S. store visits rose the most in seven months, spurred by demand in the grocery, health, home and entertainment categories, Wal-Mart said. Some consumers spent more freely on sporting goods and other discretionary merchandise after gasoline prices and payroll taxes dropped. The shift of Easter to April 12 from March 28 in 2008 also lifted sales.

Target Corp. announced Thursday that net retail sales for the four weeks ended May 2 were $4.45 billion, up 4.5% from the comparable period last year.

Minneapolis-based Target (NYSE: TGT) said first-quarter highlights included better-than-expected same-store sales and gross margins, favorable retail expense performance and credit card results that were in line with prior guidance. Target’s April results far exceeded those for the first two month’s of the company’s fiscal first quarter. Same-store sales were down 6.3% in March and 4.1% in February.

What About Adjusting for Population?

WASHINGTON (AP) -- The Labor Department reported Thursday that the number newly laid off workers applying for benefits dropped to 601,000 last week. That was far better than the rise to 635,000 claims that economists expected. But the total number of people receiving jobless benefits climbed to 6.35 million, a 14th straight record.

MP: There's one small problem with the bold statement above: The population of the U.S. has roughly doubled since the 1950s, so comparisons of today's unemployed (unadjusted) to past periods is meaningless without adjusting for the population. The chart above shows that the current number of unemployed (6.2 million average for April) is about 2% of the current U.S. population (estimated 306.56 million for April), which is still below the 2.12% level in 1975. So the claim of a 14th straight record for Americans receiving jobless benefits is not accurate, after adjusting for the size of the U.S. population.

Down With Facebook: Mind-Numbing Inanity

The reason to hate Facebook is because of the stultifying mind-numbing inanity of it all, the sheer boredom. If Facebook helps put together streakers with voyeurs, the streakers, for the most part, after shedding their trench coats, seem to be running around not with taut and tanned hard-bodies, but in stained granny panties with dark socks. They have a reality-show star's unquenchable thirst for broadcasting all the details of their lives, no matter how unexceptional those details are. They do so in the steady, Chinese-water-torture drip of status updates. The very fact that they are on the air (or rather, on Facebook) has convinced them that every facet of their life must be inherently interesting enough to alert everyone to its importance.

~Matt Labash, in The Weekly Standard via (Newmark's Door)

Save the Elephants, Buy Ivory, Eat Elephant Meat

The best way to save endangered species is to eat them?

John Stossel: International bans on the trade of rare animal parts (tiger organs, elephant tusks, rhino horns) have been about as successful as the international war on drugs. Why? Because wherever there is a demand strong enough, market forces overwhelm law enforcement. Terry Anderson of PERC, the Property and Environmental Resource Center, claims that governments have repeatedly failed when they tried to save animals by banning their sale -- it failed with the Colobus monkey in West Africa … with the alligator in China … and now, with the tiger in Asia.

It's quite the conceit that a few conservation groups think a government decree can change history, and get a billion plus people to change their habits. By contrast, does America have a shortage of chickens? No, because people own them and eat them. Allowing private owners to sell animals for food or tourism saved the rhino and the elephant in Africa, and the bison in America. It could save the tiger too, if environmental groups would drop their resistance.

Watch John Stossel's special "You Can't Even Talk About It" on 20/20 tomorrow night (10 p.m. ET) for the full report.

Jobless Claims Fall For The Fourth Straight Week to the Lowest Level Since Mid-February

WASHINGTON -- New U.S. claims for state unemployment benefits fell sharply last week, the fourth decline in five weeks, providing further evidence that the pace of layoffs has slowed after months of steep job cuts. Initial claims for state jobless benefits tumbled 34,000 to 601,000 in the week ended May 2, the Labor Department said in a weekly report Thursday. That's the lowest level since late January. Wall Street economists had expected a 4,000 rise, according to a Dow Jones Newswires survey.

The four-week average -- which aims to smooth volatility -- slid for a fourth-straight week, by 14,750 to 623,500, the lowest since mid-February (see chart above).

MP: On a monthly basis, there was a decline of 35,250 claims (four-week moving average) from early April to early May. Going back to 1987, there have only been 16 times when the monthly decline in jobless claims was greater, and 9 of those 16 times were towards the end of, or following, the 1990-1991 recession and the 2001 recession.

Monster Employment Index Rises 2 Points in April

April 2009 Index Highlights:

• Index rises by two points reflecting slight seasonal increase in online job opportunities

• Year-over-year, the Index is now down 31 percent, indicating no major change in the annual pace of decline between March and April

• Accommodation/ food services and arts/entertainment industries witness gains suggesting increased demand for workers in the leisure and hospitality sector

• Online offerings for occupations in business and financial operations rise suggesting stabilization in the banking and broader financial services industry

• Online job opportunities rise in eight out of nine regions and 19 of the 28 major metro markets in April

Summary Overview

The Monster Employment Index rose slightly in April, adding two points, as several industries, occupations, and regions registered increased online job availability. Yearover-year, however, the Index was down 31 percent. The Monster Employment Index is a monthly gauge of U.S. online job demand based on a real-time review of millions of employer job opportunities culled from a large representative selection of corporate career Web sites and job boards, including Monster.

Market Volatility Falls To An 8-Month Low

From Ian Ayres at the Freakonomics Blog on December 24, 2008:

One of the most important but underreported financial indicators is the CBOE’s Volatility Index (^VIX), which measures the market’s expectation of future volatility in stock prices. (The CBOE has written a nice technical paper describing how it is calculated here.) Traditionally, the annualized volatility of the S&P 500 has been 20%, but in both October and November the VIX reached an apocalyptic 80%. The huge drop in stock prices is bad, but it would be a lot better if the market thought that the major gyrations were mostly in our past. So the good news is that the volatility index has retreated to 45%.

Now, 45% is still more than twice what it “should” be. But it’s at least moving in the right direction. When it drops below 30%, it will be a strong indication that the market correction is complete and we’re back to business as usual.

MP: The CBOE Volatility Index closed today at an 8-month low of 32.45%, the lowest level since mid-September 2008 (see chart above), and more than 48 points below the November 20 peak of 80.86. If Ian Ayres is correct, market volatility is within a few points of the 30% reading that will signal that the market correction is complete.

117% Gain in KBW Bank Index Since Early March

The KBW Bank Sector (^BKX) is a capitalization-weighted index composed of 24 geographically diverse stocks representing national money center banks and leading regional institutions, including Bank of America, Citigroup, Wells Fargo, etc. (see list here).

The bank index closed above 40 today for the first time since the first week of January, and jumped by 11.5% from yesterday's close, and 20.7% over the last week. From the March 6 bottom, KBW Bank Index has increased by 117%.

Wal-Mart's Generic Prescriptions Are Almost Free

BENTONVILLE, Ark., May 5, 2009 – Today in Michigan Walmart announced a pilot program that will offer a 90-day supply of 300 generic prescriptions, each for $10 via free mail delivery. Beginning today, from Detroit to Grand Rapids to Alpena, Michiganders across the state will be able to take advantage of this new affordable pharmacy program from Walmart by calling 1-800-2REFILL. Additionally, Walmart’s free mail delivery program has no gimmicks, no memberships and no enrollment fees. This announcement signals Walmart’s commitment to help consumers save money on prescriptions regardless of whether or not they live close to a Walmart pharmacy location.

Dr. John Agwunobi, Walmart’s president of the health and wellness division said "Our $10 mail delivery prescription pilot program is a reflection of Walmart’s commitment to drive unnecessary costs out of the health care system so Americans can live healthier, better lives. Now regardless of whether consumers in Michigan have a Walmart pharmacy in their local community or not, we can help save them money.”

In addition to the 300 generic prescriptions for $10 each, Walmart’s free mail delivery program provides access to more than 3,000 other affordable brand and generic prescriptions, making it convenient for Michiganders to fill all their prescriptions via one simple and affordable program, especially if they don’t live near a Walmart store or Sam’s Club pharmacy.

This new initiative builds on the successful $4 prescription program which to date has saved customers more than $2 billion dollars on their prescriptions, including more than $43 million in Michigan. The company expects this savings number to continue to grow with the addition of this new pilot program.

MP: Maybe instead of turning over America's health care system to the federal government, we should turn it over to Wal-Mart.

Grade Inflation = Academic Fraud?

Soon college students will come home and present parents with their grades. To avoid delusion, parents should do some serious discounting because of rampant grade inflation. If grade inflation continues, a college bachelor's degree will have just as much credibility as a high school diploma.

The bottom line: To approach truth in grading, parents and employers should lower the average student's grade by one letter, and interpret a C grade as an F.

~Walter Williams' column "Fraud in Academia"

Rankings for Economics and Business Blogs

Click to enlarge.

According to "Traffic Rankings for Business and Economics Websites," Carpe Diem ranks #11 (out of 164 websites) by average daily visits in April.

According to the Wikio rankings for business blogs, Carpe Diem ranks #21, right behind #20 Robert Reich.

Is the Recession Over?

NY TIMES -- Is the recession over? Finally, the answer appears to be yes. But before anyone gets too excited, a dose of reality. The difference between recession and recovery may be little more than a statistical technicality. The economy may not be falling, but neither is it rising very quickly.

The outlook is for more of the same: slow, perhaps even glacial, improvement. Unemployment may continue to rise for three to six months, perhaps longer. And there is always the possibility that the recovery will abort.

Still, moving up beats moving down. There is light, if only dim, at the end of the economic tunnel. The U.S. economy has been wallowing in recession for more than a year and a half and stagnating for about three years. Output hasn't fallen very much -- the drop has been only half the size of recent recessions. It has sent millions of Americans onto the jobless rolls.

Not everything is rosy. Robert Gordon, an economics professor at Northwestern University and a member of the committee that determines the stop and start dates of recessions for the National Bureau of Economic Research, says one-third of the economy will continue to stagnate. Commercial real estate is dead; until vacant office space is filled, there won't be new construction. And the defense industry is headed down, fast. Even exports -- which have been the main source of new jobs during the last few years -- will probably slow because the Japanese and German economies are running into trouble.

The best guess is that unemployment will stay steady or edge a bit higher because companies are unlikely to make permanent hires until they're convinced recovery is for real. When might that be? Perhaps early fall.

MP: This was published in the New York Times on Sunday, March 22, 1992, which was actually one full year after the recession actually ended, but a full nine months before the NBER made its official announcement on December 22, 1992 that the 1990-1991 recession ended in March 1991.

Bottom Line: It takes almost two years after a recession ends before the NBER makes its final determination of a "trough" (21 months after the 1990-1991 recession, and 20 months after the March-November 2001 recession), and even a year after a recession ends, many in the media (see NY Times above: "There is always the possibility that the recovery will abort.") are not yet convinced of an economic recovery, and are still spreading suspicion, uncertainty and reservations about the expansion.

Despite Recession, Americans Still Have It Good

Channel 4 CBS-TV Denver: Professor Mark Perry studies the American economy at the University of Michigan-Flint.

"As much as we hear about how bad everything is, the reality is that people are still shopping, they're still out in lines. They're not in bread lines, they're in lines at the food court and lines at stores at some of the malls," said Perry.

Perry figured out a way to measure just how well we are doing. He took old Sears and Montgomery Ward catalogs from the 1940s through the 1970s and used them to gauge the typical price of a product. Then he looked at the average wage at that time and calculated the number of hours it would take at the average wage to buy some typical household items.

"Back in 1950, somebody would have to work 154 hours at the average wage back then to be able to afford a refrigerator and today somebody would only have to work around 22 hours," said Perry. That's not all he found. "Back in 1950 it took 127 hours of time or work to purchase a dryer, today that could be purchased for only 20 hours," said Perry.

He created a list of items. Things like a refrigerator and dryer, toaster, vacuum cleaner, sofa, etc. and figured it would take eight months to buy them. "An average worker today would only have to work 1.6 months to purchase those same items that almost everybody has in their household," said Perry.

Emerging Markets Hit 7-Month High

May 5 (Bloomberg) -- Emerging-market stocks rose for a fifth day, pushing the global benchmark index to a seven-month high, on speculation lower borrowing costs will quicken a recovery in economic growth and earnings.

The MSCI Emerging Markets Index climbed 0.8 percent to 706.37, bringing its five-day rally to 13%. Turkey’s ISE National 100 index led the advance in Europe, increasing 3 percent after the lowest inflation in 39 years bolstered expectations for more interest-rate cuts and lifted Akbank TAS. Philippine stocks posted the biggest gain in Asia as the country’s central bank said slower price increases will allow “increased flexibility” for monetary policy.

MSCI’s benchmark index has surged 55% from a four-year low in October on signs the first global recession since World War II is easing as governments worldwide cut borrowing costs and increase spending. Shares of Asian exporters got a boost today from reports showing U.S. pending sales of existing homes and construction spending rose in March.

Arctic Ice 2X As Thick As Expected: Global Cooling?

OSLO -- Al Gore said Tuesday the world must act quickly to slow the melting of the world's polar ice packs and glaciers before it reaches a critical rate for global warming. "We have to act and we have to act quickly because we don't want to cross this tipping point," the Nobel peace laureate and former U.S. vice president told a meeting of foreign ministers, experts and scientists from the most affected countries.

CANADA FREE PRESS -- The research aircraft “Polar 5” (see photo above) today concluded its Arctic expedition in Canada. During the flight, researchers measured the current ice thickness at the North Pole and in areas that have never before been surveyed. The result: The sea-ice in the surveyed areas is apparently thicker than scientists had suspected.

Normally, newly formed ice measures some two meters in thickness after two years. “Here, we measured ice thickness up to four meters,” said a spokesperson for Bremerhaven’s Alfred Wegener Institute for Polar and Marine Research. At present, this result contradicts the warming of the sea water, according to the scientists.

National Post -- Ice in the Arctic is often twice as thick as expected, report surprised scientists who returned last week from a major scientific expedition. The scientists - a 20-member contingent from Canada, the U.S., Germany, and Italy - spent one month exploring the North Pole as well as never-before measured regions of the Arctic. Among their findings: Rather than finding newly formed ice to be two metres thick, "we measured ice thickness up to four metres," stated a spokesperson for the Alfred Wegener Institute for Polar and Marine Research of the Helmholtz Association, Germany's largest scientific organization.

HT: NCPA

More Evidence That US Economy is Recovering

WASHINGTON (AP) — A private measure of the U.S. services sector contracted for the seventh straight month in April but at a slower pace, the latest sign the economic downturn could be moderating. The services index from the Institute for Supply Management came in at 43.7 in April compared with 40.8 in March (see top chart above). Any reading below 50 indicates the service sector, where most Americans work, is contracting. Still, the reading was higher than economists expected and provides another sign the economy's steep downturn could be bottoming out.

May 5 (Bloomberg) -- Service industries in the U.S. contracted in April at the slowest pace in six months, signaling the economic slump is gradually abating. The Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90% of the economy, rose to 43.7, higher than forecast, from 40.8 the prior month, according to the Tempe, Arizona-based group. Readings below 50 signal contraction.

ISM -- The seven industries reporting growth in April based on the NMI composite index — listed in order — are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Retail Trade; Finance & Insurance; Utilities; Other Services; and Accommodation & Food Services.

MP: The bottom graphs shows the ISM indexes for new orders and business activity. Business activity for the service sector is the highest since October, and new orders are the highest since September. Finally, the 8.2 point increase in new orders is the largest one-month increase in the history of the ISM index (back to 1997).

India and China Mfg. Data Fuel Rise in Optimism

Financial Times -- India’s manufacturing sector grew in April for the first time in five months, spurring hopes of an end to falling growth estimates and contracting exports. The ABN-Amro Bank purchasing managers’ index index rose to 53.3 in April from 49.5 a month earlier, buoyed by higher demand for goods from Indian factories and stock building (see chart above). The reading is the highest since October and reflects a steady rise in orders since the global economic downturn undermined the index at the end of last year.

Meanwhile, the purchasing managers’ index for Chinese manufacturing published by CLSA, the Hong Kong-based brokerage, rose to 50.1 in April from 44.8 a month earlier, signalling an expansion in factory output for the first time in nine months (see chart above).

HT: Buyer Behaviour Blog

Las Vegas Home Sales Increase by 85% in March

LAS VEGAS -- SalesTraq reported a median existing-home price of $134,900 in March, a 41.3% decline from the same month a year ago. Existing-home sales during the month increased 85.6% percent to 3,626 recorded closings. It's the same trend housing analyst Larry Murphy of SalesTraq has seen for the past 11 months: rising sales and declining prices.

MP: If we tracked the real estate market the way we track auto sales (number of units sold regardless of price), we would conclude that the housing market is booming in places like California, Florida, Northern Virginia, the Twin Cities and Las Vegas. Unit sales for March are up significantly in all of those markets compared to March last year.

Related:

NY Times: Where Home Prices Crashed Early, Signs of a Rebound

Inman News: Home Sales Boom in 'Busted' Markets

Barack Obama & The DC Voucher Program

Reason.tv

Related: LA Times article, "Failure Gets a Pass: Firing Tenured [Public School] Teachers Can Be a Costly and Tortuous Task"

Emerging Markets Soar 47.6% Since Early March

The MSCI Emerging Markets Index closed today above 700 for the first time since October 3, 2008 (see graph above). The MSCI Emerging Markets Index has advanced in 27 out of the last 38 trading sessions, and is up by 47.6% from its early March low, and 23.6% year-to-date.

Springtime for US Economy Could Start This Month

Trough of the US recession: May 2009?

If we refine the NBER weekly trough date to be the third week in the NBER trough month, then in four of the past five recessions the new claims peak leads the NBER weekly trough by a range of only four to six weeks, and in the fifth recession the new claims peak lags the NBER weekly trough by two weeks. Since new claims have recently reached a peak in the week ending 4 April 2009, it is tempting to conclude that the monthly trough of the US recession could come as early as the middle of May 2009 – a date earlier than most analysts appear to expect.

Bottom Line: My reasoning leads me to conclude that the ultimate NBER trough of the current business cycle is likely to occur in May or June 2009, substantially earlier than is currently predicted by many professional forecasters.

~Northwestern economist Bob Gordon, also a member of the NBER Business Cycle Dating Committee since 1978

HT: Newmark's Door

Opposite of Pro? Con; What's Opposite of Progress?

A major lesson of Fan and Fred and the subprime fiasco is that no one benefits when we push families into homes they can't afford. Yet that's what Congress is doing once again as it relentlessly expands FHA lending with minimal oversight or taxpayer safeguards.

~Wall Street Journal staff editorial


Given the current housing crisis, there is wide support for measures to make it easier for homeowners to modify their mortgages. That is understandable. Nobody likes seeing the wave of foreclosures. Plus, mortgage modifications may help stabilize home values.

But in the rush to do something, Congress is showing a regrettable willingness to adopt constitutionally suspect legislation that runs roughshod over the Fifth Amendment of the Constitution, which prohibits the taking of private property without just compensation.

~Wall Street Journal Editorial by Eric Brenner and Hamish Hume

If Non-Market Household Production Has Increased, Official GDP Stats Overstate Economic Contraction

Home construction is way down in the United States, but home production — work to produce goods and services for our own consumption — is way up. As people forgo expensive restaurant meals, they spend more time cooking at home. A Time Magazine poll reports that individuals are doing more housework and home repairs. Many Americans, famously including Michelle Obama, are planting vegetable gardens. Even some urbanites are raising chickens in their backyards.

Nancy Folbre, writing in the NY Times Economix blog, makes a good point: Adjusted for the increase in household production over the last six months or longer, the -6% contractions in real GDP over the last two quarters might overstate the severity of the contraction. That is, household production (cooking at home, home repairs, gardening, etc.) is NOT counted as part of official GDP output statistics because it is not market-based production. To the extent that Americans have increased household production in response to the economic slowdown, the BEA's official GDP statistics have overstated the true amount of economic contraction.

The 18.9% Two-Month Return for the World Stock Market (March and April) Is the Highest Since 1986

The MSCI World Stock Market Index (data available here) closed on Friday at close to a four-month high, and is up by 30% from the March 9 low.

The two-month return in March and April of 18.9% is the highest two-month return for the World Stock Market Index in more than two decades, since 1986 (19.2% two-month return for Jan.-March), and the third highest two-month return in history (the 24% two-month return through February 1975 was the highest in the history of the MSCI World Index, back to 1969).

Markets in Everything. Or Not.

This is the end of the line for Encarta. Microsoft recently announced that sales would soon cease and that the Encarta Web site, supported by advertising, would be shut down later this year.

It’s hard to look at the end of the Encarta experiment without the free and much larger Wikipedia springing immediately to mind. But Encarta arguably would have failed even without that competition. The Google-indexed Web forms a virtual encyclopedia that Encarta never had a chance of competing against.

~NY Times

Creative Destruction

Bartering Surges in Russia: 3 to 5% of Total Sales

A year ago, Russia seemed to be sloshing around in money. Now it's in the grip of a liquidity crisis, and individuals and companies are looking to another way to procure what they need - bartering. This direct exchange of goods and services is rising in popularity in Russia.

Thousands of barter offers can be found on the internet. And the items being put up for exchange give an idea of just how tough times are for some: a cottage for a car, furniture for a laptop computer, a pair of rubber boots for a box of chocolates, even retail discount cards for men's socks or baby food.

And it's not just individuals going online to barter; companies, large and small, are offering to exchange everything from apartments to building products to keep business ticking along, or to even stay in business.

Link and radio report (audio).

HT: Greg Allar

Alcohol Consumption Map

Click to enlarge.

Link.

English Word-Origins Pie Chart

Link.

Jack F. Kemp (July 13, 1935 – May 2, 2009), RIP

Jack Kemp listing on Wikipedia

ECRI: Recession Likely Over By End of Summer

NEW YORK, April 30 (Reuters) - The longest U.S. recession in a half century will probably end before the summer is out, the Economic Cycle Research Institute said on Thursday.
The research group, whose leading indicators have a solid track record of predicting turns in the business cycle, said enough of its key gauges have turned upward to indicate with certainty that a recovery is coming.

Lakshman Achuthan of ECRI states: With the level of the Weekly Leading Index in an upswing for seven weeks now (see top chart above), an end to the U.S. recession is now in clear sight.

TheStreet.com -- The end of this recession -- the most severe downturn since World War II -- is finally in sight. This is the clear message from Economic Cycle Research Institute's array of leading indices of the U.S. economy.

The "giant error of pessimism" is now rampant. This is why many will be blind to the light at the end of the tunnel that marks the exit from this recession. But to ECRI's array of objective leading indices, designed specifically to spot recessions and recoveries, the end of the recession is now in clear sight.

HT: Paul Kedrosky

Pothole Repair Smackdown: KFC vs. PETA

CHATTANOOGA TIMES FREE PRESS --The ante went up Thursday in a battle over chicken-naming rights on city streets. People for the Ethical Treatment of Animals sent a letter Thursday morning to Mayor Ron Littlefield, saying the group would double the amount of a donation the city received from KFC Corp. to fix potholes on city streets.

KFC gave $3,000, and PETA is offering $6,000.

Community Colleges Challenge The Hierarchy

17 states now allow community colleges to offer bachelor's degrees:

NY TIMES -- Florida leads the way, with 14 community colleges authorized to offer bachelor’s degrees, and 12 already doing so, in fields as varied as fire safety management and veterinary technology. But nationwide, 17 states, including Nevada, Texas and Washington, have allowed community colleges to award associate’s and bachelor’s degrees, and in some, the community colleges have become four-year institutions (see map above). Others states are considering community college baccalaureates.

In most cases, the expanding community colleges argue that they are fulfilling a need, providing four-year degrees to working people who often lack the money or the time to travel to a university. But some of those universities are fighting back, saying the community colleges are involved in “mission creep” that may distract them from their traditional mission and lead to watered-down bachelor’s degrees.

And here's another trend in higher education: "Squeeze College Into 3 Years."

Wall Street 2: Gordon Gekko Is Coming Back

LOS ANGELES — Michael Douglas and Oliver Stone are back together again with a sequel to their 1987 hit "Wall Street." Douglas is reprising his role as Gordon Gekko and Stone is on board again to direct the sequel, which for now has the working title "Wall Street 2," said 20th Century Fox spokesman Gregg Brilliant. Brilliant said the project is timely and relevant given the state of the world.

Gas is Cheaper Today Than the 1920s, 1930s, 1940s, 1950s, 1960s, 1970s and First Half of 1980s

The chart above shows the real price of gasoline (in 2008 dollars), annually from 1919 to 2009 using data from the Energy Information Administration (data here). For 2009, the average gas price from January to April was $1.93 per gallon, which is equal to or lower than the average price of gas in every year since 1919, except for 1973 ($1.88) and the 18-year period from 1986 to 2003 (see shaded areas above).

In other words, during 72% of the years since 1919 (72 years out of 91), the real price of gasoline was higher than the average price so far in 2009. Compared to the real retail price today, gas was more expensive in the decades of the 1920s, 1930s, 1940s, 1950s, 1960s, 1970s (except for one year), and the first half of the 1980s.

Is There A Manufacturing Rebound In the Works?

NEW YORK (CNNMoney.com) -- A key measure of manufacturing activity rose for the fourth straight month in April, suggesting the sector may be stabilizing even though the indicator has been at the contraction level for 15 months in a row, a purchasing management group said Friday.

The Tempe, Ariz.-based Institute for Supply Management said its manufacturing index rose to a reading of 40.1 in April from 36.3 in March (see chart above, data here). A reading below 50 indicates manufacturing activity is shrinking. Economists had forecast a reading of 38.4, according to consensus estimates gathered by Briefing.com.

"The decline in the manufacturing sector continues to moderate," said Norbert Ore, chair of the ISM's survey committee, in a statement. "This is definitely a good start for the second quarter."

The index also showed that new orders and production increased in April compared with March.

According to the ISM:

A PMI in excess of 41.2%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates contraction in both the overall economy and the manufacturing sector. Ore stated, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through April (37%) corresponds to a 1.3 percent decrease in real GD. In addition, if the PMI for April (40.1%) is annualized, it corresponds to a 0.3% decrease in real GDP annually."

MP: Assuming that the PMI continues to increase in May and June from the 40.1 April reading, there is a good chance that second quarter real GDP will be positive, or at least very close to zero. Also, the 7.2 percentage point increase in the PMI from the December bottom is the largest four-month increase in the index since January 2004.

As Larry Kudlow pointed out last night on "The Kudlow Report," the March index for New Orders (47.2) is now almost back to the level of 50 that would indicate an expansion manufacturing activity (see chart above). Further, the 19.1 percent increase in the New Order Index from Dec. to April is the largest 4-month increase in the index in more than 7 years (since March 2002), and the 14.1 percent increase in the Production Index over the same period is the greatest 4-month increase since February 2002.

Academic Earth Receives 1 Million Visits in 3 Mos.

A few months back I posted on Academic Earth, a website that features thousands of video lectures from the world's top scholars at some of the top universities (Harvard, MIT, Yale, Princeton, Stanford, etc.). Academic Earth now reports that:

Apr 29, 2009 -- Academic Earth, a portal for educational video that hosts full courses and guest lectures from leading universities, announced Wednesday that it received more than 1 million visits in the three months since it opened up its public beta. More than half of all visitors came from outside of the United States, representing a total of 213 countries.

"Our goal in founding Academic Earth was to make educational resources from leading universities more accessible to people around the globe," said founder Richard Ludlow, "we've been thrilled to see the site experience such rapid growth, especially from international users."

The site's visitors have been drawn to content in a wide variety of fields. The top 10 most visited lectures include Princeton's Alan Blinder speaking on the Origins of the Financial Mess, MIT's Walter Lewin's opening lecture to his introductory Physics course, Yale Professor Shelly Kagan discussing the philosophy of death, and even Berkeley's Alan Feng teaching strategy for the popular computer game Starcraft.

As would be expected in this economic environment, many visitors have made use of the site's resources in fields related to job skills; the top 5 most viewed subjects have been Computer Science, Entrepreneurship, Economics, Mathematics, and Engineering.

Consumer Confidence Soars in April

NEW YORK (Reuters) - U.S. consumers felt more confident about the economy last month than at any time since the September failure of Lehman Brothers that pushed global banking to the brink of collapse, a survey showed today. The Reuters/University of Michigan Surveys of Consumers said its final index of confidence climbed to 65.1 in April from 57.3 in March. That was the highest since September 2008 and the biggest one-month increase since October 2006.

The April reading also marked the first yearly increase since July 2007. Economists polled by Reuters had expected a lower final reading of 61.9 for April.

The index of current economic conditions rose to 68.3 last month from 63.3 in March, the best reading in four months. The index of consumer expectations climbed to 63.1 from 53.5, also the highest since September of 2008.

"The improvement was concentrated in expectations for the future, especially the longer-term outlook for the economy," said Richard Curtin, the director of the survey.

Life Expectancy v. Real GDP Per Capita, 1800-2007

Click on the chart above (and then click "Play") to see an amazing video chart from Gapminder showing year-by-year values for: a) life expectancy and b) real GDP per capita from 1800 to 2007 in various countries around the world. For example, in 1800 life expectancy at birth in the U.S. was 39 years and per-capita real GDP was $1,343, compared to 40 years and $2,280 in the UK, and 25 years and $467 in India.

By 2007, life expectancy in the U.S. was 78 years and per-capita GDP was $42,952. For the UK, it was 79 years and $33,203 and for India 65 years and $2,452.

There is No Gender Pay Gap in the UK: Having Children Is Decisive Factor, Not Being a Woman

UK Telegraph -- Harriet Harman claims that women earn on average 22.6% less per hour than men and takes it for granted that this difference is the result of discrimination against women by men. And yet the Government's own figures support no such conclusion.

Three official surveys are used by the Office for National Statistics (ONS): a survey of employers called ASHE (the annual survey of hours and earnings), a survey of households (the Labour Force Survey) and the panel dataset of the New Earnings Survey, which provides information from 1975 to 2006.

According to ASHE, in 2007 a gender pay gap does not open up until women reach about 30 years of age. From ages 18-29 there is hardly any difference and, according to the Labour Force Survey (LFS), women aged 22-29 are paid on average slightly more per hour than men. As the ONS concludes, having children is the decisive factor, not being a woman.

Historical data confirm this conclusion. Based on the New Earnings Survey panel data, in 1975 there was a pay gap from the age of 18 onwards, but in 2006 no such gap existed until age 34. Why? In 1975 women tended to have children in their 20s and by 2006 it was more common to have them in their 30s. As the average age of child-rearing increased so too did the age at which the pay gap kicked in.

The truth is that the vital difference is not between men and women but between women with dependent children and everyone else, whether male or female. The hourly rate of pay for women who are neither married nor cohabiting is slightly higher than for men in the same situation. For men and women who are married or cohabiting the hourly pay gap is 14.5% and the gap widens with the number of children. Women with one dependent child earn on average 12.3% less than men and with four or more dependent children 35.5% less.

Quite simply the Government's emphasis on the gender pay gap of 22.6% is an abuse of official statistics. And to infer that the difference in the average hourly rate is the result of discrimination is an abuse of logic. When women without dependent children compete head to head with men in the same situation their hourly rate is higher. Most women today work throughout their 20s and find that success is the result of being good at something. Employers are looking for capable people whether male or female.

Women today don't need government quotas. They are doing fine on their own. They want to be judged on their merits, not patronised by the old generation of 1970s quota feminists like Harriet Harman.

MP: Labor market studies in the U.S. have also found that motherhood and marriage explain much more of the pay gap than sex discrimination. For example, a 2005 NBER study concludes that:

"There is no gender gap in wages among men and women with similar family roles. Comparing the wage gap between women and men ages 35-43 who have never married and never had a child, we find a small observed gap in favor of women, which becomes insignificant after accounting for differences in skills and job and workplace characteristics."

Swimming in Nat Gas, Prices Hit 7-Year Lows

Supply is up.

Prices are down 75% from the 2008 peak.

WSJ/CADDO PARISH, La. -- A massive natural-gas discovery here in northern Louisiana heralds a big shift in the nation's energy landscape. After an era of declining production, the U.S. is now swimming in natural gas.

Even conservative estimates suggest the Louisiana discovery -- known as the Haynesville Shale, for the dense rock formation that contains the gas -- could hold some 200 trillion cubic feet of natural gas. That's the equivalent of 33 billion barrels of oil, or 18 years' worth of current U.S. oil production. Some industry executives think the field could be several times that size.

Huge new fields also have been found in Texas, Arkansas and Pennsylvania. One industry-backed study estimates the U.S. has more than 2,200 trillion cubic feet of gas waiting to be pumped, enough to satisfy nearly 100 years of current U.S. natural-gas demand.

The discoveries have spurred energy experts and policy makers to start looking to natural gas in their pursuit of a wide range of goals: easing the impact of energy-price spikes, reducing dependence on foreign oil, lowering "greenhouse gas" emissions and speeding the transition to renewable fuels.

Just three years ago, the conventional wisdom was that U.S. natural-gas production was facing permanent decline. U.S. policy makers were resigned to the idea that the country would have to rely more on foreign imports to supply the fuel that heats half of American homes, generates one-fifth of the nation's electricity, and is a key component in plastics, chemicals and fertilizer.

But new technologies and a drilling boom have helped production rise 11% in the past two years (see top chart above, data here). Now there's a glut, which has driven prices down to a six-year low (see bottom chart above) and prompted producers to temporarily cut back drilling and search for new demand.

The natural-gas discoveries come as oil has become harder to find and more expensive to produce. The U.S. is increasingly reliant on supplies imported from the Middle East and other politically unstable regions. In contrast, 98% of the natural gas consumed in the U.S. is produced in North America.

Emerging Markets Jump 39.5% Since Early March

The MSCI Emerging Markets Index closed yesterday at its highest level since Oct. 14, 2008 (see graph above), and is heading for its seventh-consecutive weekly gain. The MSCI Emerging Markets Index has advanced in 27 out of the last 38 trading sessions, and is up by 39.5% from its early March low, and 16.9% year-to-date.

Small WV Bank Loses $750,000 Due to TARP And Pays Treasury 60% Annual Interest for 6-Week Loan

The Troubled Asset Relief Program (TARP) was crafted at the outset of America's economic crisis by people under a great deal of stress, and probably without much sleep. It's had some unexpected consequences for the banks that borrowed money in the bailout.

Take the case of Centra Bank, a relatively small institution in West Virginia. Centra accepted a $15 million loan from the government and promptly paid it back. But that money came with strings attached, and over the past couple of weeks, Centra executives have realized they lost the better part of $1 million in their dance with TARP.

Here are some of the facts:

To protect taxpayers, warrants are typically part of TARP loan packages, and for Centra to get $15 million, the government forced Centra to sell preferred Centra stock worth $750,000 to the Treasury for $750. When the bank paid back the $15 million loan after six weeks, Centra Bank President Douglas Leech figured the bank would just return the $750 to Treasury.

But Treasury told Centra that to exit the TARP program, the bank would have to wire the full $750,000, plus interest.

Even though the bank had held the money for only six weeks, Centra had to pay the equivalent of a 60% annual interest rate on it. If Centra had stayed in TARP longer, the money would have been a cheap loan. But exiting early came with a stiff penalty. For Centra Bank, TARP backfired. It was supposed to give banks extra capital. Instead, it lost $750,000.

Here's the full NPR story.

MP: Senator Dick Durbin (D-Illinois) has introduced a bill called “Protecting Consumers from Unreasonable Credit Rates Act,” which proposes a federally regulated maximum interest rate of 36%. Perhaps he would consider amending it to also protect small banks like Centra receiving TARP funding from paying more than 36%?