Saturday, October 01, 2011

Happy 60th Birthday, Color TV: 1951 -2011

Color TV: "The fabric of the rainbow riding piggyback on an invisible stream of electrons."

According to this website, this week marks the 60th birthday of color TV, although other sources report that color broadcasts actually started on June 25, 1951 on CBS. 

In 1956, RCA prepared the video above titled "The Story of Color Television," with this commentary:

"The world of color - color captivates attention and brings the beauty of creation close to home. Color transforms the commonplace into the beautiful, it makes the humdrum memorable. Color, the fabric of the rainbow riding piggyback on an invisible stream of electrons."

How N. Dakota Became Saudi Arabia: Interview with Harold Hamm, Discoverer of Bakken Oil

In today's WSJ, Steve Moore interviews Harold Hamm, the Oklahoma-based founder and CEO of Continental Resources (America's 14th-largest oil company), and the original discoverer of the gigantic Bakken oil fields of Montana and North Dakota.  There are lots of gems from Mr. Hamm, here are a few:

1. Hamm came to Washington to spread a needed message of economic optimism: With the right set of national energy policies, the United States could be "completely energy independent by the end of the decade. We can be the Saudi Arabia of oil and natural gas in the 21st century."

2. "President Obama is riding the wrong horse on energy." We can't come anywhere near the scale of energy production to achieve energy independence by pouring tax dollars into "green energy" sources like wind and solar. It has to come from oil and gas. 

3. Since 2005 America truly has been in the midst of a revolution in oil and natural gas, which is the nation's fastest-growing manufacturing sector (see chart above showing oil production in North Dakota increasing more than four-fold since 2005).

4. How much oil does Bakken have? The official estimate of the U.S. Geological Survey a few years ago was between four and five billion barrels. Mr. Hamm disagrees: "No way. We estimate that the entire field, fully developed, in Bakken is 24 billion barrels."

5. Mr. Hamm believes that if Mr. Obama truly wants more job creation, he should study North Dakota, the state with the lowest unemployment rate in the nation at 3.5%. He swears that number is overstated: "We can't find any unemployed people up there. The state has 18,000 unfilled jobs. And these are jobs that pay $60,000 to $80,000 a year." The economy is expanding so fast that North Dakota has a housing shortage. Thanks to the oil boom—Continental pays more than $50 million in state taxes a year—the state has a budget surplus and is considering ending income and property taxes.

6. Mr. Hamm calculates that if Washington would allow more drilling permits for oil and natural gas on federal lands and federal waters, "I truly believe the federal government could over time raise $18 trillion in royalties." That's more than the U.S. national debt, I say. He smiles.

America's Latest Crime Wave: "Educational Theft"

From today's WSJ editorial by Michael Flaherty, president and cofounder of Walden Media, which coproduced the 2010 documentary Waiting for "Superman":

"In case you needed further proof of the American education system's failings, especially in poor and minority communities, consider the latest crime to spread across the country: educational theft. That's the charge that has landed several parents in jail this year. 

From California to Massachusetts, districts are hiring special investigators to follow children from school to their homes to determine their true residences and decide if they "belong" at high-achieving public schools. School districts in Florida, Pennsylvania and New Jersey all boasted recently about new address-verification programs designed to pull up their drawbridges and keep "illegal students" from entering their gates.

Other school districts use services like, which provides "the latest in covert video technology and digital photographic equipment to photograph, videotape, and document" children going from their house to school. School districts can enroll in the company's rewards program, which awards anonymous tipsters $250 checks for reporting out-of-district students.

Only in a world where irony is dead could people not marvel at concerned parents being prosecuted for stealing a free public education for their children."

HT: Sean Bellamy McNulty

Markets in Everything: Mobile Booty Lounge

Mobile food trucks are becoming popular in The Motor City, here are some recent CD posts here and here.  And now Detroit Lions' fans have been enjoying another form of controversial mobile commerce operating near Ford Field during Lions home game - a mobile strip club known as the "Booty Lounge" (see photo above).  

For a $10 donation, tailgating Lions fans can enter the Booty Lounge bus that features two stages, steel dancing poles, and a smoke machine.  Now the Detroit Police Department is investigating and may try to stop the Booty Lounge from operating at the next home game versus the Chicago Bears on October 10, here are some news reports here and here

HT: Brad Parkes

Reporter Asks Buffett: You Support Higher Taxes So Why Not Just Write a Check to the Government ?

In the interview above with Warren Buffett, he first responds to questions about the economy and says that we are still in a recovery and not in a double-dip recession based on the fact that the 70+ companies he owns are doing quite well. The discussion next turns to his support of higher taxes on himself and some of those in his elite "super-rich" club.

Then at about 4:30 in the video, the reporter asks Buffett the ultimate question: If he wants the rich (including himself) to pay more in taxes, why doesn't he simply voluntarily write a check to the government for the extra millions that he thinks would be "fair" for him to pay? Buffett fumbles around without giving a clear answer, and the reporter presses him again and asks "Warren, since you're a large proponent of higher taxes, why not write a check to the government for several billion dollars just to underscore a point?"  Buffett then fumbles some more and claims that he doesn't want to act alone, but would join a group of other "ultra-rich" taxpayers who are supposedly "under-taxed" and they would all pay higher taxes as a group?? 

That begs the question: Why wait for anybody else, why shouldn't Buffett be the first to voluntarily pay higher taxes and set an example for others in his "ultra-rich" club.  Isn't Buffett's position kind of like saying: I think it's a good idea to donate blood, but I won't do it unless: a) I'm forced to by the government, or b) a bunch of my friends do it with me?  

Friday, September 30, 2011

More Fact-Checking of Warren Buffett

Warren Buffett famously claimed in the New York Times that he paid only 17.4% of his 2010 income in taxes, which was a lower rate than the other 20 people in his office, whose tax rates ranged from 33% to 41%, and averaged 36%.  It's been well-documented by now that Buffett's low rate was extremely atypical for the "super-rich" and his tax rate can only be that low because he received almost all of his taxable income as capital gains and dividends, which are taxed at only 15%.  

Nick Kasprak at The Tax Foundation now does some fact-checking and finds that:

"The effective rates Buffett claims for other workers in his office are extraordinary. To me, they seem too high to be realistic, and I can't figure out how he calculated them, even if you include all payroll (employee and employer side) taxes. Even if you assume the scenario that leads to the highest possible tax burden (single filer, no deductions), a taxpayer would have to make at least $285,388 (in 2010) before his or her effective rate reaches 33 percent. 41 percent is impossible."

Nick Kasprak provides the handy calculator below that shows the highest possible tax rate for any amount of income, assuming a single filer with no deductions or credits (enter any income amount in wages below and click somewhere outside of the calculator area): 

Bottom Line: An effective tax rate of 41% is impossible.

Las Vegas Home Sales in Aug. Highest in 5 Yrs, But Mostly All-Cash, FHA-Financed and Distressed Sales

DQ News -- "Las Vegas area home sales jumped to the highest level for an August in five years, the result of a relatively long month for escrows closings and robust buying by investors and first-time buyers in the sub-$150,000 market. Home prices seemed to trend sideways to downward last month, with the median sale price dropping to its lowest level in more than 16 years.  In August, 5,412 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County), up 19.3% from July (4,536 homes) and up 26.4% from August 2010 (4,281 - see chart above)."

 Some of the details for August sales are pretty interesting:

1. In August, a popular form of low-down-payment financing for first-time home buyers – government-insured FHA loans – accounted for 39.9% of all home purchase loans. That was down from 42.1% in July and down from 46.6% a year earlier and a peak of 55.1% in September 2008. 

2. Cash buyers purchased 52.3% of the Las Vegas-area homes that sold last month. That was down from 53% in July and 48.8% a year earlier. The record was 56.7% this February. Cash purchases are where there is no corresponding purchase mortgage in the public record. 

MP: That means that 92.2% of Las Vegas-area home sales were either low-down-payment FHA financed purchases or cash sales, which must mean that only 7.8% of sales were conventional purchases with 20% down payment, etc. 

 3. Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 57.2% of the Las Vegas resale market in August. That was down from 59.5% in July but up from 52.5% a year earlier. Foreclosure resales peaked at 73.7% of the resale market in April 2009.

4. Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 12.8% of Las Vegas-area August resales. That compares to an estimated 11.1% in July, 16.5% a year ago, and 9.2% two years ago. 

5. In other words, distressed sales – the combination of sales of foreclosed homes and “short sales” – continued to dominate, representing 70% of the resale market last month.

MP: The good news is that Las Vegas home sales were the highest for the month of August since 2006, indicating an increased level of transactions and more property changing hands, but the real estate market there is certainly a long way from "normal" based on the high concentrations of FHA-financed properties, cash sales, and distressed sales. 

Cartoon of the Day: Bad Hotel Reviews

HT: Morganovich

Cuba Legalizes Used Car Sales

HAVANA (AP) — "Cuba legalized the sale and purchase of automobiles for all citizens on Wednesday, another major step in the communist run island's economic transformation and one that the public has been clamoring for during decades. Under the law, which takes effect Oct. 1, buyers and sellers must each pay a 4 percent tax, and buyers must make a sworn declaration that the money used for the purchase was obtained legally.

Unrestricted sales had previously been limited to cars built before the 1959 revolution, one of the reasons Cuba's streets are about the only place on the planet one routinely finds a multitude of finned American classics from the 1950s such as Chevrolets Bel Airs and Chrysler Imperials, all in various states of disrepair (see photo above)."

Cuban blogger Yoani Sanchez offers these comments:

"Even with this new legal reform, however, the great majority of citizens are only allowed to buy a used car, which in Cuba means vehicles more than 15 years old, and in particular Russian Ladas or Moskvitches, or Polish Fiats, which were previously marketed through a meritocracy. Some modern cars in State service will be sold to those who meet the strict requirements of belonging to an institution and demonstrating their fidelity to the Government. And those impeccably new ones, recent imports, are destined for a Revolutionary elite that has in their pockets money sanctified through official channels. To drive a shiny Citroen or a late model Peugeot will continue to be a sign of being a member of the powers-that-be."

HT: Matt Bixler

Poster of the Day: Facebook and You

Source: "How 'Free' Really Works Online" at The Consumerist

HT: Tim D.

Thursday, September 29, 2011

Obama's Intrade Re-election Odds Now Below 47%

Obama's re-election odds on now at 46.6%.

New Drilling Technologies Reshape Oil World

1. REUTERS -- "Oil output from shale prospects in unconventional sources from North Dakota to Texas could reach 1.5 million to 2 million barrels-per-day (bpd) in the coming five to seven years, twice as much as the 700,000 bpd currently produced in these places."

2. NATIONAL GEOGRAPHIC -- "Oil exploration is moving to new corners of the country as drillers use a combination of technologies to tap crude that was always known to be there, but only now can be produced economically.

Colorado’s El Paso County, which had plenty of cattle but never a producing well, sits on the Niobrara shale. The geologic formation stretches from Colorado into Wyoming, while also touching parts of Nebraska and Kansas. The Niobrara is one of about a score of new and renewed oil plays made possible  through a combination of horizontal drilling and hydraulic fracturing.  Gas producers early last decade combined fracking and horizontal drilling with outstanding results, significantly altering the U.S. energy picture and touching off major gas drilling booms in Texas, Louisiana, Colorado, Pennsylvania, and elsewhere."

3. NATIONAL PUBLIC RADIO - The article "New Boom Reshapes Oil World, Rocks North Dakota" reports that in Williston, N.D. parking spaces for RVs are going for $1,000 per month and small one-bedroom apartments for $2,000 - sounds like Manhattan or DC prices.  Here's more:

"The boom in Williston is happening in spots across America. New drilling technology is also fueling boom towns in Texas, Louisiana, and Colorado. New drilling technologies mean companies can extract oil and natural gas from shale rock that was previously thought unreachable. 

The U.S. could have 2 trillion barrels of oil waiting to be drilled. South America could hold another 2 trillion. And Canada? 2.4 trillion. That's compared to just 1.2 trillion in the Middle East and north Africa."

The 20 Countries with the Most Debt

CANADA.COM -- "With the recent spotlight on the debt crisis in Greece and other European nations, we take a look at the countries that are most in debt, calculated by the World Bank's data on gross external debt as a percentage of the GDP. The top ranking nations may surprise you."

 HT: Che is Dead

Interesting Facts of the Day: Text Messages

1. Some 83% of American adults own cell phones and three-quarters of them (73%) send and receive text messages. 

2. Text messaging users send or receive an average of 41.5 messages on a typical day, with the median user sending or receiving 10 texts daily. 

3. Cell phone owners make or receive an average of 12 calls on their cells per day. 

4. Young adults are the most avid texters by a wide margin. Cell owners between the ages of 18 and 24 exchange an average of 109.5 messages on a normal day.  (MP: Wow, that works out to almost 7 messages per hour over a 16-hour day, or about one every 9 minutes!) 

Markets in Everything: Digital Fake Girlfriend

Are you tired of being embarrassed by the fact that you don't have a girlfriend? Do you wish that you could get interrupted by a loving phone-call during man time? Let me introduce you to FakeGirlfriend.

Weekly N. America Intermodal Volume Sets Record

WASHINGTON, D.C. – "The Association of American Railroads today reported gains for weekly rail traffic, with U.S. railroads originating 305,133 carloads for the week ending September 24, 2011 (Week 38), up 1.1 percent compared with the same week last year (see chart; MP: Except for the first week of April this was the highest weekly carload count since 2008). Intermodal volume for the week totaled 248,402 trailers and containers, up 3 percent compared with the same week last year. This weekly intermodal volume is the highest since Week 39 of 2007.

Combined North American rail volume for the first 38 weeks of 2011 on 13 reporting U.S., Canadian and Mexican railroads totaled 14,399,292 carloads, up 2 percent compared with the same point last year, and 10,764,400 trailers and containers, up 5.3 percent compared with last year. The combined weekly intermodal volume of 311,125 trailers and containers, up 3.5 percent over last year, is a record." 

MP: Carload groups that showed strong gains in shipments over last year include metallic ores (+21%), lumber (+10.6%), petroleum products (+16.1%), metals (+16%), and motor vehicles and equipment (+7.4%).  Based on the ongoing weekly improvements in weekly rail traffic, the three-year high for U.S. intermodal shipments, and the new record-setting intermodal volume for North America, it seems like it would be really, really hard to make the case for a pending double-dip recession. 

The Sometimes Crazy Pricing Practices of Airlines

The Detroit Free Press ran a front page article last Sunday titled "Hub Premiums Cost Delta Fliers Plenty at [Detroit] Metro Airport" about some of the huge differences in airfares for international travel between Delta Airlines' hub airport in Detroit and its regional spoke airports in nearby Flint, Lansing and Saginaw. 

For example, I just checked Delta's website for round-trip travel to Tokyo at the end of October.  For first-class travel, the round-trip airfare from Detroit (DTW) on a 3:25 p.m. nonstop flight is $11,606, compared to only $6,324 from Flint, only about 50 miles away.  If you fly from Flint you could take a short 20-minute flight to DTW at 1:30 p.m. and join the Detroit passengers on the 3:25 non-stop flight and save $5,282.  For travel by coach, you could still save more than $600 by starting in Flint and pay $1,553 round-trip instead of $2,156 from Detroit.  

For first-class travel to Amsterdam on Delta, the cost savings starting in Flint would be less, but still almost $1,500 compared to starting in Detroit ($6,304 Flint vs. $7,777 Detroit).  

One reason given for more competitive Delta fares at the spokes (Flint, Lansing, Saginaw) than the Detroit hub: Delta accounts for 80% of the passengers at DTW and 91% of international travelers.  In contrast, Delta accounts for only 40% of daily flights at the Flint airport, where they compete with AirTran (20% of daily flights), Continental (16%), Frontier (12%) and American (12%).  Less (more) competition at the hub (spokes) translates into higher (lower) fares on average. 

And the article points out that airlines don't generally price their tickets based on cost (e.g. travel distance), but more on competition (or lack thereof) and "what the market will bear."  

Update: Although airline pricing is generally based on "what the market will bear," it seems highly unlikely that the $5,282 difference in airfare to Tokyo between Detroit and Flint (basically a remote suburb of Detroit) can be based on true market pricing, or "what the market will bear."  That is, there can't be true market fundamentals that support a $5,000 price difference between two airports that are 73 miles apart.  And many people living in the northern suburbs of Detroit like Troy, Rochester Hills and Pontiac would be equidistant from the two airports, and might actually prefer the convenience of the smaller Flint airport than mega-DTW.  I predict that some of these significant price differences are unsustainable outliers that cannot persist over time, especially because the crazy, non-market prices have been exposed on the front page of the Detroit Free Press.    

Chart of the Day: Effective Tax Rates on $100k

From The Economist.

Mortgage Rates Fall Again to New Record Lows

According to data released today by Freddie Mac, 30-year fixed mortgage rates fell this week to another new historic low of 4.01% (see chart above), and 15-year rates fell to a new record low of 3.28%.  Based on the most recent one-year increase in the CPI of 3.8% through August, 15-year mortgage rates are below the current annual inflation rate and 30-year rates are just barely above current inflation.   

Quarterly Grammar/Punctuation/Spelling Rant

From the "comment's"..............

1. Brilliant because of it’s simplicity.

2. The US CAN SELL marketable securities to cover it's debt........

3. more than likely, the manufacturer is offering what it can offer and still produce a competitive price on it's products..

4. World War 2 didn't end The Depression - and only ended it's lingering effects......

5. Back in 1984 or so.. the Federal Govt told it's employees 

6. At the same time, the city is engaging in a major shakedown of it's legal citizens. 

See previous related CD post here

Update: See tattoo below "Live life to its fullest" on the arm of ASU's quarterback:

Tattoo HT: Morganovich

Quote of the Day on Guy Who Built Gates' Garage

"Focusing on infrastructure as the crucial support of entrepreneurial activity is like crediting the guy who built young Bill Gates’s garage with the start of Microsoft. Yes, Gates needed a roof over his head, and garages are useful. But it was Gates who had the ambition to do more in his garage than store his car and lawn-care products. Incalculably more important than his physical surroundings were his imagination and business sense."

~Rich Lowry at NRO responding to Elizabeth Warren's claims that private entrepreneurs and business owners owe much of their success to the government:

"There is nobody in this country who got rich on his own. Nobody. You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did."

Russ Roberts responded yesterday in the Wall Street Journal.   

HT: Don Boudreaux

Rare Earth Mineral Prices Fall By 41% As Mining Companies and Buyers Switch to Alternatives

BLOOMBERG -- "Rare-earth prices are set to extend their decline from records this year as buyers including Toyota Motor Corp. and General Electric Co. scale back using the materials in their cars and windmills.

Prices for cerium and lanthanum, the most abundant rare- earth elements, will drop by 50 percent in 12 months, Christopher Ecclestone, an analyst at Hallgarten & Co. in New York, has forecast. Neodymium and praseodymium, metals used in permanent rare-earth magnets, may fall as much as 15 percent, he said.

Makers of electric cars, wind turbines and oil-refining catalysts have sought to reduce use of the metals after China, which supplies more than 90 percent of the market, said in July 2010 that it would cut exports and clamp down on the industry. That boosted prices, encouraging mining companies to develop new prospects and buyers to find alternatives.

“If you think you can keep raising the prices for those materials and still keep your customers, you’re crazy,” Jack Lifton, co-founder of Technology Metals Research, said in a telephone interview. “The principal customer for rare-earth metals is a global automotive industry using rare-earth permanent magnets. That industry will engineer this stuff out.”

The Bloomberg Rare Earth Mineral Resources Index dropped 41 percent in the last three months (see chart above)." 

MP: This is a good example of how the price system transmits valuable information about the relative scarcity of natural resources, how market participants respond immediately and effectively to price changes that signal increased resource scarcity, and how those natural, automatic responses effectively solve the problem of the increased scarcity.  In the case of rare-earth elements, the higher prices encouraged producers to: a) find more of the existing materials and b) find alternative materials, and encouraged consumers to: a) find alternatives and b) "engineer the stuff out" of production.    

HT: Pete Friedlander

Markets in Everything: Giant Rick Perry Chia Head

For sale on Ebay for $4,500.

Wednesday, September 28, 2011

The Kleptocracy of San Francisco

In San Francisco, Parking Tickets Are the New Taxation

With some the highest fines in the country for parking ($68) and traffic violations ($436 for running a red light),  "Many San Francisco residents now feel that the city government has become a kind of Kleptocracy, a government run by thieves. That is, those in power tax residents through the form of heavy fines for much-needed cash, even as basic services are under threat." 

HT: Pete Friedlander 

Chart of the Day: Canadian Home Prices vs. U.S.A.

"Canadian home prices in July were up 1.3% from the previous month, according to the Teranet-NationalBank National Composite House Price Index. This rise took the index to a new high of 215 (January 2000 = 100, see chart above0).  It was the fourth consecutive monthly increase exceeding 1%, and the eighth consecutive monthly increase after three straight monthly declines."

MP: On an annual basis, Canadian home prices increased by 5.26% compared to July last year, the highest annual gain in nine months, since October 2010.  Over the last ten years, annual home price appreciation in Canada has averaged slightly more than 7%, which is lower than the 12.4% annual home price appreciation in the  U.S. during the six-year period between January 2000 and December 2005 that led to the unsustainable real estate bubble and subsequent price correction.

Q: Is Canada headed for a real estate bubble, or are those record-high price levels sustainable?

Tuesday, September 27, 2011

More on Social Security

GMU economist Walter E. Williams discusses Social Security:
"During the recent GOP presidential debate, Texas Gov. Rick Perry said that Social Security is a "monstrous lie" and a "Ponzi scheme." More and more people are coming to see that Social Security is a Ponzi scheme, but is it a lie, as well? Let's look at it.

Here's what the 1936 government pamphlet on Social Security said: "After the first 3 years — that is to say, beginning in 1940 — you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year. … Beginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. … And finally, beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year." Here's Congress' lying promise: "That is the most you will ever pay."

Another lie in the Social Security pamphlet is: "Beginning November 24, 1936, the United States government will set up a Social Security account for you. … The checks will come to you as a right." Therefore, Americans were sold on the belief that Social Security is like a retirement account and money placed in it is our property. The fact of the matter is you have no property right whatsoever to your Social Security 'contributions.'"

Key Temp Employment Index Reaches YTD High

The American Staffing Association Index, a weekly barometer of temporary and contract employment, a key coincident economic indicator, and a leading indicator of U.S. payroll employment, reached a year-to-date high of 90 for the week ending September 18 (see chart above).  For comparable weeks in the last three years, the staffing index was 91 in 2008, 72 in 2009, and 90 in 2010.  During most years like 2007, 2009 and 2010, the temporary staffing activity increases towards year-end, so if that pattern prevails this year, we can expect ongoing improvements in temporary and contract employment this fall.  

Cartel-Buster Institute for Justice Goes Up Against the Milwaukee Taxi Cartel with A Legal Challenge

From the Institute for Justice (IJ):

"Milwaukee allows only 321 taxicabs on its streets—almost half of which are owned by Milwaukee County Supervisor Joe Sanfelippo. That is about one cab for every 1,850 residents, one of the highest ratios in the country. This cap on taxi permits has sent permit costs skyrocketing, from $85 to $150,000—putting the dream of owning a taxi business out of most people's reach.

Ghaleb Ibrahim is a Milwaukee entrepreneur who simply wants to own and drive his own taxicab. He has the means to operate safe and insured taxis, but the cap on the number of cabs means his dream cannot become a reality. For now if he wants to drive a cab he must do it for someone else at a hefty rental price.

It does not have to be that way. Milwaukee's taxicab cap violates Ghaleb's right to earn a living, protected by Wisconsin's Constitution. That's why on September 27, 2011, Ghaleb and two fellow drivers teamed up with the Institute for Justice to file a major civil rights lawsuit in the Milwaukee County Courthouse against the city."

Read more here at the IJ website, and read a Milwaukee Journal Sentinel article about the case here

MP: Kudos to the Institute for Justice for its ongoing "cartel busting" efforts.  There is probably no other organization anywhere in the entire world that is doing greater work defending small businesses and entrepreneurs against economic protectionism, empowering individuals to earn an honest living, and promoting economic and social justice.   

Chicago Fed Manufacturing Index Improves in Aug.

"The Chicago Fed Midwest Manufacturing Index (CFMMI) increased 0.6% in August, to a seasonally adjusted level of 85.0 (see chart). Revised data show the index increased 0.3% in July. Regional manufacturing output in August rose 7.6% from a year earlier, and national output increased 4.2%.

The Midwest’s automotive output was up 10.3% in August relative to its year-ago level, and national automotive output was up 7.2%. Regional steel output was up 17.1% from its August 2010 level, and national steel output was up 10.3%."

MP: The CFMMI increased for the fourth straight month in August, and except for April has increased in each of the last 12 months.  The August level of 85.0 was the highest monthly index in almost three years, since October 2008. 

Monday, September 26, 2011

Obama's Intrade Odds Fall to Record Low of 47.5%

Odds for Obama to be re-elected on Intrade fell to 47.5% today, the lowest odds in the history of the contract (see chart).  

Drill, Drill, Drill = Jobs, Jobs, Jobs in Michigan

From my editorial in yesterday's Detroit Free Press

Amid all of the bad economic news nationally, there is an economic bright spot: One U.S. state is booming like never before. In North Dakota, the unemployment rate was an astoundingly low 3.3% in July; it hasn’t been that low at the national level since 1953. At a time when other states are facing declining revenues and budget deficits, North Dakota’s tax revenues are soaring, and it has a $1-billion surplus. In May, the state legislature passed a bill to reduce income tax rates for individuals.

Michigan could experience a similar economic boom by producing more of its own oil and natural gas. The Michigan Basin is believed to hold more than 282 million barrels of oil, 2 trillion cubic feet of natural gas, and 83 million barrels of natural gas liquids. These vast energy resources in Michigan are now recoverable using advanced hydraulic fracturing technology. The economic benefits of a time-tested drilling technology can put thousands of Michiganders back to work, generate millions of dollars in government revenues, and improve U.S. energy security.

Ken Burns Documentary Series on Prohibition

Yesterday's Prohibition
Today's Drug War
"Prohibition is a three-part, five-and-a-half-hour documentary film series directed by Ken Burns and Lynn Novick (premieres October 2nd, 3rd & 4th, 2011 at 8 PM on PBS) that tells the story of the rise, rule, and fall of the Eighteenth Amendment to the U.S. Constitution and the entire era it encompassed."

Here's more information, with a little extra editing to maybe suggest a sequel for Ken Burns:

"Prohibition The Drug War was intended to improve, even to ennoble, the lives of all Americans, to protect individuals, families, and society at large from the devastating effects of alcohol drug abuse.  But the enshrining of a faith-driven moral code in the Constitution paradoxically caused millions of Americans to rethink their definition of morality. Thugs became celebrities, responsible authority was rendered impotent. Social mores in place for a century were obliterated. Especially among the young, liquor drug consumption rocketed.

Prohibition The Drug War turned law-abiding citizens into criminals, made a mockery of the justice system, caused illicit drinking drug use to seem glamorous and fun, encouraged neighborhood gangs to become national crime syndicates, permitted government officials to bend and sometimes even break the law, and fostered cynicism and hypocrisy that corroded the social contract all across the country. With Prohibition The Drug War in place, but ineffectively enforced, one observer noted, America had hardly freed itself from the scourge of alcohol drug abuse – instead, the "drys" drug prohibitionists had their law, while the "wets" millions of Americans had their liquor drugs

The story of Prohibition the Drug War is a compelling saga that goes far beyond the oft-told tales of drug gangsters in the U.S., Mexico and Colombia, rum marijuana runners, and cocaine smugglers, flappers, and speakeasies, to reveal a complicated and divided nation in the throes of momentous transformation. The film raises vital questions that are as relevant today as they were 100 years ago – about means and ends, individual rights and responsibilities, the proper role of government and finally, who is — and who is not — a real American."

Here's a preview:

Watch the full episode. See more Ken Burns.
HT: Mike LaFaive

Some UC-Berkeley Students Defend (Oppose) Race-Based Preferences for Admissions But Oppose (Defend) Race-Based Preferences for Bake Sale

BERKELEY -- "University of California-Berkeley student senators voted Sunday to condemn discriminatory behavior on campus - even if done in satire - in response to a Republican student group's plans for an "Increase Diversity Bake Sale," with pastries labeled according to race and gender. The 19-0 vote, with one absence, came during a special meeting of the Associated Students of the University of California, as the debate over affirmative action reignited in Berkeley.

Read more here.  

HT: Morganovich

Gas Falls Below $3 per Gallon in Michigan

Source: Michigan gas prices

Highest Prices for Domain Names

1. For 2011, the highest-priced domain name so far this year is, which sold in July for $2.6 million.

2. For 2010, the No. 1 domain name was, which sold for $13 million last November.

Sunday, September 25, 2011

Amazing Drop in Deaths from Extreme Weather

The Reason Foundation has released a new study titled, "Wealth and Safety: The Amazing Decline in Deaths from Extreme Weather in an Era of Global Warming, 1900–2010," here's the executive summary (emphasis mine):

"Proponents of drastic curbs on greenhouse gas emissions claim that such emissions cause global warming and that this exacerbates the frequency and intensity of extreme weather events, including extreme heat, droughts, floods and storms such as hurricanes and cyclones. But what matters is not the incidence of extreme weather events per se but the impact of such events—especially the human impact. To that end, it is instructive to examine trends in global mortality (i.e. the number of people killed) and mortality rates (i.e. the proportion of people killed) associated with extreme weather events for the 111-year period from 1900 to 2010.

Aggregate mortality attributed to all extreme weather events globally has declined by more than 90% since the 1920s, in spite of a four-fold rise in population and much more complete reporting of such events. The aggregate mortality rate (per million population) declined by 98% (see chart above), largely due to decreased mortality in three main areas:
  • ·Deaths and death rates from droughts, which were responsible for approximately 60% of cumulative deaths due to extreme weather events from 1900–2010, are more than 99.9% lower than in the 1920s.
  • Deaths and death rates for floods, responsible for over 30% of cumulative extreme weather deaths, have declined by over 98% since the 1930s.
  • ·Deaths and death rates for storms (i.e. hurricanes, cyclones, tornados, typhoons), responsible for around 7% of extreme weather deaths from 1900–2008, declined by more than 55% since the 1970s.
To put the public health impact of extreme weather events into context, cumulatively they now contribute only 0.07% to global mortality. Mortality from extreme weather events has declined even as all-cause mortality has increased, indicating that humanity is coping better with extreme weather events than it is with far more important health and safety problems.

The decreases in the numbers of deaths and death rates reflect a remarkable improvement in society’s adaptive capacity, likely due to greater wealth and better technology, enabled in part by use of hydrocarbon fuels. Imposing additional restrictions on the use of hydrocarbon fuels may slow the rate of improvement of this adaptive capacity and thereby worsen any negative impact of climate change. At the very least, the potential for such an adverse outcome should be weighed against any putative benefit arising from such restrictions."

Update: Julian Morris writes on about the study. 

Florida Housing Recovery Gains Strength in August

"Sales activity and median prices for Florida’s existing home and existing condo markets rose in August, according to the Florida Realtors. Existing home sales increased 15 percent last month with a total of 16,206 homes sold statewide compared to 15,517 in July, and 14,131 homes sold in August 2010 (see chart). The statewide median sales price for existing homes last month was $137,500, up 2 percent from the year-ago figure of $134,900. August’s statewide existing home median price was also slightly higher than July's median price of $136,500 (see chart).

“Over the past few months, it appears that home prices have been stabilizing in many local markets across the state,” said 2011 Florida Realtors President Patricia Fitzgerald. “This is another positive sign that the housing recovery is gaining strength.”

Fifteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in August; 15 MSAs also had higher existing condo sales.

In Florida’s year-to-year comparison for condos, 7,098 units sold statewide last month compared to 6,041 units in August 2010 for an increase of 17 percent. The statewide existing condo median sales price last month was $91,100; in August 2010 it was $81,500 for a 12 percent increase."

MP: With a 15% overall annual gain in housing sales and a 17% gain in condo sales, along with a modest increase in median home prices of about 2%, Florida's real estate market is showing some positive signs of an ongoing housing recovery.  

Markets in Everything: Gold Vending Machines

BEIJING, September 25, 2011 - "China, already the world's second largest bullion consumer, has installed the country's first gold vending machine in a busy shopping district in Beijing. Shoppers in the popular Wangfujing Street can insert cash or use a bank card to withdraw gold bars or coins of various weights based on market prices. Each withdrawal is capped at 2.5 kilograms (5.5 pounds) or one million yuan (about $156,500) worth of gold."

Inflationary Pressures Are Wilting: Exhibits A-E

Exhibit A: MIT's Billion Price Project is showing declining monthly rates of inflation since March (red line above), and mild price deflation for the month ending August 30, see chart above and Paul Krugman's post here.

Exhibit B: Paul Krugman also points to deflationary pressures for commodity prices - the chart above for the CRB Commodity Index shows that the commodity prices are almost 20% below the early May peak.

Exhibit C: The 10-year breakeven rate (one measure of the market's expectation of inflation based on the difference in yields between regular 10-year T-notes and inflation-indexed 10-year T-notes) has been below 2% for most of the month of September and is now at the lowest level since last October (about 1.7%), see chart above.

Exhibit D: Greg Mankiw points to the chart above showing the annual percentage change in hourly earnings, and comments:  "The slack labor market has kept growth in nominal wages low, and labor represents a large fraction of a typical firm's costs.  A persistent inflation problem is unlikely to develop until labor costs start rising significantly.  Notice in the graph above that the period of stagflation during the 1970s is well apparent in the nominal wage data.  The same thing is not happening now." 

Exhibit E: Gas prices have fallen by 12% since the early May peak, and are now at $3.52 per gallon, the lowest price since last March (see chart above).