Tuesday, November 22, 2011

Charts of the Day: Kidney Shortage Worsens Yearly

As a follow-up to this recent CD post on the market for kidneys, the charts above show up-to-date data on the kidney situation from the United Network for Organ Sharing (UNOS).  Here's the current situation:

1. There are currently 90,363 registered candidates on the ever-increasing waiting list to receive a kidney transplant, which is an all-time record high (see top chart). 

2. Based on actual transplant operations through August of this year, an estimated 16,855 patients will have a kidney transplant operation this year (see top chart).

3. Of the 90,363 patients currently on the waiting list, only about 18.6%, or fewer than one-in-five, will actually receive a kidney transplant this year (see bottom chart).  That's the lowest chance of receiving a kidney for those on the waiting list since UNOS records start in 1989, and way below the 50% chance in 1989, 1990 and 1991.  

4. Based on data from the last few years, there will be about 5,000 registered candidates on the list who will die this year while waiting for a kidney, and another 2,000 who will be removed from the list because they are considered to be too sick to survive a kidney transplant operation.  

Bottom Line: The situation for those with renal failure waiting desperately to receive a kidney continues to worsen every year under the current policy that prohibits donor compensation.  The only realistic, long-term and truly compassionate solution to address America's worsening kidney shortage is to legalize some form of donor compensation.  

ASA Staffing Index Reaches New High for 2011

Today the American Staffing Association (ASA) reported its weekly Staffing Index, which reached a new year-to-date high of 92 for the week of November 7-13 (see chart above), the highest level since mid-December last year.  The index level of 92 last week was just slightly lower than the 93 reading for the comparable week last year, but was above the level for the same week two years ago (80) and  the same week three years ago (85).  The ASA Staffing Index is considered to be a leading labor market indicator of broader-based hiring expected to take place in future months.     

CA Vineyard Tried to Hire Americans, But It Was a Total Failure, A "Social Experiment Gone Awry"

"With a nearly 12 percent unemployment rate in California, you'd imagine most job openings would have applicants lined up around the block, but one local man says he had a difficult time keeping almost any workers on the job.

John Salisbury owns Salisbury Vineyards in Avila Valley and Paso Robles. He needed 32 grape pickers fast for the harvest season in late September and put the call out for anyone to apply, even if they didn't have any experience, advertising on his website and on the radio.

"The idea is to be able to pick them in that one day and get them while they're perfect, but if you have to wait two or three more days, you've maybe missed a peak time," he said.

Workers had to be able to lift 35 pounds, keep up with crews and provide all necessary documentation.

Salisbury now calls his experience a social experiment gone awry. It was ill-fated from the beginning; Salisbury started with 40 applicants, but only seven actually finished the job."

Read more here

HT: Joe Lais

Markets in Everything: Computerized Contact Lens

DAILY MAIL -- "Imagine catching up with your texts, social networking and perhaps the news without having to log on to a computer or even glance at a smartphone. Messages and images would simply appear in front of your eyes, generated by a computerized contact lens.

Scientists have developed a prototype lens that could one day provide the wearer with all kinds of hands-free information. It could also be used to display directions and TV programs." 

HT: Warren Smith

What Percent Are You?

Enter your household income here and find out.

HT: Steve Bartin 

Update: At the Political Calculations blog, you can enter your individual income here and find your percentile, or enter your household income here

Monday, November 21, 2011

UCLA Finance Professor Goes Up Against College Textbook Cartel and Offers His Textbook for Free

The first edition (2008) of UCLA (Anderson School) Finance Professor Ivo Welch's Introductory Corporate Finance textbook was available through Prentice-Hall for $220, which is about the average outrageous price these days for most over-priced college textbooks.

The book is now coming out in the second edition at a new price: FREE for the online readable-only version (no printing), and $60 for the 736-page softcover print version through Amazon (available in mid-December).  According to the author "It will not be updated every two years for the sake of suppressing the resale market," which has become the new anti-consumer (student), anti-competitive industry standard.   
I've posted before about the unsustainable "college textbook bubble" (see here and here and see chart above), and Professor Welch's approach is one example of how that bubble is now starting to burst.  As Kevin "Angus" Grier commented on KPC in February: 

"These days, given that you could make yourself a pretty good free principles text just by downloading relevant Wikipedia entries, I don't see how these [textbook] rents can be sustained over the long run (I am aware that not all or perhaps not even a majority of the rents are going to the authors)."

Thanks to Professor Welch, I'm starting to hear a "giant hissing sound" of the unsustainable, inflationary college textbook bubble starting to deflate, and I encourage other professors to join in his efforts to challenge the college textbook cartel. 

Big Gains Over Time in the Energy-Efficiency of Household Appliances Make Us Better Off

The chart above shows the dramatic gains in energy efficiency over the last 20 years for clothes washers and dishwashers, based on historical data from the Association of Home Appliance Manufacturers.  In the 11-year period between 1993 and 2004, the energy efficiency of clothes washers doubled from 2.71 kWh/cycle to 1.22 kWh/cycle, and then doubled again in the six year period from 2004 to 2010 to 0.66 kWh/cycle.  The increase in energy efficiency for dishwashers has been less dramatic, but energy efficiency for dishwashers has roughly doubled since 1990, from 2.67 kWh/cycle to 1.37 kWh.  

Although not reported here, there have been similar efficiency gains in the amount of energy required to operate today's freezers, air conditioners, and refrigerators (energy efficiency has doubled since 1990).

We've heard a lot lately about how median household income has stagnated in recent years.  But I wonder if there are underlying trends like the significant increases in household appliance efficiency that lower the cost of operating our households, and thereby increase our standard of living, especially for lower and middle-income households, and offset some of the income stagnation.  That is, flat household income is not necessarily the same thing as a declining standard of living, if the energy costs of household operation (and the costs of food, clothing, appliances, furniture, electronics, etc.) are falling significantly. 

The Case for Presidential Nominee Clinton

"We write as patriots and Democrats—concerned about the fate of our party and, most of all, our country. We do not write as people who have been in contact with Mrs. Clinton or her political operation. Nor would we expect to be directly involved in any Clinton campaign.

When Harry Truman and Lyndon Johnson accepted the reality that they could not effectively govern the nation if they sought re-election to the White House, both men took the moral high ground and decided against running for a new term as president. President Obama is facing a similar reality—and he must reach the same conclusion.  

He should abandon his candidacy for re-election in favor of a clear alternative, one capable not only of saving the Democratic Party, but more important, of governing effectively and in a way that preserves the most important of the president's accomplishments. He should step aside for the one candidate who would become, by acclamation, the nominee of the Democratic Party: Secretary of State Hillary Clinton. 

One year ago in these pages, we warned that if President Obama continued down his overly partisan road, the nation would be "guaranteed two years of political gridlock at a time when we can ill afford it." The result has been exactly as we predicted: stalemate in Washington, fights over the debt ceiling, an inability to tackle the debt and deficit, and paralysis exacerbating market turmoil and economic decline.

If President Obama were to withdraw, he would put great pressure on the Republicans to come to the table and negotiate—especially if the president singularly focused in the way we have suggested on the economy, job creation, and debt and deficit reduction. By taking himself out of the campaign, he would change the dynamic from who is more to blame—George W. Bush or Barack Obama?—to a more constructive dialogue about our nation's future."

~Patrick Caddell and Douglas Schoen in today's WSJ, "The Hillary Moment"

60 Minutes Segment on Grover Norquist

(CBS News - 60 Minutes) "As head of Americans for Tax Reform since 1986, Grover Norquist has transformed a single issue - preventing tax hikes - into one of the key platforms of the Republican Party. As Steve Kroft reports in the video above, his biggest coup was getting more than 270 members of Congress, and nearly all of the 2012 Republican presidential primary candidates, to sign a pledge promising never to vote to raise taxes. But some opponents say the pledge may be hindering a solution to America's debt crisis."

MP: If you missed it last night, "60 Minutes" profiled libertarian, anti-tax advocate Grover Norquist, President of Americans for Tax Reform.  Watch the full episode above.

Lessons From Canada: It Fixed Its Fiscal Problems with 7:1 Ratio of Spending Cuts toTax Increases

Some excerpts from a very lengthy, but excellent Reuters article "Insight: Lessons for U.S. from Canada's "Basket Case" Moment":

"Canada's shift from pariah to fiscal darling provides lessons for Washington as lawmakers find few easy answers to the huge U.S. deficit and debt burden. "Everyone wants to know how we did it," said political economist Brian Lee Crowley, head of the Ottawa-based thinktank Macdonald-Laurier Institute, who has examined the lessons of the 1990s.

To win its budget wars, Canada first had to realize how dire its situation was and then dramatically shrink the size of government rather than just limit the pace of spending growth. It would eventually oversee the biggest reduction in Canadian government spending since demobilization after World War Two. The big cuts, and relatively small tax increases, brought a budget surplus within four years.

Canadian debt shrank to 29 percent of gross domestic product in 2008-09, from a peak of 68 percent in 1995-96, and the budget was in the black for 11 consecutive years until the 2008-09 recession. For Canada, the vicious debt circle turned into a virtuous cycle which rescued a currency that had been dubbed the "northern peso." Canada went from having the second worst fiscal position in the Group of Seven industrialized countries, behind only Italy, to easily the best.

It is far from a coincidence that the recent recession was shorter and shallower here than in the United States. Indeed, by January, Canada had recovered all the jobs lost in the downturn, while the U.S. has hardly been able to dent its high unemployment.  Canada's experience turned on its head the prevailing wisdom that spending promises were the easiest way to win elections. Politicians of all kinds and at all levels of government learned that austerity could win.

Canada's scrape with disaster had been building for a long time. Over a decade earlier, top finance department bureaucrats had begun raising the alarm about the problem of rising debt, a hangover from the big government era of the 1970s. The period before Jean Chretien came to power in Canada is often likened to the situation in the U.S. today. The country was not yet peering over a precipice, but was fast approaching it.

The budget deficit more than doubled between 1980 and 1990, rising to 8 percent of GDP in 1983 and 1984, before shrinking to a still unsustainable 5.6 percent just before Chretien took over, and all the time debt was soaring. The debt-to-GDP ratio shot up to 67 percent in 1993-94 from 29 percent in 1980. The numbers aren't that different to the U.S. today with its deficit of around 9 percent for 2011, and debt-to-GDP ratio at 74 percent, up from 40 percent at the end of 2008.

Drawing a parallel to Washington, Scott Clark, associate deputy finance minister in the 1990s, said Canadian leaders before Prime Minister Jean Chretien paid lip service to the debt problem but did nothing.  "There are no lights blinking saying you're at the edge of the cliff," he said. "The one lesson others can give the U.S. is that the higher that debt-to-GDP ratio goes, the more difficult it's going to be."

The ratio of spending cuts to tax hikes was seven-to-one.  Asked why, then-prime minister Jean Chretien, a Liberal who ended up chopping cherished social programs in one of the most dramatic fiscal turnarounds ever, said simply: "There was more need on one side than the other." That contrasts with proposals this year by President Barack Obama and the Democrats to have a much higher proportion of revenue increases in the deficit-tackling mix.

Canadian ministers were told how much they had to cut and then told to come back with a plan on how to do it. Cuts ranged from five percent to 65 percent of departmental budgets and included controversial cuts in transfers that help provinces pay for health and education, decisions that lengthened medical waiting lists for years to come. In the end, program spending fell by about 12 percent between 1994-95 and 1998-99. The percentage fall was substantially more after adjusting for inflation. The deficit disappeared by 1997 and the debt-to-GDP ratio began a rapid decline - it is now at about 34 percent.

"The entire political class decided to stop treating this as a matter of political contention and started treating it as a matter of national interest," said political economist Brian Lee Crowley.  After wrestling the deficit to the ground, Canada enjoyed what Crowley calls the payoff decade, outperforming the rest of the G7 on growth, job creation and inward investment. From 1997 to 2007, it averaged 3.3 percent economic growth while U.S. growth averaged 2.9 percent.

The final lesson is that you can impose painful spending cuts and still win elections. Chretien went on to win two more back-to-back to form majority governments, a rare feat. He argued that a responsible Liberal who believes the state has a role in reducing poverty can only do so by ensuring a financially healthy government."

Note: Emphasis added.

Columbia, South Carolina Food Trucks Win Victory over Protectionist Restaurant Association

COLUMBIA, SC - "The new guys in the food game were served a victory at Columbia city council Tuesday night.

A nearly two-hour public hearing on proposals by the Columbia Restaurant Association to keep the increasingly popular food trucks from parking too close to traditional restaurants ended with council voting 5-1 to adopt an ordinance drawn up by the city's planning commission that included none of the restaurant association's extreme measures."

In the video above, Scott Hall, owner of Bone-In Artisan Barbeque on Wheels asks, "Is it City Council's job to protect existing restaurants from legal competition? I certainly don't think it is."

HT: Madison Felder

The Market in Kidneys: A Moral Case

Philosophy professor James Stacey Taylor: "When there's a transplant operation from a living donor into the body of a living recipient, everybody involved in the operation is getting paid: the anesthesiologist, the surgeon, the nurses, the hospital, etc. The only person not getting paid is the person who is actually giving up the most precious commodity of all - the kidney donor.  And I think that's morally wrong."    

Cartoon of the Day: The Wrong Track

By Gary Varvel.

Markets in Everything: Roll-Your-Own Cigarettes

ABC News: "NYC Sues Roll-Your-Own Cigarette Shops Over Taxes":
"[Island Smokes] is one of a growing number around the country that have come under fire over their use of high-speed cigarette rolling machines that function as miniature factories, and can package loose tobacco and rolling papers into neatly formed cigarettes, sometimes in just a few minutes.

The secret to Island's low prices is simple: Even though patrons leave carrying cartons that look very much like the Marlboros or Newports, the store charges taxes at the rate set for loose tobacco, which is just a fraction of what is charged for a commercially made pack.

Customers select a blend of tobacco leaves, intended to mirror the flavor of their regular brand. Then they feed the tobacco and some paper tubes into the machines, and return to the counter with the finished product to ring up the purchase."
But the NYC government is not happy:
New York City's legal department filed a lawsuit against Island Smokes on Nov. 14, arguing that the company's Manhattan store and another on Staten Island are engaging in blatant tax evasion.

Without Any Real Input from Washington, The Energy Outlook in America Has Been Transformed

Edward Luce in the Financial Times, "America is Entering a New Age of Plenty":

"Forget Al Gore’s “planet in peril.” Forget also Mr. Obama’s promise that future generations would look back on his nomination as “the day the oceans stopped rising.”

Embrace instead the language of tar sands, shale gas, fracking and tight oil. Without quite knowing whether they were new boondoggles or potential game-changers, the debate in Washington until recently largely ignored these escalating supply shocks. Yet together, they have transformed America’s energy outlook. Because of better technology, notably breakthroughs in drilling, the U.S. all of a sudden realizes it is sitting on a century’s worth of gas supply (see chart above of domestic production). When Mr. Obama came to office, the country faced projections of rising natural gas imports from places like Qatar.

The same technology has unlocked ever-growing estimates of once inaccessible “tight” oil lurking beneath America’s rocks. In its immediate neighborhood, Alberta’s huge expanse of “tar sands” contains oil reserves that rank Canada second only to Saudi Arabia. In Brazil, recent advances in offshore oil drilling will relegate Venezuela into second place in the region.

Without any real input from Washington, windfalls just keep dropping into America’s lap. Welcome to a new age of plenty." 

Conclusion: "A new era of fossil fuel appears to be upon us and nobody saw it coming."

Sunday, November 20, 2011

Class of 2009: College Degrees by Discipline, Sex

Academic DisciplineMale
Percent Female
Female-Dominated Disciplines
Family and consumer sciences/human sciences 2,75419,15187.4%
Health professions and related clinical sciences17,792102,69685.2%
Public administration and social service professions 4,37419,47781.7%
Education 21,15980,54979.2%
Psychology 21,48872,78377.2%
Legal professions and studies 1,0372,78572.9%
Foreign languages, literatures, and linguistics 6,30214,85670.2%
Area, ethnic, cultural, and gender studies 2,7356,03768.8%
Multi/interdisciplinary studies 11,85725,58768.3%
English language and literature17,97337,48967.6%
Liberal arts and sciences, general studies and humanities 16,61630,48064.7%
Communication and communications technologies 31,21851,89162.4%
Visual and performing arts 35,05154,08960.7%
Biological and biomedical sciences 32,92547,83159.2%
Close to Gender Parity
Security and protective services 21,07320,72749.6%
Social sciences and history 85,19783,30349.4%
Business, management, marketing177,862170,12348.9%
Agriculture and natural resources 13,10111,88747.6%
Parks, recreation, leisure, and fitness studies 16,66615,00147.4%
Male-Dominated Disciplines
Mathematics and statistics 8,7936,70343.3%
Architecture and related services 5,7974,32242.7%
Physical sciences and science technologies 13,2999,16740.8%
Philosophy and religious studies 7,7614,68337.6%
Theology and religious vocations 5,9502,99033.4%
Computer and information sciences and support services 31,2156,77917.8%
Engineering and engineering technologies 70,67513,96116.5%

All Disciplines685,382915,98657.2%

The table above is based on the most recent data on bachelor's degrees by discipline and sex for the class of 2009 from the Department of Education. Note that:

1. Overall, there were 134 female college graduates with bachelor's degrees in 2009 for every 100 men.

2. Women significantly outnumbered men in 14 academic disciplines, men significantly outnumber women in 7 academic disciplines, and there was approximate gender parity in 5 disciplines. 

3. Even though we constantly hear about female under-representation in science, in 2009, women outnumbered men for bachelor's degrees in biology by a ratio of 145 women per 100 men.  

4. The concern about gender imbalances for college degrees is frequently selective, with great concern about female under-representation in certain disciplines, but very little concern about female over-representation, both by discipline, and overall for all college degrees. 

New Era of Oil and Gas Exploration Promises To Bring Economic Boom and 200k Jobs to Ohio

Map shows where the "shovel-ready" jobs are in Ohio
Granville, Ohio — "Providing further evidence that Ohio is on the cusp of a possible economic oil and gas boom, the Ohio Oil & Gas Energy Education Program released its second economic impact study, which provides data about how the state’s natural gas and crude oil industry positively impacts Ohio’s economy today, and includes the first comprehensive study about how planned oil and gas development in Ohio’s Utica shale formation might impact the state over the next five years.

“Pursuing oil and gas exploration in the Utica has the potential to turn Ohio’s economy around,” said David Mustine, general manger for energy at JobsOhio. “It’s an amazing economic opportunity.”

Here are some highlights from the report:

1. Ohio’s natural gas and crude oil industry could help create and support more than 200,000 Ohio-based jobs from the leasing, royalties, exploration, drilling, production and pipeline construction activities for the Utica shale reserve.

2. The state could experience an overall wage and personal-income boost of $12 billion by 2015 from industry spending.

3. Royalty payments to landowners, schools, businesses and communities could increase to as much as $1.6 billion by 2015 — a number that exceeds the total amount of royalties distributed by Ohio’s natural gas and crude oil industry in the last decade.

4. Total tax revenue from oil and gas exploration and development in the Utica shale formation from 2011 until 2015, including severance, commercial activity, ad valorem (property), federal, state and local taxes, is projected to be approximately $479 billion.

5. Industry expenditures related to Utica shale development could generate approximately $12.3 billion in gross state product and result in a statewide output or sales of more than $23 billion.

MP: The new domestic energy mantra should be "Drill, create and collect," i.e. drill, drill, drill = jobs, jobs, jobs created, and taxes, taxes, taxes collected. 

HT: Warren Smith

CA October Home Sales: Adjusted for Inflation, Typical Mortgage Payment Now Lowest On Record

From DQ News on California October Home Sales:

"An estimated 34,087 new and resale houses and condos were sold in California last month. That was down 3.7 percent from 35,404 in September, and up 4.3 percent from 32,669 for October 2010. California sales for the month of October have varied from a low of 25,832 in 2007 to a high of 70,152 in 2003, while the average is 43,528. DataQuick's statistics go back to 1988. 

The median price paid for a home last month was $240,000, down 3.6 percent from $249,000 in September, and down 6.3 percent from $256,000 for October a year ago. The median has decreased on a year-over-year basis for the last thirteen months. The bottom of the current cycle was $221,000 in April 2009, while the peak was at $484,000 in early 2007. Distressed property sales – the combination of foreclosure resales and “short sales” – continued to make up more than half of California’s resale market.

The typical mortgage payment that home buyers committed themselves to paying last month was $924, the lowest since early 1999. That was down from $964 in September, and down from $1,005 in October 2010. It was 58.8 percent below the spring 1989 peak of the prior real estate cycle. It was 66.6 percent below the current cycle's peak in June 2006."

MP: Here's the most amazing part of the report: "Adjusted for inflation, last month's mortgage payment was the lowest on record."

Cutthroat Competition: The Consumer's Best Friend

NY Times -- "As retailers battle to draw customers into their stores on Black Friday, online merchants are plotting a cunning ambush — offering an arsenal of mobile-only deals intended to pick off shoppers as they wait in line.

Not only can online merchants now offer a relatively annoyance-free alternative to shoppers stuck in crowded stores, but they can also even exploit the faster download speeds on free wireless networks promoted by retailers like Nordstrom and Macy’s. And most are throwing in free shipping. 

Last year, the online giants stole some of the Black Friday riches by offering early Web specials on Thanksgiving Day. But the move to mobile-only discounts — the specials will not be available on Web sites, in most cases — can lead to “a massive amount of share-stealing,” said Joel Bines, a managing director in the retail practice at the consultancy AlixPartners, “if I get just a small percentage to make a purchase standing in the store.”

And there is not much retailers can do to stop customers from checking out competitors, he said."

Saturday, November 19, 2011

Apostrophe Abuse Hall of Shame: It's vs. Its

From the CD comments and other sources:

1. No one mentioned that Brazil makes it's ethanol from sugar cane.

2. .....to feed it's refineries in the Chicago area...

3. The article is using the example as it's opening wedge....

4. .....if North Dakota continues on it's rampage of oil production the pipeline will...

5.  Exxon is also in the oil sands and wants to move it's product.

6. .....it will turn sleepy backwaters into boomtowns and it's direct effect will be felt for a couple of years.

7. Governor Jack Dalrymple says the oil boom is in it's peak and things will slow down.

Here's the simple, very basic grammar rule for it's vs. its. 

Charts of the Day: Oil vs. Natural Gas Prices; On An Energy-Equivalent Basis Gas is 79% Cheaper vs. Oil

I featured a post yesterday about oil prices vs. natural gas prices with charts from Scott Grannis and Nathan Slaughter, and have two new charts to present above inspired by some charts in the NY Times last February (thanks to Ed Dolan for the link). 

The top chart compares oil prices ($ per barrels) to natural gas prices back to 1994 for the energy equivalent of one barrel of oil, with natural gas prices converted at the ratio of 5.8 million BTUs per barrel of oil.  The bottom chart shows the percentage price difference between oil and natural gas, on an energy equivalent basis, from January 1994 to November 2011. 

The bottom chart shows that over the last 18 years, natural gas has been cheaper than oil on an energy-equivalent basis most of the time except for fairly short periods in 1996 (1 month), 2001 (5 months), 2003-2004 (7 months), and 2005 (4 months).  For the last 33 months starting in March 2009, natural gas has been more than 50% cheaper than oil, and in November gas was cheaper by a record 79% ($95 per barrel for oil vs. $19.82 for gas).  

Bottom Line: Thanks to the shale gas revolution, there's never been a time in recent history when natural gas has been cheaper when compared to oil on an energy-equivalent basis.   

You Can Take a Tour of "Occupy DC" on Weekends

Photos taken today at Occupy DC, McPherson Square Park, where occupiers will take you on a 30-40 minute tour of the park every Saturday and Sunday.

Interactive Graphic of the Eurozone Debt Web from the BBC: Who Owes How Much to Whom?

From the BBC - "The circles in this interactive graphic show the gross external, or foreign, debt of some of the main players in the eurozone as well as other big world economies. The arrows show how much money is owed by each country to banks in other nations. The arrows point from the debtor to the creditor and are proportional to the money owed as of the end of June 2011. The colors attributed to countries are a rough guide to how much trouble each economy is in."

See sample above for Greece (click to enlarge).  

Update: Link fixed. 

America in Color from 1939-1943

Denver Post -- "These 70 images by photographers of the Farm Security Administration and Office of War Information, are some of the only color photographs taken of the effects of the Depression on America’s rural and small town populations. The photographs are the property of the Library of Congress and were included in a 2006 exhibit Bound for Glory: America in Color."

HT: Mike Carlson 

Update: One interesting observation about the photos, sent by email: "Not one fat person."  

Friday, November 18, 2011

Leading Index Rebounds to Record High in Oct.

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.9 percent in October to 117.4, following  increases of 0.1 percent in September and 0.3 percent in August (see chart above).

Says Ataman Ozyildirim, economist at The Conference Board: “The October rebound of the LEI — largely due to the sharp pick-up in housing permits — suggests that the risk of an economic downturn has receded. Improving consumer expectations, stock markets, and labor market indicators also contributed to this month’s gain in the LEI as did the continuing positive contributions from the interest rate spread. The CEI also rose somewhat, led by higher industrial production and employment.”

Says Ken Goldstein, economist at The Conference Board: “The LEI is pointing to continued growth this winter, possibly even gaining a little momentum by spring. The lack of confidence has been the biggest obstacle in generating forward momentum, domestically or globally. As long as it lasts, there is a glimmer of hope.”

Interesting Fact of the Day: Busiest Seaports

Of the world's top 12 busiest container seaports in 2010, 7 are in China and 10 of the top 12 are in Asia.  

Update: Josh Barro counts 11 countries in Asia, if you include the UAE.  In that case I stand corrected.  In these International Macroeconomic databases from the USDA, they classify UAE in the "Middle East," and not in the "Asia and Oceania"  group. 

Comments welcome. 

Nat Gas Brings Economic Boom and Hope to Ohio

HT: Mike W.

Patriotic Millionaires Want Higher Taxes on Rich, But Are Unwilling To Voluntarily Pay Higher Taxes

Washington — "Two dozen “patriotic millionaires” traveled to the Capitol on Wednesday to demand that Congress raise taxes on wealthy Americans.

The Daily Caller attended their press conference with an iPad, which displayed the Treasury Department’s donation page, to find out if any of the “patriotic millionaires” were willing to put their money where their mouth is."

CNBC Smackdown: Rep. Bachus vs. Schweizer

On Wednesday night's Kudlow Report, Rep. Spencer Bachus responded to charges of insider trading made by Peter Schweizer in his new book:

Peter Schweizer responded to Rep. Bachus last night on the Kudlow Report:

The 25 Worst Passwords of 2011

From PC Mag, the annual list of the 25 worst passwords is out, based on actual compromises.  Here's the Top Ten worst passwords for 2011:

1. password 
2. 123456 
3. 12345678 
4. qwerty 
5. abc123 
6. monkey 
7. 1234567 
8. letmein 
9. trustno1 
10. dragon

Thanksgiving Meal for Ten Only $34.03 at Walmart

BENTONVILLE, Ark. – Nov. 18, 2011 "The American Farm Bureau Federation (AFBF) recently reported that Americans will pay more to feed 10 people for Thanksgiving dinner this year than since the mid-1980s. The average turkey feast for 10 this year will cost $49.20 – that’s $5.73 more than it cost just last year (see related CD post here). Shoppers at Walmart will pay 1/3 (31%) less for the same Thanksgiving groceries ($34.03) and will have an extra $15 in their wallet with this savings.

“If you think about it, based on the Farm Bureau’s statistics, if you were to shop at Walmart for your Thanksgiving meal for 10, you could essentially feed three of your guests for free because you saved so much on the overall meal,” Sinclair added."

Update 1:  What single organization in human history has made the greatest contribution to enriching and improving the lives of the poor, the middle class, the average citizen, the bottom of "the 99%," etc.?  I nominate Walmart. 

Update 2: See Don Boudreaux's related post here.

Two Charts on Natural Gas vs. Oil Prices, Gas is Now 75% Cheaper On an Energy-Equivalent Basis vs. Oil

1. From Scott Grannis (top chart):

"Natural gas is down fully 75% from its 2008 high, while crude oil is down by only 33%. As the top chart above shows, natural gas hasn't been this cheap relative to crude for decades, thanks to significant new drilling techniques which have resulted in a natural gas production bonanza in the U.S. It is hard to underestimate the degree to which cheap and abundant natural gas is going to transform U.S. manufacturing and energy generation in the years to come."

2. From Nathan Slaughter (bottom chart):

And over the decades, we've grown accustomed to oil as one our chief energy sources. So accustomed, in fact, that we're now overlooking a cleaner, plentiful alternative that is about 75% cheaper. The bottom graph above shows the price of crude oil versus the price of an equivalent amount of energy from natural gas during the past three years.

A barrel of oil contains about six times the raw energy content of a thousand cubic feet (Mcf) of natural gas. So all things being equal, with oil prices about $99 per barrel, natural gas should fetch about one-sixth as much, or $16.50 per Mcf. But thanks to horizontal drilling and fracking technologies, the United States is now awash in accessible, cleaner-burning natural-gas resources. And the resulting flood of natural gas has created a surplus, causing prices to collapse.

Natural gas isn't just readily available at a 10% or 20% discount to oil -- but more than 75%. These economics are simple but powerful. It's hard to justify paying $1 for an energy source when you can buy something comparable for $0.25."

The Daily Show: "LOL, Occupy Segregated"

OWS: The Ghetto vs. The Aristocrats

From Townhall (h/t Warren Smith).

Thursday, November 17, 2011

Photo of the Day: Life in the Soviet Union

Consumers had to wait in really long lines for everything so the "time cost" was really, really high, but hey, at least the "money cost" was really low.

L.A. Port Exports Set New Record High in October

The number of loaded export containers leaving the Los Angeles Port for overseas destinations reached a record high in October of 193,547 TEUs (20-foot equivalent units), beating the previous record of 192,850 TEUs in March of this year (see chart above).  October exports this year are 28.14% ahead of the same month last year, and above the previous month by 9.4%. Loaded import containers in October were 5.5% above the year earlier level, but fell from September by 1%. 

Bottom Line: Global demand for U.S. export products shipped from the L.A. Port has never been higher, fueled by an ongoing worldwide economic expansion.   

Update: The L.A. port is America's busiest container seaport, and ranks  No. 17 in the world. 

Remarkable Rise and Fall of Gov. Perry on Intrade

From Intrade.com, the odds for Rick Perry over the last 200 days. 

Chart of the Day: World Shares of GDP

The USDA recently updated its international macroeconomic data set with world and country GDP data estimates for 2011.  Here are some observations:

1. The chart above of world GDP shares (data here) from 1969 to 2011 shows America's amazingly stable share of world output, which has remained at about 26% for more than forty years, with only a gradual decline in recent years.  The U.S. share of world GDP in 2011 (26%) was actually higher than in 1982 (25.8%). 

2. It's also interesting to note that: a) the shares of world GDP in 2011 were almost exactly the same for the U.S. (25.9%), the EU-15 (26.2%) and Asia/Oceania (26.9%). For both of the last two years (2010 and 2011), Asia/Oceania's share of world GDP has been slightly higher than both the EU15 and the USA.  The combined GDP of Latin America, Middle East and Africa has also been relatively stable at about 10%, with recent increases to above 12% in the last two years.

3. The biggest changes over time have been the gradual decline in the EU-15's share of world GDP from almost 36% in 1969 to roughly 26% by 2011, while Asia/Oceania's share has increased from less than 15% in 1969 to almost 27% in 2011. The fact that America's share of world GDP has remained constant over time is a testament to how America's dynamism, resiliency, and culture of innovation and entrepreneurship have enabled us to continue to be productive and competitive in a "tough world."  In contrast, the EU-15's declining share of the world economy demonstrates the failure of anti-growth, European-style socialism with high taxes and excessive regulations that have created a culture of dependency and entitlement.     

4. For the first time ever, real world GDP (in 2005 dollars) exceeded $50 trillion in 2011, a new record high level of world output, and 2.7% above last year.  At the global level, there's been a complete recovery from the worldwide slowdown in 2008 and 2009 with world output now at an all-time high.    


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Obama's Indefensible Pipeline Punt

Some excerpts from Vaclav Smil's article in the American.com: 

"With a total length of close to 3,000 kilometers, the new [Keystone XL] pipeline would add just over 1 percent to the already existing network of crude oil and refined products lines that crisscross the United States and parts of Canada. Why, if pipeline safety is a key concern, have we not seen waves of civil disobedience focused on more than a quarter million kilometers of existing pipelines?

Long-term statistics show convincingly that there is no safer way to transport large masses of liquids over long distances than a pipeline. Moving the same amount by trucks or rail would be much more risky, in addition to being vastly more expensive. So would be moving the oil from Alberta to British Columbia and then shipping it by tankers via the Panama Canal to Texas.

 Here comes the craziest twist: if the opponents of the XL succeed and prevent its construction, there is a strong possibility that Alberta’s oil sand-derived oil will be piped westward to Canada’s Pacific coast and loaded on supertankers going to Asia, to feed China’s grossly inefficient industries.

By preventing the oil flow from Canada, the United States will thus deliberately deprive itself of new manufacturing and construction jobs; it will not slow down the increase of global CO2 emissions from fossil fuel combustion; it will almost certainly empower China; and it will make itself strategically even more vulnerable by becoming further dependent on declining, unstable, and contested overseas crude oil supplies. That is what is called a spherically perfect decision, because no matter from which angle you look at it, it looks perfectly the same: wrong."

Big Farm Raked in Record Profits This Yr. As Farm Land Soars, But They Harvested $10B in Handouts

According to the USDA, net income from U.S. farms is expected to set a new record this year of $103.6 billion on record cash receipts of $370.4 billion.  The record farm income this year is 31% above last year's income, and marks the first time in history that the combined income of U.S. farms has exceeded $100 billion.       

The USDA also estimates that the total value of farm real estate will approach $2 trillion this year, an increase of 7.12% from last year.  Separately, CNN is reporting record farmland prices based on Federal Reserve data, with 25% increases in Midwest farmland (and 31% in Iowa), the largest annual gains in three decades.

Even with record-level income, revenues and farm land values, farmers "harvested" more than $10 billion in direct government (taxpayer) payments (subsidies) this year.  

Whenever oil prices and "Big Oil" profits are high, politicians call for imposing "windfall profits taxes" and ending oil subsidies (even though oil companies don't actually get any direct government payments and only get the same tax deductions and cost recovery allowances that are available to all U.S. manufacturers), so maybe it's time for equal treatment of Big Farm?

Private Labor: Wake Up and Smell the Tar Sands

Daniel Henninger in today's WSJ:

"The decision by the Obama administration to "delay" building the Keystone XL pipeline is a watershed moment in American politics. The implication of a policy choice rarely gets more stark than this. Put simply: Why should any blue-collar worker who isn't hooked for life to a public budget vote for Barack Obama next year? The Keystone XL pipeline would have created at least 20,000 direct and indirect jobs. Much of this would have been well-paid work for craftsmen, not jobs as hod carriers to repave the Interstate. 

Within days of the Keystone decision, Canada's prime minister, Stephen Harper, said his country would divert sales of the Keystone-intended oil to Asia. Translation: Those lost American blue-collar pipeline jobs are disappearing into the Asian sun. Incidentally, Mr. Harper has said he wants to turn Canada into an energy "superpower," exploiting its oil, gas and hydroelectric resources. Meanwhile, the American president shores up his environmental base in Hollywood and on campus. Perhaps our blue-collar work force should consider emigrating to Canada. 

No subject sits more centrally in the American political debate than the economic plight of the middle class. Presumably that means people making between $50,000 and $175,000 a year. The president fashions himself their champion.

This surely is bunk. Mr. Obama is the champion of the public-sector middle class. Just as private business has become an abstraction to the new class of public-sector Democratic politicians and academics who populate the Obama administration, so too the blue-collar workers employed by them have become similarly abstracted. 

You would think someone in the private labor movement would wake up and smell the tar sands."

Wednesday, November 16, 2011

U.S. Dependence on Foreign Oil Lowest Since 1995

From Daniel Yergin's September WSJ article "There Will Be Oil":

"In 2003, the Bakken formation in North Dakota was producing a mere 10,000 barrels a day. Today, it is over 400,000 barrels, and North Dakota has become the fourth-largest oil-producing state in the country. Such "tight" oil could add as much as two million barrels a day to U.S. oil production after 2020—something that would not have been in any forecast five years ago.

Overall U.S. oil production has increased more than 10% since 2008. Net oil imports reached a high point of 60% in 2005, but today, thanks to increased production and greater energy efficiency (plus the use of ethanol), imports are down to 47%."

MP: The chart above displays oil imports as a share of U.S. consumption back to 1973 (data here), showing that dependence on foreign oil has fallen to 46.3% this year (average through September) and is the lowest in 16 years, since the 44.5% share in 1995.

Architecture Indexes Improve in October

"After a sharp dip in September, the Architecture Billings Index (ABI) climbed nearly three points in October (see chart above). As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the October ABI score was 49.4, following a score of 46.9 in September. This score reflects an overall decrease in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 57.3, up from a reading of 54.3 the previous month."

Related: See Reuters report here.

Insider Trading, Congress Style

On CNBC this morning Author Peter Schweizer discussed his forthcoming book “Throw Them All Out: How Politicians and Their Friends Get Rich off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison."

IJ Goes Up Against the Connecticut Dental Cartel

Institute for Justice -- "Teeth-whitening services are popular and increasingly available at spas, salons and shopping malls. This has been a boon for consumers because these businesses offer whitening services at a much lower cost than dentists do, often charging less than 25 percent of what a dentist would charge for similar results.

There is one group that is not smiling about these new, low-cost teeth-whitening services: the Connecticut Dental Commission. In June, the Commission ruled it is a crime punishable by up to five years in jail or $25,000 in civil penalties for anyone but a licensed dentist to offer teeth-whitening services, even if the customers apply the product to their own teeth.

Teeth-whitening products are regulated by the FDA as cosmetics, which mean anyone—even a child—can purchase them and apply them to his or her own teeth without a prescription and without supervision or instruction.

The Dental Commission's ruling has nothing to do with public health or safety and everything to do with protecting licensed dentists from honest competition." 

Watch video above, and here's background information from IJ, and here are some news reports here, here and here.

CPI Factoid of the Day: Natural Gas Prices -2.2%

Interesting factoid from Table A above (click to enlarge) in today's CPI report:

Compared to one year ago, every category of goods and services has increased except for one deflationary item: "Utility (piped) gas service," which has decreased by 2.2% from October 2011.  As I reported recently, natural gas futures prices for the month of November are the lowest in ten years, so the decline in natural gas prices for consumers is likely to continue through the winter.   

Welcome to America's shale gas revolution.

Chart of the Day: Gas Prices in Europe vs. USA

HT: Robert Kuehl

Tuesday, November 15, 2011

Amazing Time Lapse Views of Earth from Space

Earth | Time Lapse View from Space, Fly Over | NASA, ISS.

The video above features time lapse sequences of photographs taken by the crew of expeditions 28 & 29 onboard the International Space Station from August to October 2011 at an altitude of around 350 km.

HT: Sprewell

Happy 40 Year Anniversary Information Age 2.0

INTEL -- "The microprocessor has been the engine of the digital revolution that has changed our society dramatically over the past few decades, democratizing access to information and making for a more equalitarian world. This year Intel celebrates the 40th anniversary of the microprocessor and the 40th birthday of the Intel® 4004 which was the first customer-programmable microprocessor to become available on the commercial market."

MP: After the invention of the printing press in the 15th century that started Information Age 1.0, the commercial introduction of the mircochip in 1971 was the second most important information-related breakthrough in human history. Thanks to the introduction of the microprocessor in 1971, we can celebrate this year the 40th year anniversary of Information Age 2.0.  

Even in a Sub-Par Jobless Recovery, There Are Labor Shortages in the U.S. and Around the World

1. Wall Street Journal article "The $200,000-a-Year Mine Worker" (HT: Bob Wright):

"Demand for [workers] willing to work 12-hour days in sometimes dangerous conditions, while living for weeks in dusty small [mining] towns, is huge.

"It's an historical shortage," says Sigurd Mareels, director of global mining for research firm McKinsey & Co. Not just in Australia, but around the world. In Canada, for example, the Mining Industry Council foresees a shortfall of 60,000 to 90,000 workers by 2017. Peru must find 40,000 new miners by the end of the decade.

Behind this need for mine workers is a construction boom in China and other emerging economies that has ramped up the demand for iron ore, used to make steel, and other metals used in construction, such as copper, typically used for wiring buildings.

The [labor] shortage is particularly acute in Australia, the world's biggest source of iron ore and the world's second-biggest gold producer. The Minerals Council of Australia estimates the country needs an additional 86,000 workers by 2020, to complement a current work force estimated at 216,000.

"It's a tight labor market and difficult cost environment," said Ian Ashby, president of BHP BillitonLtd.'s iron-ore division. To attract workers, BHP and other companies are building recreation centers, sports fields and art galleries in hardscrabble company towns."

MP: Maybe that's what will happen in places like Williston, ND?

2. Business Week article "Why Americans Won't Do Dirty Jobs":

"Alabama enacted an immigration law in September that requires police to question people they suspect might be in the U.S. illegally and punish businesses that hire them. The law, known as HB56, is intended to scare off undocumented workers, and in that regard it’s been a success. It’s also driven away legal immigrants who feared being harassed.

[There] are [now] thousands of vacant positions and hundreds of angry business owners staring at unpicked tomatoes, uncleaned fish, and unmade beds. “Somebody has to figure this out. The immigrants aren’t coming back to Alabama—they’re gone,” says Randy Rhodes, owner of Harvest Select, a catfish processing plant. “I have 158 jobs, and I need to give them to somebody.”

There’s no shortage of people he could give those jobs to. In Alabama, some 211,000 people are out of work. In rural Perry County, where Harvest Select is located, the unemployment rate is 18.2%, twice the national average. One of the big selling points of the immigration law was that it would free up jobs that Republican Governor Robert Bentley said immigrants had stolen from recession-battered Americans. Yet native Alabamians have not come running to fill these newly liberated positions. 

Many employers think the law is ludicrous and fought to stop it. Immigrants aren’t stealing anything from anyone, they say. Businesses turned to foreign labor only because they couldn’t find enough Americans to take the work they were offering.

At a moment when the country is relentlessly focused on unemployment, there are still jobs that often go unfilled. These are difficult, dirty, exhausting jobs that, for previous generations, were the first rickety step on the ladder to prosperity. They still are—just not for Americans."

MP: More evidence that there's been a structural shift in the U.S. economy (especially the second story), leading to a temporary mismatch between the jobs available (which might be plentiful) and the skills and willingness of available employees to fill those jobs (which might be scarce), which is contributing to a stubbornly high jobless rate.