Tuesday, August 14, 2012

Oil Prosperity Delivers Economic Stimulus to TX


The oil boom in the North Dakota Bakken area has been getting a lot of attention lately due to the phenomenal increases in production there over the last few years, but there's also an oil boom going in Texas as well, thanks to the same advanced drilling technologies that are turbo-charging oil output in North Dakota.

The chart above shows daily oil production in Texas, which exceeded 1.8 million barrels per day in both April and May, reaching the highest level of production in more than 20 years going all the way to 1991.  Even though North Dakota oil production has increased six-fold over the last six years moving the state ahead of both California and Alaska in the last year to become the No. 2 oil-producing state, oil production there of 666,000 b.p.d. in June is only about one-third of the oil output in No. 1 Texas at 1.834 million b.p.d. in May.

Here's a recent account from the Houston Chronicle of the oil boom going on in West Texas in the Permian Basin, which is booming along with the Eagle Ford Shale area of South Texas, and has helped boost the state's oil production by 66% over the last two years (see chart above). 

MIDLAND, TX -- "As anyone who has tried to rent a house, navigate traffic or lease drilling equipment around here knows, the good times are rolling again. A strong demand for oil coupled with refined hydraulic fracturing and horizontal drilling techniques are tapping long untouchable, deep reserves.

What began a decade ago as a modest revival now is a full-fledged boom. The play extends across hundreds of miles of West Texas and into New Mexico, from Mentone east to El Dorado, and it is reviving long dormant backwaters. The best indicator, the Baker Hughes rig count, recently hit 442, after bottoming out in 1999 at 51. There are now more than 155,000 producing wells out here, generating revenue and requiring service for years to come.

"It's unbelievable. This has 50 years worth of life. They'll be redrilling the entire Permian Basin," exclaimed Jim Smitherman, chief executive officer of Security Bank in Midland.

Airport hangars in Midland now are jammed with private planes, there's a three- to four-month wait to join the Petroleum Club and many of the service companies lining Interstate 20 keep "Hiring" signs out front.  A freshly graduated petroleum engineer can make $80,000 a year, sometimes with a $10,000 to $20,000 signing bonus tacked on. Roughnecks and truck drivers willing to work killer hours can gross over $100,000 a year.

Arlen Edgar, 78, a longtime oil and gas investor said "There's a lot of money to be made. If you look at daily production in the Permian Basin, which is approximately a million barrels a day, that, along with the gas, represents $2.5 billion to $3 billion a month in production revenue."

Sales tax income for Midland went from $13.4 million in fiscal year 2001 to $29.4 million in fiscal year 2011. So much money is flowing in that the city's reserve fund is now equal to about half its general fund, double what it used to be. The wealth has triggered an ambitious capital improvements program. Midland will soon build a new firehouse while remodeling two others, and will also build a new municipal court building. Extensive new roadwork also is planned."

MP: Hydraulic fracturing and horizontal drilling is bringing new oil prosperity to Texas as well as North Dakota, and delivering an energy-based economic stimulus to both states, creating thousands of well-paying, shovel-ready jobs, bringing millions of dollars of new investment, and delivering millions of dollars in royalty payments to local landowners.

HT: Peter Parlapiano

America’s New No. 2 Oil State – North Dakota – Sets More Eye-Popping Oil Production Records in June

The “Economic Miracle State” of North Dakota pumped another record amount of oil during the month of June at a rate of more than 660,000 barrels per day, which was an increase of 3.2% compared to oil production in May (see chart above).  North Dakota’s record-setting oil output in June was noteworthy for several reasons:

1) The year-over-year increase in oil production of 71.1% in June followed annual increases of 75.5% in May and 73.5% in April, and those are the three largest increases in North Dakota history.

2) North Dakota produced almost 34% more oil than Alaska in June, marking the fourth consecutive month that North Dakota out-produced Alaska. The Peace Garden State surpassed Alaska’s oil production for the first time in March to become the country’s new No. 2 oil state, behind only Texas.

3) The number of producing oil wells in the state surpassed 7,000 for the first time ever, setting a new record high of 7,130 wells in June.  Over the last year, an average of 5 new oil wells have been put into production each day, and each new well is the equivalent of adding a new $8-10 million business to the state’s economy, see recent CD post for more details.

4) The amount of oil produced per oil well in the state increased to a new record high of 93 barrels per day, an increase of 29% compared to a year ago, and a sign that the efficiency of shale oil production is increasing significantly. Both the increasing number of wells and the increasing output per well is contributing to record high production levels.  Over just the last two years since June 2010, daily oil production in North Dakota has more than doubled.

As a result of the ongoing oil boom in the Bakken area, North Dakota continues to lead the nation with the lowest state unemployment rate at a four-year low of 2.9% in June, and more than five percentage points below the national average of 8.2%. There were nine North Dakota counties with jobless rates at or below 2.0% in June, and Williams County, which is at the center of the Bakken oil boom, continues to boast the lowest county jobless rate in the country at just 0.9%.  The exponential growth in North Dakota oil production has fueled exponential growth in the state’s “Natural Resources and Mining” employment, which has tripled in less than three years, and reached almost 22,000 in June.  Overall, North Dakota state employment has increased by 6.5%, almost five times the 1.3% increase in jobs nationally.

Bottom Line: The record-setting oil production in North Dakota continues to make it the most economically successful state in America, with record levels of employment and income growth, a labor shortage and the lowest state jobless rate in the country, increasing tax revenues, the lowest foreclosure rate in the country, strong housing and construction markets, and jobless rates in nine counties of the Bakken region at or below 2.0%.  Call it the “Dakota Model” of job creation and economic prosperity that is based on developing America’s vast energy resources, which is an economic model that could easily be replicated elsewhere if more domestic energy resources were opened up to exploration and drilling.  Under a Romney-Ryan administration, North Dakota’s job-creating, energy-based economic prosperity will likely spread to new parts of the country starting in 2013.

Ten Tuesday Afternoon Links

1. The "Van Indicator" Signals Economic Recovery  -  "How can we tell how small businesses are feeling? Find out how many vans they’re buying (90% of vans are purchased by businesses). Van sales were up 32% in July over last year, a greater increase than every other vehicle type except sports cars."

2.  Average sales at U.S. car dealerships are expected to rise to an all-time high of 805 vehicles this year, as the number of U.S. dealers remained flat the first half of 2012. The average sales are on pace to top the previous record set in 2005.

3. The number of U.S. craft breweries increased this year to the highest count in 125 years. It's the fastest growth rate since Prohibition ended, almost one new brewery every day.

4. Update on NYC's pizza wars in today's WSJ.  Cutthroat competition brings prices down to as low as 75 cents per slice.  Can't we get a similar pizza war in DC? 

5. The oil and gas boom brings scarcity of workers in small towns in Oklahoma, Texas, North Dakota as many businesses and government agencies now struggle to find enough workers. Reason? Most able-bodied people can double or triple their income in the oil patch.

6.  The Costco in Bellingham, Washington, has become exceedingly popular with Canadian shoppers to the dismay of locals who are claiming "gridlock" in the aisles. 

7.  419 Economists, including 5 Nobel laureates, Sign Statement in Support of Romney's Economic Plan to Create Jobs and Restore Economic Growth.   

8. Report: 46% Of U.S. Bank Account Holders Will Use Mobile Banking By 2017.

9. New York to London in an hour: Hypersonic WaveRider aircraft to be tested Tuesday.

10. Shale Gas to the Climate Rescue: Development of global shale gas could be the best way to achieve cuts in CO2 emissions. 

Markets in Everything: Research Validation Service

Science Exchange, in partnership with the open-access publisher PLOS and open data repository figshare, announced today the launch of the Reproducibility Initiative – a new program to help scientists, institutions and funding agencies validate their critical research findings.

“In the last year, problems in reproducing academic research have drawn a lot of public attention, particularly in the context of translating research into medical advances. Recent studies indicate that up to 70% of research from academic labs cannot be reproduced, representing an enormous waste of money and effort,” said Dr. Elizabeth Iorns, Science Exchange’s co-founder and CEO. “In my experience as a researcher, I found that the problem lay primarily in the lack of incentives and opportunities for validation—the Reproducibility Initiative directly tackles these missing pieces.”

The Reproducibility Initiative provides both a mechanism for scientists to independently replicate their findings and a reward for doing so.  Scientists who apply to have their studies replicated are matched with experimental service providers based on the expertise required.  The Initiative leverages Science Exchange’s existing marketplace for scientific services, which contains a network of over 1000 expert providers at core facilities and contract research organizations (CROs). “Core facilities and commercial scientific service providers are the solution to this problem,” said Dr. Iorns. “They are experts at specific experimental techniques, and operate outside the current academic incentive structure.”

See related Reuters article here, which highlights the issue of why there is a need for research validation:

"Last year, Bayer Healthcare reported that its scientists could not reproduce some 75 percent of published findings in cardiovascular disease, cancer and women's health.

In March, Lee Ellis of M.D. Anderson Cancer Center and C. Glenn Begley, the former head of global cancer research at Amgen, reported that when the company's scientists tried to replicate 53 prominent studies in basic cancer biology, hoping to build on them for drug discovery, they were able to confirm the results of only six."

Monday, August 13, 2012

Markets In Everything: Eyesight for the Blind

Bloomberg -- "Blind mice had their vision restored with a device that helped diseased retinas send signals to the brain, according to a study that may lead to new prosthetic technology for millions of sight-impaired people.  The technology moves prosthetics beyond bright light and high-contrast recognition and may be adopted for human use within a year or two, said Sheila Nirenberg, a neuroscientist at Weill Cornell Medical College in New York and the study’s lead author. 

“What this shows is that we have the essential ingredients to make a very effective prosthetic,” Nirenberg said. Researchers haven’t yet tested the approach on humans, though have assembled the code for monkeys. 

Nirenberg and co-author Chethan Pandarinath first monitored healthy eyes to determine the set of equations that translate light received by the retina into something the brain can understand. Then, they used special glasses to create a similar code and deliver it to the eye, which they had injected with a virus containing light-sensitive cells. The cells received the code and fired electric impulses, which the brain could interpret as images. 

Nirenberg’s research “is basically giving vision back to a system that doesn’t work,” said Aude Oliva, a principal investigator at the Massachusetts Institute of Technology’s Computer Science and Artificial Intelligence Laboratory, who wasn’t involved in the research. “I’ve never seen, and other people have never seen, this quality.”

No foreseeable barriers should stop the movement into humans now that the technology has been created, Oliva said. Nirenberg said that if researchers can come up with adequate cash to fund clinical trials, she hopes to soon adapt the technology." 

MP: In the midst of all of the gloom and doom we hear about daily, the pending fiscal cliff, talk of a double-dip recession, The Great Stagnation, etc. we still hear inspiring stories like this on a regular basis, a confirmation that technology, innovation and ingenuity march on, and deliver advances that make the future ever-brighter all the time.  It's a demonstration that our "ultimate resource" - America's human resources,  human capital and entrepreneurial talent - are still strong, and the vitality and dynamism of the U.S. economy will prevail.  The U.S. economy has experienced 33 recessions since around the time of the Civil War, and has successfully emerged after each one into a new cycle of growth and expansion, and there's no reason that this last recession and the current expansion will be any different.

As one example, when we look back on the period of U.S. history from 1870-1900, nobody describes that period as one of seven severe economic recessions, or a period when the U.S. economy was in recession 179 months out of 336 months, or more than half of that time period.  Instead, when we reflect on that period today, we think of the many amazing, game-changing inventions that emerged during that era despite the tough economic conditions, including the typewriter, air brakes, tungsten steel, barbed wire, telephone, internal combustion engine, phonograph, moving pictures, a longer-lasting light bulb, player piano, machine gun, gas-engine motorcycle, radar, gramaphone, contact lenses, escalator, zipper, bicycle frame, vacuum cleaner, zeppelin and the radio.  Likewise, a hundred years from now people will look back on this period of history more for its innovations (3D printing, iPhone, iPad, robotics, nanotechnology, advanced drilling technologies for oil and gas, and prosthetic technology for millions of sight-impaired people, etc.) than for the fact that we went through the Great Recession, which in comparison was relatively mild compared to the severe, recessionary conditions of the 1870-1900 period that included a five-year and a three-year recession.   

HT: John Sturges

The Best Movie I've Seen in Years



If you haven't yet seen the movie "Searching for Sugar Man," I highly recommend that you do so, it's excellent.  It's got a 96% Tomato-Meter Rating from movie critics on RottenTomatoes.com and a 96% audience rating, which is almost unprecedented for a movie to rank so highly on both measures at the same time.  Watch the trailer above, and here's a synopsis: 

Searching for Sugar Man tells the incredible true story of Rodriguez, the greatest 1970s rock icon who never was. Discovered in a Detroit bar in the late 1960s by two celebrated producers struck by his soulful melodies and prophetic lyrics, they recorded an album which they believed would secure his reputation as the greatest recording artist of his generation. In fact, the album bombed and the singer disappeared into obscurity amid rumors of a gruesome on-stage suicide. But a bootleg recording found its way into apartheid South Africa and, over the next two decades, he became a phenomenon. The film follows the story of two South African fans who set out to find out what really happened to their hero. Their investigation leads them to a story more extraordinary than any of the existing myths about the artist known as Rodriguez.

You can see Rodriguez on The Letterman Show tomorrow (Tuesday) night, and see him live, here's his touring schedule.

The Significant Medal Inequality of the Olympics

As predicted in a recent CD post, there was a significant amount of "medal inequality" in the 2012 Summer Olympics, see the country shares above of the total 962 medals that were awarded this year to athletes from 85 countries.   Note the amazing similarity between the shares of adjusted gross income earned in the U.S. in 2008 and the country shares of Olympic medals awarded this year, in both cases by the top 5, 10, 25 and 50% of "participants" or "earners."

The average person seems to understand how "medal taxes" and "medal redistribution" would undermine the competitive process that is essential to the success of the Olympics, but then that same person often seems to accept progressive "income taxes" and "income redistribution," without realizing that the "tax and redistribution" process can undermine incentives to work, produce and invest that are essential to the success of the market economy.  

Gibson Pays $350,000 Fine + $2.4M in Legal Fees


In the video above, Gibson Guitar CEO Henry Juszkiewicz discusses with Mike Huckabee the $350,000 fine his company paid to the federal government, in addition to Gibson's $2.4 million in legal fees, to avoid going to trial, which would have cost $5-6 million.  No charges have been filed. 

How About Minimum/Maximum Temperature Laws?

A version of the post below appeared on CD during the unusually cold winter of 2008-2009, and I present it again today, now that Rep. George Miller (D-Calif.) and more than 100 of his House Democratic colleagues have recently proposed legislation that would increase the minimum wage to almost $10 per hour:

Q: Couldn't the government intervene in the market for temperature-reading equipment to counteract "excessively low" winter temperatures or "excessively high" summer temperatures, just like the government does in the unskilled labor market to counteract "excessively low" wages for unskilled workers?  Let me explain.

In Defense of the Minimum Wage Law:

Unskilled workers are at the mercy of greedy, cold-hearted, ruthless, profit-seeking employers. Without some kind of government intervention in the unskilled labor market, employers will ruthlessly exploit unskilled workers, and pay them sub-standard wages (e.g. $5 per hour).

To counteract this injustice in the labor market for unskilled workers, our collective sense of fairness and justice demands legislation that currently forces employers to pay a minimum wage of $7.25 per hour. Wages below that minimum (e.g. $5 per hour or $6 per hour) are unconscionably low, and are outlawed by the minimum wage legislation, with violations subject to penalties, fines and possible jail time for employers paying less than the government-mandated minimum wage of $7.25 per hour.


In Defense of the Minimum Temperature Law:

The frigid, cold, and harsh winter of 2008-2009, and the hardships it has caused for millions of Americans (including an estimated 700 deaths), firmly establishes that we are at the mercy of a very cruel, ruthless, merciless, cold-hearted, and uncaring force: Mother Nature.

Something must be done about this unacceptable situation. Without some kind of government intervention in the market for low temperature readings being registered on existing thermometers and thermostats, Mother Nature will continually and ruthlessly expose Americans to harsh winter conditions of unconscionably low temperatures. Who among us wouldn
’t agree that these excessively low winter temperatures are unfair, unreasonable and unjust?

To counteract this inherent cold weather injustice and Mother Nature’s ongoing lack of concern for cold Americans, our collective sense of fairness and justice requires legislation that will force all thermostats and thermometers sold in the United States to have a minimum, reasonable and fair temperature reading of let's say 0 degrees Fahrenheit. As part of the new Minimum Temperature Law, all existing thermometers and thermostats in homes, offices, and businesses should be immediately replaced with new temperature-reading equipment with a minimum reading of 0 degrees.

Any temperatures below that minimum (e.g. -10 degrees F. or -20 degrees F.) are considered to be unfair and unconscionably low, and will be illegal and outlawed by the Minimum Temperature Law, with violations subject to penalties, fines and possible jail time for thermostat manufacturers continuing to sell thermostats with temperature readings below the government-mandated minimum temperature. Further, all news and weather reports, all TV and radio stations, and all newspapers and websites are immediately prohibited from quoting any temperatures below the federally-mandated minimum of 0 degrees F.  

If successful, subsequent legislation for a Maximum Temperature Law should be considered for summer months, e.g. a maximum allowable temperature reading of 85 degrees Fahrenheit on all thermostats to control Mother Nature's unfair "temperature gouging" and "temperature scalping" this summer, with temperatures in the 90s and above in so many parts of the country this summer.    

Bottom Line: If Minimum/Maximum Temperature Laws seem ridiculous, that's because they are totally ridiculous. And so are Minimum Wage Laws.  Forcing employers to pay an unskilled worker $7.25 per hour doesn't change the reality that many of those workers are actually only worth $5 or $6 per hour. The artificially high minimum wage causes distortions and inefficiencies in the unskilled labor market because the minimum wage does not accurately and truthfully reflect many workers' true productivity, and it's like creating a government-mandated fantasy world.  A disconnect is created between the true measure (e.g. $5 per hour) and an artificial, government-mandated measure ($7.25 per hour), of a worker's value or productivity.

Likewise, imposing a minimum (or maximum) temperature law would create a government-mandated fantasy world about weather conditions, with a disconnect between the true temperature (e.g. -20 degrees or 100 degree F) and an artificial government-mandated minimum or maximum temperature (0 degrees or 85 degrees F). And just like the minimum wage law creates havoc in the labor market, so would the minimum temperature law create havoc for Americans, because thermostats would be conveying inaccurate measures of the true temperature.  

When it comes to the weather, what we want most is the most precise measure possible of temperatures, and we get those from accurate thermostats and thermometers, not from artificial, government-mandated minimum or maximum temperature laws. When it comes to maximizing the efficiency of the labor market, what we want are accurate, truthful and precise measures of worker productivity, and we get those from market wages, not from artificial, government-mandated minimum wage laws. 

America's Energy Bonanza = Huge Econ. Stimulus: Millions of Jobs and Billions of Dollars in Investment


Below are some excerpts from an article today in Bloomberg highlighting America's energy bonanza and the powerful economic stimulus it's providing to the U.S. economy, including the creation of millions of shovel-ready jobs and hundreds of billions of dollars in investment:

"On the eastern bank of the Mississippi River, about an hour upstream from New Orleans, the outline of Nucor Corporation's new $750 million iron-processing plant is rising between fields of sugar cane and sweet gum trees.

It’s a harbinger of a nationwide investment boom spreading from the oil fields of North Dakota and the Marcellus gas shale in Pennsylvania to power plants in California and chemical refiners in Texas. A surge in U.S. natural gas development has spurred $226 billion in spending plans on pipelines, storage, processing facilities and power plants, most slated for the next five years, according to Industrial Info Resources, a market- intelligence provider in Sugar Land, Texas. 

U.S. energy supplies have been transformed in less than a decade, driven by advances in technology, and the economic implications are only beginning to be understood. U.S. natural gas production will expand to a record this year and oil output swelled in July to its highest point since 1999 (see top chart above). Citigroup estimated in a March report that a “reindustrialization” of America could add as many as 3.6 million jobs by 2020 and increase the gross domestic product by as much as 3 percent. 

There are signs the economic gains have begun to expand beyond the oil and gas fields and that the promise of abundant, low-cost fuels will give a competitive edge to industries from steel, aluminum and automobiles to fertilizers and chemicals. That would provide a boost to a U.S. manufacturing sector that has lost 5.12 million jobs since 2001 and become the focus of a national debate over how to revive factory employment. Manufacturers have added 532,000 jobs since January 2010 as the economy started to recover, Bureau of Labor Statistics data show.

The expansion of fossil-fuel production -- coupled with a weak economy and increased energy efficiency -- has helped the U.S. pare its crude oil imports by 17 percent since the 2005 peak, Energy Department data show. Imports in 2011 accounted for 45 percent of U.S. consumption of crude and refined products. The department predicts the share will fall to 39 percent next year, which would be the first time since 1991 that imports dropped below 40 percent of demand (see bottom chart above)." 

MP: As I have commented recently, America's ongoing energy revolution is one of the real bright spots in an otherwise sub-par economic expansion, and provides one of the best reasons to be bullish about America's future.  The Bloomberg article highlights many of the direct and indirect economic benefits that are flowing through the economy from America's abundant energy treasures.

HT: Jon Murphy

Sunday, August 12, 2012

Anatomy of a Real Estate Recovery: Minneapolis - St. Paul Area Housing Market is Hot, Hot, Hot

The chart above provides evidence of the significant recovery going on in the Minneapolis Area real estate market, based on new data for market activity there in July:

1. Closed home sales in July increased by 14.6% above last year, and by 58% above two years ago. On a year-to-date basis, the 27,413 homes sold so far this year is the highest for any January-July period since 2006.       


2. Pending home sales in July (4,748) is 24.3% higher than the same month last year, and 65% higher than July 2010.  

3. The average marketing time for houses sold in July was 106 days, down from 146 days last year and 132 days in 2010, and was the shortest average marketing time since at least 2006.    

4. The median sales price in July was $179,500, a 14.3% increase over last year and a four-year high for the month of July.  The median price increase in July was the largest year-over-year gain since January 2004 and the fifth straight month of an annual increase.  

5. The average sale price as a percent of list price was 95% in July, the highest percentage for a July since 2007, and above the 91.7% average last year and the 91.9% two years ago.  

6. The months supply of inventory in July was down to only 4.3 months, the lowest level in almost 7 years, since the fall of 2005.  

7. The inventory of homes for sale in July was only 16,806, the lowest inventory level since December 2003.   

Bottom Line: By every relevant measure (median price, closed sales, pending sales, average marketing time, percent of list price received, etc.), the real estate market in the Minneapolis-St. Paul Area is experiencing a full and sustainable recovery this year, and the housing market conditions there are reflected very closely in many other metro areas around the country.  


In fact, with the home inventory level currently at a 9-year low and the months supply of homes at a 7-year low, the biggest challenge for the Minneapolis-area real estate market is now a shortage of homes for sale relative to the increasing demand.  With the tight supply of homes listed for sale and more buyers coming into the market, we can expect multiple offers and further increases in home prices going forward.  

Here's how the Minneapolis Area Association of Realtors explains the situation in the Twin Cities:

"With the Olympics in full swing, housing has already medaled in several arenas. A few short years ago, housing was considered a headwind to economic recovery. Today, housing is seen as a tailwind to a stalling economy. For the first time since 2005, housing is on track for contributing positively to national GDP in 2012. That can occur either by way of direct residential investment or through remodeling and other ancillary services. Watch for signs of sustained tailwinds in a variety of indicators, including market times, seller concessions, prices and absorption rates."

Animated Map of the Bakken Shale Production

You may need to click on the graphic to start the interactive map.
The animated map above is from the EIA and shows the growth in Bakken shale production of oil and gas from 1985-2010.  It's interesting that most of the early increases in Bakken production (1998-2006) were in Montana (Elm Coulee Oil Field), and not the North Dakota Bakken.  It wasn't until about 2008 that production exploded in the North Dakota Bakken following the discovery of the Parshall Oil Field.  From the EIA:

"The animation highlights that drilling activity in the Bakken has been focused mainly on crude oil and natural gas liquids (generally the green and yellow dots). The larger circles indicate higher productivity wells; these are mostly horizontal wells. Bakken production, which averaged just over 2 thousand bbl/d in 2000, averaged more than 260 thousand bbl/d in 2010; horizontal wells accounted for nearly 90% of total 2010 volumes."

MP: Note that since 2010, the number of producing oil wells in the Bakken has more than doubled from 1,593 in May 2010 to 3,983 in May 2012, so there would be a lot more green and yellow dots on the map if it was updated through 2012.  

Saturday, August 11, 2012

3D Printer Could Build a Custom House in 20 Hours



Yahoo News -- "An engineering professor, Behrokh Khoshnevis, at the University of Southern California, is really thinking big: He has figured out a way to build housing with a giant 3D printer. The apparatus, instead of being the size of your typical laser printer, would actually be somewhat bigger than the house it would build through a concrete layering system called Contour Crafting.

The professor explained the process in a speech at the TEDx conference, which you can watch above. (Start at 4:30 to see the animation demo.) In the video,  the professor demonstrates how the machine lays down a concrete foundation, puts up walls, even inserts wiring and plumbing, and eventually constructs an entire building, which Professor Khoshnevis says can be completed in less than a day. (All that's left to add are doors and windows.) Robotics could even be used to add details like tiles, says the professor."

MP: The 3D printing revolution has just begun. We can expect hundreds and probably thousands of more examples like this in the future, as this amazing, innovative, game-changing technology revolutionizes manufacturing, construction, and our entire world.

Two Mind-Blowing Illusions


Amazingly, the two tabletops above look like they are different shapes but are actually identical, and the two photographs below of the Leaning Tower of Pisa look different, but are actually identical.  You can find explanations, and more illusions here.



Great Animated Video of Hydraulic Fracturing

Here's the technology driving our energy bonanza.

From Marathon Oil --"Safe, cost-effective refinements in hydraulic fracturing (also known as fracking), horizontal drilling and other innovations now allow for the production of oil and natural gas from tight shale formations that previously were inaccessible. This animated video introduces you to the proven techniques used to extract resources from these shale formations in a safe, environmentally responsible manner."

Great animation of the drilling technology that is responsible for America's revolutionary, game-changing, shale-based energy bonanza, the "energy equivalent of the Berlin Wall coming down."  

Global Trade and U.S. Exports Are at Record Highs

No sign of recession based on record world trade volume in May and record U.S. exports in June.
According to perma-bear Gary Shilling this week, "We're already in a global recession," and ECRI's Lakshman Achuthan said in July that "the [U.S.] economy is in a recession already."  

But if the U.S. and world economies are in recession, why are merchandise world trade and U.S. merchandise exports at all-time record high levels, see chart above?  The CPB Netherlands Bureau for Economic Policy Analysis is reporting that world trade increased by 2.5% in May to the highest level on record (see blue line in chart).  May's increase in world trade volume was the highest monthly gain since December 2009.  The slight decreases in Europe's exports (-0.1%) and imports (-0.3%) in May were more than offset by strong gains in Asia's exports (5.1%) and imports (7.8%).  Of course, the CPB reports comes out with almost a 2-month lag, so world trade might have declined in June and July. 

Separately, the IMF's latest World Economic Outlook points to downside risks in Europe and the U.S. that could stall the global economic recovery, but the IMF is still predicting world GDP growth of 3.5% this year and 3.9% next year.  Both of those growth rates would be above the 3.2% average annual growth in global GDP since 1980, and far from the negative growth rates in 2008 Q4 of -7% and -6% in 2009 Q1 during the worst of the global slowdown.        

The BEA reported this week that both total exports ($185 billion) and goods exports ($133 billion, see red line above in chart) reached new record highs in June.  June merchandise exports were 10.6% above the previous peak of $120 billion four years ago, and 61% above the cyclical low of $82.5 billion in 2009.  Similarly, world trade is 6.5% above its previous cyclical high in 2008 and 33% above the cyclical low in 2009. 

Bottom Line: Based on the ongoing increases and record highs for world merchandise trade in May and U.S. merchandise exports in June, and the IMF forecasts for above-average growth in 2012 and 2013,  it seems like it would be hard to make a strong case for either a global or U.S. recession.      

Update: The 174,148 loaded export containers shipped in June from America's largest sea port - Los Angeles - set a new all-time record high for the month of June, and was an increase of almost 7% above the same month last year.   

Friday, August 10, 2012

Coin Scalping: Dime Sells for 16M Times Face Value

The 1873 dime pictured above just sold for $1.6 million at auction, with strong interest and bidding from four or five serious buyers.  Here are the details.

A Michigan lawmaker plans to introduce legislation that would limit the price of tickets for concerts and sporting events to no more than 10 percent above their face value when sold on the secondary market.  State representative Douglas Geiss was upset when he found some $100 Detroit Tigers tickets selling on StubHub for $1,000, and said he found that “usurious.” (I'm 100% certain that Mr. Geiss would gladly sell shares of stock he might own for ten times the price he paid for it, and he would not find that price "usurious".)

Q: What would the politician think about coins sold on the secondary market for prices far above face value like the one above that just sold for 16 million times its face value of 10 cents (and $15,999.999.90 above face value)?  Wouldn't that be a case of usurious "coil scalping"?  

Q: Is there any legal or economic difference between scarce coins and scarce concert tickets that makes "ticket scalping" different from "coin scalping," to the point that one is often illegal (or regulated) and the other is completely legal and unregulated?  

I don't think there is any logical, legal, or economic case that can be made to treat tickets and coins differently, and the prices for both should be determined by market forces, and not limited by some arbitrary "face value." But if anybody (a musician or concert promoter maybe?) wants to make that case that scarce tickets are somehow different than scarce coins, and they should therefore be subject to different legal price restrictions, please do so. And then you'll have to also explain why you think it's acceptable for houses, cars, and bonds to sometimes sell (or "be scalped") above their face values/list prices, but not concert tickets. 

Not Even a Bronze Medal for the Command-and-Control Approach to Olympic Tickets in London

The Fan Freedom Project has been tracking the Summer Olympic ticket fiasco, here's a sample of links below that document how despite the high demand for tickets, there have been a lot of half-empty stadiums because of the lack of an efficient secondary market for tickets.  The economic lesson is that any shortage or surplus is almost always the result of a failure to allow market pricing, and/or preventing markets to operate.     

1. "No Gold Medal for Olympic Ticket Market" - These Olympics provide a disturbing snapshot of what happens when event organizers stack the deck against ordinary fans and try to stop the free market from working.

2. "The London Olympics Ticketing Fiasco" -- A San Francisco woman says she had a "carpe diem" moment (gotta love that) last week and decided at the last minute to attend  the Summer Olympics in London with her two sons.  She reports:

"Booking the flight and hotel room was simple. There was plenty of room on the direct flight from San Francisco to London. We got a great deal at a hotel. Getting tickets to the events? Not so easy."

After describing the details of her difficulties getting tickets, she concludes:

"My hope is that the next Olympic host city outsources their ticketing operations to Amazon.com, or another online retailer that knows a thing or two about high volume Internet commerce. And, hey, corporate sponsors and members of the "Olympic family," give us commoners a break. If you aren't using your tickets, be kind enough to re-sell them. There are a lot of eager buyers out there."

3. From The Economist: "Bring on the Touts" (British term for scalpers):  The author observes that "A command-and-control approach to Olympic tickets works no better than a command-and-control approach to any other market," and he blames the half-empty stadiums on Olympic organizers and Britain’s politicians "for refusing to allow a market in tickets."

Bottom Line: The market for tickets, like all markets, is a harsh mistress.  Attempts to ignore or circumvent incontrovertible market forces will be punished with severe and predictable consequences: shortages, surpluses, and inefficiencies. 

Markets in Everything: Indoor RV Park in N.D.



The video above comes from KARE-11 in Minneapolis, and features the world's first "Indoor RV Park," currently under construction near Williston, North Dakota, as one creative solution to the area's housing shortage.  When completed this fall, the RV complex will accommodate 240 campers at a cost of about $1,500 dollars per month. There will be hook ups for sewer, water, and electricity, and fresh air will also be pumped in to each unit.  
   

IJ Wins Major Victory for Economic Liberty in Utah

In April 2011, I featured the Institute for Justice's lawsuit challenging Utah's cosmetology cartel on behalf of African hairbraider Jestina Clayton. Prior to the Utah case, the Institute for Justice had successfully challenged state cosmetology regulations in seven states on behalf of hairbraiders, and had never lost a case.  IJ's record against state cosmetology cartels is now 8-0 with a favorable ruling this week in Utah, here are the details:

1. Salt Lake Tribune -- A federal judge said Wednesday the state’s demand that an African hair braider get a cosmetology license was unconstitutional since most of the training required is "irrelevant" to her home-based service.

In ruling in favor of Jestina Clayton, U.S. District Court Judge David Sam cited a 1915 U.S. Supreme Court ruling that held the right to work for a living in common, community-based occupations is the "very essence of the personal freedom and opportunity" protected by the U.S. Constitution.

2.  Institute for Justice --  In a major victory for economic liberty, a federal court ruled late Wednesday that Utah’s requirement that hairbraiders have a government-issued cosmetology license is unconstitutional.  

The Honorable David Sam of U.S District Court for the District of Utah held, consistent with decades of U.S. Supreme Court precedent, that “The right to work for a living in the common occupations of the community is of the very essence of the personal freedom and opportunity that the Constitution was designed to protect.”

IJ President and General Counsel Chip Mellor added, “This is just the most recent decision in a string of decisions by federal courts across the country to protect the constitutional right to earn an honest living.  If the State of Utah decides to appeal, we will vindicate economic liberty again, and we will keep going all the way to the U.S. Supreme Court.  The Constitution does not allow the government to make entrepreneurs jump through pointless hoops.  This is an opinion that will not only help Jestina, but will also help other entrepreneurs nationwide who find their right to economic liberty violated by state and local regulators for no legitimate reason.”

HT: Jake Williams

Pew Research's Latest News IQ Quiz

Test your knowledge about the candidates and the election by taking Pew's 11-question quiz.  Pretty easy questions....

Thursday, August 09, 2012

Pittsburgh and Ohio Rebound With Shale Gas

1. Pittsburgh Rebound -- "Pittsburgh, once known as America’s Steel City, is laying its Rustbelt heritage to rest by fostering growth in education and health services, while drawing strength from the booming natural-gas industry it keeps at a distance. 

Drilling into Marcellus shale deposits is banned in Pittsburgh, yet hydraulic-fracturing, or fracking, operations in the countryside nearby have helped bring in jobs and boost demand for office space in Pennsylvania’s second-biggest city.

New methods of extracting natural gas and oil are boosting the economies of states from Pennsylvania to North Dakota and Texas. Unconventional gas production alone is forecast to spur almost $3.2 trillion in new investment by 2035 and support more than 2.4 million jobs in the lower 48 U.S. states, according to an HIS Inc. study released in June. It projected a 14 percent annual compound-growth rate in Pennsylvania jobs tied to gas." 

2. Ohio Rebound -- "Today, Ohio once again has the opportunity to become an economic power, creating the jobs and economic revitalization that goes along with having reliable, more affordable energy. And once again, the solution lies right beneath our feet in the vast domestic shale formations that hold immense reserves of oil and natural gas. 

The good news is that in Ohio, policies and actions are already encouraging and supporting shale energy development, opening access to new lands and adopting stringent regulatory controls to address potential environmental and public health and safety concerns. As a result, shale energy is expected to contribute 65,000 jobs, with an average salary of $50,225 per job, and more than $4.8 billion to Ohio’s economy by 2014. Nationally, shale energy contributed 600,000 jobs and more than $76 billion to U.S. GDP in 2010 alone.

Here in Ohio, evidence of the potential for this shale-driven economic engine abound. The domestic steel industry, particularly in Youngstown, Canton and the Mahoning Valley, is enjoying its first growth boom since the 1980s, driven largely by the demands of oil and gas producers who need pipe, drilling platforms, heavy equipment and specialty tools. Last year shale development helped to create 2,275 new Ohio jobs and increased Ohio’s gross domestic product by $162 million. And that growth is, in turn, causing an increase in consumer confidence — people are buying cars again, which further increases the demand for steel and increases employment in Ohio.

For the first time in more than 100 years, Ohio has the chance to once again be a leader in the production of oil and gas. Shale energy provides the state a unique opportunity to build on its history to ensure a strong economic future, ensuring more affordable energy while helping to increase our nation’s energy security."

"Taxation Hero": ExxonMobil Paid More Than $1 Trillion in Taxes Since 1999, Three Times Its Profits

Click table to enlarge.
In their July 2012 policy brief "Investment Heroes: Who’s Betting on America’s Future?" Diana Carew and Michael Mandel of the Progressive Policy Institute (PPI) recognized 25 American companies as "Investment Heroes" of 2012 for their collective investment of $136 billion in U.S. capital expenditures.  Ranked as America's third largest "investment hero" was ExxonMobil, for its $11.7 billion of investment spending in the U.S. last year building oil and natural gas pipelines and exploratory costs for new sources of oil and gas. 

In a Forbes article today, "Taxation Hero: ExxonMobil Pays $3 In Taxes For Every $1 In Profit," AEI's Nick Schulz points out that since Exxon and Mobil merged in 1999, the energy giant has paid more than $1 trillion in taxes to various governments, see chart above.  Nick conludes: 

"That’s more than double its net cash flow over the same period and almost three times its profits of $352 billion.  Think about what this means: For every dollar in profits it earns for its shareholders, ExxonMobil earns nearly three dollars for governments.

Here’s an idea: Mandel and his team might also want to compile a list of “taxation heroes” given the enormous sums of money firms such as ExxonMobil pour into government coffers."

MP: I concur and hereby nominate ExxonMobil as a model, American "taxation hero" for its $1 trillion of tax payments over the last thirteen years.   In 2011 alone, ExxonMobil's total tax bill was an eye-popping $104.52 billion, which works out to $286 million in taxes every day, $11.9 million in taxes every hour and a tax bill of almost $200,000 every minute.

Further, ExxonMobil paid more than $3 in taxes last year ($104.52 billion) for every one dollar it spent on "capital and exploration expenditures" ($33 billion total, of which $11.7 billion PPI says was invested in the U.S.).  If ExxonMobil deserves "Investment Hero" status for its capital expenditures last year, it certainly deserves "Taxation Hero" status for its even much greater spending on taxes.  

Mich. Politician Objects to Tickets Selling for 10X Face Value, What About Tickets 10X Below Face?

Detroit News -- "A state representative said Friday he will introduce legislation capping the markup on tickets sold on the secondary market — in particular on websites like StubHub — at 10 percent above face value.

State Rep. Douglas Geiss, D-Taylor, requested a bill in response to a story published Thursday on DetroitNews.com, which showed ticket prices for the Detroit Tigers' upcoming seven-game homestand beginning Aug. 3 are, on average, listed at 17 percent above average ticket prices.

"It appears that we've got legalized scalping going on," Geiss said Friday. "There is a need within society for those with tickets that they can no longer use. But when you start talking about tickets with a face value of $100 being listed for $1,000 … that is usurious."

Geiss said after seeing infield box seats listed at 10 times face value on StubHub, he discovered Michigan case law allows venue operators to grant permission to resell tickets, but nowhere in the law does it permit the markup price on those tickets."
  
To Rep. Geiss: What about tickets that are selling for 10 times below face value, wouldn't you consider that to be as objectionable as tickets that are selling for 10 times above face value?  That is, if a ticket selling for 10 times its face value implies that the seller is "scalping" the buyer, then wouldn't a buyer of a ticket priced at 10 times below its face value be "scalping" the seller?  

Exhibit A: Some $52 face value tickets for the Detroit Lions-Cleveland Browns pre-season game tomorrow night (August 10) are selling for as low as $5 on SeatGeek and eBay.

Therefore, in the interest of fairness and to prevent buyers from taking advantage of ("scalping") sellers, would you consider including in your bill a provision that would cap the discount on tickets sold in the secondary market to 10 percent below face value, along with a cap of 10 percent above face value? 

Wednesday, August 08, 2012

Target Gives $3 Million a Week to Its Communities. Q: Aren't Its Prices Too High, or Wages Too Low?


The Minneapolis-based Target Corporation makes a big deal about its "caring for the community" and brags on its website and in its stores that "since 1946, Target has given 5% of our income - which today totals more than $3 million a week - to our communities" (see graphic above).   

Q1: Doesn't that mean Target is really overcharging its customers with "everyday high prices" in amounts that are sufficient to generate the $3 million necessary to give those dollars back every week to the very communities where Target shoppers live?  

Q2: Couldn't Target give the $3 million back to its communities more directly by just lowering its prices, or having more sales? 

Q3: Alternatively, if Target has $3 million every week to give back to its communities, doesn't that mean Target is really underpaying its employees in amounts sufficient to generate the $3 million extra it needs to give back to the very communities where Target employees live?

Q4: Couldn't Target give $3 million to the communities it serves more directly by just increasing its wages for hourly employees, who are members of "Target's communities"?  

Q5: What does Target mean by "our income"?  Isn't that really the shareholder's income, and why is Target management spending $3 million of shareholder income every week on community giving?  

Q6: Couldn't that $3 million per week be paid out in dividends to shareholders, who could then decide how best to spend their money?    

Bottom Line:  Isn't Target's strategy just a deceptive publicity stunt or public relations gimmick that allows it to overcharge customers with high prices and/or underpay its employees with low wages, under the guise of a "caring corporation"? 

I'd love to see this advertisement from a retail giant

"Our rock-bottom prices are so low and our wages are so high that we give money directly back to our communities daily through our "everyday low prices" and "everyday high wages."  We believe that's a more effective, direct and honest strategy of serving our communities than if we were to over-charge customers with high prices and/or under-pay employees with low wages and then generate publicity by bragging about how we give back 5% of our inflated profits to the community. Our goal is to cut out the charitable foundation middlemen with expensive overhead, bureaucracy, and administrative costs, and serve our communities by giving money directly to our customers and employees through low prices and high wages. Our commitment to publicized community giving is 0%, because we've already given everything we can through low prices and high wages, and after a normal rate of return for our shareholders, we've got nothing left to give back."  

Update: The chart below shows the performance of Target (blue line) vs. Walmart (green line) over the last five years -- Target stock has been flat (0% return), while Walmart stock has appreciated by 60% since 2007.  While other factors could certainly be playing a role in the financial performance of the two companies, we do know that Target was selling for about $60 in August of 2007 and it's selling for about that same price today.  During the same period, Walmart's stock has increased from about $45 to $75.  Judging by their stock prices, Walmart's "everyday low prices" is apparently a more effective corporate strategy than Target's strategy of high prices and $150 million a year in community giving? What might Target be selling for today if instead of spending $750 million over the last five years on charity, it had repurchased $750 million of its shares?       


Markets in Everyting: 3D Printed Fetus

Japanese company will 3D print your fetus for $1275

Wednesday Evening Links

1. Late Payments on Mortgages Hit a Three-Year Low of 5.5% in Q2, Lowest Since Q1 2009.  America's most economically successful state, North Dakota, leads the country with the lowest mortgage delinquency rate in Q2 for any state, at only 1.3%.     

2. If you tax something, you get less of it, French edition:

As French President François Hollande vows to tax income above one million euros at 75%:

"Many companies are studying contingency plans to move high-paid executives outside of France, according to consultants, lawyers, accountants and real estate agents. They say some executives and wealthy people have already packed up for destinations like Britain, Belgium, Switzerland and the United States, taking their taxable income with them. They also know of companies — start-ups and multinationals alike — that are delaying plans to invest in France or to move employees or new hires here."

3. U.S. cross-border truck trade with Mexico rose by 17.1% in May year-over-year to an all-time record monthly high of $29.1 billion, reflecting the steadlily increasing trade between the NAFTA members and growing consumption by the Mexican middle class.

4. Interesting interactive map from the EIA showing the energy infrastructure of the Gulf of Mexico.  

5. Chimera Energy Corporation of Houston, Texas, has announced that it is licensing a new water-less method for extracting oil and gas from shale fields that uses exothermic reactions instead of water to fracture shale.

6. Justice Department hits Gibson Guitar with a $300,000 fine over fingerboards.  




Why Taxpayer Subsidies of Solar Are Diabolical

From a "rare guest post" on Steven Landsburg's The Big Questions blog by David Bergeron, president and founder of solar-powered refrigerator company Sundanzer:

"Here is the real problem: Subsidies make solar appear viable today, so where is the motivation for an entrepreneur to risk money, or even focus on developing real energy alternatives when solar is “almost” there? How can an inventor justify striving with the effort it takes to really develop something great when he is competing against a straw man technology which can provide power at almost the same cost of traditional power sources today? But of course it really doesn’t.

The answer is he can’t justify the effort, so the next great thing is not developing, at least not with the sense of urgency it should be. Why enter a contest when you are competing against someone with an unfair advantage? You may be the faster swimmer, but your competitor is using flippers.

Solar subsidies are a placebo which is giving the general public a sense of security about our energy future and is robbing the motivation of those entrepreneurs that could actually address our energy problems. Subsidies are much worse that just wasteful, they’re diabolical. They lull us into thinking we have almost solved the problem and they hinder us from seeking the real solutions."

HT: Jon Murphy

Tuesday, August 07, 2012

$1.3B Greendoggle in Sen. Reid's Nevada: $4.6 Million per Job, and 4X the Cost of Fossil Fuels

LAS VEGAS (NEVADA JOURNAL) — "As U.S. Senate Majority Leader Harry Reid prepares to host his fifth annual National Clean Energy Summit on Aug. 7, a Nevada Journal examination of Nevada’s renewable energy sector shows that over $1.3 billion in federal taxpayer funds funneled into geothermal, solar and wind projects since 2009 has yielded and is projected to yield just 288 permanent, full-time jobs. That’s an initial cost of over $4.6 million per job.

Despite this, Sen. Reid continues to hype Nevada as the “Saudi Arabia of renewable energy,” even though the renewable energy subsidized with federal taxpayer dollars and mandated under Nevada’s Renewable Portfolio Standard costs consumers and NV Energy, Nevada’s publicly regulated utility company, up to four times as much as fossil fuels, such as natural gas.

Even with these government-granted advantages, the few clean-energy jobs in the state of Nevada are still precarious."

Read more here

June Job Openings Highest in Four Years

Highlights from today's Job Openings and Labor Turnover report from the BLS:

1. There were 3.76 million total job openings and 3.4 million private job openings on the last day of June, up from 3.65 million openings and 3.28 million, respectively, in May. The number of job openings has been steadily trending upward since the end of the recession in June 2009 (see top chart above).

2. Private job openings in June were at the highest level in more than four years, since May 2008, and total June job openings were the highest since July 2008. 

3. The overall number of seasonally adjusted job openings in June increased over the year by 16% and for total private openings by almost 17%.  Openings for government jobs fell by 12.8% over the year.

4. June job openings in the manufacturing sector were above 300,000 for the second time this year, a level of factory job openings not seen since 2007. 

5. In another sign that the labor market is slowly recovering, the number of private workers voluntarily quitting their jobs has been steadily increasing since the recession ended and been around the 2 million level for the last four months starting in March.  That's up by about 31% since the recession-related low of 1.51 million quits in September 2009.   

CoreLogic Home Price Indexes Increase in June for 4th/5th Month, With Highest Yearly Gains in 6 Yrs.


CoreLogic released its monthly report today on June home prices based on its Home Price Index (HPI), along with its new Pending HPI for July, with these highlights:

1. Home prices nationwide, including distressed sales, increased on a year-over-year basis by 2.5 percent in June 2012 compared to June 2011 (see top chart above). On a month-over-month basis, including distressed sales, home prices increased by 1.3 percent in June 2012 compared to May 2012. The June 2012 figures mark the fourth consecutive increase in home prices nationally on both a year-over-year and month-over-month basis.

2. Excluding distressed sales, home prices nationwide increased on a year-over-year basis by 3.2 percent in June 2012 compared to June 2011. On a month-over-month basis excluding distressed sales, home prices increased 2.0 percent in June 2012 compared to May 2012, the fifth consecutive month-over-month increase. Distressed sales include short sales and real estate owned (REO) transactions.

3. The CoreLogic Pending HPI indicates that July home prices, including distressed sales, will rise by at least 0.4 percent on a month-over-month basis from June 2012 and by 2.0 percent on a year-over-year basis from July 2011. Excluding distressed sales, July house prices are also poised to rise by 1.4 percent month-over-month from June 2012 and by 4.3 percent year-over-year from July 2011. The CoreLogic Pending HPI is a new and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes in the most recent month.

4. “At the halfway point, 2012 is increasingly looking like the year that the residential housing market may have turned the corner,” said Anand Nallathambi, president and CEO of CoreLogic. “While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half of 2012.”

MP: A few more of my own highlights:

1. For CoreLogic's HPI excluding distressed sales, the 3.2% gain in June was the largest annual increase in six years, going back to the summer of 2006. 

2. For CoreLogic's combined HPI (including distressed sales), there were 15 states in June with 12-month increases of 4% or higher and 7 states with 12-month increases of 6% or more (see map above), led by Arizona (13.8%), Idaho (10.4%), South Dakota (10.1%), Utah (8.3%), Wyoming (7.7%), N. Dakota (6.3%) and Colorado (6.2%).

Bottom Line: With almost every new real estate report, evidence continues to accumulate that the housing market has passed the bottom and is in a new cycle of sustainable recovery.  Look for ongoing increases in home prices during the month of July, based on CoreLogic's Pending HPI estimate of a 4.3% gain, which would be the largest 12-month gain in more than six years.