Forget Jobs: Is the World Ending?

imageYeah, yeah.

We will get to this morning’s jobs report in a sec.

But first, a number of readers have asked me whether the world is ending.

The answer, I’m afraid, will not be very satisfying.

The main attention-getter seems to be the Baltic Dry Cargo Index.  That index as of this morning stands at 298. 

To put this into perspective, we know that when the economy has been percolating along in the past that this index has been previously in the 1,000 and higher, level.

There are likely two things going on here:  First is the economy is experiencing another near-death experience.  As explained yesterday, you don’t have a percolating economy unless you have growth.  To have growth, however, government has (stupidly) put us into a box.

We have trapped millions of young people in the New Vicious Cycle:  Can’t get job, so can’t pay college loans.  Since the jobs they are finding pay terribly, they have to spend every dime on mandatory health care.  Everyone knows healthcare for American could be 20-50% CHEAPER if we we cut the insurance companies out of the middle of it…but no one in Washington, which we call the District of Corruption with reason, is willing or able to do anything because the insurance types are like the unstoppable force in physics.  If you want to get re-elected….and so it goes.

So the normal recovery from this mess is not happening yet.

Since people are seeing disposable incomes decline (a fact papered-over in nonsensical government schemes to count paying off your car as “savings” and such) there is not much going on.

In 2008, the labor participation rate was about 66.7% and unemployment was 5.5%.  We’ll get to this morning’s report in a minute.  But the main thing to focus on is quality of jobs.

Now back to this cargo thing:  Yes, the Baltic Dry is screaming “End of the World!  Everyone Flee from Street!”

But there are some important differences between now and 2008.

I don’t know how many transportation companies you’ve been in senior management of.  My only experience was in the airline industry.  But here, the cost of jet fuel was about 50% of costs.  And some portion, perhaps 7%, was in the debt service of a couple of tax-advantaged off-shore leases.

Here’s my first point (I know, you’ve been waiting patiently):  In summer of 2008 the price of oil was running $145’ish.  This morning it is in the $33 range if we split the difference between West Texas and Brent. 

A little simple math: The cost of oil is 23% (22.75%, but it’s easy so we don’t mess with decimal points until after noon, or so) of the 2008 level.

And when we look at long-term Bond rates, the 10-year was running right around 4%.  Today, the 10-year is 1.86% (*although this is all hopelessly simplified).

Another measure in the HARPEX container index.  This one hasn’t taken out the 2009 low  of 275.  Instead, it is edging up and down to the recent lows of 383.  In a really hot economy, talking 2007-2008 here, this index topped 1,400.

Now, a really great indicator that we talk about with subscribers over on our www.peoplenomics.com site is the Association of American Railroads’ Rail Time Indicators report.

WASHINGTON, D.C. – Feb. 3, 2016 – The Association of American Railroads (AAR) today reported weekly U.S. traffic, as well as volumes for January 2016.

Carload traffic in January totaled 968,042 carloads, down 16.6 percent or 192,747 from January 2015. U.S. railroads also originated 1,039,621 containers and trailers in January 2016, up 3.4 percent or 34,523 units from the same month last year. For January 2016, combined U.S. carload and intermodal originations were 2,007,663 down 7.3 percent or 158,224 carloads and intermodal units from January 2015.

In January 2016, four of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with January 2015. This included: miscellaneous carloads, up 45.2 percent or 7,409 carloads; chemicals, up 2.1 percent or 2,615 carloads; and motor vehicles and parts, up 3.9 percent or 2,435 carloads. Commodities that saw declines in January 2016 from January 2015 included: coal, down 33.3 percent or 150,658 carloads; petroleum and petroleum products, down 19.4 percent or 12,037 carloads; and crushed stone, gravel, and sand, down 10.3 percent or 8,475 carloads.

Excluding coal, carloads were down 5.9 percent or 42,089 carloads from January 2015.

“Intermodal was solid in January, but carload volumes weren’t what railroads were hoping for,” said AAR Senior Vice President of Policy and Economics John T. Gray.  “By all accounts, rail service right now is excellent, but volume just isn’t there.  At some point, the problems currently plaguing the energy and manufacturing sectors — low oil prices, a strong dollar, uncertainties in emerging ?markets — will sort themselves out.  When that happens, railroads will be positioned to provide safe, reliable service.”

I highlighted the number that matters because a good bit of traffic change can be chalked up to the Obama administration’s beat-down on the coal industry (which makes no sense, in terms of coal pollution compared to China, Volcanoes, and Porters Ranch and the fact that democrats used to be big with unions…) which reduced some of the numbers.

The other big factor is that inbound cargoes from Asia aren’t hardly down coming through West Coast ports.  Where the ass-kicking is taking place is on the export side.  And that is because of the familiar old complaint here about how the U.S. isn’t producing much besides porn, social media, and hot air anymore.  I point to the presidential mess, as a major point-source of hot air in global warming.

While it is true that the economy is not growing as much, there are lots of other factors in play here.  Since the odds-on favorite in terms of “Economic Solutions” is blowing over into the QE4 column and since negative rates of interest are effectively here, we may be able to set up one last minor blip as money should come pouring into stocks at some point to help the democrats in time for fall.

It’s next year we have to worry about.  The elections will be over, the QE4 pop will be gone.  The pushed back payoffs (higher rates) to the greedy bastards of the Insurance Industry will be done and come home to roost.  And whoever wins in the election should be a republican and go through a major historical rhyme of how Herbert Hoover’s presidency worked out.

In the meantime, the market is poised to put in a double-bottom on the supporting trend lines of our proprietary Aggregate Index work (which no, is not a freebie, sorry; subscriber’s only).  But from there the clouds should part and the QE4 commeth.

The only real question is what happens with all the chickens come back to roost (and crap on us) next year.  This is all about “holding the bag” and if our read on things is anywhere near it’s usual 20-15 and well in advance perspective on things, it will be a very special bag for the bag holder.

It will be a genuine, Made in America colostomy bag.   

But in the meantime, stocks (by the S&P) have been down 15% while real trade is down around 6%.

Now, spray some Lysol around and let’s return to the Big Deal That Isn’t which is the morning jobs report…

Jobs:  Like this Matters?

Somewhere north of 94-million Americans are not in the labor force.  Which is patently absurd until you figure that by the time you put a student loan on hold, pay for Ocare, and get something to eat, a lot of people have figured the math out:  They’re better being on welfare than working.

Which gets us to this morning’s fairytale about how the jobs picture looks;

Total nonfarm payroll employment rose by 151,000 in January, and the unemployment rate was little changed at 4.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in several industries, led by retail trade, food services and drinking places, health care, and manufacturing. Employment declined in private educational services, transportation and warehousing, and mining.

Both the number of unemployed persons, at 7.8 million, and the unemployment rate, at 4.9 percent, changed little in January. Over the past 12 months, the number of unemployed persons and the unemployment rate were down by 1.1 million and 0.8 percentage point, respectively. (

Among the major worker groups, the unemployment rates for adult men (4.5 percent) and Whites (4.3 percent) declined in January. The jobless rates for adult women (4.5 percent), teenagers (16.0 percent), Blacks (8.8 percent), Asians (3.7 percent), and Hispanics (5.9 percent) showed little change over the month.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged in January, at 2.1 million, and has shown little movement since June. These individuals accounted for 26.9 percent of the unemployed.

After accounting for the annual adjustments to the population controls, the civilian labor force and total employment, as measured by the household survey, were little changed in January. The labor force participation rate, at 62.7 percent, was little changed. The employment-population ratio (59.6 percent) changed little over the month but was up by 0.3 percentage point since October.

The cynical restatement:

1. The number of people working and portion of population working actually improved.  Again, this gets back to what I was saying a minute ago:  The world hasn’t ended.  That’ll be along in a year or two.

2.  On the other hand, the Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force remained at 9.9% so good luck getting a job that will pay enough to have both healthcare insurance AND pay back a student loan.

You ever ask yourself “What would anyone in their right mind run for office when things are only likely to get worse from here?”

Well, either they are not in their right mind, or they believe in borders, or they want two seats on the Gravy Train.  Some want a whole private car on the Gravy Train.

Futures are down a tad, week is likely to see the S&P finish lower than a week ago.

We Have No Borders – or Leaders, Either

With the reports this week that the Obamanation has implemented a final year “catch and release program” meaning anyone (including foreign terrorists) can come to the remains of America unimpeded by the border, a thoroughly intriguing question wanders by:

If the Republicans are a real separate entity from the corporate paymasters and their democratic henchmen, where the hell are the impeachment hearings for disassembly of our borders?

The answer was included in the comments:  corporate paymasters.  And republicans who are spineless corporate suck-ups.

For what it is worth, however, here is a Google news search that shows the unthinkable has already happened in America:

The search term “catch and release” – once the exclusive term of a group of environmentally aware sportsmen, has not fallen to second place in language use behind the references to catching and releasing illegals.

Can I have we have our country back at some point, please?    <WTF?>

FPS Disease Outbreak

Yes!  That stands for Further Political Stupidity disease.  Latest outbreak was in New Hampshire and it seemed to strike infected democrats most seriously.  A report on the outbreak here.

But the finest and purest of clear thinking ended up coming from one of our readers who makes a fine point which I couldn’t have written better myself:

“George-
The two posts on Julian and Hil(arious)C and her 6 (66) got me wondering, so I ask the question:
What is the essential difference between Hil and Ed Snowden?
1. They both allegedly mishandled National Security data
A serious FELONY!
2. They both allegedly left top secrets open to the public
3. They allegedly have some relationship with Russia-
whether it is high priced speaking engagements via
state department aegis and hubby’s foundation, for
Russian audience, or just laying low there with no
passport.
4. One has the weight of the entire intel/USG against him
t’other has it behind her.
What’s wrong with this picture?”

This is an example of why we encourage readers to post comments. 

The thing is, this is such a lump of steaming you-know-what that it is overwhelming when we nibble on the problems individually.  But if we all contribute reasonable insights – like this grand one above – then we do have a chance to save at least the remnants.

I keep waiting for Texas to exit the Union as provided for by Law.  Lots of northern liberals joke about having to carpet bomb the Lone Star State should that ever happen, but please check your maps on where Pantex is located.  Ya’ll might want to rethink a bit.

Besides, all that crude in the Dakotas lacks a little thing we have in Bay Town, Midland, Tyler, Houston…hell, all over the place:  Refineries.

Malpractice Lawsuit Considered

Personal note here:  Ure’s truly uses asthma medication – have for 60 years.  One of the meds is called Q-VAR.

Well, this year, it is not on my drug insurance outfit’s “formulary” so they don’t want to cover it. 

They sent a letter to that effect and recommended something called PULMICORT.

Here’s the key thing:  Letter was signed by a pharmacy fellow.

So the interesting concept here is this:  Can I file suit or a complaint to enjoin the insurance outfit because they are practicing medicine without a license here in Texas?

I pay (and pay and pay) my doctor to make those kinds of decisions (which meds), but when insurance companies start to prescribe seems to me they cross a regulatory line and should be called on the carpet for it.

I was a customer of the same outfit last year and it was covered.  This year, they changed their formulary and now want to tell my doc how to do his job.

You see, these pricks (and prickettes?)  in the insurance biz aren’t just passing out favors in Washington, they are getting away with practicing medicine without a license, as I figure it.

I’ll remind you of this next year when the Obamacare prices beat NASA into space.

Comments

Forget Jobs: Is the World Ending? — 32 Comments

  1. You were right on the money with your latest earthquake prediction. The 6.4 quake last night in Taiwan was it.

  2. I thought Texas could legally legalize marijuana because y’all fly the Texas flag the same altitude as the US flag, indicating your equality with the Union. Forgot about the civil war. Also I learned that the KKK is in charge of Dixie and Hawaii that’s why marijuana is illegal here, even though 57% of FL voters voted to legalize, they lost the referendum.
    I support a law to greatly reduce the noise of back up beepers, they are louder than the construction itself, and workers drive the Lull in reverse all day! The new beepers are louder and make a pulsating noise.
    I’m thinking if she of whom we don’t speak gets in, then the establishment works to keep the US ponzi scheme going, if Bernie or Don get in, then the ptb will work to finish the destruction of the US to remove the Constitution and our rights.

  3. re: private insurance. Not that I’m voting for Bernie, but he’s onto something here. Single payer seems to be working out pretty well for the rest of the industrialized world. Our private insurance system also put American businesses at an enormous disadvantage. Why do people hate Obamacare but love the Affordable Care Act?

  4. You have hit the nail on the head with the formulary question–Liability. A doctor is liable for malpractice if his/her prescribed therapy does not work, or is found to not meet established standards of therapy. Why shouldn’t insurance companies be liable to the same extent when formulary restriction results in death or injury? This kind of thing has been happening for years. For example, Dopamine and Dobutamine used to be prescribed to congestive heart failure patients in the final months of their lives. It did not prolong life, but it made the heart beat more efficiently for the time remaining, and allowed them to live at home and not, for example, gasp for every breath in their final months. Coverage was discontinued because these meds do not prolong life. So if you have end-stage CHF, you may find yourself drowning slowly as your lungs fill with fluid…

    As for Q-Var, you and your doctor can write the insurance company to request coverage anyway. If you try Pulmicort, and your Doc’s opinion is that it does not work for you, Insurance may cover Q-Var, for you. Just another hoop that all of us have to get used to jumping through. :-)

  5. George, are you missing the fact that the reason the Republicans are doing nothing is that all the top ones are being blackmailed, by the admin of course? Or are you just not wanting to talk about it?

    It is not a secret and has gone on for quite a number of years. This is why Roberts makes unconstitutional decisions, as an example.

  6. Well, does the whole human race have another 15 years left? Not according to Guy McPherson : https://www.youtube.com/watch?v=SQxYmVrSrcI And like I have said, the Pacific is dying. Reports of carcuses littering the sea bed at 100 times normal. Sea birds now dying at unprecedented rates, starving because their prey has died off. https://www.youtube.com/watch?v=j_xl9rlxyfQ Not to mention whales and other sea life. Is it Fukushima radiation? I don’t know. Is it elevated water temperatures? idk Am I just overreacting? I don’t know. I guess we just have to wait and sea.

  7. this quote of 94 million not in the labor force is an exaggeration of the situation. how many were not in the labor force before the recession? only about 15 million less

  8. I would think HIPAA law maybe a better way to address the issue, who is this rep., and how is it he has you name, drug and address.

  9. Donal Trump for president? Are you our of your mind? I’m voting for Bernie. No, I’m not voting for him for any freebies. I have all I need and then some but I do think the younger generations need a person with integrity and I believe he is it.

  10. Hi
    What Obama should do is pardon Hillary and Petreaus and Broadwell claiming that they were politically motivated “witch hunts” and nothing more.

    . Of course Hillary doesn’t want a pardon right now because it would weaken her Whitehouse bid. Old time conventional “wisdom” suggests that whomever has momentum coming out of NH and Carolina will be a strong contender for the nomination. If Sanders can win in the South anywhere Hillary might need the pardon as a “lift” in the polls, as she would be able to portray herself (and Broadwell) as “victims”.

    I think you could even see draft Biden make a strong comeback Look I know that my view is just out there but honestly things currently don’t look good for a Hillary bid.

    I will say this is really turning out to be interesting.

    You know George I was thinking of donating one whole dollar to your campaign bid but then I realized you have spoken out against out of state (and foreign) campaign donations I expect you to take a firm stand so I’ll just use that whole dollar as a “contribution” towards my next cup of coffee. Sadly, one dollar won’t get you half a cup of coffee anymore.
    Cheers
    Steve

  11. I find it interesting that ‘the doomers’ including Cliff Highs web bots were claiming ‘collapse’ some years ago in the 2009-2012 range. Now here in Feb 2016, people including this web site are claiming that the real shista will not hit the fan until 2017. Well, they were a bit early before, now their prediction is going to be late. I think the economic wheels will come off well before November 2016. I think everyone including the MSM assumes the Fed and .gov can hold off the collapse. That’s going to be the surprise of 2016. Fed and .gov out of ammo. It’s here ladies and Gentlemen. Coming to your city and community.

  12. I literally burst out laughing when scrolling news headlines and caught this one from the NYT, “Wages Rise as US Unemployment Rate Falls Below 5%” – these lies ought to be obvious to just about everybody by now.

    “In a time of universal deceipt truth telling is a revolutionary act.” ~George Orwell

    Thanks for being a revolutionary, (other) George

  13. Hawaii’s largest health insurer is doing some ‘cost cutting’ on medical imaging by requiring doctors to get ‘pre-approval’ for imaging. The insurance company refers imaging requests to a consulting company, which often recommends alternate medical treatments instead of imaging. Doctors here are up in arms because it:
    1.) slows treatment regimens
    2.) amounts to ‘practicing medicine’ by a remote consultant.

    Emergency rooms are exempt from this insurance rule, so the net result has been an increase in Emergency Room treatment for imaging results, and higher insurance costs in the long run.

    Catch-22… damned if you do…

  14. Student loans NEVER go away, welfare is not enough to keep up with the vig. Owned by the banks…

  15. I have been watching a semi-cute show out of the UK on Netflix called “Doc Martin”. Basically – the show is about a small town doctor placed in a town to be “their doctor”. People basically walk in and get treated. No insurance activities. Seems like a viable way to go and with a good doctor on the job, people get treated. It’s what I would call a “semi-dark comedy” show and I think George and others might like it.

    I would love such a situation. Limited Health Care oversight and generally an idea of “let’s keep people healthy”. The amount of dollars spent on compliance, regulations, IT infrastructure, HIPPA and more here in the USA amounts to what, 10-15% of our GDP? We could save so much and yet possibly live better with a simpler model.

    • There ARE doctors, right now, across America who are following this model, they are everywhere. They prefer not to take insurance, want payment up front, many times it is cheaper for you and better for them as they get paid right away instead of the insurance riga-ra-mole. All labs are cheaper, too, AND these doctors spend more time with you. You just have to shop cheapest vendors for prescription drugs.

  16. George,
    speaking as a Native Texican, when the Republic of Texas entered the Union, it was given the Right of Secession. But when Texas left the Union to join the Confederacy, that right was lost in the ensuing civil war. Texas was readmitted to Union following the Battle of Appomattox but only as a state, and therefore no longer has the right of secession. For Texas to break with the US now would be civil war.

  17. Poor George, still hoping the opportunity for a good decision to show up that he can feel good about.

    America, the country where there are no longer any good decisions to be made. Martha, bring me another serving of that gol dang cognitive dissonance, will ya!

    Just remember, it’s called government because it governs your life. Don’t delude yourself that just because they are not directly screwing with you means that it’s ok. Just means that they see you as too small to save. They demand your obedience. They don’t need your taxes, they can print as much money as they want.

    That’s how it looks from Ecuador (and elsewhere outside the USA).
    Just because you can’t see it, doesn’t mean that ts not true.

  18. Just give me an Executive Order to open Obama’s undergraduate records and we can get rid of all of this nonsense he has supposedly accomplished and then we can go after the vetting committee……….

    • what is funny is he only gave executive orders on thing congress has already approve and what a couple hundred less than other administrations

  19. The question that begs to be answered is can Trump get by the class issue and my bet is that he can’t, for when he goes out to dinner its not with a person of the working class but one of the 1%,as the head of U.S. Steel told Bobby Kennedy when he went after them for price fixing “your a traitor to your class” and that hasen’t changed.!!

  20. Can I file suit or a complaint to enjoin the insurance outfit because they are practicing medicine without a license here in Texas?

    Call your fellow texan Randy Kelton tonight during the 4 hour part of his show. 1-512-646-1984 http://ruleoflawradio.com/ If Texas has pre-lawsuit discovery you could use that to figure out the exact relationship(s) of the letter-person to the medical establishment.

  21. “”””Forget Jobs: Is the World Ending?”””””

    Now.. my prediction several years ago now was that this year would be the year of seesaws. market up market down.. spring up fall down.. till the election..then when the new administration walks through that door.. down the well lit hallway all the while president Obama is congratulating him on a campaign well fought .. ( tag your it) Then the new president will sit in that comfy new chair flip open the books.. and realize.. all that stuff that no one at all had a moment to read any of it just the quick synopsis on the cover..will come to full light and he will know we are in a world of deep muck and little room to move..
    Now for my push on the Donald Trump for president.. sure he can be obnoxious and outspoken at times telling it like he sees it. he does think he is the best and conceited not always politically correct but he is a good businessman he would have a team of people reading the stuff no one in DC wants to read.. he is a billionaire..and it is in his best interests to bolster America and make it great once again.. other wise he faces holding onto a pile of paper that is just that.. a pile of paper not backed by anything at all but a promise from some guys wearing tight polyester shirts and bell bottom suit pants .
    there are countless stories about people with baskets of gold and silver trading for food.. and wheel barrels of money used to buy a loaf of bread.. trillions of dollars of money to buy one ounce of gold.. etc. etc..
    so when the new administration heads to office.. to stave off the upcoming problem .. we can go to war, keep printing.. ( war makes money) fold go bankrupt.. ( oh didn’t our leaders give the ones they have been giving all this money the right to take over property) this is where the donald comes in.. he would embarrass congress enough that they would have to go to work.. repeal some of this stuff that they passed and start working on our economy forget what someone is doing in some oil field someplace else..stop the influx of immigrants and stabilize and rebuild our country for a change.. https://keripeardon.wordpress.com/2013/06/01/wheelbarrows-of-money-and-the-weimar-republic/

    • I would be careful mentioning the Weimar Republic – remember what followed . . . and HE was said to have made the railroads ‘run on time’ . . . populist leaders with so-called corporate backing, but little actual government experience do not have ‘good outcomes’ . . . Successful governance comes from co-operation, not dominance.

      • exactly…. and because our congress has stopped reading or writing the laws they have passed and given into being controlled by the very wealthy.. they have already laid the groundwork for just such a thing happening.. rand Paul didn’t stand a chance standing beside the constitution, and Bernie well his is all for the building of the base the middle class and poor so they can lift the top to new heights.. leaving us with Donald who will embarrass them enough to actually see what their desks looks like and go to work..