Say, bet’cha can’t guess what it is doing again here in East Texas this morning?
The National Weather Servicer has noticed, too: Record rainfall for the month in Dallas and we should find out how Houston came out too, later on today….
But it’s not quite over yet:
“Strong to severe storms are expected to develop over the southern High Plains Friday with large hail and locally damaging wind gusts the main threats. Scattered thunderstorms with marginally severe wind gusts and possibly hail are expected to develop ahead of a cold front from the Great Lakes southwestward across the mid Missouri Valley into the central Plains.”
Other than a cranky septic system, muddy roads, and crumby instrument flying weather, it hasn’t been too bad here in the Outback. We’ve got more magnolia and gardenia blooms than we’ve ever seen before.
Other people haven’t been so lucky.
And if this is climate change, it’s not too bad. I am taking up a collection to send Elaine and me to Brownifornia to put bird seed out. Elaine’s bird feeding is what set this all off, I swear.
Former GOP House Speaker Indicted
Former House Speaking Dennis has been indicted on corruption charges revolving around structuring of cash withdrawals to evade reporting requirements.
And yes, this case involves supposed payments of almost a million dollars to a female, perhaps from Hastert’s teaching days. More details will emerge over time.
But there are two things in play here. First is the nature of this is highly political, since payments to women are (in Washington….you kidding?) not exactly unusual. But the other thing to keep an eye on is whether Hastert actually broke the law.
As we have noted many times, there is a tendency for federal officials to take laws on the books today (very hard laws on structuring of cash transactions and using “structuring” to avoid detection and reporting) and applying them retroactively.
Of course, the lying to the FBI part? Just plain dumb on Hastert’s part, as I see it..
I don’t know how many times I have mentioned this, but in many cases, a defendant *(in this case Hastert) gets into trouble because they speak with authorities.
Here’s the classic YouTube lecture on point, in case you missed it…
I can’t say for sure, but I’m just guessing that the former GOP House speaker that wishes he’d spent a little more time on YT.
Could the case have been made without him opening his mouth? Nickel side bets are now open.
Restudy: Flood, Dresher, & Tucker’s work on prisoner’s dilemma…d’oh! Reread Nash.
Economic Ball of Confusion
(Go ahead, click the headline for the music track from the Temptations…)
So here’s the point of confusion is this: The economy like contracted in the first quarter, but the fundamentals are strong.
We’ve been watching this a lot more closely over on the Peoplenomics™ side of the house, but the long and short of it is that a) the US is in deflation and b) we are papering it over by simply printing up gobs and oodles of money so no one notices.
With the Federal Reserve’s money printing data out, we see how shoveling 8.1% more M1 into the economy over the past year – which in normal times would light off a bonfire of inflation – has been unable to move the Treasury notes far from the 2% level. In fact, the TNX (10 year) closed yesterday at 2.13% roughly.
So, what’s going on?
Well, I think the dynamic can be thought of this way: We have four percent deflation around. And we suspect that because the Money supply is up 8.1 percent, and we back out the interest rate on bonds, which says 6.1% inflation. But then you back out organic growth of the economy, maybe another 2 1/2% and you come up with about 4% deflation.
In normal times, that would result in business failures and all sorts of sand in the economic gearbox, but since the Fed is opening the back door and shoveling out grease (in the form of free money) wee haven’t had to pay the price.
The danger is that the economy is now in a new kind of balancing point, and all the doom and gloomers (who have been spectacularly wrong) will continue to be wrong until we get the final blow off which should occur (this is only a guess) in 2016.
So in the meantime, economic distortion is the order of the day. The market will open down this morning, but the market isn’t sure what to make of it either.
And while we see an ascending terminal wedge, which should result in a 5-10% downside move, there is enough distortion in the system that there’s no telling how it will all impact traditional economic measu405.6frements and forecasts.
On the other hand, if we are indeed playing the parallel to the 1921 to 1929 period, then this is late 1927 and the bulk of the blow off top is yet to come and that could be a doozy.
Then, when Hillary Clinton buys the White House in 2016, she will fulfill a historical rhyme of the Second Roosevelt (being the second Clinton) but with the twist that she will be the Herbert Hover bag-holder when it all falls down.
At least, that’s one construct present in Big Data of all this stuff.
BEA Data Confirms
You can see how this distortion is working out in the new Gross Domestic Product report just released here in the past few minutes:
Real gross domestic product — the value of the production of goods and services in the United States, adjusted for price changes — decreased at an annual rate of 0.7 percent in the first quarter of 2015, according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.2 percent. The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, real GDP increased 0.2 percent. With the second estimate for the first quarter, imports increased more and private inventory investment increased less than previously estimated (for more information, see “Revisions” on page 3). The decrease in real GDP in the first quarter primarily reflected negative contributions from exports, nonresidential fixed investment, and state and local government spending that were partly offset by positive contributions from personal consumption expenditures (PCE), private inventory investment, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
So repeat after me: Decrease in GDP means that deflation is really here. But shovel enough paper onto the fires of prosperity and no one will notice.
The market is working out a new money-fueled QE burn rate and it is causing economic distortion which has thrown traditional measurements off kilter.
It’s not (to borrow the Temptations tune) a “Ball of Confusion.” It’s the disorienting effects of being a locked in part of the old-style “Ball of Consensus.”
What’s really in play is a complex system achieving a new economic equilibrium…for now.
Dow futures down how much? -30 and the Dry Ships/Baltic Dry cargo index is stuck at 588 – about 2009 levels. Maybe the market is telling us “Could have been a lot worse…”
The reality is it probably is, but we can see it for all the mountains of cash.
Mountains, did I say?
Shakin’ and Quakin’
Spectacular blow off of a volcano in Japan reports USA Today over here. And we notice the Big Quake Jitters for May 28 paid off with a quake that has ping-ponged between 6.7 and 7.0 (depending on report time) up in the Aleutian Islands this morning in Alaska. Details on that one over here….
Keep an Eye On…
Russia masses firepower on the Ukraine border. What day of the week would you pick to start an invasion?
Your Ukraine news is linked to ‘Ukraine Today.’ Do you really think that publication is going to provide objective views?
I listen to as many sources as I can include faux snooze and vee o ae and read press dept briefings. lol
When the earthquakes hit CA – please let me know.
Tell me again what deflation is – all I see is inflation at the grocery – and the price of gasoline/push water is failing to do more than increase- around here about 5¢/week (now up to $2.75 – yes it’s been higher – it appears we are climbing back up that ladder). Watermelons – which are grown profusely around here – are between $4.75 and $5.45 – and yes – you can find a few along the side of the road from a few ‘home growers’ for $4. Much of the cost i’m sure is paying the migrant workers – most of whom speak some form of Spanish and are here on green work cards.
Hassert’s payee is a man not a woman….go figure…he’s been married since like 1974.
About that M1, money has got to be spent to affect demand and thus, cause inflation. The money “holders” ain’t no fools. Hard times are a comin’. Better to have a cushion than let John and Jane Doe of the hook.
So if history rhymes, is it possible the stock market is rhyming with the German stock market and not the U.S.’?
Went to the UT site and read the article. I used to have some respect for Reuters, but in the last several years, they’ve proven themselves, like most of the MSM, to be instruments of mass deception. If they(Reuters)can observe said goings on, why no pictures? This smells alot like the Russian non-invasion of the past year. If this was indeed happening, as presented, I cannot imagine NATO/US passing up the propaganda opportunity to show same said with sat intel. To me, this is as damning as the lack of sat intel ala MH17. As Oilman2 alluded to the comment section of the article he referred to the other day, the comment section there was as enlightening as well. A post there actually thinks that more sanctions against Russia is a good idea. Do they think Putin would really let such go unchallenged? Ask EU farmers about that…or even international bankers. Putin is no angel, for sure…but he’s lilly white compared to IMF/NATO.
Did you see the leaked letter for the peace prize? Trying to force the committe to give it to the pres of Ukraine?
“Then, when Hillary Clinton buys the White House in 2016, she will fulfill a historical rhyme of the Second Roosevelt (being the second Clinton) but with the twist that she will be the Herbert Hover bag-holder when it all falls down.”
True, that. From many years of experience handling the heavy lifting of budgeting and planning in larger organizations, I’ve noticed that whenever a woman is given a visible, plum position there is usually a backstory. Mostly, they follow a guy that has so hopelessly messed up the structure of the position that it is no longer functioning, and none of the guys in line to take it will want it, as it’s not a winning proposition. So, they give it to the gal, and she’ll work double hard to be successful, and sometimes, the gal will pull it off. If not, they’ll point and say “look, women aren’t cut out to lead.”
So yeah, none of the guys ‘running’ are really intending to win, they are there to take $$ advantage of the campaign process, and Hill will be working really hard and left holding a bag of failed country and lots of bucks from her backers.
I’ve been giving your water issues some thought. What would it take to transport excess water from Houston to LA?
Tanker Truck
Max Capacity 11,600 gallons
Mid Capacity 5,500 gallons
Min Capacity 3,300 gallons
Average: 6800 gallons or 909 cu. ft.
Distance Houston to LA 1547 miles
Trucks get about 6.5 miles/gal of fuel
Avg price of Diesel 3.129 / gal
Fuel Cost about $745 per load
Also need special vacuum equipment to suck up water into the trucks in flooded areas
Need driver(s) per truck and assume they can operate the vacuum/offload process.
Need foreman to oversee operations.
Need coordinator to get the trucks to the right flooded places and then track them as they travel to LA or wherever.
Water will have to be delivered to treatment plants , will that cost extra?
Who can broker the deal from each side? Buyer/seller
Governments being what they are, by the time you work out who can buy/sell and what the final cost will be and who will pay it, the water will be gone. Even if you didn’t ship it out of state, but just transported it out of Houston to a surrounding area with holding tanks or reservoirs, then at least the water would do someone some good. If everything is a business model, how come no one has done this yet?