No, we’re not talking about Florence here, when we talk about the Big Blow-Over. No, we’re pondering if and when the economy which has been in a massive recovery since 2009 will finally hit its zenith and will begin the next cyclical decline.
Thing is – and I’ve mentioned this to your before – there is a semi-regular 11-year cycle to recessions. Though, if does move around a bit. Since the markets hit lows in the April-May 2009 area, we can tack on 11-years (roughly the Clement Juglar and the sunspot cycle) and estimate that 2020 is a great target to be thinking about when to be “street and dislocation-ready.”
For now, we’ve got fresh storm clouds on the horizon. Retail sales figures just released by the Census Bureau this morning:
We’ll get a little better “bead on things” when the Fed releases the Industrial Production and Utilization report here in 45-minutes, or so.
Despite the drop in autos, there was some good news on foreclosures recently. “CoreLogic Loan Performance Insights Find Overall U.S. Mortgage Delinquency and Foreclosure Rates Lowest for June in 12 Years” and there’s also been something like a 6.2% increase in home prices.
On the other hand, we could be at (or nearing) the cyclical low in delinquencies. CorelLogic’s reference to rates being at “their lowest in 11-years” locks us back into that 11-year cycle thinking.
If auto sales and retail can spring-back, there’s a case for a Dow soaring past the old record. 26,616 isn’t that far away.
Thursday, the Dow surged almost 150-points and this morning – before the release of the Retail sales figures, futures were suggested another 50-points. That’s dropped to 30-something after the data.
Where’s “The Big Crisis” that will arrive and derail things? We’ve got a couple of candidates:
- Word that Special Persecutor Robert Mueller has come to some kind of deal with Paul Manafort…which could set up the long-speculated Constitutional crisis in America. With the rest of the world’s major economies looking “long in the tooth and arguably done with 5-wave advances (Elliott) since 2009) the US has been running counter the trend with a strong dollar. That’s why gold looks to cheap. Strong dollar. But, when you toss in a Constitutional Crisis…Well, that’s when foreign investors begin to rethink what’s been the Trump Bump.
- Dirty Politics in America could scare-off mostly rational foreign investors. When you think about our country from the foreign perspective, there’s been a mass polarization with an “Impeach Trump” agenda even though two-years in, there’s been no evidence of Trump involvement with Russia – which was supposed to be the reason for the probe. Not two-bit tax charges and process crimes. While the Greg Jarrett book on this whole charade is selling well, the Big Picture is found in an older book worth your time reading: “Three Felonies A Day: How the Feds Target the Innocent.”
- Today, with reports that Diane Feinstein is holding a damning tip letter from a constituent about Supreme Court nominee Brett Kavanaugh (which has a fake dossier ring to it, to our ears), we wonder how low the political class will sink in their unending efforts to stop the Trump agenda? When it happens – and when the articles of impeachment come (perhaps right after the election or in January as a time-frame) who would leave their future invested in a country where politicians will be holding the financial class hostage?
For all Americans, the problem today is “Where can I put my money where it will grow as something even a tiny bit better than the inflation rate?”
Retail gives us one answer, I think. Since putting money in the bank is a sucker’s game (purchasing powers goes down faster than interest accumulates these days), people are buying things for the future. Want a UHD TV? It’s a damn good bet that it will be more expensive next year than whatever present prices are. If the US dollar stops rising, it will take more dollars to buy foreign goods. Domestically, this change in foreign exchange rates looks like inflation. Which it is, but it’s the source of inflations (Keynes general rise of prices) that matters.
On the Crooked Minimum Wage
Wage-driven inflation is something else. That’s one of the Obama notions (he’s welcome to take credit for it): Raising the minimum hourly wage on some federal projects. Let me show you something about minimum wages:
Now we can use the Fed’s inflation data to see where the rate should be today…just to have kept apace inflation:
- The 1997 minimum wage adjusted for inflation should be $8.05 today.
- The 2007 raise to $5.85 works out to just $7.07 in today’s money.
- $6.55 in 2008 works to $7.62 today.
- And the 2009 increase to $7.25 should be paying $8.46 today.
“Wage Characteristics of Workers” (BLS, 2015) says in part, “Among those paid by the hour, 870,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.7 million had wages below the federal minimum. Together, these 2.6 million workers with wages at or below the federal minimum made up 3.3 percent of all hourly paid workers.”
The sad minimum wage continue to shine as a beacon of how the Political Class has screwed the Working Class. Where’s #metoo on this one? Why, there’s been more screwing here than you could fit on Drudge!
In 1956, for example, the minimum wage was $1.00 (this is back when a dollar could still be exchanged for silver specie, by the way).
Adjusted for inflation (and just that the government admits to and can’t “factor out” – the min wage should be $9.21 today.
The $1.15 minimum wage of 1961 pencils out to an inflation-adjusted $9.63 per hour today.
And the $1.25 per hour in 1963 forwards to present day at $10.22 an hour.
While a lot of republicans are whining about Obama, he (perhaps inadvertently?) got a few things right.
Until America gets an honestly adjusted minimum wage – which we’d reckon would be around $11 dollars now, a couple of really clear conclusions jump out of the data, none of which make us very happy.
1. The US hit Peak Prosperity (by this measure) in 1963. That’s when people’s work was most highly-valued and while single working heads of household could get along pretty well and one parent could stay home and provide for home-trained VALUES that made for a great generation – the one that went to the Moon and such.
2. It also means that while the socialists have really been talking mostly hate and mostly division, they do own a major issue that they’re not playing well: Economics for the lower class.
We could go on, but if you get those two facts clear in your head one more implication may be true:
3. While the local lefties on the Left Coast may seem extreme with things like Seattle’s $15 an hour min wage press, the data says they’re at least more honest than the Crooks in Congress who have abandoned minimum wage adjustments for almost a decade’s worth of inflation.
When that kind of thinking starts to spread, the old-line, corporate bought-and-paid-for republicans might actually have to find honest work.
A simple calculator suggests they’re not qualified for any honest jobs, however.
Stormy Pictures
No, not her…the storm that’s sitting at this hour right over the Brunswick Nuclear Plant in southern North Carolina:
Had an interesting idea someone should market: A small, blow-up, push in front of you sturdy blow-up push-boat. Something that would be a 3-foot square that you could put some critical grab-and-go stuff in. With a keel of some kind so it would be easy to push straight, a cover, and which would be cheap enough to be mass distributed in advance…,
Tell someone at Amazon. I bet it would make a hell of a globally useful Amazon Basics product as Hurricane Florence leaves hundreds of thousands without power in North Carolina.
And in Other…
Critical health note to be aware of: 3 die of breast cancer after receiving organs from same donor: report.
Here we see the need for a border wall…again: Illegal immigrant charged in stabbing death of 16-year-old girl, report says. Illegal alien isn’t PC, by why aren’t the libs defending the dead and maimed?
Passings: Volkswagen Beetle to end production in 2019. We can pretty clearly see a dune buggy shortage looming…
And as if we didn’t know all politicians are a joke? No joke as ex-comic becomes Slovenia’s new prime minister. Again, the world catches up with America.
Moron the morrow – got a couple of prepping articles about pirate radio and music at the end of the world on tap…
Dear abq joe: Remember the Battle of the Bulge. General Patton had 3 days to get there or all would have been lost. Europe will fold like a tent as Russia moves in rapidly with millions of tanks, helicopters, war planes, & troops. Every second will matter because all the easy European entrance points will be blocked. We don’t need another D-Day.
I escaped the worst of Hurricane Florence. I still have power. The only damage so far is my free standing basketball net in the front of my house (which is very heavy) was blown out into the street. Good thing I live on a Cul De Sac. The Shelter Logic “Shed in a Box” which I set up as temporary storage while I expand my Main Shed is still standing. I only anchored it with the 15″ stakes that came with it. They recommended 30″ stakes.
Update: My Shelter Logic “Shed in a Box” is destroyed.
Great column today. But, on the Big Crisis…The dirty politics is prevalent because of Trump. I will say this again. Trump is not smart enough…but the people around him, who he didn’t vet or have any idea existed prior to their appointment, are very smart. They are the real PTB…and they are in charge. They know that Trump is clueless and just by stroking his yuuge ego, they can control his every being. A compliment puts Trump in a hypnotic state.
On the 16 year old killed by an illegal immigrant. Before we go there…let’s talk about the 66 people that were shot and 12 that died in one weekend August 3-5 in Chicago. Not an illegal amongst them. Just Americans shooting Americans. We recently were in Mexico and there was a story about a couple of killings near Playa De Carmen a week or two before our trip there that caused a travel warning. Friends and family thought we were crazy for going there. We went anyway and have never had a more quiet and peaceful vacation. We spent some time in Playa De Carmen as well town and had a wonderful experience. So I had to laugh and put it in reverse perspective. When the daily killings that occur in Chicago, St. Louis, Detroit, Baltimore, Newark, NJ and even Trumps backyard of DC, historically the most dangerous cities in America…do other countries issue a travel warning on us?
The thing about the Trump administration…Their M.O. is to justify the stupid things Trump says and gets himself into. The wall is one of those things. When a story like a 16 year old girl getting killed by a “illegal” hits the news, Trump is wagging the dog To make him and only him look good. If he really wants to make America great, let’s take care of American thieves and murderers first. I know a lot of illegals…many of my American born contractors on our house flips hire them and they are incredibly hard working, always on time, and extremely skilled. Not a bad egg amongst them…and they work for a little less of course, which helps increase our margins. In addition, I couldn’t afford fruit, almonds, lettuce and all the healthy produce we eat without them. I could name a million more examples of how from corporations to people like me are dependent on theM. Are some bad? Of course. But percentage wise…compared to American born and raised thugs and criminals…not even close. Fix Americans first.
Wrong! *alth3ough I do love it when a thinking person writes!!!
When you say “not an illegal among them” that’s disingenuous to the nth-degree. Might I quote from the Chicago Trib?
Johnson, who said the shootings were mostly rooted in gang conflicts, on Tuesday said the department has immediately deployed an additional 430 officers to the neighborhoods most wracked by the shooting. Those numbers will grow to an additional 600 officers on the weekend.”
What’s more, even though we know most of the gangs such as Ms-13 et al weren’t born on American soil, the knowledge of who popped who isn’t being found out because only one murderr case in 20 is being solved in Chicago.
A Chicago Trib editorial a few days latter explained:
There can’t be a rational explanation because Chicago’s plague of urban warfare isn’t logical; it’s horrifically cruel and self-destructive. A 2017 University of Chicago Crime Lab study was able to quantify how much of the city’s gunfire victimizes residents of struggling neighborhoods: Five South and West side communities with 9 percent of Chicago’s population (Austin, Englewood, New City, West Englewood and Greater Grand Crossing) accounted for nearly half the city’s increase in 2016 homicides. African-American men ages 15-34 made up more than half of the city’s homicide victims in 2015 and 2016 while accounting for just 4 percent of the city’s population. Almost 40 percent of victims had prior violent crime arrests.
So, what’s the real picture?
I jump up to the white board and sketch it out:
African-American males are a perfect-fit for the MS-13 (and other SA) gang TEMPLATES. Join or die, bee-atch/
This is why you won’t see Rahm Emmanuel running for mayor again. We lookforward to the “battle for the cell pool” also found at https://en.wikipedia.org/wiki/Chicago_mayoral_election,_2019
You completely miss the template in play here: Bring in the slightly more violent SA gangs and the “orderly gangs” chose sides and go to war.
It’s all a horsrific rhyme of what happened during Prohibition and the mob violence of the late 1920’s.
Look for a peoplenomics piece on the data one of these days…but that’s how the data stacks.
In middle, rural America, it’s white males that keep the drug trade and its inherent violence alive with their meth labs. I am not saying MS13 is not an issue…they are…and battle lines have been drawn between the cocaine/ crack dealers of central and South America, the white male meth dealers of America l, the white collar criminals dispensing opioids and the heroine/ dealers of all kinds. You can’t single out on group
Mark: Visiting a Mexican tourist area designed for rich Americans is far different from a vacation to the South side of Chicago. You are comparing a healthy fruit & nut diet to a Smith & Wesson drug infested diet.
Also, it is nice to see you taking advantage of the illegal immigrants so you can afford to vacation in Mexico & eat nuts. Maybe you could have said hello to some of their relatives in Playa while they were serving you Margaritas. I guess that is one of the benefits of doing business in a sanctuary state. You get to parade your love of immigrants, while financially taking advantage of them. Ever heard of a fair wage for a days work – Sorry, not today, you are an immigrant & I need to live the high life.
Taking advantage? They make far better money and have exponentially better lifestyles here. If you ask me, they taking advantage of us and a our quest for increased profitability.
We’re pretty sure, for example, that MS-13 now makes a lot more money in America than in El Salvadore or other C.A. countries…my, what fine social progress, eh?
Got to love the left’s argument in favor of a higher federal minimum wage for workers that have to fill out a legit I-9 while insisting on the need for illegal workers because Americans won’t do the work for the same low (illegal) wages that illegal immigrants will. So much love for those defenseless “undocumented” workers. Someone clearly enjoys having a vulnerable underclass to exploit, and it’s not the people who want immigration law enforcement.
Mark: As you said “It’s all about the money (profitability)”. A very “Trump like” comment. I guess the bottom line is, as you pointed, out, “If it make me money, I’m for it.”
This all confirms the real reason you & your kind hate President Trump. His policies will reduce your good time money making scams to increase your profits on the backs of the poor. Very Al Gore like. Do whatever it takes to become that admired billionaire even if you have to lower your heated swimming pool temperatue 1 degree.
“In addition, I couldn’t afford fruit, almonds, lettuce and all the healthy produce we eat without them.”
You’re already “affording it,” in the many and diverse subsidies paid to the illegal aliens and their families, using your tax dollars.
You act like illiegals don’t pay taxes…they do. Everytime they buy something they pay a sales tax…and when they rent, their landlord pays a tax. Many illegals…especially those in agriculture, were on temporary work visas to begin with and paid income tax. Many illegally stayed and that’s the main issue. But, they are contributing in many other ways like keeping costs down to build affordable housing, keeping food costs low, working and owning restaurants that keep us fed. Very few, if any are gaming the system and taking federal funds for housing, food stamps and other entitlements. The owner of the company that cleans out home is an illegal from Guatemala and owns two homes…here in the Bay Area no less. She used to own restaurants and bought 30 years ago when you could buy a House here for $100,000. She somehow has a social security card and pays income tax. Don’t underestimate the Hispanic culture. They are a proud and enterprising people. They chose to be here to grow and prosper here. I applaud that.
Why is a Federal minimum wage a thing at all? Are we implying people don’t know their worth and are unable to agree at what rate they will sell their labor? Should we allow people to vote, if they don’t know basic math or have any concept of self worth? I completely agree on stopping any collusion and punishing harshly. To not let companies get together and agree on wages or not poaching people. But otherwise why is the Federal government even in the mix on two individuals coming to a business arrangement.. Nothing is in the constitution about Feds controlling wages. If anything, states should decide if they want wage controls and at what levels. I would have been happy to have my son take a lower wage position with someone that would teach him skills and introduce him to certain business environments. But such things just run afoul of labor regulations. Companies almost cannot afford to take chances with very low skilled labor to see if a person can be built up. Anyway a base freedom question for me, seems I should be able to sell my labor at whatever minimum or maximum rate that is best for me.
FYI “illegal alien” is the correct legal phase for such folks. Sotomeyer used it in a legal filing. People who say otherwise can go fish.
Definitely true! The term “illegal alien” is a word of art, recognized in law as someone who has no legal status under the immigration laws. Such a person could be anyone from a visitor overstaying by a day to a spy infiltrated from a submarine. That person may or may not have intentions to become an “immigrant”; that is – someone who intends to permanently reside in the USA and become part of the community and culture.
The terms “illegal immigrant”, “undocumented immigrant”, etc., are meaningless. They say nothing about legal status, intention, means of entry, etc. An “undocumented immigrant” could simply be a naturalized American who had his papers stolen. He or she could also be a terrorist infiltrator or virtually anything else. Fuzzy thinking makes for poor decisions and needs to stop.
George, glad to see you’re finally reconciled to the Trump cesspool. Frankly, the cheer leading was wearing a bit thin. Best, Mike.
Socialists never pay well, George. They just make sure the wealthy middle class business owner losses every penny in order to level the playing field and eliminate competition. If everyone but those inside the castle wall are the modern equivalents to feudal serfs, then the rabble herd is much easier to steer.
RE: Minimum wage – what exactly does $15 buy you in Seattle? If I’m making $50,000 in Pittsburgh, PA, I’d need to make $71,146 in Seattle. That’s a 30% spike, so I can make $10.50/hr in Pittsburgh and live as well as a Seattleite making $15.
One more thing. Michael Avenatti is a love him or hate him political “character”. But along the lines of what George has talked about here, being biased either on CNN or Fox should not be the norm. CNN goes a bit overboard on their Constant bickering on Trump and Fox did the same with Obama.
But when Avenatti made an appearance on Tucker Carlson, a chyron that Avenatti could not see, displayed “Creepy Porn Lawyer” as he was speaking. This approach is why I hate Trump and Fox. Is this the way a news organization should act? Of course not, but this is the grade school level mentality of Fox’s audience…so they play to that. Now…that is “Sad”
LOL sounds more like Truth in Advertising, Mark
Crap! Based on some of the things I did in High School 60 years ago I guess that lets me out of a chance at appointment to the Supreme Court or just about anything else for that matter.
That’s OK…if the same laws were in effect then, I’d be a freelancing terrorist with no gang affiliation