As every morning, I begin on an economic note since our roots around here are sustainable living, long wave economics, and couple of nickels from from confiscation by government (inflation and taxes) and charlatans in finance (the Bernies et al) who seem to appear at every turn.
But this morning’s insight from my daughter Allison tells more about the condition of America that years of schooling and whole reams of economic data. Best of all, it’s simple for anyone to comprehend.
Allison works, as I think I’ve mentioned, in the communications industry in sales in the Seattle area. She works long hours, trains hard, has encyclopedic product knowledge, and (as is the standard in our family) is honest as the day is long so consequently she’s doing very well. Here lately, she’s been working a lot of overtime and I asked her about that.
“Well, dad,” she began “We had an ad out here last week to hire some new sales reps. We had a total of 75 resumes come in. But then, when we called and basically invited all of these people to come in for interviews only six expressed any interest! I was talking to a friend of mine in our HR department and she said if we’re lucky three will actually show up and then we will find one…maybe two…that are worth hiring. And we could hire five….”
I trust you see the dynamic at work here? It’s summertime. People who are on unemployment in many states need only to demonstrate that they have applied to three or four places per week, not that they actually went somewhere when a potential job called back, did an interview, or actually followed up in a meaningful way.
Now, this is just a wild-ass guess on my part, but seems to me that if 75 people were invited in for interviews at least 25% ought to be interested enough to show up. Historically, in really hard times, the number showing up would be more like 50% or more…
No, I’m not arguing that welfare, food stamps, and unemployment comp should change. But just presenting the data from a trusted observer.
Attn. HR Folks: Research Requested
If you know anyone in an HR position, ask them what their current “call-to-interview rate” and the “interview-to-offer” rate is running. Then, if they keep good records, ask them what their ratio was, say, five years ago…or better: 10-years ago.
My bet is that we have seen a large decrease in the call-to-interview ratio as people have become much, much more selective about the kinds of work they are willing to do, and how much effort they will put in to getting a job. They can get a subsistence easy enough, so why put forth real effort?
Meantime, California is likely to cut extended unemployment comp. The dynamic there is that if California rolling three month unemployment dips under 9% then 10-weeks of benefits dry up.
One other note about unemployment: Fresh figures are out from the Labor Department this morning:
“In the week ending July 13, the advance figure for seasonally adjusted initial claims was 334,000, a decrease of 24,000 from the previous week’s revised figure of 358,000. The 4-week moving average was 346,000, a decrease of 5,250 from the previous week’s revised average of 351,250….”
With this latest bit of data integrated and with options expiration today, we look for the market to have a reasonably steady day (barring left field events) with volatility to increase next week and a possible down-side bias.
Student Loan Deal:
Inflation Forecasting School
There’s some excellent leg-work on what’s ahead buried in the report from the DesMoines Register which reports on a new deal being cut which may resolve student loan rates at least for a while into the future.
How so? How does one infer the direction and magnitude of coming interest rate increases, the return of inflation, and such?
It’s a two-part process. First you get a sense of where Big Ticket interest rates are presently. For this, flip over to the Federal Reserve’s Consumer Credit (which is really debt from where you and I sit) and notice the present new car loan rates. For new cars it is about 4.13%.
You might want to make up a basket of rates: Refi’s of home loans are in the 3.5% rate presently (basis a 15-year loan) and the 10-year US bond yield is running about 2½ percent.
Now, flip over to the present student loan rates: They used to run a modest 3.4% for direct subsidized loans which had a first disbursement date between July 1, 2011 and June 30th of this year.
Now, however, a new student loan is running 6.8% (ibid).
The synthesis of this morning’s Des Moines Register report and a little common sense gives us two interesting thoughts to mull over.
First, the DR reports that democorps won a lifetime of loan cap of 8.25% while the cap for grad students would be 9.5% and for parent loans (PLUS loans) would be capped at 10.5%.
Which means – reading between the lines – that econometric modeling by lenders and government off in the back rooms is looking at interest rates going up another roughly 2-3% from current levels in the immediate future. At least for now.
But there’s one other observation that comes into view which causes me a bit of consternation: The marketplace presently provides more of an incentive to buy a new car than to get additional education.
Which, near as I can figure, is not the way to build a competitive country.
A number of groups are calling out the Fools on the Hill on this, but they have a track record of being “hard of thinking” when it comes to sacred cash flow cows of campaign-buying banksters. The global chieslor cartel gets to borrow money from the Fed cheap, mark-up as loans to students, take spreads…
The future, seems, still has to be a profit center for the banker-class. EBM* at work, again.
Is there hope? Maybe: as Jesse Eisinger (NYT Dealbook/ProPublica) notes: “Finally, Bank regulators have had enough.” It’s a little early to be celebrating…years early.
*Everything’s a Business Model
That Signpost Up Ahead?
India’s outlook on the economy has turned down in the latest Business Today-C fore Business outlook. Snip from their press release:
“The turmoil in the foreign exchange market undid the gains of the last three quarters and the confidence level of businesses has dipped for the first time in four quarters. Some 75 per cent in the latest Business Today-C fore Business Confidence Survey say the economic situation will worsen in the July-September quarter.
Two-thirds of the respondents said the current state of governance has made them look overseas for investment opportunities. The dramatic dip in sentiment has come on the heels of a large number of respondents turning upbeat about economic prospects after the last Union Budget. Forty-five per cent of the respondents were hopeful that the budget would have a positive impact on their company’s performance.
Geared economic relationships mean this will make India “hungrier” for new business which will translate into increased incentives for US firms to keep exporting US jobs to lower costs centers. Can we export Congress yet?
One silver lining appears for the ownership class: Such exporting of US manufacturing has put a stake through the heart of wage-driven inflation here. Of course that means hemorrhaging of the working class, but no omelet without broken eggs, eh? ….said the People’s Economist trying to make a bad yoke.
More offshoring is fine if you don’t mind mass un and under-employment.
All of which circles back to this morning’s first headline: Why Bother?
More After This…
ODA: Observations, Departments, and Analysis
But Is He a Statesman?
It’s not very often that we can get a “test drive” to see how someone might work out as a future president or vice president. But as demos are pinning their hopes on an Immigration deal on Paul Ryan – der Mittster’s running mate last time around – we may have just such a rare chance.
Will he provide a smooth enough ride to warrant consideration in 2016? We may know in a few weeks…then again, does it matter?
Surveillance Society Notes
Headlines writ large this morning on a number of news sites about ye-another TSA search program: This one involves searching cars which are valet-parked at some airports.
Turns out, despite the largish headlines, that the program makes sense since valet cars can be left very close to terminal buildings where the potential for damage from nutter actions (like bombings) would be much higher.
Model Railroading?
As the lynch-press has failed to divide sometimes-sensible America into outright war zone through divisive and emotion trial coverage of the Zimmerman case, we see now the Department of Justice is now trolling for email tips in order to come up with a civil rights case to make stick.
Oh, and about railroading? The National Memo profile of the prosecutor in the Zimmerman case is less than complimentary.
Meanwhile, I stand by my prediction that additional charges will be filed. There’s too much press-ure on to imagine any other outcome. Might be next week, or the week after though, before “new evidence” is “discovered.” Then off we’ll go on another wild, emotional charged mediafest.
Ideally (from the media-monger standpoint) it would be sooner: July sweeps this year run until Wednesday the 24th so the news networks, I’m sure, would love to see an announcement sooner than later going into next Wednesday’s ratings finale.
NannyMike Strikes Again
A month ago I rode an escalator up and down at Macy’s in Midtown and enjoyed the ride since the elevation of the escalator gives a shopper a moment to take in the scene and consider if a floor is worth exploring, or whether to keep on going.
That may be a choice of the past as New York’s lifestyle distator Michael Bloomberg gathers any success in his latest which is targeting elevators and, we assume, escalators.
Hizzoner’s latest seems to fly in the face of fire codes and efficient HVAC operation, but I suppose that’s just one more reason to live in Texas instead of New York.
If ya’ll want elevators, a super-sized drink, and reasonable gun laws there’s still room here in the Republic for a few more folks.
Big Data
One more input to those servers in Utah: In adtion to spending records, incomes, phone calls we see now how the location of your car is about to end up in government super files thanks to police license plate scanning technology.
Tie it in with all the data from the grocer store customer discount programs and cops will soon be able to pull over cars on the way home from the store with strawberry ice cream. Which would be just the thing for appeasing alien masters, lol.
Yes sir, that was worth fighting the American Revolution plus a couple of world wars and the cold war for, wasn’t it?
“Why is there a Fish Bladder in My Beer?”
That was the headline in a reader email this morning (thanks Dean) and it pointed me to a post by the Food Bade which delves into the hiden ingredients in beer and, after you read it, you may decide to swear off for a while…
I’d point you to water as an alternative, but as the old joke goes, you know what fish do in that, right?
I can hardly wait for summer to be over so I can get back to boiled green tea…
More after this….
