I suppose this is an economic story. I’ll explain how in a sec.
When this hits, other than a lot of rain – more than a foot in places – there’s the interesting notion that hurricanes and other natural disasters are actually good for the economy.
Short term, reading “Best’s Market Segment Report: Insurance-Linked Securities Market Could Bear Up To 20% of Insured Losses from Hurricanes Harvey, Irma & Marie” gets us to wondering how much insurance company selling will depress prices short-term? Dow futures up 90…am I the only one reading the forecast, or what?
Seems counter-intuitive, but while there is bound to be an initial loss, that’s followed by rebuilding and that drives an economy. To be sure, there’s a cost to governments (taxes) and insurance (rates) but that’s offset (how much is arguable) by the replacement activity.
Lying Politicians Department
Who you gonna believe?
On the one hand, the Trump administration is proclaiming how the economy is doing oh, so well…so well. On the other, former president Obama is trying to take credit.
We have a slightly different take:
How about “None of the above?”
Here’s why: When the economy has done its best – that is provided the most growth – is when the Employment to Population is at its highest levels. And here’s the data that the Federal Reserve’s storehouse of numbers offers as guidance.
This, to our way of thinking, is pretty clear evidence that the employment to population ratio peaked in 1998-2000.
So, how can team Trump argue? The secret is in who you count as making up the workforce.
In 2000, for example, there was a US population of 282.2 million and a labor force of 143-million. 50.67% of all people were considered labor force. Today? 319.93 million people and 161.776 million means we’re still at 50.55% being in the labor force.
But, of the available labor force, who’s really working? For this we turn to the long-term view of the labor participation rate:
What we is (at least for now) is that the civilian labor participation rate is nowhere near as high as it was when the Internet Bubble was building.
If you happen to be black, here’s another inconvenient chart that neither Trump nor Obama seems to haul out:
Pardon us for calling out BOTH political parties, but the Trump team is taking credit for what’s a recurring cyclical pattern of growth, while Obama is laying claim to “setting the stage” for it. Wrong and Wrong.
Working – whether black, or white or female – we’re being fed short-term data to keep the public attention of the longer-term issues.
Sadly, the numbers say it pretty clearly: Neither can take real “credit” for the “growth” since. Basically, within one percent, there’s been no change in the fraction of people working for a couple of decades. Stagployment
Meanwhile, America has been running out of things to monetize – so we’re monetizing weather, gender, sexual preference, and anything else that’s not nailed down. Exporting America oil, now, too… The resources view long term just keeps getting worse and worse…
The real story is that due to congressional negligence (and specifically the inability to balance a budget) we have been watering down our money pretending that’s growth. Uh…not so fast…
With my latest book in the hands of proofreaders (Psychocartography, expected release October 1) I’m thinking about a real dirty-underwear economics book. The title “Losernomics: Why You Can’t Get Ahead” came to mind.
In fact, I was thinking overnight about how to lay it all out. Starting with America’s first steps on the road to Loserdom. Collapsing values, mass medication use, soaring divorce rates, the end of parenting…well, you know the list.
On the money side, it begins with not calling out interest in general – and the effects of compounding in particular – as a critical fault in the American system.
My book note then get into how no one has an incentive to save, anymore. Reason? Banks pay less that 1/2 of one percent interest while the Federal Reserve is “making-up” money (via inflation of the money supply) at a 4.0 percent annualized (M2) rate.
People who put money in the bank are suckers. Putting your money in the bank once meant after 10-years, or so, you’d be able to take out the principal and interest and actually make a little something on the interest. Gone….poof!
The crooked financial system, taken root in America today, is rigged so you lose 2-3 percent (or more) in final purchasing power per year. Oh, and it’s not even your money anymore. You’ve been reduced to just another creditor status in modern banking’s current well-told screw.
Don’t mean to be a grouch, but it is crazy to read Trump laying claims and Obama laying counters. Can we STFU and go big picture, please?
My consigliere and I talked about this again last week.
“Ever wonder how we had money in the mid-1970s to learn to fly airplanes and still have a social life, our own apartments and enough leftover to have a beer and hamburger out?”
The good news and bad (in this preview of yet-another Georgebook): We are still here as a country but our real disposable income has been stolen by the idiots of both parties. Trump talks it, but the magic of compounding debt is burning our future before our eyes.
That’s the bad news (and more in Peoplenomics Wednesday): Victimhood and government inefficiency have conspired to create a new form of synthetic growth…and blessedly, one that’s not too depending on resource. Losernomics, indeed.
Like national Alzheimer’s, we have embarked on the financial version of a Long Good-bye.
Eyes on the Fed
We will get a sense of the economy this afternoon when the Fed releases the (misleadingly named) Consumer Credit report. From their side of the table (they’re Creditors) but for America-at-large this is the “How deep a hole are we digging?” report. More is good, less is bad…and that’s why we’re in the Long Good-bye.
Syria, OTOH, is Going Faster
Bye-bye’s and body counts time: We keep waiting for the regional war in Syria to catch fire. Not that Russia accusing the US of using white phosphorous ordnance isn ‘t fanning the flames of war.
The US is stepping up air strikes as we’re charging the Syrians are planning to use nerve gas next on rebel strongholds. Germany, which has seen its markets dropping of late, may be talked into getting involved…Anything for the DAXI, huh?
For now, this is a small shit-storm in an outhouse. We expect it to grow to sewage treatment facility-size in the next week, or three.
Read the maps of the Leviathan oil and gas field off Lebanon, see how Russia wants a lock of European energy and things will begin to make sense because? (*repeat after me!)
Everything’s a Business Model!!
War, particularly and especially.
Speaking of a Head….
CPI comes out Thursday. Wednesday Producer Prices. Bunch of talking Fedspeakers who will hype raising rates at their next meeting.
We’ll take a chill pill on this because when we hit Yahoo Finance and the 10-year Treasury Note (^TNX) looks to us like a rate hike’s a non-starter unless the 10-year heads over 3 percent.
Friday, sit-by and wait for retail sales figures…
Loved these…anything to keep out of touch with the D2DS (day 2 day stuff):
Fishermen haul in monstrous skull and antlers of extinct Irish elk. Umm…coral maybe?
CBS CEO Moonves resigns, company settles Shari Redstone, NAI lawsuit. Didn’t matter last month who ran CBS…not sure why it matters now…
Human Rights Watch Warns of ‘Massive Crackdown’ on China’s Muslims. Which may explain continuity of the Chinese culture over centuries, perhaps?
Correctness killed the eye-candy dept: New Miss America is glad she didn’t have to wear swimsuit to win. Trying to pencil out the impact of all this genderism stuff on the future Playboy earnings is madness in today’s world.
And, if you’re thinking about buying us a little something as a thankyou for two decades of hard work on the web, how about this? “Luxury cruise line Seabourn launches 146-day world cruise.” We’ll pick up our own Internet charges…split the bar tab?
Bad Pun of the Day
Poor show, this Aston stock IPO rubbish, old chap. We say they should have stayed with Bonds….
As pun police surround the ranch, we threaten ‘Moron the ‘morrow…