My afternoon train reads:
• Sorry, Putin. Russia’s economy is doomed (WonkBlog) see also Why Are Commodity Prices Falling? (Project Syndicate)
• Is Technology Speeding Up Market Cycles? (A Wealth of Common Sense)
• Investors Flee Active Stock Managers (WSJ)
• Jeffrey Gundlach, on his year as new ‘King of Bonds’ (Reuters)
• Higher capital requirements didn’t slow the economy (Money and Banking) see also How to regulate banks: crazy like a fox (FT Alphaville)
• How to Be a Better Digital Native (Scientific American)
• Beware The Man Of One Study (Slate Star Codex)
• Road, Bridges and Tunnels Matter, America (Bloomberg View) see also Inside America’s crumbling infrastructure (The Week)
• Once And For All: Michael Jordan Was Way Better Than Kobe Bryant (FiveThirtyEight)
• Feeling Like a Winner Changes What You Think Is Fair (Harvard Business Review)
What are you reading?
US economy close to full capacity
Source: Deutsche Bank
Category: Financial Press
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
These are the days ZeroHedge was created for:
http://www.zerohedge.com/news/2014-12-16/total-chaos-massive-market-moves-spark-selling-panic-close
http://www.zerohedge.com/news/2014-12-16/russia-prepares-gdp-surge-consumers-scramble-spend-their-plunging-rubles
http://www.zerohedge.com/news/2014-12-16/russian-ruble-hereby-halted-until-further-notice
Aside from their overall often self-contradictory ideology, they’re one of the few “outlets” that has consistently pointed out just how rigged and corrupt the system is. When the mainstream media completely fails to do its job, it’s refreshing to see someone – anyone really – shine a light on the state of things.
“halted until further notice” – No more Russian Rubble?
Its not the union wages that are the cost problem. It is the labor rules that create inefficient labor team structures that drives much of the excess labor cost. Projects I have worked on where the contractor was able to negotiate efficient labor composition structures with the various construction unions have been done inexpensively and on schedule.
Oil is generally pumped out and refined in red states. Obama and the Democrats do not have any reason to be beholden to those states given the clear partisan partitioning of the country in the past couple of elections. The GOP representatives, senators, governors, and FoxNews talking heads don’t appear to realize that Obama is actually executing a get-tough foreign policy – with their constituents’ oil and royalty revenue!
Instead of invading countries, he is letting the growing US oil production and friendly states like Saudi Arabia take out enemies’ economies instead. Europe is often reticent about sanctions, but only Norway won’t get behind cheaper energy prices.
I expect it will take 12-24 months before a lack of financing for new fracking oil well drilling to really impact US oil production, but that should be plenty of time for the full impact of $50-65 oil to hit home on some of these countries that have not been behaving in a friendly fashion. ZIRP and QE helped usher in the Arab Spring. Maybe fracking will usher in the oil despot spring.
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/12/16/plunging-oil-prices-are-doing-obamas-foreign-policy-for-him/
i guess we are poorer than we were in the 1950s. or maybe its that we dont have leadership like we did then? cause i dont think we were any less happy with taxes back then. and they were likely to be whole lot more conservative than we are.
Actually, taxes were much higher than and people were a lot more liberal (economically not socially). After the New Deal and WWII, people expected the government to do things. Eisenhower was a flaming Socialist compared to Obama. Creation of NASA, creation of the Interstate Highway System, and a host of business regulations. Even on the social front, compare Eisenhower’s action at Little Rock (just google “Eisenhower” “Little Rock”) to Obama’s inaction in Ferguson.
well maybe thats because he was a general, that actually had been in charge when a war was being waged, and it wasnt like some of the others, it was really a war to keep the country a live, so maybe he had this odd idea that he was supposed to do some thing while he was there.
but not so sure that O is really all that liberal, he seems to be just a repeat of GWB (unless you thing he is a liberal). course then again maybe he was constrained by the politics, in that he had to support those of his party in Congress from red states.
interesting i didnt know that about Eisenhower, i had read where JFK wasnt really all that into the equal rights thing, but had to actually be pushed into it.
course O would have been crucified by his own party if he did any thing, since the govenor is from his party.
seems like we have just about divided the country in red and blue. and presidents seem to only work for their own (not that this is new, its been that way a while)
In this age where conservatives especially rail about the lazy poor mooching off the government, I remember that Nixon proposed a guaranteed annual income for everyone, whether they worked or not.
One reason is that we are spending way too much on the military. The raging socialists Eisenhower, Nixon, and Reagan had smaller constant dollar military budgets than Obama.
https://www.americanprogress.org/issues/budget/news/2011/07/06/10041/a-historical-perspective-on-defense-budgets/
Eisenhower didn’t like high taxes, but he didn’t believe in the Laffer curve either, so taxes stayed high to balance the budget. His Administration and the next couple of of Administrations had a phenomenal economic expansion. Those administrations and Congress also expected government to accomplish something with the money, like win the Cold War, create national infrastructure, and build a social safety net.
http://www.forbes.com/sites/davidmarotta/2013/02/28/dwight-d-eisenhower-on-tax-cuts-and-a-balanced-budget/
Re: Jordan vs Bryant
There is a similar argument in hockey about the greatest hockey player ever, although it is a complete non-argument as the other two candidates both agree whole-heartedly that Gordie Howe was the best ever:
http://www.leaderpost.com/sports/Gretzky+Hockey+remains+greatest+ever/10283034/story.html
http://www.thehockeynews.com/blog/bobby-orr-pegs-gordie-howe-no-1-all-time-calls-game-today-dangerous/
http://www.edmontonsun.com/2014/10/30/gordie-howe-mr-hockey-has-always-made-time-for-others
Note: The Edmonton Sun is the hometown paper for the Edmonton Oilers which the team that Gretzky became famous on. An article like this with an LA newspaper playing up Jordan over Bryant – possible but unlikely.
Dick Cheney has no problem with torturing the innocent, including the murder of one innocent person by freezing him to death. If anybody ever doubted it, here is the proof that Cheney is a Dick.
http://www.bbc.com/news/blogs-echochambers-30485999
License to Spy
There are thousands of cameras following you, anyone can watch, and it’s all legal
By Chris Francescani for The Contently Foundation
Dec 1 2014
https://medium.com/backchannel/the-drive-to-spy-80c4f85b4335
Wife Doodles On Her Husband’s Car With A Sharpie And It’s Amazing
OCTOBER 14, 2014
While recently tuning up his Nissan Skyline GTR sports car, an auto enthusiast decided to forgo a traditional paint job. Instead, he asked his incredibly talented wife if she wouldn’t mind doodling on the vehicle with a sharpie.
The car enthusiast, a member of the U.S. Military, hated the car’s silver color, and wanted to do something unique. He started by allowing his wife to draw on a few scratches that were already on his car’s bumper.
When the man saw his wife’s work, he realized that her elegant drawings deserved a bigger platform, so he allowed her to color in the entire car, while he worked on revamping it from the inside.
His wife spent more than 100 hours sketching on the car, and then they added several layers of clear coat so the sharpie design would not rub off or wash away in the rain.
Here is the final product in all of its amazing glory.
…
http://www.business2community.com/social-buzz/wife-doodles-on-her-husbands-car-with-a-sharpie-and-its-amazing-01037382
Vladimir Putin’s Novorossiya may mark just the start of his empire-building ambitions
Vladimir Putin has deftly tapped into Russians’ sense of patriotism, evoking Moscow’s defeat of the Nazis, while pursuing what critics say are alarming similar policies of expansionism – but sanctions are biting
Colin Freeman
06 Dec 2014
For a man who has made a career out of Soviet-era nostalgia, it was a timely reminder that not every memory of life back in the USSR is a cherished one. As Vladimir Putin made his state-of-the-nation speech last week, berating the West for stealing Russia’s imperial glory, his citizens were once again cursing the uselessness of the rouble.
Thanks to sanctions imposed over Mr Putin’s annexation of Crimea and falling oil prices, the currency is once again a minnow in the world financial markets, losing roughly half its value this year. Food prices, even for basics like bread, have increased by ten per cent in two months alone, and just as in Communist times, when Russians hankered over Beatles cassettes and denim jeans, Western luxuries are once again at a premium.
Last week, the price of an Apple iPhone in Moscow’s shopping malls went up by a quarter. And thanks to retaliatory sanctions on European food imports by the Kremlin, everything from French cheese and Spanish ham is now off the menu.
Even Russia’s prostitutes are fed up. In the docklands of Murmansk, in Russia’s frozen north, calls girls serving passing sailors threatened last week to peg their rates to the dollar. “We are trying to keep prices down,” one brothel owner told a local news agency. “But the cost of living is rising.”
….
http://www.telegraph.co.uk/news/worldnews/vladimir-putin/11277180/Vladimir-Putins-Novorossiya-may-mark-just-the-start-of-his-empire-building-ambitions.html
I was interesting to read the article on the effect of technology speeding up the business cycle. The same thought had been pinging around my head lately.
We seem to have these 2-3 week episodes where as a market we digest these things that in the past would have been calamitous. And then we go back to being bored…. And the market goes up.
Another factor in the equation is that there are a lot more people paying attention to markets due to the fact that it is the only place to save for retirement. We don’t put our money in the bank anymore. We don’t stash gold under the floorboards. We put money in a 401K or IRA. And the fact that our nest egg is in the stock market has caused more people to accept the challenge of managing their own destiny. Hence more eyes on the “news” that could affect markets. And there is more of a willingness to move the money around due to the technology of investing and trading. Everyone can do it. So more are. For better or worse.
Is the stock market a “shadow bank”?
Are stocks just another form of money? A last resort store of value?
Nothing like a bit of science photos to make me appreciate the world:
http://io9.com/the-most-amazing-science-images-of-2014-1671170711
Small gripe about he article “Road, Bridges and Tunnels Matter, America” and more specifically, the blog post it links to postulating various reasons why infrastructure costs more in the US: Though all of the things listed might push costs upward, don’t countries like Japan and Denmark also have organized labor and environmental regulations to contend with? It would be more useful to analyze how the US differs from countries that have lower costs.
Also, I don’t recall many democrats voting against infrastructure projects because their costs were too high. Thus the biggest current impediment to infrastructure spending in the US is in fact the republican party’s resistance to Obama and counter-cyclical spending. Of course costs should be minimized, but the current batch of republicans wouldn’t approve additional infrastructure spending at any cost–no matter how low.
I note that unemployment turned up a full year before capacity utilization came down. It looks like lay-offs triggered the recession, not the other way around.