Their names are familiar to all of us: Cleveland, Flint, Youngstown, Saginaw, Gary, Toledo, Reading, Akron, Flint and Buffalo were all once booming manufacturing cities that were absolutely packed with thriving middle class families. But now most of the manufacturing jobs are gone and all of those cities are just shadows of their former selves.
Four years after its passage, Obamacare has now been largely implemented, and millions have had their coverage disrupted. For years, the administration has propagated a number of myths about Obamacare. Some have already crumbled, and others will fall as Obamacare continues to change the American health system.
The last time we looked at the rather unpalatable issue of soaring bacon prices back in March, it was the direct result of exploding, no pun intended, prices of lean hogs stricken by the aptly named porcine epidemic diarrhea (PED) virus, which killed up to 7 million pigs and pushed the price of pork and its derivatives to record highs. We have bad news: according to Reuters an Indiana farm has become the first to confirm publicly it suffered a second outbreak of a deadly pig virus, fueling concerns that a disease that has wiped out 10 percent of the U.S. hog population will be harder to contain than producers and veterinarians expected. That's right, the PEDv, aka pig diarrhea bug, is back, and this time it may have mutated.
If there is one thing that the militarized warzone with the weapons ban (and which makes east Ukraine look like a kindergarten) namely Chicago, did not need in order to fall further into social chaos and disarray, it is a new tidal wave of unemployment: people freshly without jobs who for lack of better options would likely join the daily survival of the fittest routine on the streets of the windy city. And a tidal wave of unemployment is precisely what Chicago is likely to get if, as a group of Chicago aldermen have proposed, the minimum wage in the nation's third-largest city is nearly doubled to $15 an hour. Why $15? Because according to recently striking McDonalds line cooks, it's only fair, and is the minimum pay that fast-food workers have sought during national protests.
And War is a racket...
"They are without a doubt the worst organization I have ever dealt with. Keep suing them America! They deserve it!!" is the way one Bank of America client described the bank and the current actions that many of the mortgage banking business are undertaking will not improve the situation. As Reuters reports, many of the 20 million homeowners in America are being held hostage on their mortgage modification process by an extra clause being added to the docs: they could not say or print or post anything negative about the provider, ever. These "gag orders" are becoming more frequent and Consumer law defenders are concerned, ""If your servicer screws up, you can't say anything about it... the homeowner has no defense."
Does the economy move in predictable waves, cycles or patterns? There are many economists that believe that it does, and if their projections are correct, the rest of this decade is going to be pure hell for the United States. Many mainstream economists want nothing to do with economic cycle theorists, but it should be noted that economic cycle theories have enabled some analysts to correctly predict the timing of recessions, stock market peaks and stock market crashes over the past couple of decades. Of course none of the theories discussed below is perfect, but it is very interesting to note that all of them seem to indicate that the U.S. economy is about to enter a major downturn. So will the period of 2015 to 2020 turn out to be pure hell for the United States? We will just have to wait and see.
The structure behind the childhood pastime of rock, paper, scissors holds to modern game theory remarkably well for something so common to hungry college students contesting a final slice of 3 am pizza. As ConvergEx's Nick Colas explains, the optimal play choice is random, but human beings have real trouble fulfilling that mandate, as in the real world, life and human biases get in the way. And that, Colas notes, makes RPS a great tool for assessing how we make decisions in the real world – randomness is essentially impossible for humans, after all.
Judging by the narrative promoted after last Friday's idiotically connived jobs report, any job is a good job... however, as The Guardian reports, that does not include a job working for Amazon.com. Quarter after quarter, we highlight the growth in Amazon employees (and death-cross-like plunge in annual sales growth). While Amazon makes no secret of the fact that it relies on seasonal work force, what went unsaid and unnoticed during President Obama's visit last year, was that the Amazon 'employees' would not have jobs or prospects after the holidays. Many of the people in those Amazon warehouses were among the long-term unemployed – shuffling from one temporary job to another to another; and due to this unstable employment, a growing number of them have found themselves living in shelters... 'employed' but homeless (or "the working poor" in America).
Whenever the beltway bandits run low on excuses to run-up the national debt they trot out florid tales of crumbling infrastructure - that is, dilapidated roads, collapsing bridges, failing water and sewer systems, inadequate rail and public transit and the rest. This is variously alleged to represent a national disgrace, an impediment to economic growth and a sensible opportunity for fiscal “stimulus”. But most especially it presents a swell opportunity for Washington to create millions of “jobs”. One thing is clear. There is no case for adding to our staggering $17 trillion national debt in order to replace the bridges of Madison county; or to fix state and local highways or build white elephant high speed rail systems; or to relieve air travelers of paying user fees to upgrade local airports or local taxpayers of their obligation to pay fees and taxes to maintain their water and sewer systems. At the end of the day, the ballyhooed national infrastructure crisis is a beltway racket of the first order. It has been for decades.
One of the most consistent debates emanating out of Washington in the past 6 years has been that dealing with income tax. Whether high, low, "fair" or "unfair", said discussions, however, focus solely on tax paid at the Federal level, and largely ignore that "other" key tax: state. Which is surprising, considering some states such as California demand a total contribution amounting to a third of the highest marginal Federal tax bracket, which could make some wonder if those bracing sea breezes are really worth it. But what about the other states? Here is the full breakdown of the states with the top income tax rates, those with the lowest, and all the states inbetween.
The market may still be amused by Amazon's latest forward P/E boosting gimmick in the form of its entertaining (and stock price boosting if only briefly) proposal to deliver packages (some of which haven't even been ordered) by drone, but some US towns, tired of this endless invasion of just in time violators, are already taking aim at the messenger. Case in point: Deer Trail, Colorado, a city of 563, which Bloomberg reports, may approve today a measure that allows the town to issue hunting licenses for unmanned aerial vehicles, i.e., drones. Apparently some luddites people still place civil rights over the potential of bottom line profits achieved through increasingly more intrusive technology. People like Phillip Steel, a 49-year-old welding inspector, who wrote the proposed law as a symbolic protest after hearing a radio news report that the federal government is drafting a plan to integrate drones into civilian airspace, he said. The measure sets a bounty of as much as $100 for a drone with U.S. government markings, although anyone who shoots at one could be subject to criminal or civil liability, according to the Federal Aviation Administration.
"Either way you look at it, it's time for the Fed to stop inflating housing assets, and stop buying mortgages" is how Alex Pollock introduces the following live streamed event by AEI. With speakers such as Chris Whalen we suspect, as the moderator explains, they will explain why "financial markets never seem to grow smarter when it comes to real estate."
In what many thought was a miracle of modern money-printing-driven yield-chasing, Puerto Rico managed to get $3.5 billion of bonds off last week with no problem (albeit at a 8.73% yield). The issue (while perhaps not as surprising as the low yield issues of Uganda we have reflected on previously) raised some eyebrows and in the trading since its release, FINRA noticed something concerning. The bonds, as Bloomberg reports, are supposed to 'minimum denomination $100,000' blocks and yet 75 trades this week have been for no more than $25,000 violating regulations which deem these for "institutional purchasers" and strongly suggesting the heavy hedge fund demand was nothing more than a pump-and-dump scheme to unsophisticated retail investors. PR bonds have plunged from par to $92 this week.
When Arthur Levitt's SEC adopted Rule 2a-7 in 1998, it handed the TBTF banks and GSEs a mortgage monopoly on a silver platter.