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We Have Found Where The Gas Tax Cut Was Spent: Hookers, Drugs And Booze

Tyler Durden's picture




 

Submitted by Andrew Zatlin via MoneyballEconomics.com,

A Burst in Vice Spending

Vice spending, as we know, is affected by the weather. This year it was battered by storms which rocked the US from Spring Break into early April, holding back spending until Easter. It’s fitting that the original Easter holiday was a pagan celebration of the Spring Equinox full of revelry, feasts and sex.

1vice

Last year, we saw a similar pattern: storms dampened play time but once they passed, the game was on.

...

Hookernomics: Is Nasty Outbreak of Inflation Contagious?

Previous expectations were for a vanilla first half of the year. Over the holidays, we conducted a business survey of escorts. The feedback was consistent: for 1H of 2015, escorts expected no inflation. Given that there was no jump in costs, no major change in client spending and no margin or demand-driven pressures; that prediction should have made sense.

In March we noticed that more escorts were taking road trips. In the business of Hookernomics, fishing in new waters is typically an indication of a business slowdown.

Fast forward to April, and prices are selectively moving up. Why the sudden change?

For starters, the March slump definitely seems to have been weather related. In response to the weak start to the year, escorts hustled to generate the necessary cash flow. More recently, however, some escorts are testing the waters to see if the market will bear higher prices.

  • The What: Prices have moved up 10%. The price jumps are very selective – mostly in the middle and upper tiers of escorts. The increases are also very sporadic, just as the previous month’s road trips were.
  • The Why: Raising prices is demand-driven and client pockets are expanding with unspent cash, or so some escorts seem to believe. It’s a not-so-shining example of the free market in action. Suppliers are responding quickly to customer demand.

Whether or not this inflation trend will continue depends on several factors:

  • Escort pricing power: College summer vacations are starting and that inevitably leads to greater escort supply.
  • Client discretionary cash flow: Are escorts correctly reading the signs when perceiving fatter wallets?
  • Staying power: Client spending might be getting artificially pumped up. The spending budget grew only because of a one or two month weather delay. If the built-up funds suddenly get released in a burst of activity, demand will droop again, bringing down prices.

So is this a head fake after all? There is a spring rebound underway in consumer spending, but it may lack sufficient stamina to last into the third quarter.

Gambling Limps Back

Per Macau’s Gaming Inspection and Coordination Bureau, February saw Macau gambling revenues drop 49% year-over-year, the first annual drop in Chinese gambling revenues. The reason: Chinese government anti-graft crackdowns have set limits on the number of gamblers allowed to visit Macau, and many wealthy gamblers are keeping their heads down to avoid attention. Those travel restrictions and interest in laying-low is hitting Vegas as well. Not to mention, folks like Steve Wynn are reporting that business is bad in Sin City.

For a handle on US consumers, the odds are better if we ignore Vegas and concentrate on the local casinos; the drive-in places, not the fly-in places.

Just as retail partially rebounded in March, so too did gambling.

4vice

For some reason, many people expected that the March retail data would rebound a lot stronger than it did. This made no sense given that storms also hit March pretty hard, but there was a partial rebound in retail, just as there is a partial rebound in gambling.

What’s especially interesting are the upticks in areas hit hardest by the snowstorms: Connecticut and Atlantic City. That just underscores the large pent-up desire and cash available to consumers, which is a great sign for April.

“High” Profits: Big Tobacco Turns Big Whacky Tobacky

Name the world’s biggest drug pushers and Philip Morris is near the top. As global tobacco consumption slows, Big Tobacco is looking at alternatives like cannabis. It’s the equivalent of Seagram going after Molson. Liquor or beer… it’s all drinking. Tobacco or cannabis… it’s all smoking.

Big Tobacco also brings some much needed advantages to the cannabis community (in no particular order):

  • Political lobbying strength
  • Ties to farmers
  • Familiarity with the market dynamics of cash crops
  • Existing infrastructure to scale production
  • National branding
  • Quality control methodologies
  • Experience with extracting and mass producing the key chemical components (Cannabis-laced food products already exist, but are companies like Frito-Lay planning on tossing THC in the Tostitos?)

Also don’t forget that people all over the world frequently smoke tobacco and cannabis together.

Big Tobacco has been studying the cannabis opportunity for decades. As part of the tobacco settlements a few years ago, millions of pages of documents were released by Philip Morris et al. According to a study done by the Center for Tobacco Control Research and Education, since the 1970s Philip Morris, RJ Reynolds and BAT:

  • Determined cannabis is not a threat to tobacco
  • Studied ways to affect decriminalization and legalization
  • Considered combining cigarettes and cannabis

The business potential was recognized quickly. Cannabis was not perceived as a competitive product. Philip Morris underwrote a study that concluded:

“…marihuana (sic) smoking will have grown to immense proportions within a decade and will probably be legalized. The company that will bring out the first marihuana (sic) smoking devices, be it a cigarette or some other form, will capture the market and be in a better position than its competitors to satisfy the legal public demand for such products.”

Aside from business prospects, switching from tobacco to cannabis will have health benefits. Tobacco kills, that much is proven. Conversely, there are no meaningful studies that demonstrate cannabis is a health hazard. True or not, the general assumption is that it’s healthier. In a 1976 memo to BAT, it was noted:

“If more restrictions are placed on tobacco and if the marijuana habit notches up further small advances in legality, many people may switch from one to the other in their search for a form of escape from our neurotic civilization. Marijuana supporters would claim that was a net improvement from the health aspect.”

The key obstacle in all this is the public’s conditioning to believe that marijuana is morally bad. As BAT noted in 1980:

“At present the taking of many of these drugs is either medically prescribed or regarded as deviant behavior, but could be “socialized” like alcoholic drinking and tobacco smoking…”

...

Near-Term Optimism in Vice May Not Last

The market seems revved up to further the gains in vice spending, at least in the short-term, as people spend their pent-up cash reserves from the storm-ridden first quarter of the year.

Yet proceed with caution, because this short-term spurt in vice spending is a bubble about to burst by summer’s end.

 

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Thu, 05/21/2015 - 08:59 | 6116863 junction
junction's picture

Money well spent by taxpayers, following the example of DEA agents.

Thu, 05/21/2015 - 09:01 | 6116874 TeamDepends
TeamDepends's picture

Maybe we could roll up our debt and smoke it.

Thu, 05/21/2015 - 09:15 | 6116928 Oh regional Indian
Oh regional Indian's picture

America is of course the world's most self-avowed christian nation.

In God we trust. Whose god?

What happens in Vegas....yeah, let's make Vegas the convention hub. That way, all the drinking, cheating, prostituting, drugging etc. will process 42 million adults a year...

All left with that Vegas grime on the outside and in.

Yeah, what happens in vegas actually infects the world...

https://aadivaahan.wordpress.com/2015/05/21/are-you-ready/

Thu, 05/21/2015 - 10:10 | 6117104 Dame Ednas Possum
Dame Ednas Possum's picture

In Italy this would result in GDP spiking.

Silvio would be proud.

Thu, 05/21/2015 - 10:13 | 6117114 Richard Chesler
Richard Chesler's picture

EBT! EBT! EBT!

 

Thu, 05/21/2015 - 10:23 | 6117149 TheGreatRecovery
TheGreatRecovery's picture

PLEASE, Castro brothers, PLEASE let Sheldon Adelson emigrate to Havana.  :-)

Thu, 05/21/2015 - 09:18 | 6116937 swass
swass's picture

Wall Street probably took market profits while the retail investor got in, allowing them to spend the money on hookers, booze, and blow.

Thu, 05/21/2015 - 11:32 | 6117456 KnuckleDragger-X
KnuckleDragger-X's picture

As soon as they outlaw cash, this little problem will disappear...they think...

Thu, 05/21/2015 - 13:14 | 6117958 GOLDTRADERRR
GOLDTRADERRR's picture

"Maybe we could roll up our debt and smoke it."

Maybe we could make suppositories out of it and stick it up the asses of those in government because they are all obviously full of shit

http://goldtradercommentsaugust2010.blogspot.com/

Thu, 05/21/2015 - 09:23 | 6116879 VinceFostersGhost
VinceFostersGhost's picture

 

 

Stupid me, I just bought two $35 T-bone steaks.

 

It was fun while it lasted, but you don't need us to tell you that gas prices are back on the rise.

https://www.youtube.com/watch?v=dAkxR9T01pw

Thu, 05/21/2015 - 10:33 | 6117192 robertsgt40
robertsgt40's picture

I'm wondering if congress critters' salaries are in the hooker category? 

Thu, 05/21/2015 - 08:59 | 6116864 mtl4
mtl4's picture

Sorry calling BS on that headline.........looks pretty seasonal to me and April certainly appears to bring vice out of hibernation.

Thu, 05/21/2015 - 10:10 | 6117100 sodbuster
sodbuster's picture

Actually, I think that chart was just for the Secret Service.

Thu, 05/21/2015 - 09:02 | 6116881 Antifaschistische
Antifaschistische's picture

When some families wait 10 to 15 years for their fellow family members to "get to" America legitimately.   How is it that thousands and thousands of Chinese prostitutes are given a free pass?   Isn't it ironic, that every single one of them comes through New York.

Thu, 05/21/2015 - 09:08 | 6116902 Comte d'herblay
Comte d'herblay's picture

There are exceptions to EVERY rule and tight, petite, Little Brown did I say tight chinese girls are worthy, noble one.

Thu, 05/21/2015 - 09:14 | 6116925 Oldwood
Oldwood's picture

H1b visas?

Didn't you know there is a shortage of hookers willing to live 20 to a room and live on rice?

Thu, 05/21/2015 - 09:23 | 6116950 negative rates
negative rates's picture

It's not rice they are eating, they need a cool half million just to enter the usa,  they then pay taxes and compete with todays upper middles who have to live paycheck to paycheck  just to keep up with the joneses. It's the destruction of the middle class from every angle.

Thu, 05/21/2015 - 09:04 | 6116886 NoDebt
NoDebt's picture

"Client spending might be getting artificially pumped up"

Yes, very droll.

Thu, 05/21/2015 - 09:10 | 6116911 Grosvenor Pkwy
Grosvenor Pkwy's picture

No need to worry, because it may "suddenly get released in a burst of activity, demand will droop again"

Thu, 05/21/2015 - 09:04 | 6116889 Freewheelin Franklin
Freewheelin Franklin's picture

Bitches and blow, bitchez. 

Thu, 05/21/2015 - 09:05 | 6116892 Comte d'herblay
Comte d'herblay's picture

Other vices haven't been considered.  My GF thinks the horrific increase in my chocolate, ice cream, Twix, wedding and chinese sponge cake is worse than smoking, chewing tobacco, and watching IDHD programs about reality killing. 

 

Thu, 05/21/2015 - 10:05 | 6117085 Harbanger
Harbanger's picture

She may be right.  You could be suffering from a case of relationship gender role reversal.

Thu, 05/21/2015 - 09:06 | 6116894 Dr. Engali
Dr. Engali's picture

I've never understood the need to pay for sex. It's always been fairly easy to get it for free,and on those times when you can't find it you just have to take matters into your own hand.

Thu, 05/21/2015 - 09:10 | 6116914 Oldwood
Oldwood's picture

We just don't appreciate those things we get for free as much as those we pay for.

If people did better accounting of their marriages, they might actually feel more 'vested'. unfortunately we don't fully realize the costs till its over.

Thu, 05/21/2015 - 09:27 | 6116960 negative rates
negative rates's picture

There is always something that will not work out in a marriage, finding it (and managing it), or not finding it, is what makes for a good or bad marriage.

Thu, 05/21/2015 - 10:23 | 6117153 Pliskin
Pliskin's picture

Hmm, how can I put this? Let's think of women as fruit. I like bananas, they're my favourite fruit, but I don't want to eat them every god damn day.  It's nice to have an apple or a pear every now and again.

Comprendez?

Thu, 05/21/2015 - 10:39 | 6117214 CrazyCooter
CrazyCooter's picture

Monogamy is about family (sex and children). Marriage is about money (property), insurance, and taxes (in a nutshell).

No couple needs to get married to have a family and can do so quite successfully based on their ATTITUDES, CHOICES, and BEHAVIORS. A wedding ring changes none of that. Marriage is a legal status and introduces sharing of assets/liabilities, insurance, and special tax statuses.

The problem today, in my eyes, is culturally we are so far from the attitudes, choices, and behaviors that make for good families. Finding a quality life partner is fucking impossible these days, particularly as you get older (the good ones get it right the first time - strong bias towards fuck ups). And then there is the predatory legal system on top of that to destroy families and economic independance after divorce.

I would bet on a three legged plow mule to win the triple crown before I saddled up and rode into the sunset with an American gal who is in my age bracket. No fucking way, no how. I am sure there are exceptions, but none that I have met. Fortunately, I eventually met an amazing woman who isn't from the US and what a fucking eye opener that was! Totally happily married man and hope we have a lot of years together.

Trust me, it is all cultural and if what I see/know is any indicator of the broad reality, this place is heading for the shitter as the generational odometer keeps ticking over.

Regards,

Cooter

Thu, 05/21/2015 - 14:03 | 6118220 koncaswatch
koncaswatch's picture

+1 Cooter  I married gringas twice; longest 5 years. Left USSA 25 years ago and met a Latina/Black/Mayan; been married for 19 years now. We're growing old gracefully; no unreasonable expectations. :-)

Thu, 05/21/2015 - 09:12 | 6116918 Tasty Sandwich
Tasty Sandwich's picture

I don't pay prostitutes for sex; I pay them to leave.

    - Charlie Sheen

Thu, 05/21/2015 - 10:21 | 6117140 Pliskin
Pliskin's picture

Amen Brother!

Thu, 05/21/2015 - 09:16 | 6116932 NoDebt
NoDebt's picture

Judging by your picture, I find it hard to believe, doc.  You're telling me chicks are into the "big spikey eyeball" look?

Thu, 05/21/2015 - 19:58 | 6119508 StychoKiller
StychoKiller's picture

Fembots luv the look of real wood! :>D

Thu, 05/21/2015 - 09:07 | 6116901 Tasty Sandwich
Tasty Sandwich's picture

Top three reasons they can't get rid of cash.

Thu, 05/21/2015 - 09:08 | 6116903 roadhazard
roadhazard's picture

BS

Thu, 05/21/2015 - 09:09 | 6116907 Lady Jessica
Lady Jessica's picture

I prefer my vice seasonally adjusted.

Thu, 05/21/2015 - 09:20 | 6116939 VinceFostersGhost
VinceFostersGhost's picture

 

 

Since you're here. What do women spend their vice money on?

 

No, it's a serious question.

Thu, 05/21/2015 - 09:47 | 6117019 Lady Jessica
Lady Jessica's picture

Male hookers.  Lavender scented blow.

Thu, 05/21/2015 - 10:05 | 6117084 VinceFostersGhost
VinceFostersGhost's picture

 

 

Lavender scented blow

 

Huh, didn't even know there was such a thing. Good to know.

Thu, 05/21/2015 - 10:09 | 6117097 napples
napples's picture

Trips to Jamaica...
It's not just for fat, pedo-bears anymore!

Thu, 05/21/2015 - 10:25 | 6117159 TheGreatRecovery
TheGreatRecovery's picture

Houses.

Thu, 05/21/2015 - 10:54 | 6117274 CrazyCooter
CrazyCooter's picture

Sexual motivation in men is quite different than women. Suprise right?

Men are genetically programmed to desire YOUNGER and HEALTHIER partners, as this is directly related to successful births (older women has many more baby complications). Men have more children being promiscuous because they increase their "child production". That is to say, a child is more likely to come from a father who is promiscuous simply because there are more children born of those circumstances.

So, hookers scratch that itch for men.

Women on the other hand have to bear the children (dangerous) and need resources support to bear and raise the child. Without sufficient support/resources there is serious risk of child (or parent) death. And if mom doesn't raise the baby, it usually doesn't live (in historical terms), so a child is more likely to come from a mother who is attentive and caring simply because there are more children born of those circumstances. So, women are attracted to men who have status, wealth, and property - all resources which indicate the ability to bear and raise children. This also explains the age gap in relationships where both parties are scratching their itch.

So, women spend their vice money trying to look younger, sexier, more attractive. This explains boob jobs and all the other weird body mod crap that is COMPLETELY NORMAL now.

In conclusion, men pay for blowjobs and women pay for boob jobs.

https://www.youtube.com/watch?v=JW3cN4HWbjA (She likes money, He likes love)

Regards,

Cooter

Thu, 05/21/2015 - 17:15 | 6119079 22winmag
22winmag's picture

Bingo. We have a winner.

 

Most women are dried up by the time they are 25 or 30. A woman told me so.

Thu, 05/21/2015 - 20:13 | 6119546 Miffed Microbio...
Miffed Microbiologist's picture

I don't know. Those boob jobs look strange to me. Rubbery and unnatural. I think I'll pass.

Sometimes I think just having a fun personality, staying fit and taking care of yourself and enjoying sex is really all you need to keep a man happy. Mine doesn't complain. The women I knew who chose to ride the cock carousal instead of settling on one good guy, really looked scary when they hit 40.

Miffed;-)

Thu, 05/21/2015 - 09:09 | 6116908 22winmag
22winmag's picture

I don't smoke cigs and I don't drink heavily, but you bet your ass I'm stockpiling booze and cigs for barter when things go bartertown.

Thu, 05/21/2015 - 13:31 | 6118059 AmericanFUPAcabra
AmericanFUPAcabra's picture

Careful chief. Cigs don't have the shelf-life like grain alcohol does.

Thu, 05/21/2015 - 17:16 | 6119086 22winmag
22winmag's picture

True. Gotta rotate the cig stock, but raw tobacco stays fresh for years with proper storage conditions.

Thu, 05/21/2015 - 09:13 | 6116922 Katastrofenhausse
Katastrofenhausse's picture
Where The Gas Tax Cut Was Spent - Hookers, Booze, & Blow

and the rest was completely wasted

Thu, 05/21/2015 - 09:15 | 6116926 RushRoolz
RushRoolz's picture

This is what infuriates me! The government says there's no inflation, but if you want to buy necessities like food, gas, or sex the prices are going up!

Thu, 05/21/2015 - 09:50 | 6117030 Osmium
Osmium's picture

There are a few reasons they say there is no inflation.  If there was inflation, government handouts would have to rise as well.  Along with Social Security and disability checks.

Thu, 05/21/2015 - 09:19 | 6116935 ebworthen
ebworthen's picture

Tobacco is working hard to kill the vape industry, especially the small independent shops.

They are going to force closed container e-cigs, which are crap, via CONgress.

And don't get me started with the idiots who equate vaping to smoking.

I'll just start smoking again.

Thu, 05/21/2015 - 09:34 | 6116973 VinceFostersGhost
VinceFostersGhost's picture

 

 

E-Cigs: A Lifesaver That Health Fascists Want To Kill

http://www.forbes.com/sites/steveforbes/2015/01/05/e-cigs-a-lifesaver-th...

 

Thu, 05/21/2015 - 10:13 | 6117112 Bopper09
Bopper09's picture

I caught my 10 year old son smoking an e-cig, so I took it from him and threw the pack away and gave him shit.  He asked, 'why is it bad Dad?' and I said 'because it makes you look like a fag' and bought him a pack of cigars.

Thu, 05/21/2015 - 10:20 | 6117138 VinceFostersGhost
VinceFostersGhost's picture

 

 

bought him a pack of cigars

 

Havana?

 

Got any more?

Thu, 05/21/2015 - 09:22 | 6116947 Brazen Heist
Brazen Heist's picture

Tough times...

Thu, 05/21/2015 - 09:24 | 6116954 Robert3620
Robert3620's picture

I can not wait till someone in power suggests that we need to add these items in to find our true gdp.

Thu, 05/21/2015 - 09:26 | 6116958 JD59
JD59's picture

Not true. Even the strip clubs are hurting for paying customers.

Thu, 05/21/2015 - 12:10 | 6117604 zeroaccountability
zeroaccountability's picture

Not the one I was at Saturday nite.  PACKED.

Thu, 05/21/2015 - 09:54 | 6117044 Chuck Knoblauch
Chuck Knoblauch's picture

When cash disappears, so will vice.

HAHAHAHA...........

Thu, 05/21/2015 - 10:03 | 6117081 joego1
joego1's picture

Is there an ETF for junk rated nasty girls in GOFO?

Thu, 05/21/2015 - 10:33 | 6117191 TheGreatRecovery
TheGreatRecovery's picture

BJK, FXD

Thu, 05/21/2015 - 10:10 | 6117105 Sanity Bear
Sanity Bear's picture

I'm so proud of America right now

Thu, 05/21/2015 - 10:13 | 6117117 kaiten
kaiten's picture

So eurozone was right to include hookers in GDP figures, after all :D

Thu, 05/21/2015 - 10:14 | 6117118 Dumgoy
Dumgoy's picture

I likes titties.

Thu, 05/21/2015 - 12:11 | 6117610 zeroaccountability
zeroaccountability's picture

That's EXACTLY what I was shouting out Saturday nite!

Thu, 05/21/2015 - 10:18 | 6117120 Billy Bob101
Billy Bob101's picture

The public probably suffers a net loss when the price of gas drops because the taxes go up and the oil companies run the prices up at the first opportunity to make up for it.

Thu, 05/21/2015 - 10:18 | 6117134 gwar5
gwar5's picture

Panicked states are looking to kickstart gas tax revenues by inventing the, "Mileage tax". This means all the big-government-believing enviro wackos who smugly marched out and paid premiums for electric cars and hybrids, boasting future savings at the pump, are going to get fucked under the Karma bus.

 

Let's face it, electric cars still run on 40% coal burning electricity and hybrids that get 45 mpg are already no match for fuel injected turbo diesels (TDIs) that already get 70 mpg in Europe (but are not allowed in the USA).

Thu, 05/21/2015 - 10:19 | 6117136 Enceladus
Enceladus's picture

But it's still down 1 tic yoy... just sayin'

Thu, 05/21/2015 - 10:19 | 6117137 wrs1
wrs1's picture

In the meantime oil is back over $60........................

Thu, 05/21/2015 - 10:34 | 6117200 TheGreatRecovery
TheGreatRecovery's picture

"Send us your tired, your poor, your tight-breasted yearning to own a house in Brooklyn".

Thu, 05/21/2015 - 10:40 | 6117227 Mini-Me
Mini-Me's picture

"...escorts expected no inflation."  If there's no inflation, they'd better find a new profession.

Thu, 05/21/2015 - 11:01 | 6117308 DontFollowMyAdv...
DontFollowMyAdviceImaDummy's picture

Nothing to see here... people are naturally more horny in springtime which is why the demand and price of a sexworker goes up then.

 

Thu, 05/21/2015 - 11:23 | 6117398 PTR
PTR's picture

Surely Romania got a piece of the action?  Not everyone is likely to go the hooker route.

Thu, 05/21/2015 - 11:52 | 6117532 BoPeople
BoPeople's picture

Sorry, looks seasonal to me.

Thu, 05/21/2015 - 12:04 | 6117570 Itchy and Scratchy
Itchy and Scratchy's picture

Phew! At least they didn't waste any $$$! Had me worried for a bit!

Thu, 05/21/2015 - 12:31 | 6117718 Itchy and Scratchy
Itchy and Scratchy's picture

Wasn't that called the Bill Clinton Index at one time?

Thu, 05/21/2015 - 12:34 | 6117743 Bear
Bear's picture

Don't understand ... US has spent billions to eliminate tobacco ... in ten years pot will be demonized as causing dementia, heart problems, and Copd and we will spend billions to eliminate it ... why don't we just skip all this and embrace E-Pot 

Thu, 05/21/2015 - 14:23 | 6118336 oudinot
oudinot's picture

Bear: No chronic marijuana smoker has ever contracted dementia.

Thu, 05/21/2015 - 12:44 | 6117797 tnquake
tnquake's picture

Dang, missed another one!

Still waiting for that TV Economist's program to work out... you know "Buy high, sell low"

Picked the wrong week to give up sniffing glue...

Thu, 05/21/2015 - 18:58 | 6119369 DipshitMiddleCl...
DipshitMiddleClassWhiteKid's picture

more like dudes with cash know the world is coming to an end soon so they're enjoying their spoils while they can

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