Relevant and even prescient commentary on news, politics and the economy.

Housing rebounded sharply in May

by New Deal democrat

Housing rebounded sharply in May

One aspect of the economy that is important in terms of how well things will go once the pandemic ultimately recedes (which won’t occur until after next January 20) remains housing.

And low-interest rates brought housing back from the depths in May.

My look at the current state of mortgage rates, housing sales, and prices is up over at Seeking Alpha.

Global oil output surplus was at 8.6 million barrels per day in May, despite OPEC cut of 6.3 million bpd

Via Economic Populist, rjs writes:

Global oil output surplus was at 8.6 million barrels per day in May, despite OPEC cut of 6.3 million bpd

Wednesday of this past week saw the release of OPEC’s June Oil Market Report, which covers OPEC & global oil data for May, and hence it gives us a picture of the global oil supply & demand situation during the first month of the two-month agreement between OPEC, the Russians, and other oil producers to cut production by 9.7 million barrels a day from an elevated October 2018 baseline.   But before we review it, ​we have to caution that estimating oil demand while most countries on the planet are restarting their economies after a month or two of lockdown is pretty ​speculative, and hence the demand figures we’ll be reporting this month should be considered as having a much larger margin of error than we’d normally expect from this report…

The first table from this monthly report that we’ll review is from the page numbered 44 of this month’s report (pdf page 54), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate. For all their official production measurements, OPEC uses an average of estimates from six “secondary sources”, namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thus avert any potential disputes that could arise if each member reported their own figures…

 

Coronavirus dashboard for June 23: focusing on deaths, and the Trumpist South and Southwest

Coronavirus dashboard for June 23: focusing on deaths, and the Trumpist South and Southwest

Confirmed total US infections: 2,312,302. (+31,433 in past 24 hours)
Confirmed total US deaths: 120,402 (+425 in past 24 hours)

We know that new cases are accelerating again. Is it translating into an increase in deaths? The answer appears to be: not yet, but getting close.

Here is the 7 day average of new deaths in the US:

Figure 1

In the past 3 days, the decline has ceased at roughly 610/day.

Going Too Far

Going Too Far

Unfortunately, it was going to happen, and we who support the movement need to call out those instances where it goes too far.  I am talking about the justified Black Lives Matter (BLM) movement, mostly characterized by widespread peaceful protests even in small rural towns that never see such things, and with a solid majority of the American people currently supporting both the BLM and its main demands.  As it is, one should probably not tie the BLM to some of these recent unacceptable events, although those engaged in them will justify their actions as being part of the movement. This should not be accepted.

OK, the one that has really put me off happened last night at sometime after 10:30 PM in Madison, Wisconsin.  A statue I know well was not only pulled down, but it was decapitated with both parts thrown in a nearby lake, although apparently since recovered. This statue stood on the east corner of the Capitol Square downtown.  It is of Hans Christian Heg (1829-1863).  An immigrant from Norway, he was an active anti-slavery abolitionist and member of the Free Soil Party who led the 15th Scandinavian American regiment in the Union army.  He died fighting against the Confederacy in the Battle of Chickamauga, which it says on the base of his statue.  There is absolutely no justification for this event.

This was accompanied by other pretty unacceptable nonsense. The “Forward” statue at the opposite end of the square was also pulled down and dragged down State Street.  This is of a generic woman representing the state motto of “Forward,” not quite as completely insane as pulling down Heg, but also without any obvious justification. The Forward motto and idea has long been associated with the Progressive tradition in the state, although I suppose one could drag in bad stuff about some of those folks, such as that some supported eugenics. But I do not think this crowd was thinking about that.

What Will History Say

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        The Past                                                                  Now             The Future

What Will History Say

by

Ken Melvin

When the new US History books come out in 2040, what will they have to say about 2020? What will they say about:  Globalization?  The Trump Presidency?  Global Warming?  The 2020 Pandemic?  China’s Rise?  America’s Decline?  Capitalism and Free markets?  Mitch McConnell?

to run where the brave dare not go.

Globalization: From a US perspective, globalization began in the 1970s with the first large-scale offshoring of semi-conductor, clothing, shoe, electronic, … manufacturing, and the large-scale importation of automobiles, and accelerated during the 1980s. Capitalists and 401Ks were the most significant forces driving globalization. As a result of globalization, the DJI soared to new heights.

By 2020, most all of our critical medicines were being manufactured in China and India; hampering our ability to respond to the Covid-19 Pandemic, causing tens of thousands of Americans to die unnecessarily. The US was no longer self-sufficient, hadn’t been for more than twenty years.

Significant unintended consequences of Globalization include:   Millions of well-paying jobs were sent overseas.  A Globalization related Opioid Epidemic that began in the 1990s. The American landscape was littered with dead and dying communities.   By 2020, 40% of US Workers were living from paycheck to paycheck; working at jobs that did not pay a living wage.   America suffered a soaring homeless population. Due to offshored critical manufacturing, the nation was unable to respond to a worldwide pandemic.

What Was Behind Barr’s Friday Night Massacre???

What Was Behind Barr’s Friday Night Massacre? . . . Ignorance

A comment in my wanderings:

Barr could not fire Berman who is a court appointed US Attorney. His foolish attempt to do so only makes him look even worse than what he was perceived to be.

On Friday night, Barr claimed Berman had resigned. Sitting in the wings to replace Berman, a golfing buddy of Trump’s who is the chairman of the Securities and Exchange Commission, Jay Clayton would be the nominee to replace Berman. In the interim, the job would go to Craig Carpenito, the U.S. attorney for New Jersey. What surprised me was Berman replying he had not resigned and would not resign. As it came to light, Barr had no power to get rid of the court-appointed U.S. attorney,

Barr was forced to backpedal and enlist the president’s help. On Saturday, Barr announced that Trump was firing Berman at his request.

Trump tried to sidestep the mess by telling reporters:

“I’m not involved,”

Trump and Barr were passing the bag of crap and blame back and forth with their comments.

So who is going to replace Berman? Berman’s deputy, Audrey Strauss, the first assistant U.S. attorney. Ms. Strauss is a veteran prosecutor, respected by her peers, thoroughly versed in the cases that threaten Trump, and not relevant to all of this . . . a Democrat who donated to Hillary Clinton in 2016.

What has transpired over the last few months is a president who conspired with an ideological DOJ AG to exercise greater authoritarian power over his government and who is stumbling into blunder after blunder destroying any illusion of control and with it the grounds for fearing him.

Grinning (me)   .   .   .    a masterful setup and follow through by Berman as he exits the door leaving behind a veteran prosecutor, respected by her peers, thoroughly versed in the cases threatening Trump, and who is (although irrelevant) a Democrat who donated to Hillary Clinton in 2016. Trump and Barr are stuck with Audrey Strauss. 🙂

Failure is a Contagion

A DA responder

The Challenges to the Dollar

by Joseph Joyce

The Challenges to the Dollar

The dollar’s position as the premier global currency has long seemed secure. The dollar accounts for about 60% of the foreign exchange reserves of central banks and similar proportions of international debt and loans. But recent developments raise the possibility of a transition to a stratified world economy in which the use of other currencies for regional trade and finance becomes more common.

Such a statement may seem to be inconsistent with the Federal Reserve’s activities to stabilize global financial markets. As it did during the global financial crisis of 2008-09, the Fed has activated currency swap lines with other central banks, including those of the Eurozone, Great Britain, Japan, Canada and Switzerland, as well as the monetary authorities of South Korea, Mexico, and Singapore. Those central banks that do not have swap agreements can borrow dollars from the Fed via its new foreign and international monetary authorities (FIMA) facility. Under this program, central banks that need dollars for their domestic financial institutions exchange U.S. Treasury securities for dollars through a repurchase agreement. These moves accompany the Fed’s extensive range of activities to support the U.S. economy, which include cutting the federal funds rate to zero, purchasing large amounts of Treasury, mortgage backed and corporate securities, and lending to corporations and state and municipal governments.

But other governments are uneasy with the U.S. government’s use of the dollar’s position in international finance to enforce compliance with its foreign policy goals. International transactions in dollars are cleared through the Society for Worldwide Interbank Financial Telecommunications (SWIFT) banking network and the Clearing House Interbank Payments System (CHIPS). The U.S. has denied foreign banks access to these systems when they wanted to penalize the banks for dealing with governments or companies that the U.S. seeks to punish. This practice has become more common under the Trump administration, which has used the sanctions to strike at Iran, North Korea, Russia, Venezuela, and others.

European leaders have made clear that they find this use of the dollar’s international role no longer acceptable. When the U.S. abandoned the agreements on nuclear weapons with Iran, European banks were forced to choose between defying the U.S. or their own governments, which encouraged them to continue their ties with Iran. In response, Britain, France, and Germany have founded a clearing house, Instex, to serve as an alternative system, and several other European Union members will join it. Moreover, if the Europeans proceed with the issuance of a common EU bond, there will be an alternative safe asset to U.S. Treasury bonds that will foster the use of the euro in foreign exchange reserves.

Is The Possible V-Shaped Recovery Flattening As The Second Quarter Comes To An End?

Is The Possible V-Shaped Recovery Flattening As The Second Quarter Comes To An End?

Probably,  although it is unclear whether or not we are having a V-shaped recovery (see most recent post here). However, whatever it is, it looks like the revived spread of the coronavirus is probably slowing it somewhat.  New cases are up by 15% nationally from a low point several weeks ago, and there are reports of businesses of various sorts of closing, if not whole communities.

The pattern of the increase has various aspects:

1) It seems to be now more in red states than blue states, with the trend having been toward this since the early days of the pandemic when it first started in major Dem cities in major Dem states, such as Seattle, WA, the Bay Area of CA, and the New York metro area.  Of the states with the most rapid recent increase, we have only three that are predominantly Dem: CA, OR, and NV, with one purplish, NC, and the rest GOP: SC, GA, FL, AL, MS, AR, OK, TX, AZ, UT.

2) While now it is predominantly rising in GOP states where governors have not strongly encouraged social distancing or mask-wearing while rushing to fully reopen, and in some cases even banning local communities from requiring mask-wearing in public places, although some of those are now backing off that, such as Abbott in Texas, if one looks at this at the county level it remains that Dem counties are still outnumbering GOP ones, although the trend is strong toward GOP ones, and the line on this one will probably be crossed soon (these designations are based on how they voted in the presidential election in 2016). The obvious explanation for this apparent discrepancy is that in the red states cases tend to be increasing more in densely populated areas, which are more likely to be urban areas in Dem counties in those states, such as the Houston metro area in Texas.

3)  There is not a clear pattern of these either being spread across states or concentrated in particular areas.  Some states with increases scattered widely include the Carolinas, Florida, and Alabama.  Somewhere they are more isolated/concentrated in particular locales include the two largest on this list: California and Texas.

4) Certain sectors seem to be especially hit be reclosings, notably restaurants and bars as well as some sports facilities.

5) A possible offset to all this is that certain communities are still reopening, despite this new round of new cases.  An example is Washington, D.C., which just got going today with its second stage of reopening, following its suburbs in MD and VA that have already done so.

Barkley Rosser

George Floyd and the Costs of Racial Capitalism

George Floyd and the Costs of Racial Capitalism, LAWCHA, Ken Estey, June 10, 2020

Some History

A little bit about LAWCHA. The “Labor and Working Class History Association” is an organization of scholars, teachers, students, labor educators, and activists who seek to promote public and scholarly awareness of labor and working-class history through research, writing, and organizing. It grew out of the conversations among labor historians over the course of a couple of years between 1996 and 1998 about the importance of giving labor history greater visibility nationally in both academic circles and public arenas.

Introduction

With all the news on the murder of George Floyd in Minneapolis, little is being said about George other than his demise at the hands of the police. Ken Etsey writes on George’s background as a person and why so many other Black Americans like George arrive at a similar point in time where they can lose their lives over so minor as a “supposed” counterfeit 20 dollar bill. Many others like George struggle in what is described as a Racial Capitalist economy which values flexibility to “hire and fire” and profit over Labor stability and good pay. It is a good read. James McElroy at  LAWCHA gave AB the go-ahead to post Ken Etsey’s commentary about George and a May economy in which there are gains in white employment while black and Latinx unemployment still rises.

George Floyd’s Story