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

New jobless claims rise slightly, expect a big payrolls gain tomorrow

New jobless claims rise slightly, expect a big payrolls gain tomorrow

New jobless claims are likely to the most important weekly economic data for the next 3 to 6 months. They are going to tell us whether, as the number of those vaccinated continues to increase, there will be a veritable surge in renewed commercial and social activities and attendant consumer spending, leading in turn to a strong rebound in monthly employment gains.Three weeks ago I set a few objective targets: I am looking for new claims to be under 500,000 by Memorial Day, and below 400,000 by Labor Day. 
This week initial jobless claims increased from last week’s pandemic lows. On a unadjusted basis, new jobless claims rose by 63,282 to 714,433. Seasonally adjusted claims rose by 61,000 from last week’s downwardly revised 658,000 to 719,000. The 4 week average of claims declined by 10,500 to 719,000, a new pandemic low. 

Flood insurance

Via Truthout , (https://truthout.org/articles/flood-risks-are-rising-amid-climate-change-but-congress-is-delaying-action) comes a reminder of a perennial problem:

Floods are the most common disaster in the United States. And the 2020 hurricane season was the busiest to date in the Atlantic — 73 percent more “active” than normal, The Washington Post reported, with a record number of storms breaking ground on U.S. soil, totaling $37 billion in damage. The frequency of what is known as “sunny day” or “high tide” flooding (flooding linked to sea level rise and visible as water bubbling up from storm drains into city streets) is also on the rise. In 2019, the median flood frequency doubled from 2000 levels, up to four days per year. That median is expected to rise to six days this year. By 2050, high tide flooding could reach 75 days annually.

Given the heightened risk that the federal government’s own data reveals, delaying the implementation of a system that takes those numbers into account is like “putting your head in the sand and trying to ignore it,” Carolyn Kousky, executive director of the Wharton Risk Center at the University of Pennsylvania, told USA Today.

This may be the most important housing chart of springtime 2021

This may be the most important housing chart of springtime 2021

My longform housing market analysis is almost complete, and will probably get posted later today or tomorrow at Seeking Alpha. I’ll post a link here once that is done.

In the meantime, consider the following. The Case Shiller national house price index had another sharp increase in February, and is now up 11.2% YoY, the highest rate since the days of the housing bubble in 2002 (green in the graph below):

Meanwhile, look at inventory (gold). In absolute terms, the seasonally adjusted inventory of new homes for sale bottomed last August and October. Last August inventory was down -12.3% YoY. As of last month, it was only down -4.6% YoY. At this rate of change, it will be *up* YoY by about May.

The Iran-China Deal

The Iran-China Deal

 Yes, this 25-year deal is a big deal, just recently signed and not getting much attention in the US media.  Juan Cole has called it the most important deal involving China and the Middle East since the days of the Mongol Empire in the 1200s, when both what was then Persia and China were actually under the same ruler.  This $400 billion deal was signed on the 50th anniversary of the opening of diplomatic relations between Iran (then under the rule of the Shah) and the Peoples’ Republic of China (then under the rule of Mao Zedong). Cole identifies this deal as a “slap in the face” to the United States, or at least a clear sign of the limits of US power in the Middle East, with China stepping forward as a strong long haul rival.

I note only two points here.  One is that on the one hand this is certainly a repudiation of US policy regarding Iran in recent years.  It may be that its signing at this moment is a response to the failure so far by the new Biden administration to follow through on his campaign promise to rejoin the JCPOA nuclear deal with Iran. That really should not have been all that hard, but it increasingly seems that this simple matter has gotten bogged down in extraneous demands by neocons in the Biden administration, with both the US and Iran now having gotten themselves into a “face” conflict regarding “who will move first.”  I continue to hope that cooler heads are engaging in some unpublicized diplomacy, but all the noises so far have been that they are not.  Both sides are posturing, but the US should have just moved. If this continues, it will be the most serious mistake of the Biden administration, and this move by Iran towards China seems to be part of this signaling.

Infrastructure

An Investment in the Future

It is said that Eisenhower brought home the Autobahn; that he foresaw the need for airports. Let us say that President Eisenhower, seeing these needs for infrastructure, brought America into the 20th Century, and say, “Thanks, Ike.” Through the years, the interstate gave everyone access to work, to recreation, to their Doctor, to the shopping mall, … ; Today, for these same reasons and more, every household should have good access to the internet, and, have a few other good things.

Before Eisenhower, President Roosevelt’s New Deal and its kin employed the unemployed of the Great Depression to build a lot of infrastructure, much of which is still in use today, nearly one-hundred years later. New Deal infrastructure included: safe clean water supplies, electricity, telephones, roads, schools, libraries, universities, parks, hydroelectric and irrigation dams, … . All of these things improved our quality of life. Imagine the 20th Century without them. Imagine today without them. Imagine life without recreation, recreation without those hiking trails. Our National Parks without conservation. Quality of life is important. Infrastructure improves our quality of life.

Is the Biden Presidency The Final Triumph Of The Silent Generation?

Is the Biden Presidency The Final Triumph Of The Silent Generation?, Econospeak, Barkley Rosser

The who?  Never heard of them?  Or never heard from them? More like the latter. After all they have not been called “Silent” for nothing.

Yes, it seems that we alternate generations between large noisy ones and smaller quieter ones.  The Greatest Generation survived the Great Depression and won World War II, and they certainly let everybody hear about all that a whole lot.  Two generations has been mine, with me a front end boomer, and we have certainly boomed plenty, much to the annoyance of many other generations.  Two generations after that we have the noisily whiney millennials, although I grant that they have had some unpleasant things happen to them so not totally without grounds for some of their whining.

In between the Greatests and boomers came the Silents, with poor ironic Gen X stuck between the boomers and the millennials, although I think the Gen Xers have been noisier than the Silents. And now we have Gen Z coming up, who do not seem all that silent, alhough maybe not quite as self-righteously noisy as the millennials.

Oklahoma charter schools granted local tax revenue in ‘seismic’ settlement

Via the Oklahoman comes this news on Republican state legislation. I believe Florida and other states are enacting radical ideology in more than the voting rights arena: Oklahoma charter schools granted local tax revenue in ‘seismic’ settlement

A groundbreaking settlement will fundamentally change the way charter schools are funded in Oklahoma, despite vehement opposition from the state’s top education official.

The Oklahoma State Board of Education voted 4-3 on Thursday in favor of an agreement with the Oklahoma Public Charter School Association to settle a 2017 lawsuit.

The charter school association called the agreement a “tremendous step” for equality in school funding.

State schools Superintendent Joy Hofmeister said the settlement could violate state law and have “seismic” implications by redistributing school funding.

“Personal income decreased $1,516.6 billion in February”

Commenter R.J.S., MARKETWATCH 666

Personal Income down 7.1% in February, Personal Spending down 1.0%, PCE Price Index up 0.2%

The February report on Personal Income and Outlays from the Bureau of Economic Analysis gives us nearly half the data that will go into 1st quarter GDP, since it gives us 2 months of data on our personal consumption expenditures (PCE), which accounts for nearly 70% of GDP, and the PCE price index, the inflation gauge the Fed targets, and which is used to adjust that personal spending data for inflation to give us the relative change in the output of goods and services that our spending indicated….this report also provides us with the nation’s personal income data, disposable personal income, which is income after taxes, and our monthly savings rate…however, because this report feeds into GDP and other national accounts data, the change reported for each of those metrics are not the current monthly change; rather, they’re seasonally adjusted amounts at an annual rate, ie, they tell us how much income and spending would increase in a year if February’s adjusted income and spending were extrapolated over an entire year….however, the percentage changes are computed monthly, from one month’s annualized figure to the next, and in this case of this month’s report they give us the percentage change in each annualized metric from January to February…

Hence, when the opening line of the press release for this report tell us “Personal income decreased $1,516.6 billion (7.1 percent) in February“, that means that the annualized figure for US personal income in February, $19,945.6 billion, was $1,516.6 billion, or roughly 7.1% less than the annualized personal income figure of $21,462.2 billion for January; the actual change in personal income from January to February is not provided…similarly, annualized disposable personal income, which is income after taxes, fell by nearly 8.0%, from an annual rate of an annual rate of $19,210.5 billion in January to an annual rate of $17,678.2 billion in February…the components of the monthly decrease in personal income, which can be seen in the Full Release & Tables (PDF) for this release, are also annualized figures…in February, the reason for the $1,516.6 billion annualized decrease in personal income was a $1,584.1 billion annualized decrease in government social benefits to individuals, which was only slightly offset by a $37.7 billion annualized increase in business & farm proprietors’ income and a $15.6 billion annualized increase in interest and dividend income…wages and salaries, which fell by an annualized $0.2 billion, were barely a factor in February’s personal income change . . .

Monday Morning Reads

The Real Border Crisis, The Atlantic, Adam Serwer, March 2021

This border surge is no different than 2019 and going back a decade. It will peak in May and the decline.

What is the border crisis? Is it the recent surge of migrants, or is it the treatment of those migrants in detention facilities? The answer to that question—or whether you consider the situation at the border to be a crisis at all—most likely determines what you think the Biden administration should do about it.

For conservatives, the answer is clear: Democrats invited the increase in migrants with their permissive, open-borders immigration policies. Republican Senator Tom Cotton of Arkansas has accused President Joe Biden of announcing that “the United States will not secure our border, and that is a big welcome sign to migrants from across the world.”

If the Biden administration’s leniency is responsible for the increase, as Republicans like Cotton believe, then it follows that the U.S. government should employ harsh measures in the interest of deterrence, much like the Trump administration did.

Some Republicans have sought to have it both ways, accusing the White House of being too permissive while also attacking the administration for detaining large numbers of migrants. Senator Marco Rubio of Florida declared on Twitter the increase in apprehensions was “caused entirely by President Biden’s words & actions” and, on the same day, that the administration was “putting kids in cages.”

Seasonal Migrant Surge At the Southern Border

The same as the last 10 years.

We can take this one more step and examine the trend by looking back to 2012 going forward and displaying the cumulative totals by month over eight years ending in 2020.

Box Ship Stuck in the Suez Canal

Mike’s Blog Roundup with Infidel 753 today featuring a Sunday post from “Butterflies and Wheels,” Ophelia Benson used commenter Freelander’s words about the Container ship stuck in the Suez Canal.. Whew, that was a long chain of tributes.

If you do not know, the Suez is a short-cut saving days and tons of fuel used when going around the Horn of Africa. It is estimated to be an ~$360,000 savings.


Container Ship “Ever Given,” Evergreen Line, The New York Times, Satellite image by CNES, via Airbus By Scott Reinhard

Evergreen Line Update, March 28th:

Having removed more than 20,000 tons of sand and mud, the dredging operation underway has succeeded in loosening the EVER GIVEN’s bow within the bank of the Suez Canal and the ship’s stern has been cleared from the sand bank. The rudder and propeller of the vessel are fully functional and expected to provide additional support to tugboats assigned to move the container ship from the accident site so that normal transit may again resume within the canal.

The rescue team is continuing the dredging efforts and will resume attempts to refloat the vessel at 14:00 local time in Egypt (20:00 Taipei time).


Former Box Ship Deck Officer Freelander’s Commentary on the Evergreen Line.

“I (Freelander) served as a Deck Officer on containerships (usually known as ‘boxboats’) for several years.

Evergreen, as a shipping line, was, and still is, regarded as a menace on the high seas. I saw an Evergreen ship run aground just outside Port Suez about twenty years ago, amongst other mishaps. The Evergreen ships were blatant in their recklessness: cutting across shipping lanes, ignoring the ‘Rules of the Road’ and even cutting through prohibited areas to save time.

Sometimes, we wondered if there was anyone on watch on the bridge. Several times, we altered course to avoid collisions, even when we had right of way or arrived at the pilot station on our allotted time. They would literally barge their way in.