Financial topics

Investments, gold, currencies, surviving after a financial meltdown
Higgenbotham
Posts: 7996
Joined: Wed Sep 24, 2008 11:28 pm

Re: Financial topics

Post by Higgenbotham »

John wrote:More bad news just announced:

GM auto sales for May down 1.2%.

Experts had predicted they would be up 1.5%.

If you put together news like this with the rapidly deteriorating
financial situation in Europe and political situation in the Mideast,
as well as the possibility that China's huge real estate bubble might
finally burst, then there's definitely a feeling that history is
speeding up toward something.

John
The March Traffic Volume Trends is showing the first year over year decrease in VMT since the start of the post March 2009 "manufactured recovery" (charts on page 10 show this).

http://www.fhwa.dot.gov/ohim/tvtw/11martvt/11martvt.pdf

About the time VMT started dropping off, one of our Fed officials said it would take $145 oil to derail the recovery. I've searched and searched for the article but can't find it.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
aedens
Posts: 5211
Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

http://www.frbsf.org/publications/econo ... 6-28bk.pdf <----------- Higg
Measuring Oil-Price Shocks
Using Market-Based Information
CME to delivery would emphatically stop the nonsense.

(G-T) = (S-I) – NX

(G is government spending, T is taxes, S is savings, I is investment and NX is net exports).


Shocks from VAR with net oil price increase.
Conventional measures of oil-price shocks based on oil-price changes have two obvious
flaws: endogeneity and forecastability as paper unfolds.

http://www.ogj.com/index.html

"It seems the incident was in a noncore part of the refinery since it's still running. There's no reason why it should disrupt supplies anywhere in Europe. There's overcapacity in the downstream sector anyway," said Robert Beaman, an oil analyst at consultant Business Monitor International.

Also a open question is what does the Ruble want to equalibrium on there aquisition of a devalued currency?
What united the Third Estate is that most had little or no wealth and yet were forced to pay disproportionately high taxes to the other Estates.

http://www.marketwatch.com/story/how-to ... nginsightb
Higgenbotham
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Joined: Wed Sep 24, 2008 11:28 pm

Re: Financial topics

Post by Higgenbotham »

aedens wrote:http://www.frbsf.org/publications/econo ... 6-28bk.pdf <----------- Higg
Measuring Oil-Price Shocks Using Market-Based Information
We develop two measures of exogenous oil-price shocks for the period 1984 to 2006 based on market commentaries on daily oil-price fluctuations.
VMT (vehicle miles traveled) increased every year from 1984 to 2006. In fact, the 12 month rolling average of VMT increased almost every month during these 13 years with the exception of 2 months during the early 1990s recession and 3 months during the early 2000s recession. During this time period virtually nothing derailed the tendency of Americans to increase their driving - not the 1987 crash, the bursting of the tech bubble or the 9-11 attacks. Since the peak of VMT in 2007, virtually nothing has derailed the tendency of Americans to decrease their driving.

In fact, the severe recessions and oil shocks of the 1970s and 1980s barely derailed the tendency of Americans to increase their driving, and that was with gasoline consuming a larger percentage of the family budget than it does today. I don't have the data, but it's a virtual certainty that auto sales and VMT would have increased handily all the through the 1930s too. That may be comparable to the fact that sales of certain electronic gadgets are increasing through this Depression. I think everyone here can make the obvious Generational Dynamics conclusions as well as understand why the Crusty Old Bureaucracy of the Fed will have trouble making these conclusions.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
aedens
Posts: 5211
Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

Vehicle miles traveled, a policy of taxing motorists is VMT they want.
They have no other interest since revenue harvestor's bring no valued service.

They have no intent to be reasonable. Many convey 20 percent tax on over x, No more, no less justly so.
They get 15% as gatekeeprs only and the states get 5% based on reality not abstract ideologues. Caeser on a leash
since they destoyed us. Lobby dollars taxed 40 percent since then imo the demogogues will be omitted and singled out
as wasted captial. The two parties have destroyed the republic. Professing to be wise they became fools and even they know it.
When all are the same the voters will see real time ass hats as they are and the election process will
eliminate the waste and you can bank that as fact. The facts pan out since the mid sixty's on capital and before that all
government's are pissing contest and they tell the taxpayer it's raining. Top to bottum prevail all over terra to control and not value much of
anything since what do they really control other than excess.
If they move reserves to 20 percent backed, whatever...

As old observed.
OLD1953 » Wed Jun 01, 2011 7:22 pm
Analysts have been jumping on the "US manufacturing to be cheaper than China by 2015" bandwagon recently, though I suspect they are actually using US overall data to reach that conclusion. I strongly believe that breaking the US up regionally would show cheaper costs in the SouthEast and MidWest than elsewhere, and that region has already passed China as the cheapest place to manufacture goods for delivery in the Western Hemisphere, when all relevant factors are taken into consideration, productivity, work stoppages, expected salary increases and transportation costs.

The fact of the matter is ask any one in China what is really going on price supports issues and property rights and you will see the labor cost issue's disappear rather quickly. Remember policy is only a extraction process and to confuse not a value creation process.
I think Higgy's question is relevant to fixed analysis which dovetails to basic facets. The government is the problem not us. They will kill us off for there so reality of justice today. If you make a mess you are NOT walking away since the local sheriff has room for your lack of long term focus you stuck us with as EPA sites. Some will suggest that different points of production call for different levels of local water,air, and land quality abuse. I find that a degree of short term avarice that governments wish to shit in there own bed and on there people obsolete decades ago. It is just the art of greed at the barrel of a gun.

Worse is Taylorism, like the fashionable social constructivism—or better, social determinism constrains individuality and agency, subordinating them to the industrial process. And the industrial process itself is never controlled locally by the parts: 29 April 2008 (collegiateway.org)

“the man who is…physically able to handle pig-iron and is sufficiently phlegmatic and stupid to choose this for his occupation is rarely able to comprehend the science of handling pig-iron,” declared Taylor. The industrial process must be controlled centrally by professional managers:
It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.
We go this mental contruct every few years with another flavor of the day program.
aedens
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Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

Higgenbotham
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Joined: Wed Sep 24, 2008 11:28 pm

Re: Financial topics

Post by Higgenbotham »

Higgenbotham wrote:
We develop two measures of exogenous oil-price shocks for the period 1984 to 2006 based on market commentaries on daily oil-price fluctuations.
VMT (vehicle miles traveled) increased every year from 1984 to 2006.
Past oil price correlations will not hold up in the present environment. VMT began to level off and decline in March 2011 when oil prices went over $100 per barrel. Previously, VMT began to level off and decline between December 2007 and March 2008 when oil prices went over $100 per barrel. That may be as close as we can get to developing a price correlation.

John's note about GM sales declines would not be surprising given the context of VMT declines. Generationally speaking, it may be that Millenials are more likely to use an electronic device than go out "cruising" as young people did in the 1950s, 1960s or 1970s. I noted to John years ago that GDP is very highly correlated to energy usage. Also:
Since 1957, the cumulative correlation rate between VMT and Real GDP, calculated using Pearson’s R is 0.9913."
http://www.scribd.com/doc/51841381/Vehi ... March-2011
The correlation is beginning to break down but it still correlates strongly at about 0.95. Bottom line would be GDP and energy usage or VMT will still correlate strongly enough to have predictive relevance but a few percent variance has blown out the price correlations of previous decades. So the Fed will need to go back to the drawing board.

If they want to tax the old economy by putting tax on VMT then they will need to stop trying to enable old Third Turning capacity and work to enable future First Turning capacity as I noted previously. A simultaneous tax on VMT and more QE would be the worst of all policy measures, akin to throwing sand in the gears of the economy.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
OLD1953
Posts: 946
Joined: Tue Aug 11, 2009 11:16 pm

Re: Financial topics

Post by OLD1953 »

Crusing is directly related to sexual activity, if sexual contacts are easier/cheaper to make via internet chats than via cruising, then crusing will naturally decline. (Yes, that's droning the obvious through my nose, sry.)

Had to laugh over Feldstein today :

http://online.wsj.com/article/SB1000142 ... lenews_wsj

The economy would be doing great if there was more stimulus, properly applied (meaning his way) and more tax cuts with increases in all the spending he approves of and declines in everything he doesn't approve of. Wow. Run that man for President, LOL. Haven't we heard that before?

Somewhere, I remember someone saying "Every dish washer had some plan to stimulate the economy, usually by putting themselves on top of the heap and everyone else beneath them. It was a crazy time." in reference to the depression. Thought of that at once reading over his "we need more and better stimulus to keep everything going the same old way" spiel. The thought of changing the way we do things never crossed his mind, but that's exactly how we'll get out of this mess. Eventually.

And now Bernake is taking the blame for stock losses:

http://online.wsj.com/article/SB1000142 ... stpop_read

When that happens to a Fed chief, the end for him is near.
aedens
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Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

New regulations from the Environmental Protection Agency mean a lot of coal-fired power plants will shut down soon, said James Wood, deputy assistant secretary for the U.S. Department of Energy. He said the approval of new rules for air pollution, water pollution and waste disposal could result in the retirement of between 35 and 70 gigawatts of coal-fired power generation nationwide.
Better facts are here and not politics: http://www.nfpa.org/categoryList.asp?ca ... =1#boiler6
The MIOSHA report concluded that several factors contributed to the incident. Among these were the lack of operating igniter and flame-sensing interlocks that would have prevented natural gas flow into the furnace without any flame or igniter and the lack of specific written procedures for shutting down and blanking the natural gas lines. Communication among the boiler operators and the crew performing the gas line blanking procedure was also inadequate.
http://www.michigan.gov/lara/0,1607,7-1 ... --,00.html

AEP: Company spokeswoman Jeri Matheney could not estimate how many coal mining jobs would be lost if all of the proposed EPA regulations were to take effect. "While we believe that each plant job creates three spin-off jobs, that's not including coal mining," she said. "There is really a global market for coal now, so I would hesitate to quantify a job loss in coal mining." Matheney also could not immediately estimate how many tons of coal currently burned by the utility each year would not be used if all of the EPA proposals took effect. Morris said, "Businesses that have benefited from reasonably priced coal-fueled power will face the impact of electricity price increases ranging from 10 percent to more than 35 percent just for compliance with these environmental rules at a time when they are still trying to recover from the economic downturn." Sen. Joe Manchin, D-W.Va., said in a prepared statement, "My heart truly goes out to the hardworking men and women who have spent years working at American Electric Power and are now facing an uncertain future. My office is ready and prepared to help these hardworking West Virginians and their families in any way that we can. "Let me be clear, it's decisions like the one made by AEP today that demonstrate the urgent need to rein in government agencies like the EPA, preventing them from overstepping their bounds and imposing regulations that not only cost us good American jobs, but hurt our economy," Manchin said. "Onerous regulations issued by the EPA are the reason that 242 West Virginians will lose their jobs, and that's simply wrong."
Manchin said he is co-sponsoring a bill that would require Congressional approval of any interim or final federal regulation that costs more than $100 million. He said it is "our urgent mission to rein in the EPA and other bureaucratic agencies.
"As I have long said: Elected officials should be the people who are responsible for making major decisions that affect our economy, not bureaucrats who are unaccountable to any constituents and have never created jobs," he said.

http://www.epa.gov/climatechange/economics/apa.html
The American Power Act (APA) is draft legislation in the U.S. Senate that would put limits on greenhouse gas emissions consistent with the Administration's climate change goals. I am still waiting for the Volcanoe fines....
But: http://www.epa.gov/region4/kingston/ Restoration of the areas impacted by the coal ash spill at the TVA Kingston Fossil Plant (the Site) in Kingston, Tenn. Closer attention is warranted for proactive measures and cost basis for longer term technological solutions.
On June 14, 2010, TDEC issued a Commissioner’s Order to TVA assessing $11.5 million in penalties in response to the coal ash release for violations of the Tennessee Water Quality Control Act and the Tennessee Solid Waste Disposal Act. The $11.5 million is to be paid, as follows:

$2.5 million to TDEC by July 15, 2010 (PAID);
At least $2 million in Supplemental Environmental Projects to benefit the environment must be proposed by TVA by Dec. 31, 2010 and approved by TDEC (TIMELY SUBMITTED and APPROVED);
$2 to TDEC by July 15, 2011;
$2 to TDEC by July 15, 2012; and
$3 million was paid at the time of the Order issuance to reimburse TDEC’s oversight costs, as required by the Jan. 12, 2009 Order, and credited toward the $11.5 million penalty. TVA must continue to pay these oversight costs over and above this assessment, and to date, has reimbursed the department an additional $820,000.

BUT: On Wednesday January 27, 2010, 4:27 pm EST
UNIONTOWN, Ala. (AP) -- The owners of a west Alabama landfill have filed for bankruptcy protection despite a multimillion-dollar contract to accept tons of coal ash spilled in an environmental accident at a Tennessee Valley Authority power plant. The bankruptcy petition was filed Tuesday in Mobile by Perry Uniontown Ventures LLC and Perry County Associates. The companies own the land and permits for the Arrowhead Landfill, which has accepted tons of coal ash spilled at a Tennessee power plant in 2008. According to court documents, landfill operators Phillips and Jordan Inc. and Phill-Con Services have a multimillion-dollar contract with TVA to accept coal ash from Kingston, Tenn., site of the spill. But the owners of the landfill accuse the companies operating it of withholding money from them. The landfill owners claim the late payments forced them into Chapter 11 bankruptcy protection. Also, Perry County has yet to receive almost $780,000 in dumping fees even though the landfill operators have received millions of dollars from TVA, according to court documents.
http://finance.yahoo.com/q/cf?s=TVC+Cash+Flow&annual
The impact of electricity price increases ranging from 10 percent to more than 35 percent just for compliance with these environmental rules at a time when they are still trying to recover.
Revenue Harvesters at work. Confication levy's of hidden TAXES. The flyover states have no power to resist. If they gave 1/3 of the money to viable transmission electrical grid players only 2/3 would of been wasted. My point is reward the good logically audited BONDED players who could utilize that cash effectively in that pool. Industry can develope a cost basis to meet reality with actual technology to moderate customer's cost "inflations grip" which is lost GDP. Time can tell and will without draconian crushing measures. Both need to walk better now before we stumble but we know that ship has sailed. Indications are pointing strongly to another perfect storm from many linkages which appear as latency issues to proverbial black swan analogy's. Ruthlessly pursued to GD theory these waste triggers must be eliminated. The credit cycle cannot reset enough and political suicide convergances from economical disconnects are under the gravity which must be averted to let the market decide since direction at gunpoint from Federal death grips is certainly clear and present danger. They must understand the destructive nature of inflationary gravity but history concludes they cannot. Summers was correct in context to no flag models to a logical extent and federal proxy wars against the US market and private market taxpayers. Soon I am afraid correlations of latency's of local, state, and federal disconnects will overwhelm us. Higgs work does conclude VTM shifting but I assumed this was picked up by commercial vehicle levy's to Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving subsidise to now if it fails ruin the private taxpayer to implosion since no time in world history has so few done so much harm. Will the service from manufacturing industry model survive? History says no as we read since Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man. And we know who that is. We need honest gatekeepers as we see here but internally we need structual sanity 20 years ago to say the least. http://www.epa.gov/compliance/criminal/index.html

Natural Gas Futures are under algo attack as we speak.
h/t Taro faded from ZH
fade map http://www.nanex.net/FlashCrash/FlashCrashAnalysis.html
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aedens
Posts: 5211
Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

Same lines to correlation convulsions we have noted in the forums from social, political, market. Inflection point soon?
http://www.zerohedge.com/article/credit ... -implosion

Wall Street banks, which through May 25 increased their holdings of corporate and asset-backed debt to the highest level in 13 months, have been using both so-called Markit ABX and CMBX indexes to hedge against the deteriorating values of mortgage debt,
http://www.bloomberg.com/news/2011-06-0 ... rkets.html
said Christopher Sullivan, chief investment officer at United Nations Federal Credit Union in New York.

Many notes scraps are only left, or new spawned risk to unsuspecting proles . The market holds so much the better. Emptor
John
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Joined: Sat Sep 20, 2008 12:10 pm
Location: Cambridge, MA USA
Contact:

Re: Financial topics

Post by John »

In yesterday's "World View," I repeated Robert Shiller's statement
that he wouldn't be surprised if housing prices fell an additional
10-25%.

The article that I referenced contains the following:
> While it would be a surprise to see prices fall steeply, it’s
> possible for homes to lose more value if inflation picks up, Karl
> Case, co-founder of the index, said today.

> Real Terms

> “You could have flat nominal prices but still have it go down 20
> percent,” Case said during an interview at the conference. “If
> house prices stabilize, they could still go down in real terms. If
> we had inflation, it’d be great, because it’d mask a 25 percent
> decline.”

> http://www.bloomberg.com/news/2011-06-0 ... e-me-.html
This is one of the things that make me angry at these "experts" on
television. He's saying that 25% inflation "would be great!!"
because it would mask the 25% fall in housing prices. This is about
as airhead a remark as one can imagine. In fact, a 25% fall in
housing prices would mean deflation, not inflation.

I've been listening to people predict (hyper)inflation for almost ten
years. We're now halfway through 2011, with no real inflation
anywhere in sight. Case's remark is what I mean when I say that
predictions of inflation are the same kind of wishful thinking as
comes from people who used to say that there was no real estate
bubble, and are now saying that the stock market will surge in the
last half of the year.

John
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