The New York Times speaks out against free-trade

Here:

Since the 1970s, economic orthodoxy has argued for low tariffs, free capital flows, elimination of industrial subsidies, deregulation of labor markets, balanced budgets and low inflation. This philosophy — later known as the Washington Consensus — was the basis of advice the International Monetary Fund and the World Bank gave to developing countries in return for financial help. The irony is that during the Industrial Revolution, today’s rich countries — Britain, France and the United States — pursued the very opposite policies: high tariffs, government investment in industry, financial regulations and fixed values for currencies. Trade expanded, and capital flowed anyway. ... Nations that have ignored the nostrums of the Washington Consensus — China, India and Brazil — have grown rapidly and raised their standards of living. Improvements in poverty and inequality occurred in Latin America only in the 2000s, after the I.M.F. and the World Bank reduced their grip on those nations.

46,486,434 Americans received food stamps in July

The figure is down 2.4% from a year ago, according to the report released today.

11.2 million fewer people contribute to the economy today than in 2007

You'll have to do the math.

Rick Newman, here:

... there are still more than 16 million Americans who are unemployed or working less than they want because they can’t find a good full-time job. That’s 4.2 million more than in 2007.

Many others have dropped out of the labor force, which shows up in the numbers as a 3.3 percentage point drop in the participation rate since 2007. That might not seem like a big number, but it represents something like 7 million people who would be working or looking for work if they hadn’t dropped out. Combined with all the unemployed and underemployed, that’s a lot of people who are contributing less to the economy than they would have in a 2007 scenario.

The other big bummer is hourly wages, which have barely risen since 2007 when factoring in inflation. And that’s just for people with jobs. If you included people who used to have jobs but no longer do, the earnings number would be negative, which is why median household income is still far below where it was in 2007. That means people with jobs are barely staying even with inflation, on average, while the ranks of the economically distressed have swollen significantly.

Dallas Ebola vomit wasn't cleaned off the sidewalk for four days, and then improperly

Meanwhile, things Duncan contaminated filled 140 barrels.

The UK Telegraph, here:

Q: Was the ambulance trip to hospital handled properly?

A: On Sept 28 [Sunday] the daughter of his girlfriend brought Duncan tea in bed and found him shivering and sick. An ambulance was called. When it arrived neighbours witnessed him vomiting on the ground outside the apartment as he was placed in the emergency vehicle. No extra precautions were taken for the ambulance ride despite the fact he was Liberian and showing possible symptoms of Ebola. The ambulance was used for another 48 hours before being taken out of service. After his eventual diagnosis the three ambulance workers were told to stay home until they get the all clear. Meanwhile, it took until Thursday for workmen ... using high-pressure water jets and bleach to clean the area outside the apartment where he had been sick.

Unemployment drops to 5.9%, September jobs added were 248,000

Jobs are being added at the rate of 213,000 per month in the prior twelve months according to the report from the BLS (In 2013 population increased 187,000 per month). The average workweek is up .1 to 34.6 hours. Average hourly earnings were down a penny to $24.53. Those working usually part-time are 900,000 fewer in number than at the peak first reached in March 2010. Those working usually full-time are 3.4 million fewer in number than in the peak year of 2007. People working part-time but who want to be full-time are 2.6 million more in number than in the same month in 2007. The percentage of the population working, after falling dramatically after the election of Obama in November 2008 from 61.6 to 57.6 by January 2011, remains subdued at 1973 levels, at 59.1%.

How to sell the S&P500 in a bull market using the "Cundill" sell point

The Peter Cundill Sell is the principle that you sell half of your investment once it doubles, recovering 100% of the principal you risked. 

Assume you invested at the last S&P500 closing low, which was on March 9, 2009, at S&P 500 676.53. You multiply times 2 = 1,353.06, and sell half your holdings when the S&P500 rises to that level, according to the idea.

But the S&P500, for example, hit that level way back on April 27, 2011 at 1,355.66. So you doubled your money a long time ago, sold half your stake and recouped your entire principal. But then what? Cundill thought you were free to do anything with the remaining amount invested (which are the profits). The principal has to be reserved for another doubling opportunity.

What would a conservative bet with just the profits have meant from there?

Say you were to wager that the S&P500 would increase not 100% more as before, but only 25% more, because the S&P500 would have to hit 2706.12 to do the former. You are not greedy, just optimistic, you say. Is that a conservative plan? Maybe compared to what has just happened since 2009, but not really, because since 1970 the median annual return only has been north of 12%, half as much as that.

So you decide to let the profits ride, hoping for just an additional 12% on the index going forward. Here are the milestones of 12% from 1,353.06 up to today's current market level (1,949) at each of which you presumably sold half of your stake, gradually exiting the market and its growing risk:

1515.43 (February 2013)

1697.28 (July 2013)

1900.95 (May 2014).

An initial $10,000 invested this way made you $10,000 by April 2011 (not counting dividends).

The remaining $10,000 made you $1,200 by February 2013.

The remaining $5,600 made you $672 by July 2013.

The remaining $3,136 made you $376 by May 2014.

Since then you've had only $1,756 riding the market, making an additional 2.5% to date, or an additional $44. Total made: about $12,292 nominal. And you sell today.

By way of contrast, the buy and hold investor over the same period is up about $18,700, assuming he bought in low like you did and sells . . . TODAY. But trust me. He didn't buy low. And he won't sell today, tomorrow, in time to escape the correction, or any other time. He'll just ride it on down right past the 35% down marker at which point he'd begin waving up at you as he's headed lower. 

Jobless claims in September, not seasonally adjusted, have averaged just 236,000 weekly

Jobless claims in September have now averaged just 236,000 weekly as of this morning's report, the equivalent of an annual rate of just 12.3 million first time claims for unemployment.

Claims in August had averaged 253,000 weekly, down over 18% from July's 310,000 weekly. The average for the whole first half of the year was 326,000 weekly, so the current low level well below 300,000 sustained for two straight months is very welcome news at least for job holders.

With claims averaging 266,000 weekly at midpoint in the second half, it is conceivable that total claims in 2014 could come in under the 16 million mark, which would beat the best performance for initial claims achieved since 2000 (under George Bush). That will require claims averaging no more than about 310,000 weekly for the last three months of 2014. The last two months show that that low level is possible.

Stock futures a half hour after the report are nonplussed.

At 10.01 VGPMX is tonight again below the March 2009 low of 10.04

Vanguard Precious Metals and Mining is looking attractive once again, revisiting the territory of December 2013 when the fund briefly dipped below 10.00 to 9.69 or so. If a real stock market correction of 10% or more makes an appearance at long last, I'd expect the fund to fall in price quite a bit more, this sector fund being a stock fund. A stock market bear of 20% or more might actually take the NAV much lower, with the vicinity of 5.00 being not inconceivable.

ABA survey finds internet banking declines from 39% of customers in 2013 to 31% in 2014

Branch banking is up from 18% of customers in 2013 to 21% this year in the survey even as the number of branches has fallen back to 2006 levels, at 94,715.

Reported here.

Obama's 2014 #LIEOFTHEYEAR?

Obama quoted here, in National Journal, September 16th, 2014, two weeks ago, before the first US Ebola outbreak, reported today:

Obama said Tuesday that the outbreak is "a potential threat to global security, if these countries break down," yet said that the chance of an outbreak in the U.S. is unlikely.

Liberal hubris two months ago about Ebola virus may mean death for many Americans

Flashback to late July when you were on the beach. At the time the mendacious CDC said Ebola wouldn't spread "widely" in the US, not that it wouldn't get here, and you went on with your novel and your drink (dateline NBC here):

“It is not a potential of Ebola spreading widely in the U.S. That is not in the cards,” Frieden told reporters on a conference call. “We are not telling people who are essential to leave.” ... “This is a tragic, painful, dreadful, merciless virus. It is the largest, most complex outbreak that we know of in history,” Frieden said. “We at CDC are surging our response along with others. Although it will not be quick and it will not be easy, we do know how to stop Ebola.” ... “We have quarantine stations at all the major ports of entry,” he said. People cannot transmit Ebola to others unless they are sick, and Ebola makes you so sick that it’s pretty obvious pretty quickly, Frieden said. A traveler will be flagged by the flight crew and if someone gets sick after arrival in the U.S. they will almost certainly seek medical care. “Ebola poses little risk to the U.S. general population,” Frieden said. “Ebola is spread as people get sicker and sicker. They have fever and may develop serious symptoms.” Ebola doesn’t spread through the air like measles. People who get sick are family members or healthcare workers in prolonged and close contact with victims. ... “This is a marathon, not a sprint,” he said. “This is going to take at least three to six months, even if everything goes well.”

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If they knew how to stop Ebola, then why is it here two months later? Maybe because liberals couldn't get past their first ideological barrier: their commitment to the idea of world citizenship and thus of nations without borders and of free travel between them. Kind of reminds me of free trade, which has infected America with a disease known as unemployment and underemployment.

Stopping the spread of deadly viral disease requires restrictions on international travel, and contact tracing by every doctor, two things no longer routinely practiced in America nor supported by the health authorities. The latter has been considered "discriminatory" since the AIDS epidemic in the 1980s. And while AIDS has been more or less contained in the US for other reasons, sexually transmitted disease has not. Half the population carries one.

Your doctor is most likely part of the problem, not part of the solution.

US oil refining capacity is mismatched for our boom in light, sweet crude

So we either expand that capacity, or lift the 1975 ban on oil exports. Obama's decision to do nothing except take credit for production from private lands suggests he wants the oil boom to end.

Robert Samuelson, who has basically concluded elsewhere that Obama is lazy, in addition to being phony, tiny and small, here:

"The new oil consists mostly of "sweet, light" crudes, meaning they have a low sulfur content and are less dense than "sour, heavy" crudes. The trouble is that many U.S. refineries have been designed to process heavy, sour crudes and, therefore, aren't suitable for the new oil. At the end of 2013, the United States had 115 oil refineries capable of processing about 18 mbd, according to a report from the Congressional Research Service. About half were fitted for sour and heavy crudes. That's especially true along the Gulf of Mexico coast where more than half of U.S. refining capacity is located.

"The result is that more and more new oil is chasing less and less usable refining capacity. Refineries' bargaining power rises. Producers have to accept price discounts to sell their oil. A second problem is that much of the new production is located in North Dakota with an inadequate pipeline network to transport the crude to refineries. To offset more costly barge and rail transportation, producers (again) have to discount prices.

"Some strains will be eased by refinery expansions and new pipelines. How much is unclear. But as a report from the Brookings Institution argues, producers will be discouraged by an oil market that seems rigged against them. They will react by slowing -- or possibly stopping -- new exploration. The oil boom will ebb or end. Global oil supplies will then be lower than they would otherwise be; prices will be higher. It's a bad outcome for the United States but a good one for Russia, Iran and other producers hostile to us."

The US Dollar Currency Index, .DXY, is up 8.26% since May 6th: Expect pressure on 2nd half GDP from rising imports

Bush GDP vs. Obama GDP, same point in their presidencies

GDP under George W. Bush 5.5 years into his presidency was up nearly 35% nominal. Under Obama GDP is up nearly 18%.

Based on that, evidently, Time Magazine's Rana Foroohar is calling Obama's a 3% economy, without mentioning that Bush's was a 6% economy, nor that these figures are nominal as opposed to the generally reported real, inflation-adjusted numbers, here (it's two ways of making the present less intelligible, not more):

"But we’re now in a 3% economy, and I’m writing the same column [as three years ago]. Only this time, the message is more disturbing. Growth is back. Unemployment is down. But only a fraction of the jobs lost during the Great Recession that pay more than $15 per hour have been found. And wage growth is still hovering near zero, where it’s been for the past decade. Something is very, very broken in our economy.

"It’s a change that’s been coming for 20 years."

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Yes, wage growth has been flat since 2000. The difference is we still had our higher paying jobs with flat wage growth under Bush, but not now. But that, too, is only nominal. Add in inflation and we are 5.9% behind where we were in 2000, and Obama has done nothing to fix that, either. In fact, it got worse since the so-called recession ended in 2009, 3.1%. And dialing the blame back 20 years to further muddy the waters puts us in year two of the Clinton administration, when Clinton famously broke his promise and raised everyone's taxes, which precipitated one of the biggest and deepest waves of home equity borrowing ever to maintain disappearing lifestyles, helping to gut the basis of the American dream.

But that's not mentioned, either.

That's a lot for a financial journalist not to mention.

2Q2014 GDP, third estimate, comes in at 4.6%, 1Q still -2.1%

The third estimate of 2Q2014 GDP comes in at 4.6%, up from 4.2% a month earlier, mostly on revisions to exports and nonresidential fixed investment. Subtract 1.4 points for inventories and you've basically got 3.2%. Not too shabby but not gangbusters like it ought to be at this stage of the game.

Recall, however, that the export picture in 2Q reflects a dollar index trading in the range of 79, whereas the index has been on a tear since mid-July, marching upward beyond 85 today thus making exports very pricey in 3Q compared to then, portending rough news ahead on that front. Exports of goods are running at about $1.6 trillion nominal annualized in 2Q vs. $1.5 trillion a year ago. Imports of goods, however, which subtract from GDP, still swamp our exports by $800 billion net annually and are also up $100 billion year over year at $2.4 trillion nominal annualized in 2Q. To put that $800 billion in context, consider that total nominal GDP year over year is up only $700 billion. Think what we could be if we were an export powerhouse once again.

The Current Asset Allocation of The United States

Allocated to bonds of all types, through 2Q2014:   $38.17 trillion.

Allocated to stocks (current Wilshire 5000 X 1.2): $25.46 trillion.

Allocated to cash (MZM):                                               $12.72 trillion.

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Total:                                                                        $76.35 trillion.

That's 50% to bonds, 33% to stocks, and 17% to cash.

The trend since 2010 has been away from bonds at close to 59% to 50% now, mainly into stocks, while amounts allocated to cash have increased the percentage just a few points.

Total World Stock Market Capitalization Through 2012 Remains 17.5% Below The 2007 Peak

According to The World Bank, here.

Nigel Farage: The West is encroaching on Mr. Putin's space

"We should be viewing Ukraine as a buffer between East and West."

Interviewed here.

Freedom for me, but not for thee?

HEY HO LETS GO

Best reason yet to vote for Terri Lynn Land for US Senate from Michigan

Her Democrat opponent has been endorsed by former Republican governor, William Milliken. To moderate Republicans, like Milliken, compromising with Democrats is always more important than advancing the issues which matter to their constituencies. Republicans who vote for Peters are Republicans in name only.