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US Spends $1 Billion on Russian Helicopters for Afghan Military: Why? Posted: 08 Dec 2013 07:26 PM PST According to a top secret 2010 report the Russian-made Mi-17 helicopter is better then the US-made Chinook helicopter built by Boeing in Pennsylvania. Army Secretary John McHugh wrote in a 2011 memo "that the Mi-17 stands apart" when compared with other helicopters. Another study shows the Chinook was found to be "the most cost-effective single platform type fleet for the Afghan Air Force over a twenty year" period. This has the Christian Science Monitor and many others asking Why is US buying Russian helicopters for Afghan military? Higher Quality Questions I am not qualified to comment on which helicopter is better. Instead I want to ask a higher quality question: What the hell are we still doing in Afghanistan? We should have declared the war won 10 years ago and left. Better yet, we should not have gone there at all in the first place. Based on that simple logic, we should buy neither the Russian-made Mi-17 helicopters nor the Boeing Chinook for Afghanistan. Either way, I wonder if the real reason we bought Russian helicopters is fear for what happens to Chinook technology once we leave Afghanistan and the country falls to the Taliban once again. Regardless of "why" many important high-level questions remain. Open Questions In what ways does the top secret report show the Russian-made Mi-17 to be superior? If the Mi-17 is superior, how much money are we wasting on the Boeing Chinook program? How much money did we waste in Afghanistan? 13 years! Why? When, if ever, are we going to learn from such stupidity? Addendum: Here is the rationale for the Mi-17 There is no reasonable rationale for being in Afghanistan for 13 years  Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Young Voters Would Recall Obama, Congress, If Possible; Only 18% Think Obamacare will Make Things Better Posted: 08 Dec 2013 12:54 PM PST The Washington Post reports Majority of youngest voters would recall Obama. Young people, who played a major role in putting President Obama in the White House in 2008 and keeping him there after 2012, now say they would vote to recall the president if given the chance. A new Harvard University Institute of Politics poll shows 52 percent of Americans between the ages of 18 and 24 say they would vote to recall Obama. Among young people aged 18 to 29, the number is 47 percent. I am not sure how the Washington Post calculated the first breakdown unless they had more access to the data. Let's head straight to the Harvard Survey of Young Americans' Attitudes toward Politics and Public Service. Here are some questions I found particularly interesting. 6. For whom did you vote for president in 2012? Barack Obama ................................................ 55% Mitt Romney .................................................. 33% Someone else ................................................. 4% Don't remember ............................................. 1% Decline to answer ........................................... 6% 7. If you could re-cast your 2012 vote for president today, for whom would you vote? Barack Obama ................................................ 46% Mitt Romney .................................................. 35% Someone else ................................................. 13% Decline to answer ........................................... 7% 11. Do you consider yourself to be politically engaged or politically active? Yes ............................................................. 22% No .............................................................. 75% Decline to answer ........................................ 3% 12. All in all, do you think things in the nation are...? Generally headed in the right direction .......... 14% Off on the wrong track ................................... 49% Not sure what direction country is headed in . 34% Decline to answer ........................................... 3% 13. Do you consider yourself to be a supporter of the Tea Party movement, or are you not a supporter of the Tea Party movement? Supporter ........................................................ 11% Not a supporter ............................................... 45% Not sure .......................................................... 41% Refused .......................................................... 4% 15. In general, do you approve or disapprove of the job performance of Barack Obama as president. Approve .......................................................... 41% Disapprove ..................................................... 54% Decline to answer ........................................... 5% Some questions were split between asking about "Obamacare" or the "Affordable Care Act". Answers were similar regardless of the term used. 23. Do you approve or disapprove of [The Affordable Care Act/Obamacare], the comprehensive health reform package that President Obama signed into law in 2010? A. The Affordable Care Act. (n=1,042) Approve .......................................................... 39% Disapprove ..................................................... 56% Refused .......................................................... 5% B. Obamacare (n=1,047) Approve .......................................................... 38% Disapprove ..................................................... 57% Refused .......................................................... 5%  24. Do you believe that your quality of care will get better, get worse or stay about the same under [The Affordable Care Act/Obamacare]? A. The Affordable Care Act. (n=1,042) Get better ........................................................ 17% Get worse ....................................................... 44% Stay about the same ....................................... 34% B. Obamacare (n=1,047) Get better ........................................................ 18% Get worse ....................................................... 40% Stay about the same ....................................... 37% 25. Do you believe that your amount you pay for care will increase, decrease or stay about the same under [The Affordable Care Act/Obamacare]? A. The Affordable Care Act. (n=1,042) Increase .......................................................... 50% Decrease ......................................................... 10% Stay about the same ....................................... 36% Refused .......................................................... 4% B. Obamacare (n=1,047) Increase .......................................................... 51% Decrease ......................................................... 11% Stay about the same ....................................... 34% Refused .......................................................... 4% 26. After implementation of [The Affordable Care Act/Obamacare], many Americans will be eligible to purchase private health insurance plans through government run insurance exchanges. If you are eligible, how likely are you to enroll in insurance through an exchange? [NOTE: If 18 to 25 include the clause "after you are no longer eligible to stay on your parents plan"] A. The Affordable Care Act. (n=1,042) NET: Likely to Enroll .................................. 20% Definitely will enroll ...................................... 8% Probably will enroll ........................................ 12% 50-50 .............................................................. 28% NET: Unlikely to Enroll .............................. 47% Definitely will not enroll ................................ 27% Probably will not enroll ................................. 20% Refused .......................................................... 5% B. Obamacare (n=1,047) NET: Likely to Enroll .................................. 22% Definitely will enroll ...................................... 9% Probably will enroll ........................................ 13% 50-50 .............................................................. 29% NET: Unlikely to Enroll .............................. 45% Definitely will not enroll ................................ 27% Probably will not enroll ................................. 17% Refused .......................................................... 5% 40. In May 2013, Edward Snowden, a contractor for the National Security Agency, started releasing classified documents to the media that demonstrated what he believed was an unethical collection of private data from US citizens by the US intelligence community. Based on what you know at this time,which of the following words best describes your view of Edward Snowden? A patriot ........................................................ 22% A traitor .......................................................... 22% Not sure .......................................................... 52% Refused .......................................................... 4% 41. If you found yourself in a position similar to that of Edward Snowden, would you release the classified documents to the media, or would you not release the documents? Release .......................................................... 15% Would not release .......................................... 31% Not sure .......................................................... 50% Refused .......................................................... 4% If you could choose to recall and replace various elected officials today, would you recall: 48. Your member of Congress. Yes ................................................................ 45% No .................................................................. 45% Refused .......................................................... 9% 49. All members of Congress. Yes ................................................................ 52% No .................................................................. 40% Refuse ............................................................ 8% 50. Barack Obama. Yes ................................................................ 47% No .................................................................. 46% Refused .......................................................... 7% 57. Do you have health insurance? Yes, my employer provides it ........................ 27% Yes, I am under 26 and covered by parents .. 35% Yes, I have an individual or family plan ........ 12% No, I am not enrolled in health insurance ...... 22% Refused .......................................................... 4% Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com  Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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Here's what we're doing for the holidays:

Sunday, December 8, 2013   Here's what we're doing for the holidays: Folks across the country are getting ready for the holidays. We're celebrating here at the White House, too -- and we want you to be a part of it. We've launched our 2013 Holidays page. Check it out for exclusive videos, recipes, and more. P.S. -- Next week we're holding a meet-up here at the White House for our online followers. Want to be here for it? Click here to find out how. Stay Connected     Facebook Twitter YouTube Flickr Google+       This email was sent to e0nstar1.blog@gmail.com Sign Up for Updates from the White House Unsubscribe | Privacy Policy Please do not reply to this email. Contact the White House The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111

Seth's Blog : In search of the obvious answer

 

In search of the obvious answer

The obvious answer to your problem isn't obvious yet, but once someone finds it, it will be.

That's the way obvious answers work. They're not obvious because they're easy to find, they're obvious because, in fact, there's an answer.

Most problems don't have obvious answers, which is why you should demote them from the list of things worth obsessing over. Gravity, for example, is a problem with no obvious answer. You're never going to be able to fly like Superman, and the sooner you let that one go, the quicker you'll be able to work on something productive.

       

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State is an Institution of Theft (Except of Course for Politicians and their Escape Hatches) Posted: 07 Dec 2013 06:07 PM PST Here's an interesting video courtesy of a reader from the Republic of Slovenia who sent the link. Link if video does not play: State is an Institution of Theft Transcript - Godfrey Bloom - Member of European Parliament Mr. President, I am minded to quote the great American philosopher Murray Rothbard here. The state is an institution of theft. Tax is just about a system of politicians and bureaucrats who steal money from their citizens to squander in the most disgraceful manner. This place is no exception. Fascinatingly, and I really don't know how you manage to keep a straight face when you are talking about tax evasion. The whole commission and the commission bureaucracy avoid their taxes. You don't pay taxes like citizens pay taxes. You have all sorts of special deals: tax rates, high tax thresholds, non-contributing pension schemes. You are the biggest tax avoiders in Europe. And here you sit pontificating, well the message is getting home to the people of the European Union. You are going to find that eurosceptics are coming back in June, in ever greater numbers. And I can tell you worse, as the people get your number, it won't be long before they storm this chamber and hang you. And they'll be right. Who is Murray Rothbard? Three cheers for a great speech on the hypocrite nannycrats. And as many Mish readers know Murray Rothbard is far beyond a "great American philosopher". As Wikipedia explains, Murray Rothbard ... "was an American economist of the Austrian School, a historian, and a political theorist whose writings and personal influence played a seminal role in the development of modern libertarianism. Rothbard was the founder and leading theoretician of anarcho-capitalism, a staunch advocate of historical revisionism, and a central figure in the twentieth-century American libertarian movement. He wrote over twenty books on anarchist theory, history, economics, and other subjects. Rothbard asserted that all services provided by the "monopoly system of the corporate state" could be provided more efficiently by the private sector and wrote that the state is "the organization of robbery systematized and writ large. He called fractional reserve banking a form of fraud and opposed central banking. He categorically opposed all military, political, and economic interventionism in the affairs of other nations. In the words of Hans-Hermann Hoppe, "There would be no anarcho-capitalist movement to speak of without Rothbard." Case Against the Fed I highly recommend two easy-to-read book by Rothbard, both available as free eBooks courtesy of the Ludwig von Mises Institute. Case Against The Fed What Has Government Done to Our Money Please read the books! They are free, short, and easy to understand. They explain the fraudulent nature of the economic system we are in. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Nothing Beyond the Octopus Reach; Republican Author of Patriot Act Seeks Prosecution of Obama's Intelligence Director for Lying to Congress Posted: 07 Dec 2013 12:26 PM PST Obama's National Intelligence Director, James Clapper, blatantly lied to Congress last Spring when in response to a question stated the NSA does "not wittingly" collect information on Americans in bulk. The lie was revealed thanks to American hero and true patriot, Edward Snowden. Proven a liar, Clapper now freely admits he gave the "least untruthful" answer he could without revealing classified information. The Hill reports Patriot Act author says "Obama's intel czar should be prosecuted" Rep. James Sensenbrenner Jr., the original author of the Patriot Act, says Director of National Intelligence James Clapper should be prosecuted for lying to Congress. "Lying to Congress is a federal offense, and Clapper ought to be fired and prosecuted for it," the Wisconsin Republican said in an interview with The Hill. He said the Justice Department should prosecute Clapper for giving false testimony during a Senate Intelligence Committee hearing in March. During that hearing, Sen. Ron Wyden (D-Ore.) asked Clapper whether the National Security Agency (NSA) collects data on millions of Americans. Clapper insisted that the NSA does not — or at least does "not wittingly" — collect information on Americans in bulk. After documents leaked by Edward Snowden revealed that the NSA collects records on virtually all U.S. phone calls, Clapper apologized for the misleading comment. The intelligence director said he tried to give the "least untruthful" answer he could without revealing classified information. Sensenbrenner said that explanation doesn't hold water and argued the courts and Congress depend on accurate testimony to do their jobs. "The only way laws are effective is if they're enforced," Sensenbrenner said. "If it's a criminal offense — and I believe Mr. Clapper has committed a criminal offense — then the Justice Department ought to do its job." Nothing Beyond the Octopus Reach Infowars reports Spying Spooks Throw It In Americans' Faces With New Octopus-Engulfing-World Logo Following this year's further revelations on the NSA actively spying on Americans' communications, along with the president's promise to "reign in" the powers of US spooks, one would have expected that the government would be engaged in a damage control campaign going forward. However, this is the criminally insane military industrial complex usurped government we're referring to, so Instead they're putting world-eating Octopus logos on the side of spy satellites and tweeting about it. Here's a photograph of the launch of NROL-39, the latest government spy satellite being overseen by The National Reconnaissance Office, which provides signals intelligence to the NSA, among other agencies. The NRO is considered one of the "big 5″ spy agencies. NRO Spy Satellite Let's hone in on the logo. The logo reads "nothing beyond our reach". Obviously that includes Merkel's phone, and anything else the NSA wants to spy on. The NRO claims "The octopus, is a versatile, adaptable, and highly intelligent creature. Emblematically, enemies of the United States can be reached no matter where they choose to hide." To me that sounds like the "least untruthful" response without admitting what the symbol really means and what they really intend to do: spy on literally everything. Anti-Patriot Act The Patriot Act was anything but. It should be scrapped. James Clapper should be prosecuted and spend the rest of his life in prison where he can think about the true meaning of patriotism. Meanwhile, those looking for a true patriot ought to stand up and salute Edward Snowden. He risked his life, security, and personal freedom to protect the US constitution. What's more patriotic than that? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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Calling on Congress to Extend Unemployment Benefits This Holiday Season

Here's What's Happening Here at the White House           DAILY SNAPSHOT Saturday, December 7, 2013           Featured  Weekly Address: Calling on Congress to Extend Unemployment Benefits This Holiday Season In this week's address, President Obama says that before Congress leaves for vacation, they should extend unemployment benefits for 1.3 million hardworking Americans who will lose this lifeline at the end of the year. Click here to watch this week's Weekly Address.         Top Stories Economic Mobility: On Wednesday, the President spoke about the growing inequality and lack of upward mobility in the United States. "The idea that so many children are born into poverty in the wealthiest nation on Earth is heartbreaking enough," the President said. But the idea that a child may never be able to escape that poverty because she lacks a decent education or health care, or a community that views her future as their own, that should offend all of us and it should compel us to action. We are a better country than this.   The President called reversing this lack of upward mobility the defining challenge of our time and said he is driven to expanding opportunity to ensure that if you work hard, you have a chance to get ahead. Click here to read his full remarks. The passing of Nelson Mandela: Thursday evening President Obama delivered a statement on the passing of former South African President and anti-apartheid leader Nelson Mandela. "We will not likely see the likes of Nelson Mandela again," the President said. "So it falls to us as best we can to forward the example that he set: to make decisions guided not by hate, but by love; to never discount the difference that one person can make; to strive for a future that is worthy of his sacrifice." White House Youth Summit: The White House held a Youth Summit on Wednesday, where youth leaders from across the country gathered to discuss issues important to their generation, including the Affordable Care Act. They participated in panels and breakout workshops with administration officials, and even had a surprise drop by from the President. I look around the room and I see a lot of leaders who are going to be leading the charge well into the future on a whole range of issues. Don't get discouraged. Be persistent.  You may get a few gray hairs as a consequence -- but I think at the end of the day you'll think it's worth it. Holidays at the White House: Over the weekend, the Official White House Christmas tree was delivered to the White House by a horse-drawn carriage. The 18 1/2-foot high and nearly 11-foot-wide Douglas Fir tree is decorated in honor of military families and displayed in the Blue Room. Another National Christmas tree will be lit tonight at the 91st annual holiday tree lighting ceremony, which features a talented line-up of performers. On Wednesday, First Lady Michelle Obama welcomed military families to the White House to preview this year's holiday decor, centered on the theme 'Gather Around: Stories of the Season.' The President and First Lady joined a long line of past presidents in celebrating Hanukkah on Thursday. The two Hanukkah receptions included a candle lighting ceremony and a kosher meal. You can check out more holiday happenings at the White House and find some holiday crafts here. World AIDS Day: The White House hung a red ribbon from the North Portico on Monday to mark World AIDS Day. The President spoke in South Court auditorium on the importance of remaining a global leader in the fight against AIDS. Read his remarks here.   Facebook    Twitter   |   More Ways to Engage Did Someone Forward This to You? Sign Up for Email Updates This email was sent to e0nstar1.blog@gmail.com Unsubscribe | Privacy Policy Please do not reply to this email. Contact the White House The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111

Seth's Blog : Winner take all vs. local

 

Winner take all vs. local

Rule 1: If there's no really good reason for a business to be done locally, it will migrate to the web.

Rule 2: Businesses that migrate to the web often have economies of scale, and those businesses quickly coalesce into just a few (or even one) winner.

The winning strategy for the local business or freelancer, then, is:

a. provide a product or service that truly works better when it's local, and

b. do it in a way that works better when it's small, custom, connected and not in search of economies of scale.

       

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• Spain's Bad Bank "FROB" Admits More Taxpayer Bailouts Likely
• Enormous Discrepancy Between Jobs and Employment Continues
• Beneath the Headline Numbers, Not a Good Jobs Report
• Japan's Prime Minister Wants New Secrecy Laws; What's a Secret? Anything He Wants To Be Secret

Spain's Bad Bank "FROB" Admits More Taxpayer Bailouts Likely Posted: 06 Dec 2013 04:44 PM PST Via translation from Huky Guru's Blog in Spain please consider statements by the president of the "FROB" regarding taxpayer support of the "bad bank". The president of the Fund for Orderly Bank Restructuring (FROB), Fernando Restoy, said  "resolution does not guarantee recovery of all public support". Restoy advocates "steps to minimize costs to the taxpayer". Restoy calculates pubic aid (so far) at 6% of GDP while Guru calculates Spanish Bank Bailout Funding at 22% of GDP. Guru states the FROB croaked 26 billion euros in 2012 and 10 billion euros in 2011. Guru complains, and rightfully so "Until recently they even sold us the idea that we were going to make money. Now the question we ask is whether we will recover anything." Indeed. Spanish taxpayers are again on the hook for more "support". But why the announcement now? I can offer three possible reasons. A genuine recovery is underway, and officials believe they can finally admit the extent of the losses Officials mistakenly believe a recovery is underway and take this opportunity to disclose losses. Losses are so big and so obvious, that officials can no longer pretend there will not be additional losses. My bet is on door number 3, or possibly a combination of door number 2 and door number 3. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Enormous Discrepancy Between Jobs and Employment Continues Posted: 06 Dec 2013 11:56 AM PST Now that employment distortions related to the government shutdown in October are behind us, let's take a detailed look at the recent and growing discrepancy between jobs as reported on the establishment survey and employment as reported on the household survey. Jobs vs. Employment Discussion Before diving into the details, it is important to understand limits on data, and how the BLS measures jobs in the establishment survey vs. employment in the household survey. Establishment Survey: If you work one hour that counts as a job. There is no difference between one hour and 50 hours. Establishment Survey: If you work multiple jobs you are counted twice. The BLS does not weed out duplicate social security numbers. Household Survey: If you work one hour or 80 you are employed. Household Survey: If you work a total of 35 hours you are considered a full time employee. If you work 25 hours at one job and 10 hours at another, you are a fulltime employee. Household Survey vs. Establishment Survey Over time, and with revisions, the two data series move in sync (as they should in normal conditions): People get jobs (employment should rise) People lose jobs (employment should drop) However, there has been a serious discrepancy between the two data series in the last year that is not apparent in the above chart. A few tables will show what I mean. Household vs. Establishment Year-Over-Year Comparisons Category Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Employed Household 144,100 138,665 139,046 140,771 143,277 144,386 Jobs Establishment 135,130 129,593 130,300 132,268 134,472 136,765 Household vs. Establishment Year-Over-Year Averages Category Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Yoy Change Household (5,435) 381 1,725 2,506 1,109 Yoy Change establishment (5,537) 707 1,968 2,204 2,293 Monthly Average Household -453 32 144 209 92 Monthly Average Establishment -461 59 164 184 191 Household vs. Establishment Month-Over-Month Changes Month Household Establishment M/M Change HH M/M Change Establishment Sep-12 142974 134065 Oct-12 143328 134225 354 160 Nov-12 143277 134472 -51 247 Dec-12 143305 134691 28 219 Jan-13 143322 134839 17 148 Feb-13 143492 135171 170 332 Mar-13 143286 135313 -206 142 Apr-13 143579 135512 293 199 May-13 143898 135688 319 176 Jun-13 144058 135860 160 172 Jul-13 144285 135949 227 89 Aug-13 144170 136187 -115 238 Sep-13 144303 136362 133 175 Oct-13 143568 136562 -735 200 Nov-13 144386 136765 818 203 The third table shows the volatile nature of the data, especially the household survey. It's the second table that is the important one. Take special note of the bottom two lines in the second table. Until this past year, the establishment survey and household survey moved tightly. In the last 12 months, the payroll survey averaged a gain of 191,000 jobs a month while the household survey averaged less than half of that at 92,000 jobs per month. Blame Obamacare Obamacare is the most likely explanation for the discrepancy. Recall that the definition of fulltime under Obamacare is 30 hours, but fulltime to the BLS is 35 hours. Next, consider what happens under Obamacare if someone working 34 hours is cut back to 25 hours, then picks up another parttime job. Obamacare Effect Prior to Obamacare 34 hours worked = 1 parttime job household survey 34 hours worked = 1 job establishment survey Enter obamacare Person cut back to 25 hours and takes a second job for 10 hours Here is the new math 25 + 10 = 1 fulltime job on the household survey. 25 + 10 = 2 jobs on the establishment survey. In my example, the household survey totals up all the hours and says, voilla! (35 hours = full time). So a few extra hours that people pick up working 2 part time jobs now throws someone into full time status – thus no surge in part-time employment, but there is a surge in jobs. I commented on this discrepancy last month and repeat my claim again today. Request to ADP To prove my thesis, we need to weed out duplicate social security numbers. The BLS can't, but ADP can. I contacted them twice but to no avail. I would like ADP to crunch the data and determine how many duplicate social security numbers show up vs. the same months in prior years. If I am wrong it won't be the first time. But let's have a look at the numbers and see what they say. For further discussion and a synopsis of what really happened in today's job report, please see Beneath the Headline Numbers, Not a Good Jobs Report Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Beneath the Headline Numbers, Not a Good Jobs Report Posted: 06 Dec 2013 08:48 AM PST Initial Reaction Some of the skew in last month's job report related to the government shutdown was taken back today, as expected. The labor force stats and participation rate were exceptions, and details reveal much weakness. Last month employment fell by 735,000 due to the shutdown, this month it rose by 818,000. Averaging the two months, household survey employment only rose by 83,000 (a mere 43,500 per month) Last month, the change in those not in the labor force was +932,000. This month, the change was -268,000. Last month the labor force declined by 720,000. This month it only rose by  455,000. Averaging the two months, the labor force fell by 265,000. This explains the drop in the unemployment rate despite anemic employment growth on average. Last month the participation rate fell 0.4 percentage points to a new low, this month, only 0.2 percentage points were taken back. Ignoring the decline and the rise in employment over the past two months, the huge discrepancy between the household survey and the establishment survey persists. In essence, this was a bad report, with people dropping out of the labor force like mad.   Revisions This was the fifth straight month of revisions to the establishment survey but the revisions were relatively minor. The change in total nonfarm payroll employment for September was revised from +163,000 to +175,000, and the change for October was revised from +204,000 to +200,000. With these revisions, employment gains in September and October combined were 8,000 higher than previously reported. Explaining the Unemployment Rate Unemployment fell by 0.3 percentage points Employment rose by 818,000 Those in the labor force rose by 455,000 The civilian population rose by 186,000. The Participation Rate (The labor force as a percent of the civilian noninstitutional population) rose 0.2 to 63.0%. Employment rose more than the labor force, so the unemployment rate fell as further explained in my "initial reaction" above. October BLS Jobs Statistics at a Glance Payrolls +203,000 - Establishment Survey US Employment +818,000 - Household Survey US Unemployment -365,000 - Household Survey Involuntary Part-Time Work -331,000 - Household Survey Voluntary Part-Time Work +90,000 - Household Survey Baseline Unemployment Rate -0.3 to 7.0% - Household Survey U-6 unemployment -0.5 to 13.2% - Household Survey Civilian Labor Force +455,000 - Household Survey Not in Labor Force -268,000 - Household Survey Participation Rate +0.2 at 63.0 - Household Survey Additional Notes About the Unemployment Rate The unemployment rate varies in accordance with the Household Survey, not the reported headline jobs number, and not in accordance with the weekly claims data. In the last year, those "not" in the labor force rose by 2,418,000 Over the course of the last year, the number of people employed rose by a mere 1,109,000 (an average of 92,417 a month) In the last year the number of unemployed fell from 12,042,000 to 10,907,000 (a drop of 1,185,000) Percentage of long-term unemployment (27 weeks or more) is 37.3%, an increase of of 1.2  percentage points from last month. The mean duration of unemployment is 37.2 weeks, an increase of 1.1 weeks. Once someone loses a job it is still very difficult to find another. 7,619,000 workers who are working part-time but want full-time work. A year ago there were 8,029,000. This is a volatile series. November 2013 Jobs Report Please consider the Bureau of Labor Statistics (BLS) November 2013 Employment Report. The unemployment rate declined from 7.3 percent to 7.0 percent in November, and total nonfarm payroll employment rose by 203,000, the U.S. Bureau of Labor Statistics reported today. Employment increased in transportation and warehousing, health care, and manufacturing. Click on Any Chart in this Report to See a Sharper Image Unemployment Rate - Seasonally Adjusted Employment History Since January 2009 click on chart for sharper image Change from Previous Month by Job Type Hours and Wages Average weekly hours of all private employees rose 0.1 to 34.5 hours. Average weekly hours of all private service-providing employees rose 0.1 to 33.3 hours. Average hourly earnings of production and non-supervisory private workers rose $0.03 to $20.28. Average hourly earnings of private service-providing employees rose $0.03 to $20.09. Real wages have been declining. Add in increases in state taxes and the average Joe has been hammered pretty badly. For 2013, one needs to factor in the increase in payroll taxes for Social Security. For further discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution? BLS Birth-Death Model Black Box The BLS Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey. The Birth-Death numbers are not seasonally adjusted, while the reported headline number is. In the black box the BLS combines the two, coming up with a total. The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance. Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way. Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions. Birth Death Model Adjustments For 2012 Birth Death Model Adjustments For 2013 Birth-Death Notes Once again: Do NOT subtract the Birth-Death number from the reported headline number. That approach is statistically invalid. In general, analysts attribute much more to birth-death numbers than they should. Except at economic turns, BLS Birth/Death errors are reasonably small. For a discussion of how little birth-death numbers affect actual monthly reporting, please see BLS Birth/Death Model Yet Again. Table 15 BLS Alternate Measures of Unemployment click on chart for sharper image Table A-15 is where one can find a better approximation of what the unemployment rate really is. Notice I said "better" approximation not to be confused with "good" approximation. The official unemployment rate is 7.0%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6. U-6 is much higher at 13.2%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years. Labor Force Factors Discouraged workers stop looking for jobs People retire because they cannot find jobs People go back to school hoping it will improve their chances of getting a job People stay in school longer because they cannot find a job Disability and disability fraud Were it not for people dropping out of the labor force, the unemployment rate would be well over 9%. Grossly Distorted Statistics Digging under the surface, much of the drop in the unemployment rate over the past two years is nothing but a statistical mirage coupled with a massive increase in part-time jobs starting in October 2012 as a result of Obamacare legislation. Digging beneath the surface, the snap-back from the government shutdown was nowhere near as strong as it should have been in the household survey. More on the the discrepancy between the two reports shortly. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Japan's Prime Minister Wants New Secrecy Laws; What's a Secret? Anything He Wants To Be Secret Posted: 06 Dec 2013 07:24 AM PST I would like to use the word shocking, but hardly anything any government does anymore is shocking. The best I can hope for is Japanese citizens are disgusted enough to boot their fascist, economically illiterate prime minister before its too late. Unfortunately, I highly doubt that happens. Please consider Japan's Abe Seeks to Pass Secrecy Bill That Sapped Support Japan's government will move today to pass a bill granting it sweeping powers to declare state secrets, a measure pushed by Prime Minister Shinzo Abe to boost ties with the U.S. even as it sapped his public support at home. The bill, which is backed by the U.S. and forms part of Abe's broader push to strengthen Japan's defense policy in the face of China's military assertiveness, would stiffen penalties for bureaucrats who leak secrets and journalists who publish them. It would give government officials, rather than the courts, the power to define what constitutes a state secret under categories from defense to diplomacy, terrorism and safety threats. The measure, criticized by much of Japanese media, has prompted rare public protests. Demonstrators gathered outside parliament last night and organizers called for more protests today, while the ending of debate on the law sparked an outcry from opposition lawmakers. The approval rating of Abe's government fell 4 percentage points from a month ago to 49 percent, the first time it dropped below 50 percent since Abe's election almost a year ago, according to a recent poll by the Asahi newspaper. Half of those surveyed opposed the bill that punishes leaks of government information with jail terms of as much as 10 years. The newspaper polled 1,001 people by phone Nov. 30 to Dec. 1 and didn't give a margin of error. Public criticism heightened after Shigeru Ishiba, secretary general of the LDP, wrote a blog post Nov. 29 likening those who demonstrate against the bill to terrorists.  U.S. officials have supported Abe's push for collective self-defense and said they welcome the secrecy bill. US War-Mongers Support Abe Also disgusting (and also not surprising) is support for secrecy laws from US warmongers and NSA defenders. Please notice that the secretary general of the LDP, wrote a blog post Nov. 29 likening those who demonstrate against the bill to terrorists. Does that remind you of anything? Goering at the Nuremberg Trials Please recall what Reichsmarschall Hermann Wilhelm Göring (in English his name is also spelled as Hermann Goering) Nazi founder of the Gestapo, Head of the Luftwaffe, said at the Nuremberg Trials. Here is a clip of the interview in Goering's cell in prison, after the war. Göring: Why, of course, the people don't want war. Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece? Naturally, the common people don't want war; neither in Russia nor in England nor in America, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a Parliament or a Communist dictatorship. Gilbert: There is one difference. In a democracy, the people have some say in the matter through their elected representatives, and in the United States only Congress can declare wars. Göring: Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country. And now we are told by charismatic politicians that we are under attack. We must give up our constitutional rights to prevent further attacks. [And we need more secrecy too.] Adding an additional note about secrecy, the above is a portion of my November 1, post What's the Greatest Threat to Our Constitutional Rights? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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