Central Perk

luni, 14 iulie 2014

Seth's Blog : Lessons from the Eiffel Tower

Lessons from the Eiffel Tower

It was designed at home, on the kitchen table...
by someone who didn't get their name on it
Never been done before, not guaranteed to get built or to work
It was criticized by hundreds of leading intellectuals and cultural experts
It wasn't supposed to last very long
It's designed to be an icon, it's not an accident
People flock to it because it's famous
You can sketch a recognizable version of it on a napkin

Your turn to build one. Happy Bastille Day.

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duminică, 13 iulie 2014

Mish's Global Economic Trend Analysis

Making Sense Out of "Contradictrions That Make No Sense"

Posted: 13 Jul 2014 05:55 PM PDT

A New York Times headline by Floyd Norris reads In U.S. Data, a Baffling Contradiction.

The same article, by the same author, appears on Yahoo!Finance as In U.S. Data, a Contradiction That Makes No Sense.

The first quarter of this year was the worst for the United States economy since the depths of the Great Recession in early 2009.

During the same period, employers hired more people than in any quarter over the last six years, signaling gathering strength in the economy.

It is hard to imagine how both of those statements could be true, but they are what government statistics indicate.

While the employment numbers have been strong, the government sharply cut its estimate of first-quarter gross domestic product late last month. It had previously said the economy declined at an annual rate of 1 percent during the quarter — a small dip that could be explained by severe weather in much of the country. The new figures showed a 2.9 percent rate of decline, the worst since a 5.4 percent drop in the first three months of 2009.

What happened? Put simply, a single government survey produced highly dubious numbers. Those who conduct the survey say it was done normally and that nothing suspicious surfaced in the responses. But — particularly in the case of one vital part of the economy — that survey contradicted other available information. The result was suspiciously low revenue estimates for companies in both health services and food retailing.

The big decline in estimates of the size of the United States economy was caused primarily by a sharp reversal in the government's estimate of spending on health care services.

In May, the Bureau of Economic Analysis of the Commerce Department, which produces the G.D.P. figures, estimated that in the first quarter such spending rose at an annual rate of 9.7 percent before adjusting for inflation. That would have been the largest quarterly increase in 13 years.

There was a significant increase in Medicaid spending in the first quarter, said Benjamin R. Mandel, an economist who is chief of the federal branch of the bureau's government division. He said that increase was one reason the early estimate was so positive. He also said that increase had been expected because, thanks to the Affordable Care Act, Medicaid coverage expanded at the beginning of the year in many states.

But the revised estimate released in June said that spending on health care services fell at an annual rate of 0.9 percent. Instead of the largest increase in more than a decade, it was the first decline in nearly half a century, since the third quarter of 1965. That one change accounted for most of the decline in the estimate for overall first-quarter G.D.P.

Questions on Obamacare

In regards to the peculiarities of Obamacare I have a couple of questions:

Isn't a decline in health care spending a good thing?
Wasn't that the goal of Obamacare in the first place?

That said, I am not about to attribute such positive results (ironically portrayed by Norris as a bad thing) as directly attributable to Obamacare.

I stated this in advance of Obamacare passage: "Health care costs are on an unsustainable upward trend, and although Obamacare provides no incentive for lower costs, I expect lower costs anyway".

So here they are, and I am hardly shocked.

Questions on Employment

I am on far more comfortable ground in regards to employment. Norris simply did not dive into the details.

Yep, the last job report showed a gain of 288,000.

Had Norris bothered to look into the details, he would have discovered some interesting facts as I discussed in my monthly jobs report.

Voluntary part-time employment rose by a whopping 840,000 and involuntary part-time employment rose by 275,000.
Compared to a total gain of employment of 407,000, the gain in total part-time employment was 1,115,000. I confirmed with the BLS that one cannot directly subtract those numbers because of seasonal reporting.
However, one can compare seasonally-adjusted full-time employment this month to seasonally-adjusted full-time employment last month. Doing so shows a decline in full-time employment of 523,000!

The "strength in hiring" that Norris referred to was actually a decline in full-time employment of 523,000 - a number I confirmed with the BLS.

Is there a "contradiction that makes no sense" or is there sloppy reporting by people who do not dive into the facts?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Seth's Blog : Literacy (and unguided reading)

Literacy (and unguided reading)

Two hundred years ago, the government of Sweden changed everything: They required all their citizens to be literate. It transformed every element of the culture and economy of Sweden, an effect that's felt to this day.

Television, of course, is a great replacement for the hard work of learning to read and write, but, if you think about it, so are autocratic governments and dogmas that eliminate choice. Unguided reading is a real threat, because unguided reading leads to uncomfortable questions.

Teach someone to read and you guarantee that they will be able to learn forever. Teach an entire culture to read and connections and innovations go through the roof.

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sâmbătă, 12 iulie 2014

Mish's Global Economic Trend Analysis

Will Guerrilla Warfare Linger Long After Ukraine Takes Donetsk?

Posted: 12 Jul 2014 10:22 AM PDT

Pro-Russian rebels in Ukraine hope for support from Putin, but no such support is on the horizon. It may be weeks or longer , but one by one, the Ukrainian army is taking back rebel-controlled areas.

Next up, Donetsk: A rebel city encircled by Ukraine's army.

A week has passed since the turning point of the Ukrainian army's triumph in Slavyansk, 110km north, the rebels' main stronghold in eastern Ukraine, but from which the militants fled last Saturday. Many headed to Donetsk, vowing to make a final stand.

Slavyansk fell after weeks-long siege and relentless shelling, with electricity and water turned off – for which each side blamed the other. But analysts and Donetsk residents warn similar tactics would risk too many casualties in a city nearly 10 times the size. Ukrainian officials have pledged not to bomb Donetsk, though many residents are not reassured.

"It has been a considerable achievement this week of the Ukrainian armed forces in eastern Ukraine, but the heaviest work is still to come," says Jonathan Eyal, international director at the Royal United Services Institute, a military think tank. "Securing the large cities is a far more difficult task. The Ukrainian forces will have much less to rely on in terms of sympathetic infrastructure. The police, for example, are locally recruited, and more pro-Russian."

The rebels, meanwhile, seem to be pinning hopes on help arriving from Russia, which still has a big military presence less than 100km away at the border.

As the fighting rages, Ukraine reported 23 of its servicemen killed on Friday, including 19 in a missile attack near the border. A day earlier Kiev said it had killed more than 50 rebels in airstrikes near Donetsk.

In the broader Donbass, Ukraine's industrial heartland of which Donetsk is the centre, hundreds have died. US agribusiness giant Cargill closed a $50m sunflower seed processing factory after it was occupied by armed militants.

Armed rebels – some locals, others from Russia – occasionally roam Donetsk on foot, or roll by in tanks and trucks.

To exit the city, cars must pass through armed separatist checkpoints. "Be careful, the Fascists are a few kilometres down," a rebel guarding the road south said, referring to Ukraine's approaching military – widely portrayed by Russian television since the ousting of Ukraine's president Viktor Yanukovich – as ultranationalists.

Down the road, the commander of a Ukrainian military squad asks: "What's it like up there? Are there many of them? Are they locals or fighters from Russia?"

Ukrainian officials say they aim to blockade Donetsk, forcing separatists to surrender or retreat. A military spokesperson talked of a "surprise" for the separatists, But it was unclear if that meant incursions into the city, which could involve bloody urban warfare – giving Russia a pretext for an invasion to protect the region's large Russian-speaking population.

Separatists appeared to be entrenching themselves for potential guerrilla warfare. Kiev accuses them of using Donetsk as a human shield.

"We are preparing our defences," Igor Strelkov, the separatists' military commander, told a Thursday press conference in the city's government administration building, now surrounded by separatists with Kalashnikovs and shoulder-fired rocket launchers. It was his first public appearance since fleeing from Slavyansk with his men.

What Now?

The Ukrainian army is about to retake Donetsk. They can take it quicker by brute force, or it may take weeks or months to starve it out.

In spite of pledges to not bomb Donetsk, the government has not shown the least bit of patience or willingness to negotiate. They offered a ceasefire - but only if the rebels laid down their arms. Ceasefire on those terms means surrender, and the rebels refuse.

One way or another, sooner or later, Ukraine will retake Donetsk. Then what? Scars and resentment will linger for years, even in the best of cases. And if Ukraine backs down on promises to give regions more autonomy, prolonged guerrilla warfare is a possibility.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

The President Is Listening

Saturday, July 12, 2014

The President Is Listening

President Obama was on the road again this week, breaking out of the D.C. bubble to meet with everyday Americans in Colorado and Texas -- many of whom had written to tell him what's going on in their lives.

There's an underlying theme to these trips: The President's listening.

He's listening to the teacher of 26 years who wrote him about the importance of early childhood education -- and he's fighting for the college student whose parents lost their jobs after the Great Recession.

The President is traveling across the country and letting folks know that he hears them, and that he's going to keep fighting for them so that this country can keep making progress.

See some of the highlights from the President's trip to Colorado and Texas.

The President heads to Denver.

President Obama landed in Denver on Tuesday and made his first stop at Wazee Supper Club, where he ate pizza with five Coloradans who wrote him.

President Barack Obama has a pizza dinner with local residents who had written him letters, in Denver, Colorado, July 8, 2014. (Official White House Photo by Pete Souza)

Later that evening, the President strolled through downtown Denver, shaking hands and chatting with people on the street.

The following day, the President spoke on the economy.

On a beautiful Wednesday afternoon in Denver's Cheesman Park, President Obama delivered remarks on the economy, the progress that his Administration has made, and how Republican obstructionism is making it more difficult for Americans to achieve their full potential.

President Barack Obama makes remarks on the economy at Cheesman Park in Denver, Colorado, July 9, 2014. (Official White House Photo by Pete Souza)

The President closed his remarks by reminding people that despite the cynicism and obstructionism, he's going to continue to spend every day fighting to restore the American Dream for everybody.

"Every day I receive these thousands of acts of hope from you. I'm listening. It's why I ran for office. It's why I'm fighting for you. I will keep treating your cares and concerns as my own."

And then, he was off to Austin.

The President capped off his three-day tour in Austin, where he grabbed coffee with a letter writer and delivered another speech on the progress this country is making.

In the morning, the President met with Kinsey Button, a student at the University of Texas at Austin. She wrote the President talking about her family's struggles, after both of her parents lost their jobs.

President Barack Obama talks with Kinsey Button at the Magnolia Cafe in Austin, Texas, July 10, 2014. (Official White House Photo by Pete Souza)

Kinsey then introduced the President at his speech on the economy later in the day. During the President's remarks, he let Republicans in Congress know that he's fighting for middle-class families and wondered when they were going to do the same.

We're going to keep doing this -- because we've still got work to do.

The President is going to continue to travel around the country to meet with working Americans, talking about what their "day in the life" looks like, and highlighting the actions that he's taken this year to benefit them.

Find out more about the President's actions this year to keep moving our country forward.

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Expanding Opportunity -- It's Time for Congressional Republicans to Do Their Part

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Expanding Opportunity -- It's Time for Congressional Republicans to Do Their Part

In this week's address, the President recapped his visits with folks who have written him letters about their own American stories -- their successes and struggles. While congressional Republicans are blocking meaningful measures that would strengthen the middle class, the President continues looking for ways to grow the economy and expand opportunity for more hardworking Americans.

The President again urged Congress to join him, as they were elected to do, in working on behalf of everyday Americans -- including those the President spent time with this week -- by investing in our infrastructure to support American jobs, and ensuring that the Highway Trust Fund does not expire.

Click here to watch this week's Weekly Address.

Seth's Blog : The self-driving reset of just about everything in our cities

The self-driving reset of just about everything in our cities

Self-driving cars are going to be a huge transformational disruption, and they're probably going to happen faster than most people expect.

Starting in cities, starting with car-sharing, the economics and safety implications are too big to avoid:

Few traffic jams--cars will have a slower top speed, but rarely stop
No traffic lights--cars talk to each other
Dramatically less pollution
Pedestrians are far safer, bicycling becomes fun again
No parking issues--the car drives away and comes back when you need it
Lower costs and more access for more people more often
Instant and efficient carpooling, since the car knows who's going where

Most of the physical world around us is organized around traditional cars. Not just roads, but the priority they get, the roadside malls, fast food restaurants, the fact that in many cities, more space is devoted to parking lots than just about anything else. It's pervasive and accepted, so much that we notice with amazement the rare places that aren't built around them.

Understand, for example, that the suburb exists because of the car, as does the big amusement park and the motel. All of them were built by people who saw the changes private mobility would cause.

The self-driving car benefits from Moore's Law, which explains that computers get dramatically cheaper over time, and Metcalfe's Law, which describes the increasing power of networks as they get bigger and more connected. Both of these laws are now at work on one of the biggest expenses and most powerful forces in our world: transportation.

Like all innovations, the death of the non-autonomous vehicle is not all upside. The car industry gets mostly commodified, jobs are shifted and distruptions occur. Privacy for teenagers, ordinary citizens and bank-robbers-making-an-escape disappears. The suburbs become even less attractive to some people. But just as you can't imagine a city scene where just about everyone isn't looking at their smart phone and swarming in the virtual cloud, it's going to be a whole new cityscape once cars retreat from their spot at the top of the attention/command chain.

One way this might happen: Certain models will be labeled as Uber-compatible (or whatever network is in place). Buy that car and with a few clicks, the car starts earning its keep. When you're at work or asleep or otherwise engaged, it moonlights and drives other folks around. The combination of security cameras in your car and rider registration pretty much guarantees that your car isn't going to come back wrecked. It's not hard to imagine organizations building fleets to profit from this (a medallion replacement) but it also becomes economically irresistible to the individual as well.

This is a bigger shift than the smart phone, and it might happen nearly as fast.

Near my house, there's a parkway that was built so that owners of private cars would have a place to go where they could drive them without endangering everyone else. I wonder how long before that's what it will be used for again.

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luni, 14 iulie 2014

Seth's Blog : Lessons from the Eiffel Tower

Lessons from the Eiffel Tower

More Recent Articles

duminică, 13 iulie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : Literacy (and unguided reading)

Literacy (and unguided reading)

More Recent Articles

sâmbătă, 12 iulie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

The President Is Listening

Expanding Opportunity -- It's Time for Congressional Republicans to Do Their Part

Seth's Blog : The self-driving reset of just about everything in our cities

The self-driving reset of just about everything in our cities

More Recent Articles

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