"For many months now, the White House and Democrats at large have repeated the obvious falsehood that Joe Biden’s “Build Back Better” agenda will cost “zero dollars.”
In fact, the Treasury Department, led by Janet Yellen, has actually asserted that the bill lowers the deficit over the long term.
Then some weeks back, initial CBO estimates exposed that foolishness for exactly what it was.
Contrary to the claims of the administration, the BBB bill would actually raise the deficit by some $160 billion.
And to even get to that number, the CBO had to estimate future tax receipts based on provisions to increase tax enforcement.
Anyone who has ever heard a politician talk about a coming tax revenue windfall from cleaning up “waste and fraud” knows how big of a scam that is.
It just never happens.
The bad news didn’t stop with those first CBO estimates, though.
Today’s inflation report showed a 6.8 percent rate of growth, and Joe Manchin, who had previously seemed open to a $1.5 trillion compromise bill, has seemingly gotten cold feet.
But it was this afternoon that the sledgehammer good and fully came crashing down on the weak knees of Biden’s agenda.
The CBO released another estimate that showed the true cost of the BBB bill after all the “temporary” programs in it are extended.
That’s been the Democrat game.
Just like with ObamaCare, the Democrats wanted the BBB bill to be scored with more years of funding than programs.
But that’s not how things work in the real world.
So what’s the real number?
... President Biden two weeks ago on possible BBB extensions: "Here is what those critics are not telling you. They’re not telling you that I’ve committed to paying for every single program that extended, if any are, in future legislation, whether that’s for a day or a decade."
— Ryan Struyk
(@ryanstruyk)
December 10, 2021
Over just ten years, the BBB bill would actually add $3 trillion more dollars to the national debt.
As to Biden’s promise to pay for any future extensions, how is he going to do that?
He’s blowing smoke up the collective backside of America and even the CBO, which bent over backward to fudge the numbers surrounding ObamaCare, isn’t letting him get away with it anymore.
Here’s the thing everyone needs to know about government programs: They never go away once they are instituted.
There is no world in which that universal pre-K program or those healthcare subsidies are just ended a few years from now.
Thus, it is far more honest to score the BBB bill based on what it’s actually going to cost in the real world, not just what it’s going to cost on paper via a bunch of cheap gimmicks.
I think Joe Manchin realizes that, and that’s why his opposition has appeared to harden over the last week.
This bill is going to be a financial disaster that slams the middle-class with even more inflation while providing little value for the average American.
Perhaps Biden and his handlers can pull a rabbit out of their hat and still get this thing passed, but as it stands, the smart money is on it crashing and burning."
Saturday, December 11, 2021
Congressional Budget Office (CBO) says Joe Biden's 'Build Back Baloney' will add $3 trillion to debt in 10 years, not zero !
AAII Sentiment improved to Moderately Bullish -- 23% cash recommended for traders
(was 26.7% last week)
(was 31.0%)
Summary of Financial Data for last week
Weekly Commentary
by Doug Noland
My edited version follows:
Ye Editor
The Fed’s balance sheet
inflated $1.198 TN (16.2%)
over one year and $4.591 TN
over nine quarters (115%).
ended the eighties
Total Debt Securities-to-GDP
slipped to 236%.
This compares to 201% to end 2007,
158% to end the nineties, and
124% to conclude the eighties.
At 323%, Total Equities-to-GDP
compares to previous cycle peaks
188% (Q3 ‘07)
and 210% (Q1 2000).
Total (Debt and Equities) Securities were
560% of GDP. This compares to previous
cycle peaks 387% (Q3 ’07) and 368% (Q1 2000).
Household Real Estate as a percentage of GDP
rose to 176%, the high since Q3 2007.
For the Week:
S&P500 jumped 3.8% (up 25.5% y-t-d)
Dow Industrials surged 4.0% (up 17.5%)
Utilities rose 2.5% (up 10.3%)
Banks gained 2.2% (up 36.2%)
Transports advanced 2.7% (up 31.2%)
S&P 400 Midcaps jumped 2.9% (up 20.5%)
Small cap Russell 2000 rose 2.4% (up 12.0%)
Nasdaq100 surged 3.9% (up 26.7%)
Semiconductors rose 2.9% (up 40.0%)
Biotechs increased 0.6% (down 8.4%).
With gold bullion little changed,
the HUI gold index fell 1.6% (down 19.2%).
Three-month Treasury bill rates
ended the week at 0.0475%.
Two-year government yields
gained seven bps to 0.66% (up 53bps y-t-d).
Five-year T-note yields
rose 12 bps to 1.25% (up 89bps).
Ten-year Treasury yields
jumped 14 bps to 1.49% (up 57bps).
Long bond yields
surged 21 bps to 1.88% (up 23bps).
Benchmark Fannie Mae MBS yields
gained eight bps to 2.07% (up 73bps).
U.K.'s FTSE jumped 2.4% (up 12.9% y-t-d).
Japan's Nikkei gained 1.5% (up 3.6% y-t-d)
France's CAC40 rallied 3.3% (up 25.9%)
German DAX rose 3.0% (up 13.9%).
Spain's IBEX 35 increased 1.4% (up 3.5%).
Italy's FTSE MIB rallied 3.0% (up 20.2%)
Brazil's Bovespa advanced 2.6% (down 9.5%)
Mexico's Bolsa gained 1.2% (up 16.2%).
South Korea's Kospi increased 1.4% (up 4.8%).
India's Sensex gained 1.9% (up 23.1%).
China's Shanghai rallied 1.6% (up 5.6%)
Russia's MICEX sank 3.9% (up 14.3%).
Mortgages:
Freddie Mac 30-year fixed mortgage rates
slipped a basis point to 3.10%
(up 39bps y-o-y).
Fifteen-year rates
declined one basis point bps to 2.38%
(up 12bps).
Five-year hybrid ARM rates
fell four bps to 2.45%
(down 34bps).
Jumbo mortgage 30-year fixed rates
up three bps to 3.25%
(up 34bps).
Commodities:
Bloomberg Commodities Index
recovered 1.2% (up 24.1% y-t-d).
Spot Gold was unchanged at $1,783 (down 6.1%).
Silver fell 1.5% to $22.20 (down 15.9%).
WTI crude rallied $5.41 to $71.67 (up 48%).
Gasoline surged 9.4% (up 52%)
Natural Gas fell another 5.0% (up 55%).
Copper increased 0.5% (up 22%).
Wheat dropped 2.3% (up 23%)
Corn gained 1.0% (up 22%)
Bitcoin sank $4,908,
or 9.4%, this week
to $47,497 (up 63%).
Coronavirus Watch:
December 8 – Bloomberg:
“South African excess deaths, a measure of mortality above a historical average, almost doubled in the week ending Nov. 28 from the preceding seven-day period as a new coronavirus variant spread across the country. During the period 2,076 more people died than would normally be expected, the South African Medical Research Council said… That compares with 1,091 the week earlier. The rise, while only reflecting a week of data, contrasts with hospitalization numbers that show that most admissions have mild forms of the coronavirus…”
December 7 – CNBC:
“South African scientists say the Covid omicron variant significantly reduces antibody protection generated by Pfizer and BioNTech’s vaccine, although people who have recovered from the virus and received a booster shot will likely have more protection from severe disease, according to a small preliminary study… Prof. Alex Sigal with the Africa Health Research Institute and a team of scientists tested blood samples of 12 people who had previously been vaccinated with the Pfizer/BioNTech vaccine. They were looking specifically at how well antibodies generated by the vaccine can neutralize the new variant — meaning block its ability to infect cells. They found a 41-fold drop in the ability of the antibodies to neutralize the omicron variant compared with the original virus, a dramatic reduction from its performance against the original ancestral strain as well as other variants…”
December 7 – Financial Times:
“An offshoot of the Omicron coronavirus variant could be more difficult to distinguish from other strains with routine PCR tests, making it harder to track the global spread of the heavily mutated virus. On account of a genetic quirk, Omicron, first identified in southern Africa, can be identified by a certain type of PCR test because it does not possess one of the three coronavirus gene targets — the S gene… But an offshoot of Omicron identified in at least seven sequenced cases across South Africa, Australia and Canada no longer possesses this characteristic, meaning full genome sequencing is required to detect it. Researchers have classified the earliest identified form of Omicron as BA.1, while the offshoot has been labelled BA.2.”
Market Mania Watch:
December 8 – Bloomberg:
“The real earnings yield on U.S. stocks hasn’t been so low since Harry Truman was president and the Cold War was just starting, according to Bank of America Corp. strategists. The S&P 500 Index currently has a real earnings yield of -2.9%, meaning that without continued growth in company results, investors would lose 2.9% when adjusted for inflation, the strategists led by Savita Subramanian wrote... ‘Last time the real earnings yield was this negative was 1947.’”
December 6 – Reuters:
“Bitcoin dropped by almost 5% on Monday as the start of the week offered little respite to the world's largest cryptocurrency after a bruising weekend when, at one point, it lost over a fifth of its value. The rout sent bitcoin's price and the amount invested in bitcoin futures back to where they were in early October, before a massive price surge that sent the token to an all-time high of $69,000 on Nov. 10. Since that record peak, bitcoin has plunged 32%.”
Inflation Watch:
December 9 – Wall Street Journal:
"Over the past year, the median cost of rent has risen by nearly 20% in a handful of areas most.including Phoenix, Tampa, Fla., and Boise, Idaho, according to… the Urban Institute. The average rent for a one-bedroom apartment in Sarasota, Fla., for example, was recently at $2,004 a month—a 40% increase compared with the previous year, according to… Zumper. Many factors are driving the rent surge including a short supply of housing inventory.”
December 7 – CNBC:
“Labor productivity fell at the fastest rate in more than 60 years in the third quarter… A measure of output versus energy, nonfarm business sector productivity declined 5.2% from the previous three-month period, worse than the Dow Jones estimate for a drop of 5%, and the worst since the second quarter of 1960. The slide happened as output increased 1.8% while hours worked rose 7.4%. On a year-over-year basis, productivity fell 0.6%, which itself was the biggest decline since the second quarter of 1993. Unit labor costs, or the measure of how much businesses pay their per unit of input, rose 9.6% from the second quarter, which reflected a 3.9% increase in compensation combined with the decline in productivity.”
U.S. Bubble Watch:
December 10 – CNBC:
“Inflation accelerated at its fastest pace since 1982 in November…, putting pressure on the economic recovery and raising the stakes for the Federal Reserve. The consumer price index, which measures the cost of a wide-ranging basket of goods and services, rose 0.8% for the month, good for a 6.8% pace on a year over year basis and the fastest rate since June 1982. Excluding food and energy prices, so-called core CPI was up 0.5% for the month and 4.9% from a year ago, which itself was the sharpest pickup since mid-1991.”
December 9 – Associated Press:
“The number of Americans applying for unemployment benefits plunged last week to the lowest level in 52 years, more evidence that the U.S. job market is recovering from last year’s coronavirus recession. Unemployment claims dropped by 43,000 to 184,000 last week, the lowest since September 1969… The four-week moving average, which smooths out week-to-week ups and downs, fell below 219,000, lowest since the pandemic hit the United States hard in March 2020.”
December 8 – Reuters:
“The Labor Department's monthly Job Openings and Labor Turnover Survey, or JOLTS report…, also showed a steady decline in layoffs, another sign that the jobs market was tightening. While the number of people voluntarily quitting their jobs fell, it remained quite high… Job openings, a measure of labor demand, increased by 431,000 to 11.0 million on the last day of October. This was the second-highest on record.”
December 10 – Bloomberg:
“University of Michigan’s preliminary sentiment index increased to 70.4 from a decade-low 67.4 in November… Consumers expect inflation to rise 4.9% over the next year, matching last month’s reading, which was the highest since 2008…”
December 9 – Wall Street Journal:
“Company founders and leaders are unloading their stock at historic levels, with some selling shares in their businesses for the first time in years, amid soaring market valuations and ahead of possible changes in U.S. and some state tax laws. So far this year, 48 top executives have collected more than $200 million each from stock sales, nearly four times the average number of insiders from 2016 through 2020…”
China Watch:
December 9 – Bloomberg:
“China Evergrande Group has officially been labeled a defaulter for the first time, the latest milestone in months-long financial drama that’s likely to culminate in a massive restructuring of the world’s most indebted developer. Fitch Ratings cut Evergrande to ‘restricted default’ over its failure to make two coupon payments by the end of a grace period on Monday, a move that may trigger cross defaults on the developer’s $19.2 billion of dollar debt.”
December 6 – Bloomberg"
“China Evergrande Group is planning to include all its offshore public bonds and private debt obligations in a restructuring that may rank among the nation’s biggest ever, according to people familiar... The plan would cover public bonds sold by Evergrande and unit Scenery Journey Ltd… It would also include about $260 million of notes issued by joint venture Jumbo Fortune Enterprises that Evergrande has guaranteed, one of the people said.”
December 9 – Reuters:
“China's producer price index rose 12.9% in November, the National Bureau of Statistics said…, slower than October's 26-year high of 13.5%”
December 8 – CNBC:
“Fresh vegetable prices in China surged by 30.6% in November from a year ago, the National Bureau of Statistics said… The gains followed a 15.9% year-on-year rise in October, as floods and other extreme weather in recent months have hit farms. Although the bureau noted the supply of vegetables increased in November, prices were still up on a monthly basis by 6.8%.”
December 6 – Bloomberg:
“China’s exports and imports grew faster than expected in November, with both hitting records as external demand surged ahead of the year-end holidays and domestic production rebounded on an easing power crunch. Exports rose 22% in dollar terms from a year earlier to almost $326 billion, while imports grew almost 32% to about $254 billion… Economists had forecast exports to grow by 20.3% and imports to increase by 21.5%.”
Global Bubble Watch:
December 7 – AFP:
“The share of global wealth of the world’s richest people soared at a record pace during the Covid pandemic… Since 1995, the slice held by billionaires has risen from 1% to 3%, according to the World Inequality Report. ‘This increase was exacerbated during the Covid pandemic. In fact, 2020 marked the steepest increase in global billionaires' share of wealth on record,’ the document said. The club of the richest 1% has taken more than a third of all additional wealth accumulated since 1995, while the bottom 50% captured just 2%. ‘After more than 18 months of Covid-19, the world is even more polarised,’ Lucas Chancel, co-director of the World Inequality Lab at the Paris School of Economics, told AFP.”
Japan Watch:
December 8 – Associated Press:
“Japan’s economy contracted at a 3.6% annual rate in July-September as a wave of coronivirus infections crimped travel and other activities… The estimate for the last quarter, downgraded from an earlier report of a 3.0% contraction, reflected weakness in consumer spending and trade, the government said. In quarterly terms, the measure used for most economies, the economy contracted 0.9%... The world’s third-largest economy was in a slump before the pandemic hit. Its recovery has been fitful thanks to precautions taken to curb COVID-19 infections. Troubles with supply chains, especially for computer chips used in autos, have also taken a toll.”
December 9 – Reuters:
“Japan's wholesale inflation hit a record 9.0% in November, pushing gains for a ninth straight month, a sign upward pressure on prices from supply bottlenecks and rising raw material costs were broadening. The rising cost pressures, coupled with a weak yen that inflates the price of imported goods, add to pain for the world's third-largest economy as it emerges from a consumption slump caused by the coronavirus pandemic.”
Crime Watch:
December 4 – The Hill:
“An uptick in smash-and-grab robberies across the U.S. has jolted businesses, prompting owners and leaders to take precautions to protect brick-and-mortar shops amid a busy holiday shopping season. Stores and malls in San Francisco, Los Angeles, Chicago and other metropolitan areas have been the targets of flash mob robberies, break-ins and vandalism.”
Geopolitical Watch:
December 6 – Financial Times:
“When Vladimir Putin talks about Ukraine, he sounds like a spurned, abusive husband. A 5,000-word essay that the Russian president published in July, entitled ‘On the historical unity of Russians and Ukrainians’, is full of protestations of undying love for Ukrainians — combined with threats of violence if the love is not reciprocated. Ukrainians are variously portrayed as the blood brothers of Russians and as neo-Nazis. Volodymyr Zelensky, the president of Ukraine, joked that Putin must have a lot of time on his hands… But the contents of Putin’s essay look increasingly alarming when read alongside obvious preparations in Moscow for an invasion of Ukraine. There are now close to 90,000 Russian troops, as well as tanks and artillery, deployed near the Ukrainian border. Last week, Putin made a threatening speech, warning the west not to cross Russia’s ‘red lines’.”
December 4 – Reuters:
“Any move by China to invade Taiwan would have ‘terrible consequences,’ U.S. Secretary of State Antony Blinken said…, adding that he hoped Chinese leaders would think very carefully about ‘not precipitating a crisis’ across the Taiwan Strait. Blinken… said China had been trying to change the status quo over self-ruled Taiwan, which Beijing claims as its territory, and that the United States is ‘resolutely committed’ to making sure the island has the means to defend itself.”
Friday, December 10, 2021
November consumer prices up +0.8% from October, and up +6.8% from November 2020 (highest inflation rate since 1982)
SUPPLY CHAIN UPDATE: My Sunday morning at the supermarket
I wrote this last Sunday morning, and accidentally saved it as a draft, rather than publishing it, meaning only I could see it. I blame the computer. None of my faults are my fault.
The empty shelves syndrome may have peaked -- not obviously worse that the prior Sunday, for the first time in many months.
The store -- Meijers in nearby Southfield, Michigan -- is getting better at spreading out the products in wide, shallow displays, to disguise what used to be empty shelves.
The breakfast cereal row had a huge amount of empty shelves. But we had stocked up on Kellog's Raisin Bran last week, and didn't need more for a month.
For the first time in many months, our favorite ACE bread from Canada was available. We bought four loaves at $4 each, to freeze three of them. Left the last loaf for someone else ... only because we couldn't fit any more in our freezer! We're ACE bread hoarders!
For the first time in three months, the store had Smuckers sugar-free jam in two flavors out of four - but not the red raspberry flavor I like. Sorry Smuckers, I stopped eating your product three months ago because it was never in stock, and now I'm no longer interested in any flavor!
Thursday, December 9, 2021
"What’s tougher? Finding truck drivers or finding truck trailers?"
"Supply headwinds facing the trucking industry were front and center at an investor conference on Wednesday and Thursday.
While executives said driver recruiting and broader supply chain bottlenecks are ever so slightly easing, the procurement of equipment has gotten tougher.
“I would predict at this juncture, in our looking out at the trailer OEMs (original equipment manufacturers) and the tractor OEMs, that it could even be more difficult in 2022 on production and delivery than it was in 2021,”
said Mark Rourke, CEO and president of Schneider National (NASDAQ: SNDR), at the Stephens Annual Investment Conference held in Nashville, Tennessee.
Lack of trailers becoming the new driver shortage?
Equipment purchasing for truckload carriers will be below normal replacement in 2021 given semiconductor and parts shortages as well as COVID-related labor issues that are plaguing the OEMs.
Derek Leathers, Werner Enterprises chairman, president and CEO, said current tractor and trailer order books extend well beyond the OEMs’ manufacturing capacity for all of next year, meaning the industry fleet, which has gotten older and smaller during the pandemic, won’t be increasing anytime soon.
“I think you see continued contraction or at best case stabilization in ’22 but with an older fleet,” Leathers said.
Werner’s average truck age was 1.8 years heading into the pandemic with trailers 4 years old on average.
While a recent acquisition skewed average ages slightly higher, an inability to get all of the replacement equipment wanted has really pushed those averages up, to 2.1 years and 4.4 years, respectively.
Leathers said Werner wants to refresh equipment but “there’s no line of sight to when that moment is, it’s certainly not in ’22.”
“The best-case scenario is you may see some return to normalcy by third quarter ’22 and that’s way too late to have any impact on the year in terms of additional capacity.
So I think we have a structural cap that’s different than anything we’ve seen historically.”
Eric Fuller, president and CEO at U.S. Xpress also pointed to the third quarter as the earliest date for relief.
He said the OEMs are guiding to “a few more months” for tractors that should have already been delivered.
“A number of the OEMS are going back to some of their larger orders and reducing the amount of tractors they’re actually going to be able to produce in 2022,” Fuller said.
“I think the trailer situation is worse.
In some cases, to get a significant order we’re being told it could be multiple years … 24 months, 36 months.”
Trailer manufacturer Wabash said it would build only 50,000 dry van trailers next year compared to more than 57,000 in 2019.
The company’s backlog, which extends into 2023, has increased to more than $2.3 billion from $1.9 billion at the close of the third quarter.
It’s in the process of converting refrigerated manufacturing capacity to dry van production lines but that won’t be completed until early 2023.
Management from J.B. Hunt said delays in equipment deliveries will result in holding onto trade-ins longer than originally anticipated, which will drive its cost of service higher.
The increased maintenance expenses associated with running older equipment will be an incremental component of its customer’s rate structure in 2022.
Less-than-truckload carrier Yellow noted a lack of trailers throughout the supply chain as trailing equipment sits longer at shipper facilities that are dealing with issues recruiting and retaining workers.
Yellow CEO Darren Hawkins said he’s most concerned about being able to take delivery of the trailers Yellow has ordered for 2022.
He said the company can postpone planned trailer retirements if needed but noted that overall trailer utilization has become a material burden on operations.
“We do not have access to our own equipment as readily as what we’ve seen in the past,” Hawkins said.
“And then when you do get that equipment, it’s in the wrong part of the country and we’re having to reposition it.”
Yellow would normally use the rails to reposition trailers but given current network congestion, they have more freight than they can handle.
“I have not seen it ease.
I actually feel like demand is expanding for our services,” Hawkins added.
He said Yellow is focused on making timely freight pickups as that is its customers’ biggest concern.
“They’re not as focused on transit times as they are getting their freight picked up and getting it into a system and being able to tell their customers that it’s actually in transit.”
Driver hiring issues have eased … kind of
Most trucking executives said that multiple rounds of pay increases and sign-on bonuses, as well as the end of enhanced unemployment benefits in September, have helped driver recruiting, but only on the margins.
Fuller noted that August was the toughest month for driver hiring, with only slight improvement since.
“If August was a 10, it’s a 9.5 [now].”
J.B. Hunt said difficulties sourcing drivers have plateaued but at a high level.
“For drivers, we’re at a high watermark and we’re holding,” Shelley Simpson, chief commercial officer and EVP of people, commented.
She said driver recruitment hasn’t really kept the company from bringing on new business because it can utilize its digital 360 freight platform for capacity and backfill with permanent resources later.
But she said the labor headwinds extend beyond drivers.
Difficulty finding workers throughout all levels, from maintenance techs to office employees, has been a burden for the company.
“In the past, we were able to tweak pay or turn pay and that typically would fix 95% of the problem.
Today, that’s not the case when it comes to labor,” Simpson continued.
The American Trucking Associations’ estimate of the current driver shortfall is approximately 80,000.
But the organization sees that number moving to more than 160,000 by 2030.
“It’s the most difficult driver market I’ve ever seen,” Leathers said.
“Has it stabilized at very difficult?
That seems to be the case.
So it’s staying very difficult but it doesn’t seem to be worsening.”
Searching for a cure
Werner has been bringing on drivers through its academies.
It had four additional driver schools operating at the end of the third quarter, 17 in total.
The company will have 22 open by the end of the first quarter.
Driver sourcing costs and labor expenses incurred as a result of equipment downtime due to parts shortages led Werner to miss third-quarter expectations.
When asked about potential solutions to the driver issue, Leathers said he sees the most potential in opening the driver pool to include candidates as young as 18 years old.
He said the plan to reduce driver ages would be “one of the largest advancements for safety” the industry has seen in a while.
“These are true apprenticeships.
This is not, ‘You’re 18 years old and here’s the keys to a truck and good luck.’”
He said the current proposal for preparing these individuals would require multiple months of training with experienced drivers as well as curfew restrictions.
He believes it would also allow the industry to recruit people “from the front of the class.”
“What do you get at age 21?
If you wait to 21 because you think that there’s something magical about the number, you get the people that were unsuccessful as an electrician, a plumber, a roofer or welder
versus going to the front of the class and getting the best and brightest and putting them in a multi-month apprenticeship.”
He said relaxing hours of service rules wouldn’t be fair to the driver.
“They should not bear on their backs our inefficiencies,” Leathers said, referring to the increase in the amount of dwell time drivers are experiencing due to congestion throughout the supply chain.
Leathers doesn’t think increased vehicle or cargo weights will help either “at a time when our nation’s infrastructure is already crumbling.”
He said it will take at least a decade until recently approved infrastructure money results in material improvements to the highways.
Rourke said a new rule for entry-level candidates, requiring training from a certified institution listed on an approved provider registry, will further limit driver resources.
“For the state licensing, you have to then verify where this schooling took place and the accreditation of that school, which has a minimum number of hours, a minimum curriculum.
It isn’t just, ‘I just took the written test, let me go out and take a test and I get a CDL.’
So it radically changes that entry point into the industry.”
CRIME: "Chicago Mayor Lori Lightfoot Acts Stupidly in Remarks on City's Smash and Grab Looting Spree"
"Sadly for the residents of Chicago, Mayor Lori Lightfoot (D) ... in response to the smash and grab looting spree and violent crime wave that is plaguing the city she’s charged with running, she in part took a dangerous “blame the victim” approach, insinuating that retail store owners were partly at fault for what was happening to them:
“I’m disappointed that they’re not doing more to take safety and make it a priority,” she said. “For example, we still have retailers that won’t institute measures like having security officers in their stores, making sure that they’ve got cameras that are actually operational.”
With the thought in mind that most of the stores that are being looted by smash and grabbers in Democrat-run cities and states are the big department stores like Neiman Marcus and Nordstrom’s,
the likelihood is that they already have security guards in place and cameras that operate as they should.
Let’s assume for purposes of discussion that that is the case.
Short of having an army of armed security guards lined up in front of those stores – which is not going to happen because it would likely deter shoppers in a big way,
what’s going to stop the mobs of smash and grabbers from overpowering a security guard(s) posted in front of or in the store and getting into them to grab the merchandise?
Nothing.
In fact, we saw two situations in California recently where one security guard at a mall store was assaulted and in another case, private security guard and former police officer Kevin Nishita, who was protecting a news crew filming from the site of a previous smash and grab in downtown Oakland, was shot and killed.
Plus, look at this video evidence of how mobs of people who apparently have nothing better to do will bum rush innocent people for no apparent reason and commence with beating the hell out of them:
Chicago police were forced to cancel scheduled days off to deal with ongoing crime after a bus driver was beaten.
Chicago Transit Authority president speaks out: “my drivers are furious. They are beyond scared, they are upset they are sitting ducks in that seat.” pic.twitter.com/vATBYtnDnr
— RNC Research
(@RNCResearch)
December 7, 2021
Do you think security guards, even the armed ones, want to get in the middle of that?
I don’t think so.
If we were talking one on one situations here, they probably would – depending on the situation, but we aren’t talking about one on ones.
We’re talking about scores of people converging on these stores and smashing and grabbing what they can.
And then there are the stores that aren’t part of chains that are getting broken into by these looters.
What if they can’t afford an around-the-clock security presence?
Because crushing mandates put in place during the pandemic by the likes of Lightfoot and other dictatorial Democrats have hurt the bottom lines of many small businesses,
the likelihood of them being able to put the type of security and camera systems in place – smaller-scale versions of them – like the ones you see in the big-name stores is slim to none.
Maybe it’s just me, but I think a better approach from Lightfoot would be to not shame business owners here.
Encouraging them to get cameras and security guards is one thing, but stating you are “disappointed” is unhelpful
and will only spark further resentment from business owners who don’t appreciate being blamed for the crimes committed in their stores.
Instead, Lightfoot should focus primarily on working with law enforcement and prosecutors to make sure these perps get caught and are not immediately released which in many cases would lead to them striking again.
That would be a big help – that and maybe not trying to force vaccine mandates on police officers and denigrating their service in an effort to score cool points with the Woke Mafia.
But all of that would involve Lightfoot acting responsibly on behalf of the residents of her city instead of stupidly, and as history has shown us, acting responsibly is just not something Lightfoot does very well."
Wednesday, December 8, 2021
"Used-Vehicle Wholesale Prices Spike to Ridiculousness. Just Wait till they Hit CPI Again"
"Prices of cars and trucks sold at auctions around the US jumped another 3.9% in November from October, according to Manheim, the largest auto auction operator in the US.
These crazy prices have now spiked by 44% from the already sky-high levels in November 2020.
... In October, prices had spiked month-to-month by the most ever (9.2%).
... Prices in the Manheim Used Vehicle Value Index are adjusted for the mix of models and mileage, and for seasonal factors.
The unadjusted price increase in November was 1.9% month-to-month and 44% year-over-year.
... everyone knows this crazy price spike cannot go on forever.
... Compared to the old-normal in November 2019, prices have now spiked by a mind-boggling 67% ...
... The cause is buying behavior – psychology.
Buying vehicles is the ultimate discretionary purchase for most Americans:
They trade in one perfectly good but older vehicle for a newer one, though they might as well drive the older vehicle for another year or two ...
They have done this during the Financial Crisis, and dealer lots were overflowing with cars.
But now, the whole psychology has changed, and price doesn’t matter anymore.
Consumers are just paying whatever, and auto dealers know it, and so they’re paying whatever at the auction,
confident that they can sell those units with super-high markups to these crazy retail buyers out there.
... There is one exception to the discretionary nature of vehicle purchases: commercial vehicles.
Used vans – mostly cargo vans needed for e-commerce which is booming, and for the trades, such as plumbers and electricians – are in a special situation.
Companies are having the hardest time obtaining new vans as automakers have de-prioritized building commercial vans during the integrated chip shortage to build high-end models to maximize revenues and profits.
Ford’s Transit cargo vans dominate that market.
Ford said last week that its Transit sales plunged by 54% year-over-year in November, and by 21% for the first 11 months of the year, as it shifted production to models with higher price tags and profit margins.
In 2019, Ford sold 153,868 Transit vans.
In 2021, it’s on track to sell only 96,000, down 37% from 2019.
Hence the mad scramble to buy used cargo vans.
Unlike retail buyers of cars, SUVs, and pickups, companies don’t consider these purchases discretionary.
... auction prices of used vans in November spiked by 57% year-over-year.
Also note the 46% price spikes in sedans (compact and midsize), the vehicles that Ford, GM, and Fiat Chrysler, under pressure from Wall Street, have totally abandoned by killing their sedan models.
Total used vehicle sales – these wholesales plus retail sales – in November were roughly flat with October and declined 2% from a year ago
to a Seasonally Adjusted Annual Rate (SAAR) of sales of 37.2 million used vehicles, according to estimates by Cox Automotive, which owns Manheim.
In a good year, the industry gets to nudge the 40-million line.
Retail sales of used vehicles, at 20.4 million SAAR in November, were flat with October and up about 1% from a year ago.
... Supply of retail vehicles on dealer lots jumped from 39 days in October to 49 days in November, when 44 days is normal, the first month above normal supply all year.
Supply of wholesale units to be sold at auction jumped from 18 days in October to 29 days in November when 23 days is normal, also the first month all year when supply was above normal.
We’ll see a month from now how the supply scenario washes out.
These crazy wholesale prices here take a few months to filter into the used-vehicle retail prices of the Consumer Price Index.
The October CPI for used vehicles – we’ll get the November CPI this week – still reflects the summer pause of auction prices after the second great spike,
and they’re now setting up for the third great spike that wholesale prices are already experiencing"
Tuesday, December 7, 2021
Chicago Crime Expands To Millennium Park -- Mayor Lori Lightweight Has No Answers
"If you are in NYC and you want to take your kid to Chick-fil-A, you’re going to have to show a vaccine card.
You’re going to have to show a vaccine card to take your kid to see Santa for the holidays.
Are you kidding me?
This is not supported by science.
Are you planning an annual trip to Chicago to see the Christmas lights, enjoy a nice stroll through Millennium Park and get all romantic for the holiday season?
You might want to think twice about that plan.
Chicago’s moron mayor was at a podium Sunday to explain how she’s going to stop what happened Saturday at the tourist spot where dozens of youths were arrested and a CTA bus driver was beaten.
Police say the bus driver stopped his bus to inspect it after hearing a loud pop and was attacked by a man and a woman on North Michigan Ave., near the Millennium Park skating rink and the Bean sculpture.
The bus driver was punched “several times” before the assailants fled, police say.
That was just the start of the problems at Millennium Park where 21 juveniles were arrested after a fight broke out within a large group that had congregated.
Police say a 15-year-old boy was shot in the arm after bumping into another teen, who pulled a gun and shot the boy, as part of the park chaos.
One cop was left with a broken arm in the madness.
That’s right, the place where you used to go for a nice casual stroll to enjoy the big-city lifestyle in December is currently so bad that Lightfoot had to show up to a press conference Sunday and explain how she’s going to regain control of an out-of-control city.
Now Lori’s pissed off at the parents.
“These kids have to take responsibility, but I’m going to say the parents have to take responsibility,” she told the Chicago media.
“Do you know where your kid is?
Are you making sure that you’re talking to your children about how they should act in a large crowd?”
It’s highly unlikely any of the parents were watching her press conference.
A week ago, she blamed juvenile judges for the chaos caused by an 11-year-old boy who’s being called a “prolific” carjacker.
That boy is accused of sticking a gun in the face of a woman and stealing her BMW.
In other news, it was another typical 9 dead, 23 wounded weekend in Chicago.
Chicago’s moron mayor has no plan, no way out of this chaos and now she has huge groups of youths wreaking havoc on the tourist hotspots.
It’s not just the Millennium Park area that’s becoming a huge issue.
Magnificent Mile is being targeted by retail theft gangs that have smashed windows and have pulled off heists such as four men running into a Burberry store and taking off with handbags “worth tens of thousands of dollars,” according to CBS-Chicago.
“We don’t want to be become the headlines, like San Francisco,” Rob Karr, president and chief executive officer of the Illinois Retail Merchants Association, told the TV station, “but we’re pushing in that direction.”
Lightfoot leaves Tuesday for San Francisco where she’ll be fundraising for her 2023 reelection campaign."
Monday, December 6, 2021
Economic Logic Stock Market Timing Indicators Remain Neutral
Stock Market
Timing Indicators,
Corporate Insider Trading is bearish
GOEV Canoo Inc.
= Bearish
New Record 96 container ships are waiting to dock at Southern California Ports"
"There were 40 container ships waiting for berths within 40 miles of the ports of Los Angeles and Long Beach on Friday.
But there were also 56 container ships waiting farther out to sea, putting the actual tally at an all-time-high of 96, according to new data from the Marine Exchange of Southern California.
The Marine Exchange has just unveiled its new methodology for counting container ships waiting outside the 40-mile “in port” zone.
A new queuing system has been in place since mid-November that encourages container ships to wait outside of a specially designated Safety and Air Quality Area (SAQA) that extends 150 miles to the west of the ports and 50 miles to the north and south.
This has sharply reduced the number of ships closer to shore, leading to suggestions that efforts to tackle port congestion are cutting into the offshore queue — a misconception that should be dispelled by the Marine Exchange’s new counting method.
In addition to the 96 ships waiting offshore on Friday, there were 31 container ships at terminal berths, bringing the grand total to 127, at or near an all-time high.
The total number of container ships either at berths or waiting offshore continues to rise:
It is up +25% from the beginning of November,
+41% from the beginning of October and
+79% from the beginning of September.
The new queuing system reserves a ship’s spot in line based on its calculated time of arrival (CTA), as opposed to the previous first-come, first-served system that entered a ship in the queueing list when it came within 20 miles of the ports.
The CTA is derived from when a ship would have hypothetically arrived from its last port of call, as calculated by the Pacific Maritime Monitoring System.
The ship can then wait anywhere it wants outside the SAQA — even on the other side of the Pacific — knowing it has a spot saved in line based on its CTA.
Capt. Kip Louttit, executive director of the Marine Exchange of Southern California, said in his daily report on Friday, “The new methodology for determining the container-ship backlog for the ports of Los Angeles and Long Beach was approved by the working group this morning.”
The methodology, he explained, is to “take the traditional count of container ships anchored or loitering inside 40 miles of the ports” and then “add container ships loitering and slow-speed steaming across the Pacific outside the SAQA whose CTA is before the time of the report.”
(Prior to Friday, American Shipper used the same methodology to estimate the total queue.)
The new queuing system was designed to improve safety and air quality, not reduce the number of ships in the queue."
