Run Into Town on a Rail

High Speed Rail still on track, says representative

[Gilroy] to receive $600,000 grant for station planning in early 2014

Despite three recent court rulings viewed by some as strikes against the California High-Speed Rail Authority, the $68 billion project is still steaming along locally in Gilroy and statewide, according to a representative with the group.Ben Tripousis, northern regional director with the CHSRA, says he's working with City staff to better plan the proposed station in downtown Gilroy through a $600,000 grant the City will likely receive by Jan. 1. ....
 “The Authority won't select a preferred alignment and station location until the environmental review process is complete for the San Jose to Merced project section in roughly 2016,” Tripousis added. “The process will include significant community outreach and input before coming to a decision.”Ketchum is confident that if the CHSRA hasn’t decided on the Gilroy station’s location by then, the City can surely plan for it during the next General Plan process.The statewide high-speed rail system, according to documents provided during the Gilroy High-Speed Train Station Visioning Process, are forecasted to carry up to 100 million passengers each year as early as 2035. The 800-mile system will link the Bay area, the Central Valley and southern California together through 24 stations, all with an expected travel time of 160 minutes.“We're talking about development in and around the downtowns of all of our stations, increasing densities in the downtown cities and allowing for greater economic development,” Tripousis said.

This disaster keeps getting worse.  Gilroy is is a community of 50,000.  $600,000 to add HSR to their General Plan?  No, a $600k bribe to grease the tracks.  Come on.  The construction of the station shouldn't cost much more than a million or two. 

Nota bene.  Almost every number uttered in the excerpt above is incorrect.  No points for guessing in which direction. 

Las Vegas, The New Canary?

DQNews - Las Vegas-area home sales fell last month to the lowest level for a November in five years, the result of a constrained supply of homes for sale, waning affordability and the ongoing decline in investor purchases. The median sale price dipped slightly month-to-month but was still 26 percent higher than a year earlier, marking the 20th consecutive month with a year-over-year gain, a real estate information service reported.

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 Excuses, excuses. 

Bill McBride asks good questions 6-9

Bill's questions for 2014 are about housing.  Interesting that they are about "housing" not "real estate."  There's a difference and keep that in mind as you read.  



6) Residential Investment: Residential investment (RI) picked was up solidly in 2012 and 2013.  Note: RI is mostly investment in new single family structures, multifamily structures, home improvement and commissions on existing home sales.  Even with the recent increases, RI is still at a historical low level. How much will RI increase in 2014?

A:  Rather a lot really.  The category of deferred maintenance in particular will be fueled by residential reinvestment and increased materials prices.  The rule of thumb is that repair costs 3-4 times what upkeep costs and there has been a lot of ignored upkeep.

7) House Prices: It appears house prices - as measured by the national repeat sales index (Case-Shiller, CoreLogic) - will be up about 12% or so in 2013.   What will happen with house prices in 2014?

A:  Momentum will carry through until the spring selling season where flat to slightly down will continue through summer.  By then it will all depend upon any Fed response to the stalling market.

8) Housing Credit: Will we see easier mortgage lending in 2014? Will we see positive mortgage equity withdrawal (MEW) after six years of negative MEW?

A:  Yes.  If only for the reason of long time owners using equity to buy a downsized home and then renting out the original property in the good school district where you raised the kids now gone.  Renting the Dawghaus would yield enough to keep paying off the place and buy another more modest abode.

9) Housing Inventory: It appears housing inventory bottomed in early 2013.  Will inventory increase in 2014, and, if so, by how much?

A:  Y-o-y listings will grow steadily but slowly through the spring selling season and then get the same clamp we see now at a maybe 10%+ 2013 through the rest of the year.  Again depending upon the Fed response to slowing in the second half.

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What do you guys think?

Coming up: Bill's final question.  Deserving of an entire post all its own. 

Bill McBride asks good questions 4-5

Bill's questions 4-5 are monetary in nature.  

4) Inflation: The Fed has made it clear they will tolerate a little more inflation, but currently the inflation rate is running well below the Fed's 2% target. Will the inflation rate rise in 2014?  Will too much inflation be a concern in 2014?

A: Trick questions all around.  Inflation is what the Fed says it is.  The idea that house prices and taxes are not part of inflation is absurd on the face.  The excuse for house prices is that they are assets.  Okay then, only count the non-asset contributions of housing costs.  The obvious reason is that the current system games the results favorably. 

5) Monetary Policy: It appears the Fed's current plan is to reduce their monthly asset purchases by about $10 billion at each FOMC meeting in 2014.  That would put the monthly purchases at close to zero in December 2014.  Will the Fed complete QE3 in 2014?   Or will the Fed continue to buy assets in 2015?

A: Interesting phrasing.  The Fed is poised to continue to provide stimulus for at least another year.  In a year the Fed will still own a three quarters of a trillion more than they do now.  That's just QE3.  As we have seen there are other tools in the burglar's bag.  More than $400 per family in the US QE3 alone.  I don't need to tell readers of EN that you aren't the average "family" with respect to this burden. And yet strangely despite this added debt burden our disposable personal income seems not to go down.

So, in summary.  Inflation will be what they say it is and the purchases will continue under current and different guises. 

In 1980 the US boycotted the Olympics because the Soviet Union was in Afghanistan.  In 2014 the US is participating in the the Olympics despite being in Afghanistan. 

What good are "Estimates?"

Not good for much.  Seems like getting the sign right is barely achievable.  Every year Calculated Risk publishes a table of housing sales and starts.  Here are 2014, 2013, and 2012:

FWIW, my estimate is for 560,000 new home sales and 1,200 total starts but a far higher component of "not" SFR. 

In the mean time keep in mind the "value" of "estimates." 

Wicked Draw Down

From the EIA site:
Working gas in storage was 3,248 Bcf as of Friday, December 13, 2013, according to EIA estimates. This represents a net decline of 285 Bcf from the previous week. Stocks were 488 Bcf less than last year at this time and 261 Bcf below the 5-year average of 3,509 Bcf. In the East Region, stocks were 207 Bcf below the 5-year average following net withdrawals of 132 Bcf. Stocks in the Producing Region were 23 Bcf below the 5-year average of 1,138 Bcf after a net withdrawal of 99 Bcf. Stocks in the West Region were 31 Bcf below the 5-year average after a net drawdown of 54 Bcf. At 3,248 Bcf, total working gas is within the 5-year historical range.

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Just barely within the historical range.  Good for Nat Gas prices.  Provided you are selling of course. 

Bill McBride asks good questions 1-3

1) Economic growth: Heading into 2014, it seems most analysts expect faster economic growth.  So do I.  Will 2014 be the best year of the recovery so far?  Could 2014 be the best year since the '90s?  Or will 2014 disappoint?

A: 2014 will be by far and away the best momentum recovery year in a very long time.  This is easy. Keep this answer in mind when we get to question #10.  The first quarter will shrug off the disappointing holiday retail season.  Besides the online growth was at the high end of projections.  The talking heads will focus on that. 

2) Employment: How many payroll jobs will be added in 2013? Will we finally see some pickup over the approximately 2.1 to 2.3 million job creation rate of 2011, 2012, and 2013?

A: This is tough.  Not a lot of real jobs will be added but that is no assurance that in an election year that lots of jobs won't be reported.  Short answer; No.  Total employment will lag behind growth of working age population.  Even with 2.4-2.6 million, which is my estimate, we will barely eat into the huge gap created by the great recession. 

3) Unemployment Rate: The unemployment rate is still elevated at 7.0% in November. For the last three years I've been too pessimistic on the unemployment rate because I was expecting some minor bounce back in the participation rate. Instead the participation rate continued to decline. Maybe 2014 will be the year the participation rate increases a little, or at least stabilizes.

A: Down.  Pick a down number.  I'll take the under.  There's no way the unemployed pool mix doesn't shrink from getting too old, giving up, getting a crap job, plain old no longer being counted doesn't drop the headline number. 

3a) What will the unemployment rate be in December 2014?

A: Guess?  5.8%.  Headline U-3.

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Any other ideas?  The HCN answers were about wolf urine and chipolte and the usual.  In later posts we can discuss questions 4-10. 

Solstice Wishes

Wishing everyone a solemn Alban Arthan as we honor the souls of the trees we sacrifice then deify in our living rooms. Hang the revered kerm-oak, drink the blessed wassail. "Yule" feel so much better. The Norse had the right idea taking 12 days for Jole. 

Oh and for all you recent religion adoptees a translation: Christmas, Christmas Trees, holly, sacramental wine and the 12 days of Christmas

Changing the name makes little difference; Merry Christmas.

Four Million Sounds About Right

Hard to prove.  Harder to punish.  These ladies got a nice present under the tree.

4 Woodland Hills restaurant workers awarded $5.7M in age discriminaton lawsuit

By City News Service

Posted: 12/24/13, 8:51 AM PST |

LOS ANGELES - Four former servers at a Woodland Hills restaurant were collectively awarded $5.68 million in a lawsuit alleging they were laid off from their jobs because of their ages.
The plaintiffs, Martha Aboulafia, 61, Cheryl B. Colgin, 61, Regina Greene, 49, and Patricia Monica, 70, had a combined 47 years of service at Cable’s Restaurant at 20929 Ventura Blvd. All were let go by the restaurant’s new owner in 2010, according to trial testimony.
The women sued Cable’s and its owners, GACN Inc., in Los Angeles Superior Court in September 2011, alleging age discrimination and wrongful termination. On Dec. 17, a jury deliberated for less than two hours before unanimously awarding a combined $1.68 million in compensatory damages to the women for lost wages and emotional distress.
In a second phase of trial the same day, the jury added a combined total of $4 million in punitive damages after finding that the restaurant acted with fraud, oppression and/or malice after terminating all four, then replacing them within a short time with younger women in their 20s.
The restaurant was advertising for the plaintiffs’ replacements even after promising them that their minimum-wage jobs were safe, according to their attorney, James Rosen.

Death of Bitcoin

One of those things that seem small, like the shooting of a Duke, that turn out in retrospect to be really big deals.

From Rawstory:


Bloomberg TV anchor Matt Miller gave two colleagues, Adam Johnson and Trish Regan, $20 in digital currency in a “12 Days of Bitcoin” segment.
But Johnson unwittingly displayed the digital QR code for his money to the camera, and a viewer was able to use the private key to take his Bitcoin.
Reddit user milkywaymasta said he used his smart phone to scan the QR code that was displayed in high definition for about 10 seconds, allowing him to take the money.

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 No need for commentary. 

The Cold Reality

Thankfully that little breeze cuts 0.7° from the heat.  I was concerned a few weeks back because my fancy lime tree was just starting to yield and the avocados were still small.  The limes are like double concentrate flavor.  The flesh is still green but the skin is yellow.  Perfect for fancy drinks. 

EN Policy Change

By request let's try allowing anonymous posting.  The volume is low enough it should be workable. 

The Secret to a Happy Holiday

Easy.  Stay flexible and keep your sense of humor. 

Christmas Crafty

And now for something completely different.  Holiday craft corner time.

Now wait.  Before you think I've had too much eggnog look at the stats.
• All components from the 99¢ Store.
• Noxious fumes from melted plastic and glue.
• Electricity and soldering pencil.

Here's the visual steps:

2 large serving bowls
8pc plastic condiment bowls
4pc small bowls
3x 20 conventional light strings
Hobby cement

$8+tx and any sundry medical supplies.  

 Use the sodlering pencil to melt two holes in a large bowl and small bowl.  This is the top half.  Thread the three strings through the holes as shown and glue the small bowl to the large bowl.  Note, for now do not install the blinking bulbs.  The constant on makes the next steps easier.

Note the bleeding finger tip from a broken bulb and solder burn on the thumb. 

              

The bottom bowls are the same except there is no need to melt feeder holes.  Instead use the solder pencil tip to melt little holes just big enough for the bulbs.  Remember they are fragile glass so don't force them.  Alright.  After you bust the first one stop forcing them.  I know the kind of person who reads EN. 

Use the small cups and melt some holes in clusters and put the rest of the bulbs in them.

Replace one bulb with a blinker bulb.

Push the whole mess together and glue the large bowl rims.

Have a Merry Christmas. 

Bond Yield Flattening

30y-10y, 10y-5y, 5y-2y Treasury differentials.  Click for larger.

Seems that when 30year is rising and the yield curve is "flat" (the differences are equal) we see a recession.  Three instances are not enough but...

Flat or curved?  you decide.

 That ocean looks pretty flat to me. 

$1000/sf is back

Seems like not too long ago when Exurban Nation had a nearby listing for $2500/sf.  Are those days gone forever?  Don't be so sure.  Presenting 4514 EASTBOURNE BAY 93035

  
And yes for you "doomers" the drawbridge is included. Price history and an interesting one at that:

Oct 11, 2013	Price Changed	$1,899,500	—	VCRDS #13011891
Aug 20, 2013	Listed (Active)	$1,949,500	—	VCRDS #13011891
Jul 13, 2013	Delisted (Expired)	—	—	VCRDS #13000066
Jul 03, 2013	Relisted (Active)	—	—	VCRDS #13000066
Jul 03, 2013	Delisted (Expired)	—	—	VCRDS #13000066
Apr 14, 2013	Price Changed	*	—	VCRDS #13000066
Jan 02, 2013	Listed (Active)	*	—	VCRDS #13000066
Dec 11, 2012	Delisted (Expired)	—	—	VCRDS #12009533
Jul 10, 2012	Listed (Active)	*	—	VCRDS #12009533
Apr 21, 2003	Sold (Public Records)	$850,000	22.9%/yr	Public Records
Feb 20, 1996	Sold (Public Records)	$194,500	-24.4%/yr	Public Records
Jun 05, 1992	Sold (Public Records)	$550,000	—	Public Records

Clearly they've been chasing best price and are in no hurry.  There are decent aspects.  Two slips of 40' and 126'.  Heck park your monster ego in the 40' slot and rent out the big berth.  No Mello-Roos.  Then there are some negatives.  Biggest being a looming seawall assessment. 

About that GDP

GDP Q3 '13 third revision 4.1% from 3.6% from 2.8%.  Good news?  Not as good as it seems.  Turns out that 1.7% of the increase was inventory builds.  Much of the rest population growth.  And in a not surprising development the rest in the newly added component of intellectual property. 

Bureau of Economic Analysis (BEA) Press Release Dec, 20, 2013. 

This at the end:

Corporate profits by industry Domestic profits of financial corporations increased $9.7 billion in the third quarter, compared with an increase of $24.5 billion in the second. Domestic profits of nonfinancial corporations increased $12.7 billion, compared with an increase of $37.8 billion. The increase in profits of financial corporations reflected increases in both Federal Reserve banks and "other" financial industries. The increase in nonfinancial corporations primarily reflected increases in manufacturing and in "other" nonfinancial corporations that were partly offset by a decrease in information. Within manufacturing, the largest increases were in "other" durable goods and in food and beverage and tobacco products. These increases were partly offset by decreases in petroleum and coal products and in chemical products. The rest-of-the-world component of profits increased $16.7 billion in the third quarter, compared with an increase of $4.6 billion in the second. This measure is calculated as the difference between receipts from the rest of the world and payments to the rest of the world.

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Emphasis added.  The tick is healthy. 

DataQuick November '13 Misc

DQNews:

The typical monthly mortgage payment that California buyers committed themselves to paying last month was $1,418, up from $1,395 the month before and up from $1,026 a year earlier. Adjusted for inflation, last month's payment was 38.4 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 50.1 percent below the current cycle's peak in June 2006. It was 54.5 percent above the February 2012 bottom of the current cycle. 

-----

 That's a pretty fast increase in mortgage burden.  Even more telling:

Sales down 10.8 percent from 37,481 sales in November 2012, ...Last month's sales were 15.1 percent below the average of 39,357 sales for all the months of November since 1988.

 The Ice Queen senses a chill in the market. 

Cry for We, Argentina

Dear banks,
Enclosed please find you monthly stipend.  You may notice that the envelope is a little light this month.  You've gotten used to $85 billion and it is "only" $75 billion and worse, likely to get smaller over the next few years.  The good news is that we've successfully hoodwinked the public.  We were getting some flak for these transfers and "ongoing bank giveaways at unprecedented levels" was not a defensible way to sell it.  Boy we are good.  You still get $75 billion and we get applauded for "tapering."  WTF is "tapering?"  Damned if we know but they bought it. 

Anyway, happy holidays.  Don't spend it all in one place.  Wait, who are we kidding?  You aren't spending any of it instead prefering to collect the extra 1/4% on excess reserves.  That and bonuses of course.  No problem there.  Don't forget we are sending someone over in a few months.  He needs a job.  With big bonuses. 

Kindest Regards,
The Fed

It Ain't Pretty But It Is A Tapir

Fragile Markets

All Ford did was issue lower profit guidance.  Instant market drop stock price of nearly 9%.  Back up a few percent since but if it can happen to a good company with an expected announcement then it isn't about the company or the economy but the stock markets.

That said pay no attention to the bond market pre-positioning.  Up, down or yawn it is nothing but asymmetric trades. 

From GeoPolitical Monitor:
Strong momentum and near-zero central bank rates may see the stock market rally continue into 2014, but without an active consumer the longer-term picture is not so optimistic. While the US unemployment rate has declined to 7%, much of the job creation has been in low income roles, and the rate is enhanced by a fall in labor force participation to its lowest level since 1978. Notably, real median wages (adjusted for inflation) have fallen just over 3% since the start of 2009. 

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ZIRP is going away and low tier employment doesn't leave money for investment.  Could be ugly.  I recently checked up on the RRE & CRE REITs.  P/E ratios are eyepopping. 

Retail Sales, All Quiet

ShopperTrak – the world's largest counter and analyzer of retail shopper traffic – reported GAFO* in-store retail sales for the week of Dec. 9 to Dec. 15 were down 0.8 percent from the same week last year. Retail in-store shopper traffic also fell last week by 19.9 percent compared to the same time period in 2012.

Read more at PR Newswire.

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The good news about the sales number totally busted  is that the airwaves are not chock full of talking heads trying to sugar coat the results.  I do however expect a little stick save from online purchasing and of course then the heads will fall all over themselves concerning that 10% of sales being up greater than expected. 

Update: US Redbook numbers.

WASHINGTON (MNI) - The following is the text of the weekly retail sales report released by Johnson Redbook Tuesday, for the month-to-date through the week-ended December 14:
The Johnson Redbook Retail Sales Index was up 2.9% in the second week of December following a 2.6% gain in the prior week. Month-to-date, December was up 2.8% compared to December of last year (relative to a target of a 3.8% gain). Month-over-month showed a 1.4% drop (relative to a 0.4% drop). December is a five-week month on the retail calendar, ending on January 4, 2014.

Comment:  Nice stick save with that 5 week month!  

How do you think a man like me...?

1975. I feel old realizing there are readers who don't remember experiencing that era. The old Midas Muffler commercial was playing off the growing fear of inflation at the time. Make no mistake; it was fear. Not concern, not some modern investment strategy but the looming prospect of huddling in the dark eating Senior Vittles™. Things were bad. Volker was all but unknown. Watergate, Embargo, Carter rising.  It scarred the national psyche.  

Now look at the own to rent thrice in a lifetime opportunity seen in those graphs.  Rising rentier income.  Even better when you consider the lower interest rates.  And it doesn't matter if the prices and the rents realign.  You either get the rent or the appreciation or both.  Nota bene:  I said thrice.  Once in the 70s before inflation.  Once in the housing bust precipitated by the credit bust.  And one last time perhaps...? 

Recession Leading Indicator?

Consumer Durables Minus Consumer Non-durables 1968-present

Consumer Durables Minus Consumer Non-durables 1947-present

 Discuss.  

To get things started.  When the quarterly data goes from Positive to minus two percent meaning non durable spending exceeds the durable spending then a recession shows up in short order.   Is it a reduction in durable spending or a combination? 

In Hot Water

Scientists from the Hamburg Center for Free-Electron Laser Science have devised a novel way to boil water in less than a trillionth of a second. The theoretical concept, which has not yet been demonstrated in practice, could heat a small amount of water by as much as 600 C in just half a picosecond (a trillionth of a second). ....

All it takes for superfast water heating is a concentrated flash of terahertz radiation. Terahertz radiation consists of electromagnetic waves with a frequency between radio waves and infrared. ...

The novel method can only heat about one nanoliter (billionth of a liter) in one go. This may sound small, but is large enough for most experiments. For comparison, ink-jet printers fire droplets that are as small as one picolitre, which is a thousand times less than a nanolitre.  via R&D Magazine

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Two words:  ray gun.  

SoCal Not Immune to Interest Rates

Southland Home Sales Drop; Median Sale Price Edges Sideways - Again 

via DQNews: 

	Sales Volume			Median Price
All homes	Nov-12	Nov-13	%Chng	Nov-12	Nov-13	%Chng
Los Angeles	6,637	5,884	-11.30%	$350,000	$424,500	21.30%
Orange	2,879	2,632	-8.60%	$450,000	$560,000	24.40%
Riverside	3,274	2,934	-10.40%	$229,000	$275,000	20.10%
San Bernardino	2,304	2,130	-7.60%	$183,000	$218,500	19.40%
San Diego	3,371	3,018	-10.50%	$358,000	$415,000	15.90%
Ventura	820	685	-16.50%	$370,000	$445,000	20.30%
SoCal	19,285	17,283	-10.40%	$321,000	$385,000	19.90%

What a difference a year can make.  Those 820 buyers in Ventura County last year are up $75,000 almost the median household income.  Except tax free.  They are middle of the pack for Southland gains.  I've stopped following the imputed increases of the dawghaus seeing as up 7x then down 3x then up 1x has been nothing but mental masturbation. 

What's the return?  That's easy to model theoretically.
Nov '12 buy $370,000 with 5% fees extraction and 1.3% taxes built in.
Sell Nov '13 $445,000 with 2% transaction costs.  Realize $436,000 - $370,000 for $66,000.
How much did you put down and pay?  Generously, 20% or $74,000.  P&I; $1500/mo or $18,000.
$48,000 left, living for free and a ROI of 70%.  Nice.  N.B.  For only one year there are tax consequences but for 2 years plus the $500k exemption applies.  W[h]inning.

Happy 240th

December 16, 1773

Anyone interested in a repeat performance?

I know you aren't looking at the stamps but tear your eyes for a moment and then ponder the reality of an EIGHT CENT stamp from 1973. Then look lower. No, not her curves, the stamp price curve even further down.

This is an historical graph of stamp prices. Just in case you forgot 1971 is when Nixon stopped convertibility of the dollar to gold.

Anybody ready to toss some tea yet?

This is a repost from 2007.   And yes, the price of a first class stamp has continued on that slope. 

Pitchfork Map of the Day

Zoom for detail

This shows the percent change in median houshold income US 2000-12.  Outrageous. 
Source: US Census

French Curves

Seems more and more people are trying tho "curve fit" to try and make sense of data.  It doesn't work that way.  Actually it works perfectly right up until it doesn't.  A subtle difference.  If you are old enough and of any sort of technical background you recognize these things.  French curves.  Super handy in the days before Adobe Illustrator.  More on Adobe and their future or possible lack of one in an upcoming post.  Whether using degenerate conic b-splines with end tensors to define a surface or Coombs patching or just winging it with those nifty french curves the skill still consists of rationally choosing edge conditions and recognizing signal from noise. 

Not that there is anything wrong with French curves.  Hey, how do you think the first set of templates were drawn at all? 

Whistling Past the Register

It is that time of year.  Talking heads talking up the holiday sales season in the teeth of really bad numbers. 

Forbe's does a decent job of cheer leading without actually lying:
On the surface, it appears sales have been
reasonably strong, with the National Retail Federation (NRF) reporting November sales up 3.9% against last year and expectations that the season will net out at or above  the trade association’s holiday forecast, which was also for 3.9% growth.   These numbers exclude automobiles, gas station and restaurant sales.  On the surface, this is very good news for retailers and consumers alike, as retailers pulled out all their promotional stops, and consumers hopped on board to grab the deals.
According to the U.S Census Bureau sales report the most robust year-over-year gains were seen in big ticket sellers like electronics and appliance stores (+8% over last year), and furniture and home furnishing stores (9.4% over last year). That means chains like Williams-Sonoma, Pottery Barn, Best Buy and hh Gregg have had a top-line feast.  My take on this is that the rebounding housing market is driving high-value purchases for the home.  When you realize you’ve actually got some equity in your home again, it’s exciting to go out and buy something to put in it.
The most anemic increases were seen by general merchandise stores (think Target). 

Directly contrast that with:

Wealthy Go Frugal This Holiday Amid Uneven U.S. Recovery

While the most well-heeled shoppers still think nothing of dropping $4,600 on an Hermes tote, cracks have appeared in the $94 billion U.S. luxury market, especially for companies that cater to “Henrys” -- High Earners Not Rich Yet. Coach Inc. (COH) has said customers plan to spend less on gifts and that mall traffic fell sharply last month. Analysts predict Nordstrom Inc. (JWN)’s fourth-quarter sales may grow less than half the year-ago pace of 6.1 percent. Tiffany & Co. (TIF)’s third-quarter comparable sales in the Americas were barely higher. Even before Black Friday, Saks Inc., Neiman Marcus Group Inc. and Nordstrom offered 40 percent off on many brands.

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 And trite it may be but the weather sucks.  It will make a difference in a short season. 

Jobs yeah but crappy jobs

http://www.calculatedriskblog.com/2013/12/graphs-duration-of-unemployment.html

Unemployment by educational attainment.  Yeah, we've long known the more educated the more likely to be employed.  Even more startling is the participation rate by attainment.  Okay, that's the good news.  Now the part everyone seems to be missing.  Look at only the post recession right side of the graph.  The only cohort with rates below previous all time highs is the less than HS segment.  Not only that but look at the rates of UE decline.  The less educated the faster unemployment rates are falling.  We are only adding crappy jibs suitable for HS education or less.

While pondering the implications check this out:

The phrase you are looking for is "pushed off the back of the bus." 

PPI and Stuff

The Producer Price Index for finished goods edged down 0.1 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods decreased 0.2 percent in October and 0.1 percent in September. At the earlier stages of processing, prices received by manufacturers of intermediate goods declined 0.5 percent, and the crude goods index fell 2.6 percent. On an unadjusted basis, prices for finished goods advanced 0.7 percent for the 12 months ended November 2013.

-----

It isn't -0.1% that is the news, it is that the PPI has declined for the last three months. Month to month variation is expected especially when bouncing around at such low inflation. Three months of declines however rises to actionable attention. 

And read that last line; "unadjusted basis, prices for finished goods advanced 0.7 percent for the 12 months."

Well, I just performed the chained PPI using the data from Table A and it turns out the actual number is 0.3% year over year. 

And the sweet things to the left? They are BLS field researchers trying to guess if the tide is going out.

The Bigger Lie

Covered California (the State run ACA system) sent out a notice late Thursday that its public health exchange would offer access to 58,000 physicians, or 80% of the state’s doctors.

-----

What crap.  The headline really says 20% of the State's doctors won't even be eleigible for ACA participation.  The other 80% are being "offered."  Not accepted. offered participation. 

-----

Heck, 100% of the girls I've ever dated have been offered sexual bliss beyond their imagining.  Doesn't mean squat either. 

Introspection Overnight

It's been a few weeks of reactivating the blog. Thing is I have little idea if it is worth it. I know Calculated Risk keeps putting out thesame data. Nothing wrong with that. I'm trying to observe the inputs not track the results. Especially since it is abundantly obvious once a data series becomes useful it starts to get gamed. So. Here is the last few weeks of blog activity.

I'm thinking 8k visits 20k page views per month is worth the effort. Somebody ask KP if that's his idea of a failed blog.

Stagnant Wages

Tough to hide all the data.  This is an example.  Note: U-6 inverted right scale. 

Regular reader (face it plural is pushing it) will notice right away that for the super-majority the way to earn more is to work more.  That's the wonder of median as opposed to average.  That and of course the increasingly dishonest use of U-3 instead of U-6 for gauging employment conditions. 

As Stagflationary Mark quipped when I showed him this graph earlier, "As for your chart, real median household income can't stay at 1995 levels forever!"