Wednesday, January 08, 2014

Why I am Not A Chartist

Charting is an occult practice.  Humans seek patterns, even invent them when there are none.  Witness the 6 years of GDX (Gold miners ETF)and F (Ford) lockstep:



 

Now see what happened in the ensuing 18 months.  




How about this then?  Gas prices.  Lower highs and lower lows.  Clearly the future is spelled out for anyone who can read a graph.  




Or is it?  Same chart expanded to ten years from 18 months:





Here's how far I trust charting: 


CalSTRS Digs Deeper

From the SacBee:

The California State Teachers’ Retirement System estimates that the cost to fully fund the teachers’ pension debt will be almost $4.5 billion in the coming year, $4.6 billion the year after that, and more in each subsequent year.

CalSTRS calculates that 30 years from now – and many veteran teachers who retire now will live another 30 years – the annual cost of fully funding the system will be $13.9 billion.

The Bee’s editorial board last wrote about this issue in December 2012. The total unfunded liability stood at $65 billion then. Now, the amount is $71 billion.


Remind you of a negative amortization loan?  It should.  California is fast running out of productive class donors to the entitlement society. 

Monday, January 06, 2014

Getty Center

Okay, back to the shed in the back yard aka the office.  While I wade through the ephemera here's a fun pic I took Friday:

I take unusual pictures. 
Here's what everyone does:

And here's what I saw:  


Thursday, January 02, 2014

EMRATIO

Labor force participation.  The Federal Reserve of Atlanta has an interesting blog post:

We find that the effect on exit from unemployment occurs primarily through a reduction in labor force exits rather than through exit to employment (job finding). This is important because it implies that extended benefits do not delay the time to re-employment substantially and so do not have first-order efficiency effects. The major effect of extended benefits is redistributive, providing income to job losers who would have exited the labor force otherwise (consistent with Card et al. 2007). 

In other words, if a significant decline in unemployment benefits comes to pass, we may well see another bump downward in the labor force participation rate. Although a decline in LFP associated with the expiration of extended UI benefits would fall in Dunne and Terry’s nondemographic category, the Farber and Valletta results suggest that we should interpret any such decline as structural. And structural in this case means not directly amenable to correction by policies aimed at stimulating spending.
 -----

 My guess is that once the Fed realized the effect on headline U-3 from the cancellation of extended benefits that was when we saw them back away from the 6.5% UE target for cessation of easing.  The rest of the article is d4ense "fedspeak" but interesting. 

Wednesday, January 01, 2014

What's In the Hopper?

Here's a list of EN draft posts that will be coming out over the next week or so:

Peripheral Tunnel/Canal, Same Thing
Local Softness
Why an "Oil Economy?"
Living Wages Compared
Income Gap? Wealth Gap!
ICECAP and Other CAGW Resources
ACS 2012 Median Household Income
Bill McBride asks good questions 10

Of course the usual atrocious local listings and newsworthy posts as we go along but is there anything you'd like as a top post?  Anyone want to guest post?  And no sk, posting my method for n-secting an arbitrary planar arc is not for discussion.  ;)

Eh.. Wha.... What Year is it?

 

2014 looks interesting.  Let's take it for a spin.