Money Displaces Morals

April Fool’s Day will greet smokers with a cigarette tax rate increase that will take a big bite out of their wallets.
The new cigarette tax rate increase will see the state tax on a pack of 20 cigarettes jump from 87 cents to $2.87, with the tax including nicotine delivery devices such as electronic cigarettes, e-cigars, e-pipes, vape pens, and e-hookahs.

Products sold in combination with substances containing nicotine will be subject to the current tobacco products tax rate of 27.30 percent of the wholesale cost of the product. The average price of a pack of cigarettes in California already is $5.89. Beginning Saturday, that will increase to $7.89.

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Okay.  I've no doubt my dad died as much as a decade or more earlier than he might have had he not smoked.  No real way to tell. Doesn't matter.  I do know that if something is so dangerous and destructive that if $2.87 per pack is justified then prohibition is more justified. 

And let us not forget.  Without the "overhead" a cigarette would cost a couple pennies.  The extreme regulatory environment generates huge profits for the pushers. 

The Mystery of Real time GDP

Real economists and economic observers have been following this.  I will just add observations from a purely engineering/math perspective.

First the kindness.  at first it looks like the two metrics are irreconcilable.  Not as bad as it looks.  GDPNow from Atlanta is subject to wild swings being a snapshot.  The NY Fed evolves.  Trading sensitivity for integration is merely choice, not bad methodology.

Now the criticism.  There is no way both are correct.  There is no overlap even allowing for revisions.  Do you think come the release of the accepted GDP that one or both will admit to being wrong?

Worse, if one is lucky then we tend to dismiss the other.  We need a lot more data points. 

Personal note.  More weeding.  Pulled more invasive grass and discovered this patch of teacup roses and mixed ivy plants.

The Magic Molecule

About 18.950 years ago something natural happened.  Snowball Earth started warming.  There were a few detours along the way.  The Minoian Warm, the rRman Warm, the MWP, The Younger Dryas, etc.  Variation on variation.  Then about 70 years ago all that stopped and whatever natural process(es) were causing the steady general warming stopped and handed over the job to a magic molecule; CO2. 

Sounds silly when you hear it that way but that's what the current consensus claims. 

Seven Hundred Thousand

Historical photo of a field worker using the inhumane "short hoe."

He’s lived, and worked in Ventura County for more than 30 years. He’s raised a half dozen kids, and paid taxes. But, this now 66 year old Camarillo man isn’t in the U.S. legally, despite years of effort to get proper status. Speaking through an interpreter, Alfredo (we aren’t using his full name, because of concerns about his identity) admits he’s worried about what could happen to him and others like him under the new Trump Administration.
Alfredo is one of more than 150 people packing the lobby of the Mexican Consulate in Oxnard, seeking help.
The Consulate serves Mexican nationals living in Ventura, Santa Barbara, and San Luis Obispo County, a number estimated by officials at the office in excess of 700,000 thousand people.

More at KCLU.

Seven hundred thousand sounds like a lot but keep in mind there are many legal residents and most naturalized citizens retain dual citizenship. 

What about the component everyone is talking about these days?  The illegals.  From 2014:

The Fiscal Burden of Illegal Immigration on California Taxpayers (pdf)

Californians bear an enormous fiscal burden as a result of an illegal alien population estimated at almost 3 million residents. The annual expenditure of state and local tax dollars on services for that population is $25.3 billion. That total amounts to a yearly burden of about $2,370 for a household headed by a U.S. citizen.
Nearly half of those expenditures ($12.3 billion) result from the costs of K-12 education for the children of illegal aliens — both those illegally in the country and those born in the United States. Another major outlay ($2.1 billion) results from the need to provide supplemental English language instruction to Limited English Proficient students, many of whom are children of illegal aliens. Together, these educational costs are 57.1 percent of total expenditures.
Other fiscal outlays result from the costs of medical care ($4.0 billion), public assistance services ($800 million), administration of justice functions ($4.4 billion), and general governmental services ($1.6 billion).
Because some tax revenue is collected from the illegal alien population, we include an estimate of this revenue from sales, income, property and "sin" taxes. Yet, it should be kept in mind that the $3.5 billion in tax collections is not truly an offset to the fiscal costs, because similar, and likely greater, tax revenue would be collected if the same jobs were filled by legal workers.

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Retail Footprint

U.S. Stores Are Too Big, Boring and Expensive

This is a generational realignment in the way consumers spend their discretionary dollars, and the ramifications and economic dislocations are going to last for decades.

This year alone there will be several thousand store closings. Hold aside for a moment the debacle that is Sears/Kmart -- that has as much to do with complex financial engineering as anything else -- and consider the ongoing changes in retail sales trends. Many factors are driving weakness in U.S. retailing: 

The Bloomberg article written by Barry Ritholtz has lots more.  Click on the headline above.

Personally I think he's sugar coating.  We really won't have any uses for these storefronts at any price.  Unlike the old mills of New England they won't last long enough to find new purpose.   

Edit:  Added this cartoon.

Any excuse except the truth

Amgen shakes up R&D staff, 400 jobs to be cut/relocated

Mar. 27, 2017 1:21 PM ET|About: Amgen Inc. (AMGN)|By: Douglas W. House, SA News Editor

With the aim of improving alignment with functional capabilities, Amgen  plans to restructure its operations, affecting ~400 positions at its Thousand Oaks headquarters. About 100 jobs will be relocated to research hubs in the Boston area and San Francisco and ~50 will go to Tampa, FL where the company is opening a new capability center.

A company spokesperson says a little more than 100 employees in Discovery Research and Translational Sciences will be impacted. The action affects ~8% of Amgen's headquarters staff.

Please.  People are not this stupid.  

With the aim of improving the stock price with maximum leadership return , Amgen plans to move its technical operations, affecting ~400 positions at its Thousand Oaks headquarters. About 100 jobs will be relocated to research hubs in the Boston area and San Francisco and ~50 will go to Tampa, FL where the company is opening a new capability center and the other 250 are poof, into the wind. 

A company spokesperson says a little more than 100 employees in Discovery Research and Translational Sciences will be impacted. The action affects ~8% of Amgen's headquarters staff directly.  These jobs are however considered "apex" positions and additional hundreds of support positions will be quietly eliminated.  The Chairman/CEO's long personal history in the Greater Boston Area had nothing to do with this decision. 

School Reuse

From the Thomas Aquinas College newsletter.

The College’s new, New England home owes its origins to a 19^th century Protestant evangelist, Dwight Lyman Moody. A popular preacher who often attracted thousands to his services, Mr. Moody sought to broaden his evangelical efforts by providing a Christian education to young people of limited financial means. To that end, he founded two preparatory high schools in Western Massachusetts’ scenic Pioneer Valley: the Northfield Seminary for Young Ladies (1879) and the Mount Hermon School for Boys (1881).
In 1971 the schools merged to become a single, coeducation institution, the Northfield Mount Hermon School, operating on two campuses just a few miles apart. In 2005, however, the school consolidated onto the Mount Hermon campus. Four years later, Hobby Lobby Stores, Inc., purchased the Northfield property with the intention of giving it, free of charge, to an institution that would maintain it and continue Mr. Moody’s legacy of Christian education. Hobby Lobby then entrusted the property to the NCF, a leader in Christian philanthropy, to find a suitable recipient.

 

Even exclusive New England preps are experiencing the hollowing out of the middle class aspirants.  I'm glad they found a suitable reuse. 

The School Bus Doesn't Stop Here Anymore

As a followup to Tom Stone's earlier comment about young families, for your consideration:

This is a portion of zip 93010 with the same problem.   I'll give you approximately 1.2 million guesses why there aren't kids anymore.  This isn't a new thing but it has gotten extreme.  My youngest is literally the last public school attendee left and that for only a few more months.  Did I mention the newest plant? "Thread Agave." Took precautions and lost less than a pint of blood getting it in. 

Sebastopol Snapshot

Via Tom Stone [Century 21] A chart of Sebastopol Prices courtesy of Nick Dunlop [Dunlop Appraisal Services]

Peak pricing? Permanently high plateau? Limited supply? More data to come with "paired sales" individual properties coming soon.

Side note:  Pulled some grass and discovered I had one of these.

 

The Dawghaus and Echo Beach share this view to the north.

Oroville News

Damage, design flaws in Oroville Dam spillway point to lengthy repairs, consultants say

From the SacBee:

The main spillway at Oroville Dam is riddled with design flaws and so badly damaged that an independent panel of experts hired by the state has concluded it’s probably impossible to repair the structure completely before the next rainy season begins in November.
The panel of four engineering consultants, in a recent memo to the state Department of Water Resources, said it believes the concrete spillway can be made functional enough to release water from Lake Oroville during the next rainy season. But the panel noted it’s “questionable” whether the state has enough time to replace the badly damaged lower half of the 48-year-old spillway. The bottom of the structure is now split from the top by a gaping chasm that extends into the neighboring hillside.

Read more here: http://www.sacbee.com/news/state/california/water-and-drought/article140390898.html#storylink=cpy

Screen shot of the video at the link.

And the rock roses came out this morning. 

By "lengthy" the consultants mean "expensive." 

SI Has Swimsuits EN Has Flowers

A little break from this March of never ending winter with a few pics I took.  Took me less than five minutes within a 25 foot radius.  The gardens are a mess as you can see.

Is it safe to come out mom?  no, Bambi.  the meadow is a dangerous place.

Succulents w volunteer annual. 

Hanging basket fuschia. 

Statice awaiting transplant.

Weeds of some sort.

Bush on the hillside.

Different covers fighting for space. 

Technical details.  Samsung WB150F no digital adjustment full frames.  23MAR17. 

Dawghaus Details

 Flooring is a tough thing for both homeowners and landlords.  Quality can last longer and command a rent step.  Might last longer and believe me saving just one replacement is a big deal.  Then there are challenges.  One place has a thin subfloor.  The Dawghaus has slab.  You have to think before rolling out the Home Despot sale of the week.  Here is the majority of the Dawghaus:

8 layer engineered hardwood flooring. 

The field effect.

And as promised the xeriscape sector. 

Yellow Signal Checklist

 
The cartoon has nothing to do with the subject unless you are still wearing your Nov 7th tinfoil hat.

What are some warning signs of a rough economic path ahead?

✓  Auto loan delinquencies
✓  1% market decline
✓   Capital flows of unusual vector
✓  An Exurban Nation post on the subject

We've all been watching auto loans deteriorate.  Even the Fed:
https://www.federalreserve.gov/boarddocs/snloansurvey/201702/default.htm

a significant net fraction of banks reported they expect asset quality of credit card and auto loans to deteriorate somewhat over 2017.

As to the 1% market decline.  I fibbed.  It wasn't the declines of the last days but the lack of bigger market behavior for the past several years.



https://fronteranews.com/investing/emerging-market-capital-outflows-expected-to-hit-fourth-successive-year-in-2017/

Although emerging markets (VWO) are enjoying popularity amongst equity investors, as mentioned in the previous article, the situation remains bleak in terms of overall capital flows. The Institute of International Finance expects capital outflows from emerging markets to continue for the fourth consecutive year in 2017.
According to the Institute, the 25 emerging markets in its group are forecast to see capital outflows amounting to a total of $490 billion.
China (ASHR) will lead the aforementioned group in outflows. The Institute expects China to witness net capital outflows of $560 billion.

 Nothing big yet but from tiny acorns mighty oaks emerge. 

A final thought.  Sears/Kmart (SHLD) has a square foot of retail floor space for every person in the nation.  

How Not to Sell a House

11623 Azure View Rd, Pinon Hills, CA 92372

6 beds 3 baths 3,069 sqft

For Sale

$364,999

Price cut: -$20,000 (2/12)

Granite top through out house kitchen beautiful Model home cabinetry
Trabertine floors in master bathroom
Porche full length of house in backyard
Horse Property 2.3 acres fenced

What I love about the home

Great multifamily home or grandma home attached with spare room bathroom and kitchenette Feel free to come by and see this elegant Property. call to make appointment at your convenience dropped 20K to sell quick and it will. PLEASE ENTER AZURE VIEW RD FROM BEAR VALLEY FOR LESS DIRT ROAD

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Wouldn't want to track road dirt over the trabertine tiles.  Snigger.

Screams "CURB APPEAL!" doesn't it? 

 

Useful Data Site - AHS

We've used the American Housing Survey here on Exurban Nation for more than a decade but for supporting specific topics.  Time to recommend the latest version as a general resource.

Screen Capture of the AHS table generator.

Link - American Housing Survey Portal

 

 

A "fun" place to poke around with sometimes surprising results.  Try separating housing situations by age for instance. 

Half the Population in 1/20th the Counties

I dare say near everyone participating here is in one of those Counties. 

List here:
http://www.businessinsider.com/half-of-the-united-states-lives-in-these-counties-2013-9?IR=T

You will find Ventura in the middle between Hartford and Worcester. 

Encroachment

The numbers in red represent where water levels are into flood control management levels. 

Farming Going Straight from 18th Century to 21st

Farmers are being forced to make difficult choices about whether to abandon some of the state’s hallmark fruits and vegetables, move operations abroad, import workers under a special visa or replace them altogether with machines.

Growers who can afford it have already begun raising worker pay well beyond minimum wage. Wages for crop production in California increased by 13% from 2010 to 2015, twice as fast as average pay in the state, according to a Los Angeles Times analysis of data from the Bureau of Labor Statistics.

LATimes

Wages rise on California farms. Americans still don’t want the job

Just a reminder, "ain't nothing price won't fix."  And  before you suggest that table prices will explode, not really.  Farmers will try to claim that wages are a big portion of their costs but with the skim between farm and table in the totsl cost, not much. 

Edit:  A couple pics for fun.  The cabbage before cooking and the "Emerald Isle" drinks our kid made.

 

What Surveillance?

A laptop computer containing floor plans for Trump Tower, details on the criminal investigation of Hillary Clinton's use of a private email server and other national security information was stolen from a Secret Service agent's vehicle in New York City on Thursday, law enforcement sources tell ABC News.

Authorities are still searching for the laptop. Police expect to quickly identify the suspect from video evidence, the sources said.

The computer is encrypted and authorities are able to wipe the hard drive remotely if needed.

If needed?!  IF NEEDED?!  Wipe that evidence quick!  

Hoomins v2.0a

Sir—There are few things of which the present generation is more justly proud than of the wonderful improvements which are daily taking place in all sorts of mechanical appliances. And indeed it is matter for great congratulation on many grounds. It is unnecessary to mention these here, for they are sufficiently obvious; our present business lies with considerations which may somewhat tend to humble our pride and to make us think seriously of the future prospects of the human race. If we revert to the earliest primordial types of mechanical life, to the lever, the wedge, the inclined plane, the screw and the pulley, or (for analogy would lead us one step further) to that one primordial type from which all the mechanical kingdom has been  developed, we mean to the lever itself, and if we then examine the machinery of the Great Eastern, we find ourselves almost awestruck at the vast development of the mechanical world, at the gigantic strides with which it has advanced in comparison with the slow progress of the animal and vegetable kingdom. We shall find it impossible to refrain from asking ourselves what the end of this mighty movement is to be. In what direction is it tending? What will be its upshot? To give a few imperfect hints towards a solution of these questions is the object of the present letter. [continues...]

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The above is an excerpt from:

Darwin Among the Machines — [To the Editor of the Press, Christchurch, New Zealand, 13 June, 1863.

What has changed? Not much in intent just greatly in extent.  And never forget, if cats had thumbs humans would be thought of as their hairball reducing snack treats. 

Corned Beef & Cabbage

Happy St. Patrick's Day everyone.  As I get asked every year this year I am putting up my recipe for this traditional meal.  But first let's meet the main ingredient:

3.4 lbs Flat Point minimal fat corned beef.  I've named him Flatrick. 

And now the recipe.

It the crock pot on high, yes high, submerge the meat in "not rice" beer.  Rice beer (aka Bud) may be (debatable) good for the chef but definitely not for the beef.  Whet, rye, barley sources provide the proper proteins.  The high setting allows the fat and beer to chelate and rise where you can skim it off.  Once done you can add the spice packet if desired.  A couple bay leaves works in addition or instead.  Now is the time for low setting and another beer.  Let it go as many hours as indicated .  Prepare the unpeeled red or gold potatoes (quartered, no smaller) and carrots.  If the carrots are large, half microwave to kickstart cooking.  Dump them in and top with... yup... beer.  About 20 mins before dinner quarter (no smaller) a small cabbage and place on top don't have to be entirely submerged.  Nobody ever eats a lot of cabbage anyway.  Flip the cabbage halfway through and peel of the overcooked outer leaves.  Nobody likes those anyway.  Turn off the crockpot or better, set the ceramic bowl uncovered on a trivet on the table.  At least 5 mins to cool.  Then drain and slice the beef cross grain to preference.  Enjoy. 

Sea Otters Rock

High fives all around. 

San Francisco, March 7, 2017 — For the second time in as many years, a federal judge last Friday upheld the U.S. Fish & Wildlife Service’s decision to end the “No Otter Zone”—a failed program that the government determined would harm the sea otter population by excluding the animals from their historic range along the southern California coast.

Several fishing industry groups had challenged the federal decision to end the management program in two separate lawsuits. In Friday’s opinion, Judge Gee ruled against these industry groups by declaring that the law does not require the Service to continue a failed and harmful program.

 More: https://www.indybay.org/newsitems/2017/03/07/18797141.php

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The commercial fishermen hate them.  They eat the best sea goodies. 

China Determined to Outdo the West

China Home Sales Surge 23% 

in First Two Months, 

Defying Curbs

 

So called "Ghost City" awaiting people.

Bloomberg:

China home sales remained resilient in the first two months of the year, signaling policy makers are struggling to check the booming housing market.
The value of new homes sold rose 23 percent to 912 billion yuan ($132 billion) in January and February compared to the first two months of 2016, according to National Bureau of Statistics data released Tuesday. Sales rose 17 percent in December, the last time the data was released.
The surge comes after top policy makers used this month’s National People’s Congress to reiterate a pledge to curb property speculation, and some local governments expanded home-buying restrictions.
New banking regulator Guo Shuqing has said he will pay close attention to real estate bubbles, after 45 percent of new loans in China last year went to the property sector, with most going to personal mortgages.

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 No way this ends well or remains contained. 

Poppies Be Poppin'