Tuesday, January 01, 2019

Hiatus Ends

Hi ll. I didn't realize being gone a few weeks would make much stir. Three things. A couple vacations, I can provide picture proof. A couple holidays. Kids moving up in the world. And finally, a pretty severe computer disruption. That left me with mobile devices and an old laptop and about a zillion passwords that weren't working. All conspired to cause me to prioritize and neglect the blog. This for now and a real post in a bit. This is why college is so expensive.

129 comments:

LBD said...

Welcome home, missed your wise guidance.

I got a new all in one H/P for Christmas. Nice not having a tower under my feet anymore.

College cost are driven out of hand due to student loans. IMO

Elizabeth Merceret said...

I agree LBD. My generations costs were low. The previous gen vets got it for free.
Books are insanely expensive.
How are Trump's shutdown unemployed going to be counted?

Elizabeth Merceret said...

You underestimated your importance. Not a mistake I thought you'd make. My grandbaby is gorgeous. My house has gone back up a lot per Zillow. The house improvements are finished and look great. My relatives saw the launch and an otter in my back yard but no tortoises. One otter equals 5 tortoises anyway.

LBD said...

Good Morning!

From below freezing to mid 40's today. What a ride.

College books are part of the racketing. CD's and on line (Like Kindle) would be amazing cheaper as the content is the value. The young have adapted to the technology and books are soon to be history. If you want a book then you can buy one.

Firemane said...

The U3 and Non-Farm Payroll reports won't be produced during the shutdown, (though the data was gathered in Dec. before the shutdown). The only private source for employment data is the end-of-month ADP report (roughly equivalent to the NFP report from the Feds). Since the survey data is gathered during the 2nd week of the month, if the shutdown continues through next Monday, then the January data is at risk from EVER being produced.

Gallup was doing parallel employment tracking similar to Federal U3, but quit in the middle of 2017.

I "think" the DOL will still release the First Time Claims report for unemployment insurance, (which will have a massive spike due to the shutdown, if I am correct). The DOL site is still up, but I cannot find confirmation on whether they will continue to publish. Since it is a Thursday release, we will know tomorrow.


Elizabeth Merceret said...

And they aren't well written , and I found some errors.

Elizabeth Merceret said...

I think you have to wait 2 week to apply.

Elizabeth Merceret said...

Not sure you Can apply.

Firemane said...

Actually, you can apply immediately. The rules vary from state to state on how quickly you can receive benefits.

However, there are corporations that have annual PLANNED mass "layoffs" and auto-file for UI on behalf of the employees that they "laid off", only to "re-hire" two weeks later.

I had a friend who worked for one back in the '90s. Manufacturing plant -- they had to re-tool the line each year, which they did each December. They would "lay off" all but 10% of their work-force mid-December, auto-file for them, and the "ex-employees" would all get one UI check over the holidays. Pretty sure that most auto-manufacturers continue to do the same thing - except in July instead of December.




LBD said...

If you are given UE and then get back pay you probably have to pay it back. Good personal financial practice should include 6 months worth of savings for such events. If you don't after the other shut downs then what can I say.

Errors are every where and maybe worse in translation but easily corrected. My wife and daughter are masters of the art and laugh like crazy at mistakes everywhere. Quality of education in general is not what it should be.

LBD said...

Auto industry had what was called Work Banks where they got partial pay and UE for shut downs. One of the things that got out of hand due to union greed. I don't think it survived in it's former form if at all.

Firemane said...

I know back in 2009, one of the things mentioned regarding the FTC report was that the auto industry didn't take their "normal" July hiatus. It got pushed to something like October, IIRC. In any case, this was mentioned because the data is seasonally adjusted to account for the standard timing of this. So, it actually created two blips, one in July (when the "layoffs" didn't happen), and another in October (IIRC), when they did.

So, it most definitely still exists in some form.

And, in fact, with other government shut-downs, the spike from UI claims is noticeable.

One thing NOT mentioned in most of the coverage is government contractors (not actually Federal employees). Each contract is different. Some funded on quarterly basis, some monthly, some weekly. I have a friend who is a contractor (has been for 30 years), and his contract was funded through Dec. 31st.

So, he got paid through Dec. 31st. However, while Federal employees are routinely paid after-the-fact for the time off - contractors are NOT reimbursed for lost time. When I was a contractor it was a case of ... forced use of vacation/sick time until exhausted, then you're just not getting paid, and you're not paid for the lost time -- ever.

For high paid geeks like me and my friends, it was annoyance, not hardship. We had the cash reserves where it didn't really hurt. But, being forced to take "vacation" in January means you don't have vacation time for that trip to Key West you were planning in June. So, you either cancel that or take LWOP.

It's the low-end wage scale and youngest workers that get smacked hardest. The one's still living hand-to-mouth are the ones that can get bit hard -- no money for rent or utilities or food can be a huge deal. It can get especially costly if bills are set up for auto-draft, and it's not just failing to pay - but getting charged overdraft fees and late fees on top of everything.

It's not one size fits all. Yeah, for "most" of the Federal employees, it ends up being an un-planned "staycation". For the contractors with adequate emergency funds, an annoyance. For the rest, it's a case of near total helplessness -- scrambling to stay afloat with loans from family and friends with zero idea of when the next work day or paycheck will come.


LBD said...

The hazards of being a contractor is very similar to a small business with a few exceptions like constant cost like brick and mortar, insurance utilities etc. I know what it is like to have a snow storm shut your business down for more then a week with out warning. I can't feel sorry for those who do not understand money and how to handle it on any income level. Most live beyond their means which is self inflected.

I don't think the season of shut downs in auto will prevail as it did but be time responsive to sales and model change up. Detroit has to prepare for Auto manufacturing closing up shop and leaving the country. This includes the SUV market.

Rubygoat said...

Went couch shopping last week. Salseman said that he expects the tariffs to increase the cost of all furniture 10%-20% after the 1st of Jan. Basically any hardwood except oak is an import. Also, the cutoff of non-import Autos made from 65% US parts/labor has been raised to 75%.

Rob Dawg said...

FedGov workers have to fully reimburse if they get their pay retroactively right?

Firemane said...

I suspect reimbursement is required, but most of the rules are state level, and so vary per location.

That said - I would suspect (but have no knowledge) that government shut-down is a special known case for DOL. If so, then they could potentially flag all of those cases as such and when govt. reimbursement is formally announced could also automatically bill for UI return.

However, in most cases you cannot actually receive funds for 1-2 weeks after 'termination', (depending on the state). So, in the vast majority of cases, what you have is filing for UI ... but resolution of the shutdown prior to actual UI outlays, so most of the time, nobody actually gets any payments.

This is a case where the basic latency of the various systems makes stating precisely what happens very difficult.

So you have filing time.
Then you have first point of eligibility for benefits.
Then you have whatever time between eligible and actual cutting and mailing of checks.

I suspect that the Federal Union is likely involved in auto-filing on behalf of all of its laid off workers.

Contractors? Some firms might auto-file, but mine never did. I think we did get e-mails giving us details of how to file - but I never filed and don't know any of my co-workers who ever bothered to file, even though I was a Fed Contractor for two of the longest shut-downs (1995/1996).



Elizabeth Merceret said...

My husband didn't. I would have a nice vacation if we knew he would be paid. He wasn't essential, didn't work. We don't live paycheck to paycheck, but worried by what might happen. So eventually got paid the whole thing.

Elizabeth Merceret said...

They will never, ever prepare for that.

Elizabeth Merceret said...

Well they had a sale so we paid slightly less than quoted.
I was afraid something awful would happen so the decorating money would somehow go away, but it didn't. Now I want that car money be changed into a car.

Firemane said...

Who will never prepare for what?

Elizabeth Merceret said...

My hub said he couldn't file for unemployment under the rules. At any rate he never did and never got any ui money. He was a Fed employee, now a Fed retiree. Nobody has ever said a word about them getting cut off.

Elizabeth Merceret said...

He gets both SS AND a pension. There is a story behind thatm

Elizabeth Merceret said...

For closing up auto shop.

LBD said...

Good Morning!

I live off of SS and rental income the investment money is still reinvested, so call it savings. Savings still grow but at a slower rate then before. Live nice not big. I have always worried about others handling my money and theft. How you chose to deal with your finances is your responsibility. A 45 year work window and no back up or retirement makes it kind of hard to cry poor. IMO.

Firemane said...

Market off another 600.

The delta between projection and actual in Apple sales in China was yuuuge.

Meanwhile, Border Patrol, FBI and Coast Guard continue to work without pay.

Read a nice article noting that the TSA has long had a major issue with turn-over in airport screeners, and they are among the most likely Fed employees to jump ship in order to continue eating.




LBD said...

Does Comey get his retirement check?

Elizabeth Merceret said...

Eating is good.

Elizabeth Merceret said...

Yes.

Elizabeth Merceret said...

Who still likes Trump?

LBD said...

Good Morning!

Me. It's more about those who haven't done their job on securing the boarder and immigration. We have to plug the biggest hole first. Tech failed under Bush and the wall seems to work even when incomplete, if nothing else it will funnel the crossing point down to regions harder to pass. This would have been simple 40 years ago so the pain is now much bigger. $5billion is peanuts compared to the money wasted on illegals. IMO.

Firemane said...

Yuuuuge delta between Establishment and Household Survey results this month. The NFP number is getting all the attention, since it's over 300k, and milestones get attention. (If U3 had hit 4.0 instead of 3.9, it would be getting more attention).

In any case, the NFP number, PLUS the upward revisions for the previous two months definitely make it seem like the HH survey results (U3 spiking from 3.7 to 3.9), as probably just sampling noise that vanishes next month.

However, there is one piece of data in HHS that offers another explanation. It's in the Part-Timer data.

PT for economic reasons: -124,000
PT for non-econ reasons: +325,000

That combination makes it look like there was a massive December move to pick up SECOND JOBS or Christmas Cash for non-working spouses, etc.

There was a spike in participation (up from 62.9 to 63.1), so labor force jumped 419,000. (About double what it's been doing).

But, for the HHS
employed: +142,000
unemployed: +276,000

So, how can HHS be 200,000 off what the Establishment survey says? Well, Household Survey counts people - not jobs. So, having multiple jobs (PT or otherwise), doesn't change the ratio. But, the Establishment survey is polling businesses - and McDonalds doesn't know if you're working at WalMart too. So, Establishment Survey can (and does) double count jobs for those holding more than one. Typically this is not a big issue, because the total of multi-job holders doesn't tend to move around a lot.

Note: When the HHS and ES disagree, there's no easy way to tell where the bulk of the noise is.

If the bulk of the spike in December IS from Christmas temp jobs (which happened to spike beyond the bounds of normal seasonal adjustments to capture), then we could easily have a photo negative print in January (U3 drops back as the quick-cash PTers drop out again), and the double-dipping vanishes from the NFP report.

So, a 3.7 U3 and an NFP of +21,000 in January would not be an actual surprise - though the whiplash would drive most of the pundits insane.

Of course, if the HHS results are more due to random sampling noise, U3 could drop back to 3.7 next month, while NFP continues to show a normal 180-200k increase.

It is situations like this that make it critical to always be more cognizant of the trend than the most recent data by itself.

LBD said...

The FED marches on with rate hikes. Wall street is minute by minute and scared to death. Shut down will backlash data, The New Year starts with much confusion. IMO.

Firemane said...

It's ironic that Wall Street is panicky primarily due to the gradual return to "normalcy".

Fed Funds Rate at 2.5%? (Gasp!!! Money isn't free anymore!?!?!)

Fed balance sheet down to 4 Trillion? (Gasp! You mean we have to consider what prices act like in a real market?!?)

No more tax cuts on the horizon? (Gasp!!! You mean we will have to actually spend our profits to buy back our stocks to keep their prices artificially high, instead of doing it with tax cut windfalls?!?! Or, (God forbid), actually let the market set prices fairly, instead of continuing the rigged game we've been playing this century?1?!)



LBD said...

No one wants to take their medicine when reality sets in. Everything going on has been close to fake supported by government and free money banksters. Interesting time ahead.

Read an article the AM on Mexico car manufacturing includes GM and Nissan as the production leaders.

https://www.freep.com/story/money/cars/general-motors/2019/01/03/gm-tops-nissan-become-top-carmaker-mexico/2462502002/

How else can Detroit compete except to leave the US.

Firemane said...

Well, Detroit could try to actually make better stuff.

My view:

From 1950-1980, American businesses understood and concentrated on these three paths to profits.

1) Make something new that people find useful / fun.
2) Make something old with same quality - but do it cheaper.
3) Make something old with better quality - but for same price.


Since the '80s, the above has been replaced by:

1) Convert one time purchase product into a subscription service, so people can continue to pay additional money for something they bought years ago that hasn't changed. (VCR vs. DVR - software licenses)
2) Pay politicians to lower our taxes repeatedly, so we have no incentive whatsoever to improve products to make more profits. The extra income from lowered taxes removed the need to improve products. (all)
3) Once you have a customer, sell his data to anyone who will pay for it, no matter how much this may inconvenience him. (all)
4) Give discounts only to new customers, and constantly hike rates to previous customers to cover those discounts. (Cable, phones, any other subscription services).
5) Farm out customer service to foreign countries that is so bad customers will give up trying to use it, so you can lay off local workers who cost more. (all)
6) If product cost increases too much to afford - finance it over ever-expanding time limits, or create new exotic financing methods that disguise the fact the customers really can't afford to buy and shouldn't. (cars, houses)

Heck, the last "innovation" out of Detroit was the SUV ('90s), which consisted of putting a comfortable sedan interior on top of an existing Truck frame.







Elizabeth Merceret said...

Guatemalans were infected with syphilis by scientists ( john hopkins )at govt behest. There's a lawsuit. I think as punishment they should left in all Guatemalans who show their faces in the next 6 weeks

LBD said...

That award goes to AMC Jeep Grand Wagoneer first luxury SUV from the 70-80's.

Name an innovation in the auto industry that was not American. Refinements are not innovations.

Post WWII effect wore of and America thought we could compete and we could except for labor cost and government interference.

LBD said...

LL, they are already here. How about we don't deport them? LOL!

Elizabeth Merceret said...

Ok. You get a free pass if you are Guatemalan. What contempt was shown!

Elizabeth Merceret said...

Shut down years 45 sez. It's not a bluff if everybody can tell it's a bluff .

LBD said...

LL, I am not responsible for what others do including the government. Those involved should be held responsible if they are even alive. When did this happen?

Not a bluff, the government is shut down.

Term limits would clean the swamp of dead wood life time party thugs. I am for it.

Elizabeth Merceret said...

Shut down for years IS a bluff.

LBD said...

A scare tactic more then a Bluff. Play on words.

Elizabeth Merceret said...

Either way, I don't like it. It seems you can apply for and get ui. But you have to give it back if you get paid.

Elizabeth Merceret said...

New word used by Abramson: Foxify.

Elizabeth Merceret said...

Mr.baby is eating solid food. Or, mashed up solid food anyway.

LBD said...

Good Morning!

Anybody miss any services from the shut down and are they inconvenient or critical? Nothing has affected me as of now.

Elizabeth Merceret said...

Me either. Nor any NASA people I've rubbed elbows with. I think some NASA touristy stuff is closed down.
I'm getting a cold. But my blood sugar is way down, which is the opposite of what is supposed to happen.

Firemane said...

Not directly. But, I have a friend and former co-worker who is a govt. contractor and being forced to burn vacation at the moment, (which forced him to cancel a vacation he had planned at the end of Feb.).

Also, had a friend who was on vacation when the shutdown happened that was unable to access one of the National Park sites that was on their itinerary, (they were able to visit most of their planned locations).

Of course, since the shutdown began in the midst of the Christmas break, immediate impact was going to be minimal. This is the week the shutdown begins actually hitting more people. There's already indications that some TSA employees may be calling in 'sick', since they are in the group that is "required" to work -- but whose paychecks have stopped.

LBD said...

TSA brings up the question of how much dead wood is on the payroll. MSM claim no slow downs with TSA. This opens the door to how well the TSA works and would more technology be better and save money. Parks said to use entry fees to stay open. Not sure what that means.

Unfortunate but nobody is forced to engage work in the field where these things happen. Private biz runs out of money they do the same.

My point is how much of government is just a jobs program?

Firemane said...

The stories I've seen said "currently", the absentee rates have only risen from 3% to 5%, so the reduction in workforce "so far" has been minimal.

Just like many private for-profit businesses, there are ways to juggle "short-term" employee absences and stay operational.

The whole parks issue is a conglomeration of many, many different cases with lots of different local responses. Many of the National Parks have private enterprises located INSIDE the park boundaries. So, if you close the gates, you're shutting down private businesses. In most of these cases, the economic impacts are large enough where local governments and/or businesses find ways to "keep the doors open".

But, then you run into logistical issues beyond that - like bathroom custodians not working.

The thing that makes covering the story so difficult is that the latency of each government department is different. Few of the IMPACTS are immediate in large and obvious ways. The FDA not approving loans only immediately matters to the ones who were expecting to close RIGHT NOW. (And I've read one story about just that - an FDA loan needing only the final approval signature, but now in limbo - where a family that was expecting to move is frozen in place.

Some of the impacts won't be felt until after the shutdown is over. Backlogs of various government functions grow to massive sizes.

If the shutdown continues, then early tax filers can't. Won't matter now. But, nobody is going to be thrilled if they file taxes in March and don't get refunds until November.

Or, what happens if (God forbid), the shutdown lingers through April 15th? If the government servers are down e-filing is impossible. So, does everyone revert to filing by mail, just so they can get it postmarked in time?

Do you charge penalty and interest for those who don't file until the first day the servers are back on line, if that day happens to be April 20th? Legally, you're supposed to. But, even if you don't want to enforce that - the automated parts of the system may not allow you to easily bypass that.

Elizabeth Merceret said...

But it will become annoying when I don't get my tax refund back.

Elizabeth Merceret said...

Stopping air travel would be pop pretty effective.

Elizabeth Merceret said...

As to non closing mortgage. None of these people ever heard of forgery?
Get some of those faking mtg brokers back.

Firemane said...

Problem in the case I cited -- the bank won't move forward until the FHA guarantees it. The BANK isn't going to take any risk. That would be like ... running an actual bank, where it matters if you have done your due diligence, and when you make the wrong call, you're the one who eats the loss.

LBD said...

Not concerned about tax returns. They are a bonus to most as they are not part of their monthly income requirements. On the same note Colorado one year didn't have enough money to pay income tax refunds so they where late with mine very late. After a year went by I got paid. Beings it was a big refund, not unusual in my world they had decided to audit me, didn't find a problem or should I say buy time for not paying me in a timely manor. What if I needed the money? they didn't care.

FHA? not sad about those Banksters underwriting bad loans which many are.

National parks should remain open on a use at your own risk basis, If private businesses are inside the park. The requirement would said businesses pay for minimal maintenance over the incoming proceeds from gate revenue.

Bottom line, adjustments can be made and should be normal business practice. IMO.

Elizabeth Merceret said...

As a title agent I sometimes made things go away. A wise surveyor found an extra needed inch and it closed. None of us are sorry and nothing bad happened.

Elizabeth Merceret said...

Once a borrower had to explain a 3$ late payment. They looked at me blankly. I made something up.. they signed we closed. If we lived in sane times I would have said, oh give me a break. But I didnt dare. A Sheldon Clone would have come after me.

Elizabeth Merceret said...

Not gonna happen.

Firemane said...

Transportation Department is one of those that had not received funding previously, so they're shut down.

I'm guessing that means all road maintenance on interstates and Federal dams, bridges, etc., all grinds to a halt. No idea if that includes inspections.

Most of the FAA employees are currently working without pay. While I'm not a regular flier, and have no plans to fly this year, it is an interesting study in human psychology -- how long do ATC staff remain effective while working without pay and potentially struggling to pay bills or feed their kids. And everyone with a plane ticket gets to participate.

I just hope we don't end up finding out when some stressed out ATC lands a couple of 747s on top of each other.

The MSM is concentrating on the lowest paid Federal works, (TSA screeners are among that group), because it paints a much better picture of hardship. And while I personally have a great deal of sympathy for these people, "expected" to sit and wait with no idea how long. I am personally MORE concerned with actual safety concerns.

This is the part where I think most of the anti-government friends and pundits simply don't get. That the bulk of Government value is in PREVENTING bad things. But, it's hard to show how Federal regulations, inspections, and rules PREVENTED a couple of thousand deaths from plane crashes - or prevented 300 terrorist attacks - or prevented 8,000 cases of food poisoning. Only the failures get press.



Thomas Stone said...

I saw my first Kohler "Numi 2.0 intelligent toilet" today.
It was the black model and in a brand new state of the art smart home.
$9K list price.
The Master bath had the full range of Kohler "Smart" accessories from mirror to bathtub as well.
I'm beginning to think that the world would make a lot more sense if I took large doses of LSD every morning.

Elizabeth Merceret said...

Did it wipe and powder your tush? what would these accessories be?

LBD said...

What we don't know is who is really important and getting paid or not.

The roads and bridges will last for a while. They don't get the attention they need now, but that is another subject. The states do the work on the day to day roads anyway. They may be indirectly affected by money flow but still have the state tax payer for the short term.

Control towers I would guess are going to be funded. That one is crazy not to. Air travel has a stellar record and no one wants it to fail.

Smart toilet LOL! Seriously if you can't handle that job, well what can I say. Just another Look at me toy. When are they going to run out of ideas?

Firemane said...

Air traffic controllers are required to work - but will not be paid until the shutdown is over.

Elizabeth Merceret said...

TSA has got to be an unpleasant job. There seem to be lots of jobs out there and starving your family is not an option.
Does push come to shove here?

LBD said...

Good Morning!

TSA unpleasant? Seriously there are a lot of real unpleasant jobs in comparison.

Will see what addressing the nation does. Probably nothing.

Elizabeth Merceret said...

Schoolday today. Psych. I'll listen with T in mind.

Elizabeth Merceret said...

What would you do if you were a TSA???

LBD said...

I wouldn't be a TSA, my path was independence. Everyday was one the line, so all I can say is live with the problem and cope or quit and make your own job of daily uncertainty.

LBD said...

Why isn't there the concern for GM employees who completely lost their jobs recently and soon Sears looks like it may be done?

Elizabeth Merceret said...

Oh oh

Elizabeth Merceret said...

I have a bad cold. And I can only hear the teacher about 60% of the time. And she's using the computer communications app a lot, which I never did learn. I have an appliance which is supposed to make hearing easier in a big noisy room. If that doesn't work I'll withdraw.

Elizabeth Merceret said...

They have my concern all right. The extremely bad managers should be punished, pay back any bonuses.

Sears itself is no loss to me.

Firemane said...

Sympathy for the American workers losing their jobs was one of the primary points of all the coverage on the GM plant closings.

But, the difference between "shutdown" and "layoff" is pretty big. The problem being certainty. In most layoffs, you get warning, (the big corps, like GM, typically announce layoffs MONTHS before they occur). So, the displaced workers have time to search for new work while still employed. Additionally, layoffs from major corps typically include severance packages. (I got a two month warning and roughly $13,000 when I got axed after 18 years with the same company).

While "some" shutdowns come with warning, this one was a bit of a surprise, being that the Republican majority House and Senate handed Trump a bill that he initially said he would sign - and then he reneged at the last minute, (though the Pussy in Chief still didn't have the guts to actually veto it).


LBD said...

Good Morning!

Surprise? not really he warned everyone he would not sign another bill with out wall funding. Yes and no is part of the game and I don't care for it. Most Dems said yes in the past but no now. Why ? it's about party and not the problem at hand. In life there is no deal till the paper work is done. FED employees most who are tone deaf had a very long time to prepare. IMO.

Elizabeth Merceret said...

He's gonna sa weasel sooner or later, so do it already.

LBD said...

Not so sure, The Repubs backed him in to this corner and ran. What does he have to loose? One term Presidency? I some how don't think he cares because he is doing what he got elected to do and believes in it as I do. Cutting a deal so the government shut down is over on the promise immigration gets taken care of is the same old trick played before. I don't know what's going to happen but it going to go on for now. IMO.

Elizabeth Merceret said...

How come employment claims went down. Govt workers just not filing? Not allowed to file?
Demand for workers so high. Any spares are immediately hired?
If they get a job, does govt know or care?

Firemane said...

I know from my days in gov., that almost nobody bothered to file, because the vast majority of shutdowns were short enough it was unlikely to actually receive any benefits.

This is also complicated by the Holidays.

This is the week that I would expect one might more likely see a spike as a result of the shutdown.

Almost nobody will actually start looking for another job, since they already have one, (typically with lower pay, but better benefits than the private sector). But this goes back to guessing about the length of the shutdown.

But, as good as the job market may be, there is still an awful lot of latency between beginning a search and starting work.



LBD said...

Good Morning!

Clear and 50F today!

Good Call Firememe. China car sales Peek, Ford to lay off thousands in Europe, Jaguar/Rover lays off thousands, TESLA breaks ground in china. Ford gets smaller and continues move out of the US, as GM continues full speed ahead, TESLA opening up in China, so goes all the government funding and technology to China for free. Looks Like recession world wide.

The season of data correction is coming so what is close to clear with the shut down?

Firemane said...

CR did a nice post on how the shutdown impacts the next employment report, (which won't be out until February). Typically, when known outlier events occur, the BLS includes notes estimating the impact (they attempt to discern how much noise, how much signal). So, we'll get the official numbers (including the shutdown noise).

U3 = 4.1
NFP = -50,000

Then, we'll get liner notes estimating what the numbers would've been without the shutdown.

But, assuming the shutdown doesn't bleed into the 2nd week of February, it will be March before we get a "normal" employment report, and the accuracy of the UI Claims report will be fishy until this is over, too. Heck, I know many gov. contractors use ADP, so it is likely that the first major employment report impact will actually be on the ADP report at month's end.

I will tell you the potential train wreck that has me concerned. With only 12% of staff working, they're saying the IRS will process returns normally. If most of the furloughed are auditors, not a big deal, (though odds of getting away with tax fraud likely go up).

But ... this is first year the Trump tax cuts go into effect. That means NO BASELINE DATA. They were guessing 2/3 of itemizers won't need to - (drop from 30m to 10m). That's a yuuuuge delta -- and if there are any programming issues - and nobody to look at them for weeks -- the possibility of an e-filing nightmare is not trivial.

Any number of bad scenarios could appear -

e-files that don't get processed at all, but nobody knows

incorrect data tables that get applied to millions of returns (instead of thousands), before the error is caught.

glitches in software that result in massively good (or bad) refunds that are wrong, but not caught, because staff the would normally catch such glitches aren't there.

I hope my worries don't manifest. And the bulk of the QA for tax filing was almost certainly completed before the shutdown. But, the more you automate a system, the more critical it becomes to have competent staff monitoring the automation to keep it running smoothly.





Elizabeth Merceret said...

What if the TSA guys just get fed up and find other jobs?

Elizabeth Merceret said...

My house Zillow value have gone up a lot. OK. But the square footage has gone up 120 sq feet. We added no square footage in out renovation.

Elizabeth Merceret said...

1200 sq feet!!!

Elizabeth Merceret said...

Our new Republican govr is planning to do a whole lot to defeat green algae and red tide. AND fired the entire south Florida Water Management District for kow towing to big sugar. Yeay!

Firemane said...

Here in NC the voter fraud investigation in our 9th district is moving at a pace somewhat slower than the Mueller investigation -- so, perhaps we will get some resolution once Kavanaugh retires from the SC.

There's a mountain of evidence and dozens of witnesses all saying this lowlife Leslie McCrae Dowless, a contractor for the Mark Harris (R) campaign was doing all number of shenanigans with absentee ballots -- (including, but not limited to - collecting them (illegal), signing as witness on hundreds of ballots (illegal - witness must KNOW the person they are witnessing for), and likely (but not yet proven), destroying ballots that were not voting for Harris.

But, the investigation is kind of halted at this point (not due to government shutdown), but due to a court challenge to the makeup of the election board filed in 2016, (one of many lame duck changes the
Republican state legislature passed after Democrat Roy Cooper won the 2016 election).

Previously, the Governor had the power to give the board a partisan advantage, changed to a board that is evenly divided. The board that began investigating this fraud is 2-(R), 2-(D), and 1 independent.

The court decision effectively dissolved the (until yesterday) current board. The GOP legislature and the Governor are both attempting to appoint a new interim board - both claiming the other doesn't have the authority to do so.

Note: There is not yet any evidence that candidate Harris was directly involved or knew of any illegal activities.

Basically, it's a big mess:

https://www.vox.com/2018/12/28/18159460/north-carolina-election-board-9th-congressional-district-fraud

LBD said...

Good Morning!

So the TSA and others quit for better jobs, Good for them but I suspect most would do nothing but if they would quit and lower paying job. They probably would dump the short term job and return to the TSA. Now do they get back pay consider it as a double dip?

Firemane said...

I don't understand the logic behind your statement "I suspect most would do nothing".

TSA screener is a low-paying, repetitive, boring, generally thankless job. If they didn't HAVE to be doing something, why do THAT? This is, in point of fact, why turn-over rates among TSA screeners is extremely high.



Firemane said...

Well, the Senate vote today takes care of the gray area regarding "double-dipping".

From the EMPLOYERS (government) perspective, all the Federal furloughed will be getting back pay. They are effectively getting paid to do nothing (for those not showing up). The bill "might" make them ineligible for UI. But, regardless, any UI they receive would definitely have to be paid back.

As for a second job. No impact. No legal prevention for working two jobs (furloughed or not). So, yes, in theory, you can run out and get a job at McDonald's, work a couple of weeks, (assuming the shutdown ends in a couple of weeks), and then collect money for that job and the back pay. No different than if you'd been working the Fed job 8-4 and McDonalds 5 to midnight.

Only possible gray area would be if you choose NOT to return to the Fed job at all. No idea if that is written into the bill passed, but I suspect there is language that says something "upon return to their position ..." The grayer area might be if someone passes away during the furlough. Do they only get paid through date of death or collect for the entire time of the shutdown.

Elizabeth Merceret said...

This could push some over the edge of really looking for a job.

LBD said...

Good Morning!

A few weeks and the grand daughter is growing and responding great. Snow here in the Mile Hi city.

TSA jobs are not rocket science so neither are other jobs available at lower wages plus they get some benefits. Wage growth seems pretty good as well.

Food banks are helping FED workers as well as some mortgage lenders, restaurant are offering free meals. I think most people are willing to help out.

Elizabeth Merceret said...

Might make people more sympathetic to the poor and homeless.

Elizabeth Merceret said...

Good morning.

LBD said...

Good afternoon

On the road home! Fun time with the grand baby, what a couple week make! ��

Firemane said...

Shutdown is starting to show up in significant numbers in the Trump approval ratings. This is the 538 aggregate rating, combining many approval polls.

In mid-December his approval deficit had shrunk below 10: (-9.8)

42.5 - approve
51.7 - disapprove

This was one of his best prints since his first two months.

Today it's down to -13.6

40.7 - approve
54.3 - disapprove

Even Rasmussen, which steadily skews more favorably than almost any other pollsters shows a raw: 43 - 55 spread.

History shows that anything under a 5 point change is typically transient. It will erode pretty quickly when the inciting event vanishes from the headlines. But, once you start shifting more than 5 points, the odds of the change "sticking" begins to rise.



LBD said...

Good Morning!

How many days, months and years has it been since we had a real immigration law fully enforced? Correcting the problem today is costing us all and has been.

Polls suck when you do the right thing. Nobody wants to take the medicine to fix real problems. Let's play politics first.

Firemane said...

"Fully enforced" could mean anything. But, here are some actual facts:

https://www.factcheck.org/2018/06/illegal-immigration-statistics/

Number of illegal immigrant apprehensions (agents catching people sneaking over the border), peaked in 2000 at 1.64 million. This has dropped steadily since then, with a drastic downturn from previous decades beginning in 2009. Since then, it has moved mostly sideways at between 300-400k per year. Note: The total number of agents was 8,580 assigned to the Mexican border. In 2017, when apprehensions were 303,916, there were 16,605 Southwest border agents. So, we doubled the number of agents, and the number of apprehensions is a quarter of what it used to be.

It is estimated that 65 percent of net arrivals (those joining the undocumented population) - from 2008 to 2015 were visa overstays.

For 2015, out of 50.4 million Visa arrivals, it was estimated 545,000 had overstayed their Visa expiration. Roughly 1%. For 2017, early numbers are similar (1.15% overstays).

The total number of illegals in the US has been dropping, from a high of 12.2M in 2007, down to 10.7 by 2016. (I cannot find a more recent estimate for total illegal immigrant population).

And, of course, not all illegals are from Mexico or further south. Asians make up a significant percentage of total illegals - and the wall won't do anything about them.

LBD said...

So plug the biggest hole first then go after the others like over stays. To continue to play the same game multiplies the original problem.

Clipping Path said...


I gotta bookmark this website it seems extremely helpful very useful. Thanks

Elizabeth Merceret said...

Hey, you are allowed to post!

Dawg you said you were gonna add another post. Where is it???

LBD said...

Good Morning!

52F today January heat wave!

Welcome CP, jump on in, strong attitudes but nice and civil conversation.

LBD said...

Here is some of the help I heard about.

https://kdvr.com/2019/01/15/denver-offering-to-help-furloughed-government-workers-with-mortgage-payments/

Firemane said...

LDB,

I think you missed the point of my post.

Overstays *ARE* the biggest hole that needs to be plugged.

The Mexican border, since 2000, we have seen a drop in apprehensions from 1.6M to 400,000 while doubling the agents. The point is, we have ALREADY plugged the Mexican border enough that is NOT the largest hole (any more).

Overstays ARE the biggest hole (and apparently getting larger relative to illegal border entry). This is what makes $5B for walls a waste. It's a $5B boondoggle that will accomplish nothing.

LBD said...

Good Morning!

So says data is data they have no real clue how many are here so it is just a guess. I still say the boarder needs to continue building of a wall. It is an image as well as a long neglected project that needs to resume. $5B is peanuts and sends a strong message that we are serious about protecting our country. It would be interesting to see those who have the funds to fly here with a visa and over stay compared to the illiterates from the jungle countries contribute or drain resources. We have done very little to control who is in our country for decades.

Sad it is just a hate T government (Red and Blue)for wanting what they all wanted in the past, Bipartisan. LOL!

LL must be on strike at 100 comments :)

Elizabeth Merceret said...

Nah. Tydying up to have rugs cleaned. Jungle lovers were our ancestors.

Elizabeth Merceret said...

I'd hate T with or without a wall. He scares me.

LBD said...

Good Morning!

They all scare me, especially the extreme liberals. The hate America people who think everywhere is better then here. I have one question. Why are they here?

Rubygoat said...

It's possible to dislike America and also think it can be improved.

Rubygoat said...

I am a centrist liberal and the hard left scares me as well. No one speaks to the center anymore. More and more there is only the hard right and the hard left and the center is unrepresented.

Elizabeth Merceret said...

Criticism is not necessarily hate.

Elizabeth Merceret said...

Agreed.

Elizabeth Merceret said...

Trump. . . Pelosi. . . Civil War. . Sputter gasp choke.

LBD said...

Good Morning!

Decades of ignoring problems have driven people to extremes and hatred. We lost stability some time ago.

LBD said...

The shut down brings up the question of what should the government produce at tax payer expense? I think private business should do more of these things. IMO.

Firemane said...

LBD,

Do you have any specifics?

Most of what the government produces are national statistics. What we have learned from the past is that when you have parties with a financial stake in the outcome for statistics, the people providing them will often tell them what they want to hear or what they pay for. We saw it with the accounting firms handling Enron. We saw it with the private firms that were supposedly putting reasonable risk ratings on wall street financial vehicles.

Not to say the government is perfectly insulated. Lobbying money has managed to get laws passed that do things like prevent the CDC from attempting to do actual research with their gun death data -- and similar blocks have risen in spot regarding climate change data and research. But, for the most part, the data is about as good as one could expect (given the actual limitations on Federal Govt. power to compel states to act). But there's little evidence of intentional fraud in these stats, (unlike the many cases where private profit-driven motives invite fraud).

Beyond stats, you have safety and law enforcement. We know from history that without government oversight and laws, businesses will routinely cut corners in regards to safety due to profit motives. Even with oversight, there remains as much cheating as industry can get away with from many players.

In the current shutdown, the bulk of the people forced to work without pay are homeland security, followed by the Justice Dept.

So, you tell me. What's the revenue stream for homeland security, if not the government?

LBD said...

Check Mish out in today's post.

https://moneymaven.io/mishtalk/economics/eleven-economic-reports-delayed-due-to-gov-t-shutdown-do-we-even-need-them-yp-E1_4ROki1knbyiq7x7g/

Private duplicates already exists in many cases. Yes they all can be corrupted. The TSA being the poster child could be privatized and funded by the airports and air lines filtering down to user fees. Of course they will still be guided by the government.

To many to look at individually here but most are a free ride for business data. Some should be done by the government. This brings to light government bloat. IMO.

Firemane said...

You do understand that prior to 9/11, airport screening WAS private.

What I cannot comprehend is how one can think building a wall between us and Mexico will somehow make us "safer" (from something), but returning airline safety to the airlines (who have already proven repeatedly that their focus is on profit and efficiency, not safety), won't compromise airline safety.

Now truthfully, I would have no problem returning the airline screeners to being employees of the airlines/airports, with the government (perhaps FAA instead of Homeland Security), being in charge of review and inspection of said operations. This is where I think the union of private-public entities has shown to be most effective. The FAA doesn't do the maintenance of airplanes, but they write the rules, and they send the inspectors to insure compliance. So, if that's what you're suggesting, I agree.

As for the stats -- I think your perception of private duplication of Federal data is highly overstated. Yes, there are some parallel efforts in some areas. But, we come back to "where's the revenue?"

ADP kind of duplicates the Federal NFP report, (but uses the Federal SAFs). Gallup sort of duplicated the U3 and U6 reports for a few years, but apparently that wasn't generating enough revenue to continue. And like ADP, rather than create their own SAFs, they borrowed the Federal ones. So what happens if/when ADP decides to only sell it's data, and not make it publically available?

See, with ADP, I think what happened is that they were tracking their internal stuff already, for THEIR business purposes. Somebody realized that if you multiplied their numbers by a simple factor, the results were pretty close to the Federal NFP numbers. So, why not release their data a day before the Feds, (not really giving anything away), and get some free advertising each month. The report has almost certainly been a PR coup for them. But, it almost has to exist ONLY because the Federal numbers already existed.

The problem here is that if the government STOPS their report. ADP loses the "free" SAF production. They lose the comparison to the Fed numbers so they can tweak their reports as business conditions change. The fact ADP is such a giant in employment payroll tracking puts them in a unique position TODAY. But, if Polly's Payroll jumps up next year and snags 30% of the market in 5 years - how badly off are the ADP numbers then? How could you tell?

Again - most of the private reports deal with "subsets" of industries. Does NAR data include non-NAR sales?

Now, of course, your rich investor types understand the value of this type of data. So, absent public data, I suspect companies would pop up and fill that gap (as much as they could). But, they would have no leverage to acquire the base data. But, assuming they could, it would only be valuable if they could keep it private and secret to only their customers, (at least long enough for them to take advantage of that data). So, the rich people end up with access to data, while the common working stiff is screwed.


LBD said...

The data if valuable would be produced if the government didn't. Most people have no need or clue as to how to use it anyway. Rich people always get richer. The best for most is to get off their ass and get what they can.

If TSA works which they seem to miss from time to time then maybe technology can do better needing less employees. I hear the cry for more of it at the boarder. I don't like government, particularly union used as a jobs bank.

The wall is a funnel making it impossible for most to penetrate and have to go to smaller open areas. This is wanted by the boarder patrol and makes more sense the technology which can identify but not apprehend. Now there is probably a million (?) square miles of deadly desert to cover. The wall asked for is going to break Congress from never doing anything. The Red team screwed T before and they ran away in the 11th hour leaving Palosi. Doesn't matter whose in control for decades nothing happens not even a nickle for a wall now. Dems will lose their footing as a party how cares about Americans. IMO.

LBD said...

Good Morning!

Deep freeze season goes on for another 4 weeks and it hasn't hit yet.

TESLA seems to be unable to function with out government money. As others work on a simple cars their sales seem to be growing. Now TESLA runs to the Chinese government for free money. We wonder why China is kicking our a-s?

LBD said...

Good Morning!

The game goes on, Score 0-0.

Elizabeth Merceret said...

The RBG movie was great.

Elizabeth Merceret said...

Well the last quarter of the football game was fascinating

Elizabeth Merceret said...

Poo. Dead blog.

LBD said...

Good Morning!

Still plenty to do here. Winter project moving along well. Grand daughter a month old and has changed a lot. Politics never end pretty but it's time to get it done.

Not a sports fan. Waste of time watching a bunch of pampered kids. IMO.

Firemane said...

Trump's approval continues to tank: -15.2 this morning on 538.

The non-call on the late game pass interference in the Saints game was one of the most egregious ref gaffes I've seen in 50 years of watching football.

I am soooooo tired of seeing the Patriots in the SB.

Enjoyed the Super Blood Wolf Moon last night.

Elizabeth Merceret said...

I thought the moon was tonite
I agree abt football, but the 4th quarter was a amazing display of skill worth watching.

But the way I think this blog is dead so I will mostly over at Mudster.

LBD said...

Stop by and say Hi. Not sure where I will go. Muddy isn't for me nor is Reddit. Miss the early days of CR when I listened and didn't post. Lots to learn back then.

Elizabeth Merceret said...

Come say hi at Muddy sometimes

LBD said...

Radio check?