Wednesday, November 26, 2014

Talking Turkey

Turkey production has increased nearly 110 percent since 1970 - the total value of turkey processors' production in 2011 reached $17.8 billion. U.S. growers raised 240.0 million turkeys in 2013.

The most popular turkey product continues to be the whole turkey, comprising less than a quarter of all sales. However, many turkey products are tailor-made for today's consumers. As a result, several other turkey products are closing in on the whole bird's dominance in the marketplace. Ground turkey has experienced the largest sales growth among consumers in the last decade.

The top three turkey products sold in 2011 were whole birds, ground turkey, and cooked white meat (deli meat). Raw products, especially breast cuts, such as tenderloins and cutlets, also are seeing an increase in sales. In 2011, the average retail price for whole frozen turkeys in the United States was $1.58 per pound. The average person in the United States ate 16.1 pounds of turkey in 2011.

Exports

In 2012, 800 million pounds were exported. Exports now comprise more than 13 percent of total turkey production, compared with 1.2 percent in 1990. In 2010, the top four export markets for U.S. turkey meat were Mexico (399.0 million pounds), China (82.9 million pounds), Hong Kong (37.9 million pounds) and Canada (22.7 million pounds).

Top Turkey Producing States
Minnesota
North Carolina
Arkansas
Indiana
Missouri
Virginia
California
South Carolina
Pennsylvania
Ohio

(via National Turkey Federation)

Amazon Cuts Fire Phone Price Ahead of Holidays

Amazon has cut the price for its Fire smartphone just ahead of the Black Friday weekend as it seeks to sell a lot of slow-moving inventory. The phone is now available for $199 without a carrier contract. That price includes a one-year Prime membership, which typically costs $99 a year. That's a $250 price cut from the Fire's original price when it launched in July.

Amazon has been having difficulties selling the phone. Last quarter, it took a $170 million charge for the phone and vowed to undergo more drastic strategies to unload its inventory.




RW Note: I have seen the phone at the Amazon store at the Wakefield Mall in San Francisco and it looks good to me, and it has the Mayday feature, which allows an Amazon customer service rep to appear on screen and help you with any problems.

The one problem will be with any future apps. Since the phone isn't selling, app producers won't be spending time developing apps specifically for the phone, but it appears most current apps do have Fire phone versions.

Housing Price to Rent Ratio

In October 2004, Fed economist John Krainer and researcher Chishen Wei wrote a Fed letter on price to rent ratios: House Prices and Fundamental Value. Kainer and Wei presented a price (monthly cost to own)-to-rent ratio using the OFHEO house price index and the Owners' Equivalent Rent (OER) from the BLS.

Calculated Risk has taken that formul a and developeda similar graph using the Case-Shiller National, Composite 20 and CoreLogic House Price Indexes.

This graph shows the price to rent ratio (January 1998 = 1.0).

On a price-to-rent basis, the Case-Shiller National index is back to February 2003 levels, the Composite 20 index is back to September 2002 levels, and the CoreLogic index is back to May 2003. However, all remain far below the peaks in the ratios during the housing bubble.

9


David Stockman: Why Crony Capitalism Will Be Hard To Uproot

Interview Of David Stockman By Henry Bonner at Sprott Global
Stockman And Reagan
Ronald Reagan and David Stockman

David Stockman was elected to Congress at age 29 back in 1976; he was an avid student of Austrian economics and supported a gold-backed money system and a balanced budget. He later joined the Reagan administration as Budget Chief, where he watched in awe as the Reagan administration quickly became the most profligate spenders in the history of the United States.

After leaving the Reagan Cabinet, he worked at the well-known investment house Salomon Brothers, and later co-founded the Blackstone Group alongside legendary hedge-fund manager Steve Schwarzmann.

In his most recent book, The Great Deformation: The Corruption of Capitalism in AmericaStockman systematically repudiates and dismantles the myths surrounding the Fed’s supposed past successes at helping the US economy avoid major breakdowns, going all the way back to the crash of ‘29. Instead, as he explains, “Programs born out of desperation or idealism 75 years ago have ended up as fiscal time bombs like Social Security or as captive fiefdoms of one crony capitalist syndicate or another… Policies undertaken in the name of public good inexorably become captured by special interests and crony capitalists.”

The most important lesson I took from the book and the interview? Remember that there has never been a time of such profound debt saturation, coupled with intense crony capitalism, as today. No one has ever been here to tell how it turns out. We truly are in an unprecedented era…

David, can you explain how the ‘Fed put’ works on the stock markets and bond markets? How exactly does it translate into artificially higher stock prices and lower interest rates?

Tuesday, November 25, 2014

The People's Republic of San Francisco is Now Micro-Managing Employee Schedules of Chain Stores

San Francisco is now the country’s first jurisdiction to limit how chain stores can alter their employees’ schedules.

San Francisco’s new law, which its Board of Supervisors passed Tuesday by unanimous vote, will require any “formula retailer” (retail chain) with 20 or more locations worldwide that employs 20 or more people within the city to provide two weeks’ advance notice for any change in a worker’s schedule. An employer that alters working hours without two weeks’ notice — or fails to notify workers two weeks ahead of time that their schedules won’t change — will be required to provide additional “predictability pay.“ Property service contractors that provide janitorial or security services for these retailers will also need to abide by the new rule, reports the San Francisco Chronicle.

In other words, the city will now make it more cumbersome for retailers to adjust to short-term changing conditions like weather or other unexpected events.

In addition to limiting schedule changes, the bill requires employers to pay part-time employees the same starting hourly wage as full-time employees in the same position. Employers must also give part-time employees the same access to time off enjoyed by full-time workers, and equal eligibility for promotion.

What can I say? Harass employers and the robots will continue to come. SEE: Venture Capital is Pouring Money into Minimum Wage Law Defeating Robots

Is Milton Friedman the Direct Cause of the Current Crazed Fed "Inflation Targeting"?

By Robert Wenzel

I have been trying to trace back where this crazed notion that there should be a "target inflation" rate developed.

For sure. it launched as policy at the Federal Reserve under Fed chairmanship of Ben Bernanke. He even edited a book, Inflation Targeting: Lessons from the International Experience. I find no record of Alan Greenspan advocating inflation targeting while he was Fed chairman.

In fact, he argued against it:
Federal Reserve Chairman Alan Greenspan rejected the idea of using an inflation target to set U.S. interest rates, saying it is ``highly doubtful'' such a policy would improve policy making.
The U.S. economy is too complex to reduce monetary policy to a rule-based model, Greenspan told a Kansas City Fed conference in Jackson Hole, Wyoming.

But where did this idea originally come from that there should be an inflation target in the first place?

In his book,  IMF Essays from a Time of Crisis: The International Financial System, Stabilization, and Development, current Fed vice chairman Stanley Fischer suggests that it occurred as a riff off of Milton Friedman's monetary rule and his erroneous notion of a tradeoff between inflation and output:
In the 1950s, Milton Friedman made the case for the use of a simple money-growth rule...The nature of the tradeoff between inflation and output was clarified in the 1960s, with one of the key contributions here also being Friedman, along with Edmund Phelps...As these developments were absorbed into economics, the case for the inflation targeting approach to monetary policy clarified.
Murray Rothbard knew way back that Friedman's theories (and those of his Chicago School predecessor, Irving Fisher)  were trouble. In 1971, he wrote:
[T]he key problem with Friedman’s Fisherine approach is the same orthodox separation of the micro and macro spheres that played havoc with his views on taxation. For Fisher believed, again, that on the one hand there is a world of individual prices determined by supply and demand, but on the other hand there is an aggregate "price level" determined by the supply of money and its velocity of turnover, and never the twain do meet. The aggregate, macro, sphere is supposed to be the fit subject of government planning and manipulation, again supposedly without affecting or interfering with the micro area of individual prices.

Fisher on Money

In keeping with this outlook, Irving Fisher wrote a famous article in 1923, "The Business Cycle Largely a ‘Dance of the Dollar’ " – recently cited favorably by Friedman – which set the model for the Chicagoite "purely monetary" theory of the business cycle. In this simplistic view, the business cycle is supposed to be merely a "dance," in other words, an essentially random and causally unconnected series of ups and downs in the "price level." The business cycle, in short, is random and needless variations in the aggregate level of prices. Therefore, since the free market gives rise to this random "dance," the cure for the business cycle is for the government to take measures to stabilize the price level, to keep that level constant. This became the aim of the Chicago School of the 1930s, and remains Milton Friedman’s goal as well.

Why is a stable price level supposed to be an ethical idea, to be attained even by the use of governmental coercion? The Friedmanites simply take the goal as self-evident and scarcely in need of reasoned argument. But Fisher’s original groundwork was a total misunderstanding of the nature of money, and of the names of various currency units. In reality, as most nineteenth century economists knew full well, these names (dollar, pound, franc, etc.) were not somehow realities in themselves, but were simply names for units of weight of gold or silver. It was these commodities, arising in the free market, that were the genuine moneys; the names, and the paper money and bank money, were simply claims for payment in gold or silver. But Irving Fisher refused to recognize the true nature of money, or the proper function of the gold standard, or the name of a currency as a unit of weight in gold. Instead, he held these names of paper money substitutes issued by the various governments to be absolute, to be money. The function of this "money" was to "measure" values. Therefore, Fisher deemed it necessary to keep the purchasing power of currency, or the price level, constant.

This quixotic goal of a stable price level contrasts with the nineteenth-century economic view – and with the subsequent Austrian School. They hailed the results of the unhampered market, of laissez faire capitalism, in invariably bringing about a steadily falling price level. For without the intervention of government, productivity and the supply of goods tends always to increase, causing a decline in prices. Thus, in the first half of the nineteenth century – the "Industrial Revolution" – prices tended to fall steadily, thus raising the real wage rates even without an increase of wages in money terms. We can see this steady price decline bringing the benefits of higher living standards to all consumers, in such examples as TV sets falling from $2000 when first put on the market to about $100 for a far better set. And this in a period of galloping inflation.

It was Irving Fisher, his doctrines, and his influence, which was in large part responsible for the disastrous inflationary policies of the Federal Reserve System during the 1920s, and therefore for the subsequent holocaust of 1929. One of the major aims of Benjamin Strong, head of the Federal Reserve Bank (Fed) of New York and virtual dictator of the Fed during the 1920s, was, under the influence of the Fisher doctrine, to keep the price level constant. And since wholesale prices were either constant or actually falling during the 1920s, Fisher, Strong, and the rest of the economic Establishment refused to recognize that an inflationary problem even existed. So, as a result, Strong, Fisher, and the Fed refused to heed the warnings of such heterodox economists as Ludwig von Mises and H. Parker Willis during the 1920s that the unsound bank credit inflation was leading to an inevitable economic collapse.

So pig-headed were these worthies that, as late as 1930, Fisher, in his swansong as economic prophet, wrote that there was no depression, and that the stock market collapse was only temporary.
And so now we have a Fed that has upped the madness, not only must policy aim at preventing prices from falling, as was the policy under the Fischer influenced Fed, but with the introduction of new macro-tinkering ideas developed by Friedman, the Fed now has a target positive inflation rate---that completely ignores the distortions such a policy causes at the fundamental business cycle level  (SEE: Austrian School Business Cycle Theory). And ignores the benefits of naturally falling prices. Further, the Fed is completely oblivious to the fact that price inflation does not have to continue along the current slow trend line. A point I warn about in the EPJ Daily Alert  and a point that Greenspan now seems willing to admit. Just recently, he said:
Ultimately, inflation will eventually rise. It has to rise...
The current inflation target policies at the Fed are ignoring many fundamentals that Friedman obscured with his incorrect monetary theories and it is likely to result in extreme volatility in the economy and price inflation in the not too distant future.

 Robert Wenzel is Editor & Publisher at EconomicPolicyJournal.com and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics

Venture Capital is Pouring Money into Minimum Wage Law Defeating Robots

Venture capitalists poured $172 million into robotics startups last year, according to an annual survey by PricewaterhouseCoopers LLP—nearly triple the $60 million two years earlier.

WSJ reports:
In the past, robots worked mostly on factory floors—often locked behind gates to keep them from smashing into people as they did their jobs. But new technologies, including sensors and wireless connections that allow robots to move around obstructions and even find their way around a busy hotel or office, have enabled robots to do more varied tasks as well as function alongside people.

Steve Cousins, chief executive and founder of Savioke in Santa Clara, Calif., says he saw a shift in sentiment among venture capitalists. “It was hard to find VC funding for robotics three years ago,” he says. “You had a lot of people who said, ‘We don’t do hardware, we do software.’”

Mr. Cousins’ company builds a robotic butler that hotels can use to shuttle items to guest rooms. It’s currently operating in one hotel in California but a host of other companies have expressed interest in the machines, Mr. Cousins says. Savioke raised $2.6 million earlier this year, above the target of $1.75 million to $2.5 million.

“For a long time, robots stopped at factories—and they were behind cages,” Mr. Cousins says. But much of the new investment is going into machines that are designed to operate close to people, like his hotel robot.
Some of this funding might have occurred without new higher minimum wages, but for certain many  businesses are looking at robots as a way to counter the cost of hiring a high cost minimum wage employee.

Be sure to watch this video:

It Has Only Begun: Nearly 120 Protests over Ferguson Decision Planned

As of midday, nearly 120 protests were planned for Tuesday (mostly at night) in 35 U.S. states, Washington, D.C. and Canada, according to information from a site set up to help organize the efforts, the Ferguson Response Network.

Like most revolutions, this rage and the rioting will not change anything. The protesters have no clue as to underlying problems. Some are opportunists who don't care and just want to loot, and some have rage but incorrectly believe that gaining control of the power structure is the solution. They mix and confuse government power with private sector corporations that serve consumers, and they believe they are one in the same. And, further, they think that the front men of government need to be changed with different front men, when it is government and its destructive nature that must be shrunk--not changed.

The LOUP must be freed of minimum wage laws, compulsory education and charlatans like Al Sharpton and Jesse Jackson, before there is a chance for improvement.

Minimum wage laws keep these hoodlums on the streets and blocks them from getting their first job experiences. Compulsory government education is obviously worthless.

The government can't educate these hoods and they can't protect us from their vandalism. What we are seeing in these riots is the intersection of government failures.

(via CNN)

The U.S. Has Seen the Strongest Six-Month Expansion in GDP in More Than a Decade BUT...

The problem is it is a Fed manipulated high.

U.S. gross domestic product expanded at an average 4.25% pace over the second and third quarters this year, the best two consecutive quarters since 2003′s third and fourth quarters came in at 5.85%.


Like all these Fed created boom's it will not end well. To understand why, see:

The Fed Flunks by Robert Wenzel

and 




Tim Geithner's Incredible Eye for Talent



Simon Johnson, former chief economist of the IMF and current professor at MIT Sloan, reminds us of Geithner's great skill:

In his recent memoir, Stress Test, Geithner says, “I basically restored the New York Fed board to its historic roots as an elite roster of the local financial establishment.” His choices included Dick Fuld, CEO of Lehman Brothers, which failed spectacularly in September 2008, and Stephen Friedman, a Goldman Sachs board member, who resigned as chair of the New York Fed’s board after being accused of inappropriately trading Goldman stock during the financial crisis. Geithner also established a tangled web of connections between the New York Fed and JPMorgan Chase, some of which linger to this day.

Exploding Military Spending in Africa


In Africa, when it comes to government spending between guns and butter, it's all about guns.

Two out of three African countries have substantially increased military spending over the past decade; the continent as a whole raised military expenditure by 65% during that period, after it had stagnated for the previous 15 years. Military spending grew faster in Africa last year than in other parts of the world, reports Economist magazine.

PETER SCHIFF: All eyes should now be focused on the Swiss voters

The Clock is Ticking in Switzerland
By Peter Schiff

For most of my career in international investing, I had always placed a great deal of faith in Switzerland's financial markets. In recent years, however, as the Swiss government has sought to hitch its wagon to the flailing euro currency and kowtow increasingly to U.S.-based financial requirements, this faith has been shaken. But this week

Prime Time for Ferguson

By Robert Wenzel

In an odd bit of scheduling, St. Louis County Prosecuting Attorney Robert McCulloch chose to announce that a grand jury did not indict Ferguson, Missouri police officer Darren Wilson in the shooting death of Michael Brown, during prime time: 9:00 ET, 6:00 PT.

Perfect timing for the rest of America to sit back and watch rioters first loot then burn stores, under the cover of darkness, in Ferguson .

It's almost as though America was getting an object lesson on why local police need all that militarized equipment that the government has been recently providing them. You see, it's so that this doesn't happen to the rest of America.

Of course, as per usual in these cases, there was little to no protection of the private sector and the only thing that seemed to get the full protection of the police was the police headquarters. This despite the fact that the police had months to prepare for the grand jury decision and that the governor of Missouri had declared a state of emergency days ago, which included his ordering national guard assistance.

Note well: In crisis, government takes care of its own. The rest of you are on your own. Government protection of the private sector is largely a myth. You want evidence? Here's evidence:






And finally  a CNN reporter hit in the head with a rock:




 Robert Wenzel is Editor & Publisher at EconomicPolicyJournal.com and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics


(ht Jay Stephenson)

Monday, November 24, 2014

What Kind of Specializations Do Female Hard Science PhD Candidates Focus On?


(via Carpe Diem)

Is Bitcoin "Creator" Satoshi Nakamoto an NSA Agent?

 CryptoNews, not an outlet unfriendly to Bitcoin, reports:
The NSA was one of the first organizations to describe a Bitcoin-like system. About twelve years before Satoshi Nakamoto published his legendary white paper to the Metzdowd.com cryptography mailing list, a group of NSA information security researchers published a paper entitled How to Make a Mint: the Cryptography of Anonymous Electronic Cash in two prominent places, the first being an MIT mailing list and the second being much more prominent, The American Law Review (Vol. 46, Issue 4 ).
The paper outlines a system very much like Bitcoin in which secure financial transactions are possible through the use of a decentralized network the researchers refer informally to as a Bank. They list four things as indispensable in their proposed network: privacy, user identification (protection against impersonation), message integrity (protection against tampering/substitution of transaction information – that is, protection against double-spending), and nonrepudiation (protection against later denial of a transaction – a blockchain!).
CN concludes with a series of questions:

For the Paul Krugman File

There are a number of points that Paul Krugman makes, today, in his column at NYT that require some highlighting and other comments that require filing away for later review as economic events unfold.

First, he continues to promote the idea that interest rates were at zero after the crisis. This is simply not the case.

He writes:
Six years ago the Federal Reserve hit rock bottom. It had been cutting the federal funds rate, the interest rate it uses to steer the economy, more or less frantically in an unsuccessful attempt to get ahead of the recession and financial crisis. But it eventually reached the point where it could cut no more, because interest rates can’t go below zero.
Here's the Federal Reserve's own data on the effective funds rate, since rates collapsed:



The Fed funds rate, to be sure, is very low, but this is not a surprising phenomena following a financial crisis, but it is not zero and has indeed fluctuated throughout the period following the crisis.

Krugman likes to spread the myth of the zero bound being hit because he uses it to justify increased Federal government deficit spending:
[W]e were told again and again that budget deficits were our most pressing economic problem, that interest rates would soar any day now unless we imposed harsh fiscal austerity. I could have told you that this was foolish, and in fact I did, and sure enough, the predicted interest rate spike never happened — but demands that we cut government spending now, now, now have cost millions of jobs and deeply damaged our infrastructure.
And this is what needs to be filed away, despite accelerated price inflation over hanging the economy, Krugman wants more deficit spending and continued Fed driven low interest rates:
[I]nflation is low, wages are weak, and the Fed seems to realize that raising rates too soon would be disastrous...So the counterintuitive realities of economic policy at the zero lower bound are likely to remain relevant for a long time to come, which makes it crucial that influential people understand those realities. 
Just how is Krugman going to explain away this advice when the price inflation does accelerate?

New Bill Passed: Did This Just Happen in the Land of the Free?

By Simon Black


Science is about truth. It’s about fact.

It’s about forming hypothesis and either proving or disproving that hypothesis through what we can observe, test, and measure.

For thousands of years it’s been through this method that humanity has progressed. And history shows that every time “authorities” get involved, it invariably arrests this process.
Human civilization lost centuries of progress in the “Dark Ages” (a bit of a misnomer, given that societies were flourishing in Asia at the same time).

European governments would burn anyone at the stake who dared to write that the Earth wasn’t the center of the universe.

We’d like to think we’ve come a long way since then. But have we really?

It was just a few years ago that

Peter Schiff: Why Gold Will Rise And Exceed Previous Highs; Destroys Inflationist Advocates

Industries with the Highest Employment Concentrations: Large Metro Areas