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Lying Liars Who Lie About the Weather

July 28th, 2015 - 12:15 pm
(Chart courtesy RealClimateScience.com)

(Chart courtesy RealClimateScience.com)

Good lord:

The measured US temperature data from USHCN shows that the US is on a long-term cooling trend. But the reported temperatures from NOAA show a strong warming trend.

They accomplish this through a spectacular hockey stick of data tampering, which corrupts the US temperature trend by almost two degrees.

The biggest component of this fraud is making up data. Almost half of all reported US temperature data is now fake. They fill in missing rural data with urban data to create the appearance of non-existent US warming.

That’s Tony Heller, writing for RealClimateScience.com.

The lies never stop, do they?

Top Men, Top Men

July 6th, 2015 - 10:01 am
Press sanitized for your protection. (AP photo)

Press sanitized for your protection.
(AP photo)

The Clinton Camp has lost count of the number of experts it has on hire:

In the months before she began her second run for the White House, Clinton spent hours quizzing economists, lawyers, educators and activists about everything from executive compensation to the latest research on lead paint.

By last fall, the number of experts she had interviewed hit two hundred and her team stopped keeping track.

“It was like I hadn’t left Harvard,” Roland Fryer, an economist at the university, said of his meeting with Clinton to discuss successful charter school practices. “It was like talking to a colleague and debating over a cup of coffee.”

Can’t keep track of the experts who, after the election, will supposedly keep track of everything in an $18,000,000,000,000 economy made up of 320,000,000 people.

That in a nutshell is everything wrong with “progressive” ambitions.

We’re Next

July 1st, 2015 - 10:26 am
(Chart courtesy Washington Examiner)

(Chart courtesy Washington Examiner)

Go ahead and laugh at the Greeks — while you still can:

With all the chaos unravelling in Greece, Congress would be wise to do what it takes to avoid reaching Greek debt levels. But it’s not a matter of sticking to the status quo and avoiding bad decisions that would put the budget on a Greek-like path, because the budget is on that path already.

A quarter-century ago, Greek debt levels were roughly 75 percent of Greece’s economy — about equal to what the U.S. has now. As of 2014, Greek debt levels are about 177 percent of national GDP. Now, the country is considering defaulting on its loans and uncertainty is gripping the economy.

In 25 years, U.S. debt levels are projected to reach 156 percent of the economy, which Greece had in 2012. That projection comes from the Congressional Budget Office’s alternative scenario, which is more realistic than its standard fiscal projection about which spending programs Congress will extend into the future.

There, with or without the grace of God, go I.

Slightly less glib, the difference between the US and Greece is that we control our own currency — which also happens to act as the world’s reserve currency. We also act as a worried planet’s mattress of last resort. That is to say, when other countries’ economies go to hell, the stash their money in US banks, securities, real estate, etc. So the good news is, we can probably exceed even Japan’s levels of indebtedness (more than 200% of GDP), before the stuff hits the fan.

The bad news is that the CBO’s “alternative scenario” may prove entirely too optimistic regarding how long it takes us to get there.

The End of Antivirus [LINK FIXED!]

June 24th, 2015 - 2:04 pm

John McAfee — yes, that John McAfee — says the real computer security risk comes from lazy or unthinking human beings:

ThreatConnect, typical of the tech studies, posted a four page analysis of the OPM hack. It included discussions of malware packages that were possibly used and means of connecting the hack to the Chinese. It was highly technical, well thought out and cogently presented.

But the phrase “social engineering” was used only once, in the last paragraph, as a near aside to the main threat – suggesting that the hacked data could help socially engineer someone.

This shows the typical lack of comprehension, among the technical crowd, about the craft of social engineering.

Social engineering has become about 75 percent of an average hacker’s toolkit, and for the most successful hackers, it reaches 90 percent or more.
I can easily find an organization chart within OPM giving titles and names with little research. Once I have a target, the target can be “humanly” engaged. Using one example, I find the “dream” love partner, or the ideal friend, not by hacking into a database, but by observing eye movements and other body language over a small course of time and inserting that ideal person into the target’s path. From that engagement and its end products, comes the need for explicit technical materials that I must use to gain what I want. The more sophisticated the social engineering, the less is the need for high technology.

A simple social engineering hack might involve leaving a thumb drive on the pavement close to the driver door of a car. The thumb drive might be labeled “naked photos” or “first quarter profits”. The idea is to influence the driver to insert the thumb drive into his computer. From that point technology takes over and the majority of the remaining hack will be purely technical. On the other hand, the “dream love partner” hack mentioned above would most likely require very few technical resources once the target’s password or other info has been obtained.

Read the whole thing — and up your awareness level if you want to reduce the threat level.

Your ♡bamaCare!!! Fail of the Day

June 10th, 2015 - 10:28 am

SIGNAL

To stay in informed and in touch with the man on the street, former NYC Mayor Ed Koch would routinely ask his constituents, “How’m I doing?” And New Yorkers being New Yorkers, he’d often get an earful. After a couple of years, it’s a fair question to ask of the state ♡bamaCare!!! exchanges, which is more or less what Melissa Quinn did for the Daily Signal and summarized in the chart above.

Of the seventeen states (including the District of Columbia) which set up their own exchanges, the results so far aren’t very promising. Just less than half are “functional.” Those are the exchanges in CA, CT, DC, ID, KY, NY, RI, and WA. Currently they have enough customers and enough revenue to stay afloat, although tax dollars are no longer available to the “risk corridors” which help keep them that way.

Maryland and Massachusetts have had to rebuild their sites or merge with tech from another state. Massachusetts is an interesting case because before ♡bamaCare!!!, they’d had a functioning exchange under Romneycare. “First, do no harm,” was never made a part of ♡bamaCare!!!’s language.

Colorado, Minnesota, and Vermont’s sites are are suffering serious technological or financial difficulties, and their fates are all still up in the air. They may soon follow Hawaii, Nevada, New Mexico, and Oregon’s exchanges into oblivion.

So 50 states plus DC were expected to set up their own exchanges, but only 17 did so. Out of those 17, only 11 have survived intact so far, and three of those are expected to fail — for a total of eight functional survivors.

That’s a whole lotta fail.

(Chart courtesy Doug Short, Advisor Perspectives)

(Chart courtesy Doug Short, Advisor Perspectives)

All we’re missing now is a spark:

BTIG’s Dan Greenhaus has one message in his note to clients on Wednesday: Stop worrying about margin debt.

Here’s Greenhaus:

“Like the Fast and Furious movie franchise, worries over margin debt have become a frequent occurrence. A new post on Business Insider, which has nearly 40,000 views, is titled ‘Here’s some great news for those who want the stock market to crash.’”

That post, written by Business Insider’s Henry Blodget, highlighted that margin debt is at a record high and could be cause for concern over the stock market.

Blodget adds, “Even after adjusting for inflation, margin debt is now higher than it was at the peak of the great bull market in 2000 and the echo bull market in 2007.”

But back to Greenhaus:

Greenhaus argues that even though margin debt hit $507 billion in April, it’s really small as a percentage of the New York Stock Exchange’s market cap at around 2%.

Greenhaus adds: “And so, the high level of margin debt doesn’t mean this will cause a crash. It just means whenever stocks start to crash, the tumble would be faster as investors scramble to meet their margin calls.”

Think of margin calls as an accelerant for starting a fire. By itself it can’t start a fire, but once a spark is lit it causes the fire to spread too rapidly to be easily put out.

When you sell a falling share you bought with your own money, you’re only out the difference between your buying and selling prices. When you sell a falling share you bought with borrowed money, the lender will make that margin call to get his capital back. Odds are you’ll have to sell other shares to make good on that margin call — if you can. The more shareholders with margin debts, and the bigger the margin debts, the faster the accelerant works on the flames.

I saw a couple of acquaintances lose everything to margin calls when the last two bubbles popped, and their stories were hardly unique. Gambling — and the stock market is gambling — with other people’s money is a dangerous game.

Sign “O” the Times

May 29th, 2015 - 7:08 am

Chart of Doom

“History repeats itself, first as tragedy, second as farce.”
-Karl Marx

Back when I was a young man, way back in the first quarter of 2015, all we got was 0.2% GDP growth — and we liked it!

But then came the downward revision… unexpectedly:

The U.S. economy went into reverse in the first three months of this year as a severe winter and a widening trade deficit took a harsher toll than initially estimated.

The Commerce Department says the overall economy as measured by the gross domestic product contracted at an annual rate of 0.7 percent in the January-March period.

The revised figure, even weaker than the government’s initial estimate of a 0.2 percent growth rate, reflects a bigger trade gap and slower consumer spending.

I don’t happen to worry too much about the widening trade gap. That’s an inevitable result of the strengthening dollar, and there are going to be dislocations as King Dollar returns to his throne. Central Banks around the world have been in a years-long “race to the bottom,” with each country trying to weaken its currency the most. And in chaotic times like this, that’s a race the US is going to lose — people (and central banks) hoard dollars when times get weird. The result is that the dollar appreciates against other currencies, which normally takes a bite out of our exports.

What’s worrisome is that the trade gap is growing while consumer spending is shrinking. Relatively cheaper foreign goods (thanks, King Dollar!) should encourage more consumer spending, or free up more consumer dollars to spend on domestic goods. Gas prices are above their recent lows (although still well below their “new normal” highs), so that can’t be the cause of the consumer slowdown.

Maybe something more fundamental is wrong:

The new data for the first quarter, and signs of only a tepid rebound in the current, second quarter of 2015, are now forcing some economists to rethink earlier assumptions.

“This isn’t the off-to-the-races kind of expansion we envisioned six months ago,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “More and more folks are coming around to the view that the long-term growth rate of the American economy is 2 percent, at best. We can’t sustain 3 or 4 percent growth for very long, so it’s two steps forward, one step back.”

Your typical economic recovery is V-shaped. That is, things come bounding back at about the opposite rate they declined. A short, sharp recession leads to a short, sharp recovery before evening back out at 3-4% growth. A longer but less dramatic recession gives you a longer but less dramatic recovery.

There are only two times in 20th or 21st Century American history that this hasn’t been true.

The first time was during the Great Depression, when the Roosevelt Administration’s response to the financial crisis was to endlessly muck around with the money supply, while foisting reams of new regulations and requirements and taxes on the economy. The second time was the aftermath to the Great Recession, when the Obama Administration’s response to the financial crisis was to endlessly muck around with the money supply, while foisting reams of new regulations and requirements and taxes on the economy.

I know history repeats itself, but I can’t tell if this time is the tragedy or the farce.

Your ♡bamaCare!!! Fail of the Day

May 19th, 2015 - 1:26 pm

It’s becoming more and more difficult to remember when ♡bamaCare!!! was supposed to save every American family an average of $2,500 a year — especially with health care expenses growing so quickly that they may be what’s caused the economy to stall.

Anthony Mirhaydari has the numbers:

The percentage of personal consumption expenditures (in current dollars) spent on health care goods and services has jumped from 20.0 percent last March to 20.8 percent this March, while the percentage spent on gasoline fell from 3.2 percent last June to 2.2 percent this March.

David Rosenberg at Gluskin Sheff echoes Yardeni, noting that the gasoline windfall wasn’t spent “on gadgets and small luxury goods” as was normally the case, but on cyclical services (like bars and restaurants) and health care. He highlights the fact that spending on health care is running at a 6.6 percent annual growth rate as of March.

Thomas Costerg at Standard Chartered is also worried about the drag on spending from changes under Obamacare, charging outright that, “health-care reform is stalling private consumption.” He’s waiting for forthcoming statistics from the Internal Revenue Service to provide specifics, but notes “anecdotal evidence from tax preparers already suggests millions may have had to pay penalties and/or seen their tax refunds reduced.”

It’s time for a tax revolt.

Sign “O” the Times

May 15th, 2015 - 7:29 am

ALHAMBRA

Let’s talk about the recovery, which if it ever existed (it didn’t) ended at least two years ago. Jeffrey Snider writes for Alhambra:

If March was supposed to herald at least the beginning of the anticipated yearly rebound, April put that idea to rest. In terms of retail sales, one of the most important and largest segments of “demand”, April’s figures were mostly the worst of the recovery and some of the worst in the entire series – “beating” out February in every category. Even including autos, total retail sales gained just 0.72% in April more than suggesting there really is a major economic problem brewing.

Among the other segments, the figures are getting truly dire (all numbers are year-over-year not-adjusted): retail & food sales ex autos -0.35%; retail trade incl. autos –0.26%; just retail ex food ex autos -1.80%; general merchandise stores -1.52%. While these numbers are severe on their own, this is a contractionary environment that now stretches at least four months and in some cases five. Recessions are not spontaneous events but rather the accumulation of negative pressures and results. There can be no doubt that consumers in the US right at this moment are acting out of recessionary impulses.

Janet Yellen is gonna need a bigger printing press.

UPDATE: Whatever killed PJM this morning seems to still be messing up some images. There’s supposed to be a chart in that blank spot above — a wicked scary chart. Will get it fixed after I’m finished playing Superdad this morning.

The End of China’s Boom

May 5th, 2015 - 12:18 pm
(Chart courtesy Calafia Beach Pundit)

(Chart courtesy Calafia Beach Pundit)

Scott Grannis writes that foreign investors aren’t buying into China like they once were:

As the chart above shows, China has been buying foreign currency (thus increasing its holdings of foreign currency) for most of the past two decades, AND it has been allowing its currency to appreciate. Until recently, China has been the beneficiary of massive net foreign investment inflows—so massive that even $5 trillion of forex purchases by the Bank of China weren’t enough to stop the yuan from appreciating.

The Bank of China now holds about $4.7 trillion of forex reserves. However—and this is critical—China’s forex reserves have not increased over the past 18 months, and have actually declined by about $300 billion since last summer. This means that China is now experiencing net outflows of currency, and that in turn is a sign that China is no longer a magnet for capital. Foreign investment is no longer flooding into the economy because the opportunities for excess returns in China have diminished significantly. The bloom is off the Chinese rose.

I can’t find it in the archives, but I blogged a story years ago about a conversation between (I think) President George W Bush and (I think) Chinese Premier Hu Jintao. Bush had told Hu that the US economy needed to generate 2 million jobs a year or he’d be out of a job. Hu replied that the Chinese economy needed to generate 25 million jobs a year or there’d be a revolution.

The good news is that Beijing still has that $5 trillion in the bank, which is enough to paper over a lot of problems, and for quite a while.

But what happens if the money runs out?

Your ♡bamaCare!!! Fail of the Day

May 4th, 2015 - 8:34 am

USATODAY CHART

Remember when ♡bamaCare!!! was going to result in fewer people visiting the emergency room for non-emergencies? Would you believe exactly the opposite has happened? Of course you would:

A poll released today by the American College of Emergency Physicians shows that 28% of 2,099 doctors surveyed nationally saw large increases in volume, while 47% saw slight increases. By contrast, fewer than half of doctors reported any increases last year in the early days of the Affordable Care Act.

Such hikes run counter to one of the goals of the health care overhaul, which is to reduce pressure on emergency rooms by getting more people insured through Medicaid or subsidized private coverage and providing better access to primary care.

A major reason that hasn’t happened is there simply aren’t enough primary care physicians to handle all the newly insured patients, says ACEP President Mike Gerardi, an emergency physician in New Jersey.

“They don’t have anywhere to go but the emergency room,” he says. “This is what we predicted. We know people come because they have to.”

The ER is required by law to see you, unlike doctors who aren’t reimbursed enough under the Medicaid expansion.

Sign “O” the Times

April 29th, 2015 - 11:05 am

In1in5FamiliesNoOneWorks (1)

Sustainability:

A family, as defined by the BLS, is a “group of two or more persons residing together who are related by birth, marriage, or adoption. In 2014, there were 80,889,000 families in the United States, and in 16,057,000 of those families, or 19.9 percent, no one had a job.

The BLS designates a person as “employed” if “during the survey reference week” they “(a) did any work at all as paid employees; (b) worked in their own business, profession, or on their own farm; (c) or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family.”

Members of the 16,057,000 families in which no one held jobs could have been either unemployed or not in the labor force.

The chart accompanying the story shows that the 16-17% range is “normal,” but I cannot in my experience even imagine a household in which not one person earns a living.

That’s one in five households, in other words, which the workers in the other four must also support.

Chart of Doom

That’s not my headline — it’s in quotes because I lifted it directly from WaPo’s Wonkblog.

And isn’t it telling?

Anyway, here’s what Matt O’Brien had to say about those economists who have finally woken up to the reality the rest of the country has been living with during this “recovery” we keep hearing so much about:

Now if you add it all up, this shadow unemployment means our jobs hole is more than three times as big as it looks. That, at least, is what economists Danny Blanchflower and Andrew Levin found when they looked at how low the unemployment rate is versus how low we think it could go, how high the participation rate is versus how high we think it could go, and how many people can only find part-time jobs. That first part tells us how much further unemployment itself could fall, the second how many discouraged workers could come back, and the last how many people would work more if they could. In other words, it shows us the gap between how many full-time jobs we have and how many full-time jobs we need. The result, as you can see above, is that instead of being a million full-time jobs short, like the unemployment rate says we are, we’re about 3.5 million short.

So it’s no surprise that workers still aren’t getting raises. Even though it looks unemployment is low enough that they should have more bargaining power, shadow unemployment is high enough that they don’t.

Longtime Sharp VodkaPundit Readers™ have known all this for years, and so has anybody who’s been looking for work.

And so has anybody who finally gave up looking — and they number in the millions.

So are we supposed to sneer at economists Danny Blanchflower and Andrew Levin for taking so long to recognize the obvious? Are we supposed to cheer them for giving a solid number to the truth the Administration has been hiding for so long? And speaking of so long, what took?

Reading this thing, it’s OK to feel frustrated, relieved, and impatient, all in equal measure.

The Evitable President

April 13th, 2015 - 8:46 am
(Chart courtesy NYT)

(Chart courtesy NYT)

Nate Cohn:

Mrs. Clinton’s weaknesses may not be enough to derail her primary campaign, but it may help ensure that she will not be a juggernaut in the general election. Her favorability ratings, which soared into the 60s while she was secretary of state, have already returned to the mid-40s. Those figures are far more reminiscent of recent polarizing presidential nominees who faced close elections, like Mr. Obama or Mitt Romney in 2012.

Mrs. Clinton’s chances will depend in no small part on national political conditions. The general election is still 19 months away, and much can change, but today’s political environment is consistent with a close election that might tilt slightly toward the Republicans.

This is going to be a tough fight, waged on the Democrats’ part with nothing but money, sex, and phony “War on…” memes.

But that doesn’t mean the GOP can’t win, it just means the party needs to learn how to fight in exactly the way it didn’t in 2008 and 2012.

Driving My Life Away

April 9th, 2015 - 2:35 pm
(AP photo)

(AP photo)

Now I don’t know if Morgan Stanley analyst Adam Jonas is right when he argues that in the future, only the rich will own cars — and even those will be driven by computers. The rest of us he thinks, according to HuffPo, “will be driven by cars that are either a public utility or part of a privately-owned fleet that users subscribe to use.”

Maybe Jonas is right — but I hope not. Getting into your own car and driving it where you damn well please is a liberty, not a luxury. And that freedom of movement is something Americans have enjoyed since horse & buggy days. I don’t mind having computers making us safer drivers, or helping traffic to flow more freely. But a car is a mobile extension of our homes, of ourselves, and “mega-fleets of public vehicles” is a potential tool of tyranny.

Or maybe I’m just hopelessly old-fashioned.

That aside, part of Jonas’s analysis requires a second look:

Over the next decade, rich people will likely swap out the cars they drive for cars that drive themselves. Already, Tesla is planning to roll out a version of its Model S sedan that has limited autopilot features sometime this summer. The latest version of the car, announced on Wednesday, starts at $67,500 after a Federal Tax Credit.

Middle class tax dollars paying to make it more affordable for the rich to enjoy being semi-chauffeured around by electric cars — I’m telling you, the fix is in.

PolitiFact: Providing Cover Since 2009

March 31st, 2015 - 7:44 am

PunditPress ran the numbers behind PolitiFact’s so-called fact-checking, and they ain’t pretty:

PolitiFact’s Obameter has been ongoing for six years now. I remember looking at it in 2009 and thinking about how it would stand near the end of Obama’s term in office.

Today, looking at the chart, there are many more “promises kept” than there are “promises broken.” Yet anyone who has been paying attention over the last few years would surely see that Mr. Obama had broken a tremendous amount of promises.

So why does PolitiFact still have Mr. Obama’s promises kept at nearly twice those broken? I decided to take a look.

The first thing I did was see what promises were considered broken. It’s a fairly hefty list, but some of the very largest are completely missing. The biggest, and most famous, broken promise is that “if you like your doctor, you can keep you doctor.” That was proven irrefutably to be a lie.

According to PolitiFact, that wasn’t a broken promise. In fact, that promise doesn’t exist; it’s no where to be seen on their “promise broken” page.

Read the whole, devastating thing.

How’s That Workin’ Out for Ya?

March 31st, 2015 - 5:20 am

Obama has allowed Iran to run wild through the Middle East in hopes of making a deal with them regarding their “peaceful” nuclear program.

Your ♡bamaCare!!! Fail of the Day

March 17th, 2015 - 5:05 am

BN-HI554_deduct_G_20150310161354

If you’ll recall, it was just last week I speculated that the declines in consumer spending, for three months running and despite falling fuel prices, might have something to do with ♡bamaCare!!!’s tender mercies.

Well:

Deductibles are an element of any insurance product, but as deductibles have grown in recent years, a surprising percentage of people with private insurance, and especially those with lower and moderate incomes, simply do not have the resources to pay their deductibles and will either have to put off care or incur medical debt.

The chart above, based on a Kaiser Family Foundation study published Wednesday, shows that about a quarter of all non-elderly Americans with private insurance coverage do not have sufficient liquid assets to pay even a mid-range deductible, which at today’s rates would be $1,200 for single coverage and $2,400 for family coverage. We found that more than a third don’t have the resources to pay higher deductibles. Among low- and moderate-income households, even fewer are able to meet deductibles. It’s no wonder that collections for medical debt represent half of all bill collections. The estimates are conservative because they assume that people have all of their liquid assets available to pay their health-care bills. But most people must tap into their liquid assets to meet other obligations, such as their rent or mortgage, car repairs, or educational costs.

It’s difficult to spend more when you’ve got to pay more for basic medical services — and Lord help you if you get really sick. ♡bamaCare!!! plans basically provide catastrophic coverage at Cadillac prices.

The theory behind increased deductibles and copays is to force people to have more skin in the game, and to shop around more for better prices. The problem is, that just doesn’t work under a insurance-for-everything system.

There’s not much of an incentive to shop around when the savings go to the insurance companies rather than to the customers. And how exactly are we supposed to shop around when ♡bamaCare!!! creates narrower and narrower coverage networks from which to choose?

Imagine insurance covered grocery shopping — I’m sure there’s a liberal with some boneheaded scheme very close to that already. Anyway, the same plan will pay for choice meats at Whole Foods, or for the sad, wilted vegetables at Walmart. Any savings you get while shopping at Walmart go directly to your “food insurer,” and the deductible and the copays remain the same at either place. There are other grocery stores in town less expensive than Whole Foods and with a better selection than Walmart, but they’re outside of your grocery network.

Are you going to go for the grass-fed ribeye at Whole Foods, or those turnips at Walmart that look like they hit their sell-by date over a week ago?

That’s essentially the system ♡bamaCare!!! has set up. It’s expensive for you and for me, but Whole Foods and the organic beef producers just love it.

Sign “O” the Times

March 12th, 2015 - 12:05 pm

Chart of Doom

Consumer spending still sucks:

The Commerce department reported that in February, retail sales missed once again and missed big and across the board, the third big miss in a row, with the headline print coming at -0.6%, far below the 0.3% expected, and in line with the -0.8% drop last month. Putting the headline numbers in context: December -0.9%, January -0.8%, February -0.6%. Surely a great time for the Fed to hike.

Excluding the volatile autos and gas, sales dropped once again, sliding -0.2%, below the 0.3% expected – in fact below the lowest estimate – and worse even than last month’s downward revised -0.1% decline. And with that the worst run in retail sales since Lehman is now in the record books.[Emphasis in original]

Falling gas prices were supposed to spur more spending on other things — so what’s happening?

I have several guesses, none of them good, and a few of them involving ♡bamaCare!!!.

EDITION

That pretty little number up there is Apple’s most expensive Edition model, topping the charts at $17,000 per. Availability will be “limited” as will be outlets at which to buy it. You won’t be hitting the Apple Store at your local mall to try on one of those babies.

The Sport line starts at $349 as promised and tops out at $399. The only differentiation is the 38mm versus 42mm sizes — all colors and bands cost the same. The bands are so easy to switch out, I expect many buyers will be happy to spend another $49 each for extras in various colors to suit their moods. The buy-in might look steep, but this is easily the best smartwatch made right now, and I don’t expect it to obsolesce any time soon. It’s also a safe bet that, like iPhones and iPads, there will be a lot of kids getting some very nice hand-me-downs as their parents upgrade. Casa Verde has a perfectly-functional iPhone 1 and an iPhone 3GS floating around here somewhere, which might still be getting use if we hadn’t run out of people to use them.

That said, I don’t know if the Sport will be another “line up at the Apple Store weeks in advance” item at launch — but it’s easy and safe to predict that Apple will sell oodles of them.

The stainless steel Watch line is where the pricing gets really interesting, and also quite competitive.

LOOP

Pricing starts at $549 for the smaller model with a rubber Sport band, and tops out at $1099 for the larger model with the link bracelet. I fell in love at first sight with the Milanese Loop bracelet back in September, and was pleasantly surprised to see that it’s one of the less-expensive upgrades at $649-$699. (On all but Edition 18k gold models, the price difference is always $50 between the 38mm and 42mm sizes.) Since Watch is “the” Apple Watch, I’d expected a broader range of prices, starting at $649 or so and topping out around $1500 — and I suspect even those prices wouldn’t have scared off many prospective buyers.

Longtime Sharp VodkaPundit Reader™ and watch collector Mr Lion commented, “The stainless pricing is spot on. A grand for a gadgety daily wear is perfect,” and I think he’s spot on with that comment. It’s not easy to find any stainless steel watch for $999 with a link bracelet as nice as the one Apple Watch has. Throw in all the smartwatch features and it becomes a no-brainer. I’d wager it’s going to be the upper-middle-class accessory item in the next 12-18 months.

About those Edition prices…

When you buy a gold Rolex, you aren’t just paying for the gold — you’re also paying for the intricate and hand-tooled mechanisms inside, which with proper care will last more than a lifetime. But an Apple Watch — whether Sport or Watch or Edition — is still just an Apple Watch with electronic guts which will be obsolete in five years or so. In other words, when you buy an Edition watch, you’re really just paying more for the gold. Some buyers will find that’s worth their money, but I don’t know if that will prove to be as many buyers as Apple expects. On the other hand, if the company really is moving into fashion, it might serve them well to have a very, very select clientele of Edition buyers.

We’ll know for sure if Edition flopped if prices come down, or if the line quietly disappears from Apple’s selection.

When Apple previewed their new watch last fall, I wrote:

Steve Jobs liked to say that Apple stood at the intersection of Technology and Liberal Arts. That’s a fine place to stand, but that corner might have seen as much development, if I may belabor the analogy, as it’s going to get for a while. You have a desktop, a laptop, a tablet, a smartphone — we’re running out of places to put computers. Which is why everyone has expected “wearables” to be the Next Big Thing for a couple of years now, ever since the smartphone and tablet markets started closing in on their saturation points.

It’s time then for Apple, or for somebody, to set up shop at a new crossroads — the intersection of Technology and Style.

After seeing today’s demo and the prices, all I would add now is that Apple has set up a very big and profitable shop at those crossroads.

Sign “O” the Times

March 6th, 2015 - 9:29 am

Consumer spending is down, initial jobless claims are up, and Marc Cuban says we’re in a tech bubble “far worse” the the DotCom Bubble of 2000:

“If we thought it was stupid to invest in public Internet websites that had no chance of succeeding back then, it’s worse today,” he wrote in a blog post detailing the risks facing the current crop of angel investors and crowdfunders (more on that below).

He’s not alone in his fear-mongering. While retail investors are all-in, equity-wise, as are corporations, prophets of doom are counting the moments until the cards fall in the public markets, as well. The thing is, they’ve been counting them for years now. Check out the chart of the day for how long it’s been since we’ve felt a serious pullback. Spoiler alert: almost three years.

Doug Kass, president of Seabreeze Partners, has been anticipating some weakness for a while now, and he’s positioned himself to turn a profit when that day comes.

The difference between the last two bubbles and today is, we weren’t already sitting on $18,000,000,000,000 worth of debt, interest rates weren’t already at zero, labor participation was increasing not decreasing, and the Fed hadn’t already expanded its balance sheet by multiple trillions.

I really want to be wrong about this, but it’s difficult not to fear the worst.

The Future of War is Now

March 2nd, 2015 - 7:28 am

DEFCON

The infographic above does a gorgeous job of making plain Russia’s sometimes difficult-to-quantify hybrid warfare against Ukraine.

Over at Jane’s, Reuben F Johnson uses that chart and some cold analysis to determine that Russia’s newfangled operational art “is working” to keep Ukraine destabilized:

Overall, the Ukrainian military continues to be severely disadvantaged by not being equipped with a list of the items that are becoming well known to those watching the current situation in eastern Ukraine: secure communications systems; anti-tank guided weapons with tandem warheads; counter-battery radars; UAVs for both reconnaissance and strike missions; and the ability to stream multiple intelligence sources into centralised command centres to get inside the ‘decision loop’ of the Russian-backed forces.

As I’ve noted before, the beauty of Putin’s warmaking is that he can dial it up or down on the X or Y axis virtually at will, which serves to keep NATO divided and confused, while giving himself a working combination of political cover and military gain.

This is the Operational Art of War brought fully into the 21st Century, allowing a much weaker actor (Russia) to leverage its few strengths against a much stronger potential opponent (NATO) to get what he wants (Ukraine) without a full-scale war.

This is what President Look At Me Looking At Me derided with “You just don’t in the 21st century behave in 19th century fashion.” But we know who is really living in the 21st Century and who is stuck in the past.

Friday Night Videos

February 27th, 2015 - 10:24 pm

It’s another “I Apologize for Nothing!” edition of FNV.

Ah, Gino Vannelli — Canadian master of cheesy light rock and body hair. He’s easy to make fun of, and even SCTV took a shot at him in a “Lee Iacocca’s Rock Concert” sketch with Eugene Levy playing Vannelli. Every time he turned around or the camera angle changed during his performance of “I Just Wanna Stop,” Levy was, werewolf transformation style, covered with more and more body and facial hair. It’s starts at about the 4:50 mark in this YouTube clip. Snark aside though, Vannelli sold a ton of records and cut a few singles which haven’t aged too badly.

Tonight’s pick, “Wild Horses,” was Vannelli’s penultimate single to chart in the US, and for whatever reason it really caught my ear during senior year at Missouri Military Academy. I had this cheap boombox for playing tapes and picking up the local radio stations in Mexico, Missouri, and it was my policy when listening to the radio to have a scratch tape ready to go. “Record” and “Pause” were pressed at all times, so when I heard a new song I liked, I would just release the pause button and record it straight off the radio in crystal clear FM-radio-to-crap-cassette quality. This one was a minor hit, and I was lucky enough to have had a scratch tape ready to go the second — and final — I ever heard it on the air.

The tape got lost in the sands of time, but somehow this one popped up in my suggestions on the iTunes Store while I was searching for some other bit of high school-era pop-fluff — and you know what? It’s still all right. Oh, you can hear the producer throwing every single mid-’80s studio trick at it, trying to generate a big hit, but the lyric has some lovely imagery and the music somehow fits Vannelli’s Disco Shirt Chest Hair delivery.

This one’s a keeper.

Friday Night Videos

February 20th, 2015 - 10:11 pm

Helen Reddy’s “Angie Baby” is easily one of the weirdest and creepiest songs ever to chart — and yet the music is perfectly cheesy ’70s soft rock.

Don’t believe me? I bet you haven’t heard this one in ages, so listen and, um, see.

Strange Bedfellows

January 28th, 2015 - 8:51 am

LE PEN

Huh:

A week before the attack on Charlie Hebdo, France’s leading gay magazine, Têtu, announced the winner of its annual beauty contest. His name was Matthieu Chartraire, and he was 22, doe-eyed and six-packed, with perfectly groomed hair, stubble and eyebrows. A pin-up in every way — until he started talking.

To the anger of many of the magazine’s readers, the Adonis of 2015 turns out to be an outspoken supporter of the Front National. Têtu’s editor-in-chief, Yannick Barbe, refused to play censor. ‘It’s within his rights to vote for the FN even if we don’t share his beliefs,’ he said. ‘This is a beauty pageant, and our readers’ vote was only based on a single criterion! He only stands for himself and not for the gay community.’

Barbe has a point (although from next year, it’s worth noting, entrants for Têtu’s beauty contest will have to sign a code of ethics that rejects discrimination). But his assertion that Chartraire does not stand for the gay community overlooks a trend that has been accelerating over the last decade: French gay votersare falling for the Front National’s leader, Marine Le Pen. A survey by the polling firm Ifop indicates a dramatic increase in support for the FN among homosexual and bisexual voters since the French presidential elections of April 2012.

The National Front is the party in France with the strongest anti-Muslim stance. Given the desire of a sizable fraction of France’s sizable Muslim minority for Sharia law…

…does the poll really seem all that strange?

Jobless Claims Up, Up, and… Away?

January 22nd, 2015 - 2:14 pm

JOBLESS CLAIMS

Tyler Durden reports that as oil prices are plunging, jobless claims are spiking — mostly in big energy-producing states like Texas, North Dakota, and Colorado:

Not “unambiguously good” as Shale states see initial jobless claims spiking. Overall initial jobless claims missed expectations for the 4th week in a row, holding above 300k for the 3d week in a row (for the first time since July). At 307k, this week’s print is below last week’s but well above the 300k expectation. However, across TX, CO, ND, PA, and WV, initial claims (1 week lagged) rose to over 75k (from 30k in October)… “crisis has passed”?

Losses like these are supposed to come out in the wash, as money that had been going to the shale oil fields gets redirected to consumer spending. But we’re in uncharted waters here, as energy jobs are some of the few high-paying blue collar jobs left in this country.

I get the feeling the money we save at the pump will be going to buy cheap Chinese crap directly, instead of first going through the hands of an oil worker in North Dakota, but we’ll see.

Straight Outta Chartres

January 15th, 2015 - 11:25 am

Today’s Trifecta features what might be Scott Ott’s best close ever, which is impossible to say lightly.

About That Jobs Report…

December 8th, 2014 - 10:52 am

Chart of Doom

In case, after six years of Obamanomics, you hadn’t yet learned to read below the headline numbers, maybe Jeff Cox help you with that:

Friday’s turbocharged jobs headline came thanks to seasonal adjustments and other wizardry at the Bureau of Labor Statistics, which reported that U.S. job growth hit 321,000 even as the unemployment rate held steady at 5.8 percent.

That big headline number translated into just 4,000 more working Americans. There were, at the same time, another 115,000 on the unemployment line. That disparity can be explained through an expanding labor force, which grew 119,000, though the participation rate among that group remained at 62.8 percent, which is just off the year’s worst level and around a 36-year low.

But wait, there’s more: The jobs that were created skewed heavily toward lower quality. Full-time jobs declined by 150,000, while part-time positions increased by 77,000.

Cox notes that analysts “mostly gushed over the report,” which should also teach you all you need to know about most analysts.

The Oil Bubble

December 5th, 2014 - 11:03 am

From Charles Hugh-Smith via Tyler Durden:

Since 2009, central state/bank authorities have backstopped the private banking sector and the sovereign debt market with everything they’ve got. The Federal Reserve alone threw something on the order of $23 trillion in guarantees, loans and backstops at the private banking sector, and the other central banks have thrown trillions of yuan, yen and euros to shore up the banking sector and sovereign debt.

They did this because they identified the banking sector and sovereign debt as the sources of systemic risk. Now that they’ve effectively shored up these two risk-laden sectors with the full weight of the central state and bank, they presume the systemic risk has been eradicated.

They could not be more wrong. As I often note, risk cannot be disappeared, it can only be masked or transferred. The systemic risk will not manifest in the heavily protected banking sector or the sovereign debt market–risk will break out of sectors that are considered ‘safe”–like oil.

Yesterday, I described how The Financialization of Oil has followed much the same path as the financialization of home mortgages in the 2000s: a “safe” sector has been piled high with highly profitable and highly risky debt and leverage.

We just had a conversation an hour or two ago about what declining oil prices might do to Vlad Putin’s Russia, but Russia isn’t the only country at risk of financial ruin. Before we get to that though, a brief word about the Saudis.

The Saudis don’t enjoy so much control over the price of oil just because they have so much of it, although that is a part of their control. The other part is that their oil is the highest quality (light, sweet), easy to get to (scratch the sand and the oil comes forth), and easy to market (the oil fields are right there on the coast). So the Saudis can sell oil at a profit at prices which drive higher-cost producers out of business.

The fracking revolution has done wonderful things for our economy, but fracking is far from a low-cost method of oil production. See this from an October Reuters report:

ROBERT W. BAIRD EQUITY RESEARCH (Oct. 14)
“We estimate $73 as the weighted average breakeven point for
U.S. supply.”

SHALE FIELD BREAKEVEN OIL
PRICE PER BARREL
Eagle Ford Liquids Rich $53
Wolfcamp North Midland $57
Bakken Core $61
Niobrara Extension $64
Eagle Ford Oil $65
Niobrara Core $68
Wolfcamp South Midland $75

Bakken Non Core $75
Texas Panhandle $81
Mississippi Lime $84
Barnett Combo $93

At the time of this writing, crude oil is trading at under $70.

Much of our present recovery, lame as it is, is due to the revolution in fracking. The jobs pay well, the work requires lots of expensive equipment, and those benefits plus the benefits of cheaper energy ripple through the rest of the economy. So it’s great to watch Putin squirm as the rug is pulled out from under his imperial ambitions, but if Hugh-Smith is right, the US economy could be looking at an oil bubble ready to pop — a bubble every bit as big as the real estate bubble of 2007-08. The ripple effects we’re enjoying now could easily become the giant sucking sound of trillions of dollars leaving the economy.

Can we afford for the Fed to inflate its balance sheet by several additional trillions? Can we afford another trillion-dollar stimulus? Can we afford seven trillion more in debt? Can we afford negative interest rates?

Which begs further questions still.

Where would the Fed’s newly-minted trillions go? Who would be the beneficiaries of Washington’s renewed largess? Who would buy our debt? What happens to an economy when banks become the Fed’s enlarged syphons of middle class savings?

I’m not sure there’s ever been First World economy as dependent on the production of extraction wealth as ours has become under Obamanomics. We’re in uncharted waters here, but its plain to see for anyone willing to look that they are treacherous.

Goin’ South

December 2nd, 2014 - 1:44 pm

SOCIAL INSECURITY

Social Security’s inevitable insolvency keeps getting pushed up:

Social Security’s trustees projected in 1983 that the recently enacted Social Security reforms would keep the program active for at least the next 75 years, through 2058. However, according to research by Rachel Greszler, a senior policy analyst, and James M. Roberts, research fellow for economic freedom and growth at The Heritage Foundation, that approach date has accelerated.

“If the trend since 1983 continues, the program will become insolvent in 2024—34 years earlier than originally projected,” Roberts writes.

The problem with the inevitable is that it always seems to happen. Sooner, in this case, than most people are willing to admit.