December 1, 2006

The Strickland Campaign Docs Reference Post

Filed under: Taxes & Government — Tom @ 11:59 pm

Within an hour of the appearance of this post on February 9, 2007 about the discrepancies between Ted Strickland’s abdication of involvement in the decade-long school funding controversy in the current two-year budget discussions and the Turnaround Ohio program he campaigned on, the tedstrickland.com web site was taken down (only a “Ted Strickland” banner remains at every page that formerly existed).

Thankfully, yours truly had already saved the two pages relevant to that post to my hard drive, so the traceability of that post was not compromised.

The incident made clear the need to gather up as much Strickland campaign site material as was still available in Google cache. This post contains a listing of the material obtained.

As of the writing of this post on February 11, 2007 I found no evidence that Team Strickland had made any attempt to remove documents from Google cache, so as of this writing they can all still be considered publicly available docs. If the Google Cache is removed, I will continue to make the documents available at the link below for fair use and discussion purposes, both for evaluating the Strickland administration’s performance and for comparing its results a few years from now to what was promised during the 2006 campaign.

The directory where the docs are stored is here:

http://www.tomblumer.com/StrickCollected020907

After OFHEO’s 3rd Quarter Report, I Still Say ‘Bubble, Schmubble’

Filed under: Economy,Taxes & Government — Tom @ 4:11 pm

From Bloomberg News at the Philly Enquirer:

Housing prices grew in the third quarter at the slowest pace in eight years, a sign that low mortgage rates failed to revive the market, a government report released yesterday showed.Prices for single-family homes rose an average of 0.86 percent nationwide in the July-September period from the quarter before, the lowest since a 0.79 percent gain in the second quarter of 1998, the Office of Federal Housing Enterprise Oversight, known as Ofheo, said.

Since the Consumer Price Index excluding food and energy only went up 0.6% during the third quarter (text-format download) and only 0.1% with all items considered, home prices nationwide still rose faster than inflation.

CONCLUSION: Bubble, Schmubble.

A few other observations based on a quick look at the OFHEO’s report (PDF):

  • (Page 16) Only one state (Michigan) had an overall home-price decline during the 12 months ended Sept. 30. Only 3 other states (OH, IN, and NE) are below 3%. The Bureau of Labor Statistics says that overall inflation during the 12 months ended September 30 was 2.1%.
  • (Page 24) Every region came in with positive growth during the quarter, though three (Middle Atlantic, New England, East North Central) came in below the 0.6% CPI ex-food and energy figure.
  • (Page 27) 18 of the 20 worst areas for price depreciation during the 12 months ended September 30 were in MI, IN, and OH.
  • (Pages 28-41) Only two Metro areas (Lima, OH and Burlington, NC) had drops during the quarter of greater than 3%.
  • (Pages 28-41) Roughly 70, or 25%, of the 275 metro areas listed had declines during the quarter.

41-Month Manufacturing Expansion Streak Comes to an End (UPDATE: Media Near-Panic Ensues)

NOTE: The body of this post was written before reviewing any media coverage of the related news.

Cross-posted in condensed form at NewsBusters.org.

______________________________

The Institute for Supply Management’s November report tells us that manufacturing’s winning streak is over:

Economic activity in the manufacturing sector failed to grow in November for the first time following 41 consecutive months of growth, while the overall economy grew for the 61st consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

As I have noted periodically (here, here, and here, among others), the 41-month expansion streak we were in the midst of is one of the longest ever, and enters the record books with other expansions as follows (link is to ISM history going all the way back to 1948; parenthetical values are for the month following the end of each streak, the lowest value it went to during the subsequent contraction, and the number of months it took for the value to get back to 50.0 or higher):

– October 1962 – December 1966: 51 months (49.1, 42.8, 8)
– August 1975 – July 1979: 48 months (49.5, 44.8, 7)
– February 1971 – August 1974: 43 months (46.2, 30.7, 12)
June 2003 – October 2006: 41 months (49.5, NA, NA)
– August 1986 – April 1989: 33 months (49.3, 45.1, 12)

If you want a silver lining, the November reading ties with 1975-1979 expansion for the highest-value streak-breaker.

In retrospect, considering the awful situation with the Big Three in Detroit and the dropoff in housing sector activity, it’s amazing that the streak lasted as long as it did. The length of the streak is probably a testament to the underlying strength of the rest of the manufacturing sector. If that assessment is correct, considering that both of the laggards (autos and housing) may have bottomed out, I would not be surprised if the ISM reading drops very little beyond where it has gone, and stays below 50 for a much shorter time period than after the previous lengthy expansions.

_____________________________________

UPDATE: As noted, I wrote the above while deliberately NOT looking at any media reports about the manufacturing index results.

Zheesh, I must have been out of my mind in my analysis, because it seems from press reports that the world as we know it is coming to an end:

From AP:

In a report that points to a worrisome trend for the economy and for jobs, ISM said its manufacturing index registered 49.5 in November, behind October’s reading of 51.2. The last time the sector contracted was in April 2003. A reading below 50 indicates contraction.

The sector had been growing for 41 consecutive months.

November’s index came in below the average analyst expectation for a reading of 52.

The index was one of two troublesome economic reports Friday. The Commerce Department said construction activity in October plummeted by the largest amount since 2001, and home building fell for the seventh month in a row.

Both reports raised concerns that the economy may be in for a hard landing.

The report waits until the last para to tell us:

While the overall manufacturing sector contracted, eight industries reported growth in November. They included apparel and leather; plastics and rubber; primary metals; food, beverage and tobacco; computer and electronic products; printing; chemical products and the miscellaneous category.

But the ISM’s report covers 18 industries. The other 10 are:
– Textile Mills;
– Wood Products;
– Paper Products;
– Petroleum & Coal Products (NOTE: this one came in “neutral,” per ISM);
– Nonmetallic Mineral Products;
– Fabricated Metal Products;
– Machinery;
– Electrical Equipment, Appliances & Components;
– Transportation Equipment;
– Furniture & Related Products;

So, almost half of manufacturing (8 sectors of 18) is still in expansion mode, one sector is neutral, and 9 are contracting. This is how you get to a reading that is almost neutral (49.5). That actual situation makes the “hard landing” reference above, and the following comment from a different AP report, seem pretty absurd:

“This is just additional confirmation that the economy is not only slowing but quite possibly going into a recession,” said Hugh Moore, a partner with investment firm Guerite Advisors. “It’s not just the housing and auto industry any longer, now we’re finding out that manufacturing in general is slowing.”

Moore said an ISM number below 50 has preceded every U.S. recession since the 1960s.

Oh, for cryin’ out loud, Hugh, the number has been below 50 during a lot of NON-recessionary periods too.

As to that construction spending report (link is to a third AP article), a closer look reveals that the weakness is still confined to residential housing. Government-related construction increased 0.8% during the month (about 10% annualized), and “non-residential building was still 16.4 percent above the level of a year ago.”

Those who believe that there is a comprehensive political meme behind the reporting may sense that the economy is being set up to look bad, so that the new Congress can “come to the rescue” when it takes control in January. I’m not ready to contend that just yet, especially because it seems that the Christmas shopping season is on its way to strong results, but be on the lookout.

UPDATE 2: Take it for what it’s worth (because I don’t know the degrees of the expansions and contractions), but the sectors reported as expanding made up a bigger percentage of the manufacturing portion of GDP than the sectors that were contracting (I split the neutral sector between the two):

ISMexpVcontract
(information courtesy of ISM’s Rose Marie Goupil)

Lending Reform Legislation: Strange But Proper Bedfellows

One of the promises that supposedly enticed many who supported Bankruptcy “Reform” in April of 2005 to vote as they did was that since the financial industry had basically gotten what it wanted in the bill, something would be done about abusive lending practices “later.”

“Later” was meant to mean during the 109th Congress. “Later,” as anyone could have predicted (and yours truly did), never happened.

Thanks to the 109th’s inertia, this gives the 110th’s new majority a chance to work on, pass, and take credit for credit card abuse legislation such as that advocated by the quite liberal Center for American Progress (CAP) and identified/reviewed yesterday by Jeff at Credit/Debt Recovery (web link not available, though the American Bankruptcy Institute has a “cold fusion” link that doesn’t work and will hopefully get fixed; Dec. 2 — here it is). The problem is that CAP, though its rhetoric is a bit over the top, is advocating common-sense measures that both I and Jeff agree with, and that I believe any free-marketeer with a sense of perspective should support.

The key measures:

(1) enact legislation to ban retroactive application of interest rate increases so credit card companies can no longer raise a customers’ interest rate and then apply that higher rate to earlier purchases;

Basically, what reformers want is to say that “a deal’s a deal.” So of course I agree with this, with the “exception” that if the customer agrees to a variable rate pegged to a lending index (e.g., “Prime Plus 2%”), that rate CAN go up with the index, even on previous purchases. This is consistent with how other variable rate loans are treated. I also believe that if a borrower’s credit situation deteriorates, the lender should be able to lower credit limits and close accounts (i.e., prevent future charges) at their discretion, with adequate notice.

(2) ban the practice of universal default to prevent credit card companies from changing the terms of a card based on a customer’s experiences with another issuer.

Doh. I’ve been railing about the outrageousness of “universal default” for quite some time. As Moderate Mainstream has roughly said (but I can’t find the link for the exact quote), “Your landlord doesn’t raise the rent because you’re late with your electric bill.” (Don’t give ‘em any ideas.)

(3) ban what it deems to be abusive and excessive fees (such as unilateral over-the-limit fees when the issuer approved the over-the-limit transaction, and processing fees when consumers pay their bill by phone or online).

What Jeff said here is really good: “It’s an act of fraud for a creditor to approve a purchase and then charge the consumer a fee for going over the limit. I’m a little less sure about processing fees. If it’s a lot cheaper for the creditor to process payments by mail, I don’t see why they shouldn’t charge a fee for payments by phone. That is, if the consumer is talking to a live operator.”

I would go a little further and say that if finance charges are the only reason you went over your limit, and you pay your balance down below the limit by the next due date, there is NO justification for an over-the-limit fee.

The last two of CAP’s ideas, to improve disclosures and strengthen the FDCPA (Fair Debt Collection Practices Act), don’t grab me. Disclosures won’t end up being as complex or lengthy if the first three items are enacted; some of the disclosure ideas I have seen ether have a “cure worse than the disease” look to them, or appear to be close to babysitting. The biggest problem with debt collectors is that they violate existing laws, which I believe are adequate if enforced; making the penalties for continuing to do that tougher would make more sense that piling on additional laws that would also be ignored without tougher penalties.

If a Democrat-majority Congress passes legislation limited to these five items, President Bush would be out of his mind to veto it. Otherwise the prediction I made last year when I suggested that he veto bankruptcy “reform” might actually come totally true:

As a political calculation, the (bankruptcy) bill is a disaster that has the potential to jeopardize much of the rest of the GOP agenda during the rest of your presidency, cause the GOP to lose the White House in 2008, and leave the party of Lincoln in the political wilderness for years to come.

Veto sensible lending reform, and it will indeed be “hello, wilderness” time.

If You Do Something Illegal, and You Post the Proof, Guess What?

Filed under: Taxes & Government — Tom @ 6:20 am

You’ll get arrested (HT Techdirt):

OSLO, Norway (AP) — Police took up pursuit in cyberspace after a young Norwegian posted on the Internet video of his wild car driving. Following an electronic trail that he left online, police caught him and slapped him with real-life fine $1,300.

The Norwegian, identified only as a man in his early 20s, posted the video called “Driving in Norway” on Google Inc.’s popular video-sharing site YouTube. The recording showed the car’s speedometer hitting up to 150 miles – 240 kilometers – per hour on a public highway near Oslo.

Has Public Support of Pro Sports Franchises Reached Its Limit?

Seattle, for one, has answered in the affirmative:

November’s elections brought a small, but encouraging bit of news for disbelievers of the proposition that government exists to advantage the already advantaged. Voters in Seattle overwhelmingly approved a ballot measure ending taxpayer subsidies for professional sports franchises.

The tide began to turn against public financing of athletic facilities when the Seattle SuperSonics basketball team’s previous owner offered to put up a mighty $18 million to renovate KeyArena, on condition that the city kick in $200 million. Following the defeat at the polls, Clayton Bennett, chairman of the team’s present ownership group, whined that the city had turned its back on the National Basketball Association. Residents now widely expect the Sonics to decamp for Bennett’s home base of Oklahoma City.

For cryin’ out loud, KeyArena was just totally rebuilt in 1995!

The link at TCS Daily is worth a full read.

Ho-Hum Hiring Headline (120106)

Filed under: Business Moves,Economy — Tom @ 6:10 am

From not far south of Knoxville, TN:

Ground broken for plant expansion, to add 500 jobs

MARYVILLE, Tenn. Japanese auto components maker DENSO has broken ground for its plant expansion in Maryville.

Site preparation is nearly completed and construction is about to begin on the expansion. The plant personnel chief says DENSO will begin hiring almost immediately, so workers will be ready to go when the plant is.
Senior Vice President James Woroniecki says the most of the 500 new jobs at the expanded plant will be assembly jobs. He says the plant is highly robotic and employees must have practiced skills to run it.

Hispanic Family Values?

Filed under: Immigration — Tom @ 6:05 am

Not exactly. Read Heather MacDonald’s article. Major misperceptions are busted.

Positivity: Woman Is Oldest Known Survivor of Spinal Muscular Atrophy

Filed under: Positivity — Tom @ 6:00 am

The next time I’m feeling sorry for myself or whining about something that’s unimportant in the grand scheme of things, I’ll think of Amy Macak (related video is at link):

November 14, 2006 – Amy Marquez has done more than beat the odds. She is the oldest-known survivor of a debilitating medical condition. And she has amazed her doctors by living a normal life as a wife and the mother of two.

Fourteen years ago, as a camper, Amy Macak had beaten the odds against her many times over. At 21, her lifetime had been spent coexisting with spinal muscular atrophy. Even so, she earned an associate degree with honors and a place on the national deans list. But her biggest challenges were ahead of her. Today she is 35, married to Steve Marquez, and a mother who has given birth to two girls.

“To our knowledge I am the oldest living with that condition. It will not improve at this point. There are no medication or drug treatments to either stop the progression or improve it,” said Amy Marquez.

A resident of McHenry, she ultimately earned a degree in psychology and criminal justice, then eight years ago married Steve Marquez.

“She was like no one I had ever met,” said Steve. “Easy to talk to, someone that understood me, but she’s got a lot of fire, she likes to keep going.”

Rounding out the family are 2 1/2-year-old Harley and 7-year-old Danielle.

“She’s very special to me and I think she’s a very special mom to me and I like her a lot,” Danielle.

Those afflicted by spinal muscular atrophy type one do not survive beyond 2 and rarely to age 12.

“Doctors look at us like we’re a miracle,” said Amy. “They’re amazed that things went so well.”

“She’s good for me. She keeps everything together. She makes everything run smoothly,” said Steve.

‘In the end, this is the life I wanted, and whether I’m disabled or not, I can never let that stop me from getting what I wanted, and that’s why I live now the life I have,” Amy said.