Thursday, October 19, 2017


Today (October 19th, 2017) is the 30th anniversary of Black Monday when the DJIA plunged more than 20%.  so naturally people are looking for a sign that we are there again.  Attention has been drawn to the similarity of the S&P 500 stock price rise and 1987.  What they don't knte is the on the Friday before Black Monday was a dark Friday.  If you carefully look at the figure,* you will see a sizable drop in the S&P 500 before the biggie.  This we haven't seen.  In fact, the S&P 500 was already on a general downtrend for at least a month before the biggie.  The peak was hit in July.

Even if we do have a crash, we should remember that both the DJIA and the S&P500 were up around 3% for the year, not great but certainly not bad.  somehow that doesn't get mentioned.

While the S&P 500 has been hitting new highs lately, it is creeping up and not jumping up (not obvious from the figure).

One interesting thing going on right now is not only are American companies earnings very good, but there is an increasing global economy that should be good for U.S. multinational companies.  While I don't believe that market will go straight up (today's drop doesn't surprise me), I stick to my forecast for the year that the indices will creep to new all time highs  during the year.


Wednesday, October 18, 2017


We seem to have entered a time where the lights are going out in America.  They already are in my state of North Carolina with our HB-2 legislation where transgender people must go to the bathroom of their birth.  so far as I know, I have never met a transgender person,r in a bathroom, locker room, or elsewhere.  I have even been places with unisex bathrooms where men an women do their thing in the same bathroom together.  Though at first I felt uncomfortable, I quickly got used to it.  I mean you can go into stalls and close the door can't you?

I'm not sure when it started.  Maybe with the Supreme Court decision of Citizen's United where it was ruled that companies are people.  Chairmen of the Board and CEOs  (usually the same person) not only could make their personal contributions to politics but that of their companies as well and didn't even have to tell their stock holders (allegedly the owners) what they were doing.  Well maybe some of the major stock holders know.

But is was clear when the Supreme Court ruled that owners of a privately-held company could pick and choose what parts of a law they wouldn't obey based on their religious beliefs - the Hobby Lobby Case.  In the case in question it was including contraceptives in health insurance under the ACA health law.  It was clear that the division between church and state was over.

Mind you, there was already an exemption for religious organizations to comply with the contraceptive issue for their own employees.  The problem was that the Federal government would take care of the matter so that the company could be guilt free, but The Little Sister's of The Poor weren't satisfied and sued the government.  The Supreme Court ruling was that the two sides should work out something.

Now our President has sided with the Little Sister's Of The Poor and religious groups won't have to comply with the law.  In theory of course, you don't have to work for religious organizations like the privately held Hobby Lobby or the Little Sister's Of The Poor and about 200 other religious organizations.  So now, the president, not surprisingly, is allowing all lawsuits claiming they should not have to obey the contraceptive provision of the ACA because of the religious beliefs avoid any Federal workaround.

Weirdness over contraceptives has been around for some time.  The paleo-religious have even invented the view that a fertilized human egg deserves personhood and doing anything that might not bring this personhood to birth should be against the law.   Notice that the definition of pregnancy is when a fertilized egg  has attached to the womb wall.  This procedure can take days, even a week or more so there are plenty of opportunities for something to happen to prevent the pregnancy.  A woman could pass the egg, for example.  I have not found any studies on this, admittedly they would be difficult, but I suspect this is what happens in most cases.  But there are drugs a woman can take to ensure that the fertilized egg does not adhere to the womb wall such as the Morning After pill.  This is what the paleo-religious are after.

So what does this mean?  Do women have to collect any passed eggs to see if they are fertilized and if they are to name them and give them a proper burial?  Our Vice-President was after something like this with aborted fetuses, i.e. that the must be given a proper burial by law.

Where all this will end up, I don't know.  Still, we are a long way from ISUS that would throw gay men off a building top and murder fornicators.  I believe in the early days of our country, there were laws that you had to go to church and there were people there to ensure you didn't go to sleep.  There is the statement, "There is freedom of religion, not freedom from religion."  Of course there is an exception to this for Muslims in America.  Will they be required to convert to Christianity.  If they refuse, what happens?  And what happens to Jews?

As for Gays, there are Evangelicals who will quote you verses in the Bible that say we should kill homosexuals.  The "liberal" Evangelicals say "Not yet, they should be first be given a choice to recant."  As if they can.

How far will this develop?  We have a political party where all their Representative, Senators and, even, the President oppose abortion - 100%.  They could have passed a law without Democrats that removed the contraceptive provision from the ACA.  Why didn't they? Why did they rely on the Supreme Court for this legislation?

Monday, October 16, 2017


Lobbyist Bruce Mehlman sees a similarity between today, and what is known as the Gilded age of the 1890s:*
He likens Facebook’s Mark Zuckerberg, Google’s Larry Page and Amazon’s Jeff Bezos (who also owns The Washington Post) to captains of industry like Andrew Carnegie, John D. Rockefeller and Cornelius Vanderbilt.*

“Back then you had iconic innovators who built these dominant companies and amassed great fortunes. You've got that again today,” Mehlman explained in an interview. “You saw income inequality spike. The last time it was as high for the top 10 percent as it is today was the Gilded Age. … In politics, you saw a rich few increasingly dominating spending to impact elections — similar to today.”*

One thing on which I heartily agree with Mehlman is the lingering effect of the Great Recession.
President Trump’s win should be viewed partly as an aftershock of the Great Recession, just as the fear that lingered after market crashes in 1873 and 1893 affected the outcome of multiple elections.*

Perhaps Republican Teddy Roosevelt (26th President) is best known for the Expediting Act of 1903 that broke up the steel, meatpacking, oil, and railroad cartels, but he was also known for improving food safety and conservation.  The Gilded Age is usually felt to be the period from about 1870 to 1900 so Teddy Roosevelt might be said to have ended the Gilded Age.


Sunday, October 15, 2017


Our president keeps saying an untruth that we are the highest taxed people in the world.  I noted a few months ago* that is not true, but I thought that the figure below** from CNBC adds something to the discussion:

(Click on figure to enlarge)

It turns out that we are not even close to being the highest taxed though we are above the OECD average, but that is not good enough, I guess.  There are several ways to look at taxes.  Another way is to look at taxes as a percent of GDP,**  This way shows America is the 4th lowest in the world and way below the OECD average (See the figure in the first reference* and 2nd figure in the scecond reference, which are the same except for the number of decimal points).  Only Korea, Chile, and Mexico are lower in taxes as percent of GDP.


Saturday, October 14, 2017


There is worry that the stock market is getting toppy and could have a sizable correction.  One thing bolstering the stock market is that the global economy is on the rise and, of course, many U.S. companies are multinational and should be able to take advantage of this rise.*  Thus, in contrast, there are also those who say that this bull market may have more to run.**  One thing that sort of reassures me is that in setting new all-time highs in this century, the S&P 500 has changed to creeping higher rather than boldly moving higher as happened in the 1980s and 1990s.  See the figure from the reference:*

(Click on figure to enlarge)

My guess is that the current trend will continue.  I wrote earlier in this year that I thought the stock market would creep higher and that is what it is doing so long as the president leaves the economy alone.  The president temporarily talked down aircraft manufacturers, but they have recovered in spades.  Investors are always skittish.  I think Boeing is one of the best performing stock this year.

The health care stocks were hit on Friday the 13th by the president changing the rules on the ACA.  In toto, however, health care stocks have recovered nicely from a bad 2016.  I'm not sure he can do this because the subsidies he is removing are in the law.  Whether the current decrease in the value of healthcare stocks is temporary, remains to be seen.  They started to drop before Friday the 13th that may have been in anticipation of the president's actions.

The IMF upgraded its global economic growth forecast for this year by a tenth of a percentage point to a 3.6 percent annual growth rate, compared with its last report in July. For next year, the IMF expects the world economy to grow at a 3.7 percent annual growth rate. The improved outlook was driven by stronger numbers on global trade, investment and consumer confidence.*

The hurricanes are not expected to impact corporate earning much.
"Hurricanes Harvey, Irma and Maria have devastated many communities, inflicting severe hardship," the post-meeting statement said. "Storm-related disruptions and rebuilding will affect economic activity in the near term, but past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term."
New York Fed President William Dudley recently suggested that the ultimate impact of the storms actually could be a modest boost to the economy due to rebuilding activity. The "broken windows" economic theory has its detractors, but Dudley is not alone in suggesting that storm rebuilding results in some growth.***

Thursday, October 12, 2017


On the surface of it, it seemed like a good idea to get the recently retired (age 65) both Chairman and CEO of Exxon Mobile (stock symbol XOM)* to be Secretary Of State (It has become common for one person to hold both positions.).  It is the largest U.S. oil company with a world-wide span so he had a lot of experience of dealing with foreign leaders and had, at least met, many of them.

But what they had not taken into account was that Tillerson retired from being equivalent to a Head Of State whereas the President was maybe wealthier but was head of a "Mom and Pop" real estate company (with no Mom).  In more graphic terms, it was like having a General work for a Sargent.  It wasn't preordained to failure, but it is tricky.  It got off on the wrong foot  Early on there was trouble when Tillerson was not allowed to pick his own Deputy, a position I assume is currently being held by an Acting-Deputy Civil Servant.

Even by October 2017, only one of six Deputy Secretaries is filled (two are listed as vacant, i.e. not even an acting person in the position); only three of six Under Secretaries are occupied: two of the 24 Assistant Secretary positions were filled and both of those by hold overs,** surprisingly.   Only six of 10 positions equivalent to Assistant Secretary have been selected. Because the President wants to downsize the Department of State, I doubt the open positions (acting or vacant) will be filled.  I assume the offices of the positions listed as vacant are actually dissolved, but what happened to the staffs?  Have they been redistributed?

Tillerson is not communicative.  For me to know what is going on in negotiations between countries is not important, but he has also not communicated to the State Department staff about what is going on with the reorganization.  At any rate, reports are that he is unpopular with the staff and some "experts" say he is the worst Secretary of State ever.  It is said he didn't want the job in the first place, but that his wife said it was his patriotic duty.  Others say he is determined to master the job.  So there you have it.

The Secretary of Defense, the Chief of Staff plus Tillerson, however, are said to what is keeping our nation from complete chaos. (e.g. Sen. Corker).  I find it interesting that the National Security Adviser to the President is not included in the group.  I don't know what that means - though it appears he is considered ineffective?


Monday, October 9, 2017


Do you get the impression that we have entered a new age?  It seems like the days are gone when powerful men , ah, "ask" women for favors to achieve something.

Think of what has gone on even this year.  There has been the ascension of a sexual predator to the Presidency,* Bill Cosby, the male Venture Capital sex scandal,** the sex scandals at Fox News (esp. Roger Ailes and Bill O'Reilly),*** the Harvey Weinstein sex scandal**** and we are only in October.  Of course these are only the most lurid cases, and there are many others.   We are only seeing the tip of the iceberg.In the past, there are also our presidents like Roosevelt who had a mistress while he was president, plus womanizers who have "IT" like Kennedy, and, of course, Bill Clinton.  We didn't know about Roosevelt and Kennedy until after they were dead.

One of scandal of note is the anti-abortion Repub. congressman Tim Murphy case who urged his mistress to get an abortion (  This is more funny than anything because there is no indication the mistress was forced to be a mistress.

The idea is going around that that men knowing to be womanizers should have their political donations returned.  What they don't seem to realize is that most large political donations by men would have to be returned.

Some men run scared of being accused of a sexual harassment (  I know because when I was in a stage of my career and was the first- or second-line supervisor of 120 to 140 people (depending on the number of temps), I ran scared.  I used to have my administrative assistant (a woman) in the office when I was interviewing or having to discipline a woman employee.  As it was three times in five years I was accused of sex discrimination (but not harassment).  I managed to survive these.  Of a different note, I was accused of "gross misuse of trust" by the safety officer for not shown monthly safety movies to my employees.  This was right after I had received the Safety Manager Of The Year Award!  I won't go into the details because this is a side issue of this post, but I began to feel like big Julie, the guy in Guys and Dolls, who said he was a law abiding citizen, "... as has been proved by my record: Thirty-three arrests and no convictions!."

Sexual harassment is something I never approved of  because in my youth I had a very tight moral code; still, I can think of incidents where I might have been accused of sexual harassment.  I write some more about this in my piece "Some Men Have It, Most Don't" (  Women never seemed to have any qualms about telling me to get lost.  But then I not only did not have ""IT" but was not a powerful man.