Thursday, January 19, 2017

GRINCH THAT STOLE THE SANTA KLAUS RALLY

As the so-called Trump Rally went on for the stock markets, I began to wonder if the Trump Rally was simply borrowing the Santa Klaus Rally?  Well that seems to be the case.  The Santa Klaus Rally wasn't negative but it was barely positive (see figure).

Traditionally the Santa Klaus Rally is the last three trading days of the old year and the first two trading days of the new year.  On this basis, the S and P 500 started the Rally period at 2268.88 on December 27, 2016, and ended it at 2270.75 on January 4, 2017 or an increase of  +0.082%.  The figures for other indices are: +0.19% for both the DJIA and the NASDAQ Composite, +0.58% for the NASDAQ 100, and +0.74% for the Russell 2000.


(Click on figuire to enlarge)

Another piece of Wall Street lore is that the first five trading days of the new year show you how the year will go on stocks: if positive, the year will be positive and, if negative, the year will be negative.  So how did it do.  I'm pleased to say it did pretty good.  The S and P 500 gained 1.34%.  The DJIA gained 0.63%.  The NASDAQ Composite gained 2.76%,  The NASDAQ 100 gained 3.31%; however the Russell 2000 gained only 0.02%.

Though this indicator is positive for 2017, we need to remember that 2016 started as the worst ever period for stocks although the year ended up quite good.  Also consider that most years are positive for the stock market so you would on average do well if you just stayed in the market year after year, called "long-term buy and hold."

* http://www.cnbc.com/2017/01/18/narrowest-dow-range.html
http://www.cnbc.com/2017/01/18/business-euphoria-over-trump-gives-way-to-caution-confusion.html

Tuesday, January 17, 2017

DONALD TRUMP AND RUSSIA

President-Elect Donald Trump is full of praise for Vladimir Putin and trying to destroy our intelligence agencies, especially the CIA, to say nothing of NATO.  Putin is slamming those who criticize Trump.  Clearly Trump is some sort of asset of Russia, perhaps unwittingly, but an asset none the less.   Putin has Trump all covered with syrup without Trump noticing he has tipped the pitcher. Putin could hardly contain himself in his actions to maneuver Trump.  Many have noted that Putin is the one person whom Trump never criticizes.. Putin must be laughing wildly at his luck,  This is far more than just trying a reset with Russia and very, very scary.

Should Trump succeed in his attempt to destroy the CIA and many veteran agents leave the organization, we will be, in a manner, defenseless while new hires get experience.  We are depending now on veteran employees of the CIA to be so patriotic that they will stay.  I'm not sure what the outgoing Director of the CIA (John Brennan) means when he says that Trump has crossed a line, but it doesn't sound good.

If a number of the nominated cabinet members mean what they are saying in their nomination hearings, we will heavily depend on them to preserve the nation.

I also am wondering if the Republican's and Trump's attack on health care, among other things, will revitalize something like the demonstrations against the Vietnam War.  The Women's March is expecting more than 200,000 demonstrators on Saturday though well short of the million that was their original target.

Building the wall on our Southern Border has become a trivial issue.  To paraphrase what Sen. McCain said years ago about the border fence," build the dang wall."  At least it will provide temporary work for a lot of employees in the construction industry, except we are told there is not much slack there.

Saturday, January 14, 2017

BORDER ADJUSTMENT TAX

The latest thing is something called a Border Adjustment Tax that is creating quite a row among Republicans.*

Currently, U.S. corporations are taxed on their worldwide profits at 35 percent. The House GOP plan would change that radically.
The new tax formula would tax domestic revenue (minus domestic costs) at a much lower rate of 20 percent. The net effect would be one that favors exports over imports.*
So the costs of importing goods would be wold be higher because you can't deduct the cost of the import:

But economists who support the tax say the policy would lead to a sharp rise in the value of the dollar — anywhere from 20 percent to 25 percent. As a result, retailers' costs will go down so much that it will be a wash to consumers, they say.

I have no opinion on this - whether it is good or bad - as it is above my pay grade, but it is something we should know about. You can read up on a few opinions.**

* http://www.cnbc.com/2017/01/10/what-is-a-border-adjusted-tax-mean-and-will-it-happen.html
http://www.cnbc.com/2017/01/13/forget-obamacare--heres-the-real-republican-civil-war.html
** https://danieljmitchell.wordpress.com/2016/09/28/shocker-paul-krugman-makes-a-sensible-and-accurate-observation-about-tax-policy/

Friday, January 13, 2017

FATHER-IN LAW -- SON-IN-LAW

I find it endearing that Donald Trump seems to have such high regard for his son-in-law Jared Kushner.*  I agree that he should be allowed to be an official adviser to President Donald Trump and have an office next door.  Heck, let him have a desk in the Oval Office.

I don't know much about Jared Kushner, so in a way I'm flying blind, but I presume he is more rational than his father-in-law.  He seems to want to pursue a political career.  I have to wonder if Trump's sons are a bit jealous of Kushner's closeness to their father.  Trump also seems to favor Ivanka, his daughter.  Perhaps letting the sons run the Trump empire will make up for it somewhat.  Of course they are not supposed to talk to their father about the business.  Ha, ha!

Kushner's brother Joshua** runs a health care business in New York called Oscar.  This may help Kusher moderate Trump's view on Obamacare.  Trump has said he wants the replacement to come shortly after the repeal, essentially simultaneously.  Joshua is said to have not voted for Trump.

Republicans want to get Obama's name off the health care law very much which after all has the acronym of ACA (for Affordable Care Act).  Obama is willing to have his name removed, but the media won't let it happen.  After all, the ACA IS largely the conservatives health plan which is why they are having such a problem coming up with a replacement.***  They didn't vote for it out of spite as a part of their political scorched Earth policy.

The ACA was supposed to get insurance companies to compete with each other; however, they have avoided this by backing out of the plan so that there is only one company to choose from in most places.  Various Republicans have wanted health insurance to be national where it is now run by each state.  This presumably would make health insurance companies compete.  This suggestion is interesting because it goes against state's rights.  But I'm for it.  In fact I am in a national plan that is voluntary and covers preexisting conditions.

Kushner may help Trump from being impeached.  What for?  Well, it could be a lot of things, but his too, too friendliness with Putin may eventually do it.  In fact one comedian asked if one could impeach a President-Elect before he gets into office.

Frankly, I think Trump is safe at least until he names a Supreme Court Justice, where the Republican establishment dearly wants input more than anything.  So far they have gotten their way on the cabinet appointments.

In addition to his over friendliness with Putin, Trump seems on a track to destroy the U.S. intelligence agencies, especially the CIA.  This makes me very nervous if a large number of the veteran CIA agents leave.  It is rumored that many are getting their resume's ready.

There is a lot of attention being made of the Russians having a dossier on Trump that includes unverified accusations of Trump being attended to by some "ladies" while he was in Russia.  I'm sure that the Russians have a dossier on Trump but not sure about the "ladies."  The trouble is that we know Trump is a womanizer and that he talks big on his sexual possibilities from the tape on the bus, so the accusations are not too wild.  But who knows for sure?  I also  wouldn't put it past Putin to have pictures rigged.

It is hard for me to see this ending well.

* https://en.wikipedia.org/wiki/Jared_Kushner
** https://en.wikipedia.org/wiki/Joshua_Kushner
*** Mitt Romney's in Massachusetts was slightly more conservative than a plan put forth by Richard Nixon.  The ACA is slightly more conservative than the Massachusetts plan.

Sunday, January 8, 2017

WHY DID VOTERS REACT SO DIFFERENTLY TO THE GREAT RECESSION?

The economy has been good for a number of years and increasing good as time goes on.  I have wondered why so many white working men are so angry that they nominated and voted for Donald Trump?  I'm not alone in concluding that we are dealing with a hangover from the Great Recession (http://stopcontinentaldrift.blogspot.com/2016/12/the-great-recession-vs-great-depression.html).  Normally people feel good and optimistic when things are getting better, even from a low level.  The problem is that people are not feeling the increasingly good economy.  I even have a post considering this very thing (http://stopcontinentaldrift.blogspot.com/2016/09/how-good-do-things-have-to-get-before.html).

And why did the voters react so differently to the Great Recession when they became so angry?  In the Great Depression, there was anger at the Republican party in power when the recession started (Herbert Hoover).  Starting with the 1932 Presidential election of Franklin Roosevelt, the U.S. went for nine elections with the Democrats in power for seven of them, broken only by the election twice of a hero who picked being a Republican over a Democrat (Gen. Eisenhower).  The anger following the Great Recession that also started under a Republican President (George W. Bush); however, was focused on the party in power during the recovery (Barack Obama).  My projection is that Barack Obama will eventually be noted for being President during the Great Recovery.

The WSJ has a most interesting presentation on jobs and wages.*  All the seven figures presented are very good and I suggest you look at the  entire article.  Below I'll present two of the figures.
The U.S. economy added 156,000 jobs in December, the unemployment rate was little changed at 4.7% and wages grew at the strongest pace since 2009. Here’s a closer look at how that compares.
Job growth slowed in December, as employers added fewer jobs than economists surveyed by The Wall Street Journal had expected. But it was the 75th straight month of job creation, in the final full month of President Barack Obama’s term. That marked the longest stretch of job growth on record back to 1939.
In the figure, you can see that the employment decline bottomed in 2010  with employment starting to rise in 2012 and  picking up steam as the years progressed.  The decline in participation rate is  not understood and can be only partially explained by retirement of Baby Boomers, the oldest of whom were 54 when the decline started.  It started a long time ago in 2000, flattened in 2004-2007 and resumed and steepened during the Great Recession.  Note the decline in job participation rate that may be flattening in recent months.
(Click on figure to enlarge**)

After wages bottomed in early 2012 they continued to rise slowly.  Thus beginning with 2015, wage gains started to increase at a good clip (See figure**); yet the increase did not seem to be felt by voters, nor the media for that matter that continued to comment on the slow recovery.


(Click on figure to enlarge.**)

* http://www.cnbc.com/2017/01/06/unemployment-rose-in-december-but-a-more-realistic-rate-is-even-higher.html
** http://blogs.wsj.com/economics/2017/01/06/the-december-jobs-report-in-seven-charts/
*** http://www.cnbc.com/2017/01/05/us-weekly-jobless-claims-dec-31-2016.html

Thursday, January 5, 2017

TEENAGER (Poem)

(Stimulated by The Late Patricia Clark)

In my old age
I enjoy doing things
That I missed out on
In my youth.

Being a teenager
In my second childhood
Is much better
Than the first.

December 14, 2014

Wednesday, January 4, 2017

ITEMS WITH THE MOST PAGE VIEWS AND MY FAVORITES - VI

Herein is my sixth annual summary of posts on my blog "Reunite Gondwanaland."  As of the end of 2016, the blog had 51,000 page views and contains more than 700 items of which more than 170 were published in 2016, compared to 120 in 2015 that was a few greater than 2014's 111.

Much to my surprise, the posted article with the most page views, all time, is titled simply "Infrastructure Program" with more than 440 page views (My first post to top 400 page views) (http://stopcontinentaldrift.blogspot.com/2016/11/infrastructure-program_23.html).  Number two on the list is titled "Detroit ?" that appeared on October 26, 2016 (http://stopcontinentaldrift.blogspot.com/2016/10/detroit.html) with more than 350 page views published in October of 2016 (It was actually my first post to top 3page views).  Number 3 of the top ten is the "Break Even Price Of Fracking" with 297 page views from October  8, 2014 (http://stopcontinentaldrift.blogspot.com/2014/10/break-even-price-of-fracking-oil.html).

Also joining the select list of posts with more than 200 page views is a biographical piece titled simply "Enabling" with more than 220 page views  and posted on October 10, 2016 (http://stopcontinentaldrift.blogspot.com/2016/10/enabling.html).  There are four other biographical pieces with more than 200 page view which, in order of the decreasing number of page views are: "My Maternal Grandmothers" (October 7, 2013), "You Are So Lucky" (November 23, 2009), "Tea Cup Seismograph" (August 12, 2014), and "Muammar Qaddaf And Me."

Rounding out the top 10 viewed posts of mine on the blog, surprisingly, is a very short piece called "What Does This Mean?" from September 28, 2012 with more than 210 page views.  The piece is so short that I reproduce the text here in its entirety: What can you say about a nation that opposes unions  for teachers, firemen, and police, but supports the professional National Football League referee's union?  Are our priorities straight?

There is a section on Poems By Others on the blog.  In this small collection is a fun poem by Ogden Nash that I have called "Fossils" from January 9, 2013.  It has racked up more than 560 page views.  There are many ways to see this poem on the internet so I am rather surprised to see so many people found it on my blog.  It is a good one for sure.  It was included in the music for Carnival of The Animals by Camille Saint-SaĆ«ns.  You may hear this music at: https://www.youtube.com/watch?v=wBGEf4urGNo

People are making use of my Table of contents now with more than 1,440 page views (http://stopcontinentaldrift.blogspot.com/2011/07/reunite-gondwanaland-november-2009-2016.html)

Though all the above is gratifying, my own favorites depart from my "winners" to some extent.  I feel that the best post I ever wrote is "Effectiveness of Taxes"  (http://stopcontinentaldrift.blogspot.com/2010/05/effectiveness-of-taxes.html). This appeared May 7, 2010,  is listed as receiving 124 page views, not bad, but also not in the top 10 and. Basics of Bureaucracy [http://stopcontinentaldrift.blogspot.com/2011/07/basics-of-bureaucracy.html] with 134. In the former, I point out why decreasing taxes on individuals is an inefficient way to stimulate the economy. I liked this so much that I refer to it in three other pieces. In the latter that was written many years ago, I give some real rules of dealing with bureaucrats in a humorous fashion.

New to this group is a series of posts of three posts examining the Great Recession Vs. The Great Depression (http://stopcontinentaldrift.blogspot.com/2016/12/the-great-recession-vs-great-depression.html; http://stopcontinentaldrift.blogspot.com/2016/12/great-recession-versus-great-depression.html; and http://stopcontinentaldrift.blogspot.com/2016/12/great-recession-versus-great-depression_9.html) .  Here I note how dangerous financial collapses are relative to recessions and the Great Recession involved a financial collapse somewhat like 1929.  There is a dangerous hangover from financial collapses.  After the 1929 financial collapse many people turned to Soviet-Style Communism, fortunately not enough to alter our political system.  In the 2008-2009 financial collapse, people turned to Donald Trump, not truly a member of either political party (Democrats or the establishment Republicans).  It is yet to be seen how this turns out.

Let me give two Honorable Mentions. I wouldn't say this is a favorite of mine, but it can be important to some, i.e. Preferred Stock Investing [http://stopcontinentaldrift.blogspot.com/2011/11/preferred-stock-investing.html]. I have invested for about 60 years, but never got involved in preferred stocks until the last decade. I would also like to mention one poem Upon the Second Anniversary Of Apollo 11, the first landing on the Moon [http://stopcontinentaldrift.blogspot.com/2010/01/upon-second-anniversary-of-apollo-11.html]. Normally a couplet or more just pops into my mind and I construct a poem around it. The second anniversary of Apollo Eleven, however, was little noticed which I thought was terrible so this was the first time I sat down to compose a poem from scratch.

 Also among poems, my favorite couplet that I have ever written is in  "So How About An Asteroid" (Poem) [http://stopcontinentaldrift.blogspot.com/2011/07/so-how-about-asteroid-poem.html]:
Who could possibly be annoyed
About the study of an asteroid.

My favorite stanza is from  "On Age 82" (Poem) [http://stopcontinentaldrift.blogspot.com/2013/09/on-age-82-poem.html]: 
I do not text
And do not tweet
I'm 82 years old
Feeling kind of beat.

http://stopcontinentaldrift.blogspot.com/2016/04/items-with-most-page-views-and-my.html