Upon Further Review -- Oh, Oh -- The Jobs Report -- October 4, 2014; Subtract Texas' Hiring Gains And US Jobs Report Still Down From 2008; Germany Energy Policy And Rube Goldberg; Joe Biden: I Started A Joke

Yesterday:

The September jobs report was huge; it was the first time in six years the rate has dropped below 6.0%.

How do we get to 5.9%? Easy: remove 93 million people from the labor force.

While by now everyone should know the answer, for those curious why the US unemployment rate just slid once more to a meager 5.9%, the lowest print since the summer of 2008, the answer is the same one we have shown every month since 2010: the collapse in the labor force participation rate, which in September slid from an already three decade low 62.8% to 62.7% - the lowest in over 36 years, matching the February 1978 lows.

And while according to the Household Survey, 232,000 people found jobs, what is more disturbing is that the people not in the labor force, rose to a new record high, increasing by 315,000 to 92.6 million!

Now, today, in this week's issue of BloombergBusinessweek (it will be on newsstands Monday): "In many states, jobs aren't coming back."

• subtract Texas' hiring gains and the US is still down from 2008
• "this is not like any other recovery. There is a tremendous disparity."

Those are the two bullets headlining the story in the October 6 - 12, 2014 issue of BBW, page 20.

The article starts out:

Kevin Yearout has added about 80 jobs at his Albuquerque contracting company since July 2013. That still leaves him with fewer than half the 750 workers he employed in 2009..."

Another data point:

• 29 states have not recovered all the jobs they lost in the recession 

This is the regional disparity (change in regional GDP, 2010 - 2013, rounded):

• Southwest (TX, NM, AZ): 13%
• Rocky Mts (MT, ID, UT, WY): 9%
• Great Plains (ND, SD, MN, IA, NE, KS, MS): 7%
• Far West (CA, NV, WA, OR): 7% -- this is actually quite surprising
• Great Lakes (MI, IL, IN, OH, WI): 5%
• Southeast (a bunch of states, including FL, VA, NC, SC, GA): 4%
• New England (ME, NH, VT, MA, CT, RI): 4%
• Mid-Atlantic (NY, PA, NJ, MD, DC): 3% -- the president's backyard

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Upon Further Review -- The Germany "Green" Miracle

This is quite a story. Think of a Rube Goldberg cartoon when reading the story:

1) because of the Japanese debacle, Merkle turned off the nuclear energy switch a few years ago and made the decision to go "green" 
2) German utilities are going broke because of net metering and renewables
3) to survive, or make a profit, the German utilities must use cheap coal -- even cheaper than natural gas
4) Russia shutting off Europe's main source of natural gas due to sanctions
5) German utilities have little recourse but to use coal to survive (Russia cutting natural gas deliveries; fracking not allowed in much of Europe; nuclear energy verboten)
6) German utilities, to survive, or make a profit, are generating more electricity than the country needs, using cheap coal 
7) to survive, or make a profit, German utilities are selling their cheap, excess electricity made from very dirty coal to countries like the Netherlands, destroying the natural gas industry there (remember the article on the Netherlands and natural gas?)

and, the result, the Rube Goldberg outcome:

a paradox of Germany's "Energiewende," the energy revolution aimed at weaning the country off fossil fuel by 2050, that CO2 emissions were now rising despite the rapid expansion of solar and wind power. In 2014, the surcharge on electricity bills will provide some $30 billion of subsidies for renewable energies. A four-person household will pay a surcharge of almost $275 this year.

Perception is important: the Germans and the world think highly of Ms Merckle, but it certainly seems she took the wrong fork in the road. 

Der Spiegel is reporting:

In 1990, Germany's brown coal-fired power stations produced almost 171 billion kilowatt hours of power. At the time, many old eastern German plants were still in operation.

It was a situation that the German government wanted to change, with the aim being that of radically reducing the output of the CO2-polluting lignite plants, but that's not happening.

In 2013, it rose to 162 billion kilowatt hours, the highest level since reunification in 1990.

As a result, Germany's CO2 output is expected to have risen in 2013, even as power from renewable sources has reached 25 percent of the energy mix. [That's quite a feat.]

Part of the reason is the low price of CO2 emissions permits in EU trading scheme. Another reason is that new brown coal plants, with a capacity of 2,743 megawatts, came on line in 2012, far exceeding the 1,321 megawatts from old plants shut down that year.

"Brown coal power stations, after nuclear plants, are the main source of profit for RWE and Co.," said Höhn, referring to Germany's major utilities. "So they don't even switch off the really old power stations."

Power output from anthracite coal also rose, by eight billion kilowatt hours to over 124 billion, while output from gas-fired plants fell by 10 billion to 66 billion. That means that coal plants are making up for the bulk of the energy production lost due to the 2011 shutdown of eight nuclear plants, while gas plants, which emit less CO2 but are more expensive to run, are barely profitable at present.

The increase in coal-generated power also led to a new record in German electricity exports to around 33 billion kilowatt hours.

"In 2013 Germany exported more power than it imported on eight out of 10 days. Most of it was generated by from brown coal and anthracite power stations," said Patrick Graichen, a power market analyst at Berlin-based think tank Agora Energiewende.

"They are crowding out gas plants not just in Germany but also abroad -- especially in the Netherlands."

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Bloomberg Businessweek

 
The numbers:

• 92 pages (not counting cover, back cover, inside cover, inside back cover)
• 40 pages of advertising (not counting inside cover, inside back cover, back)
• three "special" advertising sections (which I detest above all)

Full page articles, each on:

• crickets for lunch: the insect food of the future is finally here
• what I wear to work (mostly a full-page photo with a few boxes of text)
• how did I get here (Facebook timeline of Judith Rodin, President, Rockefeller Foundation)
• full page pictures introducing articles (6)
• one 3/4 page picture of Bill Gross

Unless you like advertising and photographs that add little substance, I would never recommend BBW; I only get it because I get it practically for free ($10/year); and it's delivered to the door with the Wall Street Journal. 

I track the demise of the mainstream media here.  

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I Started A Joke

I Started A Joke, The Bee Gees

The AP is reporting that the vice president was just joking; calls Turkish president who didn't get the joke --

U.S. Vice President Joe Biden apologized Saturday to Turkish President Recep Tayyip Erdogan, who was angry over comments in which Biden said Erdogan had admitted that Turkey had made mistakes by allowing foreign fighters to cross into Syria.

Erdogan denied ever saying that and told reporters in Istanbul before Biden's apology that he "will be history for me if he has indeed used such expressions."

Biden spoke with Erdogan by phone on Saturday, the White House said.

"The vice president apologized for any implication that Turkey or other allies and partners in the region had intentionally supplied or facilitated the growth of ISIL or other violent extremists in Syria," the White House said, referring to an acronym for the Islamic State group.

Wow, one really has to parse Biden's statement of apology (obviously he was taking something from a briefing, perhaps classified, when he spoke of Turkey's actions).

I can't make this stuff up. Okay, okay -- the AP didn't call it a joke, but everyone knows ...

The only question was which video to use....