August 27, 2015, Part II

Updates

Later, 12:37 p.m. Central Time: more on the 2Q15 GDP from Market Watch:

• initial government estimate: 2.3%
• economists expected it would be revised to 3.3%
• current 2Q15 estimate: 3.7%
  
• business investment stronger than expected: 3.2% vs an expected decline of 0.6%
• business investment: office buildings rose 3.1%, instead of an expected decline of 1.6%
• consumer spending (major US driver of GDP) revised very slightly upward
• corporate profits rose 2.4% in 2Q15 after declining almost 6% in 1Q15
• inflation up slightly

Whether this is "inflated," or Commerce Department massaging the numbers, guys like Warren Buffett can probably confirm / dispute the business investment numbers which seem to be the big reason for the upward GDP. With interest rates where they are now, and talk about future hikes, it's very possible, businesses are building now.

Earlier this week it was announced that US durable orders surged unexpectedly to 2% month-over-month, and that "investment demand was up sharply." The July data is in 3Q15 and did not affect 2Q15 GDP data, but it certainly suggests the trend in 2Q15 was real (unless, of course, one doesn't believe the data at the linked article). From the linked article:

The Commerce Department said Wednesday orders for durable goods — items expected to last at least three years like refrigerators and cars — increased 2 percent in July after a 4.1 percent gain in June.

Although I have trouble imagining a lot of refrigerators moving this time of year, the reports over the past few months of automobile sales have been stellar.

I can't speak for the rest of the country, but development in north Texas is quite incredible. I see it every day. Earlier this week it was reported that house prices are skyrocketing in north Texas, #3 in price acceleration, only superseded by Denver and San Francisco.

This was earlier this year:

Dallas  had the fourth highest price gain the country in February. The largest increases were in Denver, 10 percent, and San Francisco, 9.8 percent.

“Home prices continue to rise and outpace both inflation and wage gains,” S&P’s David M. Blitzer said in the report. “While prices are certainly rebounding, only two cities – Denver and Dallas – have surpassed their housing boom peaks.”

Then, remember this: they say Texas economy, especially Dallas and Houston are oil-economy-dependent. This is all happening when oil industry seems to be at the wrong side of the boom-bust cycle.

With regard to office buildings, besides all the usual stuff, there appears to be an upsurge in medical buildings. My hunch is that ObamaCare is driving urgent care facilities and clinics that can provide same day appointments.

Yesterday on the radio, newscaster -- not advertiser -- said he saw local mortgage rate of the almost-unheard of 2.98%.

Original Post

 
Jobs, by Bloomberg:

Filings for U.S. jobless benefits declined to a three-week low, indicating persistent demand is encouraging employers to maintain headcounts.Unemployment applications dropped by 6,000 to 271,000.

The four-week average of claims, a less-volatile measure than the weekly figure, rose to 272,500 from 271,500 in the prior week.

The number of people continuing to receive jobless benefits increased by 13,000 to 2.27 million.

So, to recap:

• today, August 27, 2015: a decline of 6,000
• last week, August 20, 2015: an increase of 4,000
• August 13, 2015: an increase of 5,000
• August 6, 2015: an increase of 3,000
• July 30, 2015: surges, up 12,000; this "surge," by the way, was glibly reported and glibly blown off by Reuters

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2Q15 GPD Surges 3.7%

Economy, by Bloomberg:

The economy grew more than previously estimated in the second quarter (2Q15) on bigger gains in consumer and business spending that show the U.S. expansion got back on track. A surge in inventories also signals such strong growth will be difficult to sustain in the short run. 

Gross domestic product, the value of all goods and services produced, rose at a 3.7 percent annualized rate, exceeding all estimates of economists surveyed by Bloomberg and up from the 2.3 percent the Commerce Department reported last month.

This is very, very interesting. Very interesting. Combine this with the China story and one might be able to connect the dots.

So, how's 3Q15 doing? From August 26, 2015: The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 was 1.4 percent on August 26, up from 1.3 percent on August 18. The forecast for real GDP growth increased 0.1 percentage point to 1.4 percent after this morning's advance report on durable goods from the Census Bureau. The report boosted the model's forecast for equipment spending in the third quarter from 7.7 percent to 8.9 percent, and led to a slight improvement in the contribution of real inventory investment to third-quarter GDP growth.

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Oil Prices Surge 4.5%

Oil prices, by Reuters:

Oil prices jumped more than 4.5 percent on Thursday after a rally in equity markets and an unexpected fall in U.S. crude inventories, but worries over the Chinese economy and a global oil glut kept the outlook uncertain.

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Tesla Model S Sets Distance Record: 453 Miles On A Single Charge

Forbes is reporting:

Beginning their video with the boast that they “aim to set the world record” for the most distance traveled on a single charge, two Norwegians claimed to have pulled it off in a Model S from Tesla. 

They racked up 728.7 kilometers, or 452.8 miles, during the trip that began and ended at a Supercharger in Rødekro, Denmark.

The P85D that they drove has an EPA estimated range of 253 miles.

It wasn’t a cinch.  At one point the driver says “I’m sweating like a pig” because air conditioning is a no-no when you’re trying to set a world record. And at another point, a driver exclaims that they had been “overtaken by a truck again.” That’s because driving fast is another no-no.

Commonly referred to as hypermiling, the average speed was a snail-like 39 kph or about 24 mph. And the fact that during most of the trip they had “almost no elevation” helped a lot too.  The total driving time was 18 hours and 40 minutes.

Okay, so let's re-cap:

• flat terrain (they would have gone further had they started at the top of the Alps and coasted to the Mediterranean Sea)
• no air conditioning (that works great for Californians, about the only folks in the US who buy the Tesla)
• 253 miles in 20 hours. It doesn't say whether they stopped for breaks or not, so we will simply round the 18.70 hours to 20 hours. At that speed, it would take all day (9 hours) to get from Williston to Bismarck; slightly longer with a break in Minot to visit the zoo)
• at 24 mph on 35E north of Dallas, I would end up in the ditch, getting run off the road by 18-wheelers
• at 24 mph on I-10 in west Texas, I would be picked up for obstructing traffic

This is a non-story. Leave it to two Norwegians to even think up this crazy stunt.

Consumer Reports gives the Tesla a perfect rating. They actually gave the car a score of 103 on a scale of 0 - 100, but had to dial it back to 100, to make it a "perfect" score, rather than a super-perfect score, I guess.

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Slicers And Dicers Not Welcome Everywhere In Iowa

THOnLine/AP is reporting:

Black Hawk County will retain its status of having no industrial wind turbines after county officials rejected a plan to erect three of the structures.

The Board of Adjustment declined a request Tuesday for a special permit and setback variance for Optimum Renewables to install the tall structures in the county.

Opponents of the project said it could possibly harm residents' health, reduce property values and potentially endanger eagles and other wildlife.

Attorney Adam Van Dike for Optimum Renewables says there isn't any evidence to support any negative health issues for humans or livestock. He says the threat to eagles and birds was overstated.

No, the threat to eagles and birds is not overstated. The risk is so bad that the President of the United States actually had to step in and "give" blanket immunity to the wind industry for slicing and dicing migratory birds, otherwise protected by federal law.

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Are Americans Finally Tired of Milquetoast Politicians, 

Presidents Apologizing For America's Strengths?

Pollsters dumbfounded by Trump's popularity. Even Biden speaks more favorably of America than Obama, Hillary, Jeb, Bush I, Carter, and all the rest.  I would vote for Biden before Bush III just to see some humor back in the White House. I doubt Biden would bow to any Saudi prince or Japanese shogun. I know he would still be enamored with the folks who don't speak English taking your money at 7-11 convenience stores.

Milquetoast? Speaks softly and gets hit with a big stick.

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Huge Blind Spot

Updates

August 31, 2015: National Geographic, over the years, has had any number of articles on the butchering of elephants by poaches for ivory. National Geographic has never had a photo-essay on Planned Parenthood collecting baby-parts for medical research. Continuing that remarkable lineage, the cover story for this month's issue of National Geographic is on ... guess what ... butchering elephants for ivory. But no mention of Planned Parenthood's poaching human baby-parts. This is the NPR link to the National Geographic cover story, September, 2015. 

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From today's Los Angeles Times, this headline story:

In all the years I've been reading the Los Angeles Times, not once have I seen a headline story about the non-grief associated with government-supported agencies selling baby parts.

Same with National Geographic. I think the National Geographic has had a photo-essay on almost every subject, including the holocaust, and the magazine, to the best of my knowledge, has never had a photo essay on sorting through baby parts for medical research. The photos would be very, very colorful and incredibly thought-provoking. And real, unlike the cover photo of the Statue of Liberty up to her waist in ocean water.