Friday Morning Links -- Most Of It: Nothing To Do With The Bakken; If You Came Here For The Bakken, Scroll Up or Down But Avoid This Post

Updates

Later, 7:07 pm: this is getting weirder by the moment. Now this story (sent to me by a reader, thank you), regarding the movie about fracking, Dimock, EPA, and starring Matt Damon.

While left-leaning Hollywood often targets supposed environmental evildoers, Promised Landwas also produced “in association with” Image Media Abu Dhabi, a subsidiary of Abu Dhabi Media, according to the preview’s list of credits. A studio spokesperson confirmed that AD Media is financing the film. The company is wholly owned by the government of the UAE. 

Original Post

Fracking, Dimock (Pennsylvania), EPA, Matt Damon, and all that jazz: perhaps the best link of the day, from a reader's comment. Thank you. See update above, dated "later, 7:07 pm." This is getting really, really weird. But at least we're starting to find out who is backing anti-fracking in this country.

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IPs for wells coming off the confidential list today have been posted; see sidebar at the top.

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Google Chinese slowdown idles US coal mines. This article is about metallurgical coal. It is a very, very sobering story. Front page story in the WSJ.

While many have blamed the downturn in the US coal industry on cheap natural gas supplanting coal and tougher environmental regulations, the slide in metallurgical coal demand has been equally devastating.

But voters seem to be content/satisfied. Polling continues to show four more years.

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What are the odds? The other night I met a nice young couple from Sri Lanka here in Boston area; he was working in the local area; she was his sister visiting the US for the first time. I knew a little, but not much, about Sri Lanka. So, today, p. D6 of the WSJ, a full page story on "tropical modernism in Sri Lanka." Almost as good as opening to a full page on the Bakken. Sri Lanka is a tropical paradise, and for Bakken oil millionaires, one can get a brand-new, 8,000 square-foot architectural masterpiece for 40 million rupees ($300,000).

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Google Obama trumpets revised job data.

For the first time since President Barack Obama's inauguration, the number of jobs in the US economy is higher than it was when he took office.

And voters seem to be content/satisfied. Polling continues to show four more years.

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Google ObamaCare's tax raid on medical devices. --> RECESSION

Data point: the new health care bill places a 2.3 percent tax on medical devices -- call it  the US medical devices VAT. The tax...

threatens thousands of American jobs and our global competitiveness. It will also stifle critical medical innovation in the industry that gave us defibrillators, pacemakers, artificial joints, stents, chemotherapy delivery systems and almost every device we depend on to save lives. 

The 2.3% tax well be charge to manufacturers on each sale and takes effect in January. 

Many US device companies, in response, have already announced layoffs, canceled plans for domestic expansion and slashed research-and-development budgets. This month, Welch Allyn --- a make of stethoscopes and blood-pressure cuffs -- announced that it will lay off 10% of its global workforce over the next three years, but all of the jobs being cut are in the US. [Welch Allyn produces 90% of the medical diagnostic equipment sold in the United States. -- wiki]

And that's the point. Remember all the hand-wringing over NAFTA which essentially sent US textile jobs overseas, and killed that domestic industry -- at least that's what I've heard. I don't know. I don't follow the industry.

But Evan Bayh, a US senator from Indiana, a member of the president's party, says that the medical device VAT will force another US industry overseas.

I'm pretty sure this industry was headed overseas before the VAT. A 2.3% VAT on medical devices seems pretty inconsequential. If a medical device company cuts margins that close ...

What's the production tax and extraction tax on Bakken oil? I believe its 6 to 7% on each -- 12% total. Again, I could be wrong (see "welcome" and "disclaimer" posts regarding this blog). Maybe a grand compromise: the senators from "oil states" will vote for repeal of the medical device VAT if senators from "high tech" states vote for keeping the EPA out of fracking on state land.

I wonder what high-tech medical device company is located in Indiana that got Mr Bayh's attention?

Regardless of how this turns out, it appears not to be a big issue for voters. Americans seem pretty content/satisfied; polling shows we are headed for four more years.

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Remember: An ISM reading above 50 -- expanding; an ISM reading below 50 -- contracting
See also: Business investment falls off a cliff -- November 19, 2012

The linked article has a lot of words and phrases we've come to expect from the mainstream media when reporting on current state of the economy; words like: "unexpectedly," unexpectedly contracted," "uncertainties surrounding domestic fiscal policy," "unemployment exceeding 8 percent for 43 consecutive months -- the longest stretch in the post-World War II era," etc. But here's the data points from the linked article:

• business activity in the US unexpectedly contracted in September for the first time in three years -- foreshadowing the Great Recession of 2013
• the ISM fell to 49.7; it was a whopping 53 in August -- just one month earlier
• expectations: median -- 52.8; range -- 50 to 54.54. No one predicted a contraction.
• this explains why the Fed acted -- QE3
• household purchases rose by 0.5 percent (GOOD); because prices increased 0.4 percent (BAD)
• the jump in prices was the biggest since March, 2011, (not March, 2012, but March, 2011) (BAD)
• unemployment exceeding 8 percent for 43 consecutive months; the longest stretch in the post-WWII era (REALLY BAD)
• household spending increased at a 1.5 percent annual rate in the second quarter, the lowest in a year (BAD)
• lingering concerns (Congressional dithering) about the January "fiscal cliff" are restricting business such as ATT and their long-term planning (BAD)
• taxes are going to go up and companies are looking at ways to cut costs

Bakken readers know that when oil companies look to cut costs, they lay down rigs (or at least that's the mantra).

But Americans are content/satisfied. Polling suggest we are headed for four more years.

The really good news: once these artificial chokeholds on American business are released, the pent-up demand for goods and services will be staggering. If the eight percent unemployed can just hang on for another four years.

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Speaking of VAT. There's been a lot of talk in Washington about a VAT. Won't happen. So, one way to get around a VAT: do it by industry. The medical device VAT is as good an industry as any to start.

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