Surrealistic Times; It's Time To Give Greece A Break -- Bloomberg -- January 31, 2015

Some data points and observations from the past week:
All that talk about how severe this year's flu season has been. The data suggests something entirely different (source):

Yes, this year's flu season is pretty much over. And yet stories like this:

Some new evidence this is a particularly bad flu season: Flu-related hospitalizations of the elderly are the highest since the government started tracking that statistic nine years ago.

Perhaps with ObamaCare more folks are seeking care; doctors get better reimbursement to admit. Hospitalization data as a single data point is about as worthless as a rig count is as a single data point to tell us how the Bakken is doing. But it's great copy to sell newspapers. But this year's flu season is winding down. Thirty-second sound bite: spiked late; petered out quickly.

****************************************

Update: I'm not the only who thinks the unemployment rate of 5.6% is a lie. Gallup poll:

There's no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.

Original blurb

 

Jobs: first time claims plunge; 15-year low; and nary a word from the mainstream media; media knows the data does not jibe with lay-off announcements; and, "everyone" knows the 5.6% unemployment rate is a lie if 4% is considered full employment in the US -- in fact with a) the technology revolution in the past 20 years; and, b) the social safety net, one can argue that 6% is full employment; Janet Yellen should use 6% or 7% as the new benchmark for "full employment" and move on. Stick a fork in it. It's as good as it's going to get.

4Q14 GDP: an unremarkable (at best) 2.6%. Just one quarter earlier (3Q14), the GDP was 5.0%. Again, nary a word in the mainstream media about this incredibly anemic recovery. 

Israeli-US relationship: may be at its lowest point ever; Obama, worse negotiator ever? Agrees to 80% of Iran's demands;

Europe (EU):

• Greece won't cooperate with "troika" from EU, IMF, ECB; rejects aid extension; aid ends at end of February;
• Spain looks like it may go the same way as Greece
• EU's days are numbered? ; already the new leftist leader is starting to backtrack on campaign rhetoric;
• BBC update on Greece; already the new leftist leader is starting to backtrack on campaign rhetoric; Greece rejects more loans -- does the country have enough cash to get through February?
• Greece's Crazy Leftists Have A Good Idea, Bloomberg, on-line, January 27, 2015 (the story is re-printed in the hard copy issue that was delivered to my door today but with a new headline: "It's Time To Give Greece A Break: The country's new leader wants debt relief. Germany should oblige."

As long as it's "other people's money." But I about burst out laughing when I turned the page and saw the headline: "It's time to give Greece a break." Wow.

Measles endemic? Follow-up to the mysterious viral disease that came out of Guatemala in 2014? No serious investigative reporting? Anyone with half a brain that gives even thirty seconds of thought to these two quasi-under-reported-epidemics will know what's going on.

*********************************

Peak Oil

Confused about "peak oil"? You are not alone. I was surprised this week to see just how confused some folks are regarding the definition of "peak oil" as defined by M. King Hubbert. Two key quotes from wiki that "define" Hubbert's theory:

Peak oil, an event based on M. King Hubbert's theory, is the point in time when the maximum rate of extraction of petroleum is reached, after which the rate of production is expected to enter terminal decline.

By observing past discoveries and production levels, and predicting future discovery trends, Hubbert used statistical modelling in 1956 to accurately predict that United States oil production would peak between 1965 and 1971.

Wiki says Hubbert "accurately" predicted that US oil production would peak between 1965 and 1971.

Looking at recent trends one could argue that "the jury is still out."

There were two parts of Hubbert's theory (the following are direct quotes):

• a point in time would occur when the maximum rate of extraction of petroleum is reached; and,
• after that point in time, the rate of production is expected to enter terminal decline

With regard to the second point: the rate of production did not enter terminal decline after 1971. Fast forward to 2011 -- clearly the trend does not suggest the US has entered a period of terminal decline (I'm reminded of Mark Twain's comment about premature news reports of his death).

Now, back to the first point in Hubbert's theory:

• a point in time would occur when the maximum rate of extraction of petroleum is reached

It was just pointed out that it looks like the fastest rate of production did not occur in 1971 as wiki suggests, but in fact, we saw a much faster rate of production from 2011 to 2013. I assume the rate will be similar form 2013 to 2014 though that may not be true in calendar year 2015.

Remember, rate = "rise over run" = change in degree over change in time = change in production of crude oil over change in time. 

I think it's pretty common sense to say that in any given oil field, or in any given country, or in any given region, or in any given planet, there will come a time when the rate of crude oil production will be reached. Predicting when is a fool's game. Clearly, that point has not been reached in the US or in North America.

We won't even go into another area of confusion noted by wiki: peak oil is often confused with oil depletion; peak oil is the point of maximum production, while depletion refers to a period of falling reserves and supply.

******************************************

I was reminded of "all that" (Hubbert, peak oil theory) after reading the article at this link. I couldn't follow the argument the writer was trying to make (granted, I was watching The Big Lebowski when a reader sent me the link to the article). When confused, I look at the URL, and in this case, it's a "Peak Oil" blog. That explains everything. I'm not sure what definition of "peak oil" the folks at that link are using, but clearly ... well, what can I say?

By the way, when I read the following sentence at the same wiki source on "peak oil" ...

The same theory has also been applied to other limited-resource production-domains, such as minerals, lumber, and fresh water.

... I was reminded of another great scholar: Thomas Robert Malthus.

****************************************** 
Not Much Left Of ObamaCare
No Wonder The GOP Is Ignoring The Law

There are three legs to the ObamaCare stool:

• the tax on medical devices
• the corporate mandate
• the personal mandate

With President Obama about ready to defer, waive, or expand exemptions to the personal mandate, it looks like the only leg still "standing" is the tax on medical devices, and I think that provision was watered down.

Meanwhile in California, the ObamaCare train wreck in full color. The Los Angeles Times is reporting:

California's ambitious effort to save billions of dollars by changing how the state's costliest patients get treated is on the ropes.

The Obamacare program was designed to reduce medical costs by putting more of the nation's 11 million most challenging and expensive patients into tightly managed care.

But the rollout in California — one of the first states spearheading the effort — has been marred by widespread confusion, enrollment glitches and a revolving door of health officials. Sixty percent of eligible patients have rejected the program, and state leaders are demanding to see financial savings in a year.

Most of the patients suffer from multiple chronic conditions, such as diabetes and Alzheimer's. They range from younger, disabled adults to older Americans in nursing homes. Nationwide, some $300 billion is spent annually on these patients who qualify for both Medicare and Medicaid.

State leaders are demanding to see financial savings in a year. State leaders? They are all Dems who thought up this crazy scheme. 

California's program, known as MediConnect, calls for turning about 450,000 of the state's 1.2 million dual-eligible patients over to HMOs run by Anthem, Health Net and other insurers. The prospect of increased profits from taking on the poorest, sickest patients has captivated Wall Street and sent company shares soaring.

But the rollout has been far rockier than expected and raised concerns about the state's approach.

"These numbers are falling far below what the state was hoping for, and it puts pressure on them to increase enrollment rates," said Kathryn Kietzman, an expert on this population and a UCLA health-policy researcher. "The stakes are high for California, and these changes are potentially a big deal nationally if they can get it right."

Much, much more at the link and it ain't pretty.

**************************

Negative Mortgage Rates

I've always thought about buying a house in Yorkshire, England. This just might make it possible. No link; google it, if interested:

With negative interest rates in Germany, Switzerland, Ireland, Belgium and Denmark, it was about time that we saw negative mortgage rates in Europe as well. In January, as much as $3.6 trillion of debt in the Europe and Japan traded at negative yields. Unprecedented bond buying by the European Central Bank (ECB) and Bank of Japan (BOJ) has resulted in a manipulation of global capital markets that could result in another major asset bubble.

The situation has gotten so out of hand, that not only are interest rates -0.2% at the ECB’s overnight deposit facility, commercial banks are lending to individuals at negative rates as well. The ECB’s Mario Draghi may be biting off more than he can chew at this point (thank you Super Mario!). According to Finans.dk, mortgage rates are now negative in Denmark. The situation is so bizarre that Nordea Bank’s IT systems need to be reprogrammed as they are are not accustomed for situations where the bank is not receiving interest payments on outstanding mortgages.

**********************************

SNL Skit To Explain Greece's Debt Repayment Scheme

I don't watch television so I would have missed this. Don tells me it was a skit on Saturday Night Live:

Greece's economy minister said it would be better to link the country's debt repayments to its economic growth rate as it needs a feasible solution to bring its sovereign debt under control.

"At the moment, we spend around five percent of gross domestic product on servicing our debt. ...It would be better if we linked the repayment to growth: if growth is higher, we pay more, if it is lower, we pay less."

Lois Lerner and Al Sharpton would be co-chairmen of the International Debt Verification Committee To Make Sure Greece Pays Its Fair Share (IDVCTMSGPIFS) -- pronounced "idiots my foot."

***************************************

 A Note To The Granddaughters

I did not get out on my bicycle today due to all the family commitments. In addition to swimming and soccer, we now have band and ensemble competitions. So this evening, I went for a bike ride -- up to a Barnes and Noble 5.2 miles away from home.

It was raining and it is raining, so it will be a wet ride home. While riding here, I was quite surprised. A cowboy (I know he was a cowboy because he had a cowboy hat on and was driving a pick-up) stopped to ask me where I was going and offered to drive me there -- throw the bike in the pick-up bed and get a dry ride to Southlake. I declined. It wasn't raining that hard; it looked worse than it really was.

I don't know if I told this story. Years ago I was hitchhiking from Williston, North Dakota, to the East Coast, New York City, to be specific. Hitchhiking through urban areas are always the toughest. I was somewhere in Minneapolis about 8:00 p.m. when a pick-up truck stopped to pick me up. It was an old truck but when hitchhiking one generally doesn't turn down any rides.

We had not gotten very far when all of a sudden a fire erupted, or flames shot out of the dashboard somewhere -- I never saw a driver head to an interstate shoulder as fast as he did and jump out of a burning pickup. I jumped out also. Before the night was over, fire trucks on scene and one burned out pickup truck.

I remember sleeping over at the driver's house that night -- but I don't recall how we got from the torched pickup to his house. But I do remember a good night's sleep.

Which, for some reason, reminds me of this:

***************************************