The Fed Is Now Impatient -- March 18, 2015

I was out and about much of the day today. Wow, a lot of news.

I was surprised about the "action" of the stock market. It is disheartening that so much of the volatility is related to reading the tea leaves stirred by the Federal Reserve. Much could be written but I need to move on.

For the archives, the DOW is back up over 18,000. The NASDAQ briefly hit 5,000 again; it appears it closed at 4,982. The Russell 2000 closed at a new high. Oil surged 2 or 3 or 4% -- I don't "trust" what I see over at Yahoo!Finance any more -- it is so often wrong. But WTI is still below $45, I think.

So, back to the Fed's "dovish statement." What exactly was said? Oh, how funny -- the Fed did exactly what was predicted: it removed the word "patient" from the March meeting statement. OMG. Ridiculous. But it's fun. Puts me in an upbeat mood to see these new highs or a return to near-record highs.

Ms Yellen can remove the punch bowl any time she wants. At her own risk.

So, what else? A reader sent me this. I had not seen this particular story in the WSJ but it seems I saw the same story somewhere else: despite the slump in oil prices, Watford City is bursting at the seams:

For now, Watford City and other once-tiny towns in this region of western North Dakota are still humming with construction. Developers are building thousands of apartment units and homes, hoping to see the same demand that sent rents for two-bedroom apartments soaring to $2,800 a month—more than double what landlords got before a type of oil extraction known as hydraulic fracturing, or fracking, took off in the area starting around 2009.

By the way, the state is pouring millions of dollars into the Bakken oil patch this summer for infrastructure, mostly roads and bridges. 

For newbies, the EIA now says that the Bakken reserves exceed those of the Gulf of Mexico. Some readers used to call Watford City and Williston the "Odessa and Midland" of the north. If the Bakken is bigger than the Gulf of Mexico, should WC and Boomtown, USA, now be the Houston and Baton Rouge of the north?

I had forgotten but BNSF put a thousand-dollar ($1,000) surcharge on refiners using old tank cars. Now those refiners are suing. That's fine; if BNSF loses the lawsuit, they can simply refuse to pull/push the old tank cars down the track. Whatever. Too many chefs in this kitchen.

What else? Netanyahu won by a landslide -- a landslide? Not everyone would agree, but he did win; by the time he puts his new government together it might look like a landslide.

I see Target is going to raise its minimum wage to $9/hour as competition heats up for lower wage workers who can a) speak English or Spanish; b) show up to work on time; and, c) be relatively drug-free. The pool of relatively drug-free minimum wage workers who can show up to work on time seems to be shrinking. I assume the extra 45 cents/hour in their paychecks will help cover the costs of mandatory ObamaCare. How funny; just after writing that I went to the article and starting reading the comments. This was the first comment:

Interesting how the pay is relatively comparable with each other, but when you go into Walmart, you find toothless ex-drug addict employees, and those who do not have a remote grasp on the English language (regardless of race), and when you go into Target, you get very nice, educated but progressive (may have a tattoo or piercing), but they are articulate, helpful, knowledgeable, and look like they're working their way through college or something.

I hate to imagine what the writer really wanted to say.

I see The Dickinson Press is happy to report that the slump in oil prices will knock another billion dollars off North Dakota's revenue forecast.

North Dakota’s oil tax revenues took another nearly $1 billion hit in an updated revenue forecast released Wednesday, but the picture for general fund revenues was nearly $131 million rosier than in January, leaving some lawmakers scratching their heads as they pointed to slumping oil prices and a drop in drilling activity.

The forecast, prepared by the Office of Management and Budget with consultant Moody’s Analytics, is the first since a Jan. 29 forecast from Legislative Council predicted that oil and gas revenues would total $4.3 billion next biennium – $4 billion less than the December forecast used in Gov. Jack Dalrymple’s budget proposal.

Wednesday’s forecast drops oil tax collections by another $870 million in 2015-17, and assumes $108 million less in the current biennium.

I think a lot of states would be happy with a billion-dollar surplus with a population of less than a million people.