Sunday, September 18, 2016

Raising Interest Rates -- What's The Hurry? Idle Chatter -- September 18, 2016

I'm the last one who should comment on the Fed. I have no understanding of macroeconomics. I hardly have any understanding of microeconomics for that matter. Having said that, I enjoyed the review of Ben Bernanke's recent book, The Courage to Act: A Memoir of a Crisis and Its Aftermath, as reviewed in the current issue of the New York Review of Books. It seems to be a very fair and balanced review.

I actually read it slowly and tried to understand more about the Fed. Near the end, the last five paragraphs seem to fit my way of thinking (much has been left out; only snippets reprinted):
What’s unclear is how well these lessons have been learned. Today’s Fed, for instance, has been under a lot of pressure to end its “easy-money” policies and start raising rates at a steady clip. With unemployment below 5 percent and inflation close to the Fed target of 2 percent, conventional wisdom has been that it’s time for interest rates to go back to “normal,” lest inflation finally rear up....

Yet if you look past the headline numbers, you have to wonder what the hurry is. Inflation is stable. GDP growth in the first half of the year looks to have been around 2 percent. The economy has been creating a reasonable number of new jobs, but the percent of employed Americans between twenty-five and fifty-four is still lower than it was in 2007...

Given all this, the fact that some investors and retirees think interest-rate hikes are now necessary is a sign that the old ways of thinking about monetary policy are still powerful...

What The Courage to Act shows is that its consequences are anything but academic—in fact, nothing has a bigger impact on the lives of American workers. The American economy’s failure to grow as fast after the crisis as it did before has cost the US trillions of dollars in lost GDP. It’s kept employment down, and it’s kept workers from earning higher wages, since the only thing that leads to higher wages in today’s economy is a tight job market.
What we need, in other words, is a Fed that understands the one thing Bernanke got unquestionably right: when it comes to raising interest rates, sometimes what a central banker needs most is the courage not to act.
California Pensions: Much Ado About Relatively Nothing

The top story in today's Los Angeles Times:
With the stroke of a pen, California Gov. Gray Davis signed legislation that gave prison guards, park rangers, Cal State professors and other state employees the kind of retirement security normally reserved for the wealthy.
More than 200,000 civil servants became eligible to retire at 55 — and in many cases collect more than half their highest salary for life. California Highway Patrol officers could retire at 50 and receive as much as 90% of their peak pay for as long as they lived.
Proponents sold the measure in 1999 with the promise that it would impose no new costs on California taxpayers. The state employees’ pension fund, they said, would grow fast enough to pay the bill in full.
They were off — by billions of dollars — and taxpayers will bear the consequences for decades to come.
This year, state employee pensions will cost taxpayers $5.4 billion, according to the Department of Finance. That’s more than the state will spend on environmental protection, fighting wildfires and the emergency response to the drought combined.
And it’s more than 30 times what the state paid for retirement benefits in 2000, before the effects of the new pension law, SB 400, had kicked in, according to data from the California Public Employees’ Retirement System.
And how will Californians respond? They will re-elect the incumbents, which tells me that there is no problem. In the big scheme of things, only the Los Angeles Times seems concerned. There is a lot of money in California. Six billion dollars is not all that much. In the big scheme of things.

All California needs to do is charge Zuckerberg the back taxes he should have paid had California had different tax laws. Sort of what the EU does.

The Political Page

For various reasons, boredom being the #1 reason, I am reading "US Politics" As Low As It Get" by Jonathan Freeland, in the current issue of the New York Review of Books. I've only read the first few paragraphs and these are my immediate thoughts:
  • I wonder what the author's point is, assuming he has a point?
  • is this a serious essay or humor (the NYRB does not do humor)?
  • I wonder if I will finish the article?
  • the author appears not to be paying attention to the mood of the country
  • the author appears not to be in touch with mainstream America
  • the author most likely lives in NYC and does not own a car; whether he has a driver's license or not is hard to say
It should be noted that in the USC-LA Times poll today: Trump, 48%; Hillary, 41%.

The Apple Page

I have a MacBook Pro -- a gift from the family that is now many years old. It feels like a brick. I seldom use it.

Today, because my MacBook Air is elsewhere I got out the old MacBook Pro. The battery was completely dead but once plugged in, at 1% battery level, it sprung to life, and is as good as ever. Color me impressed.

Here I am, using a computer that is probably nearly ten years old and here it is, working as well as ever. And you know why? The cloud. For basic activities -- blogging, spreadsheet, word documents -- not much is needed in a computer.

In the bedroom is an Apple iPad, second generation which is even older, and it does everything I need it to do. Apple products don't last as long as our GE microwave or our GE refrigerator, but they seem to last a lot longer than one would think.

And the MacBook Pro looks as "new" as ever.

Sophia, September 18, 2016

Oasis To Report Two More Nice Hysted Wells In Camp Oil Field -- September 18, 2016

Monday, September 19, 2016
  • None.
Sunday, September 18, 2016
  • None.
Saturday, September 17, 2016
  • 31131, 1,206, Oasis, Hysted 5200 11-30 9T, Camp, 36 stages, 3.5 million lbs, t3/16; cum 57K 7/16;
  • 31132, 2,157, Oasis, Hysted 5200 11-30 8B, Camp, 36 stages, 3.2 million lbs, t3/16; cum 109K 7/16;
  • 32432, SI/NC, SM Energy, Bronkar 2B-6HS, Skabo, no production data,

31132, see below, Oasis, Hysted 5200 11-30 8B, Camp:

DateOil RunsMCF Sold

31131, see above, Oasis, Hysted 5200 11-30 9T, Camp:

DateOil RunsMCF Sold

The United States Air Force 69th Birthday -- September 18, 2016

A reader reminded me this was the 69th birthday for the United States Air Force. I had forgotten. I was wondering what was subconsciously encouraging me to bake chocolate chip cookies this fine Sunday morning, but there you have it.

Three photos of photographs that I have in our small hovel.

These are the three patches worn on my flight uniform when assigned to the 22nd Tactical Fighter Squadron, the Stingers, back in 1984 - 1986. They are on my silk flying scarf. The "bumblebee" patch was designed by Walt Disney during WWII (at least that's what I was told when assigned to the squadron).

The three patches: the top one is the USAFE (USAF in Europe) patch; the middle patch is the wing patch, the 36th Fighter Wing, Bitburg Air Base, Germany; and, the bottom patch is the squadron patch. The patches also came in "subdued" (camouflaged) colors. The only patch missing is my name patch.

While assigned to the 22nd TFS in Bitburg, I participated in various overseas training deployments. This is a montage of photos taken in 1985 when the squadron was deployed to a bare-base air strip in Morocco. Two medical technicians and one flight surgeon manned the medical tent. Prime BEEF (wiki, GlobalSecurity) provided outstanding support but what I remember most was the incredible food.

Prime BEEF provided outstanding meals every day, but most memorable was the second to last day of the deployment.

The deployment forces are rotated out over the course of three days. The fighters depart first. On the second day, most of the rest of the force -- mostly maintenance personnel -- fly out on C-130s. Finally, at the end of the second day or the third day, the medics and the security forces are the last to leave, along with Prime BEEF.

The Prime BEEF kitchen personnel kept inquiring how far out the fighters were on the day they departed. Once the fighters had passed the half-way mark home, I assume somewhere over the Mediterranean, the kitchen personnel brought out steak and lobster. They had to make sure the fighters had passed the half-way mark home: if any of the F-15s had a problem, they would head home rather than turn back to Sidi Slimane.

I recall very vividly our departure from Morocco in 1985. I remarked to the pilot on the C-130 we were flying out on that while loading, he had not turned off the engines. Usually they turn off all props or at least the two on the side of the plane on which we were boarding. He said that one of the engines would not re-start if he turned it off. In addition, a fourth engine was leaking "oil". He did not want to take the chance of turning off the engines and not having at least three for take-off.

The third photo is a going-away gift from the folks at the surgeon's office of Air Combat Command, back in 2000, or thereabouts. One of the new missions at Langley Air Force Base, VA, at this time was flying drones over Afghanistan. It was amazing to see what 19-year-old men and women could do over Afghanistan half-way around the world from "trailers" across the street from our hospital.

The biggest regret I have to this day is the fact that I did not generate a 3" x 5" index card on each individual in the Air Force that crossed my path that had at least more than a casual acquaintance. The index cards would have exceeded 2,000 in number, I am quite convinced. Thirty years in the service, and I assume 100 new individuals each year, some years 250 or more x 30 = maybe as many as 6,000 index cards. And that's probably a conservative number.

Apparently The Blast In NYC -- Explosive Device Wired To Cell Phone Was "Intentional" -- September 18, 2016


September 19, 2016: less than 36 hours or 48 hours, or thereabouts, the FBI has captured the alleged terrorist; a shootout with the police. It looks like he is the terrorist version of Kaepernick: it appears, like Kaepernick, the alleged terrorist had a personal problem. Kaepernick, as we all know, was at risk of losing his role as starting quarterback. 

September 19, 2016: authorities have released the name of a person of interest related to the terrorist acts in NY/NJ over the weekend. I do not recognize the name to be of Scandinavian origin.

Later, 9:19 p.m. Central Time: at least the governor is willing to go "out on a limb": New York Gov. Andrew Cuomo said it was clearly "an act of terrorism." Wow. He actually said that?

Later, 9:05 p.m. Central Time: in light of "the Manhattan bomber," #BlackLivesMatter and Kaepernick look incredibly pathetic. Very pathetic. NYPD -- who are you gonna call?

Later, 8:22 p.m. Central Time: she or he now has a name: "the Manhattan bomber." And this comes just hours after Hillary and the mainstream media criticized Trump for calling the device a "bomb."What mainstream media is missing: this was a single bomber (or maybe a small cell of three or four Islamists). Even if it turns out to be an American-born lone wolf, imagine all the Islamists President Obama has allowed to enter the US in the past two years. Any New Yorker voting for Hillary in November is simply not paying attention. 

Later, 5:05 p.m. Central Time: from another "realist":
Unlike the powers-that-be charged with running New York City, you and I can be realistic. Intentionally placing two live bombs set to explode and intended to commit mass murder in a populated center of the most recognized city in the United States is terror. It does not matter if the perpetrator is part of a group or a lone wolf, it doesn’t matter if you are fighting for Islam or animal rights or if you are an anarchist. The definition is plain and simple. Using violence or the threat of violence to achieve a political end is terror.

The only time it is not called terror is when you want to keep the masses calm. Then you rely on antiquated definitions by the FBI and Justice Department. But those days are long gone.

When the bomb injuring dozens of people exploded in Chelsea on Saturday night and a second unexploded bomb was discovered a few blocks away, New York City’s Mayor De Blasio said it was “intentional,” but he added “there is no evidence at this point that there is a terror connection.” He also said that “there was no credible specific threat to New York.”
Later, 12:58 p.m. Central Time: after calling the event "bombings" (plural), Hillary jumped on Trump for calling them "bombs." With the Clintons, one really, really needs to parse their statements and a Funk and Wagnalls dictionary nearby. Hillary is correct: if it was simply a Samsung phone exploding, then technically it was not a bomb. 

Later, 12:49 p.m. Central Time: after reading the various news reports, and watching some of the video on the internet, is it just me or does it now appear there is a developing competition to see who can be more "successful": #BlackLivesMatter / attack on US law enforcement OR ISIS / attack on US citizens? 

Original Post
When I first saw that statement by the mayor of NYC that the blast was "intentional" I stepped back for a moment and said, "hey, wait a minute. If it was a Samsung cell phone ... that changes everything."

Seriously, did the mayor of NYC actually query his advisers on whether there was enough evidence to actually say the blast was "intentional"? I would be curious how the discussion went, and what the final vote of his staff was, to call it "intentional."

I've also lost the bubble on the definition of terrorism. Everyone agrees that there was one blast in NYC; another explosive device found in the same immediate area; and, another blast in New Jersey, all within hours of each other. And, then, of course, the mall stabbings, in that Minnesota mall in the name of Allah, apparently. But there remains a question whether this is terrorism.

Some people have blamed this on the Amish. At least in the comment sections of various news reports. 

Based on much less information, perhaps one rhetorical question, the mainstream press can declare Trump unfit for president. 


Time for a video.

Las Ketchup, Las Ketchup

Other than stories on the "intentional" explosions (but perhaps not tied to terrorism) it's an incredibly slow news day. Hillary must have taken the weekend off. Was she on the campaign trail only one day this week? I think so.

Which reminds me, what does the USC-LA Times poll show? Trump, 48%; Hillary 41%. Okay.

It's an incredibly slow news day and I had to really search the headlines to find something, anything worth posting, and here it is, over at the Drudge Report of all things. This was the headline link: In North Dakota, hints of US oil industry comeback. The article itself was hardly worth reading, but I did learn something: there's a new temporary work agency in Williston: the Command Center. I should be back in Williston in the near future and will check it out. The article said the center is across from the railroad tracks. That pretty much limits the area to about a two-mile stretch from east Williston to west Williston.

Don sent me the link to a story on whether Nigeria could upset the apple cart when OPEC ministers meet later this month to discuss the trillion-dollar mistake that Saudi Arabia made two years ago. The data points from that article:
  • no one has a clue
  • if Libya and Nigeria get their combined acts together, they could add 800,000 bopd to the current glut.
I replied to Don, not ready for prime time, and only slightly edited, with regard to the upcoming OPEC meeting:
The players:
  • Saudi Arabia: 90% of its income comes from oil.
  • Nigeria: no matter how much income comes from oil, it can exist as a failed nation if oil goes to $20
  • Russia: oil is important to its economy, but it has a bit more diversified economy than Saudi's; in addition, the Russian people have tolerated much worse conditions than low price of oil.
Saudi can't survive on $40 oil.
  • On $50 oil, Saudi won't do much better. Even $60 oil is well below a budget that depends on $100 oil. I am eager to see the Saudi's August cash reserves. The most recent data I can find is through July which I have posted a couple of times.
  • Saudi is in deep trouble. They live in a troubled neighborhood and have the most to lose if they can't get this turned around.
I still don't understand the (implied) concern in this country about the glut or the price of oil.
  • I think most Americans are happy with $2.00 gasoline (in our area, gasoline is now $1.85 in many places)
  • Investors have reset their portfolios assuming oil will be at $40 for a long time
  • Some operators will still fail, but the overall US oil industry has probably stabilized at a new level
Although oil trending down towards $40 right now is worrisome, I still think $46 to $52 oil is the sweet spot for the American economy.