Notes From All Over -- Part 1 -- The Investor's (Investors') Page -- JOLTS -- Trolling -- October 7, 2021

Cars:

• did folks know that Samsung bought Garmin?
• Apple will be huge player in "managing" automobile experience
• my hunch: a natural spin-off of other research
  

Jobless claims, first time: down 38,000 to 326,000 (yawn)

• 11 million job openings
• monthly job openings over the years;
  
• total claims:
• had been 11 million under extended benefits;
• recently dropped to 5 million total claims
• today: about 4 million total claims
• Steve Liesman, CNBC: things improving and improving "somewhat rapidly"
• continuing claims: link here;
• due to the "compressed" "y" axis it looks quite "impressive"
• in fact, not all that impressive: from 3.3 million to 2.7 million
• despite job openings at eleven million
• market reaction: pretty much unchanged; if anything, up slightly;
• Fed chairman has set the bar low for raising rates, based on jobs data
• not sure if today's data is trending toward Jay Powell's goalpost 
  

Port delays:

• 66 ships anchored off Los Angeles ports
• ten days for a ship once anchored to get appointment time for unloading
• long pole in tent: lack of warehousing upstream; even if enough trucks / drivers at the port, nowhere to take the products upstream;
  
• another long pole in tent: lack of trucks / drivers
• data we never get: number of trucks / drivers in 2019 vs 2021
• more/less tractors in 2021 vs 2019?
• more/less CDL truckers in 2021 vs 2019?
• over-the-road regulations in 2021 vs 2019?
  
• retailers turning to trucks vs rail to get products; trucks much, much faster

Trucking regulations: later, after posting the above, wondering out loud what was going on with trucking that might help explain what was going on at the ports of Los Angeles and Long Beach. A reader who works in the trucking industry provided this which goes a long way explaining some (all?) of this:

California had a proposition changing the way independent contractors are classified. They changed the classification to employee if they are doing a job that the employer also has hourly employees doing. If you have trucks and drivers employed, you cannot use independent contractors to do the same job, they would be classified as employee for benefits, taxes , union representation etc. This reduced drastically the number of available trucks and drivers. The independent owner operators all left the state . Most of the port drivers are owner operators who own  their trucks. When they could no longer work , they left the state.

The port operators are stuck with no equipment, at least a one-year backlog for any class 8 trucks, and all new environmental regs apply so they can’t use used equipment unless it is CARB approved and there is a shortage nationwide of used equipment.

This slow down in freight movement was foreseen by the industry, but the great state of California won’t budge on the regs. It’s been through court and the port operators are stuck.

The next shoe to drop with regard to drop: intermodal transport. Those 18-wheelers are a standardized length, width, and height for a reason as are the railroad cars that carry them. We discussed this a long, long time ago.

It took years (decades) for this intermodal transport to mature. Now, with the very, very heavy batteries in EV trucks, the cargo they can carry will be significantly less, which means .... drum roll .. the trailers will be significantly shorter. 

Unfortunately they won't be half the size but somewhere between "full-size" and "half-size" which means the efficiency of the intermodal transport system will be completely torn asunder.

Most likely these EV trucks/trailers will fill a niche, but whether it will include cross-country shipping is yet to be seen. Remember: the truckers would like to have "Australian road trains" through long-haul states like Montana, Wyoming, Colorado, New Mexico, Arizona, west Texas, and Nevada.

It's going to be tough to make the "financials" work.

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The Investors' Page

I'm not sure where this post will go. 

Risk-on, slow melt-up, the market can handle:

• 2.5% on the 10-year Treasury; and,
• $110 WTI

Covid-19: again, this is for investors, no one else --

• analyst said it this morning about as clearly as anyone could say it
• it doesn't matter whether the vaccines work or don't work
• the only thing that matters is perception
• Germany: today announces there will be no new pandemic restrictions this winter with regard to Covid-19
• how come? has nothing to do with current number of infections, deaths, etc.
• Germany says it won't introduce new pandemic instructions this winter because vaccination rate has exceeded a certain percent (I missed what that number was; doesn't matter; Germany says enough folks have been vaccinated for the country "to move on")

Reconciliation: definition / background;

• GOP has clearly stated they will "allow" Democrats to use "reconciliation"
• Democrats who once threatened to use "reconciliation" to raise the debt limit, now says the party does not want to use the "reconciliation" process
• one problem: unlike the recent past, the US House Democrat party has become very fractured; Ms Pelosi has lost control

Market caps:

• Square: $110 billion
• market cap greater than Bank of New York / Regions Financial combined 
• market cap greater than PNC / Regions combined
  
• JP Morgan Chase: $500 billion
• Citi Group: $147 billion
• PNC Financial: $85 billion
• BK (Bank of New York Mellon): $47 billion
• Regions Financial: $21 billion

Op-ed: must-read from The WSJ today -- the entitlements of US decline; Biden says his plans will make America great again. Ask Europe how that has turned out. Link here. The lede:

Democrats are scrambling to find an argument, any argument, that sells their $5 trillion spending plan to a skeptical public. The latest, and startling, attempt is President Biden’s claim that all of his new entitlements will, well, make America greater.

“To oppose these investments is to be complicit in America’s decline,” Mr. Biden said Tuesday, adding that “other countries are speeding up and America is falling behind.” Got that, Senators Joe Manchin and Kyrsten Sinema ? You’re complicit in the country’s looming failure.

Finally being acknowledged: the benefits of oil for the US

• previous spikes in the price of oil have been devastating for the US
• not this time
• 10% increase in price of WTI used to cut 25 basis points on GDP; no longer, pretty much a wash
• as price of WTI increases, increased activity in oil sector offsets negative impact of higher prices
• % of disposable personal income, six-month average:
• 1975: 6.5%
• 1980: 8.4%
• 1990: 5%
• 2008: 6%
• 2020: 3%

Stagflation: this is my pet peeve. A few weeks ago, this was a "thing" on CNBC -- 

• although CNBC seems to have moved on; not mentioning stagflation much any more
• there are a couple of different definitions of stagflation
• I don't see either definition being met by current use of the word "stagflation" by CNBC talking heads
• at least one definition of "stagflation": a key component of "stagflation" is the concept of unemployment
  

Request for help from readers: JOLTS

• JOLTS has been around for at least a couple of decades, I do believe, but even wiki does not have a page on JOLTs, which is surprising since wiki seems to have a page on almost everything else
• I am unable to find a graph going back more than two years regarding JOLTS
• JOLTs seems to have become a thing only beginning in calendar year during the year of the plague, 2020, and especially now, coming out of the pandemic
• Later, October 8, 2021: CNBC showed the JOLTS graph going back to 2005
• in round numbers, it appears JOLTS runs about 4,500 - 5,000 / month
• in round numbers, it appears JOLTS was 7,500 in 2019, just before the pandemic year of 2020
• huge drop in JOLTs during the year of the pandemic
• 2021, the year after the year of the plague; JOLTS went almost straight up month over month so that it ended at/near 12,000 in September 2021
  

"Full employment": hard to define.

"Umemployment": I've talked about this before. Is there a difference between unemployment numbers during:

• a recession in which there are simply no jobs available when folks are desperately looking for work; or,
• during a manufactured pandemic when folks don't look for jobs resulting in record amount of jobs available

Unemployment: talking heads seem to suggest that unemployment of 5.2% now --during economy expansion -- is no different than unemployment rate of 5.2% during an economic downturn. I honestly don't get it.

Roth vs traditional IRAs: see if you can find the fallacy in the argument presented by this writer -- "why I won't do a Roth IRA conversion -- even  if this is the last chance." Brett Arends is very, very knowledgeable and has been around for quite some time. How he missed this fallacy is beyond me. His argument:

• most of us -- including the writer, Arends -- are almost certainly going to be better off in a traditional IRA
• his fallacy: see if you can find it

Goldman's Currie: $90 oil

• so far behind, no matter what OPEC+ or the US does, it cannot catch up
• must-see interview on CNBC