The markets resumed their continuous climb. Credit Suisse says there are only four things that can derail this bull market:
Using data going back to 1950, Warwick University economics professor Andrew Oswald finds that doubling home ownership in a state can lead to more than a doubling of the jobless rate. Oswald said the research may go some way to explaining why Spain, with a home ownership rate of 80 percent, has unemployment above 25 percent, whereas Switzerland, with a 30 percent ownership rate, has a jobless rate of just 3 percent. Germany, another nation of renters rather than home owners, also has relatively low unemployment. High home ownership means low labor mobility - people can't follow the jobs. We've already broken up the several millennial old multi-generational family in the name of more mobile labor; we're in the process of breaking up the nuclear family so that women can be more mobile; now we're all to live in apartments. One has to wonder, at what point is IBM's access to labor going to drop to 2nd place in our priorities?
Only In China Dept: Have a close look at the building below. This is a low-cost apartment building build by the Chinese government, as they're worried about low-cost housing. Notice that the windows are painted on.
London homes are reaching nose bleed price heights - in some areas over £2000 per square foot - a 3000 sq.ft. apartment is well north of $10m. Who's paying this? Certainly not the notably sensible British. The "middle price" apartments are being bought by Chinese as a place for their children when they attend British schools, and a landing pad if they feel forced to flee China. The highest prices are being paid by Russian and Arab billionaires. In a recent British op-ed a writer noted it was now cheaper for him to commute daily to his London job from Spain than to buy or rent in downtown London.
Sears, Pennys, Borders - will the blood letting ever stop? Brick and mortar retailers have had a 5% drop in sales year to date. Internet retailers (think Amazon) have had a 10% gain. No one wants to park and shop anymore, we prefer to shop at home and have it delivered. Prices are better, selection is better, and importantly it takes less time - as men drop out of the workforce, women are finding free time to be ever more scarce. Malls are now for teenage mall rats, who, tellingly, have no money. Sears is selling off their Auto Centers and Land's End, hoping to raise enough cash to keep paying their outsized executive salaries for a few more years. They're getting squeezed by Target on the low end and internet sales in the middle and top ends. Personally I won't even miss Craftsman tools, I haven't bought any in fifteen years.
The most expensive movie ever made was Pirates of the Caribbean: At World's End at a cost of $300m. #3 on the movie list is Spider-Man 3 at $258m. The most expensive video game ever made was Grand Theft Auto V at $115m. The credits for each of these run to several hundred names. You could have made both movies and the game for the price paid for the ObamaCare website, $678m. Most silicon valley startups start with about $1m and get perhaps $10m in their second round of financing. How was this much money spent on a website? A broken website? Where did the money go? Who now has a huge bank account in the Caymans? The original version of the web site was built in a few months by a company Development Seed, 12 guys working in a garage; then they were bought out by CGI Federal who took over development. CGI Federal was awarded a no-bid contract. Who is CGI Federal? Toni Townes-Whitley, a college classmate of Michelle Obama's, major Obama donator and frequent visitor to the White House. This is not the first super-sized no-bid contract CGI federal has received, nor is it the first they have screwed up.
How's ObamaCare doing? Day 1: 6 people signed up. We're told there were 21 million visitors to the site Healthcare.gov and 6 signups. By the end of Day 2, that number was up to 248 signups. We're told this is due to web site problems which will be fixed by the end of November. What if they started up Obamacare and no one signed up? Oops, it's happening. Just as SNL predicted.
The United Nations Intergovernmental Panel on Climate Change predicts that food production will drop 2% per decade this century due to climate change, and food demand will increase 14% per decade due to population growth. The IPCC shared the 2007 Nobel Peace Prize with Al Gore, so apparently they're exactly as credible as he is. . .
I have a hobby: I rescue German Shepherds from high-kill shelters, clean them up, calm them down, socialize them and place them with nice families. I've saved 43 shepherds in the last two years. Recently I decided it would make my work easier to be a non-profit corporation with IRS 501c3 status, so I looked into this. I was speaking to a lawyer. In the middle of a bland, technical business/legal conversation he says to me, "Are you white?" "Yes." "Oh. Well your 501c3 paperwork has to be impeccable; you need five directors completely unrelated to each other; and all five must be squeaky-clean, no convictions, no IRS liens. I can get you approved in 12 weeks. If you were black I could submit quite sloppy paperwork and you could do it with any three people as directors, so long as I could also submit three pictures of happy, smiling black faces. I'd have you approved in three or four weeks. In 25 years, this is by far the most racist IRS and DOJ I have ever dealt with."
Thinking of taking up a sport? Lots of men enjoy pickup basketball or golf. If you want to dream of being a pro, here's a helpful hint: this is Yao Ming with Dustin Johnson (6'4"), Graeme McDowell (5'11"), Rory McIlroy (5'9"), and Luke Donald (5'9"). Ask yourself where you would fit into this photo.
It's fall. We're off of daylight savings time now - I like the extra hour of sleep we get, but I don't like that it gets dark so early. It's 4:45pm as I write this and it's dusk. It's cold - today I switched from shorts to levis (big boy pants) and from short sleeve shirts to long sleeve shirts. Denial can only take you so far, and walking around in shorts and a sweatshirt and a windbreaker is denial. I know, many of you switched away from shorts many weeks ago, and some never wear shorts, but this is the People's Republic of California and one of my few pleasures living here is wearing shorts and Harley t-shirts for much of the year.