The market continues to bounce off its top. The bottom is trending up. This would tend to indicate we can expect a breakout to the upside in the near future. People continue to be afraid of the "Fibonacci 50% retracement level," a particularly scary voodoo doll.
Census bureau data shows that union membership in private companies is in a continued 30 year decline. However, union membership among government workers has stayed above 40% over the same period. Counting benefits, the average federal worker's pay will leap from $72,800 in 2008 to $75,419 next year, compared with $40,331 in the private sector. Upton Sinclair taught us that unions are critically important to protect the poor helpless worker from the evil business owner. So, now who is the evil employer that takes advantage of innocent workers? Judging by union membership figures, it's the government.
The president's job-approval rating has slipped to 49%, and the percentage of people who strongly disapprove of the president's performance, 41%, outweighs the 37% who strongly approve. Disapproval of the job that Congress is doing has risen to 68%, "an all- time high," and 77% among independent voters. "I've come to the conclusion on independents, that what really drives them is they dislike both parties, and they dislike the party in power more," said Goeas, a Republican pollster. The survey also reveals a "disconnect" between what most voters would like to see in healthcare -- controlling the cost of medical care -- and what they view as the president's priority, insuring the uninsured. 28% said their priorities match Obama's priorities, and 64% said they do not.
The Senate is apparently quite close to passing a health care reform bill. If they do, it will still need to be reconciled with the house version - the Senate version contains no public insurance option, the house version does. It's not at all clear that this difference can be resolved in a way that can pass both houses. The current bill contains large subsidies for low-income workers and a requirement that most everyone buy insurance. The result of this is currently a very large marriage penalty for some people. Two single people making $30,000 per year get heavy subsidies and spend about $600 per year each on insurance. If they marry, as a $60,000 per year couple they get no subsidies and would spend about $12,000 per year on the same insurance.
Citigroup sold $20.5 billion in stock and debt to repay the government $20 billion. Wells Fargo sold $10.8 billion in stock to repay their tarp debt. The move relieves the banks from having to deal with government-mandated compensation restrictions, as was reportedly the main impetus for Bank of America to exit from TARP earlier this month. Importantly, Citi repaying TARP will end the government's $300 billion loss-sharing agreement with the bank, meaning Citi executives and their regulators must be confident there aren't big loan losses ahead. But as Joshua Rosner, managing director at Graham Fisher, wonders in an email Monday morning: "If Treasury is so sure that Citi, perhaps the sickest of the sick, is healthy enough to get out of TARP without a risk that they end up right back at our doorsteps again, why did Secretary Geithner ask, last week, to extend TARP until October?"
On 60 Minutes last Sunday Obama said, "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street." Two days after he said that, it was announced that the Treasury, Citi, and the IRS had come to an agreement to forego $38 billion in taxes Citi would normally owe. This free handout is much larger than any "profit" the government stands to make when they sell their Citi stock. Geithner is toast. You heard it here first.
Boeing's new 787 jetliner finally took to the skies Tuesday, more than two years later than the company had planned. The plane is the first of six 787s Boeing will use in the flight test program. Boeing currently has orders for 840 787s. The 787 is a radical departure for Boeing: About 50 percent of the plane is made of lightweight composite materials such as carbon fiber, with large sections produced by suppliers around the globe and assembled by Boeing at Everett WA. The plane will be quieter, produce fewer emissions and use 20 percent less fuel than comparable aircraft, while passengers will enjoy a more comfortable cabin with better air quality and larger windows. The program has been plagued by ill-fitting parts and electrical problems. The first flight was supposed to be in 2007 with deliveries the following year, but Boeing has been forced to push that back five times -- delays that have cost the company credibility, sales and billions of dollars.
At the U.N. climate conference on Monday, Al Gore said new computer modeling suggests the Arctic Ocean may be nearly ice-free in the summertime as early as 2014. Gore cited new scientific work at the U.S. Naval Postgraduate School, whose Arctic ice research is important for planning polar voyages by Navy submarines. The computer modeling there stresses the "volumetric," looking not just at the surface extent of ice but its thickness as well. One U.S. government scientist Monday questioned the new prediction as too severe, but other researchers previously have projected a quicker end than 2030 to the Arctic summer ice cap. "It's possible but not likely," said Mark Serreze of the U.S. National Snow and Ice Data Center in Boulder, Colorado. "We're sticking with 2030."
At the time of this writing, the climate conference is not going well. A bunch of third world countries think they should be paid for climate damage such as rising sea levels, and paid for not cutting down trees. Personally, I would favor paying them to produce and enforce a 1 child policy like China has. In my mind the most serious environmental threat the world faces right now is due to exponentially growing populations in Africa, India, and the Amazon. Emerging countries like India and China are unwilling to make major cuts in emissions as they believe it would set back their economic progress. And the US is ham-strung by the knowledge that any treaty with substantive cuts will almost certainly be blocked in the Senate - "Climategate," the release of emails indicating data manipulation and suppression of opposing opinions by global warming researchers, is not going over well with republicans, and democrats are focused on passing some kind of health care reform before they get kicked out of office. Obama claims to have brokered a deal. The deal is that there will be an international agency like the World Bank that monitors progress against goals. The goals are yet to be determined. The year the agreement will be made is yet to be determined, but China rejected 2010. But, it is agreed that there will be an agency to monitor results.