Stocks are poised to shoot up Monday on news Larry Summers withdrew from consideration for chairman of the Fed. Putin made Obama look like a blithering idiot on Syria. Money continues to flee emerging markets. In other words, very little news this week. It's been a quiet summer, and the markets like quiet.
For several weeks there has been talk that Larry Summers would be nominated to replace Bernanke. I never wrote anything about that because I knew it would never happen: Larry is too polarizing. For example, a few years ago he told the faculty of Harvard that the reason we don't have many women as professors of Engineering, Math and Science is that the IQ curves for women have a much lower standard deviation than that for men, so at 3 standard deviations out, an IQ above 145 or below 65, men outnumber women 6:1. That's why federal prisons and physics departments are full of men. He was forced to resign from the presidency of Harvard for saying this, because it's all but criminal to speak the truth in this country. Anyway he withdrew his name from consideration over the weekend in the face of four democratic senators saying they could not support him, and stock market futures immediately shot up. It seems clear Janet Yellen will play far more fast and loose with the money supply than Summers would have.
Consumer confidence is dropping a bit. Are we heading for a recession? Meanwhile on Wall Street the talk is all about the convergence of Europe, China and the US, all headed for extended periods of growth. China, whose numbers we generally don't trust, has had growing electricity usage which we do more or less trust to indicate a growing economy. Some on Wall Street are calling for an imminent crash; I don't see it. Personally, I think things are fine right now - businesses are hiring. The house of cards remains stable, imho.
In early October we'll need to raise the debt ceiling. Republicans say they want something, but they seem unclear on what they want. Democrats say they'll give nothing, but they seem confused about the democratic process. 44% of Americans say the debt ceiling shouldn't be raised at all - I expect there's a big overlap between that group and the 44% who lives on government handouts. Failure to raise the debt ceiling would likely hit very hard on many of those who say it shouldn't be raised. This used to be a nation that prided itself on education.
Microsoft is in serious trouble. Five years ago Windows dominated computing as the operating system of choice with a 70% market share, today that's 20% and shrinking fast. A few more years like this, a few more companies deciding that Windows 8 is simply too obtuse and insecure, and Windows will be no more relavent than Compaq.
We haven't spoken much about Greece for a while. Their condition continues to deteriorate, with unemployment continuing to rise. It's clear they will need another bailout sometime next year; it's not completely clear they'll get it.
Why are Americans getting fat? If you ask Dr.Laura how to lose weight, her stock answer is "Eat less, move more." Statistics bear this out. Americans are simply eating too much. Why? I believe a large part of this is addiction to fats. Basically there are only two fats/oils consumed by people: C16 and C18. If these fats are unsaturated, that is they are missing one hydrogen atom and have a carbon double bond, then we call them Oleic and Linoleic acid. These fats are liquid at room temperature so we call them oils. These are essential to life, you have to eat some of them or you get weird diseases. If you saturate them, that is every available carbon bond has a hydrogen, then they're called Palmitic and Stearic acid and they're bad for you. These are solid at room temperature so we call them fats. If you get the oils very hot, like in a fry vat or a hydrogenation process, then some of the oils remain unsaturated but a hydrogen atom moves, changing the shape of the oil molecule from bent to straight. These are then trans fats, they're solid at room temperature and incredibly bad for you - they build up in your cells and you have almost no chemical process available to eliminate them, they just hang around for years blocking important processes. If your cells are low on oils they send a message to your mouth to eat more; your mouth is kinda dumb so perhaps you go to McDonalds and eat a bunch of stearic acid in a McDouble and a bunch of trans fats in the fries. The fats then clog up your blood and cells and leave you still wanting oils; after a few days of this you're addicted. Solution: minimize red meat, stay away from fried foods and burgers, and don't ever eat trans fats which are present only in fried and processed foods - these never occur in nature.
|Fat or Oil|
Want to make a great salary? The median US household income is $52,000. The top six counties in the US have median incomes over $100,000, just about double the average. Which counties?
One of my readers enjoys accumulating gold coins. He likes to buy a couple each month. To do this he withdraws cash from his bank account once per month, never more often, sometimes less. The amount he withdraws is always under $10,000. He recently got a letter from his bank telling him he might be in violation of Federal law. The letter said in part, "Federal regulations require financial institutions to file a Currency Transaction Report whenever a customer conducts one or more transactions in currency totaling more than $10,000 in one business day. Because of this reporting requirement, many illicit enterprises deposit/withdraw large amounts of currency in a manner that makes it possible to evade CTR filing requirements. This can be accomplished in several ways, including through multiple, same day currency transactions in small amounts conducted by or on behalf of a person that result in currency transactions totaling more than $10,000 in the aggregate. This can also be achieved by depositing/withdrawing currency in amounts that are consistently below the reporting requirement. Purposely designing transactions to avoid CTR filing requirements is a federal crime known as "structuring". In order to identify instances of structuring, financial institutions scrutinize the transactions of their customers. Many people are not aware that their transactions may resemble impermissibly "structured" transactions and place their financial institutions in the awkward position of having to determine whether their customers purposely designed their transactions to avoid CTR filing requirements and whether it may be appropriate to close accounts if this activity continues over time."
California has voted to raise their minimum wage from $8 to $9 on July 1 2014 then to $10 on January 1 2016. One republican legislator said, "Liberals want to raise the cost of tobacco to discourage its use without realizing the same principle applies to labor: If you make something more expensive, people will buy less of it." Who's going to get a raise? Roughly 1.5 million Californians work for minimum wage. Who are they? Illegals - 2/3 of the new money goes to hispanics. Not blacks, they're going to get almost none of this money. Some young Asian and White girls will also get a raise.