17 January 2019


OK, so here's the latest exemplar of how and why our healthcare process is screwed up. And where a lot of the money goes.

Immunomedics is a New Jersey pharma which has been around since 1982. As of market close today, its market cap was $3.44 Billion. Now, this company has never gotten a drug approved. Let that sink in for a second. Tomorrow was to be the decision day from FDA for its latest attempt to get an approval. Well... FAIL!! A day early and an approval short. Rejected. They released the news after both regular hours and after-hours trading.

I doubt it'll be worth north of $3,000,000,000 tomorrow morning.

Cannon Fodder

It wouldn't be Right Wingnut without dissying anyone who gets paid by the Damn Gummint. Never mind that at least 80% of those folks live outside the DC metroplex. Exact figures are hard to come by, but here's a few attempts.

From 2013
With so many government jobs tied to Defense Department operations, there's a clear "federal employment belt" running through the South and West. "At the end of the day," Florida writes, "it is America's red states that appear more heavily tied to the levels of federal employment than their blue state counterparts, setting up a fundamental irony about the locations of the most ardent 'starve-the-beast' supporters of smaller government."

Well, of course there is.

From 2015
The highest concentrations of public sector jobs are frequently found in states with relatively large rural populations. Eight of the 10 states with the highest concentrations of public sector jobs were less densely populated than the national population density of 87.4 people per square mile. On the other hand, eight of the 10 states with the smallest public sectors were twice as densely populated as the nation as a whole.

Those are all levels of Damn Gummint employment, but still... AKA, empty shitkicker country.

From 2018
Although the Washington area has the highest number of federal workers, government employees make up large shares of the workforce in many other areas, often near military bases. Federal civilians are 15 percent of the workforce in the small metropolitan area near Robins Air Force Base south of Macon, Ga. Similarly, federal civilian workers are 13 percent of the workforce in the Bremerton-Silverdale metropolitan area near Seattle. Federal workers are 16 percent of the workforce near the Patuxent Naval Air Station in Southern Maryland.

There's a map of where these folks live.

Another from 2018
Outside Washington D.C., several Midwestern and rural states have the highest share of their workforces employed by federal agencies affected by the shutdown.
60% of the federal workforce has at least a bachelor\u2019s, compared with 35% in the private sector.

Again, detailed maps.

From 2019. Anecdotal information.
Many of the affected federal workers — including 10,000 people in Utah, 6,200 in West Virginia and 5,500 in Alabama — have salaries far below the average $85,000 for government employees. But those paychecks drive local economies, and workers are starting to make tough choices about how to spend them — eating out less, limiting travel and shopping at food pantries instead of grocery stores — creating a ripple effect through the neighborhoods and towns where they live.

I wonder? Will these Trumpsters ever figure out that they've been conned?

16 January 2019

Steel This Missive

Some episodes ago (and here), the notion that tariffs on foreign steel and aluminum would be born by those foreign countries was blown up. Americans pay the tariffs. End of story. Well, now we have some new data. Which proves the point, naturally.
But in the 10 months since the Trump administration imposed 25 percent tariffs on steel imports, prices in the United States have now fallen back to levels last seen before the tariffs were announced on March 1.

From the wiki:
In 2017, there were 9 operating integrated steel mills in the United States (plus one idled), down from 13 in 2000. Integrated mills produced 31% of the steel produced in the US.
[these mills make primary steel from ore]
There were about 112 minimills or specialty mills in the US, which in 2013 produced 59% of US total steel production. The specialty mills use iron and steel scrap, rather than iron ore, as feedstock, and melt the scrap in electric furnaces.

Is anyone surprised? I think not.
"Tariffs are taxes paid for by American families and American businesses — not foreigners," said Thomas J. Donohue, the president of the U.S. Chamber of Commerce.

I wonder? Is Donohue on the contact list of the Red Phone?

I wonder whether the American Enterprise Institute is on the contact list of the Red Phone?
Increased productivity means today's steel mills don't need as many workers. Steel industry employment peaked at 650,000 in 1953. By the start of this year, U.S. steelmakers employed just 143,000.

12 January 2019

City Folk

Way back in 2014, one of these missives had this to say:
The Great Migrations, from farm to factory, in the 19th and 20th centuries, were based on unskilled labor moving to another unskilled labor.

That was old news, at least to me. What was inferred, naturally, is that same-for-same skill, but higher wage and standard of living, no longer holds. Clearly, the shitkicker states where all those displaced 55 year olds live can't reasonably send those 55 year olds El Norte. Simply obvious.

Well, an MIT economist has closely quantified the problem. Not too surprisingly, here's the lede:
For decades, workers migrated to big cities in America that promised abundant jobs and decent wages — in clerical offices in New York, at shipbuilding yards in Oakland, on auto assembly lines around Detroit.

Big, dense cities offered not just better pay for lower-skilled workers; cities offered them better kinds of jobs.

But, naturally
Workers, whether with a college degree or not, could long count on earning more in denser urban areas than in rural ones. Today, that pattern holds for highly educated workers — and has in fact grown much stronger. For workers without any college education, the added wage benefits of dense cities have mostly disappeared in Mr. Autor's data.

Neither the reporters nor the MIT economist offer a solution. I suppose to do so would get them labeled "God Damned Socialist!!", but the simple fact remains, it's either that or let the uneducated, unskilled, Trumpistas starve. The low skill service sector jobs in cities just aren't the step up for today's shitkickers the way factory work was for Okies and other displaced, or ambitious, farmhands in the early 20th century. It helps to keep one's eyes open. A great, beautiful wall won't help, either.

11 January 2019

My Name is Bond, Junk Bond - part the second

Sheila Bair and Gaurav Vasisht take on corporate bonds in the NYT. It's worth reading to your kids, if giving them reason to have nightmares is key to your parenting style.

What they miss, as do the mass of big name pundits, is a discussion of 'where is all the moolah coming from?' that keeps fiduciaries expensive and interest rate low. You can't have a continuing rise in bond prices, and the necessary fall in the interest rate, without a continuing supply of moolah. Where is it coming from? Part of it is clearly The Manchurian President's tax giveaway, which re-filled corporate coffers. The CxO class controlling said coffers having no idea how to spend it productively, go the fiduciaries route. The result is explicable by an Econ 101 student: demand drives up price.
... yields on junk debt remained low, a sign that investors are too willing to take on the risk of bonds held by companies with less-than-stellar credit.

Well, NO. The only reason they're doing something so stupid is the driving stupidity of lack of invention in their own businesses: for the better part of a decade there's been a flood of cheap money available to boost physical capital, yet corporations and the .1% continue to buy up fiduciaries. And the mainstream pundits remain puzzled. D'oh.

The solution, albeit likely impossible, is for the CxO class of corporations to get their heads out of their asses, where they've been for a decade, and make physical investment in better production. The real return from such investment manifests itself in higher interest rate that is profitable. So, given that the CxO class couldn't find real investment above near 0 interest rate for so many years, what's the chance they'll find Jesus (well, that other guy: 'Jesus saves but Moses invests') now and get inventive? Yeah, you're right; not bloody likely.

Perhaps the canary in the coal mine is Apple, which appears to have run out the clock on its iPhone. Each new version is decreasingly differentiable from the last. And at increasing price, too. The damn asymptote of progress just won't shut up.

In the world of mobile devices, phones particularly, the Next Big Thing is likely the clamshell, full size, variant. It's been mentioned here before that patents and PoCs exist. Whoever pulls it off first will be the winner. And, no, 5G isn't the answer, either. Opposition is significant, and benefit isn't clear. Do communities really want microwave ovens spewing on every light pole in town?

05 January 2019

I Told You So - 5 January 2019

Well, about two years ago I predicted that The Manchurian President would actively kill data reporting.

So, in the last few days we've experienced data dishonesty.

Here's a long piece on lying from DHS.

An early piece from Across The Pond:
As a former Census Bureau statistician explained, once you change the statistics, "you can write your own narrative. You can tell people how sick they are or how safe they are."

As that old saying goes, 'the winners write the history'. Naturally, it helps if the winner didn't cheat to win.

If your stomach is really strong, drink this cup of acid.

03 January 2019

China Syndrome - part the fifth

So, what have we learned today, campers? First, and foremost, the meme that China is the next bounty of aggregate demand has always been a pipe dream. Whether Apple's problem will lead to the Next Great Recession remains to be seen. It is clear that Apple's failure to continue non-linear growth there will have significant knock-on/side effects. It is clear that Apple, despite braying by the FAANG zealots, really is a one-trick pony. Were it otherwise, it's share wouldn't have tanked.

Apple absorbs quite a bit of parts, since it makes virtually nothing on its own. All those suppliers have been riding on that demand, but now poof!

Buckle up.