30 September 2019

1) The White House is considering putting limits on U.S. investment in China, which would aggravate the protracted trade dispute between the two largest economies in the world. Advisers are discussing ways to limit U.S. investors’ portfolio flows into China, including limiting all U.S. investment in China. One possible method being considered is to delist Chinese companies on the U.S. stock exchanges thereby limiting American’s exposure to the Chinese market.

2) Alexandria Ocasio-Cortex, the New York Representative, announced a comprehensive anti-poverty bill that would provide new protections for tenants, children, immigrants and other Americans who are increasingly vulnerable to the high cost of inequality. One part of the bill is a tenant rights bill which would significantly expand federal housing policy. This would include a cap on annual rent increases or rent control.

3) General Motors has reversed itself and reinstated health care benefits to its striking workers, as a result of sever criticism from politicians and social media. Normal procedure in strikes is for the cost of health care to shift from the company to the union. The strike of 49,000 GM workers has shut down 30 GM plants across the nation for nearly two weeks. The GM plant in Mexico has been forced to close due to parts shortages as a result of the strike.

4) Stock market closings for – 27 SEP 19:

Dow              26,820.25    down    70.87 
Nasdaq           7,939.63    down    91.03
S&P 500          2,961.79    down    15.83

10 Year Yield:    down   at    1.68%

Oil:    $56.18

27 September 2019

1) The first all electric ‘gas station’ has been opened in America in Takoma Park, Maryland. The owner of the gas station, which has been around since 1958, decided to convert to all electric supplier of auto energy because of the difficulties and short comings of business with the oil companies. There are 20,700 registered EVs (Electric Vehicles) in Maryland, and the station has four dispensers that allow four vehicles to charge to 80% battery capacity in 20 to 30 minutes.

2) The market for smartphones is expected to decline by 3.2% for 2019, the largest decline ever. This decline is a result of the market becoming saturated because there’s no longer the innovations in device features plus the life span of devices has increased. Users are reluctant to buy new phones if there isn’t a perception of new abilities and features. The next big push in sales will be from the 5G devices as service areas expand.

3) The e-cigarette industry faces a crisis with Juul Labs potentially being crippled by a ban on most of it’s product. The tobacco giant Altria Group Inc., who owns 35% of Juul Labs, and had been in talks with Philip Morris International for a blockbuster merger, but those talks collapsed in part by the threat of Juul’s potential troubles with federal regulation.

4) Stock market closings for – 26 SEP 19:

Dow                        26,891.12    down    79.59
Nasdaq                     8,030.66    down    46.72
S&P 500                    2,977.62    down      7.25

10 Year Yield:    down   at    1.68%

Oil:    up    $56.54

26 September 2019

1) Devin Wenig, the president and CEO for eBay is stepping down as the company moves forward with potential sale of assets. EBay’s board of directors considers that a new CEO is best for the company at this time. Scott Schenkel, eBay’s senior vice president and chief financial officer has been appointed as interim CEO.

2) Inspired Brands, a restaurant chain holding company, announced it is adding Jimmy John’s Gourmet Sandwiches to its portfolio. Other restaurant chains owned by Inspired Brands is Arby’s, Sonic, Buffalo Wild Wings and Rusty Taco. This acquisition will make Inspired Brands the fourth largest restaurant company in the U.S., with over $14 billion dollars in annual sales from 11,200 restaurants in 16 countries.

3) The number of mortgage applications has fallen 10.1% this last week, as interest rates rise. However, the volume is still 46% higher than a year ago when interest rates were higher. Applications for refinancing home loans, which are very sensitive to interest rates, fell 15%, but again is still 104% higher than a year ago.

4) Stock market closings for – 25 SEP 19:

Dow                26,970.71    up    162.94
Nasdaq             8,077.38    up      83.76
S&P 500            2,984.87    up      18.27

10 Year Yield:    up   at    1.73%

Oil:    $56.66

25 September 2019

1) There are fears that the repo (repurchase agreements) market or short term funding, where banks lend to each other, is looking like it did on the 2007 market crash. The Federal Reserve Bank injected hundreds of billions of dollars into the repo system after it seized up last week when the interest rates quadruple. This has been coming about for the last several years after the Fed ended the policy of quantitative easing (QE) in order to increase liquidity to encourage banks to lend more. The squeeze like last week’s indicates there isn’t enough reserves in the financial system for the repo markets to operate. This means the government is having to buy back treasury securities.

2) Presidential candidate Bernie Sanders has propose a tax that would cut billionaires’s net worth in half. This wealth tax takes Elizabeth Warren’s idea and pushes it even further, with Sanders goal to cut American billionaires’ fortunes in half over 15 years. This wealth tax would raise an estimated $4.35 trillion dollars over the next decade by targeting 0.1% of U.S. households.

3) The consumer confidence index has declined by the most in nine months. Americans’ expectations for the economy and the job market deteriorated posing a risk to the household spending that is key to growth. The index dropped from 134.2 to 125.1, the lowest level since January. The overall measure remains elevated suggesting consumers will continue to support the record long U.S. expansion via spending.

4) Stock market closings for – 24 SEP 19:

Dow               26,807.77    down    142.22
Nasdaq            7,993.63    down    118.84
S&P 500         2,966.60    down       25.18

10 Year Yield:    down   at    1.64%

Oil:    $56.80

24 September 2019

1) Saudi Arabia has restored 75% of its crude oil output and will have restored full production by next week. The September 14 attacks had reduced crude production to half, but promises that production will be fully restored by the end of September. The Saudis have managed to avoid a world wide oil crisis by drawing upon their stockpiles to continue supplying their customers at near pre-attack levels of crude.

2) The retailer giant Amazon plans to purchase 100,000 electric delivery vans from the company Rivian as part of its carbon neutral plan. Furthermore, Amazon announced plans to up its present 40% renewable energy to 100% by 2030. Rivian will design a custom electric delivery van for Amazon to be delivered between 2021 and 2024, who also has an agreement with Ford to develop an electric F-150 pickup truck. Amazon is also working to halt its support of the fossil fuel industry, stopping donations to climate denying politicians and think tanks, and stopping the oppression of climate refugees.

3) The British travel firm Thomas Cook has collapsed with bankruptcy, leaving about 600,000 customers stranded. The 178 year old group, which is debt plagued and struggling against fierce online competition for some time, is blaming Brexit uncertainty for the recent drop in bookings, and thus its inability to secure $250 million dollar loan to prevent collapse. This also leaves 22,000 staff members unemployed, with the British government chartering airlines to fly stranded passengers home.

4) Stock market closings for – 23 SEP 19:

Dow             26,949.99         up   14.92
Nasdaq          8,112.46    down     5.21
S&P 500         2,991.78    down     0.29

10 Year Yield:    down   at    1.71%

Oil:    $58.49

23 September 2019

1) The retailing mammoth Amazon has spawned a rival called ‘Free and Fair Markets Initiative’ (FFMI), who have launched a nation wide campaign to criticize Amazon’s business practices. They claim that Amazon stifles competition and innovations, inhibiting consumer choice, gorging on government subsidies, endangering its warehouse workers and exposing consumer data to privacy breaches. The group claims to have grass-roots support, but haven’t disclosed they are receiving backing from some of Amazon’s major corporate rivals such as Walmart.

2) An additional 4,500 Canadian auto workers have been furloughed as a result of UAW (United Auto Workers) strike on GM (General Motors), which is now in its fifth day. This is a result of the strike disrupting operations and supplies of auto parts and assemblies needed for Canada’s plant to manufacture automobiles.

3) The Ohio Public Employees Retirement System, the largest public pension system in Ohio, is moving to reduce cost of living benefits for current and future retirees. This requires legislative changes, which the board of directors have voted to ask lawmakers for. Like so many retirements, public and private, the public pension system is striving to straighten out its finances. The fund has $24 billion dollars in unfunded liabilities to contend with and this proposed action will wipe out $3.44 billion dollars of that liability. .

4) Stock market closings for – 20 SEP 19:

Dow               26,935.07    down    159.72
Nasdaq            8,117.67    down      65.20
S&P 500           2,992.07    down      14.72

10 Year Yield:    down   at    1.76%

Oil:    $58.39

The High Cost for Millennials / Generation-Z!

A major problem facing the millennials and generation-Z is the increasingly difficulties and cost of keeping them in a modern high technology society.

James Lyman BSAE, BSEE, MSSM

People of all ages never think about what it takes to keep an individual in a modern high technology society, assuming that the world they live in has always been there and so therefore must always be there. But the reality is, with a growing world population and diminishing resources, it’s becoming increasingly expensive and difficult to keep individuals in advance technology societies as resources become more difficult and therefore more expensive to procure.

The land area of Earth is 57,308,738 square miles, of this 33% is desert and 24% is mountainous. Subtracting this uninhabitable land leaves 24,642,757 square miles of habitable land, land where a human can gather food to live. Looking on the internet, I found that land requirements to feed a single hunter-gatherer human ranges from 150 to 14,000 hectares with the average being about 250 hectares or not quite one square mile. This gives a maximum world population of about 25 million humans in our natural environment, a long way from our present population of 7.53 billion people. That means, through technology, we have about 300 times the number of people that our natural environment can sustain.

The pre-mechanized agriculture of horse drawn plow produced about 10 bushels of grain per acre compared with the 300 bushels for a modern techno-petrol chemically based industrial farm of today. I just recently read that half the large mammals in the world are human, and the other half are the domestic animals used to sustained the human population. This leaves just a 5% sliver for all the other mammals in the world- the zebras, elephants, whales, dolphins, tigers and etcetera, etcetera and etcetera.

The human race as it is today, can only be fed and sustained by the massive use of high technology, and that means having the resources, with the principle one being the oil. One third of the oil we use each year goes to feeding ourselves. Another very important resource needed is fresh water, a resource that like oil, is becoming scarcer across the world. Other needed resources required to keep a person in an advance society (1) is natural minerals and resources such as metals, wood, sand, rock as well as foods such as ocean fish. Also energy, oil and the petrol chemicals for virtually everything in our lives, in particular the plastics, as well as all the infrastructure and negative resources. The negative resources is the pollution, trash and climate change that will always be a part of a modern society.

Articles and news stories abound about the problems of diminishing resources, from the looming oil shortages to global warming. In view of the problems of resources, it’s easy to see why it’s becoming more difficult and expensive to keep individuals in our advance societies. It’s all about those needed and must have resources! Human conflict is based on getting and holding resources (see chapter V, America’s Slide into Domestic Terrorism (2), Amazon.com), that’s how war came about in humanity long, long before any recorded history, probably before our species. The first epoch of war was the hunter-gatherers getting and holding their territory to feed themselves, their children and sustain their lives (3), much as any other animal species does. Histories of the American plains Indians provide ample evidence of this, such as when the Sioux migrated out of the forest lands of Minnesota down into the open plains of North and South Dakota and adopted the horse culture. In the process, they pushed the Cheyenne, Crow, Pawnee and other tribes out of their territories to take them over- just as the white man did a century later . . . and sent the Sioux packing off to the reservations.

What people don’t get, is that competition for resources is a major factor in the precipitation of human conflict . . . WAR! Be it a married couple squabbling over spending the family money or nations and superpowers vying for oil, competition for resources, of one sorts or another, is the source of friction leading to human conflict. We see that everyday on the news with groups such as ANTIFA railing against various small right wing groups, as they lash out against each other, sometimes physically. They are being pushed out of the social economic system just as surely as the Indians were pushed out of their lands by a more technologically advance people . . . and they’re mad as hell about that. In this case, the competition for resources is having a place under the sun in the coming years, but not having any understanding of what’s happening to them, they blindly strike out at each other as convenient targets to vent their frustration and anger on.

While the news media focuses on the supposed political differences between groups like ANTIFA, in actuality they’re one and the same.

Indirectly, they are competing for basic resources such as the oil, natural resources, water and the negative resources, by virtue of the high cost of keeping individuals in a high technology society. That high cost coupled with their being to far behind, at a time when technology is providing the means to do their jobs, is what is really pushing them out. The fact that none of these groups understands the reality of their situation means nothing in their conflict. Like two cats in the above picture, tied together by a short leash, the cats blame each other for their restraint and just as blindly lash out at each other. Indeed, one may actually kill the other, simply because neither cat understands their real problem.

The same holds true for those who we have elect to govern us. They too lack the ability to understand the problems, blindly applying the invalid linear singularity principle to those problems faced by the people. The simplistic concept that problems are caused by one and only one thing, and that the world is proportional or linear, while in fact the real world is anything but that.  
Although they can’t really articulate it, the young people’s real struggle is to keep a place in the sun of the American social-economic system as technology displacement slowly pushes them out. Already, we are seeing open conflict, the prelude to domestic terrorism as lines are drawn, as process of social mitosis continues pulling society apart. While social mitosis has been on going since I was a boy in the sixties, it nevertheless continues to strain the social fabric with no attempts of restrain it.

Social mitosis has two possible conclusions- the people come back together as one or there’s a rupture and seperation. And that rupture is almost always the open conflict of revolution . . .

WAR!

Corollary of War:

A technologically advance people will displace a lesser people. (4)

1) “America’s Slide into Domestic Terrorism, A Technology Monogram for Law Enforcement”, James C. Lyman, Compass Rose Publications, San Antonio, TX, 2010, pp1-4. Available Amazon.com.

2) ibid ‘Basic Theory of War’ pp72-124.

3) ibid p86.

3) ibid p119.

1) There are expectations that global growth will slow this year to a rate that can become a financial crisis. The Organization for Economic Cooperation and Development claims new data showing the US-China trade dispute is increasingly threatening the outlook of the two largest economies as well as others. Furthermore, the uncertainty from the Brexit and a possible crash out would further aggravate economic growth in the European sector.

2) Saudi Arabia is avoiding a global oil crisis by using the crude it holds in reserve until production can be fully restored. The Saudi’s claim necessary repairs will be completed in two to three weeks, thus restoring production levels prior to the attack. However, oil experts are skeptical that these repairs can be done in such a short period of time. This uncertainty is due in part from Saudi Arabia’s lack of transparence of their oil operations.

3) Good news for home owners, sales of used homes rose to its highest in more than a year, with the median price up 4.7% from last year to $278,200. This home sale bonanza is fueled in part by the low interest rates now available and by income gains. However, there are fears of a global economic slow down darkening this rosy picture in the near future. Presently, it would take 4.1 months to sell all the available houses, with realtors considering anything below a five month supply a tight market.

4) Stock market closings for – 19 SEP 19:

Dow              27,094.79    down   52.29 
Nasdaq           8,182.88          up     5.49
S&P 500          3,006.79          up     0.06

10 Year Yield:    down   at    1.77%

Oil:    $58.68

19 September 2019

1) The Federal Reserved voted for a quarter percent drop in the interest rate, bringing the ire of President Trump in a tweet, complaining the Feds lack the guts and vision to cut more. But the board surprised everyone by its divided vote, three of the members voted against a policy decision, while seven voted for it. This is considered an indication of how uncertain things are and just what the economic future holds. In response, the stock markets fell over the news of just a quarter percent rate reduction.

2) Some fear that parallels in the market signal the coming of another recession. These parallels include an inverted yield curve with the stock markets making new highs in July, followed by a correction in August, then a rally in early September. Additionally, growth is slowing. These same signs occurred in 2007 prior to sliding into a sever recession. All that is needed is a trigger such as the world oil supply.

3) As a result of the UAW (United Auto Workers) strike, GM (General Motors) announced 1,300 layoffs in their Oshawa plant in Canada. This is because GM plants in the US are shut down and unable to deliver needed parts and assemblies to the Canadian plant. This shows that the strike is spreading to other units of the automakers business.

4) Stock market closings for – 18 SEP 19:

Dow             27,147.08         up    36.28
Nasdaq          8,177.39    down      8.62
S&P 500         3,006.73          up      1.03

10 Year Yield:    down   at    1.79%

Oil:    $58.25

18 September 2019

1) World oil prices dropped sharply with Saudi Arabian source saying that their oil production could be fully back on line within weeks. This is far sooner than was initially assumed by world markets. Production may be back up in as little as two to three weeks. The attacks resulted in the largest single supply disruption in half a century.

2) Economists say the GM (General Motors) strike no longer has the economic impact that they once did. They assert it will take a lengthy shutdown to make a national impact. This is a result of GM’s market share shrinking while its work force is now smaller, in part because of automation. A prolonged strike could impact the economy by disrupting the supply chain effecting other industries. GM has shifted workers health care cost to the UAW (United Auto Workers) union, increasing pressure on the union for a quick settlement.

3) There are expectations that the Federal Reserve will lower interest rates on Wednesday for the second time in two months with another likely cut later this year. The consensus is the feds will drop the interest rate by about a quarter percent in an attempt to starve off the world economic slowdown from reaching America. Job growth has slowed and the index of manufacturing activity shows contraction, increasing fears that a recession will happen in the near future.

4) Stock market closings for – 17 SEP 19:

Dow                 27,110.80    up    33.98
Nasdaq             8,186.02    up    32.47
S&P 500            3,005.70    up      7.74

10 Year Yield:    down   at    1.81%

Oil:    down   at    $58.81