12 August 2019

1) The electric car company Tesla Inc is being sued claiming the company limited battery range of its older vehicles using software updates. The alleged intent was for Tesla to avoid costly fixes to defective batteries. The lawsuit is seeking class action status for thousands of Model S and X owners. The suit claims that older generation batteries had their range curtailed by an automatic software update. As a result of a battery fire, Tesla claims they are revising charge and thermal management settings via the software to further protect the battery and improve battery longevity.

2) The Chinese-American trade war hasn’t been bad for all nations, other nations are experiencing increase trade as a result of the war. Australia is the biggest beneficiary with exports to China of natural resources. Second is Switzerland, the third is Mexico which has replaced China as U.S. largest exporter. Fourth is Brazil who is benefitting from agricultural export to China and the fifth is Canada.

3) Malaysia is expanding its efforts to prosecute seventeen Goldman Sachs executives, who were allegedly involved in misleading investors in a $6.5 billion dollar bond sale. The bonds were for the state investment fund, 1 Malaysia Development Bhd or 1MDB. Charges include executives knowing that funds would be siphon off so Malaysia is also seeking to recoup funds and fees.

4) Stock market closings for – 9 AUG 19:

Dow             26,287.44    down    90.75
Nasdaq          7,959.14    down    80.02
S&P 500         2,918.65    down    19.44

10 Year Yield:    up   at    1.73%

Oil:    down   at    $54.27

31 July 2019

1) One of the nations largest credit card companies Capital One announced a massive data breach which affects tens of millions of customers. This news has sent its stock down 7%. Most of the data lost to hackers was personal information such as names, addresses, phone numbers and income of consumers and small businesses from 2005 to 2019. About 140,000 Social Security numbers of customers was comprised with 80,000 bank links. This breach is one of the largest yet.

2) China and America have resumed trade talks in Shanghai after a three month suspension. President Trump has criticized China for it’s reluctance to buy U.S. agricultural products, the Chinese using this as a pressure point on Trump with many farmers having previously supported Trump. There are low expectations for a breakthrough in trade talks because the two sides are further apart now than three months ago.

3) American consumer confidence is at the highest level since November negating its June drop. The index rose from June’s 124.3 to 135.7. The index measures consumers’ assessment of the current economic conditions and their expectations for the next six months. Consumers have little concern for trade tensions with China or a slowing economy. This should translate into robust spending in the near future.

4) Stock market closings for – 30 JUL 19:

Dow               ,198.02    down    23.33
Nasdaq       8,273.61    down    19.72
S&P 500      3,013.18    down      7.79

10 Year Yield:    up   at    2.06%

Oil:    up   at    $58.34

29 July 2019

1) Newly released reports says that raising the minimum wage to $15 per hour by 2025 will raise the wages for 22.2% of American workers. They claim that 33.5 million workers would experience a $92.5 billion dollar increase in pay or $2,800 per worker. Currently, the minimum wage is $7.25 per hour, but it’s not expected such legislation to increase the federal minimum wage can pass through congress and not be vetoed.

2) China is looking for new markets to sell to. Presently, it has too many factories making too many goods because the trade war has diminished sales to its biggest customer America. China is seeking to create free-trade zones across the Asia-Pacific region in the hopes of opening new markets. Additionally, China is talking with Japan and South Korea to lower trade barriers. The problem is no country can absorb the volume of goods that China sells to America.

3) High tech companies are taking business to Canada and her supple of technology skilled immigrants. Canada has more relaxed controls over entry for workers having the education and skills sought by high tech companies, and therefore provides a base for such companies to expand into. Canada processes work visas for such workers in weeks, while the U.S. is noted for its long delays to grant the needed visas.

4) Stock market closings for – 26 JUL 19:

Dow             27,192.45    up    51.47
Nasdaq          8,330.21    up    91.67
S&P 500         3,025.86    up    22.19

10 Year Yield:    up   at    2.08%

Oil:    down   at    $56.16

23 July 2019

1) Despite the world wide forces that normally pushes oil prices higher, the oil markets remain surprisingly flat. Available oil has dropped with the embargos on Venezuela and Iran, plus tensions over the Strait of Hormuz which would have normally pushed oil prices up. But at the same time, consumption has dropped with China leading the way, plus U.S. oil production continues to creep up. The International Energy Agency recently cut its expectations for global demand for 2019 and 2020.

2) Ford Motor Company stumbles in its attempt for global growth, in particular in trying to expand its market in China. Ford’s auto sales in China are down 27% for the first six months. Ford is being threatened by much improved Chinese’s domestic brands, resulting in a speedy and deep decline in Ford’s sales in China. So Ford is now counting on introducing new-models to revive its sales. Auto sales in China are softening as the Chinese economy slows and with the uncertainty over trade relations with America.

3) American farmers now facing a third obstacle to profits with a stifling heat wave spreading across the continent this summer. First, farmers faced the trade war with China imposing counter tariffs which dropped the demand for food products from one of their biggest customers. Then torrential rains flooded farmland delaying planting of crops and harvesting. Now droughts threaten to severely limit production and harvests. Many farmers may be facing financial disaster by the end of this year, not having the monetary resources to hold out for a better next year.

4) Stock market closings for – 22 JUL 19:

Dow             27,154.20    down    68.77
Nasdaq         8,146.49    down    60.75
S&P 500        2,976.61    down    18.50

10 Year Yield:    up   at    2.05%

Oil:    up   at    $55.74

27 June 2019

1) Ikea, the pioneer of inexpensive self-assembled home furniture is adapting its manufacturing and marketing methods to inexpensive housing. Sections for homes will be built in factories, then quickly assemble into ready to move-in houses. Bringing the factory manufacturing techniques to homes would significantly reduce the cost as compared to the hand built housing techniques now used. This could open the way to home ownership by the younger generations.

2) Despite the continual upsurge of the markets, Americans aren’t convinced the economy is doing well. A survey shows 39% of U.S. consumers believe the economy is ‘not so good’ or even poor. Lower income Americans are not doing as well as macro indicators would suggest, despite getting more raises recently. These gains don’t offset years of high unemployment and stagnant wages.

3) A huge drop in U.S. crude oil inventories and the outlook for demand has pushed oil futures prices up to near $60 dollars a barrel. Domestic stockpiles fell by 12.8 million barrels last week, the biggest drop in supplies since September 2016. In the past week, oil futures have jumped 10%, with the traditional expected increase in oil demand with summer driving. Gasoline reserves are further aggravated by the fire at Philadelphia Energy Solutions, the East Coast’s largest refinery.

4) Stock market closings for- 26 JUN 19:

Dow                    26,536.82    down    11.40
Nasdaq                  7,909.97          up    25.25
S&P 500                 2,913.78     down      3.60

10 Year Yield:    up   at    2.05%

Oil:    down   at    $59.21

21 June 2019

1) Boeing has landed a$24 billion dollar contract from IAG SA, the owner of British Airways, to purchase 737 MAX airliners. Rival builder Airbus has vowed to fight the agreement since they never received an RFP (Request For Proposal) for making a bid on the contract. The secret negotiations between Boeing and IAG was the bomb shell surprise coming out of the Paris air show this week. This sale comes as a major endorsement to Boeing’s 737 MAX to reestablish Boeing as a major supplier of airliners.

2) The price of crude oil shot up 5% over news that Iran has shot down a American drone aircraft, fueling additional fears of a US-Iran military confrontation. The drone was shot down by a surface to air missile while flying over international airspace of the Strait of Hormuz. This is another move by Iran to control the seaway and thus control the flow of oil in an effort to force the U.S. to abandon its crippling economic sanctions.

3) The cost of opening a major fast food franchise in terms of liquid assets can be as much as a million dollars or more. You must have $500,000 cash to open a McDonald’s, $750,000 to open a Taco Bell and $2 million dollars to open a Wendy’s. Startup costs exceed a million dollars for most major fast food chains in America, with additional monthly fees for royalties, advertising and services, which can add up to 10% of gross sales.

4) Stock market closings for- 20 JUN 19:

Dow            26,753.17    up    249.17
Nasdaq         8,051.34    up      64.02
S&P 500        2,954.18    up      27.72

10 Year Yield:     down   at    2.00%

Oil:    up   at    $57.16

19 June 2019

1) The pizza giant Domino’s will test pizza delivery using fully autonomous vehicles in Houston. Domino’s has been exploring this technology for the last two years with robot cars that had standby drivers for safety, but these robots will be human free. The Silicon Valley startup Nuro, who has been working with the grocery chain Kroger testing home delivery service, will provide the automobiles. Customers will be able to make orders via their smart phones, track progress of the cars, then use their smart phone to unlock the robot car to obtain their pizza.

2) Boeing Aircraft Co., the manufacture of the grounded 737 MAX, announce they have not received one single order for new airliners at the Paris air show. Their rival Airbus recorded orders and options for 123 new planes. Overall orders for this year’s Paris air show is expected to be the lowest since 2016, with emphasis on defense spending.

3) President Trump announced he will meet with China’s Xi Jinping at the G-20 summit, raising hopes of resumption of Chinese-American trade talks and a deal which will resolve the current trade war. The President says he will have extended meetings next week at the G-20 conference in Japan. News of the meeting coupled with expectations of near future cuts in the interest rates boost confidence in the markets.

4) Stock market closings for- 18 JUN 19 Stocks rally on news of US-China trade talks.

Dow                    26,465.54    up    353.01
Nasdaq                 7,953.88    up    108.86
S&P 500                2,917.75    up      28.08

10 Year Yield:     down   at    2.06%

Oil:    up   at    $53.97

EFR PODCAST EP. #32: TAX SZN

We’rrreeeeeeee back new episode of the EFR Podcast with your hosts Businessman Bassey (Sammy BE) @Ecofiretv, James Lyman @ObsoletePeople (finally getting a twitter handle), and on the engineering boards Jon “The Don” Sterling @TheDramaBlock.

The trio discussed the tax season in the U.S. of A, month of April, as well as topics ranging from President Donald J. Trump’s tax returns, American citizen having to pay taxes (or if you don’t want to, face the penalty & consequences), @ YOUR OWN RISK, of course.

As well as topics, such as Herman Cain & Stephen Moore possibly being nominated for the prestigious Federal Reserve Board; then both gentlemen dropping out from the nomination process; and plenty of more economic, financial and business discussion topics…..

This is a must listen to episode, for your ears…

As always #BEBless #StayBless #GODBLESS #RealRecognizeDeal

Check Out Our Online Platforms:

1) www.instagram.com/EcoFireTV (Sammy BE)
www.twitter.com/EcoFireTV

2)www.twitter.com/ObsoletePeople (James Lyman)

3) www.EconomicandFinanceReport.com (Economic & Finance Blog)

4)@Economic-FinanceReport (Podcast/Online Show)

5)www.youtube.com/channel/UCWZo5bug…Nlb2VRfDCQ/videos (EFR.Tv Youtube)

6)www.SammyBuysHomes.com (Real Estate Investment)

7) www.TraderSoul.com (Financial Trading Website)

Recession Worries?

Some analyst are claiming the good economic indicators we are seeing today are really portents of a recession.

James Lyman BSAE, BSEE, MSSM

Fears of another recession are particularly acute for the millennials and Z-generation, because in general, they are the first to suffer the most from an economic downturn.  This was seen in the 2008 downturn and is a consequence of our service economy, where for so many Americans, their economic value is as consumers, rather than substantive contributors to society.  As consumers, they are particularly vulnerable to any economic downturn . . . to a recession.  So what is causing some economic experts to think we may soon have a recession?

Some point to the fact that for the last 10 recessions in America, a recession quickly followed when the economy hits full employment. In other words, when the unemployment rate reaches a minimum cusp . . . in as little as a few months the economy starts a down slide.  The average time between when the cusp occurs and when the recessions starts is just 3.8 months, and for 3 downturns it was just 1 month after, with the longest being 10 months.  This trend started in 1950, a time when automation was starting to make inroads in American society, and a decade or so before the decline of manufacturing in America started. Therefore, we must view this hypophysis with the realization that the environment was changing, and that this may have had a profound effect.

But the problem with using this correlation as a predictor is it’s all hindsight.  To know if a recession is nearing, you must know when you’ve actually reached the cusp.  This April, the unemployment was down to 3.9 percent, a 17-year low, but since then it’s dropped to 3.7% and may well continue down.  There’s no way of knowing when the cusp has been reached until the unemployment rate starts back up.  But with the rate already one of the lowest, there’s less and less chance it will go much lower.

A low employment rate indicates that the labor force is fully utilized, but why would that indicate the onset of a recession?  What’s the forcing function? What’s the relationship?  Without knowing that, using this empirical relationship could be erroneous.  For one thing, the hypotheses assumes a constant environment, specifically when it doesn’t consider the growing obsolescence of people, and their displacement by technology.  This is an important consideration for our hyper-consumerism economy, because displacement of workers means fewer consumers and therefore a shrinking economy.  A shrinking economy, for whatever reason, is the basic ingredient for a recession.  So it’s safe to say, that the good economic indicators we are presently seeing, will most likely not continue for long, regardless of which political entity is in power.

Even though the past performance of a system is no guarantee of how that system will react in the future, you can’t just ‘out-of-hand’ dismiss the correlation of low unemployment cusp and the onset of a recession.  This next unemployment low may not foretell the onset of a recession, but then again, it may just as well happen as seen with the last ten recessions.  We can’t know with any certainty until after the fact.  While President Trump has created a stimulating environment for American business and the economy, there are a number of factors in which neither he, or anyone else has control over, that can bring an end to that stimulation.  The instability of world economies in Europe and Asia to start with. China’s blend of communism and capitalistic economics is showing to be more and more unstable.  If China’s down slide continues, what effects will that have on our economy?  Again, there’s no way of knowing until after the fact.

The millennials and Z-generation are the first to feel and suffer in a recession, mainly because so many of them now have ‘shallow’ jobs requiring little to no skills.  People who’s work hours can easily be reduced when business slows, or simply laid off.  In turn, with reduced income their effect as consumers is reduced, and that in turn further exacerbates an economic downturn.

Possibly the cusp in unemployment isn’t a forcing function, rather it is an artifact of other forces causing a downturn, that in turn results in unemployment starting to rise again to form that cusp.  This would make the validity of the hypophysis more palatable and hence acceptable.  There are other indicators that economic problems may be just over the horizon, such as the contraction of the big box stores, the foundation of hyper-consumerism.  Also there are problems with house sales declining, rising mortgage rates and a decline in house prices.  The rising US debt is adding further pressure on the economy to support what many consider unsustainable.  And finally, the frailty of so many world economies presents a major threat to the US economic viability.  A sever downturn of the fragile economies such as Greece, Spain or Italy could start a chain reaction that also pulls America’s economy down.

But even if the millennials and Z-generation know of a coming recession, what can they do to protect themselves?  Well, first of all, minimize personal debt as much as possible, and that starts right now. Just because things are booming now, that doesn’t mean you have to go out and buy things on credit.  Shop the same as when times aren’t so rosy.  If at all possible, save up and pay cash. The personal debt factor, more than anything else, is what causes people their biggest problems in a recession, especially if looking for new work.

Be more flexible by increasing skills and education now, particularly technical skills such as mathematics and science.  This is the twenty-first century, not the eighteenth or nineteenth century, and eighteenth century people have far fewer opportunities in this century.  Try and avoid careers directly involved in hyper consumerism, since consumerism is usually the first to feel the effects of a recession.  In other words, try and stay off the thin ice.

More than anything else, thinking ahead can do more
than anything else, in weathering a recession.

11 October 2018

New article posted below titled, “SEARS SEEMS TO BE GOING THRU BANKRUPTCY………”

1) A wave of warm weather has proved to be an economic boost to England’s economy.

2) The stock market cratered today with a massive 830 point drop in the Dow Jones.  President Trump blamed the sudden drop on hikes of the interest rates, with money flowing out of the stock market into the bond market.

3) There are questions if this is a correction of the markets or the start of a decline from the long run of stock gains.

4) 10 OCT 18 Stock market closings:  Dow and S&P down 3%, while Nasdaq is down 4%

Dow:                  25,598.74            down           831.83
Nasdaq                7,422.05            down           315.97
S&P 500               2,785.68            down             94.66

10 Year Yield:    up   at   3.22%

Oil:      $72.71    down   from    $74.69