Category Archives: Free Market

What the Latest Jobs Reports Really Mean

Tuesday, 09 January 2018 06:20

This article appeared online at TheNewAmerican.com on Monday, January 8, 2018:

There were three jobs reports released last week: two from the Labor Department’s Bureau of Labor Statistics (one based on its “household” survey, the other on its “establishment” survey), and one from ADP based upon its payroll data.

ADP’s numbers came in first on Thursday, showing job growth in December exceeding forecasters’ predictions at 250,000. This was followed by the Bureau of Labor Statistics (BLS) report on Friday, showing 148,000 new jobs in December. They both said that the unemployment rate held steady at a record low 4.1 percent.

Mark Zandi, the establishment economist at Moody’s, was “disappointed” in Friday’s numbers from the BLS and thinks they’re going to get worse going into the New Year. First,

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Economist Mark Zandi Exposes His Statist Worldview

Tuesday, 09 January 2018 06:13

This article was published by The McAlvany Intelligence Advisor on Monday, January 8, 2018:

Mark Zandi should be embarrassed. Not because he is an establishment economist. Not because he is a Keynesian. And not because he’s not a smart guy. He should be embarrassed that someone allowed him to publish nonsense about the state of the economy in order to promote his worldview.

He lives in a world that is behaving much differently than he expected or than he apparently wants. He wants the Trump tax reform law to fail. He must admit that the economy is working much better than he ever expected it to. But, in the end, he says that it’s all a mirage, temporary, that the resurgence measured by nearly every metric isn’t going to last.

He is establishment to the core, and perhaps that’s why he’s willing to go to the mat for a worldview that is being overturned and increasingly discredited: that statists can control things much better than an uncontrolled “free” economy can.

He admitted in an article for CNBC that things are going just swimmingly:

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Trump’s Interior Secretary Proposes Selling Offshore Drilling Leases Starting in 2019

Saturday, 06 January 2018 06:21

This article appeared online at TheNewAmerican.com on Friday, January 5, 2018:

English: Nancy Pelosi photo portrait as Speake...

One of the usual suspects

President Trump’s Interior Secretary Ryan Zinke was very careful in announcing his agency’s next step in expanding energy development to include the United States’ offshore reserves. He knew that environmentalists and far-left politicians would attack his plan and did what he could to placate them in advance. Said Zinke:

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Trump Economy Making Democrats Look Increasingly Foolish

Saturday, 06 January 2018 06:12

This article was published by The McAlvany Intelligence Advisor on Friday, January 5, 2018:

The kept media dutifully reported California Democrat Nancy Pelosi’s disgust over President Trump’s tax reform program, even though it made her look foolish. Said Pelosi, “If this goes through, kiss life on earth goodbye. The debate on health care is life/death. This is Armageddon.” This was followed by the media quoting Democrat Chuck Schumer: “Tax breaks don’t lead to job creation … [this bill is a] punch in the gut for the middle class.”

It may be a little early to tell, but at the moment the middle class is doing just fine. Life goes on; if Armageddon occurred, the media missed it. That “punch in the gut for the middle class” is about to be caused by heavier wallets, thanks to tax cuts showing up in their February paychecks.

For hundreds of thousands, that punch in the gut was immediate:

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Dow Smashes Through 25,000; to Smash Dems in November?

Friday, 05 January 2018 06:44

This article appeared online at TheNewAmerican.com on Thursday, January 4, 2018:

The surprising thing about the Dow’s volcanic eruption through the 25,000 level on Thursday is that it was matched by all-time highs in other key stock market indexes such as the S&P 500 Index, the NASDAQ, and the Russell 2000. Even more surprising is that this isn’t happening in an American vacuum: Japan’s Nikkei Stock Average hit a new 26-year high, rising above 23,000 for the first time since January 1992. The Hang Seng (Hong Kong) Index just touched a new 10-year high, while major stock market indexes in New Zealand, the Philippines, and Thailand also set new records on Thursday.

The reasons why aren’t surprising:

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Dakota Access Pipeline Fulfilling Its Promise

Tuesday, 02 January 2018 05:58

This article appeared online at TheNewAmerican.com on Monday, January 1, 2018:

Fully operational since June, the Dakota Access Pipeline is lowering transportation costs, reducing tank car usage, reducing environmental and population risk, improving North Dakota’s financial condition, and putting the lie to the alarmist anti-pipeline propaganda.

There’s scarcely a downside.

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Obama Fracking Rule to be Overturned by BLM in January

Saturday, 30 December 2017 07:17

This article appeared online at TheNewAmerican.com on Friday, December 29, 2017:

Map of the part of the region in Texas, red is...

Part of the Permian Basin in west Texas

A federal appeals court refused on Wednesday to reconsider its decision to overturn an Obama administration rule on fracking, holding that the issue was moot: The Trump administration is planning to throw out the rule altogether in January.

The Bureau of Land Management (BLM) said that the Obama administration’s rule “unnecessarily burdens industry compliance costs and information requirements that are duplicative of regulatory programs of many states and some tribes. As a result, we are proposing to rescind, in its entirety, the [Obama administration’s] 2015 final rule.”

The original decision in 2016 ruled that the Obama administration was guilty of federal overreach,

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The Permian Basin is Driving Another Nail into OPEC’s Coffin

Saturday, 30 December 2017 07:00

This article was published by The McAlvany Intelligence Advisor on Friday, December 29, 2017:

English: Pumpjack east of Andrews, TX

English: Pumpjack east of Andrews, TX

Just a few years ago, the Permian Basin was considered nearly depleted. But with the advent of fracking technology, the enormous basin – called a “super basin” – could now contain two trillion barrels of recoverable crude oil. That is more than the reserves of Saudi Arabia’s Aramco oil field and all of Venezuela’s proven reserves put together. IHS Markit, the world leader in information gathering and analysis, just announced that the Permian Basin’s production exceeded its previous high registered back in 1973, producing a record 815 million barrels of oil in 2017. It estimates that its daily production will approach 3 million barrels a day (mbd) next year, which will set another record of a billion barrels produced in single year.

This far exceeds the requirements for any oil basin to quality as a “super basin”: 5 billion in reserves and 5 billion in accumulated production. It also far exceeds the reserves of Saudi Arabia’s Aramco oil field (265 billion) and those of Venezuela (300 billion).

It’s also a “disrupter,” according to Pete Stark, a director of IHS: “When we consider the impact on the world’s crude markets, the Permian has to be considered a global disrupter.” IHS’ Reed Olmstead added:

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Bah Humbug: The Left Is Unhappy with Year-end Bonuses Paid Following Tax Reform

Thursday, 28 December 2017 06:13

This article appeared online at TheNewAmerican.com on Wednesday, December 27, 2017:

Within hours of passage of the Tax Cuts and Jobs Act of 2017 (TCJA) on December 20, major American companies began announcing year-end bonuses, salary increases, and plans to expand capital investment. This was an unexpected but pleasant surprise to many, including House Speaker Paul Ryan, who tweeted: “It’s only been a few hours … and companies are already announcing new investments into the US economy & raises for their employees.”

Senator Tim Scott, Republican conservative from South Carolina, called its passage “a tremendous victory,” adding that it’s an “early Christmas present for the American people.”

Details of raises, bonuses, and capex expansion plans poured out of Comcast

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Opening ANWR to Energy Development May Be Too Late

Friday, 22 December 2017 12:20

This article appeared online at TheNewAmerican.com on Wednesday, December 20, 2017:

Part of the motivation by Republicans to open the Arctic National Wildlife Refuge (ANWR) to energy development — off limits for nearly 40 years thanks to environmental extremists and the Obama administration — is to use lease fees to offset the deficits in the tax reform bill.

The numbers coming from the Congressional Budget Office (CBO) are impressive. Leasing even a tiny part of the tiny part that “Section 1002” represents of the total ANWR acreage would produce $2.2 billion in revenues over the next 10 years, to be split evenly between Alaska and the federal government.

Alaska’s Republican Senator Lisa Murkowski said in a speech on the floor of the Senate late Tuesday night that

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Trump Can’t Do Everything Himself, so He Nominated Neomi Rao to Help Him

Monday, 18 December 2017 10:01

This article was published by The McAlvany Intelligence Advisor on Monday, December 18, 2017:

Who? Up until Thursday, few had ever heard of Neomi Rao. Looking into her background, fewer still would have predicted the role she is playing in helping President Donald Trump keep one of his most important campaign promises.

After graduating from Yale University with “highest distinction” in ethics, economics, and philosophy, she attended the University of Chicago Law School where she received her Juris Doctor degree. She was comment editor of the school’s law review and also executive editor for the Harvard Journal of Law and Public Policy.

But she never drank from the cup of regulatory Kool-Aid. Instead she went on to clerk for U.S. Supreme Court Justice Clarence Thomas and from there to serve as a staffer on the Senate Judiciary Committee. In 2012, she received tenure from George Mason University’s Antonin Scalia Law School where she founded the Center for the Study of the Administrative State.

In other words, until Thursday, Rao was invisible.

But when Trump nominated her in April to his Office of Management and Budget with the mind-bending title of Administrator of the Office of Information and Regulatory Affairs, Jonathan Adler took notice.

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NFL Players’ Protests Focusing Attention on League’s Tax Breaks

Saturday, 25 November 2017 07:28

This article appeared online at TheNewAmerican.com on Friday, November 24, 2017:

The knee-bending antics of professional football players are focusing attention on a key issue: Are the taxpayer subsidies involved in supporting the NFL worth it in generating new revenues as promised? An issue getting less attention is whether taxpayers should be involved in supporting professional football in the first place. Especially when those in the league are thumbing their noses at the very taxpayers who are funding them.

Jeff Mordock, writing in the Washington Times, said that

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Jobless Claims Drop Confirms Economy’s Strength

Thursday, 23 November 2017 06:12

This article appeared online at TheNewAmerican.com on Wednesday, November 22, 2017:

The announcement from the Department of Labor on Wednesday masked the remarkable record: the seasonally-adjusted initial claims for unemployment insurance filed by workers following a job loss during the week ending November 18 — 239,000 — are approaching levels not seen since the early 1970s when the workforce was much smaller. This is reflected in the unemployment rate — 4.1 percent — the lowest rate seen in 17 years.

What’s more remarkable is

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IEA: United States to Dominate World Energy Market Within Eight Years

Thursday, 16 November 2017 06:42

This article appeared online at TheNewAmerican.com on Wednesday, November 15, 2017:

According to the International Energy Agency (IEA), the growth of energy production in the United States, doubling as it has in just the last eight years, is expected to double again in the next eight. Authors of the IEA’s annual World Energy Outlook report released on Tuesday could hardly contain their surprise: “A remarkable ability to unlock new resources cost-effectively pushes combined United States oil and gas output to a level 50% higher than any other country ever managed; already a net exporter of [natural] gas, the U.S. becomes a net exporter of oil in the late 2020s. In our projections … the rise in US tight oil output [fracking] from 2010 to 2025 would match the highest maintained period of oil output growth by a single country in the history of oil markets.”

The U.S. production increase makes up an astonishing

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Where Will 50,000 Former Deutsche Bank Employees Find Work?

Saturday, 11 November 2017 06:14

This article was published by The McAlvany Intelligence Advisor on Friday, November 10, 2017:

The short answer is: they will find other work. They will also find that other work to be more rewarding, higher paying, more satisfying, and providing greater benefits to others than they did while working for the bank. That’s how the free market operates, when it is allowed to.

It’s not that those DB employees didn’t have fair warning. In September, DB’s CEO, John Cryan, hired in 2015 to turn the bank around, told them:

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Germany’s Deutsche Bank to Cut Half lts Employees

Friday, 10 November 2017 06:39

This article appeared online at TheNewAmerican.com on Thursday, November 9, 2017:

John Cryan, the CEO of Deutsche Bank, the world’s 16th largest bank, gave advance warning about the avalanche of pink slips that were coming. In September, without divulging just how many were coming, the blunt-spoken Cryan told Financial Times’ Laura Noonan that it would be a “big number.” On Wednesday he made it much clearer just how big that “number” is going to be: ”We employ 97,000 people. Most big peers [our competition] have more like half that number.”

Cryan went further, targeting just who was going to get the axe: anyone involved in banking processes, working in cubicles, managing customers’ accounts, tracking investors’ positions, filing financial reports — in other words, any job that a human is currently doing that can be done more efficiently by a robot:

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Aramco CEO Not Worried About American Frackers

Friday, 27 October 2017 07:31

This article appeared online at TheNewAmerican.com on Thursday, October 26, 2017:

English: Headquarters of Aramco Services Company

Headquarters of Aramco Services Company

Saudi Aramco CEO Armin Nasser told CNBC’s Squawk Box on Sunday that he wasn’t at all worried about American frackers, since they are concentrating on “sweet spots” — the richest fields with the highest returns — which can’t last forever: “The concentration that we are seeing today [by American frackers] is on the sweet spot of shale, and this will not last forever. You can concentrate for some time on the sweet spots and produce more oil. But ultimately you need to venture downward, and that’s where you have less quality and you require more cost to produce these barrels. Shale oil will contribute additional barrels [to world crude oil supplies], but it will all depend on the price of crude.”

Nasser no doubt was referring to data released last week that showed

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Aramco’s CEO Tells Half a Truth

Friday, 27 October 2017 07:19

This article was published by The McAlvany Intelligence Advisor on Friday, October 27, 2017:

Carbon print of Alfred Lord Tennyson, 1869, pr...

Alfred Lord Tennyson, 1869

A Yiddish proverb holds that “a half-truth is a whole lie,” while Ann Landers said that “the naked truth is always better than the best-dressed lie.” Alfred Lord Tennyson said it best: “A lie which is half a truth is ever the blackest of lies.”

Whether Aramco’s CEO intended to tell a lie or just wasn’t completely forthright remains unknown. What Armin Nasser did tell CBNC’s “Squawk Box” on Sunday certainly wasn’t the whole picture. He blew off America’s energy frackers:

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This Thoroughbred is Just Beginning to Feel His Oats

Saturday, 21 October 2017 05:40

This article was published by The McAlvany Intelligence Advisor on Friday, October 20, 2017:

English: Thoroughbred racing at Churchill Down...

Thoroughbred racing at Churchill Downs.

It’s tempting to push the analogy comparing the U.S. economy to a Thoroughbred horse too far. But it is tempting. The Thoroughbred breed began around the time of the Industrial Revolution, when an English mare was crossbred with an imported Oriental stallion with Arabian, Barb, and Turkoman breeding. All Thoroughbreds can trace their pedigrees to three stallions imported into England in the 17^th century. They were exported to Australia, Europe, Japan, and South America during the 19^th century, and today an estimated 100,000 Thoroughbred foals are registered worldwide every year.

A Thoroughbred is tall, slender, athletic, and built for competition, usually on racetracks. Among the most famous are Citation, Phar Lap, Old Rosebud, Whirlaway, Roamer, Seabiscuit, and Man o’ War.

And, of course, the United States economy.

Starting at around 1800, the U.S. economy grew at such a rate that

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Many Surprises in Latest Jobless Claims Report

Friday, 20 October 2017 05:51

This article appeared online at TheNewAmerican.com on Thursday, October 19, 2017:

The first surprise from the latest jobless claims statistics is that new claims for unemployment insurance benefits last week fell to the lowest level in 44 years, according to the Department of Labor (DOL): “The advance figure … was 222,000 … the lowest level for initial claims since March 31, 1973.”

The second surprise is that the number of continuing claims (those lasting more than a week) also fell to levels not seen since 1974.

The third surprise is

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