Yellin's labor market dashboard is looking good. WIth China, Japan and the US perking up, why all the economic pessimism?

. . . except for the labor force participation rate.


The US, China and Japan, world's three biggest economies, are looking better. Question: why all the worry about world gdp growth?

The Economist says the US government is the biggest extortionist racket in the world.

From The Economist, August 30:

"WHO runs the world’s most lucrative shakedown operation? The Sicilian mafia? The People’s Liberation Army in China? The kleptocracy in the Kremlin? If you are a big business, all these are less grasping than America’s regulatory system. The formula is simple: find a large company that may (or may not) have done something wrong; threaten its managers with commercial ruin, preferably with criminal charges; force them to use their shareholders’ money to pay an enormous fine to drop the charges in a secret settlement (so nobody can check the details). Then repeat with another large company.

"The amounts are mind-boggling. So far this year, Bank of America, JPMorgan Chase, Citigroup, Goldman Sachs and other banks have coughed up close to $50 billion for supposedly misleading investors in mortgage-backed bonds. BNP Paribas is paying $9 billion over breaches of American sanctions against Sudan and Iran. Credit Suisse, UBS, Barclays and others have settled for billions more, over various accusations. And that is just the financial institutions. Add BP’s $13 billion in settlements since the Deepwater Horizon oil spill, Toyota’s $1.2 billion settlement over alleged faults in some cars, and many more.  In many cases, the companies deserved some form of punishment: BNP Paribas disgustingly abetted genocide, American banks fleeced customers with toxic investments and BP despoiled the Gulf of Mexico. But justice should not be based on extortion behind closed doors. The increasing criminalisation of corporate behaviour in America is bad for the rule of law and for capitalism."

From <http://www.economist.com/news/leaders/21614138-companies-must-be-punished-when-they-do-wrong-legal-system-has-become-extortion

US companies are increasing investment significantly

A majority of US small businesses plant to increase investment, compared with less than 1/3 eighteen months ago.  Finally! (from the WSJ)

The US is going broke due to dependency.

Our basic fiscal problem in the US is too few people pay income tax and too many received welfare benefits.

Only about 1/2 of the population live in households that pay taxes:

This parallels the increase in the numbers of "takers" relative to "givers."

Finally!?! Is the monetary transmission mechanism (i.e. bank lending) starting to function again in the US?

From the Wall Street Journal.

Famous last words

David Tang has this anecdote in today's FT: “Talking of death, I have always admired the optimism of Spain’s General Franco who regarded himself as almost immortal.  Once, it is said, he was lying, extremely weakly, in bed and everyone around him thought he was going to die.  Hearing a great deal of commotion and noise, the dictator asked, with a weakening hand, “What’s all that noise?”  His aide replied: “General, that's the crowd outside.  Your people.  There are thousands of them chanting your name.  They have come to say farewell.”  The General looked faintly puzzled and asked: “Where are they going?”

WIll Russia benefit from sanctions?

Interesting article on Russian agricultural in yesterday's FT. Russia exports energy and imports food and manufactured products. It's exports have not been affected by sanctions, therefore. In response to western sanctions, Russia has banned the import of many foodstuffs.

Russia has 0.8 hectares of arable land/capita, about the same as Argentina and Ukraine but still imports 40% of its food. With bans on imports from Europe and a weaker ruble, Russian agriculture may grow. Since the collapse of the Soviet Union, land under cultivation dropped from 90 mn hectares to 73 mn. The poor logistics infrastructure is a barrier. Nonetheless, poultry production is up 60% since 2008 and pork 36%. Will Russia become self-sufficient in and then an exporter of food? Russia already generates excess cash flow; this would increase greatly without food imports.