06/7/18

Employment

Employment, Big Red Car – what about employment?

Dear reader, US employment and unemployment are both headed in the right direction, but there is a concern we need to discuss.

We need to discuss the Labor Force Participation Rate. Do you know what that means?

The LFPR is the percentage of folks aged 16-64 (the labor force) who are currently employed or seeking work.

Here is a picture of what that looks like today with our 3.8% unemployment rate. Notice, in particular, the comparison between our current LFPR/unemployment rate and the Jan-Apr 2000 all time high LFPR. Therein lies the story.

LFPR

Credit Doug Short over at Advisor Perspectives for this great chart. Read his stuff at dshort.com.

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04/25/18

Tariffs and the American Market

Tariffs, Big Red Car? Really?

Big Red Car here thinking about tariffs. I am sure you are interested in tariffs. They are an effective tool to control access to the world’s best and biggest market – the United States of America. That is the big win for the rest of the world – access to our market.

Until 1913, tariffs also funded our government, before the advent of the income tax. They are an important element in the history of the US.

As you can see, the US had high tariff rates until the time of the World War II Era Bretton Woods Agreement. Starting in 1970, the US lowered its tariffs dramatically in support of notions of free trade.

Free trade should, also, be fair trade. As you can see, during times of higher tariffs, the US trade balance was positive. Since the advent of lowered tariffs, the US trade balance has gone and stayed negative.

I support the Trump admin’s efforts to drive equilibrium back into the trade balance with the strategic use of tariffs.

But, hey, what the Hell do I really know anyway? I’m just an American made Big Red Car. Be good to yourself and think about tariffs, free trade, and fair trade.

 

 

 

 

04/6/17

Valuation Mojo — Tesla v Ford v GM

Big Red Car here on a lovely Thursday in the ATX. On Earth as it is in Texas! Today, we talk valuation mojo. What?

So, the Big Red Car is ciphering about the market caps and other data of car companies. “Some interesting stuff, Big Red,” said NOBODY ever. [“Hey, I resent that,” sayeth the Big Red Car.]

So, ┬áhere you have three car companies: Tesla, Ford, and General Motors. Three companies who are struggling to make a profit — or are they?

Tesla pic

Sexy Tesla enjoying the ocean air at sunset?

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08/3/16

Trade — Fair, Free, Trump Trade

Today we speak of trade — fair trade, free trade, Trump trade.

It has been a little time since your Big Red Car has posted. Please accept my apology. I will do better in the future.

So, here we are with the issue of trade becoming a big argument in the Presidential election of 2016.

One candidate, Crooked Hillary, was/is for TPP (the TransPacific Partnership) while Donald Trump has been a huge critic of all trade deals suggesting they are one of the root causes of the offshoring of American jobs. Crooked Hillary is now not so much for the TPP and other trade agreements because a focus group told her her opinion.

Let us reason together, beloved readers, and see what a few facts may throw on the situation.

We shall focus on the famous Maquiladora economy on the Mexican side of the border with the United States.

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05/12/16

Recovery? Won’t Get Fooled Again

Recovery. Talking recovery today.

Big Red Car here. I’m vexed. People think that the economy is doing fine or, worse, that it is headed in the right direction. It is not.

Let me tell you why. First, say: STRUCTURAL CHANGES to the ugly face of employment.

There are four things we need to look at: total unemployment, unemployment for 25-54 year olds, the Labor Force Participation Rate for the same 25-54 year olds, and Employment-to-Population ratio for the same 25-54 year olds.

So, the hypothesis of this post is this — while America has been engaged in the weakest recession recovery dynamic in the history of the United States, the job market and the structure of our employment force has changed STRUCTURALLY.

A historic example of something like this was the wholesale introduction of women into the work force in the early 1980s. It changed things. Forever.

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04/18/16

Oil, Keep An Eye on Oil

Big Red Car here with gasoline prices in the ATX now at a low of $1.69/gallon at Sam’s Club in South Austin where it was about $1.49/gallon less than two months ago. It’s all about the price of oil. Wow!

Still, that is historically cheap.

Big news in the last few days out of Doha — the OPEC + Russia countries were unable to agree to freeze oil production at current levels through the end of 2016.

Saudi oil pic

The fly in the ointment?

You guessed it — Iran.

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04/7/16

The Curious Reality of the Minimum Wage

Big Red Car here on a glorious ATX day. On Earth as it is in Texas, y’all.┬áToday, we turn our focus on the minimum wage.

The current Federal minimum wage is $7.25/hour.

Individual states may have legislation setting another standard within their states. As an example, California has a $10.00/hour minimum wage which will increase to $15.00/hour by 1 January 2022 (1 Jan 2023 for businesses with 25 or fewer employees). Thereafter, it increases annually with inflation and the Governor of California may suspend increases if economic conditions suggest such a course of action is prudent.

Note that for all of California’s goofiness, it takes six years to get to $15.00/hour.

You may be tempted to suggest that the new California law feels like a head fake. Maybe so?

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02/1/16

The Lost American Decade

Big Red Car here and awaiting the results of tonight’s Iowa caucuses. Why do we care what a bunch of very white folk in Iowa care about anyway?

Foggy and 80F today. Ahhh, winter in Texas!

So, we’ve heard of the lost Japanese Decades, right?

Did you know we’ve got our own Lost American Decade? The Lost American Decade! Continue reading

01/18/16

Oil >>> Gas Prices, It’s Starting

Big Red Car here. It’s beginning to happen. I told you it would.

Here is a picture from Michigan showing gasoline prices dipping to lower than $1/gallon.

Note it is a “price war” and that isn’t the exact same thing as the entire country.

Remember two anecdotes do not a trend make nor a database. But it IS a start.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Gas prices. Low gas prices. It’s what’s for breakfast.

01/16/16

“I’ve Got A Bad Feeling”

Big Red Car here on a lovely Saturday morning (actually it’s drizzling). That time of the morning when the leaves in the driveway are scurrying to wherever leaves scurry to running in front of the morning breeze. I like to stretch and yawn and think.

Oh, shit, there is a tech wreck upon us and it is going to be ugly on an ape.

Slow down, Big Red Car, slow down, big fella. It can’t be that bad. Can it? Continue reading