This Economy Is Roaring

I just came back from a fly fishing trio to Traverse City, Mi. The fishing up there is horrible. A news report today claims fish catches in the Manistee River, a popular trout stream, are off 90% since Labor Day.  Woe is me. But the economy up there was booming.   I could not believe my eyes. Restaurants on Front Street had good crowds- and tourist season is pretty well past. The population is growing- due to an influx or retirees, not illegal immigrants.    I saw help- wanted signs in McDonald's windows.  This is a sign that minimum wage jobs are going begging- a precursor of inflation. Rush hour traffic was heavy. Real estate sales are strengthening.   http://www.realestateone.com/pdfs/monthly/aug2015.pdf )  I heard rumors, of course, of hotel booking cancellations from out-of-state fishermen who have gotten the word about the dismal trout and salmon  harvest this year.  Tourism is huge up there and this could turn out to be a real drag.
  In any event, it looks like people in the Traverse City area all the way south to Frankfort, are comfortable, confident, and prosperous.
 It did me good to get outside the D.C. beltway where people always are prosperous because they  feed off of your tax dollars to see what life is like elsewhere. Of course, the trip would have been more rewarding if I had caught some fish!

O's Iranian Deal and John Kasich

Ohio Gov. John Kasich had the most rational reaction to O's nuclear deal with Iran.  Wait and see.  I personally think the deal is a good one for the US and Israel.  First of all, it gives the US military time  to reconstruct itself.  We are ill prepared for a land war with Iran.  Second, Iran  may actually comply with the agreement. I believe that it will.  Think about this: Iran could easily buy a bomb from a rogue state like Pakistan or North Korea if it desperately wanted one.  If it is a nihilistic enterprise as billed by some of our conservative politicians then what better use of its money than to spend it all on weapons of mass destruction?   Sunnis might help foot the bill, endeavoring to finance a nuclear exchange that would eradicate the Persians and Israel and (collaterally) the Palestinians.
 
      Give peace a chance- so that we may better prepare our military  for war.

The Debaters Won the Debate

Here are some quick thoughts on last night's CNN debate.
The losers: CNN and Jake Tapper, which tried to turn the event into a mud-slinging, Trump-centric reality program and failed miserably. The 11 varsity candidates, including The Donald, failed to swallow the bait.
The winners: Marco Rubio, the most substantive candidate; Rand Paul, who presented a sensible foreign affairs policy; John Kasich, who made a compelling case for  a more moderate direction for the party; Carley Fiorina, who was forceful and CEO-like if soft on the details.
Trump was a clown show.  His candidacy is doomed. A recent Washington Post-ABC poll showed hat the public distrusts him and does not deem him suitable to be president, despite his general popularity.
The JV team: Jindall and Graham showed that they could go toe-to-toe with the 11 candidates on the varsity squad.
Jeb Bush: To Bush-like to be liked. His name is radioactive. He is too laid back. (I will resist the temptation to insert a reefer joke).
 We saw some flashes of wit from Huckabee, as when he  compared The Donald to Mr. T. Too bad  that there was a dearth of humor and wit on stage for most of the three hours the 11 were on stage.
At the end of three hours, I was exhausted.  Not one of the candidates would keep my eyelids open.

Obama's Big Test for the Economy

Today is September 16 and there has been quite of bit of  political activity regarding the economy. The Federal Reserve's Federal Open Market Committee is meeting to decide whether or not to lift bank rates from near zero, where they have been for some time, owing to deflationary pressures. (My bet is that we see a token rise tomorrow.) The GOP's second debate is tonight and the slow growth of the economy is one topic certain to be discussed,. And you may have missed this, but this morning President Obama addressed a host of CEOs in town for a meeting of the Business Roundtable.
  The President's remarks to the CEOs are available on the White House web site at https://www.whitehouse.gov/the-press-office/2015/09/16/remarks-president-business-roundtable
  I zeroed in on O's discussion of free-trade agreements, because a treaty in the Pacific would be a big shot in the arm for the economy and a counter-weight to China's attempt to  extend its influence in the region.  Obama is nervous  about the prospects of  congress passing a treaty, underscoring his weak, strained relationship with that body. It underlines his failure to continually engage the congress on important economic matters  and secure dependable allies.
  The President, mostly because of Republican support,  in June was granted so-called "fast-track" authority to negotiate a trade deal with 11 Pacific Rim nations.  The treaty would  be a major accomplishment-one for the history books.  What Fast Track means is that the president can negotiate a deal that will not be subject to congressional tampering.  Congress will either vote for or against  the treaty negotiated by the President's team. Congress may not amend it.  Obama believes there will be a deal with the 11 nations before the end of the year.  This is hugely  positive. But he warned of a major obstacle in Congress- his fellow Democrats.   
Said the President, "We should not assume, though, that because the authority was done, that we automatically are going to be able to get TPP done. And I’ll be honest with you, the reason is that the politics around trade are tough.  And I said this even in the run-up to getting TPA authority.  A lot of Americans, when they think of trade, think of plants in their hometown or nearby shutting down and moving to Mexico or China, and American manufacturing and good-paying jobs being lost.  That’s the image of trade. "

  If Obama cannot enlist the support of his own party on this significant deal, his economic legacy will be one of failure.  The recovery primarily was driven by the fracking revolution even has Obama was waging war on the oil industry in the name of saving the planet from global warming.  The increase in manufacturing jobs between 2008 and the start of the year largely was in the carbon energy sector. Obama fought oil tooth and claw. Witness the Keystone pipeline stall.Now that the oil industry is in decline due to a glut of global supply created by a global economic slowdown, a trade treaty could spur growth in other sectors, offsetting the negative impact in the energy fields. A trade treaty could help avert a recession.  If Democrats kill the treaty, they will leave themselves blameworthy for any economic contraction, which is especially harmful for the prospects of their candidates going into 2016.
   Enjoy the debate. Watch the Fed. Do not forget what President Obama said!

Thinking Outside the Classical Music Box

 At age 66, I fret that I don't see more young persons at classical music concerts. The art form will wither and die without their support.
Classical music has been an important part of my life since my university days. At home during my younger years, my parents played musicals and Gilbert and Sullivan operettas on our prized stereo. a cabinet with a turntable and two speakers that was easily five-feet long. I transitioned to classical myself and I am not sure how. I believe it was by listening to a classical station on the radio.
The younger generation has iPhones and no appetite for classical music. They like concerts that are spectacles.  I was listening to Gershwin's "An American in Paris" a few days ago and thought his would be a good piece for a spectacle in the concert hall that would appeal to youth.  Imagine my imaginary concert hall:
The orchestra is divided like a pair of speakers- half stage front, half stage rear. The concert floor has no seats, but its a Hollywood-style set  with two faux-Parisian Streets. The audience is free to roam about the street, where ballet dancers perform, where there are video's streaming in some of the faux store fronts The music, of course, transports us to Paris.  The set, the videos, the dancers, help to intensify the experience.  
  I think we older folks might enjoy the experience as well.

The Fed Rate Hikes-Plural!

Seven years after the Great Recession, deflation, not inflation, is the most consequential threat to the economy, with the idiocracy in Washington, D.C. placing second in the list of potential hazards to the precarious recovery.
 Deflation?
 Precious and industrial metals have hit rock bottom; and oil-- who would ever have thought that we'd  one day feel sorry for the JR Ewings of the world?    Food prices have climbed but the prices of most everything else are flat to down. Merchants of consumer goods  worry about the elasticity of their products.
   Although the employment picture has radically improved, we've not seen  employers outside of tech land chasing employees with ever higher wages.  Worried about a decline  in demand and consequently in profits in coming quarters due  to slowdowns in Europe and China , mid-sized and large- cap companies are curtailing hiring, training, and investment in equipment.
  But the Fed will raise rates, nevertheless. There's this central banking  thing about getting ahead of the potential drunks at a party and  draining the punch bowl of intoxicating low rates.  Although the rates have not yet triggered general inflation, they have distorted the economy in other wicked ways.  Equity and debt  prices are elevated because stock and bond trading in the only game in town that offers a decent return.  Low rates have allowed marginal companies to compete with leaner and meaner organizations and thus made the employment picture appear rosier than it is, Remember the tech bubble!
    For this reads  December. They will be non-hike hikes.  They will minimally strengthen the dollar at the outset, which will attract a flood of foreign hot money, which will have the effect of bring down the rates the Fed had just lifted.

On the Scent of " Scent of a Woman."

Nicola Beneditti is a Scot of Italian descent whose looks remind you of Sophia Loren and whose violin music sounds like strains coming from heaven.  I had never heard of her until 2014 when my wife cajoled me to going to a concert she was giving at he Kennedy Center. Smitten by her artistry, I immediately bought her three most recent CDs.
The best one is called "The Silver Violin." In Britain, it was a top selling record, besting all of the charts. She plays movie themes as well as fine classical works- some by Corngold are particularly lovely.
  She also plays "Scent of a Woman." Remember the movie with Al Pacino.  I wanted to know who composed the piece of tango and discovered through Wikipedia that it was written by two South Americans in 1935-both killed in a plane crash shortly after its release.  They were Carlos Gardel and Alfredo La Pera.   The song's original title was Pa Una Cabeza, which means "by a head," alluding to horse racing. I urge you to read Gardel's Wikipedia bio. He was an amazing entertainer, quite poular in the US as he was in South America:
https://en.wikipedia.org/wiki/Carlos_Gardel

Secrets of the Temple Persist

Fellow journalist  Bill Greider, a columnist for the far-left magazine The Nation and, in spite of this, a marvelous human being, wrote his best-seller about the Fed's inner workings back in 1988, when the central bank  and its all-powerful Federal Open Market Committee had no more transparency than the Kremlin  back in the days of the Soviet Union.   The book inspired Texas Congressman Henry Gonzalez, chairman of the House Banking Committee, to wage war on Alan Greenspan and the Fed to make its  decision making process  more transparent. After all, the Fed is run by bankers.  There was no check on these bankers to keep them from using their power to benefit their own industry at the expense of others. 
Fed Chairman Al Greenspan  in one of his career low points, famously misled congress to keep a secret Fed tapes of monetary meetings out of Gonzalez's hands.
  Transparency has improved somewhat since then.  The Fed now releases minutes of monetary meetings three full weeks  after the fact.  Full transcripts are available after five years.  This delay remains an outrage in a society where the government and its agents supposedly are in the service of the people.  And who is to know who sees the minutes in advance and is privy to information that provides a trading advantage in the markets?
  The Federal Open Market Committee  in a 1981  lawsuit (I an relying on a 2011 article by Nancy Watzman of the Sunlight Foundation) claimed that timely release of its would roil the markets and out it at a disadvantage as it tried to conduct policy . The courts sided with the FOMC.
  The arguments seem silly now that the Bank of England has begun release its minutes almost immediately. Furthermore, the minutes released by the BOE are three times longer that the FOMC's and included detailed footnotes.
 You can see for yourself here:

http://www.federalreserve.gov/newsevents/press/monetary/monetary20150714a1.pdf

and here:
http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2015/aug.pdf

Congress should pressure the Fed to follow the BOE's example.