By Lambert Strether of .
“Aluminum, steel tariffs driving up raw material costs for trucks, trailers” . “Don Ake, vice president of commercial vehicles for [FTR Transportation Intelligence], tells FreightWaves that the tariffs could add up to 5% to the cost of a new trailer and probably less than that for a truck, but that is speculative.”
“IMF chief Lagarde warns trade system is at risk of being ‘torn apart'” . “‘The multilateral trade system has transformed our world over the past generation. But that system of rules and shared responsibility is now in danger of being torn apart. This would be an inexcusable, collective policy failure,’ Lagarde said…. Any imbalance in trade is driven by the fact that a country spends above its income, she said. That means the best way to rebalance is to introduce structural reforms or .” Elite Brand Snake Oil™.
“The ‘olive twig’ that Xi extended: Chinese President Xi Jinping raised eyebrows and garnered some praise when he pledged Tuesday to lower tariffs on automobiles and further open up his country’s market — but the promises, at least for now, don’t seem to be enough to head off a tit-for-tat tariff war” . “Business leaders and analysts alike are warning that what was branded a major speech from Xi on Tuesday amounted to little more than a few recycled and incremental promises that have yet to be fulfilled. And while it nibbled around the edges of key issues, it largely ignored the U.S.’s core concerns with China surrounding massive subsidization and state support of Chinese industry.” That doesn’t seem like something we can readily effect.
“The highly contentious steel supply chain between China and the U.S. increasingly runs through Vietnam. On the coast near Ho Chi Minh City, dozens of factories have been following a simple and lucrative business model by importing import steel from China, galvanizing it and then exporting it—often to the U.S.” . “[T]he companies have used the blueprint to make Vietnam one of the fastest-growing suppliers of steel to the U.S.”
WI-01: “Exit Paul Ryan” . “The political world was rocked Wednesday morning by House Speaker Paul Ryan’s (R, WI-1) decision to not seek reelection to his southeastern Wisconsin House seat. That said, this really should not have come as that much of a surprise. Rumors had been swirling for months that Ryan was not long for the House, and more than a month ago when we first listed Ryan’s district on our list of competitive House seats, moving it from Safe Republican to Likely Republican. This the retirement of Rep. Dennis Ross (R, FL-15), which also came out Wednesday morning, , adding to a total that is already the second-highest of the post-World War II era. Of these, 39 are held by Republicans to only 20 by Democrats…. Paul Nehlen (R), a despicable white supremacist who Ryan defeated in a landslide in the 2016 primary, has already been running for the GOP nomination…. On the Democratic side, , although he’s unproven as a candidate. Cathy Myers (D), a member of the Janesville School board, is another possibility, and one wonders if the field of Democrats may grow now that the seat is open.” Ryan was lauded as a policy wonk for years by all factions in our famously free press, and then when he had to step up to the plate and deliver an ObamaCare replacement, he whiffed. He didn’t have legislation, and he didn’t have the voters. (To be fair, ObamaCare is a Republican plan to begin with, so Ryan’s was no easy task.) And that was the end of Paul Ryan, empty suit. (A ham sandwich could have delivered on tax cuts, because Republicans love them some tax cuts.)
WI-01: “Ryan Retirement Puts WI-01 at Risk and Throws House GOP Into Deeper Turmoil” . “Nearly two years after Ryan initially refused to endorse Trump as the nominee, Trump’s takeover of the GOP base is nearly complete. Ryan and Trump forged passage of a signature legislative initiative—tax cuts—but overall, Trump’s populist vision for the party has supplanted Ryan’s supply-side conservatism. Last week’s YouGov poll found Trump’s favorability with GOP voters at 80 percent; Ryan’s was just 52 percent…. Wisconsin’s 1st CD is a traditionally Republican seat: it voted for Trump 52 percent to 42 percent in 2016 and for the Mitt Romney/Paul Ryan ticket 52 percent to 47 percent in 2012. Last Tuesday, a GOP-backed state supreme court nominee carried the 1st CD by five points despite losing statewide. But now, Republicans will have to start from scratch without Ryan’s $9.6 million campaign account against a Democrat armed with millions and a blue-collar profile.”
WI-01: “Ratings Change: Ryan Exit Moves Wisconsin 1 from Solid R to Lean R” . “While Ryan’s decision is huge news because of his position, it’s not as electorally alarming to his party compared to the retirements by Rep. Ileana Ros-Lehtinen of Florida’s 27th District or Rep. Dave Reichert of Washington’s 8th District. Both of them leave behind Democratic-leaning districts that Hillary Clinton carried in 2016. Wisconsin’s 1st is not a toss-up district, but could still host a very competitive race under the circumstances… Republicans have until the June 1 filing deadline to figure out their field.”
WI-01: “Paul Ryan won’t run for re-election” . “This decision was foreshadowed when Politico’s Tim Alberta and Rachel Bade in December that he saw his “wild Washington journey coming to an end,” but his final deliberations were held extremely closely.”
UPDATE WI-01 “Fiduciary duty” . “[A]s this imaginary letter from a potential corporate recruiter suggests, assembling a portfolio of board directorships would be a cinch for the man who cut company taxes down to a slim 21 percent.” Yes indeed!
MN: “The tragedy and farce that is Tim Pawlenty” . “Tragedy – in terms of a fallen bridge – is a lasting image of his governorship, and was also how Pawlenty got elected twice and what defined his governorship. In 2002 he was in second place behind Tim Penny in the race for governor when Paul Wellstone’s plane crashed and the senator died. That event, then the Wellstone memorial service, transformed state politics, resulting in Pawlenty winning the governorship with 44.4 percent of the vote…. Pawlenty never won a majority of the popular vote, and were it not for tragedies or missteps by others – or the help of others – he would not have been governor. Couple these events with his miserable run for president and one can really ask how good or formidable a candidate he was. Given the tragedy of his governorship, it is a farce for him to run again. Watching his video declaring the run, one wonders what is his narrative or rationale for running?”
MO: “McCaskill continues on record fundraising pace for a Missouri Senate race” . “Sen. Claire McCaskill had $11.5 million in her campaign bank account entering April after a record first-quarter fundraising haul of $3.9 million, her campaign announced Monday…. McCaskill depends, in part, on fundraising through a Democratic conduit called ACTBlue, a website that allows donors throughout the country to designate small donations, sometimes in multiple iterations, to a candidate they may want to support in another state. The donations are possible through a few computer mouse clicks, and such internet sites have opened the spigot for Senate campaigns with national significance…. But third-party groups — which support candidates but don’t directly coordinate with them — also are expected to spend heavily in Missouri’s Senate race and could dwarf the individual candidates’ spending. McCaskill told donors last year she expected the race could attract $200 million in total spending when it’s all over and that she could end up spending $30 million on her own.”
“Voters’ Motives Shift, and Allegiances Harden” . ” In meetings since the first of this year with farmers and others in agribusiness in California, central Illinois, Kansas, Minnesota, Nebraska, and North Dakota, I came out convinced that in small-town and rural America, despite their serious concerns about some of Trump’s specific policies and statements on immigration (availability of farmworkers) and trade (tariffs, trade wars, and crop prices), there seems to be little he can say or do that would alienate many of them. Today’s political divisions are very different from what they were 30 or 40 years ago. Today race, religion (specifically church attendance), geography (rural and small-town versus suburban and urban), and attitudes on social and cultural issues (e.g. abortion, guns, the environment, and women’s issues) drive voters’ attitudes about party and Trump far more than class and economic self-interest. . … What’s more relevant than approval numbers is who shows up on Election Day. We know that Trump benefited from a greater intensity of support in the closing weeks of the 2016 campaign, particularly among white, working-class, small-town, and rural voters, most specifically across industrial, Rust Belt states, while Hillary Clinton’s side was handicapped by ambivalence. That intensity does appear to be greater on the other side of the political ledger today.” One might give consideration to the idea that the least risky course for Democrats would be to expand their base, rather than depending on voter enthusiasm. But no.
2016 Post Mortem
“Team Hillary: Comey Should ‘Beg Forgiveness,’ Not Hawk Book” . Ya know, there are times when I think Team Hillary just has no sense of self-awareness or irony whatever.
New Cold War
“Russia and the 2016 U.S. Presidential Election: Laying Out the Publicly Available Evidence” . An enormous compilation, reasonably clear about sourcing, useful for research, though based only on the mainstream.
Realignment and Legitimacy
Centrist World (1):
Obama has given speeches to leaders of the financial industry who helped our nation recover from the recession, he's joined forces with the Bushes in Harvey relief efforts, he's working on constructing his library in the South Side Chicago, etc.
— Proud Hillbot (@mjba257)
Centrist World (2):
Actually, is already claiming a$$hats!
— Grace Tiscareno-Sato (@GraceTiscareno)
How “Unity” works in the great state of Florida:
UPDATE: After I tweeted this, Grant Stern texted the Chair of my board demanding I be “censured.” Once his request was denied he claimed he would go through the to have me removed from my position in Miami’s Progressive Caucus. I promise to . More soon.
— MiamiGator (@GeoffMiami)
“How A Twitter Fight Over Bernie Sanders Revealed A Network Of Fake Accounts” . “The writers at Shareblue, a pro-Democratic Party news site that supported Clinton in the primary and general elections, were also frequently retweeted by the network of fake accounts, particularly when the Shareblue folks had something negative to say about Sanders. A spokeswoman for Shareblue told HuffPost that the company does not create sock-puppet accounts and has never worked with [sock puppeteer Sally] Albright.” Of course they did. Worth reading again, after experiening the outrage machine go to work over the standing ovation Sanders got in Jackson, MI.
“Missing hyphens will make it hard for some people to vote in U.S. election” . “A law passed by the Republican-controlled Georgia state legislature last year requires that all of the letters and numbers of the applicant’s name, date of birth, driver’s license number and last four digits of their Social Security number exactly match the same letters and numbers in the motor vehicle department or Social Security databases.” Only they know, and they’re asking you… .
Consumer Price Index, March 2018: “A drop in gas prices pulled down consumer prices in March which came in at Econoday’s low estimate for a 0.1 percent decline. But the core rate, which excludes energy, did hit expectations” . “But the gain in the yearly rate shouldn’t raise any eyebrows since it reflects an easy comparison with March last year when wireless service prices started to plunge. The balance of core items in today’s report is showing only limited pressure with downward pull coming from apparel, at minus 0.6 percent, and education & communications, at minus 0.2 percent…. This report is roughly in line with the Federal Reserve’s expectations: modest pressure that is slowly building.” And: “Key Measures Show Inflation increased in March” . “On a monthly basis, median CPI was at 3.0% annualized, trimmed-mean CPI was at 1.7% annualized, and core CPI was at 2.1% annualized. Using these measures, inflation increased in March. Overall, these measures are close to the Fed’s 2% target.” And: “Even though the prices for oil decreased this month, they were the main driver for year-over-year nflation. Core inflation is now above 2.0 % year-over-year” .
Atlanta Fed Business Inflation Expectations, April 2018: “Yesterday’s producer price report showed the initial effects of tariffs on steel prices and today’s unusual jump in business inflation expectations, up 2 tenths to a year-on-year 2.3 percent, may very well also reflect the tariff impact” . “Watch on Friday for an update on consumer expectations for inflation which have, like actual consumer prices as evidenced by today’s CPI report, been moving higher though very slowly.”
MBA Mortgage Applications, week of April 6, 2018: “Purchase applications for home mortgages fell a seasonally adjusted 2 percent in the April 6 week, pushing the unadjusted Purchase Index down into negative territory for the first time this year” . “Purchase applications in the red versus last year is a signal of perhaps only temporary weakness for the housing market.” And: “According to the MBA, purchase activity is DOWN 0.5% year-over-year” .
Commodities: “Copper supply crunch earlier than predicted — experts” . “Copper demand will surpass supply earlier than expected, with the first clear signs coming as early as next year, experts attending the 17th World’s Copper Conference being held this week in Santiago, Chile, said. According to Arnaud Soirat, chef executive for copper and diamonds at Rio Tinto, increased consumption from new technologies, including electric vehicles, will drive demand for the metal and its by-products, he said. ‘We anticipate global market supply and demand will keep close to balance in 2019 and 2020,’ he said, noting that after that the deficit will become increasingly evident. The outlook is widely shared by other experts, including CRU analyst Hamish Sampson. According to him, unless new investments arise, existing mine production will drop from 20 million tonnes to below 12 million tonnes by 2034, leading to a supply shortfall of more than 15 million tonnes.”
Real Estate: “Warehouse developers appear to be catching up to e-commerce-fueled demand. The supply of new industrial real estate in the U.S. edged closer to total demand in first quarter, according to brokerage CBRE Group Inc.”  “[D]evelopers completed more than 216 million square feet of new warehouse space in the quarter, a growth pace that brings the overall market closer to equilibrium. There hasn’t been much sign of prices leveling off from rapid growth trends, however, although the real estate group noted sharp increases in availability in some big markets from the fourth quarter to the first, including Atlanta and Dallas.”
Apparel: “New technology may start creating different patterns for inventories in apparel supply chains. Some factories in southern China are working with software that’s aimed at making the very fastest of fast fashion, offering custom-made clothing and shoes” . “[T]he business model is being called ‘click, buy and make,’ and aims to sharply curtail the time from purchase to shipping in a field that’s both notoriously inefficient and extremely sensitive to rapidly-changing tastes.”
Shipping: “A deeper dive on railroad service issues” . “[Larry Gross, president of Gross Transportation Consulting,] explained that the railroads have generally demonstrated that they are not really good at flexing upward quickly and they don’t have that capability anymore. ‘So they were caught off guard and now they have been digging out,’ he explained. ‘When they say ‘we had terrible weather,’ well, winter comes every year, especially in Canada, and I think one of the problems is that these massive trains they are running now i.e. these very long 12,000 foot monster trains have been very efficient, but in the winter that creates some issues and makes them perhaps a little more vulnerable to the cold weather operating conditions and then they have to shorten the trains up and flex up more resources…but that is all pretty predictable.” And then there’s intermodal. Sounds like a tightly-coupled system that’s been over-optimized by MBAs.
The Bezzle: “Tesla’s Musk, NTSB Chief Talk After Spat Over Fatal Crash Probe” . “Tesla Inc.’s Chief Executive Officer Elon Musk and a top U.S. transportation safety investigator spoke over the weekend to patch things up after testy exchanges related to the investigation of a fatal crash.” Yes, it’s important for regulators to show a proper deference.
The Bezzle: “‘I keep getting the same phone case over and over’: How Amazon’s review system is ripe for abuse” . “According to conversations Business Insider had with 29 different Amazon shoppers and sellers, a subculture geared towards driving sales through reviews has arisen on the site, and some are using underhanded tactics — including sharing discount codes and sending shoppers free products in exchange for reviews — to do so.” I don’t think analysts doing valuation on Facebook understand how important the reviews — created for free, naturally, by users — are to Amazon. When I use Amazon (and I do try not to) the most important feature by far is not the one-click checkout, or even tracking the package, but the reviews. Amazon, in other words, is an enormous content creator.
Mr. Market: “Are Short Sellers Signaling Optimism in the Major Banks?” . “[W]hen short sellers make a play against these major banks, they are effectively betting for a downturn. Conversely, when they back off they might be expecting a surge. Granted, some plays are directly against individual companies, like we saw with Wells Fargo early in 2017. The March 29 short interest data have been compared with the previous figures, and short interest in most of these selected bank stocks decreased.”
Five Horsemen: “Facebook rebounds to nearly a market performer as Zuck wows Congress critters” [Hat Tip, Jim Haygood]. (Haygood writes, Thursday evening: “Can’t update tomorrow, but here are Five Horsemen as of 7 pm tonight, along with the regular Mania-panic index based on today’s closing values”)
NakedCap Mania-Panic Index: “Mania-panic index rises to 39 (worry) on yesterday’s stock market rally” [Hat Tip, Jim Haygood]. (The NakedCap mania-panic index is an equally-weighted average of seven technical indicators derived from stock indexes, volatility (VIX), Treasuries, junk bonds, equity options, and internal measures of new highs vs new lows and up volume vs down volume … each converted to a scale of 0 to 100 before averaging, using thirty years of history for five of the seven series.)
“Facebook’s Zuckerberg deflects congressional questions, and gets $3 billion for the effort” . “After the first two hours of questions were nearing an end and there was a call for a potential break, Zuckerberg took a sip of water and said he could keep going for a bit longer. That break came just after trading ended, with Facebook stock noticeably jumping as the hearing went on and gaining 4.5% to its highest closing price since March 21, adding more than $20 billion back to its damaged market cap and increasing Zuckerberg’s net worth by about $3 billion.”
Impressive advance work for Zuckerberg (1):
Tech companies pretend they don’t understand the subtlety of the bias their platforms introduce, but OF COURSE they do.
Zuckerberg is 5’7″
His team has him sitting on a 4″ cushion during testimony because they know it’s important for him not to look small or meek in the pics.
— Kaivan Shroff (@KaivanShroff)
Impressive advance work for Zuckerberg (2):
Photo of Zuck's notes, by AP's
— Stefan Becket (@becket)
Though I’ve gotta wonder what’s going to happen to the staffer who let that happen.
“What You Don’t Know About How Facebook Uses Your Data” . “[Facebook] also collects so-called biometric facial data without users’ explicit “opt-in” consent… The sifting of users gets into personal — even confidential — matters. The company has allowed marketers to target users who may have an interest in various health issues, like the 110,000 Facebook users who were listed under the category ‘diagnosis with HIV or AIDS,’ the 51,000 people listed under erectile dysfunction, and 460,000 users listed under ‘binge-eating disorder awareness,’ according to 2015 data submitted as an exhibit in a lawsuit. Facebook says it has since removed those ‘targeting options’ and does not create targeted ad audiences involving users’ medical conditions.” I’ll believe that if the relevant code is audited. And as I read this, they hang on to the data.
“Facebook Shadow Profiles: A Profile of You That You Never Created” . “A shadow profile is a collection of data that Facebook has collected about you that you didn’t provide yourself. In other words, let’s say you’re a cautious social media user, and you limit what information you put online. While you may not have listed your cell phone number, if one of your connections used the “Find My Friends” feature and allowed Facebook to scan their s, Facebook collected all the other information about you associated with that . Even if you never provided them, Facebook very likely has your alternate email addresses, your phone numbers, and your home address – all helpfully supplied by friends who are trying to find you and connect….. Even if you’ve never signed up for Facebook, you may have a profile that contains your info and a mathematical template of what you look like nonetheless.”
“The Case for a Zuck-free Facebook” [Felix Salmon, ]. The headline proposal is actually less interesting than this idea: “[R]egardless of what governments request, Facebook should turn off not only its insidious Lookalike product but all narrowly targeted advertising altogether, with advertisers being forced to appeal broadly to large geographies.” In other words, turn Facebook’s greatest asset, the social graph (see today’s Links) into slag. Personally, I think that’s a great idea!
“Why does it take so long?” . “Welcome to the U.S. health system. Here are the sources of delay, with time=0 the moment the doctor had a diagnosis and called me.”
We get letters:
You mentioned this a few days back. My dentist, who is a friend and relative of mine, has been on a tear about this. People have stopped making dental appointments with him once they turn 65. And bad teeth are implicated in heart disease. Also, as he has pointed out many times, if you look at pictures of these super-old people, they have all retained at least some of their own teeth.
So: Medicare for All with Teeth
Or else, it may be even time to change the slogan to: Everyone’s Medicare + Dental / Mental
Don’t even get me going on how bad the care is in the U S of A for mental illness. And the United States has an unusually high rate, too (not even mentioning the rising rate of suicides).
“Medicare with Teeth.” I like that!
“John Boehner is joining a marijuana company” . Boehner: “I’m convinced de-scheduling the drug is needed so we can do research, help our veterans, and reverse the opioid epidemic ravaging our communities.” Presumably this implies that Boehner supports amnesty for the jailed entrepreneurs who actually built the industry, lol no.
Our Famously Free Press
“That Politico article on ‘news deserts’ doesn’t really show what it claims to show” . “It is just ahistorical to say Trump’s campaign “succeeded in avoiding mainstream outlets.” Candidate Trump gave tons of interviews throughout the primaries! And when he scaled those back in the general, one of his strategic shifts was ! Whatever perfectly legitimate criticisms you want to make about how the media covered Trump, to say Trump ‘avoided’ coverage in mainstream outlets is just…wrong.” The Politico article got some play, because who wants a “news desert,” so this article is an important corrective.
“Colorado seeing earthquakes where they’ve never happened before” . Scientists at the University of Colorado have been closely studying a rash of earthquakes in Colorado and northern New Mexico over the past decade. They say most have been caused by fluids pumped deep underground during oil and gas wastewater disposal. When oil is removed from the ground so is water. After drilling, the wastewater is injected back into the ground. The problem is that it can seep into existing faults and that pressure can pry the rock apart and cause a fault to slide. ‘There are many case studies so it’s very clear it’s happening,’ said William Yeck, a geophysicist with the U.S. Geological Survey in Golden. Injection-induced earthquakes in Colorado are primarily occurring in two parts of the state: In Weld County near Greeley and in the Raton Basin along the Colorado-New Mexico border.”
“Burgerville Workers May Form America’s First Recognized Fast Food Union” . “Burgerville, a fast food chain based in Vancouver, Washington, with 42 locations throughout Oregon and Washington, announced last week they would support employees at a Portland store who plan to vote on whether to establish a nationally recognized union. If employees in favor of forming a union, it would the first nationally recognized fast food union in United States history. But union members are skeptical about management, and multiple members say they have faced retaliation.”
News of The Wired
“I am failing” . “If you know a female advisor who might want to talk to us about her career, I want to hear to about it. You can send an email to info at ritholtzwealth dot com. I am personally overseeing this initiative and I will not give up until I fix this issue. Please spread the word, your assistance is much appreciated.”
“Visually Mapping Gopherspace in 2018” . “The Gopher Protocol is a simple client-server network system built around a system of menus and files. Launched in 1991, it was proposed as an alternative to the HTTP system that underpins the current World Wide Web…. If you want to learn more about Gopher, then Cameron Kaiser’s is the place to start, as it’s generally considered to be the home of Gopher in the 21st Century… I have also written a , which works on all current versions of Windows from 7 through to 10. Why not download it, and try it out?” Hmm.
“Age and High-Growth Entrepreneurship” . “Our primary finding is that successful entrepreneurs are middle-aged, not young. The mean founder age for the 1 in 1,000 fastest growing new ventures is 45.0. The findings are broadly similar when considering high-technology sectors, entrepreneurial hubs, and successful firm exits. Prior experience in the specific industry predicts much greater rates of entrepreneurial success. These findings strongly reject common hypotheses that emphasize youth as a key trait of successful entrepreneurs.”
“Money-saving hack: Living ‘off-peak’ for a week was the best thing ever” [(Clive)]. “Off-peaking means doing things when other people are not. Instead of shopping on a Saturday afternoon, for example, hit the supermarkets at closing time on a weeknight and bag the cut-price bargains. Instead of commuting at rush hour, save money and escape the crowds by travelling earlier or later.” Clive: “There’s probably a case for a new category I For One Welcome Our New Serfdom Existence So Always Look on the Bright Side of Life.”
“Bite the dust at Bangkok’s ‘death awareness’ cafe” . “[The cafe’s owner, a] professor and social researcher, Veeranut Rojanaprapa conceived of the cafe as a way to teach Thai people — some 90 percent of whom identify as Buddhist — about the benefits of ‘death awareness’. ‘We found that having an awareness of death decreases greed and anger,’ explained Veeranut, whose giggly demeanour belies his fascination with more morbid matters…. The cafe has also spread out to a public walkway, which is now posted with signs asking questions like: ‘What is the purpose of your life?'” To anyone who knows Bangkok, a cafe spreading out onto the sidewalk is unremarkable (and a sign of exuberant life).
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Readers, feel free to me at lambert [UNDERSCORE] strether [DOT] corrente [AT] yahoo [DOT] com, with (a) links, and even better (b) sources I should curate regularly, (c) how to send me a check if you are allergic to PayPal, and (d) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! If you want your handle to appear as a credit, please place it at the start of your mail in parentheses: (thus). Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (GP):
GP writes: “Portola Redwood State Park, California. It’s good!!!” A bit of fog… .
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