Shipments in the US

Sorry I have not been posting much lately, the cruel lash of 4th quarter (and end of year) market reports has kept me at bay.

And there has been so much worthwhile things to blog about.

But the tasty trinket that most caught my eye was this, a brief article released by the 2007 Economic Cencus: Nationwide Movement of Goods

This is a 5 year figure calculated by the Bureau of Transportation Statistics and the U.S. Census.

In 2007:

Total shipments of goods in the US accounted for 11.7 Trillion in revenue ($11,700,000,000,000).

This is up from $8.4 Trillion in 2002 ( a 40% increase in just 5 years).

12.5 Billion tons of goods was hauled, up from 11.7 billion tons in 2002. ( a 7% increase). I.E. what we are hauling is worth more. (FYI these are inflation adjusted numbers).

Trucks hauled 71% of the total value (or 8.3 Trillion Dollars, 8.8 Billion Tons)

55% of tonnage traveled less than 50 miles.

For-Hire freight (3PL's etc.) shipped an average of 599 miles.

Public Truck Shipments shipped an average of 57 miles.

What does this mean?

The value of what is shipped drastically increased.
Trucks are still how goods end up in the hands of the consumer.

Short Haul trucking makes up the majority of shipping.

I am guessing most of these goods were counted twice or more, once as raw goods to a manufacturer, then to a wholesaler distribution center, then to a retailer local warehouse, then to an acutal retail store. The 3pls will take it from manufacturer (or manufacture it themselves) thus they travel longer distances, while the public truck shipments are from a local warehouse to a local retail store.

The reason why I am guessing these goods were double counted is that the GDP of the US in 2007 was only 13.8 Trillion, and it is impossible for shipping to account for some 85% of GDP.

Sad (and Funny) but True

http://www.newstatesman.com/ideas/2009/12/assets-loans-products

Call it a load of old bull
Harry Shearer

Published 03 December 2009

Bad banks, troubled assets and securitised loans – such linguistic tricks just add to the madness of the crisis

Euphemisms, by their nature, are supposed to plaster over unpleasant truths. In my adopted home town of New Orleans, a city known for its straight talking, the estate agents have lately taken to renaming the little residen­ces at the backs of main houses - long known by their truthful name, "slave quarters" - as "dependency units". The mind rebels.

I always thought of the economic and financial worlds as similarly resistant to euphemising. We had bulls and bears, of course, but those were metaphorical caricatures of real attitudes. Most of the jargon of the money world was, if anything, mind-numbingly literal: puts and calls, debentures and debt. But that all changed during the recent madness, a madness that may have been exacerbated by the looseness of the language.

This was a time, after all, when financial services began to be called "products". Conventional thinking would suggest that if I lend you money I haven't given you a product; I've afforded you (temporarily) the means to purchase products or services. But that was the term financial firms, insurance companies and banks started to use to refer to what they were offering.

Did it make people in these enterprises feel more muscular, less nurturing? Was it a linguistic farewell wave to a manufacturing economy, disappearing just as finance took centre stage? Seemingly innocuous, this change naturally led, as it did in the world of actual products, to an important next step: product innovation. Loans are loans, but a loan product seems awfully lonely up there on the shelf, all by itself. It needed some friends, some fellow products. Some friends.

Enter Ninas, home loans that required from their prospective borrowers "no income, no assets". Like the other loan "products", they had something in common with their manufactured brethren: once sold, they left the purview of their sellers. As with products, future responsibility for them was farmed out to someone else, preferably in Bangalore. Calling these things products made it possible, maybe even mandatory, to treat them as such. The only "service" left in the equation was the "servicing" of the loans, which itself was a euphemism for collecting.

Calling these loans Ninas feminised them, made them seem cute, charming, a little naughty, perhaps, but not criminal. Just as referring to the whole class of loans as "sub-prime" avoided the unpleasantness of the reality that they were junk. It's like describing someone on his deathbed as "sub-well".

When things started going bad, the language started getting even cuter. A year ago, we were told that the main cause of the crisis was the crushing burden of "toxic assets" - home mortgages lent to borrowers who could afford to pay them off just as soon as pigs filed flight plans. That's why three-quarters of a trillion dollars went from the US treasury into the Troubled Assets Relief Programme, or TARP (reassuring, isn't it? A safe plastic covering, in capital letters), supposedly to get these toxic assets off the books of the banks. In fact, entirely something else happened with the money, and with the language. While the federal funds became a simple cash infusion into favoured banks, the word "toxic" was nudged aside in favour of "troubled". Really. The assets were now to be seen as delinquent youths, their faces smudged with dirt, their clothes tattered but their souls still full of potential. It wasn't really their fault. They didn't need to be wiped off the books, just . . . understood.

Where were those assets supposed to go? Many officials proposed the notion of a "bad bank". Again, just a miscreant, like the dog that poops on the living-room carpet. Bad bank! Sit over there in a corner and think about those stinky mortgages you're collecting! It's a rolled-up newspaper to your noggin if you try it again. Of course, the main thrust of this particular euphemistic gambit was a brave attempt to convince us that there was, by contrast, such a thing as a good bank. Nice try.

When you want your euphemising to be particularly opaque, you go French. Hence, "tranche". Look it up and the dictionary will tell you it means "slice", but that sounds like something that's done in a delicatessen, parcelling out thin portions of pastrami to the waiting rye bread. That's not what sophisticated gents (and ladies) in bespoke suitings do inside Important Offices. The desired effect of tranche was to induce a tranche-like state, in which investors would come to assume that the people slicing up pieces of bad mortgages actually knew what they were doing.
This leads us to "securitising", which is to securing as "believitising" is to believing. In fact, believitising would be the creation of exactly the level of credulity this stuff called for; unfortunately, nobody bothered to coin that word until just now. The essence of securitising was persuading the financial ratings companies, by means as yet unknown, that a collection of slices of crappy mortgages (or a slice of a collection, take your pick) could be an AAA-grade investment. Those letters are themselves a kind of linguistic shorthand, as what they're really saying is: "Of course, this posits a new scale on which, if securitised mortgage packages are AAA, a truly secure investment would be ratedAAAAAAAAAAAAAAAAAAAAA+++." That is, it would be ratingised.

When the market tumbled a year ago, there was an uptick within a few weeks. That started a discussion about whether or not this was a "dead cat bounce", the short-lived surge upward before the destined plummeting resumes. When I first heard the phrase, I thought it was the name of a particularly inelegantly titled 1940s dance tune. But no, it's an example of financial malphemism, in which a mere reversal of market direction is depicted as an act of cruelty to animals - the dropping of an expired (or soon-to-be-expired) feline for the purpose of measuring gravity's effect on its air-worthiness. The deliberate crudity of the phrase probably reflects its origins among short-sellers and their contempt for any sign of hope.

Which brings us to the pedlars of positive thinking, among whom "green shoots" have contended with "glimmers of hope" as the optimistic usage of choice. "Green shoots" implies an organic process of growth, outside human control, but dependent on the season. "Glimmers" are more promising, requiring neither a green thumb nor the right time of year to make their appearance. This phrase has been a par­ticular favourite of the US treasury secretary, Timothy Geithner. Visualising these glimmers became for him almost an evangelical enterprise. Were they just an aurora geithnerealis, or were they signs of a true recovery? Don't ask, brothers and sisters, just believe.

And then there is the word tossed around blithely by CEOs and financial journalists alike, designed to drain all the dread out of one of the most frightening consequences of economic slowdown. That word is "shed" - not as in the little building out back where you keep your tools, but as in what prudent companies do to jobs. We've not been experiencing the widespread throwing of people out of work recently, just the shedding of jobs.The word makes the process sound all National Geographic, like what snakes do with their skins every whenever. But its progress has not yet led it to the scene of the actual transaction: "Bill, we value your contribution to the company over the years. I'm sorry, but we're going to have to shed you." No, "let you go" still is the go-to euphemism. Which raises the question: "But what if I don't want to go?" We're still letting you do it.

Contemplating these linguistic tricks inspired me. I have written songs around them, including "Bad Bank", "Troubled Assets", "Dead Cat Bounce" and "Glimmers of Hope". They appear online as part of a collection of compositions about the meltdown, named after the two contending forces in stock markets: Greed and Fear. It was an act not so much of composing, frankly, as of songitising.

Harry Shearer plays more than 12 characters in "The Simpsons" and was Derek Smalls in "This is Spinal Tap". For more information, visit his website.

Unemployment Drops?

Nonfarm payrolls fell by just 11,000 last month, slowing down from a downwardly revised 111,000 drop seen in October, as the recovery encouraged some companies to retain workers, the Labor Department said Friday.

But, if the total number of unemployed actually increased, how can the unemployment rate actually drop?

Well, according to the people who actually track the unemployment rate (my hero, the BLS), the unemployment rate is the number of unemployed person's divided by the labor force.

So how can the number of unemployed increase while the rate goes down?

Here is the definition of an employed person:

Persons 16 years and over in the civilian noninstitutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family; and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Each employed person is counted only once, even if he or she holds more than one job. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations.

And here is the definition of an unemployed person:

Persons aged 16 years and older who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment sometime during the 4-week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.

And here is why I think the unemployment rate went down:

Discouraged workers (Current Population Survey)
Persons not in the labor force who want and are available for a job and who have looked for work sometime in the past 12 months (or since the end of their last job if they held one within the past 12 months), but who are not currently looking because they believe there are no jobs available or there are none for which they would qualify.

If the number of discouraged workers increases at a faster rate than actual job losses, the unemployment rate will go down. I.E. if the number of people who were laid off in Nov 2008 is higher than the number of people who have been laid off in Nov 2009, the unemployment rate will decrease.

Here is the full press release from the BLS.

A broader measure of unemployment, U-6, counts discouraged workers and those marginally employed. It stands at 17.2%. This is actually down from 17.5%.

So, maybe the economy is creating jobs and this is more than just a statistical recovery. In any event, more will have to be seen before you can call this a trend.

Maybe this video will clear things up: