Mischief With Government Statistics

                       

The public is unduly influenced by the numbers the bureaucrats in Washington put out, whether on GDP, unemployment or other important statistics.

                       

Few bother to learn how these numbers come about and the role of estimates, including the seasonal variety. Therefore, lots of bureaucratic mischief can be done with the process, some innocently, and others with a political purpose.

                       

What I cannot understand is why these estimates must be made. If they were not, the public would be forced to do a bit more thinking, especially with media assistance, which does such a poor job. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter)

Finding Company CEOs

                 

There was a time when CEOs of major corporations grew into their jobs from the lower corporate ranks, arriving at the top spot in their late 50s or so. Retirement age was at 65 as a rule.

                       

These days the paths involved usually differ. Many top executives fail to stick around long. Change is the new corporate mantra. CEOs are being treated more like sports coaches who are dropped after one losing season.

                       

It’s an unfortunate management error. Large companies cannot be turned around to suit monthly business conditions, the same way big boats can’t make U-turns in minutes. The idea that this is expected does not speak well for business experts and the media which egg on such action. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter)

The Failed Dodd-Frank Experiment

               

The Dodd-Frank Act was passed in 2010. One of its main features was the Volcker Rule, which pertained to the separation of bank’s so-called proprietary investing and commercial banking. The idea was to make the banks safer because perceived speculation could hurt bank safety.

                       

The rule has not really been fully implemented. Why? All the brains that comprise government bureaucracy have yet come up with a suitable definition of which constitutes proprietary investment or trading by the banks. And no one will ever accomplish this task.

                       

But there’s an assumption that government knows

best and will safely guide bank operations with more and more regulation layers. The bureaucrats talk; nothing concrete is accomplished; the big banks get bigger, and still too big to be allowed to fail, according to the bureaucrats. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter)

Gasoline Pricing

     

Most gasoline consumers have little idea of how gas prices work. Unfortunately, they take the path of least critical resistance and always blame the oil companies and/or speculators when prices are high. They learned what they feel is accurate from the political demagoguery of politicians who always take their best route for getting votes from an unknowing public.

       

When oil prices are low, as today, the subject is forgotten. 

                              

The subject is complex because of tough, ever-restrictive, and often unreasoned government environmental regulations on oil production, refining and distribution.

                       

Then there are heavy government taxes. On top of that are other restrictions, limitations and regulations. The speculators simply exaggerate short- term pricing; their effects can be to lower as well as raise pricing.

                       

There is a bottom-line solution here: produce more oil and gasoline. That over- rides the other complexities. Moreover, the U.S. is awash with hundreds of years of supplies, which would cost us nothing in balance of payment debits. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter)

                       

Political Budget Deficits

          

Government spending is often more than a waste of money. Excess spending that produces budgetary debt causes even deeper recessions than we would have. In fact, I have repeatedly reported that so-called stimulus funds have actually been a political slush fund, doled out to “friendly” recipients. And that independent study has shown actual overall job losses while the “stimulus” was applied to mainly help certain states balance their bloated budgets.

           

Remember the Soviet Union with its periodic Five Year Plan stimulus efforts and their notable lack of success?

           

But budget overspending will do to us in the future what it is doing to several European countries. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Oil Prices Truths

                  

Every time the price of oil and gasoline goes up, calls arise for a congressional hearing which put oil company CEOS on the grill.

                       

Of course, the results, after all the political hoopla, will be the same. The politicos find nothing, despite all their efforts. The media get their headlines and stories. But the facts will be overlooked--again.

                       

The oil companies pay an effective tax rate of 39.8%, much higher than most corporations, far too high in an industry where exploration is so necessary and so expensive. They make about 8 cents on each dollar.

                       

Oil prices are determined by expectation of future long-term oil production. Supply and demand for oil play an important part, and the politicians do all they can to reduce supply.

Notice no political talk now that oil prices are way down? So the  Merry-go-Round goes on and on. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Wall Street’s Noise and Gibberish

                   

There’s an old saying: Nothing is new under the sun. Especially on Wall Street, where the merchandisers are constantly coming up with terms for marketing old investing concepts.

                       

I have heard a new term to offer investors a means of beating the odds of investment success. Unfortunately, it has little to do with needed discipline. The term is applied

to “tactical investing.”

                       

However, it’s the same old tactic used to time the market, a strategy where the odds for best-price success are rather small, researched at about 5% for those seeking optimal in-and-out transactions. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)