Saturday, January 30, 2010
The Brat May Be Contained
Regarding yesterday's economic news: Q4 GDP will probably be revised down somewhat, but the important thing is that most of the number came from clearing and replacing inventory, which is more of a one-shot deal than most like to acknowledge. However Chicago PMI (which is a three month average) came in beautifully, and appears to indicate that we have enough of a carrying wave to get us through February.
So the bottom line is that T-bill yields are telling us that we are in danger of sliding back down later this year, which means that Congress had better get on the stick and do something to boost the economy ASAP to carry us through the danger period.
How big is the danger? Let me tell a tale with pictures.... (Click on these and open them in separate window or tab). If you don't really look at these graphs you won't get it.
The first point I want to make is that this recession is like no other Post WWII. First, it is global, and second, we are so far from getting back to where we started that it is worrisome and poses special risks.
The current period is most like the 75-84 sequence. During this period the US turned in three separate recessions (IMO, two, because I count the 80s as one). The danger we now face is that 2010 in the current sequence may really be 1981 instead of 1983.
Inflation and interest rates eroded effective incomes back then, which built up a monumental adjustment triggering successive downturns.
Fed Funds were raised, which precipitated the second slide.
Some still lambaste Volcker over this, but no, he was right, because....
The adjustment wasn't over - look how retail first sagged then legged down, precipitating the first downturn and then the hard adaptation in the 82 recession.
Inflation was too high, and only knocking the expectation out of the system crushed interest rates for consumers, which slowly restored the ability to buy. Retail sales did not return to 78 levels until 1985-86.
A lot of credit is given to tax cuts, etc, during the Reagan era, but that wasn't the important factor for consumers. It helped companies! It helped production - which helped jobs, which helped consumers. But many consumers saw their net taxes increase, due to the broad-based consumer tax raise in the form of the SS deal.
You see the steep rise in CMDebt (Household outstanding debt) beginning in 1984. Interest rates were so much lower that it created the ability to purchase because debt carrying costs were so low. That fueled problems later on, but it did restore consumer buying power.
So now let's look at the same sequence of graphs for our time:
This is why the Fed keeps promising that it will keep rates low for "an extended period". It does not want to return us to contraction by playing with rates.
Well, well, well. Kind crammed those retail sales down, didn't we!!!
How badly? We haven't fallen as far from the peak as we did during the earlier cycle. I keep reading economists saying we've never experienced this before. Piffle. We fell faster this time, but in percentage terms, we haven't fallen as far.
But this last graph, oh, this last graph tells a tale of sorrow, tribulation, and great worry.
Note that CMDebt is scaled to the right, which obscures the painful fact that CMDebt now is approximately equivalent to GDP, whereas, OMG, in the previous period it was more like 1/3rd of GDP. Expecting retail sales to bound joyously upward to their previous levels is like expecting the law of gravity to repeal itself.
So we still have a major structural adjustment LEFT in the system, and rates can't fix this problem. That's why keeping inflation under control is far more important then any other factor - it was inflation that eroded the spendable incomes of the population in the 70s, and if we set up that dynamic again, we are going to leg downward again.
This is foundation I needed to go back and really address Thai's comments about government control and taxation. Thai claims I am not really a conservative. I don't care about the conservative or liberal labels. I would like to see debate from either viewpoint. I do care about REALISM, and the US economy is now and has been, and will be predicated on the prosperity of the median person.
Thursday, January 28, 2010
Sending Myself To The Doghouse
I am not afraid to criticize our president, but there were some hopeful tinges here and I would like to make sure that my irritation over certain things doesn't overshadow the positives.
The other day several people and I got into a long discussion over at No Oil For Pacifists. The post is here, and the discussion was between some sort of technically educated person (OBH), Carl, the blog's proprietor, me, and Thai (a physician). I want to post a follow-up to that. Most interesting to me is that Thai zeroed in on the question of marginal tax rates leading to government control of the economy. This is a huge issue in economic theory (government control of economies has usually worked out disastrously), but it confounded me that Thai would focus on this issue.
Thai had previously given me a link to the Covert Rationing blog (written by Dr. Rich), and I've been reading it for months with interest. I spent yesterday's hospital interlude wondering why a physician would focus on this issue, and then I remembered that the question of control has been recurring in Dr. Rich's posts. Not just in terms of government control, but also in terms of the creation of a medical bureacracy that would prescribe treatment options to the point of preventing the most cost effective and successful treatments for individual patients. And that has some linkage to SW's series of posts which begins here.
Finally, during the now nearly two decades that the SuperDoc has been treating me, I had slowly realized that the SuperDoc's method of treating untreatable illnesses is really a matter of building margin back into the body (and sometimes mind) to change its functioning enough to expand treatment options.
And it's not just me. Take the Chief. Whatever has caused his situation is truly mysterious; many very good doctors have taken a crack at him and come up with nothing. There is one more test result we are waiting for, and SuperDoc tells me that if that one doesn't show anything, he's out of ammo. But it doesn't MATTER, because whereas the Chief had been worsening rapidly, over the last few weeks he has changed trajectory and is now improving rapidly. The underlying condition may not have been found or even addressed, but the human body is a complex, self-repairing system. SuperDoc treated one of the Chief's symptoms and and one medical problem that hadn't been found, and SuperDoc appears to have tilted the balance back toward life, because the Chief seems to have entered an self-reinforcing upward spiral rather than the downward spiral. I wouldn't necessarily discount the prayers either....
So probably Thai's approach is not surprising; both the human body and the economy are complex, highly interactive systems which must preserve a certain level of balance to maintain function, both are dominated by a lot of unknown or very difficult to measure balancing processes, and meddling with such a system when you don't know what's really going on can be dangerous. In both, the apparent problem can be a symptom of a self-corrective process.
Tuesday, January 26, 2010
First, Japan - its credit rating was just cut. Second, more news about China restricting loans.
This current phase started last year, and I'd date it from Dubai's default. But there continue to be nasty little reality checks, like Greece's problems, Japan's contracting nominal GDP, Singapore's most recent results, etc. And the drizzle of these things continues, which is curbing exuberance, and causing people to question their assumptions.
The idea that China was ever going to make up, in the near future, for drops in US and European consumption of oil was odd, to say the least.
But now if we step back and consider our own situation, Japan's dilemma ought to make us rethink some of our economic assumptions. There is a limit to government borrowing, especially when the demographics of your population are unfavorable. We are nearing those limits and can't afford to get there.
Monday, January 25, 2010
File Under "The Same Mistake"
Investors should seek out “rough gems” among Asian junk bonds including Agile Property Holdings Ltd. and Evergrande Real Estate Group, which will hold value as credit spreads widen, according to BCP Securities Asia Ltd.I guess desirable locations means "not building empty cities in deserts".
To lock in “slightly softening but still high yields,” investors should buy “better quality names” in defensive industries such as retail and utilities, as well as Chinese property companies with good management and projects in desirable locations, she said.
Technically, you could argue that the call to buy the junk bonds is correct, since you could technically argue for a gain on spreads. On the other hand, it is lot like arguing that one should buy subprime US mortgage bonds for the higher yields in say, late 2005 or early 2006, because the Fed WAS tightening:
There are (snort) limits (gasp) to gains (choke) from sheer technical trading. When the cash flow fails it fails. LMAO. That's where this post's title comes from - later on I will descend into sobriety.
A little perspective from Snarky Mark, and we must not forget one of my favorite blogs, Immobilienblasen (real estate bubbles auf Deutsch), which provides us some perspective here and here.
Crude oil: WTI Cushing spot was trading below $94 this morning, and dated Brent spot below $93, and that is after the morning bounce. Because here in the US we don't know what's left to buy.... Both heating oil and gasoline were still hanging below $2.00/gallon after the bounce. More moderate weather combined with a failure to bling, I think. Anyway, the other side of this is weakness in the Canadian dollar, probably because people are winding down USD/oil hedges.
And if you really want a reality check, how about Chinese oil consumption? This is why the oil play is played out. If the US imports and usage (2009 down more than 4%) are dropping so significantly (the US still seems to be consuming more than 20% of the world's oil supply) and China, which hasn't made it to consuming 10% of the world's oil supply yet, is growing by a lesser percentage (plus 1.4% in 2009 according to China), you can bet that the next BP oil report is going to have some baaad news for oil bugs.
Yes, recovery should boost oil consumption in some countries, but if oil prices are a hard constraint on the US economy and US consumption trends, then they will certainly be a hard constraint on the world economy.
So we rock back on our heels and contemplate January:
- The dizzying drop in US T-bill 2 and 3 year yields, with pricing gains solid all the way through 20 years.
- Drops in stocks largely combined with drops in blingier commodities.
- Hard fundamentals (a very good WTRG writeup) in the oil industry that appear to indicate substantial current supply margins. Look at the workover rig graph, US consumption graph, and these two representing OPEC and non-OPEC production:
I think we are moving back into less hopeful and more fundamental valuations, which I view as a sign of some world recovery. But it's not going to be brilliant; oil prices will constrain that. I am not going to get into the quarrel over world oil reserves, but it's a hard constraint that some countries with great reserves have political blocks preventing effective exploitation, and also it's a hard constraint that oil development is very capital intensive and dictates a rise in prices. It is also a hard constraint that China is predicting domestic oversupply in 2010.
Overall it is difficult not to see these trends as a mark of pricing negotiation and a return to much more rigid pricing standards. This is an environment which is unfavorable to bubbles. Bubbles evolve and survive in atmospheres in which pricing is conducted on recent price trends, but not in environments in which pricing is conducted on place-in-economy trends.
Warehouse stocks of industrial metals are boosting and more money is shifting into industrial metals. But it is not really justified over the 5 year range - there is some overshoot. All in all it is not really an inflationary picture; if you adjust industrial metals with energy prices, it looks like a slow recovery and an internationally subdued picture with some forward buying on price expectations. Hedging with supplies instead of financial instruments is usually not a sign of explosive growth, and it is aligned with the US January increase in non-financial commercial paper.
I do not agree with the take that announcement of the "Volcker rule" by the US induced a sudden sell-off. It seems to me that everything here is the continuation of the same trends prevailing over the last few months. Foreign direct investment is going to be light through 2010, and although hopes for both China and India are running high, concerns over a Chinese bubble are gaining, and the pressures on India are sufficient to induce some rationalization in India's byzantine FDI regulatory schemes. Perhaps I am wrong, but I have always figured some of India's interesting rules to be pure protectionism, and some to be a ministerial revenue-enhancement scheme. Few things that directly enhance the direct incomes of government officials are ever found to be unworthy of continuance.
Sunday, January 24, 2010
Ninety Percent Debunking
I don't know how long it will take me to get through my head that a considerable group of people whose business is essentially politics or commenting on politics are actually horrendously, awe-inspiringly bad at it. Unbelievably bad. Self-destructively bad.
Take, for example, Frank Rich's column on what the Massachusetts vote means, and then compare it to Krauthammer's diagnosis. Krauthammer has more recent data, which is probably one clue as to which I find more convincing. Yet I suspect that both are probably missing some of the real impetus behind the vote. Almost always these things are more local than pundits want to believe.
Still, Krauthammer's point about health care "reform" is addressed in both columns. Rich claims that the WH hasn't done enough communicating about what the bill will mean. In part that's because there isn't a final plan yet, and in part it is because most independent analyses have raised severe concerns about the financial viability of the plan, and its purported solutions. The population doesn't like it and doesn't support it, and as far as I can tell, the population has realistic concerns.
I'm still mentally staggering to find this much off-the-wall nuttiness so proudly displayed, and I'm struggling to understand why this is occurring.
Perhaps these other bloggers are on to something. I am very fond of the Photon Courier blog, because it's different. It's not about sides or the current, but about the basics that we all might miss. David posted a link to Assistant Village Idiot's post, (discussion there or at Chicago Boyz crosspost) which is pretty much a post of correspondence from a friend. It's hard to describe and far too long to excerpt, because his friend is discussing why people who are intelligent fail in the real world, and why academic strengths frequently do not contribute to success outside the ivory tower.
Here are some of the observations:
- How to correctly define the problem, in most cases when it presents itself as something else, is key to a successful outcome.
- ...simple understanding of a concept does not mean that you can do it.
- Paraphrasing - successful business executives become generalists who are not wedded to the skills of their training, but use techniques and skills as necessary to address the problem.
- Paraphrasing - High level failures are often created when a stressed executive returns to what has worked in the past but is inapplicable to the current problem.
- The last point is that they don’t value experience and the judgment that comes with it.
- The conclusion: I think that academics hate business because they don’t “recognize”(are either aware of them as skills or give the credence as skills) business skills at a high level and they don’t recognize the lack of skill in themselves.
It's quite true that the attitudes of Massachusetts' citizens towards health care didn't change as a result of Obama's election. What changed is their guess as to how the proposed reforms would work in practice. The rallying cry of "let's just pass it and fix it later" is a dud.
I continue to be amazed that health care, which is a winning issue among small business owners (closely correlated with independents), has been so flubbed by this administration. These people are like a football team that has no defensive line and no running game. Their only idea is to throw touchdown passes, one after another.
Regarding point 4, see Shrinkwrapped's post. He has mentioned his concerns about divisiveness in this administration before. Historically, it has usually been the case that a failed ruler has used scapegoating in the population to suppress concerns over the regime's failures. With all their failures, the Bush administration tried hard not to let this sort of thing develop. One can argue that searching little old Polish-American grandmas instead of targeting people with Arabic names might have been overkill, but it was a strong effort to prevent a tense domestic atmosphere from becoming a persecutorial one.
Saturday, January 23, 2010
The Electorate; The Mob: The NY Times Version Of Armageddon
Perhaps it is good that the NY Times is about to disappear behind a paywall; it may induce a less fevered and more contemplative environment in the newsroom:
Welcome to the mob: an angry, wounded electorate, riled by recession, careening across the political spectrum, still craving change, nursing a bloodlust.
It seems as if Obama and the Democrats made the mistake of believing that a heart once won was forever won, that people would be patient, and that the mob would accept their reasoning for
lack of results.
They were wrong. The mob is fickle. And it’s back with a vengeance.
And the bloodlust! Don't forget the bloodlust! We got a vengeful, bloodlusting mob going to the polls here to vote in an angry, wounded manner.
Is it really worth using all this rhetoric over people going to the polls to vote, which has been happening for over two hundred years? How exactly do the Massachusetts voters in any way resemble a mob? Isn't the very act of voting a commitment to working through established, constitutional, peaceful time-honored methods to create change? Aren't mobs groups of people who have thrown aside the peaceful, legal methods and proceed to direct violent action?
I truly do not think we should blur the lines between the legal and peaceful and the violent and illegal. The distinction is important.
The op-ed (which is by a Charles M. Blow, who has a blog), ends by quoting Obama's explanation to Stephanopoulos, which was basically "we forgot to communicate", and then expounding:
He underestimated the mob, and his agenda will suffer now that the emperor has no clotureSo now the mob is kinda bright? Maybe this ChBlow guy is just trying to whip up some blogging fervor. Here's a sample of his blog, which really is more about numbers and less about adjectives, although lately he has been in a frenzy about mobs. From which I quote his own words:
As the comedian Bill Maher pointed out, strong language can poison weak minds, as it did in the case of Timothy McVeigh.
And apparently more than a few NY Times columnists do have weak minds. Trying to inculcate a fear of the voters by depicting them as fundamentally irrational and violent is both ridiculous and somewhat dangerous, but it is not as ridiculous as failing to see the difference between voting and swarming the streets with pitchforks and lighted torches to commit group acts of violence.
Further, if one logically follows the ideas implicit in this sort of perverse punditry, which delights in depicting the voters as not being worthy of a vote, then one would feel concern about our constitution and feel a concern about whether the average person stands to lose his or her constitutional rights under it.
Thursday, January 21, 2010
I'm Reading Citizens United
Well, We'll See
A lot of this is in the seasonal adjustment - the prior week's actual claims were 804K compared to Jan 16ths actual claims of 650K, which the magic of seasonal adjustment converts to the the numbers given above. Since initial claims were considerably higher last year, I am puzzled by DOL's explanation, although I do not dispute it.
It is hard to understand what these numbers really mean over time, especially since the population and covered employment has changed a great deal over the decades. I made you guys a graph to give a little perspective.
Covered employment are the job accounts reported to DOL by the states. The green line takes 13 week average of covered employment and expresses it as a 13 week percent change. In reality, the changes shown on the graph really occurred centered about three to four months earlier.
The purple line represents seasonally adjusted initial claims as a percent of each week's covered employment. The bluish line is the same, but not seasonally adjusted.
As you can see, a small change in initial claims produces a large change in covered employment, and this recession's change is far more serious than that of the 91 or 01 recessions'. Indeed, it now appears somewhat more severe than the 82 recession. The reason the small change in initial claims corresponds with such large changes in covered employment is less the jobs being lost than the sudden drop in job creation during recessions.
However, one takeaway is that the rate of initial claims we are currently experiencing is still one associated with recessions. Here I drop the covered employment so that I can show the claims in greater detail:
The great thing is that one can now plausibly argue that we are entering a period of post-recession blahs. The bad part is that if we are entering it, we have just done so, and the situation may be very fragile indeed.
That is why I am concentrating so much on small businesses; what will decide whether we are going up or down will be more job creation restarting than the level of claims. Restructuring (aka layoffs) in the larger companies will continue for another year.
Without further comment, here is the list of states reporting increases in claims of over one thousand for Jan 9th:
STATES WITH AN INCREASE OF MORE THAN 1,000
State Supplied Comment
Increase due to holiday shutdowns.
Layoffs in the automobile, construction, trade, and manufacturing industries.
Layoffs in the construction, trade, and service industries.
Layoffs in the construction and trade industries.
Layoffs in the construction and service industries.
Figures are based on a six day processing week, as well as layoffs in the transportation and service industries.
Layoffs in the service and manufacturing industries.
Layoffs in the construction, trade, and manufacturing industries.
Return to a five day workweek, as well as layoffs in the manufacturing industry.
Layoffs in the manufacturing industry.
Layoffs in the textile, furniture, chemical, primary metals, and service industries.
Layoffs in the construction, trade, service, and manufacturing industries.
Layoffs in the construction, trade, and service industries.
Layoffs in the construction, trade, service, and manufacturing industries, and agriculture.
Layoffs in the trade, service, real estate, and manufacturing industries.
Return to a five day workweek, as well as layoffs in the construction and service industries.
Wednesday, January 20, 2010
Guns, God, Gays, Pickup Trucks and RACISM
This clip of Olbermann bringing up the possiblity of "truck codes" and racism as a potential explanation for the MA massacre is about the funniest thing I've seen in years, and it is accentuated by Obama's exhortations not to get in the truck when he hit Mass last weekend. While it is true that over 20% of Democrats did get in the truck, I doubt it was due to racism.
Among the facts which would tend to bely the truck-racist-code theory are that the current governor of Massachusetts is black and the strong support for Obama in the presidential election. I doubt the citizens of Massachusetts were too dumb to notice that both of these dudes were not whites. The rallying cry of "Fuck The South, Virginia, New Jersey and Massachusetts!" does not seem like a winning meme fir the Democrats and should be abandoned ASAP. The topic of angry white guys and Massachusetts also came up on Andrew Sullivan's blog a few days ago. There must be an implicit "straight" in between the angry and white, because Sullivan's been about the angriest white dude out there for some time. Hat tip The Anchoress.
Today was a better day for me. I woke up feeling less exhausted, I finished the last of the worse on SuperDoc's computers this morning, and then I got home and found a "The Wizard of Id" cover on Shrinkwrapped's blog. There is no greater joy than to find a cartoon about the Wizard of Id on a shrink's blog. Two of my favorite Wiz strips from the last year are here and here. A pickup truck may be lurking in the background.
I have been following Ace for the political squirming and realignments going on in DC. I was deeply amused to find Obama emerging as the defender of states rights:
President Obama warned Democrats in Congress today not to "jam" a health care reform bill through now that they've lost their commanding majority in the Senate, and said they must wait for newly elected Massachusetts Republican Scott Brown to be sworn into office.This is a big change from just a week ago. Obama is still polling far better than his policies, and if he does exhume himself from the Pelosi political grave (aka The Peasants Are Revolting) his presidency could succeed. He needs to hire a few of Clinton's people - Clinton knew how to tack in political storms. It is always a heck of a lot easier to lead to a place where people want to go, which is going to a be a a place in which they perceive potential success.
There is a hysterically funny Chris "Mr. Tingle" Matthews interview with Howard Dean posted at Ace. Mr. Tingle just cannot believe his ears when Howard Dean claims that MA voters wanted health reform and a public option so badly that they voted against the candidate who supported healh reform with a public option.
Mary Katherine Ham points out that the press is going to have to back off the "domestic terrorists" explanation for the teabag movement:
Perhaps Coakley's loss would not have snuck up on national Democrats and Coakley herself if they hadn't spent the last year minimizing and denigrating administration critics. It's easy to think you've got an election in the bag when you assume your only opposition is a tiny clan of noisy, redneck racists (and, how many of those could there by in Massachusetts, anyway?).The public's fiscal concerns have been in political play since the 1990s. It was one of the Democratic criticisms of Bush, although it played a little oddly during Bush's drive to get Medicare Part D (some prescription coverage) through. But it resonated then with voters (especially conservatives) and it has been an official plank of the Democratic party for some time. The rising deficits under Bush were a real problem for many voters on the left and right. It is not surprising that there are many voters of widely different political backgrounds still concerned. The Democratic leadership switched position on this, not the voters, and this was screamingly obvious to anyone who wasn't all tingly.
It's easy to do a mediocre job selling one's sweeping health-care overhaul when you assume anyone against it just lives to hate poor people and/or do violence to President Obama.
Democrats fooled themselves into believing the town-hall/Tea Party caricature and ignored the feelings of real Americans.
But the press was all tingly, and completely dropped the ball on their reporting of the entire teabag movement. In many ways over the last year, journalists cooperated with a very few leaders in DC to create a climate that allowed DC denizens to ignore reality. Voters were trying to get through to their elected representatives, and the press ought to assign more blame for the MA election to itself than to pickup trucks. But the press rarely accepts responsibility for anything. Mort Zuckerman lambastes Obama fiercely, and a read of Zuckerman's articles show that he has been more realistic than most on what the public is being asked to swallow. However someone needed to take on congressional leadership over the last year - it was, after all, the spin taken from Pelosi et al that ignored the fact that the citizens were concerned about fiscal realities. The press created a DC womb in which the voters concerns were not addressed, first by spouting accusations of racism against critics, and then by deriding them all as a tiny group of extremists.
PS: The funniest blogging line of the day comes from Betsy Newmark:
I don't think that the House Democrats have quite the suicidal fervor of Ataturk's soldiers.
But Maybe We'd Better Pay For It
It is not that the US public doesn't support health care reform, but the health care reform must be genuine - it must lower costs and increase access (on average). The problem with the current health care bills is that they will increase costs and lower access for far too many people. It's fake reform.
Any true health care reform has to start with raising the Medicare payroll tax about a percent, and then increasing reimbursements to halt the cost-shifting that is dramatically driving up costs for those privately insured. Then you want to promote laws that allow small businesses to combine in trade associations or whatever to negotiate health insurance for large groups rather than small groups.
However there are other big issues pending. I wrote about this last year, and with every month that passes such a step becomes more likely. See Coyote Blog for the ongoing drive to get US private retirement funds converted into T-bills. The problem with doing this is that a Congress which has shown so little fiscal responsibility will take the money, spend it all, and then your retirement funds will be GONE. Seriously gone.
But this will keep coming back and back. I guess this sort of thing will support gold prices for some time. If it's not in financial assets it is not as easy to take it, although Congress could pass a law outlawing the possession of specie and requiring that it be turned over to the government in exchange for "full faith and credit" assets.
Otherwise, the US dollar is looking good, which is one factor causing oil prices to trend down. The other factor is that heating oil prices did not keep up with crude prices, which surely has caused refineries to back off some of their purchases. I noticed that dated Brent spot (Euro) had fallen below $76 yesterday. But Nymex heating oil and gasoline futures are below 205, which is not very congruent with crude future prices.
There was a 6.1 mag quake in Haiti. I guess it is officially an aftershock, but it can't have improved things any.
Caroline Baum has a pretty good column up about interest rate risk and the Fed's operations. As soon as interest rates rise the Fed takes an implicit loss on its MBS holdings. Right now they can do what they are doing because their Net Interest Margin (NIM) is high due to their cost of funds being so low. If the demand for money rises (recovery), then T-bill costs will rise, and their net returns from the MBS holdings go down.
But I do not think the Fed will be able to get out of it this year. Technically the Fed does not really control interest rates - the market does. However the Fed can always flood the market with money, thus forcing down relative demand. If it does, it causes inflation to the degree that money is circulating. Needless to say, that money always circulates to some extent. In such a case one would see commodity prices rise quite rapidly, which would crush recovery.
In general, this is not a spot one likes to see one's central bank in. It is not clear that the interests of the real economy and the Fed's interests will be aligned later in 2010.
Tuesday, January 19, 2010
If You Care
Update: 69% in, Brown 53, Coakley 46. I think that's it. She can make up a few points from here, but not 7.
Boston.com has an election returns page. Or CNN is updating this post with results.
On a humorous note, this has got to be the worst headline ever - Democrats seek Plan B on health reform.
Plan B is an emergency high dose of hormones similar to the pill designed to prevent a fertilized egg from implanting.
So is the headline implying that Democrats are seeking a way to discreetly prevent the health care reform bill from entering the world as law?
Maybe CNN used this lead because of Coakley's recent comments implying that orthodox Catholics shouldn't be allowed to work in an emergency room. This caused something of a furor in a state in which many hospitals are run by the Catholic church. See Ann Althouse's post which covers the whole thing, except for one important fact: Plan B is sold over the counter. You don't need a doctor to get it. So I can't imagine what Coakley is after aside from gratuitous Catholic bashing!
Words VS Deeds
The Democrats, on the other hand, have been specializing in tokenism and words, but neglecting the deeds. I suspect that's part of the reason why they have been losing Independents in such numbers.
Bob Herbert can't figure Dems out:
Jobs and freedom. In America, you can’t have one without the other. Democrats are in deep trouble right now — just a year after their giddy celebration of Barack Obama’s ascendance to the presidency — because so many millions of Americans are out of work, unable to find the gainful employment that would unlock the door to a stable future for themselves and their families.I can't figure it out either! Unless it is because almost all of their current policy agenda amounts, in practice, to a job-killing agenda, and they are loathe to recognize that. Herbert wants the government to launch job creation programs, but the government is awful at creating jobs. Businesses have to do it. In order for businesses to grow we should cut business taxes to a lower rate to be more competitive with international tax norms. That is the complete opposite of the Democratic agenda.
The president and his party may be obsessed with health care, but unemployed and underemployed Americans want a job. Why this has been so hard for the Democrats to realize, I can’t say.
As Betsy points out, Obama hasn't really done much:
He hasn't been up to the task, and why should we expect that he would be? He has never run anything. He had not been in politics that long and only as a back-bencher. He can blame Bush all he wants, but he should have known what the job was going in. And campaigning through four years while blaming his predecessor and the Republicans for all his setbacks and handing over governing to Pelosi and Reid is not going to allow him to maintain the fantasy that was his campaign.I have spent most of my functional time since last Thursday dealing with SuperDoc's computer problems. To my amazement, his Symantec Endpoint managed to convert itself into a virus. Sadly, due to the Symantec products' design, which is intended to prevent trojans and viruses from knocking the product out of commission, when these installations go bad they convert themselves a Super Virus. I deleted over 75,000 files generated by SuperDoc's virus protection, which was blowing up his computer and shutting it down.
The Democrats might want to think about this. I used to really like Symantec's products, but in the push for total control, they overshot and now prevent the fixes to problems when they fail. So they're a heavy load drawing a disproportionate amount of resources when they work, and when they go bad they go very, very bad and cost a lot of skilled time to fix.
I know nothing about Massachusetts politics. It was only Saturday evening that I figured out who Martha Coakley and Scott Brown were. I also suspect that many people writing about this election don't know anything about Massachusetts politics either. But one thing is probably significant, and that is the huge margin for Brown among MA Independents shown in the polls.
And as for Obama, he should know that the health care bills in Congress are not going to help economically, and have major flaws. The push to pass something CALLED health care reform has won over the idea of reforming health care. So his support for this is really proof that he believes in tokens and not action.
SW still has hopes for Obama. I hope SW is right. But I find I gave up on Obama this weekend, when it became clear that once again his Haitian policy was more words than deeds. It was inevitable that the more the US did in Haiti the more controversial it would become, and there are real sovereignty issues. But Obama - the Nobel Peace Prize laureate - could have gotten on the phone with various heads of state and the head of the UN and brokered an agreement rather than waiting around for the UN group on the ground in Haiti to get itself together and tell us what they needed. For one thing, the local UN group's two top leaders were killed, so they had a significant leadership deficit.
Instead Obama has outsourced this again, and tens of thousands of Haitians have paid the price with lives and limbs. And who but Obama could do it? This is one area in which a major government action could have worked and would have saved many lives, and we really did not do what we should have done. A week is far too long. I believe that if Obama wouldn' t throw his weight around in such a noble cause, he has no intention of ever emerging from his professorial, rhetorical womb to become an effective president.
So the way I sum things up to myself is this:
A) The Republicans had control of Congress and they blew it.
B) The Democrats had control of Congress and they are managing to make it even worse.
C) Either we need to split control of Congress or we need a third party. We are going to have to get some competition and debate back into the system. A good president can't do much with a bad Congress, and the 98-0 vote in the Senate for the unemployment/major tax giveaway bill (to some of the worst offenders causing the current crisis) seems to be proof positive that neither the GOP nor the Democrats care at all about good government or rational policies.
D) We might as well face it, we have a bad president from whom we can expect no help in the fight to get Congress to be a viable instrument of functional government instead of a graft-taking organization. For three more years.
I'm suspecting that the national growth of the Independent bloc in polling is a reflection that many share my A and B conclusions.
The irony is that I believe we truly must reform health care. I believe that we have to reregulate the financial system. I believe that the US has to turn its focus to rebuilding our internal, domestic economy on the basis of production and not consumption. The rhetoric is there. The action is not. The Obama administration's current policies are very Japanese, and Japan is on the brink. If we follow them we will be teetering on that edge in just a few years more. Congress doesn't appear to have any policies except to create huge streams of payoff money flowing from companies who want government benefits.
The sole consolation in the last week is that MLK would be pleased that we have a black president and that he will be judged by the content of his character.
We have made progress, but to make more we must turn to deeds. The era of rhetorical flourish is decisively over. Either we go back or we go forward, but our current government is one of our problems rather than being a part of the solution.
Update: See this. Our current dissension is really not between progressives, liberals, moderates and conservatives. It's between those who are interested in real world results and those who are interested in evading the truth about real world results. The divide is present among all political divisions, but not very active among the population, which, after all, mostly is subject to the results. Thus we have an increasing disconnect between our political class and our people and between our goals and our outcomes.
Further update. Every Dem is not clueless:
"Regardless of the outcome ... this should be a gigantic wake-up call to the Democratic Party - that we're not connecting with the needs, the aspirations and the desires of real people right now," said San Francisco Mayor Gavin Newsom.Congressional leadership always seems to be slow to get this sort of message. I remember the GOP after Katrina as the public became more and more disgusted with them. Waaaaay out to lunch.
Friday, January 15, 2010
Small Business Hope And Change
It declined again, but less than it did in November. There's very little positive in this and a lot of negatives, and this is particularly worrisome given the general worries for 2010, especially....
Ten percent of the owners increased employment, but 22 percent reduced employment (seasonally adjusted). While the trend for increased employment is going in the right direction, there is no indication that job growth will be strong enough to dramatically reduce the unemployment rate. Ten percent (seasonally adjusted) reported unfilled job openings, up two points from November, a good sign. Over the next three months, 15 percent plan to reduce employment (down two points), and eight percent plan to create new jobs (up one point), yielding a seasonally adjusted net negative two percent of owners planning to create new jobs, a one point improvement from November.Profits:
Reports of positive profit trends were unchanged at a net negative 43 percentage points.The whole thing is just as depressing as anything I've ever read. If you have no credit background, you probably won't find some of this as surprising as I do. Small business owners are generally an over-optimistic lot. One older lender told me that he split their profit forecasts into thirds when figuring credit carrying capacity. One third he always credited them with as long as they had been making it. The next third he credited or debited based on the current economy and their recent record. The last third he almost never gave them. He said he was usually within ten percent of actual.
I will just quote a bit from the summary without comment, except to note that the political division known as "Independents" on political surveys contains many people who are in business for themselves.
So why hasn’t owner optimism soared like it usually does at the end of a recession, especially one that cut so deeply into our economic fabric? The answer is “hope and change.” There is little hope and the change that is being delivered is far from encouraging. Washington is offering nothing but higher taxes and fines and fees and more regulation. Congress is passing bills with thousands of pages of hidden bombs that will go off as the legislation is passed and implemented. Federal spending has soared amazingly, yet been ineffective except at pushing the federal deficit to incomprehensible heights, promising to double our national debt in just a few years. The interest burden this will place on average Americans is astounding. Uncertainty is the enemy of economic growth and investment, and Washington, D.C., the usual source of uncertainty, is delivering plentyBoth energy taxes and health care are striking fear into the hearts of the people who have been the job creators over the last few decades. But nobody's listening. The 35 years quoted in this survey go back as far as the survey history. From the small business POV, this recession is far worse than the 80s.
of it. Confidence in our political leadership has tanked.
So we begin the year with capital spending and inventory investment plans in record low territory as well as job creation plans. More owners expect sales to fall than to increase in the first quarter, more have been cutting workers and worker compensation than increasing them and reports of actual spending on capital projects are at 35 year historic lows.
Still Asleep At The Switch
WhoStruckJohn: Second ditch to the left, and straight on to the congressional midterm elections!
And that about sums up this post, which is dedicated to M_O_M figures.
Before I get into this, I want to point out that I am not disputing BEA figures, but I believe they misrepresent an important point as it relates to the real economy, which is cash flowing into workers' hands and out to businesses.
Let's start with Fausta's blog, which has nothing to do with economics. However, Fausta thinks (probably due to the fact that she grew up in an era in which the libraries still had books), and she was wondering about this NY Times article discussing the CDC's finding that Americans are no longer getting fatter.
Now, one thing you can usually count on when reading an NYT article is that either the facts or the explanation will be completely wrong, and this one is no different. The explanation:
“Until we see rates improving, not just staying the same, we can’t have any confidence that our lifestyle has improved,” said Dr. David Ludwig, director of the Optimal Weight for Life Program at Children’s Hospital Boston.We're so fat we can't get any fatter? Srsly, dude? Kthxby.
Dr. Ludwig said the plateau might just suggest that “we’ve reached a biological limit” to how obese people could get. When people eat more, he said, at first they gain weight; then a growing share of the calories go “into maintaining and moving around that excess tissue,” he continued, so that “a population doesn’t keep getting heavier and heavier indefinitely.”
Furthermore, Dr. Ludwig said, “it could be that most of the people who are genetically susceptible, or susceptible for psychological or behavioral reasons, have already become obese.”
A look at this graphic tends to suggest that most of the improvement is recent. What you are really seeing here is the result of the inflation of recent years, which has led to a change in food-buying and consumption, mostly among poorer folks. Look at the change in black women in just a few years. This coincides with rapidly rising food prices, not education efforts, and the reason black women are losing the most is that they are trying to feed their kids.
In fact, it has a lot to do with this graph that I posted last year:
The CDC is going to be all excited about the next few years of obesity data. The population is growing; food shipments are dropping; ergo, thinner 'Mercans.
It's a little-discussed fact, but true obesity (not the BMI calculation, which is highly flawed) in the US is concentrated in lower-income Americans and certain ethnic groups. Well, many of them went on short commons about mid 2005, as this graph showing the Food At Home index suggests (in combination with energy increases, which reduced the budget available for food):
And the number on short commons kept growing through 2009. One of the few things this administration has done very well at is food stamp allotments. The above trend is also related to the drop in bottled beverage sales, which is also related to food costs and lower incomes. It would be nice if our government could climb down from the Breatharian heights of academia and get connected to the reality of an increasing number of working and middle-class American families.
This is one reason the various health reform bills have my eyebrows raised so far - the net effect over the first few years is to cut benefits and raise costs on most of these people; I do not think they can afford it. In 2006 and 2006 I already knew of a number of white families with children and two working parents in which the parents were skipping meals at the end of the pay periods to feed their children. They also can't afford to pay more for energy, which is why sales of propane are way up (and stocks are way down), and consumption of heating oil is highly restrained, no matter what the weather may be.
And how is this playing out on the ground? Well, I have discussed before that I have my own sets of inflation and income indicators, and the reason they are so different is that they concentrate on cash flow. Often the official figures include other imputed and non-paid amounts. It's fine if your company is paying more for medical insurance, but it doesn't put money in the wage-earners' pockets, does it? And it is possible to argue endlessly about various aspects of the calculation (such as the OER estimate). For that matter, BEA argues endlessly with itself over its attempt to measure inflation. They are not attempting to distort anything, but to show a true picture of a very complex situation. But still....
On a cash basis, Treasury reported wages (as calculated from the Medicare tax receipts) have slowed their YoY fall consistently this year. From October through December, the YoY drop was -3.3%, -3.2%, -3.1%. Of course the YoY comparison period is getting easier, which is one factor.
According to BEA:
Real average hourly earnings fell 1.3 percent, seasonally adjusted, from December 2008 to December 2009. A 0.3 percent decline in average weekly hours combined with the decrease in real average hourly earnings resulted in a 1.6 percent decrease in real average weekly earnings during this period.But I show that total wages dropped by about twice that, before adjusting for inflation. One difference is that Medicare tax isn't paid on a lot of benefits. Nonetheless, my -3,1% for YoY December is before inflation. BEA has YoY inflation for all items at 2.7%. I feel safe in saying that it is not less (it is far more for families on moderate to low incomes in most areas), which means that real cash wages declined more than 5% over the year. Per capita, of course, they declined more. In fact you can literally see this by running your eyes over that BEA table, and noting that the more basic the expenditure category is, the higher the inflation rate EXCEPT for food at home, which shows a net decline - because a lot of people have had to cut back on eating. Another way to see this is to follow the price of eggs, which are fall-back for animal protein. And eggs have sustained their margin over this period.
If it were not for the early retirements and extended unemployment benefits, not to mention expanded food stamps and so forth, the US population would be in a heck of a fix. And creditors are in a heck of a fix.
Since consumers only pay debt out of cash income, or a relative gain in cash income from offsets in benefits such as WIC and food stamps, the outlook for marginal credit is getting consistently worse.
Industrial production seems to suggest that the manufacturing surge for consumer items and businesses is falling off. Take a look at the fourth quarter vs the third quarter growth rates for business equipment and consumer final goods.
From here on out, the natural growth rate in the economy is going to be much more related to movements in incomes than the end of the cliff-dive. When I saw industrial production this morning and looked at John's comment, I burst out laughing. Because if utilities had not risen so much, the headline increase of 0.6% would have been pretty paltry in December. The US economy is struggling weakly for the shore, but it cannot survive any further drags at all. It is possible that energy prices above $70 alone might push us into the next dips. Ladling any more on top of this is going to kill it slowly. There isn't the spare cash out there.
Forget housing. There is really very little demand for it. Cars are wearing out, which helps car sales. But most people just aren't earning enough to buy a new car and a house plus pay necessities. CA still has life left, because its homeownership rate was so low. But in many areas, property taxes alone are going to mandate a slow decline in home prices over the next decade.
Thursday, January 14, 2010
But Economically Speaking, All Is Not So Wonderful
On a YoY basis:
Initial claims are still improving. SA claims were 535,000 a year ago, versus this year's 444,000. NSA claims were 956,791 a year ago, versus this year's 801,086. However both insured employment numbers rose from a year ago. SA rose from 3.4% to 3.5%, and NSA rose from 4.4% to 4.6%.
Retail sales unadjusted for inflation continue to show a big hike over last year's numbers. Table 2A gives the seasonal/trading day version, which has December's retail sales up 5.4% YoY. Table 2B is the unadjusted version, which has retail sales up 5.5% YoY. Of course, when you adjust for inflation the rise is going to be very muted. YoY gasoline sales were up 33.4%, which is mostly inflation. The YoY gross gain was almost 18 billion, and adjusting for price increases in gasoline subtracts a bit over 9 billion according to the figures I have. Also a good hunk of the gain in pharmacies disappears, and so on.
The implications are that spending per capita is still falling, which should not surprise any of us when we contemplate the much higher unemployment rate. Per capita incomes are still falling.
Things ain't gonna look so good in retail for a while:
In 2009 retail spending rose some in the early months of the year, engendered largely by lower fuel costs. In 2010 the trend is different, and rises in gasoline YoY are turning negative. So the YoY comparisons aren't going to look brilliant for the next few months.
What it seems to mean for the economy:
Overall the US economy continues to turn in slow incremental gains, but the pace of gain appears to be falling. The reason is that almost all of the ex-government spending gain has been coming from two sources - pent up consumer spending for needs (cars and clothing, for example, are just wearing out), and inventory clearance and restocking.
The big impulse in recession recoveries usually comes from people who are working, pull back from spending during the worst phase of a recession, and then find themselves spending on needs plus later when they really start to need things, hit the stores, and buy needs plus stuff they really have wanted. The patterns of category spending seem to show that this impulse is very limited in this recovery. Electronics, furniture, and bars and restaurants are all turning in real declines. Grocery stores, department stores, gasoline stations and pharmacies are turning in gains.
And the slim-to-none increase in real retail spending, combined with higher base-level costs and higher producer prices seem to indicate that a strong business expansion in the first half of 2010 is not in the cards.
There is no better way to intuitively understand where we are than by looking at two graphs from the December Rail Indicators report which is published by AAR.
Carloads are most related to industrial and basic needs activity, such as ag, building, utilities and manufacturing.
A look at the multi-year trend shows that we are almost, but not quite, stabilized at a lower level after having fallen down one huge step. But growth is not there - we are just trying to bounce around and hang in on the current step.
Intermodal is most related to retail, because it is strongly related to imports.
Note that we have crossed the low part and are now turning in YoY gains. Again, we are on a lower step. We show no sign of stepping up a level. The big hump in the fall is related to clearance and restocking, but real retail sales are such that we are not really seeing a building trend - just a consolidation trend.
The real hope for 2010 has to be that we hang in there and ratchet up production enough so that we can start to build business investment. Anything - anything at all - that Congress does to kick the slats out from under consumers or businesses in the form of higher costs or increased uncertainties is going to injure the probability of doing so.
Some retail chains can begin to expand. Some retail chains are still cutting. Small businesses are still folding, and big businesses have mostly launched another round of cost-cutting. The outlook for commercial real estate is extremely poor in 2010 and little better in 2011. The outlook for housing is extremely poor; I doubt the Fed will be able to exit the MBS market in 2010.
Defaults on debt on all levels are still inflicting heavy damage on asset valuations; consumers still need to pay off debt or default on it; many businesses are in the same position.
State and local governments are facing the Year of Fiscal Reckoning. In 2010 they have to find a way to balance their budgets long term. Most of them can't do it, because most of them have built up ridiculous levels of necessary spending on public employees, especially public employee retirements.
Update: This is real retail sales through November, and you can see that it shows a slight build:
We're not out of the demand woods yet; the grocery stores look pretty bad. Pricing power is not there and the consumer is acutely price sensitive. The uptick seen in this graph is largely the result of increased needs spending by those who have money and secure income flows.
The natural course of affairs given current energy pricing is for retail spending to be diverted back into basic needs over the next couple of months. We'll get a hop from Census jobs, which will put a nice chunk of money back into the economy over the first half, and from there we are dependent on underlying recovery.
Wednesday, January 13, 2010
All Is Well
I couldn't get the hospital to discharge the Chief, so eventually we just walked out this evening. They said they were going to this morning, but somehow they just never could get around to it. The nurse was desperate for the bed (they had patients waiting for admission) and I was staggering tired, so finally we just gave up and escaped.
The Chief is snoring in bed. He is really tired but looks very good. The bulldog is sort of purring to herself in her bed, in perfect harmony with the Chief. She was about the happiest dog in creation when she saw the Chief walk in the door.
I am about to roll into bed. I am very tired. Thank you all so much for the good thoughts, prayers and just companionship. The last few months have been extremely difficult. I have not been able to use my medication much at all because of the Chief's difficult situation, and I really did need divine aid to get through this. At one point I was barely able to walk on my right leg.
I am horrified about the Haitian quake. It is truly a disaster of epic proportions. Apparently all three of the Doctors Without Borders(MSF) hospital were pretty much destroyed, which just goes to show how pervasive the damage is. Many of the roads are blocked, and it will be very difficult to get the basic infrastructure back up in a country with so little resources of its own.
Earthquake In Haiti
I would encourage everyone to make a donation to an organization such as the Red Cross. I know times are really rough, but it's not so bad for anyone here as it is there. I usually give through Mercy Corps and I just did. Doctors Without Borders(MSF) has a presence in Haiti. Its hospital has been damaged but it will be continuing its effort and trying to expand it. That's another good candidate for a donation. OxFam has some people in the region and says it will be bolstering its efforts. There is a Red Cross in Haiti and local Red Cross organizations should be helping it. The American Red Cross has a warehouse in Panama and says it has released all its supplies there, but so far the American Red Cross has only allocated $200,000. It is collecting donations for Haiti; you can give $10 to the effort by texting HAITI to 90999.
The Anchoress suggests Food For The Poor, writing that they have a strong presence in the Caribbean and that their overhead is less than 3%. So if you give $100, at least $97 in aid should reach the suffering. Here is a page which lists the projects they had underway in Haiti already, and it is impressive! This or Doctors Without Borders might be the best bet. The organizations already on the ground are obviously hurting from damage, but will be the most effective long term.
It's going to take a lot. I realize that many people in the US are beginning to live much tighter (I was just looking at some data on cable drops) but not as tight as most people in Haiti. There you are middle class if you have $2 a day to live on. AJWS (American Jewish World Service) is mostly a grant-making organization, but it does have prior projects in Haiti and Lord knows money on the ground is needed. Here's a page about their prior projects in Haiti.
Donations of food or clothing are not going to be as useful as money. An explanation from CIDI. Mercy Corps usually flies in some supplies, but mostly it hires people and contracts for supplies locally. This supports the local economy and is an important part of relief operations.
Tuesday, January 12, 2010
She Wrote Cheerfully
I'm very encouraged - it looks like he might get out of this without any real damage. With any luck he'll be home tomorrow.
The nicest thing tonight is kind of hard to explain. The other morning he had seemed somewhat dazed - as if he hadn't quite woken up. Last night he was even more muddled - it was subtle, but very real, and he was getting confused about the events of the morning. Tonight he was much more alert and normal. Every once in a while he gets a bit tangled up, but for the most part he is dead on. He had read the paper and was shaking his head about some of the economic stories.
Most of SuperDoc's computers were working this morning. I may have fixed the last one today, but I am pretty dazed myself and I am not sure!
I will now execute a topple into bed and a descent into unconsciousness.
Specifically, I want to talk about the importance of Fed independence and insulation from short-term political pressure in the conduct of monetary policy. I also want to argue for maintaining a strong, independent, apolitical regional voice in policy deliberations through the 12 Reserve Banks.I cannot stress enough the importance of that last sentence. Despite everything, credit is not the current bar to business expansion. Business profits are; it should be obvious that until hiring rebounds, the consumer side of the economy is not going to expand much. We're through the shock zone and into the replacement zone; what we have here is about as good as it gets with current consumer incomes. Take a look at ICSC and Redbook; as good as it gets is not very good.
Businesses are still reluctant to invest and hire. Businesses are holding fire pending clarification of future government policy in the areas of health care, taxes, and climate change. Most importantly, many businesses are waiting for clear improvement in top-line revenues.
I never thought the Democratic party set out to be suicidal, and I retain hope that at some point this year they are going to "get" the concept that handing out bennies to financial companies is a BAD idea, and that the private infrastructure of our economy is not capable of handling large doses of uncertainty and higher costs. True reforms are needed but will have to be delivered in modest packages. Demotopia has already failed.
Currently it seems to me that a tiny group is controlling Democratic initiatives. I don't think that group is representative of the larger Democratic party. We will find out if I am right or wrong quite quickly.
The trade balance for November worsened again, but not severely. That is because although the import price for crude oil rose about $5 from October ($72.54), imports lessened. Exports grew and imports grew. Current oil prices have implications for bonds for foreign countries, trade expectations and pricing expectations, and are not favorable for sustained global growth in trade and investment.
China raised reserve requirements on banks 50 bps. After looking at trade figures, I am not surprised, but I don't think China will be able to contain this bubble.
Monday, January 11, 2010
Bear 1: SuperDoc 1: M_O_M 0
But apparently not, because when I got back to the hospital this evening the Chief's symptoms (which had pretty much cleared by the time I left him in the ER) were back, but had spread. The numbness and tingling in his face had come back, and now he was experiencing numbness in his left arm and leg. The charge nurse (he had just been admitted to the stroke unit) had picked up a left/right differential when she did her admitting exam. Upon inquiry, the Chief confessed to the numbness.
This was news to any doctor, because the Chief is rather the quiet type and had not seen fit to mention this to any one in the ER, where he was waiting for a bed. So the Chief is probably not coming home tomorrow.
I would rather be in a hospital with so-so doctors and facilities but good nurses than the reverse. This particular hospital has great nurses, very good facilities and very good doctors, so at least the Chief is in the right place. He is now chained to the bed with a monitor because he is not supposed to get out of bed without supervision. I did get him fed around 10 PM. That appeared to buck him up a bit. Part of the delay was that the charge nurse was going through this long process of making sure that he could properly swallow.
They insist on doing the whole cardiac bit again, and he is going to have a brain MRI tomorrow.
The poor dog is convinced that she has utterly failed in life; she did not manage to save her Rescue Dog and now her man is apparently in great trouble. She was sort of crawling and cringing when I came home this time. I sat down with her and praised her. It's not like I'm doing well either.
I have the ugly feeling SuperDoc's computers will blow up tomorrow. I just do not seem to be winning at anything.