Category Archives: Economy

Christmas Eve Trading in 2018 Worst in US History

The Dow Jones plunged 640 points on Monday, December 24 during shorter than normal hours due to the Christmas holiday. The sell-off was prompted by an unstable White House which reacted poorly to one of the worst trading weeks in ten years.


The S&P 500, NASDAQ and the Dow Jones all fell at least 2.2%, but the Dow Jones Industrial Average lost 2.85%, 640 points. These numbers declare the historic, harrowing losses experienced on Christmas Eve, pushing the stock market for a yearly decline of about 11%. If the year ends with such a decline it will be the worst year since the beginning of the financial crisis.


Investors are struggling to understand the forces that prompted the retreat, speculating on several possibilities all coming together to sow chaos and concern.


Treasury Secretary Steve Mnuchin called on six bank CEOs to try and reassure them and fragile financial markets after an historically poor week. It was a highly unusual move, which only made matters worse.


There is concern that President Trump is seeking to fire Federal Reserve head Jerome Powell. Trump is angry that the Fed has raised interest rates four times already and inquired of his aids if he had the authority to fire the Chairman of the independent Federal Reserve.


This might just be the end of the decade-long bull market which was helped to a great extent by loose monetary policy. From the 2009 low to the high of this past September, US stocks have climbed by 280%. But global growth is losing some steam, a trade war with China and others, and interventionist Fed policy are all coming together to accompany a new kind of stock market.


“Markets still under pressure from last week’s more hawkish Fed update, exacerbating fears about slowing growth and more expensive refinancing following years of stimulus,” said Michael van Dulken, the head of research at Accendo Markets.

David Michery and Clean Transportation

Clean transportation provides a solution to the challenges of air pollution and unhealthy vehicular emissions. It’s a cause that many car companies are making a priority. David Michery, CEO of Mullen Technologies, a company that manufactures and distributes eco-friendly cars, is a leader in the field of clean transportation.

“The congestion and pollution we have been experiencing have been issues across the globe, it is not our problem only,” says David Michery.  “We have therefore prioritized studying innovation overseas in order to develop high quality and efficient solutions.” Cutting-edge, holistic solutions to the clean air crisis include manufacturing electric vehicles that use state of the art battery and energy technologies.

Although many consumers feel strongly about clean transportation, they find themselves bound by their budgets: many electric vehicles cost an upwards of 100,000 dollars. Electric vehicles tend to be luxury cars; driving an electric car is often viewed as a status symbol, reserved for the wealthy.

David Michery recognizes this reality and is pioneering a novel concept: affordable, clean transportation. “We are uniquely focusing on clean tech at an affordable price,” says Michery. “Clean transportation is good for everyone and should not become a luxury.”

David Michery, with his strong background of success, is uniquely poised to champion the cause of clean transportation. After working in the music industry for 27 years and producing more than a dozen gold or platinum records, Michery now channels his energies into the cause of clean transportation.

As the affordability of electric vehicles increases, clean transportation can become a reality.

 

Economy Hot Says JOLT Data

Unemployment by county in the United States 2017.

The numbers for August are in, and it seems they are telling a happy story right now about employment and the US economy. The positive findings appear in the Bureau of Labor Statistics’ Job Openings and Labor Turnover Report (JOLT), which is an important report that does not get enough attention.

According to JOLT there were 7.14 million job openings in the USA in August, a record number. In July there were 7.10 jobs available, which was also an historic high. It seems right now is one of the best times in US history to be job hunting.

JOLT’s assessment is that the economy is running hot. August was the fifth consecutive month in which there were more jobs available than there were unemployed people to fill them. According to JOLT there were about 1.2 million more jobs than the 5.96 million unemployed. That has never happened before, at least not since series began in 2000. Also setting records is the number of new hires, which reached 5.78 million in August.

Workers are also feeling more confidence in the labor market in general. That story is told by what is known as the “quit-rate.” In August about 3.58 million workers left their jobs voluntarily, a sign, according to economists, that people feel they can take a chance and leave their old job in hopes of finding a new, better job. The number for August 2018 was up by 12.7% over last years “quit-rate” number.

Only One Third of Census Bureau Number for Small Businesses are Truly Small Businesses

Of the 32,570,855 small businesses the US Census Bureau says are small businesses, only about one-third of them are what most people think of when they think of a small business, one that has employees.

Its even worse than that. The 76.2% of small businesses that do not have employees only account for 4% of sales of all small businesses. So what is the explanation? Who are these non-employers?

According to Alan Grundy of the Census Bureau, they are

“self-employed individuals operating a very small unincorporated business which may or may not be the owner’s principal source of income.”

Simply put, these “small business owners” are not business owners at all.

A lot of them are people making some money “on the side.” Maybe they sell a few thousand dollars a year of stuff on Etsy. Or a student that babysits to support his education. Or a professional that occasionally rents out his apartment on Airbnb. These people most likely have a full-time job with health insurance and other benefits. They are certainly not entrepreneurs. They are just earning a few extra dollars that they report on Schedule C.

Then there are other types of businesses skewing the numbers. For example, a person who owns ten rental properties, each one with its own separate tax return. Yes, he is a real business owner, but of one business, not ten. There can also be several partners that own one business, but each one files his own tax return.

Another source of the inflated figures are “independents.” These are also real businesses, but without employees. Many of these “businesses” are the main livelihood of service providers such as stockbrokers, cleaners, delivery people. A hairstylist who is independent and just works in someone else’s salon; an accountant or lawyer who works from home; or a consultant or real estate agent who works from a work-share space are all small businesses without employees. The owner and worker is the same person.

A more accurate way of knowing if someone is a small business owner is to ask whether he or she has employees. Real employers sign paychecks, have vacation policies, break rooms, hires and fires.
More precisely, there are closer to 7.8 million true small businesses in the USA. The rest of the 32 million are just people reporting extra income on their tax returns.

Limited Legal Immigration is Hurting US Business

Donald Trump and Mike Pence at Executive Order Signing Ceremony Buy American Hire American
President Donald Trump displays his signed Executive Order.

The news is full of stories about the crack down on illegal immigration to the US by the Trump administration, but there is also a powerful effort going on to reduce the number of legal foreign workers, essential for many US businesses, coming into the country.

More work visas are being denied; applicants are asked for more personal information; and approvals are being delayed more often than just a year ago. This slow strangulation of the flow of legal foreign workers hurts hospitals, hotels, tech companies and other business that rely on them and which now are having trouble filling their available jobs.

Without the foreign workers, domestic workers must work more to cover, or businesses are forced to cut back on their services. Corporate leaders are worried what the long-term effect will be on their companies of the best and the brightest from outside the US end up going to Canada or elsewhere, where engineers and programmers are welcomed with open arms.

In April 2017 Trump signed an executive order called “Buy American and Hire American,” which directed the government to “rigorously enforce” immigration laws. The order went into effect without much notice or fanfare.

Not long after the president supported a law that would reduce the number of legal immigrants in half. Introduced by two Republican senators, Mr. Tom Cotton of Arkansas and Mr. David Perdue of Georgia, the bill has not gone anywhere, yet. A few lawmakers are saying that the president has been using administrative, bureaucratic means to curtail immigration, since actual legislation to achieve that goal has been stalled.

“If they want to have a proposal on immigration, they should send it to Congress,” said Democratic Representative Ro Khanna, whose district includes parts of Silicon Valley. “The administration should engage in that conversation. To unilaterally and without any accountability change what Congress has authorized is not democratic.”