I saw your corrected the miscategorization of Kwak over on that evil orange satan (:)), might correct it on the original for while we don't get the participation/comments on EP, we often beat the actual number of reads per post than DK....
Also, in your title, should be rescission.
Folks, I've done this myself, spell checker doesn't work in the titles and those damn programs...
often they just don't like them big fancy words and will get you to put in recession as an example. (I just did it, easy to do!).
but another big favor, regulars on EP, add EP to your DK blogroll.
The issue is conditional probability is very difficult to comprehend. People see "0.5%" and can't track where the rest of the numbers are coming from and Kwak didn't spell out the procedure on how he got the ballooning rescission numbers. Probably (pun intended) because most people, including a lot of PhDs, do not have graduate probability/statistics course work or a lot of experience with conditional probability, Bayes' Thm. and Actuarial Science.
The insurers claim that rescission is very rare; at the Congressional hearing, two of three industry representatives said it happens to less than 0.5% of policies per year. But that is a deeply misleading number. That means that if you are in the individual market for twenty years, you have a 10% chance of your policy being rescinded; 30 years, and it goes up to 14%.
Even myself, despite passing the "quiz", walked into Las Vegas and simply "forgot" the concept of independent events, much to the consternation of my bank account. (went the opposite way, maybe blowing on the dice will help!)
"Speaking of the FDIC, their fund that covers the losses of depositors will be completely wiped out in the coming weeks."
Yes, but as she told Bill Moyers, that fund is backed by the "full faith and credit of the United States government".....I'm beginning to wonder just how much that is in real dollars.
-------------------------------------
Maximum jobs, not maximum profits.
This is what I said: "And remember, insurers only try to rescind policies if you turn out to need them; so the percentage of people who lose their policies when they need them is even higher. (The denominator should exclude all those people who never need expensive medical care, at least not before 65 when they go onto the single-payer system.)"
I'm generally not this sensitive, but I am proud of my statistical chops, so I don't want people to think I missed this one.
That said, Taunter dealt with the issue in much more depth and much more clearly than I did, and I'm glad that everyone is picking up his post.
he speed and size of this current rally is truly astonishing. S&P 500 crosses 1000, marking a 50% rally from the 666 low in early March.
It’s an amazing run-up throughout the last five months, but one that is also very similar to the five-month rally of 48% from November 1929 to April 1930, notes Miller Tabak equity strategist Peter Boockvar.
No offense, but I really do not want to see midtowng validated. Unfortunately this blog is from the Dow Jones wires.
because jobs have been leaving the U.S. for China in the last two years, in droves. Finance jobs too. Citigroup signed a $2 billion dollar outsourcing deal AFTER receiving TARP funds and used the meltdown as an excuse to offshore outsource even more tech. IBM, massive layoffs...all offshored. GM, 13k offshored. I haven't even gotten to R&D being offshored in droves. So, while one can claim "construction" the job losses are across the board, every occupational category.
job losses have been so steep this recession (they didn't go to China this quickly) and why it is so hard to create jobs here anymore. People can be easily replaced with tech and as the economy worsened businesses realized just how "efficient" the new techs were.
The other thing to remember that NDD doesn't discuss is the massive losses in construction and finance jobs this time that were almost entirely the result of bubbles popping (ie they should never have been there in the first place and are not coming back).
It could be, or it could be landlords are just greedy bastards....so yet another subtopic to be analyzed as to where these increased profits are coming from.
BTW: One of my favorite sayings is "an exercise for the reader", simply because so many textbooks say that when it really means the author of the book didn't solve it. ;)
What could be happening is that costs are rising for property owners in the form of utility costs and taxes which is then passed on to tenants in the form of higher rents?
That's my suspicion and I believe midtowng's as well. But we need to go digging into the statistics to prove it.
This BEA release has tables with monthly stats and you see an anomaly right when those receiving SS got rebates.
Those were $250 to 50 million people, done in May. I bet you can calculate the bump in savings to a dime. ;)
(This release is June).
On the PCE, I think a blog post titled "Nickled and Dimed to Death" is in order.
Did you notice landlords are making money? The legal population increase (lord knows about the illegal one but I read they aren't leaving) ~300k and that doesn't correlate
to that much rental income upon first glance....
so....did rents rise in the middle of a recession? another exercise for the reader.
I went looking to make sure I was calculating things right and unfortunately FRED doesn't have any updated graphs either, because I couldn't believe my eyes when I calculated the yearly percentage drop and it would be even higher if one ignores
I think I'm correct and what's weird is I didn't see any other sites looking at those figures in terms of percentages or on a yr-yr basis.
Maybe another question is Will they get rebuilt? There is still a lot of excess capacity left over from the bubble.
The other thing is that the inventory cycle may actually work against GDP since we manufacture very little in the U.S. Any increase in inventories will probably be a boost for imports.
"Although eventually inventories will get down to some point where they will have to be rebuilt, we are not there yet."
I'm not sure we'll ever get there. In specialized areas we now have robots that allow just-in-time on-order manufacturing (the first of these was in the publishing industry), and the number of consumer items that can be manufactured this way increases every day.
Yes, it's still cheaper to order an inventory from China at this point; but even that is fast receding as a business model.
I envision the day is coming, perhaps faster than we know, when retail outlets will be replaced with room-sized versions of this invention:
and for smaller items, you'll merely click in the proper plasticizer cartridge into your $2400 desktop fabricator at home, and download the plans off the internet.
Compare that to spending thousands of dollars a year on warehouse space, and the answer will be obvious.
-------------------------------------
Maximum jobs, not maximum profits.
did you read about Geithner screaming at regulators because they weren't so keen on giving the Fed "super regulatory authority"? Some sort of rant fest.
than conditional probability. I saw this and it's a great post, trying to expose one of the common areas of confusion, conditional probability which is used to lie with statistics.
This is a very tough problem for FDIC. Private equity is an important source for buying up weaker banks and bank assets but private equity is a very risky source of capital for the banking system. The alternative for the FDIC is allowing financial conglomerates to get bigger.
could be that we are measuring GDP wrong. To look at it another way, with as severe as this recession has looked statistically (credit freezing etc.) the GDP numbers could be far worse. So maybe the what has happened is that the way in which we actually construct GDP is wrong and the decline is far worse than is being reported. I would look towards the import-export difference as one point of confusion (among many others).
And I am with Krugman on the productivity issue. Computers/PDA's/Robotics are continually improving and making more and more jobs obsolete. I work with manufacturers and have been through some new plants and all I can say is the only people working in them are the people who load the material in one end and take it out the other and those who maintain the robots. There are no "factory" workers in modern manufacturing plants.
I saw your corrected the miscategorization of Kwak over on that evil orange satan (:)), might correct it on the original for while we don't get the participation/comments on EP, we often beat the actual number of reads per post than DK....
Also, in your title, should be rescission.
Folks, I've done this myself, spell checker doesn't work in the titles and those damn programs...
often they just don't like them big fancy words and will get you to put in recession as an example. (I just did it, easy to do!).
but another big favor, regulars on EP, add EP to your DK blogroll.
I didn't catch this, Tony, he did catch it.
The original post from Baseline Scenario, Health Insurance "Innovation".
The issue is conditional probability is very difficult to comprehend. People see "0.5%" and can't track where the rest of the numbers are coming from and Kwak didn't spell out the procedure on how he got the ballooning rescission numbers. Probably (pun intended) because most people, including a lot of PhDs, do not have graduate probability/statistics course work or a lot of experience with conditional probability, Bayes' Thm. and Actuarial Science.
Even myself, despite passing the "quiz", walked into Las Vegas and simply "forgot" the concept of independent events, much to the consternation of my bank account. (went the opposite way, maybe blowing on the dice will help!)
"Speaking of the FDIC, their fund that covers the losses of depositors will be completely wiped out in the coming weeks."
Yes, but as she told Bill Moyers, that fund is backed by the "full faith and credit of the United States government".....I'm beginning to wonder just how much that is in real dollars.
-------------------------------------
Maximum jobs, not maximum profits.
This is what I said: "And remember, insurers only try to rescind policies if you turn out to need them; so the percentage of people who lose their policies when they need them is even higher. (The denominator should exclude all those people who never need expensive medical care, at least not before 65 when they go onto the single-payer system.)"
I'm generally not this sensitive, but I am proud of my statistical chops, so I don't want people to think I missed this one.
That said, Taunter dealt with the issue in much more depth and much more clearly than I did, and I'm glad that everyone is picking up his post.
I did not expect to see a projection like this....
oh yeah, remember all of that talk about a HOLC and a RTC way back when?
Ya all gotta read this one. Echoes Of 1930 In Current Market Rally:
No offense, but I really do not want to see midtowng validated. Unfortunately this blog is from the Dow Jones wires.
because jobs have been leaving the U.S. for China in the last two years, in droves. Finance jobs too. Citigroup signed a $2 billion dollar outsourcing deal AFTER receiving TARP funds and used the meltdown as an excuse to offshore outsource even more tech. IBM, massive layoffs...all offshored. GM, 13k offshored. I haven't even gotten to R&D being offshored in droves. So, while one can claim "construction" the job losses are across the board, every occupational category.
job losses have been so steep this recession (they didn't go to China this quickly) and why it is so hard to create jobs here anymore. People can be easily replaced with tech and as the economy worsened businesses realized just how "efficient" the new techs were.
The other thing to remember that NDD doesn't discuss is the massive losses in construction and finance jobs this time that were almost entirely the result of bubbles popping (ie they should never have been there in the first place and are not coming back).
It could be, or it could be landlords are just greedy bastards....so yet another subtopic to be analyzed as to where these increased profits are coming from.
BTW: One of my favorite sayings is "an exercise for the reader", simply because so many textbooks say that when it really means the author of the book didn't solve it. ;)
What could be happening is that costs are rising for property owners in the form of utility costs and taxes which is then passed on to tenants in the form of higher rents?
RebelCapitalist.com - Financial Information for the Rest of Us.
That's my suspicion and I believe midtowng's as well. But we need to go digging into the statistics to prove it.
This BEA release has tables with monthly stats and you see an anomaly right when those receiving SS got rebates.
Those were $250 to 50 million people, done in May. I bet you can calculate the bump in savings to a dime. ;)
(This release is June).
On the PCE, I think a blog post titled "Nickled and Dimed to Death" is in order.
Did you notice landlords are making money? The legal population increase (lord knows about the illegal one but I read they aren't leaving) ~300k and that doesn't correlate
to that much rental income upon first glance....
so....did rents rise in the middle of a recession? another exercise for the reader.
I went looking to make sure I was calculating things right and unfortunately FRED doesn't have any updated graphs either, because I couldn't believe my eyes when I calculated the yearly percentage drop and it would be even higher if one ignores
I think I'm correct and what's weird is I didn't see any other sites looking at those figures in terms of percentages or on a yr-yr basis.
Maybe another question is Will they get rebuilt? There is still a lot of excess capacity left over from the bubble.
The other thing is that the inventory cycle may actually work against GDP since we manufacture very little in the U.S. Any increase in inventories will probably be a boost for imports.
RebelCapitalist.com - Financial Information for the Rest of Us.
Real PCE dropped. So the increase in PCE is attributed to higher prices. Income is dropping but prices are increasing that is not a good mix.
Question: So does this mean that any temporary economic stimulus was saved in May and not spent. Just like it was in 2008.
RebelCapitalist.com - Financial Information for the Rest of Us.
"Although eventually inventories will get down to some point where they will have to be rebuilt, we are not there yet."
I'm not sure we'll ever get there. In specialized areas we now have robots that allow just-in-time on-order manufacturing (the first of these was in the publishing industry), and the number of consumer items that can be manufactured this way increases every day.
Yes, it's still cheaper to order an inventory from China at this point; but even that is fast receding as a business model.
I envision the day is coming, perhaps faster than we know, when retail outlets will be replaced with room-sized versions of this invention:
and for smaller items, you'll merely click in the proper plasticizer cartridge into your $2400 desktop fabricator at home, and download the plans off the internet.
Compare that to spending thousands of dollars a year on warehouse space, and the answer will be obvious.
-------------------------------------
Maximum jobs, not maximum profits.
His benefactors on Wall Street are nervous. They so desperately want the Fed as super cop.
RebelCapitalist.com - Financial Information for the Rest of Us.
did you read about Geithner screaming at regulators because they weren't so keen on giving the Fed "super regulatory authority"? Some sort of rant fest.
technology explains the mass exodus of manufacturing to China? I don't think so.
than conditional probability. I saw this and it's a great post, trying to expose one of the common areas of confusion, conditional probability which is used to lie with statistics.
This is a very tough problem for FDIC. Private equity is an important source for buying up weaker banks and bank assets but private equity is a very risky source of capital for the banking system. The alternative for the FDIC is allowing financial conglomerates to get bigger.
RebelCapitalist.com - Financial Information for the Rest of Us.
could be that we are measuring GDP wrong. To look at it another way, with as severe as this recession has looked statistically (credit freezing etc.) the GDP numbers could be far worse. So maybe the what has happened is that the way in which we actually construct GDP is wrong and the decline is far worse than is being reported. I would look towards the import-export difference as one point of confusion (among many others).
And I am with Krugman on the productivity issue. Computers/PDA's/Robotics are continually improving and making more and more jobs obsolete. I work with manufacturers and have been through some new plants and all I can say is the only people working in them are the people who load the material in one end and take it out the other and those who maintain the robots. There are no "factory" workers in modern manufacturing plants.
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