Seeking Alpha
View as an RSS Feed

Ironman at Political Calculations  

View Ironman at Political Calculations' Comments BY TICKER:
Latest  |  Highest rated
  • Winter 2015 Snapshot Of Expected Future S&P 500 Earnings [View article]
    Since "number of shares" is in the denominator of both the dividends per share calculation and the earnings per share calculation, the same observation that applies to the effect of the change upon earnings per share will also apply to dividends per share.
    Feb 19, 2015. 05:53 PM | Likes Like |Link to Comment
  • 10 Years Of Disappearing Teen Jobs [View article]
    Tin Lizzy,

    We appreciate that you're trying to make a good faith effort to counter our analysis, so we'll take some time to fill in some of the missing pieces in the data that you're likely not familiar with.

    In looking to see whether older Americans are really displacing teens (and young adults) from the labor force, you have to pay attention to a lot of pieces, starting with the changing age demographics of the U.S. labor force over time, which is something that you need to control for in any competent analysis. You need to be able to answer questions like: "Does an increasing number of Age 55-64 individuals (aging of the Baby Boomers) explain why the relative percentage of teens and young adults (Age 16-24) has smaller share than it did X years ago?"

    [We point out Age 16-24 because this age group has represented approximately half of all minimum wage earners, which you can confirm, as we have, by consulting all of the BLS' reports on the characteristics of minimum wage workers.]

    You also need to take factors like inflation and economic growth into account, because those are both things that directly affect the number of jobs that exist.

    And then, you have to look at the entire income spectrum - you cannot just focus at the minimum wage level, although as it turns out, that threshold is very significant when you review the available data over an extended period of time.

    Here's what you'll find when you correctly combine the relevant pieces:

    1. The population of teens and young adults has been very stable for a prolonged period of time. The actual numbers of teens and young adults has not significantly changed.

    2. After adjusting for inflation, the aggregate income earned by all Age 16-24 year olds is virtually unchanged over a 20 year long period. The only exception during that period coincides with the inflation and deflation phases of the Dot-Com Bubble (1997-2003), where the Bubble provided enough extra economic growth during the period to temporarily offset the negative impact of minimum wage hikes that occurred at that time until it ended.]

    3. Going by the number of individuals with incomes, teens and young adults whose wages place them above the inflation-adjusted minimum wage level have not been displaced from the U.S. labor force. That's especially significant because if older workers were really displacing teens from the job market, we would see these numbers decline right along with the number of teens and young adults earning incomes below the inflation-adjusted level affected by minimum wage hikes, and they're not - instead they've actually increased slightly. What we do find reported in the data however is that very large numbers of teens and young adults with incomes that place them below the minimum wage income threshold are no longer there. Working teens and young adults below this level have essentially disappeared over time.

    So there you have it: over the last 20 years, the population is virtually unchanged, the inflation-adjusted aggregate amount of wages being paid to these individuals is virtually unchanged as the numbers of teens and young adults making more than the inflation-adjusted minimum wage level has very slightly increased. Meanwhile, what has changed significantly is the inflation-adjusted minimum wage threshold.

    So guess what pops out of the data when you combine all these factors? A growing number of teens and young adults with incomes disappear over time from the labor force. All are at incomes at or below the inflation-adjusted minimum wage level.

    None of this should be a surprise to anybody who has taken time to review all our analysis on the topic - we've covered each and every single one of these factors. Meanwhile, you should be aware each of the papers you've recommended reviewing have problems - especially the Card/Krueger paper, which we would describe as borderline junk science. But we'll leave that discovery to you as an exercise.
    Feb 16, 2015. 06:03 PM | Likes Like |Link to Comment
  • Crude Oil Prices In The Driver's Seat? [View article]
    Thank you for your question. The real correlation is between the S&P 500 and the index' expected future dividends per share, which makes your observation extremely easy to explain. There was very little in the way of actual future dividend erosion related to the downturn in oil prices prior to the first quarter of 2015, which is why you don't see any correlation between the downturn in oil prices and the S&P during the period preceding the last week of 2014. Simply put, all of the relevant data is in 2015.

    As for your baseless accusations of cherry picking, since we've already established that there was no relevant reason to extend any of our analysis significantly backwards into 2014, we only went one week back before the beginning of 2015 to establish a relevant baseline for comparison.

    To really appreciate the extent to which investors appearing to follow something other than their expectations of future dividends in setting stock prices is interesting, even if it only lasts for a short period of time, you would have to both follow dividend futures on a regular basis and be aware of the relationship between them and the behavior of stock prices. We appreciate that you're both unfamiliar with dividend futures and are completely unaware of their role as the primary driver of stock prices, much less any of our own previous discussions of the topic.

    Thanks also for the link to the charts showing the spurious correlation charts. We're fans of Tyler Vigen's work exploring the topic and have even contributed some of our own to the discussion:

    http://bit.ly/1MrOGoC
    Feb 16, 2015. 04:54 PM | Likes Like |Link to Comment
  • 10 Years Of Disappearing Teen Jobs [View article]
    Quick clarification, needed given how SA displays replies to comments - our "Wow, mathematically illiterate too!" comment above applies to the following statement made by Ba1k3es:

    "Found a much better graph that shows what is going on much easier.

    http://wapo.st/1CSLgs7

    Clearly the number of minimum wage jobs increased over the period of minimum wage rate increases. Clearly those 25+ is a much greater share."
    Feb 11, 2015. 01:36 PM | Likes Like |Link to Comment
  • A Reality Check For Greece's New Government [View article]
    There's a bigger picture to consider - Greece's income-based taxes are greater than Sweden's and Italy's (see following chart from The Economist):

    http://econ.st/1zvMX7p
    Feb 11, 2015. 10:56 AM | Likes Like |Link to Comment
  • 10 Years Of Disappearing Teen Jobs [View article]
    Wow - mathematically illiterate too! You might want to calculate some actual percentages from the chart you linked....
    Feb 10, 2015. 10:26 PM | 1 Like Like |Link to Comment
  • 10 Years Of Disappearing Teen Jobs [View article]
    Tin Lizzy wrote:

    "So you could prove me wrong by demonstrating that the average age of minimum age workers in California has remained the same while overall numbers of minimum wage jobs have declined. If you have access to this type of data, we could assess the relative validity of the two hypotheses."

    Proving you wrong is not how science works. If you want to challenge our data-backed hypothesis, you need to do some actual work to advance a different hypothesis that that is better supported by the data. So far, it doesn't seem like you've put much, if any, effort into proving your own hypotheses. It's not difficult.

    And then, Tin Lizzy continued:

    "Do you have such data? For example, have you proven that in California, job gains for older adults do not include an increase in the number of minimum wage jobs, or is this an assumption on your part? Are you sure that increases in minimum wages are not simply making these jobs more palatable to older adults, who are replacing teenagers? If you could produce such data you would be more convincing."

    First, we realize that you probably asked the question out of ignorance, but *everybody* has the data. It's published by the BLS.

    Second, we've previously demonstrated it at the national level (you know, Google is a wonder search engine!) We'll leave the California level data to you as an exercise, as we're curious to find out if you're capable of even finding it.

    Good luck!
    Feb 10, 2015. 10:23 PM | 1 Like Like |Link to Comment
  • Chinese Economy Continues In Recession [View article]
    Sounds like some people are awfully, and almost blindingly, trusting of the official economic statistics reported by China's government agencies - the ones that China's top leaders don't buy!
    Feb 10, 2015. 10:59 AM | Likes Like |Link to Comment
  • 10 Years Of Disappearing Teen Jobs [View article]
    Ba1k3es,

    Thank you for confirming that you're not familiar with any of our previous analysis, where all the "you should" steps you suggest were presented.

    Second, your remaining comments suggest that you've missed quite a lot of detail in the information we presented, as you've either chosen to ignore what is plainly evident in the data or perhaps do not understand it.

    If we may, we would suggest that instead of linking to random charts that neither support your claims nor apply to the discussion at hand (for example, in this article, we discussed the employment-to-population ratio for teens, which captures the full range of teen employment displacement - something the chart you linked showing the Age 16-19 unemployment rate, which is the ratio of unemployed to the size the labor force, cannot capture), you should focus on producing relevant apples-to-apples comparisons.

    If it's not clear, we're disappointed with the low level of quality analysis in your comments. You should work harder to have the phrase "To try to say otherwise is absurdly foolish" not apply to the things you write.
    Feb 10, 2015. 12:52 AM | Likes Like |Link to Comment
  • Dividends: U.S. Economy Contracts In January 2015 [View article]
    You've just discovered the reason for the difference in the evolution of the S&P 500 and the Russell 2000 indices since their performance diverged in 2014!
    Feb 9, 2015. 03:46 PM | Likes Like |Link to Comment
  • 10 Years Of Disappearing Teen Jobs [View article]
    The direction of causality is clear. Minimum wage hikes occurred before each episode of job losses in the Age 16-19 population during the Great Recession, independently of job losses that otherwise occurred in the industries that were most negatively impacted by factors specifically linked to the Great Recession [mainly because there were near zero numbers of teens working in banking, finance, manufacturing, or real estate/construction, where job losses were very specifically, and we might add, regionally concentrated].

    Meanwhile, a good question you've missed asking is where is the teen job recovery in the years from 2009-2014?

    [Seeking Alpha commenters: It is never a good idea to offer criticism when you're not familiar with any of the previous analysis we've provided on the topics we cover. We recommend you take some time to get up to speed before even considering weighing in.]
    Feb 9, 2015. 03:42 PM | 1 Like Like |Link to Comment
  • Reverting To The Mean Or Something More Ominous? [View article]
    Potentially. A lot of things would have to line up just right for such a panic to erupt however (or as we would say in chaos theory, for there to be a cascading failure), and in addition, the things being done to arrest such an event should one begin would also have to fail.

    http://bloom.bg/1mRWsh4

    Jan 11, 2015. 04:29 PM | Likes Like |Link to Comment
  • Reverting To The Mean Or Something More Ominous? [View article]
    Answering the questions in reverse order:

    Oil extractors = firms directly engaged in exploration efforts for crude oil and removing it from the Earth.

    Other 2B2F banks are involved, but are believed to have limited exposure, even though the dollar amounts are large. See the following article from Julia LaRoche at Business Insider:

    http://read.bi/1xF4IFi

    And this from the WSJ:

    http://on.wsj.com/1BVvg4L

    See also the following article from Nick Cunningham at OilPrice.net, which considers the potential for a crisis in the junk bond sector, which has provided a lot of the financing for smaller oil extractors in particular:

    http://bit.ly/1vpaWTQ
    Jan 9, 2015. 12:28 PM | 1 Like Like |Link to Comment
  • An Inverse Problem for S&P 500 [View article]
    Wow - *still* bitter (and wrong!)
    Jan 5, 2015. 04:04 PM | Likes Like |Link to Comment
  • Dividends: Boom!?! [View article]
    It's worse than you think - we don't care if it does or not.
    Dec 4, 2014. 04:38 PM | Likes Like |Link to Comment
COMMENTS STATS
72 Comments
22 Likes