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  • 1.2 Million Americans Quit Seeking Work Since November 2010 [View article]
    Moon Kil Woong, While I agree with and appreciate your sentiments, it is not statistical lying. The unemployment rate is calculated as the ratio of number of people unemployed to the total labor force or: "unemployed / total labor force"

    If the a person gives up looking for work then the numerator gets smaller and thus, so does the unemployment rate.

    What I take issue with is media spin. When a media organization (print or television) announces that the unemployment rate dropped to 9% without offering an explanation they are trying to be deceptive in a way that relies on the public not making any more effort than reading or listening to that headline or blurb.

    That's the way the calculation works and it can't be changed, all of the relevant information is fully disclosed, we just have to read it. As citizens we have a civic responsibility to find out what is really the case but unfortunately, most of us would rather be entertained than well informed.
    Feb 4 12:56 PM | 6 Likes Like |Link to Comment
  • 1.2 Million Americans Quit Seeking Work Since November 2010 [View article]
    I guess its all relative and getting by means different things to different people. I have not heard of anyone content with unemployment since way back when I was a kid and someone got laid off from a factory of some sort, they were content to collect unemployment until they were called back, because they knew they would be.

    It should also be noted that one is required to look for work while unemployed in most if not all states. Any week you do not apply for a minimum number of positions you do not receive a check.

    Just estimating here, but if you are speaking if 10 people you know, this is hardly a big enough sample size to statistically broad stroke a population of 13.863 million unemployed people.

    I know educated, highly motivated people with great track records who have literally sent out "hundreds" of resumes and never even received a phone call. Quite frankly knowing where some of them live I do not blame them for "giving up".

    It depends on what your skill set is and where you live, in this new global society we must be prepared to be mobile and move where the work is or learn to "create the money" when needed. However, some are pinned down by homes etc.

    No system is perfect. I don't think the guy or gal who goes to work everyday to stand around the water cooler, gossip and stare at his/her smart phone reading facebook posts while collecting a paycheck is any better than the contented unemployed person. You go to work to work and be productive enough each to cover your wage and then some, not to socialize. That kind of behavior is just another form of entitlement. This sort of person only has a job due to political maneuvering, not ability. They both need to be weeded out of the system in my judgment.

    I've enjoyed the back and forth.
    Feb 5 11:38 AM | 5 Likes Like |Link to Comment
  • Initial Jobless Claims Take a Holiday Break [View article]
    j-dub, thanks for reading this. I know what you mean about spin. However, when it comes to initial jobless claims I do not pull out the unadjusted claims and here is why:

    Historically, unadjusted claims rise much higher than adjusted claims every year in the Nov-Dec time frame as well as in the May-June time frame, although it is to a lessor extent during the summer. I just wrote about this a few weeks ago. Check out the second chart in this article.

    Thanks again for reading me.
    Dec 30 11:06 AM | 4 Likes Like |Link to Comment
  • Returning to Single Earner Household Prevalence [View article]
    While a return to single earner households may be beneficial to some, it will lower the potential GDP and therefore the living standards of the nation as a whole. A nation which is highly leveraged opens itself up to potentially catastrophic results under such conditions. e.g., This is kind of like having an individual who is highly leveraged voluntarily accept a lower salary.
    Dec 5 01:50 PM | 4 Likes Like |Link to Comment
  • Pumping Wheat On Weather Makes Little Sense [View article]
    Wheat & corn have a feed relationship. Farmers frequently substitute corn/wheat as animal feed depending on price/supplies. As the prospect for available corn supplies diminish, farmers want to secure wheat for animal feed use, thus driving wheat futures higher. There are other nuances as well, but that's the base reason for higher wheat prices.

    Soybean meal and corn have a similar relationship. Hope this helps.
    Jul 12 04:27 PM | 3 Likes Like |Link to Comment
  • Will Lower Corn Ending Stocks Fertilize CF Industries' Share Price? [View article]
    Hi Chris, thanks for reading the article. I am aware of how the things you mention impact the business of CF industries. I am also aware of how the various crops use nitrogen, which is why I state in the above article.

    "This is due to corn's relationship with soybean meal as an animal feed substitute.". This is also why the short-term (45 day) correlation is more volatile than the long-term (60 months) as the feed relationships between corn, wheat, and soybean meal are dynamic.

    One must always consider the possibility that a correlation is spurious. That's he first thing any reputable analyst using statistics would consider. I've followed this and until recently, the relationship puzzled me as well. This caused me to do some more reading on the relationship between the two crops.

    As for statistical validity, the number of observations used to measure statistical significance is what's relevant, not just saying "its only two months", 45 daily observations are just as valid as 60 monthly observations. I did not include graph of monthly observations in this article, but soybeans also has a very strong, statistically significant relationship with the CF share pricing over the last 60 months, although that distribution is slightly skewed while the 45 day distribution is normal. In both the short (45 daily) and the long (60 monthly) regression, the t-statistic is well over its critical value.

    I think that's enough talk about statistics. :-)

    As I state in my conclusion, things could go either way, for me its a red / black roulette wheel "bet" and not a trade that tells me to stay out, observe & learn. Without differing opinions we would not have a stock market. I truly appreciate your reading the article as well as your comments.
    Jan 14 01:04 PM | 3 Likes Like |Link to Comment
  • Some Reverse Stock Splits Actually Do Work [View article]
    The vast majority of reverse stock splits do not work. The majority of failures are with stocks trading for less than a dollar by near bankrupt companies trying to not be de-listed. Reverse splits done with stocks trading over $1 but less than $5 have a better track record than the penny stocks but there is still no guarantee of success.

    AIG is an insurance company, there was no need to change the business model, just stop taking risks outside of the realm of reasonable underwriting is all that is needed and the flow of premiums will fix the business over time.

    The $5 question is, "Can Citibank fix its business? If it can the stock price will fix itself.
    Mar 21 07:09 PM | 3 Likes Like |Link to Comment
  • 1.2 Million Americans Quit Seeking Work Since November 2010 [View article]
    The size of an unemployment check is not big enough to "get comfortable" on. In many cases they are not enough to keep an independent roof over one's head but enough to keep one from starving.

    The truth of the matter is that many of them will end up homeless and unfortunately, forgotten about.
    Feb 5 10:18 AM | 3 Likes Like |Link to Comment
  • Further Thoughts on Obama's Tax Cuts [View article]
    For the top 2%, Love Of Country has given in to Self-Interest.
    Dec 7 08:42 AM | 3 Likes Like |Link to Comment
  • U.S. Jobs Report Likely to Be Robust [View article]
    MarketGuy. Agreed. While Labor will affect our potential and ultimately real GDP, it will not affect the stock market because globalisation allows the largest multinational corporations to continue to profit by seeking the lowest cost labor force wherever they may be.

    Unfortunately, to the elite, american middle class jobs do not matter as much as they used to.
    Dec 3 07:54 AM | 3 Likes Like |Link to Comment
  • Soybean Production Cuts, Increased Corn Acres Puzzle Agriculture Stock Investors [View article]
    oaksprings, thanks for reading the article. I find your comment quite funny.

    My job as an analyst is to not take any individual or organizations word for anything, but to process & interpret all available information into an unbiased opinion of value. If I'm right more than wrong then hopefully you will continue to read my reports, if I'm not then you won't have much use for them and neither will I. :)

    That said, USDA reports are based on statistical estimates like all other economic reports and are subject to the limitations inherent in all such analyses. My job is to wade through all that for you. Thanks again for reading me.
    Apr 15 07:36 PM | 2 Likes Like |Link to Comment
  • Global Wheat Stocks At Highs Not Seen In 12 Years [View article]
    Agegaz, thanks for reading the article. Regarding the EUR/USD exchange rate, I was not referring to a YTD peak. I was thinking of my October article.

    in which I wrote about the exchange rate peaking in the days following a previous piece written in August. I should have expressed that more clearly. Thanks for pointing that out.
    Dec 13 04:54 AM | 2 Likes Like |Link to Comment
  • Has The Size Of The U.S. Labor Force Reached Its Peak? [View article]
    Davewmart, thanks for reading the piece. With regards to your comment, I do refer to this as a possible beginning of a new trend. It will indeed take 10-15 years to see if it plays out. An initial analysis of the US and Japan population has been done which I illustrate in the graphs.

    As I illustrate in the article, the size of labor force generally grows parallel to working age population. For the US, labor force growth stopped in May of 2009 while the working age population continues to grow. If you look at the graph carefully, when the labor force peaked in Japan in the mid 1990's, the working age population growth line had not yet begin to flatten out as it is now. It looked similar to the US population growth line.

    Japan is actually getting a break now that there population growth has flatten out, if it did not there participation rates would be even lower.

    If the working age population in the US continues to grow this will actually make our situation "worse" over time because our labor force participation rates will be even lower because we will have a larger population with no growth in the size of the labor force.

    A few terms:
    Labor Force = employed + unemployed

    Working Age Population = Labor Force + Those Not in the Labor Force (This grows every month as people reach 15 or 16 depending on the country)

    Labor Force Participation Ratio = Labor Force / Working Age Population
    Employment to Population Ratio = employed / Working Age Population

    If anyone is interested in a more detailed article about what makes up the labor force size, participation rates etc. I'd be more than happy to publish an introductory piece.

    Thanks again Davewmart for your insights.
    Dec 3 10:39 AM | 2 Likes Like |Link to Comment
  • 1.2 Million Americans Quit Seeking Work Since November 2010 [View article]
    Moon Kil Woong,
    I wrote an article about what you are speaking of entitled "Just how relevant is American Labor" back in December that shows the decline in the employment-to-population ratio. Once again, we are in agreement.

    The data I used for the article came from the government. The formula for calculating the ratio is well known and readily available. Let me be clear, I have not said once that the Govt. is a benevolent beast. Just that we will find whatever it is that we seek with application of some effort.
    Feb 5 10:03 AM | 2 Likes Like |Link to Comment
  • 4 Stocks That Buffett Could Buy Now [View article]
    Adding this additional comment because I inadvertently hit reply before I was done and the software will not allow me to edit my original comment.

    Regarding estimating rates of growth: you must learn how to estimate the rate of growth in earnings, dividends, FCF, Residual Income or whatever it is you are discounting to find a firms value. The firms value is VERY sensitive to changes in both the required return and growth rate.
    Jan 24 12:31 PM | 2 Likes Like |Link to Comment