Random Economic Posts

[goldenvalley]

The Bloomberg headline is ridiculously off base "California Governor Newsom Slams Valero's Profits from Record Fuel Prices" when the real news is that the company is making bank off of the gas prices we are paying. 

Valero, which reported $2.82 billion of net income for the third quarter, didn’t immediately respond to a request for comment.

Of course not, the Board and shareholders are busy contacting their financial advisors and tax lawyers on how to shelter this income and the 4th quarter profit as well.  No time for talking to the press.

I assume other oil companies will be announcing nice profits too.

[LFC]

Feel like you're getting hosed by your internet provider? You're probably right.

If there’s one thing Americans seem to agree on, it’s that they don’t like their internet service providers. They have a lot of good reasons to be frustrated, according to a survey of US broadband service from Consumer Reports released Thursday.

Consumer Reports collected and analyzed over 22,000 internet bills in an unprecedented study scrutinizing 500 internet service providers from all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The study uncovered arbitrary price differences, confusing bills, hidden fees, wildly varying speeds, and an overall lack of transparency that rendered it extremely difficult for anyone to get a clear picture of what it should cost to connect to the internet.

“We knew we’d uncover a lot of nonsense, but it was surprising to see how difficult it is for consumers to understand bills that should really be straightforward,” said Jonathan Schwantes, senior policy counsel at Consumer Reports. “Policymakers need to step in to make things more affordable and transparent, and address competition issues.”

Speed was a major issue. People who participated in the study had download speeds that regularly failed to match the speeds that ISPs promised. Ironically, that problem was worse for people paying for “premium” plans that advertise higher speeds between 940 and 1,200 Mbps. In reality, speeds fell between 360 and 373 Mbps.

Nationally, prices ranged from less than $40 to over $100, with a median price of $74.99. The study found inconsistent pricing for identical services, though. Internet service providers (ISPs) even charged some people the same or higher prices for download speeds less than 25 Mbps (extremely slow) as others paid for speedy 300 Mbps plans. But issues with the bills were even more troubling when the researchers drilled into the details.

The bills were rife with fees that make prices even more confusing, which can surprise consumers and hide the true cost when you’re signing up. More than a dozen providers charged so-called junk fees with names like “network enhancement fee,” “internet infrastructure fee,” “deregulated administration fee,” and “technology service fee.” Some fees are avoidable, like an extra charge for renting a WiFi router, but most aren’t.

“These make a lot of mealy mouthed excuses for why they charge these fees, but they’re really just charging extra to cover the cost of doing business,” Schwantes said. “Maintaining your high speed fiber network sounds like something my 60 bucks should cover, why do you need to charge me an extra seven dollars?”

The study found that providers including Comcast, Cox, AT&T, and Wave Broadband use data caps in some areas and charge extra fees for going over the caps. While unlimited data plans are an option, they can add as much as $49.99 to the monthly price.“We knew we’d uncover a lot of nonsense, but it was surprising to see how difficult it is for consumers to understand bills that should really be straightforward,” said Jonathan Schwantes, senior policy counsel at Consumer Reports. “Policymakers need to step in to make things more affordable and transparent, and address competition issues.”

Speed was a major issue. People who participated in the study had download speeds that regularly failed to match the speeds that ISPs promised. Ironically, that problem was worse for people paying for “premium” plans that advertise higher speeds between 940 and 1,200 Mbps. In reality, speeds fell between 360 and 373 Mbps.

Nationally, prices ranged from less than $40 to over $100, with a median price of $74.99. The study found inconsistent pricing for identical services, though. Internet service providers (ISPs) even charged some people the same or higher prices for download speeds less than 25 Mbps (extremely slow) as others paid for speedy 300 Mbps plans. But issues with the bills were even more troubling when the researchers drilled into the details.

The bills were rife with fees that make prices even more confusing, which can surprise consumers and hide the true cost when you’re signing up. More than a dozen providers charged so-called junk fees with names like “network enhancement fee,” “internet infrastructure fee,” “deregulated administration fee,” and “technology service fee.” Some fees are avoidable, like an extra charge for renting a WiFi router, but most aren’t.

“These make a lot of mealy mouthed excuses for why they charge these fees, but they’re really just charging extra to cover the cost of doing business,” Schwantes said. “Maintaining your high speed fiber network sounds like something my 60 bucks should cover, why do you need to charge me an extra seven dollars?”

The study found that providers including Comcast, Cox, AT&T, and Wave Broadband use data caps in some areas and charge extra fees for going over the caps. While unlimited data plans are an option, they can add as much as $49.99 to the monthly price.

[LFC]

Amazon is going to be laying people off but is first looking for voluntary separations.

Amazon sent a letter to some of its employees this week offering a buyout program if they voluntarily resigned. The proposal is a “voluntary severance” that would provide employees with three months’ pay if they selected to leave the company amidst mass layoffs at the company.

The company said employees will receive the three months’ pay as a “lump sum” plus one week’s salary for every six months of tenure they worked at the company, according to internal company documents obtained by CNBC.

If the employee agrees to take voluntary severance, they will also receive health insurance benefits through the end of December and a weekly stipend over 12 weeks. It’s being reported they’ll have until November 29 to make a decision but will be able to withdraw their decision to resign by December 5.

The news comes as Amazon becomes one of the latest tech giants to cut jobs. The New York Times first reported the company aims to cut 10,000 jobs across the company. Elon Musk laid off half of Twitter’s staff of 7,500 employees earlier this month while Facebook’s parent company Meta laid off roughly 11,000 employees. Since the beginning of the year, an estimated 128,865 people have been laid off across 814 tech companies, according to layoffs.fyi - a site that tracks job cuts across the tech industry. The number of individuals laid off per month in the tech industry has drastically increased from 3,625 in February of this year to 37,866 in November alone.

[goldenvalley]

Nov 17, 2022 17:18:52 GMT LFC said:

Amazon is going to be laying people off but is first looking for voluntary separations.

Amazon sent a letter to some of its employees this week offering a buyout program if they voluntarily resigned. The proposal is a “voluntary severance” that would provide employees with three months’ pay if they selected to leave the company amidst mass layoffs at the company.

The company said employees will receive the three months’ pay as a “lump sum” plus one week’s salary for every six months of tenure they worked at the company, according to internal company documents obtained by CNBC.

If the employee agrees to take voluntary severance, they will also receive health insurance benefits through the end of December and a weekly stipend over 12 weeks. It’s being reported they’ll have until November 29 to make a decision but will be able to withdraw their decision to resign by December 5.

The news comes as Amazon becomes one of the latest tech giants to cut jobs. The New York Times first reported the company aims to cut 10,000 jobs across the company. Elon Musk laid off half of Twitter’s staff of 7,500 employees earlier this month while Facebook’s parent company Meta laid off roughly 11,000 employees. Since the beginning of the year, an estimated 128,865 people have been laid off across 814 tech companies, according to layoffs.fyi - a site that tracks job cuts across the tech industry. The number of individuals laid off per month in the tech industry has drastically increased from 3,625 in February of this year to 37,866 in November alone.

Are the tech layoffs the result of a mature industry?  Not much innovation happening anymore, just updating and refining old stuff.  Amazon hired a bunch of folks during the Covid time, but online shopping has decreased?

[LFC]

Nov 17, 2022 17:57:51 GMT goldenvalley said:

Are the tech layoffs the result of a mature industry?  Not much innovation happening anymore, just updating and refining old stuff.  Amazon hired a bunch of folks during the Covid time, but online shopping has decreased?

Dunno. In this case it sounds like sales may be be slowing, or perhaps just sales increases, and they're trimming some of their less cost efficient units. I suspect that a lot of companies put their foot on the gas when it came to hiring during the COVID boom and are now dialing back a bit.

In a letter to employees on Wednesday, Amazon Senior Vice President of Devices and Services David Limp told employees they could expect layoffs in their devices and services units. He referenced a town hall meeting in July where he said he talked about the state of the economy and the “unusual and uncertain macroeconomic environment.”

He told employees that they had made the difficult decision to “consolidate some teams and programs,” adding, “One of the consequences of these decisions is that some roles will no longer be required. It pains me to have to deliver this news as we know we will lose talented Amazonians from the Devices & Services org as a result.”

[LFC]

Long COVID may be impacting the employment situation more than most people realize.

Data suggests that millions of Americans now find themselves in a similar situation, but it’s tricky to know exactly how widespread long COVID is, or how it is affecting America’s workforce. Somewhere between 10 and 30 percent of people who get COVID develop long COVID, according to the Government Accountability Office, or between 7.7 million and 23 million Americans. While symptoms vary, long COVID typically involves fatigue, cognitive issues like “brain fog,” muscle or joint pain, organ damage, heart issues, shortness of breath, and/or mood changes.

Like Finley, some sufferers have been left so impaired that they’re no longer able to work, or at least not in the same job or under the same conditions that they used to. And yet we still don’t know for sure just how many people have been affected this way or what the impact on the economy has been. As data continues to roll in, however, it seems quite likely that long COVID is a significant part of why the labor market is currently so tight: it has forced people out of the workforce, plunging them into financial turmoil, which is making it harder for employers to find workers.

One international online study of nearly 4,000 long COVID patients found that 22 percent had left the workforce due to their symptoms. Here in the United States, economists have been trying to pinpoint a more robust answer with different datasets. One is the Census Bureau’s Current Population Survey. It’s a well-respected dataset: it’s nationally representative, and it also has a long history, allowing researchers to compare trends over time.

In a recent paper, Gopi Shah Goda, deputy director of the Stanford Institute for Economic Policy Research, and Evan Soltas, a PhD economics student at MIT, looked at how many more health related work absences were reported in the CPS in the pandemic compared to the years before, using that as a proxy for people who got COVID. They found that workers who had to miss work for at least a week when they got COVID were 7 percentage points less likely to be in the labor force a year later compared to those who hadn’t had such a disruption.

Thus, they concluded, COVID illness had reduced the labor force participation rate by 0.2 percentage points by June, meaning there were about 500,000 fewer people working. “That does explain a pretty substantial chunk of the reduction in labor force participation since the beginning of the pandemic,” Shah Goda noted, and could be a big reason for why the labor market is so tight. “It’s maybe not the whole story, but it’s still something that’s relatively substantial.” The labor force losses will cost the economy about $62 billion a year, they calculate. “COVID is basically half as costly to the U.S. economy as diabetes or all cancers,” Soltas noted.

But not all of what they observed could be attributed to long COVID: their findings include those who got sick with COVID and quickly recovered, but perhaps lost their job when they had to take time off or saw it as a good catalyst to retire, as well as those whose symptoms lingered. “Long COVID is certainly, we think, in the mix here,” Soltas said. But it’s not the only phenomenon they measured.

Let's take this moment to recall that it was an abundance of Republicans, including Ron DeSatanist, who said we should just let the disease run wild and take its course rather than safeguarding people.

[LFC]

Excuse me while I cringe. I was a software developer for 25 years and currently design software for financial planners. This just hurts my soul.

[andydp]

Dec 15, 2022 3:21:24 GMT LFC said:

Excuse me while I cringe. I was a software developer for 25 years and currently design software for financial planners. This just hurts my soul.

View Attachment

Let me take a guess: (Full Disclosure: I have a celebration when my checking account balances)

If you reduce a number by 10% (100 - 10% = 90) the result is 90. (A smaller number.)  If you increase the smaller number, 90 by 10% you'll get 99 because 9 is 10% of 90.

Conclusion: the OP is affected by IO** error.

** IO error: Idiot Operator

[LFC]

In a similar vein, who could have imagined that a bunch of "social media influencers" would scam their audiences?

SEC Charges Eight Social Media Influencers in $100 Million Stock Manipulation Scheme Promoted on Discord and Twitter

The Securities and Exchange Commission today announced charges against eight individuals in a $100 million securities fraud scheme in which they used the social media platforms Twitter and Discord to manipulate exchange-traded stocks.

According to the SEC, since at least January 2020, seven of the defendants promoted themselves as successful traders and cultivated hundreds of thousands of followers on Twitter and in stock trading chatrooms on Discord. These seven defendants allegedly purchased certain stocks and then encouraged their substantial social media following to buy those selected stocks by posting price targets or indicating they were buying, holding, or adding to their stock positions. However, as the complaint alleges, when share prices and/or trading volumes rose in the promoted securities, the individuals regularly sold their shares without ever having disclosed their plans to dump the securities while they were promoting them.

[AnBr]

Dec 15, 2022 3:21:24 GMT LFC said:

Excuse me while I cringe. I was a software developer for 25 years and currently design software for financial planners. This just hurts my soul.

[AnBr]

[andydp]

Dec 24, 2022 13:03:05 GMT AnBr said:

Andy Borowitz said it all in the headline:

World Shocked That Man Running Business Based On Imaginary Money Might Be Fraud

[LFC]

Facebook Meta and Google Alphabet no longer control half of web ad traffic.

Meta and Alphabet have lost their dominance over the digital advertising market they have ruled for years, as the duopoly is hit by fast-growing competition from rivals Amazon, TikTok, Microsoft and Apple.

The share of US ad revenues held by Facebook’s parent Meta and Google owner Alphabet is projected to fall by 2.5 percentage points to 48.4 percent this year, the first time the two groups will not hold a majority share of the market since 2014, according to research group Insider Intelligence.

This will mark the fifth consecutive annual decline for the duopoly, whose share of the market has fallen from a peak of 54.7 percent in 2017 and is forecast to decline to 43.9 percent by 2024. Worldwide, Meta and Alphabet’s share declined 1 percentage point to 49.5 percent this year.

Jerry Dischler, head of ads at Google, told the Financial Times that fierce rivalry from new entrants reflects an “extremely dynamic ad market.”

Regulators in the US and Europe have added antitrust scrutiny such as pursuing Google for allegedly promoting its products over rivals.

In December, Facebook owner Meta was served with a complaint from the EU’s watchdogs over concerns that the social network’s classified advert service is unfair to rivals. Tech groups are fighting harder than ever for a share of the $300 billion digital ads market, even as companies worldwide are cutting their ad budgets in response to rising interest rates and high inflation.

Amazon and Apple have expanded their advertising teams. In July, Netflix announced it would partner with Microsoft to build an advertisement-supported tier of its streaming service.

Meta chief executive Mark Zuckerberg has blamed recent revenue falls on Apple’s privacy changes that make it harder to track users and target advertising, as well as the growing popularity of viral videos app TikTok, owned by Chinese parent ByteDance.

Their revenues are based on a treasure trove of personal information, and the only trick they seem to have is an even deeper dive into people's computer use. Privacy and their ability to even more directly target ads are at odds.

[goldenvalley]

Culture war comes to Congress in the form of a bill that would repeal a Labor Department regulation that allows retirement plan managers to consider environmental, social, and governmental factors in making investment decisions. 

Congress on Wednesday cleared a measure to block a Labor Department rule that allows retirement plan managers to incorporate climate and social considerations into their investment decisions, setting up a veto fight with President Biden over an otherwise obscure regulation that has become a flash point in the culture wars.

The Senate passed the resolution by a vote of 50 to 46 after two Democrats, Senators Jon Tester of Montana and Joe Manchin III of West Virginia, joined every Republican. Coming the day after the House approved the measure on a mostly party-line vote, that cleared the measure to be sent to the White House, where Mr. Biden’s advisers have said he plans to veto it.

It's not a requirement.  It is permissive, not mandatory.  And some fund managers have been considering these things for years. 

The rule in question, which was updated in December, allows retirement funds to consider climate change and other factors when choosing their investments. The Biden administration put it in place to counter a rule instituted in 2020 by the Trump administration that sought to limit the ability of retirement and pension plans to consider those issues.

But who doesn't like it?   Fossil fuel companies.  I remember pension fund management pulling out of tobacco product company investment, South African companies during apartheid, and Israeli companies over the Palestinian question.

[LFC]

Elon Musk is looking to resurrect the concept of the company town. I'm sure he'd run it as well as he runs Twitter.

Tesla, Twitter, SpaceX, and Boring Company CEO Elon Musk is adding one more title to his resume: town owner. The multi-billionaire is reportedly working on building his own “utopia” in Texas and plans to name it Snailbrook.

The Wall Street Journal reports that Musk plans to build the town outside of Austin near his Boring and SpaceX facilities which are currently under construction, according to the outlet. Facebook photos revealed the area already has a collection of modular homes, a pool, an outdoor sports area, and a gym, and already has signs posted that read: “Welcome, snailbrook, tx, est. 2021.”

According to the Journal, Musk’s plans include building a place for his employees to live and charging them roughly $800 per month for one and two-bedroom homes, with the caveat that they would have 30 days to vacate the premises if they were laid off or quit. Although the plans are still in the works, it seems like a good time to ask: Is this even a good idea?

Companies have been lapping up towns for decades, creating a place where they could establish a monopoly of power in an area for their wide-ranging companies and make a profit from their employees. The idea, in essence, sounds good—work for an employer and you get to live in the town with access to all the amenities for a discounted price. But what happens when things go south?

Company towns have a long history of creating so-called utopias for their workers but also created towns that were akin to a prison camps where employers are the landlord and the shopkeep and everything else one could need. Many towns were built by coal companies and the workers often lived in poverty and abuse.

[jackd]

Pullman, near Chicago is a good example and Kohler in Wisconsin.

[goldenvalley]

I hope this is random.  A bank failure...

Silicon Valley Bank, a lender to some of the biggest names in the technology world, did just that on Friday, becoming the largest bank to fail since the 2008 financial crisis. The move put nearly $175 billion in customer deposits, including money from some of the biggest names in the technology world, under the control of the Federal Deposit Insurance Corporation.

It was an extraordinary denouement less than two days after the bank shocked Wall Street and its depositors with emergency moves to raise cash and stave off a collapse in the face of withdrawal requests and a precipitous decline in the value of its investment holdings. The bank as of Friday morning was working with advisers on a potential sale, a person with knowledge of the negotiations said, and had halted trading in its shares in the wake of a rapid fall.

Silicon Valley Bank’s spiral accelerated with incredible speed this week, but its troubles have been brewing for more than a year. Founded in 1983, the bank, based in Santa Clara, Calif., was a go-to lender for start-ups and their executives.

Though Silicon Valley Bank advertised itself as a “partner for the innovation economy,” it was being shaken by decidedly old-fashioned decisions. To compete with bigger names, it had long boasted of looser lending standards for fledgling companies, and offered to pay higher interest rates on deposits than its larger rivals.

Flush with cash from high-flying start-ups, it bought huge amounts of bonds more than a year ago, just before the Federal Reserve began to raise interest rates. Like its peers, Silicon Valley Bank kept just a fraction of the deposits on hand and invested the rest with the hope of earning a return.

I'm hoping this is an isolated situation in which the managers and owners screwed up royally. Seems like their lending practices were a pretty loose.  Considering that venture capital was the source of a lot of start up company money I wonder if this bank was one that people went to because the venture capitalists wouldn't fund them.

[pnwguy]

Mar 10, 2023 19:35:39 GMT jackd said:

Pullman, near Chicago is a good example and Kohler in Wisconsin.

Scotia, California is another, from the giant redwood sawmill there, Pacific Lumber Company.  The previous family owners for generations were fairly benevolent, but they got taken over in a leveraged buyout from Maxxam Inc of Texass.

[LFC]

[goldenvalley]

While COVID had some impact on that chart I personally think most of the movies aren't worth watching.  Get off my lawn!

[LFC]

Brad DeLong ripped into an article in The Economist that distorted history and fluffed "the market."

The past decade has not been kind to neoliberalism. With 40 years of deregulation, financialization, and globalization having failed to deliver prosperity for anyone but the rich, the United States and other Western liberal democracies have seemingly moved on from the neoliberal experiment and re-embraced industrial policy. But the economic paradigm that underpinned Thatcherism, Reaganomics, and the Washington Consensus is alive and well in at least one place: the pages of the Economist.

A recent essay celebrating America’s “astonishing economic record” is a case in point. After urging despondent Americans to be happy about their country’s “stunning success story,” the authors double down on condescension: “The more that Americans think their economy is a problem in need of fixing, the more likely their politicians are to mess up the next 30 years.” While acknowledging that “America’s openness” brought prosperity to firms and consumers, the authors also note that former President Donald Trump and current President Joe Biden “have turned to protectionism.” Subsidies, they warn, could boost investment in the short term but “entrench wasteful and distorting lobbying.” In order to address challenges like the rise of China and climate change, the US must “remember what has powered its long and successful run.”

As usual, the Economist delivers its reverence for neoliberal dogma with all the sanctimony and certitude of a true believer. Americans must sit down, shut up, and recite the catechism: “The market giveth, the market taketh away: blessed be the name of the market.” To doubt that the US economy’s current problems are caused by anything other than an interventionist, overbearing government is apostasy. But, as an economic historian, what took my breath away was the essay’s conclusion, which attributes America’s postwar prosperity to its worship of the Mammon of Unrighteousness (more commonly known as laissez-faire capitalism).

[pnwguy]

Apr 27, 2023 21:50:27 GMT LFC said:

Brad DeLong ripped into an article in The Economist that distorted history and fluffed "the market."

It's a central tenet of Hanauer's education effort against Neo-liberal economic dogma

[golden_valley]

I wonder if this will happen in hurricane prone areas too. 

State Farm said it would stop selling new insurance policies to homeowners in California, exacerbating troubles for thousands in the wildfire-prone state, who are already feeling the heat with coverage getting costlier or harder to come by.

State Farm General Insurance Company - State Farm's provider of homeowners insurance in California - said on Friday that it made this decision due to "historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market."

The insurer said it was necessary to take these actions now to improve the company's financial strength.

Of course there is always a little more than fire losses in CA behind the decision.

Global insurers are facing a challenging 2023 as reinsurers hike rates on key business lines by as much as 200% from Jan. 1. The reinsurers blame sharp losses from the war in Ukraine and from natural catastrophes such as Hurricane Ian in Florida.

Additionally, climate change has added to problems. Global insured losses from catastrophes were anticipated to reach at least $15 billion in the first quarter alone, insurance broker Aon Plc (AON.N) said in a report

[Bact PhD]

Flori-DUH has dealt with this sort of stuff off-and-on for decades. Corporate pulls out after a series of major underwriting losses, corporate tiptoes back in, corporate writes policies for beachfront and flood-prone areas, a series of storms precipitates a series of major underwriting losses, rinse and repeat. The state is in deep shit right now because so many insurers have bailed, thrusting homeowners onto the state-backed “insurer of last resort.”

[pnwguy]

May 31, 2023 15:21:40 GMT Bact PhD said:

Flori-DUH has dealt with this sort of stuff off-and-on for decades. Corporate pulls out after a series of major underwriting losses, corporate tiptoes back in, corporate writes policies for beachfront and flood-prone areas, a series of storms precipitates a series of major underwriting losses, rinse and repeat. The state is in deep shit right now because so many insurers have bailed, thrusting homeowners onto the state-backed “insurer of last resort.”

So Flori-DUH is where un-woke insurance companies go to die?  Can't DeSatanist provide fascist control of hurricanes?  I thought he was God's Fighter.  Surely that gives him unique powers over the weather...