The Market Ticker ®
Commentary on The Capital Markets
Login or register to improve your experience
Main Navigation
Sarah's Resources You Should See
Full-Text Search & Archives
Leverage, the book
Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions. For investment, legal or other professional advice specific to your situation contact a licensed professional in your jurisdiction.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility; author(s) may have positions in securities or firms mentioned and have no duty to disclose same.

The Market Ticker content may be sent unmodified to lawmakers via print or electronic means or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must be complete (NOT a "pitch"; those get you blocked as a spammer), include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Considering sending spam? Read this first.

2025-02-08 07:00 by Karl Denninger
in Employment , 180 references
[Comments enabled]  

So sayeth the BLS...

Total nonfarm payroll employment rose by 143,000 in January, and the unemployment rate edged down to 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, retail trade, and social assistance. Employment declined in the mining, quarrying, and oil and gas extraction industry.

Remember, this was before Trump's inauguration, so any impact from there forward is not in these numbers.  But also, as a serious confounder, is the "rebase" that occurs on the non-institutional working population every January.  And boy was that a whopper this time around, alleging more than three million not-counted people over the last 12 months were in fact present.

This has several impacts in the figures -- for one, it directly reduces the employment-population ratio, which means the previous ratios were wrong -- and looked better than they really were.  This is extremely important because of all the data in the labor report that is the single figure that tells you more about how sustainable the government's taxing and revenue structure is than anything else.  It was not just wrong, it was wildly inaccurate.

It also moves the unadjusted unemployment rate massively as well -- six full ticks from 3.8% to 4.4%.

But more to the point in addition to all that hours worked went down a tick and that directly resulted in negative changes in weekly check sizes across most of the subgroups in the report.

I won't bother ascribing motive; that's speculation and not the remit of this particular monthly column.  But this is a weak report both on its face and internally and in addition the UM consumer sentiment report was released which showed a full percentage point jump in inflation expectations in one month.  Unless my data set is wrong somewhere that has only happened once before -- simply put, people are expecting serious inflationary pressures in the economy -- and it is precisely that event that The Fed fears when attempting to provide "monetary stimulus" -- a disorderly change in perception of inflation over time.

Well, there it is, and this complicates the picture mightily on a forward basis.

PS: Don't expect more rate cuts.... not with this sort of set of reports.

View this entry with comments (opens new window)
 

2025-02-06 08:00 by Karl Denninger
in Health Reform , 813 references
[Comments enabled]  
Category thumbnail

.... DOGE is in the house.

CMS, to be precise.

This is step 1, incidentally, but one that Congress can neither interfere with or prevent.  In fact it is the Executives job to pay only valid invoices at valid amounts to valid vendors for valid acts.

Note all those uses of the word valid.

That a voucher was submitted does not make the voucher valid to be paid.

CMS is likely a very fruitful place to find fraud simply because of its size.  Roughly $2 trillion a year is currently passing through there so if even 10% of that is bogus that's $200 billion each and every year without touching any of what is supposed to be done and paid for there.

If you just look at the overhead rate for CMS you'd be quite impressed; as entities go they pay for a lot with not a lot of overhead.  But this presumes that they're not being ripped off.

Step 2 is found in the proposal that I've put forward for a very long time which goes at cost directly, not at whether someone is robbing the system at the current structure of cost.  Those are two different thins but not to be ignored.

Step 2 requires Congressional action for most of it -- but not all.  None of the enforcement provisions require Congressional action; indeed, to the contrary the Trump Administration (now that it has a functional DOJ with an actual confirmed director) can go after the 15 USC issues directly and not only does Congress not need to be involved they can't stop it.

Indeed, were Trump and Pam Bondi to start indicting insurance and hospital executives, along with the entire boards of both sets of firms for facial violations of 15 USC Chapter 1 (which are trivially-documented every single day) the only way to keep it all from collapsing immediately would be to implement something very similar to my proposal where everyone pays the same price.  80% of the cost would come out of the entire system in a literal weekend.

But to the point of this discovery and documentation of widespread fraud, if it is found and proved up would provide not only political cover but a direct mandate from the people to Congress to stay out of it and in fact put a real medical reform package in place lest a bunch of Congresspeople lose their jobs in a couple of years as the scope of said scam is about $1.5 trillion in the Federal Government alone per year, every year.

I'm not sold -- yet -- on Trump actually going after the meat of the problem -- which from a budgetary perspective resides almost-entirely in the medical realm.

But perhaps -- jut perhaps -- this time he means it and is headed there.

We'll see.

View this entry with comments (opens new window)
 

2025-02-03 07:53 by Karl Denninger
in POTD , 104 references
 

 

View this entry with comments (opens new window)
 



2025-02-03 07:00 by Karl Denninger
in Foreign Policy , 297 references
[Comments enabled]  

Its right here:

(h)  For avoidance of doubt, duty-free de minimis treatment under 19 U.S.C. 1321 shall not be available for the articles described in subsection (a) and subsection (b) of this section.

What is that?

Ever order something off Alibaba, eBay or Amazon -- that is shipped in from China?

Its been exempt from import duties because of that rule.  Essentially "small shipments" 

This has been wildly exploited.  The original law is why you can bring a small amount of personal purchases into the United States without paying duty on them.  But this was expanded and has been wildly exploited for years -- the current limit, for example is $800 per shipment from China and it does not have to accompany you on the way in.

So various selling channels are set up so that each shipment to a person is under that amount, and thus there is no duty even when there would be otherwise.  The intent is to let small sellers -- and travelers -- come into the United States without paying duties.  It was never intended to, but has been exploited to, permit organized trade via sites like eBay, Alibaba and Amazon in the billions from China into the Unites States without paying the duties that would be payable had a retailer, say, WalMart sourced the same products for retail sale to Americans.

It is facially reasonable to let people travel and, as a small percentage of their total expenditures buy things in that nation and import them back into the US without having to keep their receipts for everything and then calculate a duty on it.  That makes sense.  But this has been wildly abused by various firms and neither Congress or the Executive has been willing to consider "bundling" (which is basically what they're doing) a circumvention and thus levy duty on the aggregate amount that comes into the US on a per-month basis irrespective of the number of shipments when coordinated by a single selling or marketplace entity.  That too is reasonable.

Well, Trump just slammed the door on that game at least in respect to Canada, Mexico and........ the big one..... China.

View this entry with comments (opens new window)
 

2025-02-01 10:14 by Karl Denninger
in Musings , 262 references
[Comments enabled]  
Category thumbnail

I'm speaking of Bennu.

The asteroid, which we intercepted, is believed to be fragments of a celestial body more than 4 billion years old that originated within our solar system in the area beyond Saturn; that body was destroyed in a collision and one of the pieces remaining is Bennu.  There are quite a large number of asteroids that are on orbits of various periods around the sun which were birthed this way during the earlier years of our solar system.

In 2023 NASA recovered a spacecraft it had sent to deliberately collide with (and was designed to survive that) and thus obtain samples from the asteroid.

What was found in said samples is astounding.

The majority of amino acids that form the basis of all life on Earth were found -- 14 of the 20.  Further, all five of the nucleobases used to craft DNA and RNA into those amino acids were also found, as well as ammonia and formaldehyde, which between the two are the precursors for those.

In addition salts -- including sodium chloride, or common salt, was also found.  That finding is equally significant as it is essential for the formation and maintenance of all life and for all of this to be found in one place is akin to the 2010 (movie) segment when they find chlorophyll where it has no reason to be.

One caution: As I've repeatedly observed over this column's lifetime, and long before it as well in other context, science is not simply the process of discovery; science is, in every case, about replication and conclusions cannot be drawn without replication.

Not in this case and not in any other case.

But -- assuming the findings are true and were not the result of contamination (pre or post), malfeasance or other-than-straightforward presence and recovery the findings are profound.

They provide presumptive evidence that four billion years ago most of the elemental components necessary for life on this planet, including most of the amino acids in completed form, were presumably present in a celestial body beyond the orbit of Saturn.

This in turn strongly implies it didn't start here and further it is extremely unlikely it is unique to this solar system either, simply on the mathematics of how many galaxies, stars and solar systems exist in the known universe.

Incidentally this also throws a huge wrench into a bunch of claims that we're going to be able to do certain things -- some of which I'll talk about on my podcast this weekend, because it is those very same mechanisms that are destructive most of the time on very long odds are almost-certainly what led to this formation in the first place and it continuation here on Earth ultimately leading to the world we live in today -- including us.

View this entry with comments (opens new window)