Unemployment

Count Dankula of Nazi salute pug infamy escapes prison term

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Scottish comedian Count Dankula taught his girlfriend’s pug to do a Nazi salute as a prank. The video went viral. Regardless of the level of one’s taste in humour, he clearly never intended it as a hate crime. Luckily for the Count, the courts have ruled that he doesn’t need to do a 12mth jail term as was flagged. The fact that it even saw the inside of a courtroom shows just how ridiculous the legal system is becoming. The Crown initially claimed he was inciting hatred against Jews. Count Dankula was convicted of a crime with an £800 fine.

Unlike Kathy Griffin who has seen her career nosedive since after the Trump decapitation stunt, Count Dankula is likely to see a jump in following because he hasn’t made a song and dance about being a victim of his own making.

Disrespecting the dead then preaching one’s subjective value to society

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Should we be surprised at yet another unhinged lefty taking pot shots at the dead and gloating about it? It was hard to top Canadian freelance journalist Nora Loreto who tweeted at the whiteness of Humbolt hockey players who died in a bus crash but Randa Jarrar has managed to one up her.

Fresno State University Professor Randa Jarrar tweeted that former First Lady Mrs. Barbara Bush was a

generous and smart and amazing racist who, along with her husband, raised a war criminal… “F**k outta here with your nice words….all the hate I’m getting ALMOST made me forget how happy I am that George W Bush…I’m happy the witch is dead…”

She then defended her rant to someone that clearly found her words unnecessary by saying,

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Her college President Joseph Castro had a slightly more balanced view of her behaviour,

On behalf of Fresno State, I extend my deepest condolences to the Bush family on the loss of our former First Lady, Barbara Bush. We share the deep concerns by others over the personal comments made today by Professor Randa Jarrar, a professor in the English Department at Fresno State. Her statements were made as a private citizen, not as a representative of Fresno State. Professor Jarrar’s expressed personal views and commentary are obviously contrary to the core values of our University, which include respect and empathy for individuals with divergent points of view, and a sincere commitment to mutual understanding and progress.

Provost (Vice Chancellor) Lynnette Zelezny of Fresno State spoke afterwards at a news conference confirming a question to her that the disrespectful professor could be fired.

One doubts there will be many that shed a tear at this self inflicted stupidity. Makes one wonder what standards she holds her class to. If history is any guide she will no doubt drag up her lack of white privilege as justification enough to mock a woman who served her country with dignity.

Shipping industry needs to save ITSELF before it has any chance of saving the PLANET

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Yet more eco-mentalism being celebrated by the UN International Maritime Organisation (IMO) with little thought to the very economics that has crippled shipping companies for so long. Shipping companies need to save themselves before bothering to save the planet.  Although the back slapping for the supposed “watershed agreement” (their words) will be achieved by 2050. The most pressing global issue of our times and these metal hulks which burn the ugliest, dirtiest and cheapest fuel (bunker) available have 32 years to get there. Perhaps the irony is that bankruptcy might take half the ships out of service meaning the emissions target could be hit decades earlier. A brief look at history.

It wasn’t so long ago that Korea’s largest container transporter Hanjin Shipping declared bankruptcy.  The above chart shows the daily shipping rates for the industry which remain tepid for the past decade. The problem with the shipping industry is the fleet. Ships are not built overnight. Surging order books and limited capacity meant that as the pre GFC global trade boom was taking place, many shipping companies were paying over the odds without cost ceilings on major raw material inputs (like steel). This meant that ships were arriving at customer docks well after the cycle had peaked at prices that were 3x market prices because of the inflated materials.

The pricing market was looking grim in 2016. CM wrote, “These are the latest prices in 2016 vs the 5 year average by type. New LNG, grain and oil carriers etc are holding up but the used market is being slaughtered. Ships are generally bought with a 25-yr service span at the very least. Global seaborne trade growth has shrunk from 6%+ growth in 2011 to less than 2% now.”

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According to Weber’s Week 4 report, VLCC rates for the route from the Arabian Gulf to China dropped to $10,925 per day on January 26 from $18,389 per day on January 19, which represents a 40% fall week-over-week. The average rate for all VLCC routes dropped to $13,179 per day from $19,974 per day on January 19. The current rates are 67% lower year-over-year.

Clarkson’s note 2010 build Capesize rates have fallen from $20,000/day 6 months ago to less than $3,900/day as of April 2018. 84K CBM LPG carriers have fallen from over $800,000/mth in April 2016 to $542,000/mth today.

Take a look at the financials of global leader Maersk. It recorded $US27.1bn of revenue in 2012 but only $24bn in 2017. Yet profitability slumped from $2.1bn to a paltry $25mn. Maersk carries around $34 billion in deferred tax loss carry forwards. That is the extent of the ‘financial baggage’ it still carries. The three major Japanese shipping companies have had a hell of a hit to profitability in recent years. See below.

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If the volume of goods transported by sea increases 3% every year, the volume in 40 years will be 3.3 times today’s volume. To cut total CO2 emissions in half by 2050, CO2 emissions per ton-mile need to fall by 85%. NYK is looking at the following ship that will cut emissions by 69% in 2030.

If the shipping industry is not fixed through market forces it will be difficult to repair the profitability and balance sheets that would allow the companies to invest in more eco friendly vessels. Bankruptcies are mergers are needed to streamline the sector.

According to Clarksons, the global fleet of all types of commercial shipping is 50% larger than it was before the GFC despite the World Trade Organization saying growth in global trade has crept up from $14.3 trillion in 2007 to $15.46tn in 2016 (+8%). Scrapping rates have fallen 40% since 2012 but since 2017 have risen moderately, appealing to owners with too much tonnage on their hands.

The International Chamber for Shipping’s secretary general Peter Hinchliffe said, “This is a ground-breaking agreement — a Paris agreement for shipping — that sets a very high level of ambition for the future reduction of carbon dioxide emissions…We are confident this will give the shipping industry the clear signal it needs to get on with the job of developing zero carbon dioxide fuels so that the entire sector will be in a position to decarbonise completely.”

What a wonderfully naive plan. At least the IMO can feel warm and fuzzy despite so many headwinds ahead of an industry still in structural distress.

Chapter 11 bankruptcy filing trends in the US surging

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The Chapter 11 bankruptcy trends in the US have been picking up in the last 4 years. While well off the highs of the months and years of the GFC and years following it, the absolute numbers of filings has exceeded the levels leading up to the crisis in 2007/8.

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Here we put 2006/7/8 alongside 2016/17/18. The average monthly bankruptcy filings were around 355 in 2006 moving to 429 in 2007 and then 718 in 2008. If we looked at the data in the 12 months prior to the quarter leading into Lehman’s collapse, bankruptcies averaged 463/month. The ultimate carnage peaked out at 1,049 in 2009 (1,377 in Apr 2009). For 2016, 2017 and 2018 (annualized) we get 454, 480 and 521 respectively.

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Bankruptcy filings tend to be seasonal and often show peaks in April when tax season coincides with businesses.

However the %-age spike in bankruptcies in 2008 ahead of Lehman’s downfall was 46%. In the latest recorded month from the American Bankruptcy Institute (ABI) was 81%. This March 2018 spike is the second highest since the GFC hit. April figures will be interesting if we get another lift on that figure. Not even seasonality can explain away the differences. The trends seem clear.

Thinking logically, we are at the end of the generous credit cycle. Interest rates are heading north thanks to a less accommodating Fed. Naturally ‘weaker’ companies will have more trouble in refinancing under such environments. The lowering of corporate taxes would seem to be a boon, but with loss making businesses it becomes harder to exercise tax loss carry forwards.

We’ve already started to see GFC levels of credit card delinquency at the sub-prime end of town. Sub-prime auto loan makers seeking bankruptcy protection have surged too.

Fitch, which rates auto-loan ABS said the 60+ day delinquency rate of subprime auto loans has now risen to 5.8%, up from 5.2% a year ago, and up from 3.8% in February 2014 to the highest rate since Oct 1996, exceeding even GFC levels.

growing number of car loans in the US are being pushed further down the repayment line as much as 84 months. In the new car market the percentage of 73-84-month loans is 33.8%, triple the level of 2009. Even 10% of 2010 model year bangers are being bought on 84 month term loans. The US ended 2016 with c.$1.2 trillion in outstanding auto loan debt, up 9%YoY and 13% above the pre-crisis peak in 2005.

The irony here is that sub-prime auto loan makers expanded lending because new technology allowed these companies to to remotely shut down and repossess vehicles of owners who were late on payments. That game only lasts so long before it forms its own Ponzi scheme.

Throw skittish financial markets, geopolitical instability and the mother of all refinancings coming the US Treasury’s way it is not to hard to see bankruptcies pick up from here.

Racial bias in US school discipline? Some shocking correlations

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The GAO has published a 98 page report on discipline in US schools. In a perhaps somewhat irresponsible manner of formatting, it suggests that teachers seem to pick on particular races and disabilities for those reasons alone. It is as if teachers are pushing kids with wheelchairs uncontrollably down ramps. Yet, ‘disability’ of course includes mental problems which could range from anxiety to depression. 11.7% of students are classified with a disability. Yet delving deeply within the stats, of the 56 million K-12 students, 5.7% have been in detention, only 0.4% of the total have been referred to law enforcement, 0.3% have been expelled, 0.2% received corporal punishment and less than 0.1% have been arrested. In short, 99.6% of students stay out of ‘big’ trouble and 94.3% stay out of detention. Single parent households and poverty levels are highly correlated to discipline. Reporting the headlines of the GAO makes for shock and awe but had they reported the 0.X% stats it would deflate the rhetoric.

The NY Times article implied there must be some sort of unconscious bias as teachers were being bigoted bullies. Doesn’t the mainstream media defend the very same people as the last bastions of educational excellence against the tyranny of Education Secretary Betsy DeVos. 80% of teachers are white. Although this has been on a long term decline.

If white students (K-12) represent 50.3% of the total is it fair to assume that they should hold an equal % of disciplinary actions? Do crime stats and incarceration rates reflect race based demographics anywhere in the world? In America, 24.7% of students are Hispanic and 15.5% are black. When it comes to higher levels of poverty, Hispanics are way under-represented in the disciplinary stats despite being higher proportions of the students. Whites are punished more or less in line with their population in that bracket.

In the interests of gender equality, why are girls, at 49% of all students punished at half the rate of boys? Unconscious bias or is it through our own experiences, women are far less likely to bring the wrath of teachers in class? A reasonably safe assumption to make.

Nearly half of all public school students went to schools where 50% or more of the students were low-income, and about a quarter went to schools where 75% or more of the students were low-income. Of the 11.5mn students in 75-100% low income backgrounds, 1 million spent time in out of school detention. Of the 9.9 million students in 0-25% low income schools, 217,000 spent time in out of school detention. 128,500 of those were white. Whites make up 78% of 0-25% low income school populations and only 16% of 75-100% low income schools. Therefore it stands to reason statistically that if students in less poverty stricken schools trigger fewer disciplinary issues, then the stats would naturally bear out such differences rather than it being pure racial profiling.

So it would appear that low income would impact the rates of delinquency. Referring to number of kids living with both parents/step-parent (according to a 2015 Pew Research Center study) in America we find:

Asian: 82%

White: 71%

Hispanic: 55%

Black: 31%

The GAO stats make clear that Asian kids get caught up in the least amount of disciplinary action both by absolute and percentage wise. Blacks the most, Hispanics second and whites 3rd. Could it be an inverse correlation? Psychological studies have shown boys seem to be more impacted by the lack of a father in the house than do girls. Children (especially boys) raised by single mothers are more likely to fare worse on a number of dimensions, including their school achievement, their social and emotional development, their health and their success in the labor market. They are at greater risk of parental abuse and neglect (especially from live-in boyfriends who are not their biological fathers), more likely to become teen parents and less likely to graduate from high school or college.

survey taken by the National Center for Education Statistics (NCES) in the US back in January of 1993 revealed poverty, alcoholism, student apathy and absenteeism were cited as big problems in secondary public schools. Lack of a parent was also high on the agenda.

The American Psychological Association, “poor (bottom 20 percent of all family incomes) students were five times more likely to drop out of high school than high-income (top 20 percent of all family incomes) students…Family poverty is associated with a number of adverse conditions — high mobility and homelessness; hunger and food insecurity; parents who are in jail or absent; domestic violence; drug abuse and other problems — known as “toxic stressors” because they are severe, sustained and not buffered by supportive relationships…Community poverty also matters. Some neighborhoods, particularly those with high concentrations of African-Americans, are communities of concentrated disadvantage with extremely high levels of joblessness, family instability, poor health, substance abuse, poverty, welfare dependency and crime

Broken homes and poverty are undoubtedly a big issue. The report said, “Besides lack of parent involvement, the school problems viewed as serious by at least 10 percent of public school teachers included student apathy, poverty, student absenteeism, student disrespect for teachers, parental alcoholism and/or drug abuse, and student tardiness. Behaviors and attitudes of students were more likely to be seen as problematic by teachers at the secondary level than by teachers at the elementary level. Parent alcoholism, on the other hand, was described as “serious” as often by elementary teachers as by secondary teachers and poverty was described as “serious” more often by elementary teachers.”

85% of kids likely to go to college or higher levels of education came from stable family backgrounds. 61% of kids likely to drop out before graduating high school are from broken homes. Sixty One Percent!

So before reading into it that teachers must be subconsciously racially profiling students in handing out punishment, perhaps the overwhelming weight of societal evidence points to far bigger problems that need addressing. Poverty, single parent households and a whole raft of issues need dealing before the government watchdog should report back racial bias at a top down level. According to the logic, perhaps teachers should be forced into student discipline quotas. That way (un)conscious bias won’t afflict teachers and whites can be punished in line with their demographically representation.

Let’s not forget that financial institutions have often been targeted for charging black customers higher interest rates on loans than whites. What they always fail to mention is that Asians pay even lower rates than both. That is the problem with selectivity in data without meaningfully looking at the broader picture. Just like the recent Florida school shooting where a look at what is going on in terms of school security over decades paints a different picture to what the mainstream narrative would want us to believe.

Food insecurity & poverty levels by US state & the 2016 election result

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The US Department of Agriculture listed the level of food insecurity by US state as at the end of FY2016. Looking at the data, Deplorables (states that voted Republican (red) in the 2016 election) made up 20 of the 25 states that suffered the most from it. Coincidence? Looking at the % below the poverty line and 19 out of 25 states voted for Trump. Coincidence? There is a touch of irony that the Democrats, which push for citizens to be married to the state, were by and large rejected by those suffering the most and want to be free of the shackles of poverty. So is it any wonder they’d reject the establishment. Should also be a signal for the Democrats to think more widely about what makes the Deplorable tick – not free hand outs. Opportunity!

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Multiple Job Holders in the US hits a record in Feb-18

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Since the US Bureau of Labor Statistics (BLS) has been keeping score, Americans with more than one job soared in Feb 2018 to the highest level seen in that month for a quarter century. March 2017 was also a record for that month in 24 years. One would expect when the economy is in the groove that people do not need to hold down multiple jobs to get by. On a percentage of the total labour force basis, multiple job holders in Feb 2018 have exceeded the level set in 2007 ahead of the GFC, or 5%.

However since the shake out of GFC, people holding down multiple jobs has continued to rise every year for the last 9. The previous record was only 5 years. Trends in disability payments and food stamps shows eerily similar trends since 2002.

SNAP (food stamp) recipients numbered as follows (working disability recipients in brackets, with cost outlays per annum)

1994: 27.47 million ( 6.381mn, cost $2.621bn)

1997: 22.58 million (6.998mn, cost $3.253bn)

2002: 19.10 million (8.109mn, cost $4.621bn)

2007: 26.32 million (9.858mn, cost $7.127bn)

2013: 47.67 million (12.156mn, cost $10.25bn)

2017: 42.20 million (Dec 2016 fig, 11.832mn, cost $10.316bn)

The Social Security Administration (SSA) highlights that back pain and musculoskeletal problems are 32.3% of disability claims, followed by mental illness at 26.3% (up from 19.2% in 2011) in 2016. This compares to 8.3% and 9.6% respectively in 1961. Half of claims in the 1960s came from heart attack/stroke and ‘other’ categories which made up only 17% of the 2016 figure.

Disabled beneficiaries aged 18–64 in current-payment status accounted for 4.7% of the population aged 18–64 in the United States. The states with the highest rates of disabled beneficiaries – 7%+ -were Alabama (SNAP benefits 17% of population), Arkansas (13%), Kentucky (15%), Maine (14%), Mississippi (18%), and West Virginia (19%). All above the national SNAP average of 13% and only Maine that voted Democrat in the 2016 election. Coincidence?

Could it be that more Americans are sick of living off more and more handouts? Seems plausible that Trump’s delivery to the White House was driven by these immutable trends – they want change to a system which they know can’t sustainably deliver forever like this. That is why tax breaks resonate. Why tariffs strike a chord. None-the-less maybe the uptick in multiple jobs is highlighting that things aren’t moving quickly enough.