Friday, January 1, 2010

Readers jumped all over the nutty idea, presented here yesterday, that America’s economic prowess has remained undiminished by decades of job losses in the manufacturing sector. That was a salient point of the graph below, which accompanied an upbeat article by Jim Manzi in National Affairs.  Although Manzi’s blog is first-rate, we wondered how he could have gone so far awry as to suggest that the nation’s manufacturing sector is as economically meaningful as ever, notwithstanding the fact that it employs far fewer workers than in the past.  If you take  the graph at face value, manufacturing’s share of the country’s GDP has hovered just below 15 percent for more than 60 years, steady as a rock. However, some readers saw statistical fraud here of the same blatant sort that colors U.S. unemployment data. Indeed, while the government’s statisticians assert that 10 percent of the work force is currently unemployed, the actual figure is closer to 22 percent if calculated using the same assumptions that were used in the 1980s.     With similar disingenuousness, the spinmeisters supposedly tweaked the definition of manufacturing a few years back so that Starbucks and Burger King instantly became “manufacturers.”  Both “assemble” food, or so the bureaucratic thinking goes, and that is why the contribution of sandwiches and lattes to the country’s economic output is grouped in the same category as jet aircraft, concrete and roller bearings.  We were unable to verify this at press time, but even if Burger King et al. are not in fact classified as manufacturers, we’d bet dollars to donuts that there are dozens of equally farfetched businesses that are.   Offshore Fudge-Factor  The statistical lies grow still more brazen, and probably more meaningful, when it comes to differentiating goods actually produced in this country from those that are merely assembled from

An interesting take from Jesse's Cafe American, it would appear that households have effectively been pushed into Treasurys by almost non-existent yields on money-market funds. Click here   for the story.

We hold two January 230 calls for 1.00, having missed acquiring two more yesterday when they traded down to 0.54, two cents above our bid. We'll stick with what we've got and cross our fingers.  As noted here earlier, this is a speculative bet on the prospect of a Big Rally kicking off the New Year.

May the New Year find you and yours healthy, prosperous and serene!  The photo shows this year's Polar Bear Plunge in my hometown of Margate, New Jersey.  The event drew about 5000 swimmers and spectators in weather that was relatively balmy compared to last year's 15-degree chill.  The pier in the photo is officially known as Margate Pier, although it actually belongs to a local angler's club that prefers surf-fishing for sea robins and sand sharks to the blue fins that school miles offshore. Margate is situated on Absecon Island, an eight-mile-long sandbar that also includes Atlantic City and the boroughs of Ventnor and Longport.  The picture was taken by a childhood chum, Glenn Klotz, whose blog is dedicated to preserving the Jersey Shore from the depredations of dredging, artificial dunes and the politically ruthless Corps of Army Engineers.