From today’s Wall Street Journal, front page article Republicans Grow Skeptical On Free Trade, “By a nearly two-to-one margin, Republican voters believe free trade is bad for the U.S. economy, a shift in opinion that mirrors Democratic views and suggests trade deals could face high hurdles under a new president.”
For example, from the actual poll that was given to Republicans:
Statement A: Foreign trade has been good for the U.S. economy, because demand for U.S. products abroad has resulted in economic growth and jobs for Americans here at home and provided more choices for consumers.
Only 32% of Republicans agreed with this statement. Yikes!
Statement B: Foreign trade has been bad for the U.S. economy, because imports from abroad have reduced demand for American-made goods, cost jobs here at home, and produced potentially unsafe products.
59% of Republicans agreed with this statement. Yikes!
In another part of the poll on policy positions that a Republican president might take, 61% of Republicans agreed with the position “Favors tougher regulations to limit imports of foreign goods.” Yikes!
In other words, it looks like there will be upcoming bi-partisan consensus on anti-trade, pro-protectionist policy positions. That’s pretty scary when you have the Republicans agreeing with the Democrats that free trade is bad and protectionism is good. Legislative gridlock on trade would be a lot better, I agree with P.J. O’Rourke on this one. Here’s what he said:
“I like legislative gridlock. What I hate is bipartisan consensus. Bipartisan consensus is like when my doctor and my lawyer agree with my wife that I need help.”
From today’s Wall Street Journal article “Home-Price Outlook Takes Another Shot: Trading on CME Indicates a Decline Into Late 2011″:
Traders on the CME expect home prices in 10 major cities to drop an average of about 10% from mid-2007 to November 2011, according to an analysis of prices for housing futures traded on the exchange.
The contracts have been trading since May 2006 but last month were adapted so that traders could bet on prices as long as 60 months into the future. The current contract prices show that traders expect prices in the Miami metro area in November 2011 to be down 28% from the mid-2007 level. The expected drops in other metro areas for the same period are 18% for Las Vegas, 12% for New York, 19% for San Diego, 26% for San Francisco and 13% for Washington, D.C. (see chart above).
MP: Below (click to enlarge) is an example of the current quotes for the Miami Housing Futures Contracts from the CME, showing November 2007 contracts trading at 251.80 and November 2011 contracts at 187.80, a -25.42% difference. If you expect Miami housing prices to fall by less than (more than) 25.42% between November 2007 and November 2001, you can take a long position (short position) on this contract and make money.
“The only good news from Maryland and Michigan (both raised taxes) is that these states will serve as laboratories for economic failure. In upcoming years, public policy experts will compare their economic performance to the results in states — like Rhode Island and New Mexico — that have lowered tax rates. Needless to say, it is easy to predict that the states lowering tax rates will prosper relative to the states that are increasing the burden of government.”
Read the full article here from Cato.
Update: Thanks for all of the comments to this question, I agree with “ty b” who said:
A: “Milk requires expensive refrigeration, so the shippers and sellers want to maximize the use of refrigerated space. The square containers do that.”
That is the answer I had in mind. Milk and cream require constant refrigeration from the time of processing and packaging, during shipping, and at the point of sale, and square containers maximize the use of refrigerated space. Water, beer and soft drinks don’t need constant refrigeration, and so square packaging isn’t an issue. Another example of square containers is the Tropicana varieties of pasteurized “Pure, Premium” orange juice, which would also require constant refrigeration.
Actually, Ford’s car sales slipped a whopping 39% in September 2007 vs. September 2006, according to AutoData, while trucks sales dropped by “only” 8.6%, Jaguars sales fell by 8.4% and Volvo dropped 13.1%. Land Rover sales increased by 21%, the only bright spot for Ford’s September sales numbers.
Fortunately, the Supreme Court is considering this egregious sentencing double standard.
What’s going to happen to the U.S. dollar over the next year? Stronger, weaker? The best place to find out is in the forward markets for foreign exchange, where the dollar is already trading against the currencies of about 30 countries for delivery one year from now.
According to yesterday’s one-year currency forward rates, the dollar is expected to continue depreciate over the next year, and is trading at a one-year forward discount, against 11 major currencies like the euro, Swiss franc, yen, Canadian dollar, etc. (see chart above, click to enlarge). The USD is expected to appreciate over the next year, and is already trading at a one-year forward premium against 18 currencies including the UK pound, Mexican peso, Indian rupee, etc.
Bottom Line: The fall of the USD has probably stabilized and will actually appreciate over the next year against some currencies like the UK pound, and will depreciate only mildly against many other currencies.
NEW YORK (AP) — Wall Street shot higher Monday, sending the Dow Jones industrial average above 14,000 for the first time in 2 1/2 months (closing at 14,087.55) as investors moved back into stocks at the start of the fourth quarter. The blue chip index rose more than 200 points as it surged to a new trading high.
The market grew more optimistic that the Fed might lower rates to boost the economy after a report showed that manufacturing grew in September at the slowest pace in six months.
“People are getting more confident there is going to be an October rate cut.”
The Fed (FOMC) meets again on October 30-31. What are the chances of another rate cut?
1. According to Fed Funds futures contracts for November, the chances of a rate to 4.5% are about 74%.
2. According to trading on Intrade.com (“The Prediction Market”) for the contract “Fed Funds Rate to be ON or OVER 4.75% on Year End 2007,” there is only a 19.5% of that happening, indicating about an 80% of a rate cut by year end.