30-year fixed rates for conventional mortgages (5.69% as of last week) are the lowest in 2.5 years, since since July of 2005 (see chart above).
Chief Executive’s fourth annual “Best & Worst States” survey recently asked 605 top executives to evaluate their states on a broad range of issues, including proximity to resources, regulation, tax policies, education, quality of living and infrastructure. CEOs were also asked to grade each state based on the following criteria: 1) Taxation & Regulation, 2) Workforce Quality, and 3) Living Environment.
“Overall, the message CEOs are sending is that over-taxed and over-regulated states are not conducive to the health of their businesses,” said Ed Kopko, CEO and publisher, Chief Executive Group.“This is the message they’ve been communicating since our poll started in 2005. However, in states like California, Michigan and New York, where we are increasingly facing a shrinking population, the message seems to have fallen on deaf ears, as CEOs continue to be extremely frustrated with the business-unfriendly practices in these states.”
The chart above (click to enlarge) shows pay around the world for the positions “Head of Marketing and Sales” and “Data-Entry Operator,” according to Mercer. Also listed is the cost of living rank and expected pay increase in 2008.
From Business Week (1/17/2008): “Big Blue has built a global network for client services and in the past three years has hired 90,000 people in low-cost countries.”
Of IBM’s 375,000 employees worldwide, about 2/3 of them (250,000) are outside the U.S., see the map above (click to enlarge) with a sampling of its global staffing levels. Almost 2/3 of IBM’s sales are outside the U.S. as well. How has globalization impacted IBM’s profits and share price? Quite well apparently, judging by the 40% increase in its stock price over the last 2 years:
Political rhetoric: According to Governor Jennifer Granholm, “No state has been ravaged more than Michigan by unfair trade policies.”
Economic reality: China’s demand for Michigan vehicles and auto parts has exploded and has grown by a factor of 10X since 2001 (see chart above), and demand has also increased for other Michigan exports to China like inorganic chemicals, machinery, medical instruments and soap.
Source: The Mackinac Center for Public Policy’s report “Globalization is Good for Michigan” by James Hohman.
Bottom Line: Exports and imports are two sides of the same coin of international trade. In other words, trade works both ways, and increased imports of products FROM China = increased exports of U.S. products TO China.
The chart above shows the number of new claims for unemployment benefits in the first month of the last four official recessions using data from the Department of Labor (claims) and the National Bureau of Economic Research (recession dates).
At the onset of each of the last four recessions (1980, 1981, 1990 and 2001), initial claims for unemployment benefits were above the average of 353,000 (from 1967), and in most cases, way above average. The two most recent reports of 301,000 claims (week ending January 19) and 302,000 claims (week ending January 12) suggest that the labor market is healthy and resilient, not weak and anemic.
Bottom Line: If there is going to be a recession in 2008, it definitely did NOT start this month. We are NOT in a recession.
Update: From a comment by Bill: “According to BLS employment data here are the percentages of initial UE claims as a percent of the seasonally-adjusted total civilian employment force for the dates noted”:
Jan ’80 —–> 0.42%
Jul ’81 —–> 0.40%
Jul ’90 —–> 0.29%
Mar ’01 —–> 0.27%
Jan ’08 —–> 0.19%
It’s a good point to adjust for the increasing size of the labor force over time. Using the percentages above for previous recessions and the size of the current civilian labor force (about 154 million), we would have to see somewhere between 415,000 and 615,000 new claims for unemployment benefits before we would start to approach the levels of new claims at the onset of the last four recessions. At 301,000 claims, we are nowhere NEAR those levels. Not even close.
Detroit Mayor Kwame Kilpatrick and his chief of staff Christine Beatty (pictured above) probably thought so when they both lied under oath about their romantic relationship last summer at a police whistle-blower trial that cost the cash-strapped city more than $9 million, according to records obtained by the Detroit Free Press. (Note: Kilpatrick is married, and he and his wife Carlita have three sons.)
Kilpatrick and chief of staff Christine Beatty denied during testimony in August that they had a sexual relationship. But the records, a series of text messages, show them engaged in romantic banter as well as planning and recounting sexual liaisons.
The newspaper examined nearly 14,000 text messages on Beatty’s city-issued pager. The exchanges, which the Free Press obtained after the trial, cover two months each in 2002 and 2003.
The false testimony potentially exposes them to felony perjury charges, legal experts say.
Read all about it here.