Category: Statistics

This is a Shanda Before the Goyim

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A tool to run comparisons

Israel has the highest proportion of its population living in poverty of any OECD nation:

Israel has the highest rate of poverty of all developed countries, according to a report released by the 33-nation Organization for Economic Cooperation and Development (OECD) on Wednesday.

 The OECD found that Israel’s poverty rate stands as almost 21%.

 It also put Israel at fifth place among countries with the widest gaps between rich and poor, after Chile, Mexico, Turkey and the United States, while Iceland, Slovenia, Norway and Denmark were the most egalitarian societies.

Israel has been practicing Thatcher style economics, even the Labour Party, for the past few decades, which could explain this.

I’m also wondering how much of this number is driven by the growing number of Heridi Jews in Israel. They are about 10% of the population, and are disproportionately: Over half the Heridim live in poverty, and are on government assistance, as versus about 15% of the general population.

Much of this differential is actually an artifact of poverty by choice. Many in this community prefer to remain on the dole, so that they can study Torah.

Of course, there is no requirement for someone not to work in order to study Torah.

Maimonides was a noted doctor, Rashi was a vintner, and the Baal Shem Tov was an inn keeper.

I do not know of anyone of this generation with the chops of those folks. Get a f%$#ing job.

It’s Jobless Thursday!

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And the numbers are not great:

The number of people who applied last week for new unemployment benefits surged to the highest level in a month and a half, indicating the U.S. labor market is still not healing fast enough to rapidly bring down the nation’s jobless rate.

Initial jobless claims climbed by 32,000 to a seasonally adjusted 360,000 in the week ended May 11, the Labor Department said Thursday. Economists polled by MarketWatch had expected claims to rise to 330,000 from a revised 328,000 in the prior week.

It should be noted that the 4-week moving average only rose by 1250, and continuing claims fell 4,000.

More Evidence of German Self-Mythologizing

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A couple of weeks ago I mentioned that the recent stories about the Germans being poorer than the rest of Europe, and how it was largely bullsh%$?

Well, it appears that it was even more bogus than I had previously thought. You see the difference in household wealth is almost entirely due to difference in household sizes:

Media hype had been generated by the ranking of the countries’ median household wealth results, especially by the fact that:

• Germany was in last place with €51,400.

• Italy and Spain were significantly above France with wealth equal to €173,500 and €182,700 respectively, compared to the French households’ €115,800.

The mean household wealth averages paint a very different picture to current narratives about the relatively wealth of nations in the Eurozone. The relative dispersion in the estimates is much smaller: the German household mean is €195,200, while for France, Italy and Spain it is €233,400, €275,200 and €291,400 respectively. Moreover, Germany climbs six places in the wealth ranking.

As already noted by De Grauwe and Ji (2013), Germany’s position at the bottom of the median ranking is simply due to its large wealth inequality compared with the others. This is confirmed by observing that the concentration of wealth, measured by a Gini index of 0.76, is much higher in Germany, while for France, Italy and Spain the estimate is smaller (0.68, 0.61 and 0.58 respectively).

Household Size Matters

This analysis does not take account of household composition in the various countries. The distribution of household wealth across countries is affected by differences in the demographic characteristics of households (age, education, household size):

• In northern countries, households are generally small, often composed of a single member.

• In the south it is not unusual to find many people, even from different generations (grandparents, parents and children), living together.

The splitting up of household members produces a sort of partition of wealth among the households they generate, as happens when young members exit the household to form a new family.

 A simple way to sterilise for household size is to consider per capita averages:

• The per capita wealth figure for Italy and Spain is €108,700, slightly higher than for France (€104,100) and Germany (€95,500).

BTW, do you know one of the reasons that there are more multigenerational households in the Mediterranean Euro nations?

Because the generous social welfare system in Germany allows for generations not to live together. (Things like high quality government subsidized elder care and strong pensions).

Monthly Jobs Numbers are Relatively Decent

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176,000 jobs added to the non-farm payroll in April, which is somewhat better than natural growth in the labor force, and additionally, the adjustments to February and March added 100,000 to the NFP.

It should be noted thought, that this really is only a bit better than treading water:

The American economy continues to add jobs in proportion to population growth. Nothing less, nothing more.

 The share of American adults with jobs has barely changed since 2010, hovering between 58.2 percent and 58.7 percent. This employment-to-population ratio stood at 58.6 percent in April. That is about four percentage points lower than the employment rate before the recession, a difference of roughly 10 million jobs. In other words, the United States economy is not getting any closer to recreating the jobs lost during the recession.

And here is the scary quote:

Furthermore, the projections were wrong. Participation has actually risen among people older than 55. The decline is entirely driven by younger dropouts.

So, better, but our economy still sucks wet farts from dead pigeons.

The Beatings Will Continue Until Morale Improves

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Unemployment in the Euro Zone has hit a record high, and there is still no sign of inflation:

The latest eurozone unemployment data, due at 10am BST, is expected to show the region’s jobless rate has risen to a new record high of 12.1% in March (from 12% last month).

Italy’s unemployment rate is also forecast to increase, showing the challenges facing its new government as it strives to drag the country back to growth.

And in Spain, new GDP data will doubtless confirm that the country’s economy contracted again in the first three months of 2013 (economists expect a fall of 0.5%).

………

Eurostat also reported this morning that inflation across the Eurozone has fallen to just 1.2% in April. That’s a sharp fall on March’s 1.7%, and a much smaller rise in the cost of living than analysts had expected.

That makes it more likely that the European Central Bank will bow to pressure and cut interest rates at its next monthly meeting on Thursday.

Austerity is not working.

What a Surprise, Right Wing Economists Fudged their Data………

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The lead on the mass media stories is that Carmen Reinhart and Kenneth Rogoff’s paper showing that debt levels above 90% of GDP have slower growth was an “Excel spreadsheet error”, but every single error reinforces their pro-austerity arguments, which indicates that these omissions and errors were deliberate:

In 2010, economists Carmen Reinhart and Kenneth Rogoff released a paper, “Growth in a Time of Debt.” Their “main result is that…median growth rates for countries with public debt over 90 percent of GDP are roughly one percent lower than otherwise; average (mean) growth rates are several percent lower.” Countries with debt-to-GDP ratios above 90 percent have a slightly negative average growth rate, in fact.

This has been one of the most cited stats in the public debate during the Great Recession. Paul Ryan’s Path to Prosperity budget states their study “found conclusive empirical evidence that [debt] exceeding 90 percent of the economy has a significant negative effect on economic growth.” The Washington Post editorial board takes it as an economic consensus view, stating that “debt-to-GDP could keep rising — and stick dangerously near the 90 percent mark that economists regard as a threat to sustainable economic growth.”

Is it conclusive? One response has been to argue that the causation is backwards, or that slower growth leads to higher debt-to-GDP ratios. Josh Bivens and John Irons made this case at the Economic Policy Institute. But this assumes that the data is correct. From the beginning there have been complaints that Reinhart and Rogoff weren’t releasing the data for their results (e.g. Dean Baker). I knew of several people trying to replicate the results who were bumping into walls left and right – it couldn’t be done.

In a new paper, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst successfully replicate the results. After trying to replicate the Reinhart-Rogoff results and failing, they reached out to Reinhart and Rogoff and they were willing to share their data spreadhseet. This allowed Herndon et al. to see how how Reinhart and Rogoff’s data was constructed.

They find that three main issues stand out. First, Reinhart and Rogoff selectively exclude years of high debt and average growth. Second, they use a debatable method to weight the countries. Third, there also appears to be a coding error that excludes high-debt and average-growth countries. All three bias in favor of their result, and without them you don’t get their controversial result. ………

………

So what do Herndon-Ash-Pollin conclude? They find “the average real GDP growth rate for countries carrying a public debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0.1 percent as [Reinhart-Rogoff claim].” [UPDATE: To clarify, they find 2.2 percent if they include all the years, weigh by number of years, and avoid the Excel error.] Going further into the data, they are unable to find a breakpoint where growth falls quickly and significantly

The actual Excel error might be real, but the rest of this is a case of hypocritically massaging the data to get the results that they really wanted.

The Non Farm Payroll Numbers Sucks

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Only 88,000 Jobs were created:

American employers added an estimated 88,000 jobs to their payrolls last month, compared with 268,000 in February, according to a Labor Department report released Friday. It was the slowest pace of growth since last June, and less than half of what economists had expected.

It also was the start of a third consecutive spring in which employers tapered off their hiring after a healthy start to the year. Slowdowns in the previous two years could be attributed to flare-ups in the European debt crisis, but this time the cause is less obvious. The recent payroll tax increase or other fiscal tightening in Washington could be partly to blame for the sudden retreat in hiring, but neither seems to be showing up much yet in other relevant economic data.

“People were starting to believe the economy was really picking up steam, and desperately wanted this report to be better,” said Joshua Shapiro, chief economist at MFR Inc. “But that didn’t happen.”

Paul Krugman understands what is causing this:

That deficit has declined from 5.6 percent of potential GDP in 2011 to 2.5 percent in 2013 — that’s 3 percent of GDP, which is a lot of austerity. Not all of that cut has even hit yet — the sequester isn’t in the macro numbers yet — but the rise in the payroll tax is very clearly driving the latest bad numbers, which show big declines in retail.

This is Obama policies that we are talking about largely.  Notwithstanding the posturing by Republicans, all they really want is to cut the social safety net and cut taxes for rich guys.

Obama is the one who really wants to cut the deficit in the middle of a recession.

His “Grand Bargain” is all about balancing the budget in the relatively near future while bridging the difference parties. 

It is a dangerous delusion.

Manufacturing Slows

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The Institute for Supply Management’s manufacturing survey shows factory activity growth slowing:

Factory activity grew at the slowest rate in three months in March, suggesting the economy lost some momentum at the end of the first quarter as the effects of tighter fiscal policy started kicking in.

Data so far this year had shown little sign that higher taxes, and the $85 billion in across-the-board government spending cuts that took effect March 1 known as the “sequester,” had weighed on economic activity.

“It suggests the economy was probably starting to slow at the end of the quarter, possibly reflecting the impact of the fiscal headwinds coming from sequestration and higher taxes,” said Millan Mulraine, a senior economist at TD Securities in New York.

So not surprising.

Weak demand, nut-jobs who want to crash the economy in the house to reinforce their 2014 electoral prospects.

I would not be inclined to ramp up anything either.

Another Study Proves that Jenny McCarthy is a Dangerous Loon

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We have another study showing that there is no connection between vaccines and autism:

There is no link between receiving a number of vaccines early in life and autism, researchers said on Friday.

In a study slated to appear in The Journal of Pediatrics, researchers said there is no association between receiving “too many vaccines too soon” and autism, despite some fears among parents around the number of vaccines given both on a single day and over the first 2 years of life.

As many as one in 50 U.S. school-age children have been diagnosed with autism, up 72 percent since 2007.

………

Researchers from the Centers for Disease Control and Prevention and Abt Associates analyzed data from children with and without autism spectrum disorder (ASD), according to a statement from the journal.

Researchers examined each child’s cumulative exposure to antigens, the substances in vaccines that cause the body’s immune system to produce antibodies to fight disease, and the maximum number of antigens each child received in a single day of vaccination, the journal’s statement said.

The antigen totals were the same for children with and without ASD, researchers found.

Not surprising.

In the normal course of growing up, a child is exposed to hundreds, possibly thousands, of new antigens a day, the idea that adding a dozen or so to that would be received through a series of vaccinations would “cause” autism is ludicrous.

Of course, the antediluvian thinking of the anti-vax crowd has real consequences: we have seen increases in outbreaks of previously nearly vanished childhood diseases resulting from a loss of herd immunity.

Another Cherished Myth Shattered

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It turns out that gold shirt crew were statistically more likely to die that red shirts:

Yep, I know, you are wondering how it is safer to be a red shirt than a gold shirt.

The pretty picture seems to indicate otherwise, until you realize how many of the crew were red shirts:

A pie chart was created using Minitab to graphically view the data. It is obvious from the pie chart in Figure 1 that redshirts suffer most of the casualties. However, raw casualty figures are not very informative without knowing how many people were in each uniform. According to the Joseph’s Star Trek Blueprints, the only set of Enterprise blueprints endorsed by Paramount Pictures, the Enterprise’s 430 crew members consisted of 55 command and helm personnel, 136 science and medical personnel and 239 engineering, operations and security personnel. This means 16.4% of casualties were in command and helm, 5.4% were in science and medical and 10.0% were in operations, engineering and security. Of the remaining 27.3% of casualties, 12 were killed by contact with the galactic barrier or Rigelian fever, which could have affected personnel regardless of duty assignments.

It should be noted that the relative safety of red shirts varies with tasking though:

Based on an analysis of casualties that considers the overall total number of personnel in each color of uniform, wearing a redshirt may not be the automatic death sentence that it is popularly considered to be. On the other hand, 18 of the redshirt casualties were security personnel out of a total population of 90; 20% of the security department were casualties. Although wearing a redshirt may not of itself be particularly hazardous, personnel in a redshirt who are members of the security department should expect to pay a high premium on their life insurance.

So, engineering/operations, pretty safe.  Security, not so much.

Moving in the Wrong Direction

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So, the recession lowered the salaries of the 99%, and raised them for the 1%:

Incomes rose more than 11 percent for the top 1 percent of earners during the economic recovery, but not at all for everybody else, according to new data.

The numbers, produced by Emmanuel Saez, an economist at the University of California, Berkeley, show overall income growing by just 1.7 percent over the period. But there was a wide gap between the top 1 percent, whose earnings rose by 11.2 percent, and the other 99 percent, whose earnings declined by 0.4 percent.

Mr. Saez, a winner of the John Bates Clark Medal, an economic laurel considered second only to the Nobel, concluded that “the Great Recession has only depressed top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s.”

We need to raise the minimum wage, raise taxes on the rich, and reign in the financial industry, and we need to do that right now.

Or maybe guillotines.  I could go for  then too,

The Fed’s Beige Book is Out

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Decent, but not great:

The U.S. economy picked up across much of the country last month, boosted by auto and home sales, even as the outlook for unemployment showed few signs of improvement, the Federal Reserve said.

“Economic activity has expanded since the previous Beige Book report, with all 12 districts characterizing the pace of growth as either modest or moderate,” the central bank said today in its Beige Book business survey, which is based on reports from the Fed’s district banks.

A Lesson in Economic Statistics from the Shrill One

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Paul Krugman explains why Italian productivity has fallen precipitously over the past decade or so:

Dean Baker, in correspondence, makes an interesting point about the mysterious productivity collapse in Italy — namely, that a big chunk of it could be a statistical illusion. This is always something you should consider when you see something strange in economic data.

 Here’s the story: Italy, with its combination of extensive regulations and weak enforcement, used to have a lot of “black labor” — workers who weren’t on the books, so as to evade various government-imposed requirements. But then came reforms that made keeping part-time workers, etc., on the books less onerous — and the hidden labor came into the open. Measured GDP wasn’t affected, because statisticians were already making imputations for the shadow economy; so the result was a decline in measured productivity.

It’s a reasonable explanation.  It’s not like Italy has stopped being Italy since 1995.

Entering the Euro zone has brought changes, but nothing that would have their actual productivity dropping off a cliff like this graph pr0n.

Holy Sh%$, We Are Running out of Gullible Idiots

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I understand that all resources are finite, but I never thought that it would apply to human gullibility and stupidity, indicating a continuing fall in trading volume.

His explanation is that we are finally running out of rubes willing to trust Wall Street:

The uptrend bit is easy: volumes, at least until 2009, always went up over time, especially when they were helped along by things like decimalization and high-frequency trading. But what explains the downtrend? It’s not the decreasing number of stocks: that might explain a bit of what’s going on in the US, but it wouldn’t explain the rest of the world.

Instead, I think that what we’re seeing is the slow death of the stock-market investor — the kind of person who subscribes to Barron’s, idolizes Warren Buffett, and thinks of stock-market investing as a do-it-yourself enterprise. During the dot-com bubble, lots of people thought they were really smart when it came to stock-market investing, and then after the dot-com bubble burst, the rise of discount brokerages helped encourage new people to step in to the market and try their luck.

Nowadays, however, the message is sinking in: it’s a rigged game, you can’t win, and you’re better off with a passive strategy.

It is very hard for me to believe, but the idea that Wall Street is finally running out of hard-working, regular folks who are willing to be cheated is not an unreasonable thesis given this data.

It’s Beginning toBlook Like the Last Days of the USSR Here

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Much like the USSR life expectancies are falling at the end of empire:

For generations of Americans, it was a given that children would live longer than their parents. But there is now mounting evidence that this enduring trend has reversed itself for the country’s least-educated whites, an increasingly troubled group whose life expectancy has fallen by four years since 1990.

 Researchers have long documented that the most educated Americans were making the biggest gains in life expectancy, but now they say mortality data show that life spans for some of the least educated Americans are actually contracting. Four studies in recent years identified modest declines, but a new one that looks separately at Americans lacking a high school diploma found disturbingly sharp drops in life expectancy for whites in this group. Experts not involved in the new research said its findings were persuasive.

 The reasons for the decline remain unclear, but researchers offered possible explanations, including a spike in prescription drug overdoses among young whites, higher rates of smoking among less educated white women, rising obesity, and a steady increase in the number of the least educated Americans who lack health insurance.

 The steepest declines were for white women without a high school diploma, who lost five years of life between 1990 and 2008, said S. Jay Olshansky, a public health professor at the University of Illinois at Chicago and the lead investigator on the study, published last month in Health Affairs. By 2008, life expectancy for black women without a high school diploma had surpassed that of white women of the same education level, the study found.

 White men lacking a high school diploma lost three years of life. Life expectancy for both blacks and Hispanics of the same education level rose, the data showed. But blacks over all do not live as long as whites, while Hispanics live longer than both whites and blacks.

 “We’re used to looking at groups and complaining that their mortality rates haven’t improved fast enough, but to actually go backward is deeply troubling,” said John G. Haaga, head of the Population and Social Processes Branch of the National Institute on Aging, who was not involved in the new study.

In the last two decades of its existence, life expectancies fell in the USSR, because it was carving the heart out of its economy with a bloated and over-sized military.

Luckily, we’re nothing like that.

Just how many primary care physicians would one carrier battle group buy?