Apologies (as always) to Shakespeare. From Sun Yu in the FT:
“As the entire market is aware, there is no such thing as deflation in China,” a prominent economist told a closed-door conference in Beijing in response to a question about deflationary risks. “We could, however, talk about low inflation [risks],” they added, asking the audience to be prudent in choosing which part of his remarks to report.
“It will be bad if you don’t see me tomorrow,” the economist said.
Now, one might say that in all governments, economists are not free to say in public what they think, particularly if their views do not align with the administration’s view. (In my experience in USG, it was only policy level appointees that could speak on the administration’s behalf regarding policies. Regarding the data, civil servants could discuss the data freely; obviously things change in different administrations, see 2017). But in the current situation, the Chinese government is putting pressure on private sector actors (economists in brokerages, universities).
There doesn’t seem to be much public discussion of the reliability of price data in China (and I’m not privy to any private discussion), but the numbers look bad enough (from this July 10 post).
Figure 1: China CPI (black), core CPI (tan), and PPI (green), all in logs, 2019M12=0. ECRI defined peak-to-trough recession dates shaded pink. Source: Kose/Ohnsorge – World Bank and IMF, IFS, both updated using TradingEconomics; and author’s calculations.
Figure 2: China year-on-year inflation rate for CPI (black), for core CPI (tan), and for PPI (green). ECRI defined peak-to-trough recession dates shaded pink. Source: Kose/Ohnsorge – World Bank and IMF, IFS, both updated using TradingEconomics; and author’s calculations.
I think there’s also some reason to wonder a bit about the GDP numbers, given previous difficulties I (Chinn 2021), and others (Fernald, Mueller, and Spiegel, 2021 ), have had reconciling the various GDP series reported by NBS. From the July 16th post on the GDP and IP release.
Figure 3: Real GDP, 1992Q1=1 (black), Bloomberg consensus of 7/16 (red triangle), IMF WEO April 2023 (light blue triangle). Source: OECD, IMF WEO, Bloomberg.
Figure 2: Chinese industrial production ex-construction (black), Bloomberg consensus of 7/16 (red triangle). ECRI defined peak-to-trough recession dates shaded blue. Source: OECD, Bloomberg, ECRI.
Just think of all this as part of an ongoing escalating suppression of economic information, (see Thomas Hale’s recent FT article on the black box of revisions and seasonal adjustments) accelerated by the disappointing numbers on economic activity.
Stay tuned for more on the plausibility of the 2023Q2 GDP numbers.
I think the thing that makes me saddest about this suppression of information (and some regular readers may find it difficult to believe it makes me sad based on statements I may have made when drinking and/or moody) is who is it who suffers because of the suppression of information?? The general Chinese populace—uuuuh– “Jia Six Pack” and his wife suffers. Who I have found (“I lived there X years, annoying navel-gazing, blablablabla, buhduhbuhduhbuhduh buhduh, blablabla bla”) to be much more kind-hearted, gracious, hospitable, ingratiating, giving, tolerant in general than their crappy government. And the number of good people in China, suffering is…. troubling.
“But the worst thing he could do — and I see this as a real danger — would be to politicize the agencies that produce government economic data, to put people in place that will skew the numbers in his favor. If that happens, the data will be useless, and we’ll essentially be flying blind when it comes to the true state of the economy. It would also bring a lot of economic research to a screeching halt. Both macro- and microconomists depend greatly on government data for their research.”
Mark Thoma back in 2017! Now isn’t true that Speaker Gingrich tries similar tricks back in the 1990’s? Bruce Bartlett certainly told us that Gingrich tried to shut down reliable government data and research.
Yea, why do we need to politicize the data to skew the data, when the government is perfectly capable of doing it themselves?
“It is interesting that central banks have never subjected their forecast performance to outside evaluation. The ECB’s model has been giving wrong forecasts for the last ten years. It is not the forecast error that is the problem, but the forecast bias. The model is biased in favour of the actual target. It does not tell you what you need to know. It tells what you want to hear. If your benchmark is biased in favour of the target, then it is biased in favour of a lower interest rate. The reason we are focused so heavily on discussions of the model here at Eurointelligence is because it is the main source of policy errors.” https://www.eurointelligence.com/
Of course, central banks are not the only ones who avoid publishing their forecast performance…
JohnH: Do you understand the distinction betwee data (e.g., estimates of the median real weekly wage) and forecasts? I’m not sure you do.
Well? Jonny boy has some other definition of ex ante real interest rates other than nominal rates minus expected inflation. When asked what that would be Jonny cannot answer but he can hurl pointless insults.
Funny me! And here I was led to believe that real interest rates were derived from TIPS breakeven forecasts. Apparently reality and data are two different things?
Maybe we should calculate real interest rates by subtracting inflation from the interest rates that lenders are offering today.
BTW the Grumpy Economist has an interesting piece on “the standard story that high interest rates soften the economy, with a lag, and that lowers inflation, also with a lag; and that interest rate policy is the main determinant of inflation so the Fed has main responsibility for controlling inflation.” https://johnhcochrane.blogspot.com/2023/08/interest-rates-and-inflation-part-1.html#more
JohnH: You can infer “a” market expectation of the real rate using the inflation breakevens, but the most rudimentary approach would require one to allow for at a minimum a risk premium on long rates and a liquidity premium on TIPS.
For sure, nobody I know estimates an ex ante rate proxy by subtracting the actual ex post inflation rate on the corresponding yield. That is what is called an “ex post” real rate.
Theory usually suggests behavior depending on ex ante, as we don’t assume generally people have perfect foresight.
Jonny boy loves to cite right wing John Cochrane. Two problems – Jonny boy has no clue what Cochrane is saying. And Jonny boy cited an old post from Cochrane on the alleged failure of expectations of inflation well after Cochrane had the integrity to note reality bit him in the rear end.
Come on Jonny – if you are going to cite someone, do try to be honest about what they have said.
“And here I was led to believe that real interest rates were derived from TIPS breakeven forecasts.”
My goodness – we knew you were stupid but damn. TIPS is a real interest rate – not some means of inferring expected inflation. Come on Jonny boy – could you at least get basic definitions correct before you embarrass your mother once again.
So you’re saying that it’s not OK for the government to release inaccurate historical data, but it is OK to release forecast data that incorporates a basic bias?
JohnH: Forecasts can be biased for any number of reasons. In fact, under rational expectations, forecasts can be biased when learning is occuring. It’s not “OK” for biased forecasts to be reported, but you can’t make the logical leap that it’s because of attempt to deceive that such forecasts are released.
Man, you are the dumbest purported economic analyst around.
Our host has addressed this. But yea – you never figured out the difference between actual observed historical data v. forecasts of the future. It is an important distinction that even 3 year old children get but not little Jonny boy.
You don’t think that Fed forecasts are biased towards the target rates as an integral part of their efforts to set expectations? What other reason can you think to explain the persistence of forecasts that err in a certain direction (favorable to the Fed’s goals?) Oh, well, I suppose it could be just wishful thinking…
JohnH
August 9, 2023 at 5:37 am
You don’t think …
Followed by Jonny boy’s usual intellectual garbage. Nothing but trash. And this troll dares to use the term “think”? Seriously?
Central banks? Your use of the plural is unsupported. The ECB is a single central bank, though it’s members are drawn from a number of central banks. You have provided no evidence that the Fed, for instance, BoJ or BoE are biased in their forecasts. (I’m ignoring the difference between forecasts and daa, which Menzie covered). Her, for instance, is one of many reviews of Fed forecasting accuracy:
https://www.federalreserve.gov/econres/feds/the-accuracy-of-forecasts-prepared-for-the-federal-open-market-committee.htm
When it has been pointed out to you repeatedly that you ate ignorant of how economics works, there is no longer any need to wonder whether your errors grow from dishonesty or ignorance. You are ignorant and dishonest in pretending to be other than ignorant.
“We compare the root mean squared error, mean absolute error, and the proportion of directional errors of Greenbook forecasts of these macroeconomic indicators to the errors from three forecasting benchmarks: a random walk, a first-order autoregressive model, and a Bayesian model averaged forecast from a suite of univariate time-series models commonly taught to first-year economics graduate students.”
That is how the adults do it. Only problem – Jonny boy has no clue what any of that means.
“Huh??” (I’m semi-joking on myself.)
I did those more simple regressions in college. Oh, to be young again, and have a functioning brain. Where did those days disappear??
“The ECB is a single central bank”
One has to wonder if Jonny boy knows the Italian lire, the Irish pound, the German DM, and the French franc no longer exists.
Is your name Jack Welch? To suggest that the government politicizes the data is not only wrong but rather stupid. But your forte is stupid lies so hey!
“The big problem with data dependence is that it does not tell you what you need to know. You may know that inflation is coming down, but you don’t know whether or not it is coming down to 2%.”
As our host has already noted – Jonny boy does not know the difference between forecasts of future inflation v. observations of past inflation. So when this notes “it does not tell you what you need to know” – Jonny boy of course knows nothing including how to ties his own shoelaces.
Case in point – a year ago Jonny boy mocked people who were forecasting inflation over the next year might be only 3%. After all we just went through a previous 12 months where prices rose by 6% so genius Jonny boy used that as his expected inflation rate for the next 12 months. Well a year later we know inflation was …. drum roll please … 3%!
Yea, even a broken clock is right twice a day!
Except when Jonny boy makes the clock – Jonny boy is wrong 24/7.
[ 8 months later ]
Reuters: “Fan Jianping hasn’t been seen since the third week into last July. When his wife was asked where Fan is now, she faintly murmured ‘The local PSB told me he fell off a tall apartment building….. but they had to cremate the body immediately after wandering upon his corpse because America Sex Cooties had invaded his
腹股沟. Mrs Fan said she did not believe it but when pressed hard said ‘I am just a street vendor, what do I know about evil foreign cooties??’ “
https://econbrowser.com/archives/2023/08/first-thing-we-do-lets-gag-all-the-economists#comment-302928
August 6, 2023
[ 8 months later ]
Reuters: “Fan Jianping hasn’t been seen since the third week into last July. When his wife was asked where Fan is now, she faintly murmured ‘The local PSB told me he fell off a tall apartment building….. but they had to cremate the body immediately after wandering upon his corpse because America Sex Cooties had invaded his
腹股沟. Mrs Fan said she did not believe it but when pressed hard said ‘I am just a street vendor, what do I know about evil foreign cooties??’ “
[ There is no such Reuters article to be found using Google or Bing search engines.
The evident purposes of such a post are to demean an entire people in the most cruel and lewd way and to frighten and intimidate readers. This is a way in which an entire people comes to be despised.
Please forgive me for pointing to such prejudice. I realize the risk in pointing to such repeated prejudice. ]
@ ltr
It’s called satirical humor. Econbrowser readers of only average intelligence figured out that wasn’t a real Reuters story, and knew that, without having to Bing it or Google it. Can you imagine the awesome brainpower involved to know it was intended as ironic humor ltr?? I know since guys like Zhao Benshan in your country can only do CCP approved humor (which rules out political satire), or they will be banished from the public conversation, you are probably damned near retarded in being able to discern what satire or irony is. If you live in mainland China, that’s not your individual fault from being unable to make sense of satirical humor, so I forgive you for being slow in that specific regard.
I would try to do simplistic word puns, OR pantomime idiot, Harpo Marx/ village idiot/clown material JUSTfor you ltr, which is a popular form of stage/TV comedy in China, but the latter is hard to communicate over type-written text on a blog.
Since you seem to only understand things at surface level ltr, here’s an actual Reuters story I found you can read:
https://www.reuters.com/world/china/no-joke-chinas-backlash-against-stand-up-stirs-fear-comedy-clampdown-2023-05-20/
Here’s something I copy pasted from Wikipedia for you ltr, I’m wishing hard you can grasp it. “Strangely” the Chinese link to the original story doesn’t work.:
In 2014, Zhao was omitted from the guest list for a Liaoning arts conference and the Communist Party Central Committee’s own exclusive arts conference in Beijing hosted by General Secretary Xi Jinping to ‘promote Chinese values’. His missing both conferences led to speculation about Zhao having politically fallen ‘out of line’. Chinese-language media has linked Zhao with disgraced politicians Bo Xilai and Wang Lijun, both of whom spent a large part of their careers in Zhao’s home province, Liaoning.
“In an exclusive interview with Shanghai-based news portal The Paper (澎湃新闻), the reporter asked if Zhao had become ‘too political’. Zhao said “If you are not politically engaged, do not believe in our Party, why do you engage in art? You do not listen to our Party, why you still do art work?.” In response to the Central arts conference, Zhao hosted his own “study sessions” to extol the virtues spoken about at the conference, during which Zhao said, ‘I have repeatedly read General Secretary Xi’s speeches. I’m extremely emotional, extremely excited! Sometimes I cannot even sleep at night… we are living in times where we can dare to dream; a time with positive energy! The spring for performing arts is here!’ “
See ltr, a happy ending!!!! Zhao Benshan is a good little pet doggy for the CCP now. He can still take a pie to the face or smash a raw egg in his hand. Sure, a little “highbrow” for you ltr, but it pays the bills for Zhao.
BTW, ltr the “big hint” it was not a real Reuters story was inside the brackets~~ “8 months later”. Are you one of those people that needs diagrams??
When the going gets tough, real economists say “banana”.
It is truly odd that those who live outside China have the opportunity to understand the performance of China’s economy better than those who live in China.
I dared to say this to 3-4 friends in China (never in a classroom setting). I think only two people (that I recall) actually believed it. Because they were a colleague and knew I had a degree in finance, one of my first friends I had in China asked me about 10–15 times if I thought the Chinese market was worth investing in. I told them it was tempting because the fast development, but in the end I would not because you couldn’t trust the balance sheet numbers. So she and her husband went ahead and did what they wanted anyway, She may have done very very well, I don’t know. But when I came back to America I noticed a lot of people like John Hempton of Bronte Capital and some others were making a TON of money shorting China stocks. And I thought “yeah, I think I had it about right”.
One of the FT commenters made a terrific comment, I damned hell wish I had said it, [ paraphrasing ]
“And people said that it was only local officials who lied to Beijing about economic performance.”
By “people” he of course means the feckless American media, who believe what any Chinese government lackey tells them. And it was the incessantly hammered message at the time, from Bloomberg, CNBC etc, as if it wasn’t the CCP intimidation that was the initial cause of the city and province level lies. CCP holding out of carrots to tell lies also, but the margin between the carrot and disappearing into a ravine was and is small.
https://econbrowser.com/archives/2023/08/wisconsins-finest-expletive-deleted-below#comment-302882
August 6, 2023
@ —
I heard about your problems entering into Russia… I don’t care about any of those rumors about indiscretions with a Borzoi Wolfhound….
@ —
I heard about your problems entering into Russia… I don’t care about any of those rumors about indiscretions with a Borzoi Wolfhound….
@ —
I heard about your problems entering into Russia… I don’t care about any of those rumors about indiscretions with a Borzoi Wolfhound….
[ Notice the crazed psycho-sexual attack. ]
You are pathetic. People have the right to call out your dishonesty. Either stop being dishonest or own up to the fact that you spread PRC lies.
You are pathetic. People have the right to call out your dishonesty. Either stop being dishonest or own up to the fact that you spread PRC lies.
You are pathetic. People have the right to call out your dishonesty. Either stop being dishonest or own up to the fact that you spread PRC lies.
You are pathetic. People have the right to call out your dishonesty. Either stop being dishonest or own up to the fact that you spread PRC lies.
[ Notice the racist attacks, over and over and over. ]
Seriously? I am not a racist but you are still pathetic.
Racism? Again? How many times do we need to remind you of your government’s racism toward Uyghurs? There is no more racist regime in the world than Xi’s China. You are an apologist for racism.
Either stop being dishonest or own up to the fact that you spread — lies.
Either stop being dishonest or own up to the fact that you spread — lies.
Either stop being dishonest or own up to the fact that you spread — lies.
[ This, of course, was precisely the way in which European Jews were attacked in the Inquisition. Renounce your faith, renounce your ethnicity or be burned, literally burned. Even when Jews converted under extreme persecution, however, they were always subject to being denounced as secretly being Jews.
This is definitive racism; definitive racism. ]
Ah, aligning China with European Jews. That makes sense. European Jews were in charge of an empire, just like China. European Jews operated slave camps, just like China. European Jews threatened war on their neighbors, just like China.
Really, China today is just like Europe’s Jews in the 1930s. Oh, except when China is just like disenfranchised Blacks in the U.S. And just like Winnie-the-Pooh, too.
Hush, hush, hush; ltr is part of the Winnie-the-Pooh cult. However, pointing that out is:
A) Racist
B) Misogynistic
C) Spieciesistic
D) Xenophobic
E) All of the above (but not on a Tuesday)
If you get the answer right you can take the test again; if you get it wrong you must take it again.
Calling someone dishonest is racist? “Definitive racism?” Do you even know what the word “racist” means?
And what does calling someone dishonest have to do with the Inquisition? Are you a fanatic Donald Trump supporter or something? Because you sure sound like one.!
WSJ July 28, 2023:
“Ukrainian officials say the recent [Russian] strikes have deliberately targeted the [Odesa] port, damaging key infrastructure. The [Odesa] port now sits idle, hobbling Ukraine’s struggling wartime economy and leaving MILLIONS OF TONS of foodstuffs to rot.”
ltr = let tyranny reign and Xi Jinping say: “Yawn……. The real tragedy is 4 mainland Chinese jackoffs couldn’t get past Russian border security. Waaaaaahh!!!!! I want my Mommy!!!!!”
— = let tyranny reign and Xi Jinping say: “Yawn……. The real tragedy is 4 mainland Chinese jackoffs couldn’t get past Russian border security. Waaaaaahh!!!!! I want my Mommy!!!!!”
— = let tyranny reign and Xi Jinping say: “Yawn……. The real tragedy is 4 mainland Chinese jackoffs couldn’t get past Russian border security. Waaaaaahh!!!!! I want my Mommy!!!!!”
— = let tyranny reign and Xi Jinping say: “Yawn……. The real tragedy is 4 mainland Chinese jackoffs couldn’t get past Russian border security. Waaaaaahh!!!!! I want my Mommy!!!!!”
[ Notice the crazed psycho-sexual racist attack. Over and over and over, psycho-sexual racist attacks. ]
Remember when you gloated over the storm damage in Vermont, because the Great and Wonderful CHINA is so much better? Now a million Chinese have been displaced by storms, and the government has diverted water into other cities to prevent worse flooding in Beijing:
https://www.reuters.com/world/china/china-floodwater-diversions-populated-areas-unleash-wave-online-anger-2023-08-06/
https://www.cnn.com/cnn/2023/08/04/china/china-northeast-hebei-beijing-flooding-recovery-intl-hnk/index.html
So, China is not so great and wonderful? Apparently, there is a bit of anger at the authorities.
If Vermont’s storms were worth mentioning, why hasn’t ltr bothered to tell us about China’s weather? Might as well get started, since the region affected by these storms will become increasingly vulnerable as climate change continues. Meanwhile, China keeps building new coal-fired power plants faster than the rest of the world combined.
I oscillate between anger and really kinda the giggles when I read ltr’s supposed views. I would say 7/8ths the giggles, 1/8th anger. His thoughts are so absurdist I do not believe he himself believes them. It’s more of a 9 year old’s “tag, you’re it” thing for him. So really mostly it just makes me laugh. Most mainland Chinese “know the score”. They really do, and if you sit with friends and families there at their family dinner table or even in a public restaurant out of earshot of others they will let you know how they are aware their reference point to other nations. It is what it is, you just wonder who (how?) the ones who insist on putting up the “eminence front” really think they are kidding?? Mostly themselves I think. Like the girl at the supermarket who buys the “fun size” candy bars really thinks that’s going to help her eat less. It’s a game they are only playing in their own minds. But it just consumes more plastic to wrap around the same volume of candy bars. Yeah!!! Congrats!!! You can tell her she will eat the same amount when she sits down on her couch as if she had bought the regular sized bars. But why make her sad??
Like the girl at the supermarket who buys the “fun size” candy bars really thinks that’s going to help her eat less. It’s a game they are only playing in their own minds. But it just consumes more plastic to wrap around the same volume of candy bars. Yeah!!! Congrats!!! You can tell her she will eat the same amount when she sits down on her couch as if she had bought the regular sized bars. But why make her sad??
[ The need to destroy a people; the sickness of racism. ]
Moses is certainly not a racist. And your abuse of this term makes us think you are a racist.
The sickness of enslaving Uyghurs.
You deplorable hack. You are the most racist person commenting here, yet you accuse others of racism.
https://econbrowser.com/archives/2023/03/china-signals-stability-with-surprise-move-to-keep-pboc-governor#comment-295379
March 12, 2023
BTW, where is “—”?? Is he drawing the water for Li Keqiang’s bath and prepping his hands for Li’s first post-retirement full-body rubdown?? I mean, I know “—” loves China, but this is taking it too far.
BTW, where is “—”?? Is he drawing the water for Li Keqiang’s bath and prepping his hands for Li’s first post-retirement full-body rubdown?? I mean, I know “—” loves China, but this is taking it too far.
BTW, where is “—”?? Is he drawing the water for Li Keqiang’s bath and prepping his hands for Li’s first post-retirement full-body rubdown?? I mean, I know “—” loves China, but this is taking it too far.
[ Notice the psycho-sexual racist attacks, over and over and over. ]
The problem is that the most effective economic policies are build on accurate data. When you corrupt the data it becomes very hard to get good guidance on how to solve problems.
Good point. If Putin really wants to destroy the US he should find a way of letting his boy JohnH run our economic data reporting agencies.
I am reading Matthew Desmond’s book “Poverty, by America” and his writing is so incredible and I find it hits me on a personal level, I cannot believe I did not know about this guy sooner. I enjoy his writing so much as I read through this book I think I am developing a “man crush” on him. Just really great writing.
In the early days, we knew the data was crap, but it was all we had.
Later, we knew they might provide some local insights, but that the national totals were internally inconsistent.
In the past 20-30 years, the volume of data, frequency of reporting, and importance of having SOMETHING to say gave a lot of people a huge incentive to pretend to understand far more than was possible to know. Li Keqiang confirmed the danger of this approach.
It would appear that the faithful believe the Party Core is no longer interested in any reality that infringes on His vision.
[FYI, ltr: When people call out your bullsh1t, it isn’t racist or sexist; it is a public service.]
The latest from Little Lindsey Graham:
https://www.msn.com/en-us/news/politics/what-s-worth-that-lindsey-graham-buried-for-latest-groveling-claims-about-trump/ar-AA1eTPCl?ocid=msedgdhp&pc=U531&cvid=856752668b714a52a7332961c8d15382&ei=7
Reacting to a speech Sen. Lindsey Graham (R-SC) gave in his home state over the weekend where he made self-deprecating jokes about himself while praising Donald Trump, “Morning Joe” host Joe Scarborough flayed the senior Republican for “groveling” in public.
In a clip shown on MSNBC on Monday morning, Graham can be seen mildly joking, “People ask, ‘What happened with you and Trump?’ I said, ‘Well, he beat me like a drum,’ and I acknowledged that he did. He sort of liked hearing that, but we found something in common: I’ve come to like him, and he likes him and that gets us through 18 holes of golf.”
He later added, “One thing I can tell you, you better not screw with this guy or you’ll regret it.”
After first bursting out laughing, Scarborough began, “I keep asking what’s worth that? I can tell you, having a Congressional pin is not.”
And we thought Trump toadie lawyer John Lauro was the babbling baffoon:
https://pjmedia.com/news-and-politics/gwendolynsims/2023/08/03/mark-levin-to-trumps-legal-team-seek-an-emergency-hearing-before-the-supreme-court-n1716003
Mark Levin to Trump’s Legal Team: ‘Seek an Emergency Hearing Before the Supreme Court’
Seriously – how drunk all these clowns?
From Wikipedia:
In March 2016, Levin endorsed Ted Cruz for the 2016 Republican presidential nomination.[89] Over a month after Donald Trump was nominated, in September 2016, Levin stated on this radio program that he would vote for Trump in the presidential election, following his declaration earlier that year that he was in the “Never Trump” camp and would never vote for Trump.[90][91][92] He qualified his support by stating: “I take no responsibility for the dumb things he says or the dumb things his surrogates say.”[93]
https://www.politico.com/story/2016/04/mark-levin-i-wont-back-trump-in-the-general-221754
Mark Levin pretty much checks every negative stereotype on Jews. He is the fertile soil that racists use to paint an entire people falsely. And therefor, I would argue a deadweight on his people’s shoulders.
Yellow files for Chapter 11 bankruptcy a week after closing trucking terminals in Brooklyn, Summit County
https://www.cleveland.com/news/2023/08/yellow-files-for-chapter-11-bankruptcy-a-week-after-closing-trucking-terminals-in-brooklyn-summit-county.html
BROOKLYN, Ohio — A week after shuttering its terminals in Brooklyn, Richfield and Copley, trucking giant Yellow Corp. filed for Chapter 11 bankruptcy protection on Sunday. A week earlier, the company, which owns Holland and YRC Freight, abruptly closed its terminals across the U.S. In a news release, the company said Sunday it would wind-down operations and look to sell its assets.
Its 10-K filing notes that this company has made very modest operating profits relative to its assets whereas most of its assets were financed by high cost debt. Its operating profits were therefore overwhelmed by its interest obligations.
I have a soft spot for the old school trucking companies and the teamsters Union. I even have a bit of a soft spot for Jimmy Hoffa (which many people would find quite strange and maybe even immoral to hold Jimmy Hoffa up as a hero). But I can’t help it, it’s just how I feel. Maybe I watched the Jack Nicholson/Danny DeVito dramatized (and “whitewashed”??) version of Jimmy Hoffa and have conned myself into believing in a Jimmy Hoffa that only exists together with unicorns, centaurs, and cyclops?? I don’t. It just makes me sad to see “Yellow” dying the same way it made me sad when the Hostess labor union was destroyed.
There’s the sentimental fool I try to hide. Ssssssshhhhhhh!!!!! It’s our secret.
Digging a little I found out that the credit rating agencies at put the credit rating for Yellow Truck at or below B-. Brutal. Their 10-K filing noted:
‘A significant portion of the outstanding variable rate debt is currently determined by various USD LIBOR rates subject to a floor of 1.0% plus fixed margins ranging from 3.5% to 7.5%.’
Some pretty steep loan margins but yea an awful credit rating. Plus borrowing in the variable rate market sort of sucked when the FED started raising interest rates.
You might see stories blaming the unions for asking for decent wages. Rubbish – this company has been horribly run and deserves to be bankrupt. Their assets and workers will be better off under the management of the next trucking company.
According to NYT private equity company Apollo Global Management got involved with them. Private equity is how companies and their investors get fleeced.
I wonder if the best way to deal with itr is to ignore itr and not interact with itr.
itr will never change as a paid propagandist. Arguing with itr just gives itr more of a platform.
I am surprised that itr has not violated Econbrowser’s rules of engagement, which would result in being banned from participation.
That’s my general motto. When I do engage – she accuses me of racism. Excuse me?
I have never seen any direct engagement with ltr. There has been useful and topic relevant links provided by ltr, but actual personal opinions or engagement in back and forth exchange of ideas doesn’t seem to happen. It’s more or less like talking with a database or a cult member. I question whether ltr is even capable of engaging in a normal back and forth data-founded debate or scholarly exchange.
The data provided by ltr with respect to China is extremely one sided positive, using questionable sources. Anything critical of China is meet with almost maniacal attempts to discredit those critical using accusations of horrible personal characteristics. No attempt to argue the other side of an issue – just character assasination to an absurd level.
“I have never seen any direct engagement with ltr. ”
this is true. ltr will not respond to posts pointing out her untruths and false accusations of racism. she simply claims racism and then continues to promote more propaganda from the ccp. she uses this site as a propaganda venue. she will not get involved in tit for tat directly, because it will probably result in her being banned immediately. she relies on the fact the hosts typically do not ban for the type of propaganda posts she makes, and will simply continue to take advantage of this until some time in the future, action is taken. she has found she can accuse you of racism and not be banned, and seems to not try to push the envelope any further. her priority is to keep an open venue to post propaganda links from the ccp, not wage a discussion of ideas.
Off topic, U.S. monetary policy –
Fed Governor Bowman said today: “…I supported raising the federal funds rate at our July meeting, and I expect that additional increases will likely be needed to lower inflation to the FOMC’s goal,”
Note the use of the plural – “increases”. That may indicate more than one additional rate hike or it may be meant to avoid the use of the singular to avoid giving the impression that only one more hike is likely. Either way, Bowman is leaning toward at least one more rate hike – probably 25 basis points – and quite possibly more. She is not known for being particularly hawkish.
Money markets are pricing in rather limited odds of even another 25 BP hike, with pretty good odds of a rate cut in Q1 or Q2 of next year. Bowman recognized progress on inflation, but cited labor market tightness as a reason to continue hiking rates.
Bowman is a lawyer, not an economist, so it’s reasonable to assume she is taking a centrist position on monetary policy. Looks like markets and FOMC members are out of sync on near-term policy by 25-50 bps or more.
A little Uncle Moses trivia (no prizes awarded but a pat on the back):
Who is 98 years old now, and has a birthday coming up in 16 days. HINT: He was born in Brooklyn.
Are you guys not answering my trivia question just because you know I will be excited to tell you?? Come on all strong, all good-looking, and all above average readers from Lake Wobegone. I know you can find the answer. Even if you have to “cheat”.
As much as it excruciatingly pains me to admit it, I bet Professor Rosser would have already got the answer to this trivia question. Did I just say that?? REALLY!?!?!?!?! I feel a cancer tumor on my tongue started just right now.
OK, it’s been 24 hours I gave you guys, yeah?? I really thought someone would answer this.
Who is 98 years old now, and has a birthday coming up in 16 days?? (Now 15 days) Robert Solow. Jewish
https://www.britannica.com/biography/Robert-Solow
Now as many times that I cite his work, I should have known that.
First thing I do when I see a right wing economist like Kudlow is to gag.
I think he’s semi-retired now and supplements his income as Joshua Pruitt’s cocaine dealer.
Would the two of them qualify as a gaggle of geese – or just a clueless cluster?
All of the above friend
: )
Alas Faux Business has given Kudlow the Klown a spot of their worthless station. I refuse to watch as there is already too much Trumpian stupidity running around.
OK I just listened to Kudlow’s latest. He actually claimed that Biden only created 2.1 million new jobs in his first 30 months in office whereas Trump had created 4.9 million new jobs. It seems the BLS disagrees with Kudlow the Klown:
https://fred.stlouisfed.org/series/PAYEMS