The state has until the end of the month to come up with a budget plan or will be forced to pay thousands of state employees minimum wage ($7.25) until it does. While some might argue our state employees could have used a pay cut quite some time ago and may be partially to blame for our budget troubles, I’m not sure this is the way to go about fixing our broken budget. If and when Sacramento does figure out a budget, state employees will be due back pay. For now, however, it’s looking like a rough summer for some.
A state appeals court ruled Friday that Gov. Arnold Schwarzenegger can reduce state workers’ pay to the federal minimum wage when the state budget is late.
The ruling comes a day after the governor ordered the pay of nearly 200,000 state employees to be reduced to $7.25 an hour until a budget is passed, but State Controller John Chiang, who issues the paychecks, has said he would not obey the order.
The ruling by the 3rd District Court of Appeals centers on a 2008 case, when during a similar budget impasse Schwarzenegger ordered state workers’ be paid the federal minimum wage.
John Chiang obviously doesn’t want his house burned down but Schwarzenegger could care less, before long he won’t have to worry about any of this crap and will be getting fat on the ranch far far away from Sacramento and all the drama that comes with.
Confidence among U.S. small businesses increased in January for the first time in three months as the outlook for sales improved, according to the National Federation of Independent Business optimism index.
The gauge climbed to 89.3, the highest level in 16 months, from 88 in December, the Washington-based organization said today. The advance left the measure close to the 2009 low of 81 reached in March, which was second only to a 1980 reading as the lowest on record.
Three of every 10 companies surveyed said a lack of sales remained their biggest concern even as the demand outlook turned positive for the first time since January 2008, the month after the recession began. A majority of small businesses expect profit and employment to decline, showing why the Obama administration has announced new plans aimed at providing credit and tax breaks to small firms.
“This is very disappointing for an indicator of the health of the most critical segment of the economy in terms of new job creation,” said Joshua Shapiro, chief U.S. economist at MFR Inc. in New York.
“The good news was less bad news,” William Dunkelberg, chief economist at the NFIB, said in a statement. “Optimism has clearly stalled in spite of the improvements in the economy in the second half of 2009.”
President Obama last week announced he will back a temporary increase in Small Business Administration loans to $1 million from $350,000 to encourage hiring. He has previously endorsed $33 billion in small business tax cuts and incentives for hiring as well as a plan to use $30 billion of bailout money paid back by Wall Street financial institutions to help community banks make loans to small businesses.
Such aid is “misdirected,” NFIB’s Dunkelberg said in the statement, because the top problem for small business leaders is weak demand rather than a lack of credit. Stimulus therefore should focus on reviving consumer spending, he said.
Nearly two months ago we explained "How Beijing Is Responding To A Soaring Dollar, And Why QE In China Is Now Inevitable" in which we cited Cornerstone who reminded us "that from 2007 to late 2008, U.S. fed funds dropped 500 bp, and then the Fed still needed to do QE? The backdrop for China looks a bit similar. We had a credit bubble, they have a credit bubble. We had a housing bubble, they have a housing/investment bubble. Will China eventually have to go down the same path as the U.S., and the Eurozone? ... The PBoC will first cut rates to 0%, before contemplating QE."
The Department of Transportation's Federal Highway Commission has released the latest report on Traffic Volume Trends, data through February.
"Travel on all roads and streets changed by 2.8% (6.1 billion vehicle miles) for February 2015 as compared with February 2014." The less volatile 12-month moving average is up 0.20% month-over-month and 2.36% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) is a smaller change, up 0.13% month-over-month and up only 1.23% year-over-year.
Here is a chart that illustrates this data series from its inception in 1971. It illustrates the "Moving 12-Month Total on ALL Roads," as the DOT terms it. The ...
A reader asked me if I ever hired someone for the minimum wage. He also believes the minimum wage is really a maximum wage.
From Drew ... Mish, I’m curious if you have ever had to actually pay someone minimum wage to work for you week in, week out, year after year?
I’ve signed plenty of paychecks myself, and honestly, I could never employ someone and pay the minimum wage knowing it was not enough for that person to live on, regardless of whether or not the “market” says I could hire them for that price. I have willingly paid more, and they always very much appreciated it, and I also felt like I got more effort since they knew I was paying them more. But I know that’s not how large corporations work.
I believe you would argue whether or not the minimum is enough on which to live is irrelevant a...
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King Dollar has been on a role since last summer, up over 20% in less than a year. When looking back on the US$, the rally has been rare and nearly historic. Majority of the rally took place inside the steep rising channel above. Over the past month the US$ might have put in a double top. Over the past few days, the US$ has slipped a little below rising support at red arrow above.
Here's an interesting argument by Felix Salmon, although I think he is taking two correct observations and mistakenly attributing a cause-and-effect relationship to them: Bitcoin is going nowhere because women are not involved.
More likely, in my opinion, women are not involved in bitcoin because bitcoin is going nowhere (and they know it). Or maybe, simply, bitcoin is going nowhere and women are not involved.
Nathaniel Popper’s new book, Digital Gold, is as close as you can get to being the definitive account of the history of Bitcoin. As its subtitle proclaims, the book tells the story of the “misfits” (the first generation of hacker-l...
As we get into the heart of earnings season and anticipate the GDP report for Q1, the investor spotlight has been taken off the Federal Reserve and timing of its first interest rate hike, at least temporarily. Even though Q1 economic growth will undoubtedly look weak, the future remains bright for the U.S economy – even though many multinationals will struggle with top-line growth due to the strong dollar – and any near-term selloff resulting from weak economic or earnings news should be bought yet again in expectation of better results for the balance of the year. High sector correlations remain a concern, reflectin...
Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene
The replay is now available on BNN's website. For the three part series, click on the links below.
Part 1 is here (discussing the macro outlook for the markets)
Part 2 is here. (discussing our main trading strategies)
Part 3 is here. (reviewing our pick of th...
In my last post (Part 1 of this article), I looked at alternative ETFs that could be used as hedges against the corrections that we have seen during that long 2 year bull run. Looking at the results, it seems that for short (less than a month) corrections, a VIX ETF like VXX could actually be a viable candidate to hedge or speculate on the way down. Another alternative ETF was TMF, a long Treasuries ETF which banks on the fact that when markets go down, money tends to pack into treasuries viewed as safe instruments. In some cases, TMF even outperformed the usual hedging instruments like leveraged ETFs. There could of course be other factors at play since some of 2014 corrections were related to geopolitical events which are certain...
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PSW Members - well, what a year for biotechs! The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down! The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months. What could go wrong?
Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.
Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies. A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at email@example.com with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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