A case study in crap data put to meaningless use

❝ On Monday, I cast doubt on the many stories about how Black Friday retail sales were off to a disappointing start. This is an important story because retail is such a critical part of the U.S. economy, and because such a large share of the industry’s sales occur during the roughly five weeks between Thanksgiving and Christmas. But the more important point — at least for my purposes — is that the initial reports, thanks to the National Retail Federation, are a case study in how to obtain meaningless data and then put it to bad use.

❝ The NRF reported a 3.5 percent drop in spending. “Average spending per person over Thanksgiving weekend totaled $289.19, down slightly from $299.60 last year,” the organization said in a statement. This information was based on asking consumers how much they figured they would spend this year versus a year ago…

A lousy guess turns out to be wrong. Q’uelle surprise!

❝ I make a big deal about the retail trade group’s record of inaccuracy every year for a few reasons: it is important for investors — and indeed, citizens — to be grounded in reality. Most human progress is the result of the work of scientists, technologists and logicians who rely on facts and testable theories…

❝ This is crucial because retail sales are such a big deal. Almost 16 million people work in retail, or about 10.9 percent of the U.S. labor force. It accounts for a huge percentage of the overall economy. Retail sales provide a window into consumer sentiment, as well as corporate revenue, profits and investment decisions. By some measures, consumer spending counts for almost two-thirds of gross domestic product.

❝ …It is of course way too early to have the final retail sales data, but we do have some early numbers based on actual sales. First Data Corp., a point-of-sales transaction processor, says that it examined data from almost 1 million merchants and concluded that sales so far this holiday shopping season are up 9 percent from a year earlier. Furthermore, perhaps in a sign of the state of the industry’s health, sales of electronics and appliances rose 26.5 percent, compared with a lackluster 2.3 percent gain last year. First Data also found that the average transaction grew by more than $41 year over year.

Oh.

❝ First Data noted that its analytical methodology “is based on actual consumer transactions rather than surveys or speculation.” The company has access to this information because it processes actual credit-card and debit-card transactions.

RTFA. We’re in an extended season of mediocre surveying, surprising results, poor planning afflicting anyone making decisions based on “truthiness”.

Barry is speaking to investors; but, his point of view on hard data needs to be taken to heart across the spectra from politics to Giftmas shopping.

Thanks, Barry Ritholtz

Graduate from college – going home, staying or moving on?

net-migration

❝ This year’s election has forced Americans to take notice of class divisions between workers. And while these divisions may at first ring of lazy stereotypes — the rural Rust Belt worker without a college degree and the coastal urban college-educated worker — they’re rooted in a real dynamic. Many of the most skilled workers — young people with college degrees — are leaving struggling regions of America for cities, specifically for cities in Southern and coastal states.

There are clear economic reasons for their choice. Dense metro areas tend to produce more jobs and make workers more productive. Wages, for all kinds of workers, are also higher.

❝ In theory, these incentives should prompt workers of all levels of education to move to metro areas. But moving outside one’s region is relatively rare these days, and even more rare for someone without a college degree

❝ For America’s first century, internal migration was largely driven by farming — moving west to new land. But toward the end of the 19th and in the early 20th century, migration began to be driven by people moving to American cities — small and large.

This pattern added a twist after World War II, when more people began moving outside their local region, particularly to the Sunbelt. Before the 1940s, roughly 15 percent of Americans lived outside a census division in which they were born, and by 1970 that had jumped to 25 percent.

❝ But in the 1980s, people started moving less. Internal migration has been in gradual decline ever since across all demographic groups…In the regional competition for the most skilled and most mobile workers in America, noncoastal states are at a disadvantage. Although they have some large cities, they tend to be farther from other large cities than is the case in the coastal areas…This advantage provided by clusters of cities is helpful for coastal states, which tend to contain many big metro areas, like San Diego, Los Angeles, San Jose and San Francisco in California, or the so-called Acela corridor stretching from Washington to Boston. But it can be bad news for inland areas with one or two large cities that are farther apart…

Folks in the article make the best point – for me – and that is the jobs also have to be someplace you want to live. Otherwise, it’s just a stop along the way…

Finland is banning coal by 2030 and aims for carbon-neutral by 2050


Click to enlargeReuters/Vesa Moilanen/Lehtikuva

❝ Finland, which gets about 10% of its energy from coal, said this week that it will stop using the fuel by 2030.

The Finnish ministry of economic affairs and employment let slip the news when it released its climate and energy strategy…Plenty of other countries, including the UK and France, are slowly phasing out coal. But Finland’s commitment is more concrete. Canada too announced last week that it would phase out coal by 2030.

❝ Finland’s long-term goal is to become carbon neutral and — perhaps by 2050 — rely entirely on renewable energy, the strategy document said. In the nearer term, by 2030, as well as cutting out coal, it aims to increase the share of renewable energy in its mix by 50%.

Not that 50% is a big increase. Renewables like wind and hydropower are only a tiny fraction of Finland’s current energy mix, in contrast to its Nordic neighbors: Norway runs on 100% renewable power thanks to its geothermal and hydro resources, while Denmark and Sweden have both built a lot of wind infrastructure in recent years…

❝ The strategy said that new investment should not be made in coal, either to build new plants or refurbish old ones. The document will go to parliament on Nov. 30.

It’s even easier for me to be enthusiastic, now, about nations outside the GOUSA working creatively towards a healthier environment. Americans seem hellbent to stay on the downbound train.

Força Chapecoense

3000
Click to enlargeFernando Remor/EPA

“Que essa seja a última imagem dos nosso guerreiros”

❝ Police in Colombia have confirmed that at least 75 people were killed when a plane carrying, among other passengers and crew, the first-team squad of Brazilian top-flight team Chapecoense, went down close to the town of Cerro Gordo in the early hours of Tuesday. Initial reports said there were six survivors, including players and a travelling journalist, but police said one person had died in hospital. The plane was carrying 72 passengers and nine crew members.

❝ Based in the city of Chapecó in the state of Santa Carina, Chapecoense were en route to Medellín to play the first leg of the final of this year’s Copa Sudamericana (South America’s answer to the Europa League), against the current Copa Libertadores holders Atlético Nacional. Colombia’s El Tiempo newspaper reported there were 22 players from the squad on board as well as 22 football journalists. A 23rd Chapecoense player, whom the newspaper did not name, had been supposed to travel with his team-mates but was not on the plane…

Team sports are a special part of athletic life. They were a year-round part of my childhood. Growing up when I did, where I did, meant The Beautiful Game wasn’t central to my young life. For most of the world – that centrality would be automatic.

Once in a great while a disaster claims the lives of athletes, a whole team, managers, medicos, trainers, heros and hardly-ever starters. They had a life together that also was something with a life of its own. And now death.

Here’s why Trump can’t save jobs in the coal industry?


Completed in 1974, Monroe Power Plant will be the last one standing in 2030

❝ All year, Donald Trump has been promising to rescue the US coal industry by repealing various Obama-era pollution rules and ending the “war on coal.” And all year, analysts have pointed out that he probably can’t stop the collapse of the coal industry — since coal’s woes go far beyond the Environmental Protection Agency.

But if you want a perfect example of why Trump will struggle to bring back coal, just look at Michigan.

❝ Last weekend, the CEO of Michigan’s largest electric utility reiterated that his company is still planning to retire eight of its nine remaining coal plants by 2030 — whether or not Trump tries to repeal President Obama’s climate policies…

Gerry Anderson’s reasoning was simple. Coal is no longer the economic choice for generating electricity, due to relentless competition from cheaper (and cleaner) natural gas and wind power. In Michigan, a new coal plant costs $133 per megawatt hour. A natural gas plant costs half that. Even wind contracts now cost about $74.52 per megawatt hour, after federal tax credits. “I don’t know anybody in the country who would build another coal plant,” Anderson said.

❝ What’s more, Anderson added, surveys show that most of Michigan’s consumers want to add more renewables “if it can be done at reasonable cost.”

❝ It’s not just Michigan. This dynamic is playing out all over the country, as coal plant after coal plant succumbs to competition from cheap natural gas and wind. Over at Politico, Michael Grunwald estimates that US power plants are now on track to emit 27 percent less carbon dioxide in 2016 than they did in 2005.

What’s remarkable is that this is all happening before Obama’s Clean Power Plan even takes effect. That rule, which is still tied up in court, aimed for a 30 percent cut below 2005 levels by 2030. We’re almost there already. So it’s clear that scrapping the CPP, as Trump has pledged, won’t help coal power make a huge comeback.

Not that reason, efficiency and cost mean much to Republicans and other Trump Chumps. The vicarious thrill of turning back regulations designed to make life healthier for most folks is almost as visceral a pleasure as, say, machine-gunning a basket of kittens.

VW, BMW, Ford to build charging network as part of the growing matrix of electric vehicles

❝ Ford Motor, Volkswagen Group, BMW Group and Daimler today said they plan to set up charging stations for electric vehicles along major highways in Europe. The move will be an important step toward facilitating the mass-market adoption of EVs, the companies said in a joint statement.

❝ The companies have signed an initial agreement to create the charging network in what they said is an “unprecedented collaboration.” The goal is to quickly build up a sizable number of stations in order to enable long-range travel for battery electric vehicle drivers.

The projected ultra-fast high-powered charging network with power levels up to 350 kW will be significantly faster than the most powerful charging system deployed today…

The buildup is planned to start in 2017. An initial target of about 400 sites in Europe is planned. By 2020 the customers should have access to thousands of high-powered charging points…”The charging experience is expected to evolve to be as convenient as refueling at conventional gas stations,” the automakers said.

❝ The network will be based on Combined Charging System standard technology. The planned charging infrastructure expands the existing technical standard for AC and DC charging of electric vehicles to a higher level of DC fast-charging capacity with up to 350 kilowatts. EVs engineered to accept 350 kW of power will be able to recharge in a fraction of the time as today’s EVs.

Here it comes. The historic auto truism hasn’t changed. Just about every advance in the auto craft starts in Europe.

The next army of American workers who will be automated out of existence are truckdrivers


AP Photo/Tony Avelar

❝ Carmaking giants and ride-sharing upstarts racing to put autonomous vehicles on the road are dead set on replacing drivers, and that includes truckers. Trucks without human hands at the wheel could be on American roads within a decade, say analysts and industry executives.

At risk is one of the most common jobs in many states, and one of the last remaining careers that offer middle-class pay to those without a college degree. There are 1.7 million truckers in America, and another 1.7 million drivers of taxis, buses and delivery vehicles. That compares with 4.1 million construction workers.

❝ While factory jobs have gushed out of the country over the last decade, trucking has grown and pay has risen. Truckers make $42,500 per year on average, putting them firmly in the middle class.

❝ On Sept. 20, the Obama administration put its weight behind automated driving, for the first time releasing federal guidelines for the systems. About a dozen states already created laws that allow for the testing of self-driving vehicles. But the federal government, through the National Highway Traffic Safety Administration, will ultimately have to set rules to safely accommodate 80,000-pound autonomous trucks on U.S. highways.

In doing so, the feds have placed a bet that driverless cars and trucks will save lives. But autonomous big rigs, taxis and Ubers also promise to lower the cost of travel and transporting goods…

Trucking will likely be the first type of driving to be fully automated – meaning there’s no one at the wheel. One reason is that long-haul big rigs spend most of their time on highways, which are the easiest roads to navigate without human intervention.

But there’s also a sweeter financial incentive for automating trucks. Trucking is a $700-billion industry, in which a third of costs go to compensating drivers.

Decent, well-written article. You should read it. In most states, the number 1 or number 2 job category is truck driving. Probably half of those drivers are working over-the-road. Gonna be a lot of unhappy unemployed truck drivers, say, before the 2028 presidential elections.

USA!, USA!, becoming more diverse


Click through to the article

Farmland outside a Midwestern city turns into a bedroom enclave of commuting urban professionals. A handful of non-white people move to Dubuque, Iowa. Already diverse cities become increasingly mixed with immigrants from Asia, Africa and Latin America.

These are just some of the ways diversity is increasing in U.S. communities.

To quantify how America is changing, we used the diversity index, which measures the chance that two people chosen at random will not be the same race and ethnicity. A high score means a county has people of many races and ethnicities, while a low score means the community is made up of a single dominant group.

Click through to the article and maps. Plural. While there is an all-inclusive graphic that shunts you through a quasi-3D map, individual maps focus on each of the four trends examined.

Get used to it, folks. Trump voters probably won’t. I imagine the intellectually-curious folks who pass through here won’t have any trouble with change.