Purdue Agricultural economnist Chris Hurt is projecting pork prices to head this summer into the mid $90 per head profit range for producers. Currently they sit around $70 per head. Excluding inflation from money printing, he states that smaller spring farrows from PEDv virus and growing foreign purchase of US pork is driving the pricing. Hurt has suggested farmers has seen this price indicator and plan to expand their pork farrows between 4-6%. His analysis also leads to lower pricing after September of this year after the $90/head profit is reached. Spring of 2015 bigger herd numbers should be seen.
Category / Indiana
Indiana “Obamacare” Prices To Rise by Double Digits
Prescription drugs, new federal rules and insurer fees will help drive up healthcare premium costs related to Obamacare “Silver Plans” in Indiana by 16%. Bloomberg Business fills a rather short article with lots of good financial nuggets for readers to absorb. Bloomberg broke down the pricing.
How insurers set prices: Cost of claims, benefit changes, rising prices, risk pools, provider networks, geography, reinsurance, taxes and fees, profit and risk load.
With all that calculated, this is what they got for various states:
Indianapolis Star: Gas stations bring crime and unhealthy food
Sunday addition of Indy Star brought about some reveleations that even stunned me. Not so much of its trueness but of its complete idiocy of accusations. According to Indy Star writer Erika Smith, Gas stations bring crime. The plot of the article is some neighbors in the area on the West side are not liking the growing number of gas stations popping up.
For the past five years, these businesses have been moving into this urban core neighborhood and others at an alarming rate: 10 stations within a two-mile radius along the high-traffic corridors of West Washington, West Michigan and West 10th streets
So what are the main reasons to not like gas stations now?
The problem isn’t so much with the gas that the stations sell, but with the crime they attract and the convenience stores that come with them. Full of cheap, unhealthy food and paraphernalia that people use for illegal drugs, the businesses are easy money makers in neighborhoods bereft of grocery stores and wracked by poverty.
She goes on to state as an example Rural/New York Street where there is a gas station. It had 900 calls over 10 years Smith states. I looked at that area for the month of May/June. Closest crime listed there through Spot Crime is three blocks east and IMPD labeled that as “Other”. Smith also goes on to state that those gas stations builders are following those pesky zoning laws:
The hangup is a mix of outdated zoning laws, neighborhoods that for years have been empty of vocal stakeholders, and the profitable business model of opening gas stations and convenience stores in poor urban areas.
Read the rest of the article if you want to see Academy award winning emotions for “Social Justice”. My job on this blog is to use Austrian thinking to rip apart crap published like this. Overall Smith’s biggest problem is the profit side of these gas stations. I can’t explain why she doesn’t like them, she just doesn’t. She will go to great lengths to demonize them to her audience. What Erika Smith doesn’t address from an economic standpoint is the amount of investment from investors or banks that go into building, remodeling or stocking a gas station. It takes great preparation of studying the area to see what needs are to be met. If it’s a poor area, countless economic writers have written about grocery stores leaving those areas because it’s 1) Too Risky & 2) Not profitable. What Erika Smith needs to do is kiss the feet of gas stations that open up in poor areas. Because without them, those in the X number of square block area wouldn’t have access to supplies the gas station has in stock.
I really don’t debate the “unhealthy food” scapegoat anymore. In this day and age, if you haven’t picked up the difference of bad or good food, then there isn’t much hope for you. Smith has stated in other articles throughout the years that some sort of organization through government needs to teach people on how to cook. She basically went full communist mode at that point.
1952 Presidential Executive Action
Currently I am reading the book, Obama’s Enforcer: Eric Holder’s Justice Department. Pretty good so far but stumbled upon some historical context of regulation and thoughts from Supreme Court Justice Robert Jackson.
The president’s authority to issue executive orders is strongest when he does so with the backing of Congress (category one), more dubious when he issues an order pertaining to a topic on which Congress has not passed a law (category two), and weakest when the executive order is “incompatible with congressional command” (category three).
President Obama recently said he is about to go “on his own” and Congressman Boehner is threatening litigation. Many in media defending Obama by saying Congress won’t work with him. Maybe reading the above should give you pause in wondering why they won’t and if the President needs to take a breather.
IPO Market
18 new IPO’s hitting stock market this week. I invest off money supply movement and IPO’s are one of many indicators to watch in regards to movement of money into the system. What is noteworthy of this amount hitting in one week, it has hasn’t happened since the year 2000.
Year to date, 136 IPO’s have come to market which is a 64% increase from the previous year. Money printing is taking hold.
US Federal Government Interest on Debt Payments
After August, Congress (House/Senate) will convene and raising the debt ceiling will once again be a hot topic. The US Federal Government has not passed a Constitutional required budget in almost six years. In America’s new age economics of moral relativism, spending at any level is o.k. You can get mad at it all you want if you don’t fall into this thinking, but you might as well make a lot of money and/or save your wealth while the masses cheer on this debt driven philosophy.
The Treasury Department just released their “Interest on Debt” payments for the month of July. They paid out $25 Billion in just one month. There are two fiscal months left but so far the US Government has paid out $370 Billion in payments. Most of these payments go to the Federal Reserve and foreign countries.
Here is the federal government link showing how much we have paid out for numerous years. The word “Trillion” pops up real quick when you just start adding up just a small portion of years.
These stats are good to know when thinking about your investments.
Big Ten Football = Lots of Money
Want to know how much money Big Ten schools rank from football alone? A lot and they are about to become very much wealthier. Before one bashes this money, just remember the next time you see a “softball complex” or an obscure sports facility being built on a Big Ten campus, that funding probably came from Big Ten football itself.
Hat Tip to Mike Carmin and his Big Ten football money article on jconline.com.
As a football enthusiast I remember very distinctly when the Big Ten Network kicked off in September 2007. The idea to air “Big Ten” only sporting events was laughed at by people not grasping the desire to see football games of all kinds. Six years later it is seen in almost 100 million homes in the U.S. and Canada. Financially it has paid its obligations and turned a profit just last year. Here is something else to ponder that Mike Carmin covered:
One year before BTN launched, the Big Ten Conference distributed about $14 million to each of its 11 schools.That was 2006-07. Six years later, that figure has jumped to more than $25 million.
Thats not all…..
According to documents obtained by the Journal & Courier from Purdue, the Big Ten is expected to distribute about $26.4 million per school after 2013-14 — and more than $35 million at the end of the 2016-17 academic year.
The robust payouts, which include a projected $30.1 million in 2014-15 and $33.3 million in 2015-16, will be sent to the core 11 Big Ten schools
Budgets vary greatly in the Big Ten when it comes to athletics. Ohio State currently operates a budget of $132 Million compared to Purdue who runs a budget of $70 Million. Here is the breakdown of revenue payments received:
Schools in the Big Ten share equally in the revenue generated by television contracts, NCAA distributions, bowl games — including Bowl Championship Series and the future College Football Playoff format — along with the gate receipts from the league’s men’s basketball tournament and football championship game.
The Big Ten is about to get a lot wealthier. Many of their TV contracts are due to be re-negotiated in 2016-2017(Minus BTN which is a 25 year contract).
In 2006, the Big Ten signed a 10-year, $1 billion deal with CBS and ABC/ESPN for first-tier rights and a separate 25-year agreement with BTN. The Big Ten’s deal with Fox to broadcast the football championship game started in 2011 and ends in 2015.
Projections are just that, but the aforementioned $35 million per-school figure may pale in comparison to what each school will receive once the league’s next television contract is finalized.
“The ’16-’17 year is an important mark because that coincides with the end of our current television agreement with CBS, Fox and ESPN,” Traviolia said.
Look for many Big Ten schools to enjoy continued financial success well into the mid 2020’s and beyond. The next bigger task will be to break up the NCAA and let the conferences soak in their revenue they stockpile.
Hoosier Lottery On Pace for Almost $1 Billion in Revenue
Hoosier Lottery officials are announcing that the organization is on pace for record breaking numbers in revenue. Per Indiana Economic Digest:
The Hoosier Lottery is on pace for a record revenue year, thanks in part to to higher Powerball ticket prices and jackpots. The lottery projects that revenue for its 2013 fiscal year ending June 30 will be $945 million, about 9.5 percent more than last year’s record of $855.6 million. The impact on Indiana coffers won’t be as impressive. Lottery officials are forecasting net income at $227.6 million, about $200,000 more than last year’s result.
There is one catch to the whole record breaking revenue celebration though…..
One reason the record sales won’t bring more income to the state for the fiscal year is that the lottery is spending about twice as much as it did last year on advertising and promotion—nearly $23 million. The commission forecasts total operating expenses will come in at $716.5 million, more than 10 percent higher than last year’s $645 million.
I still think a better investment than Powerball tickets is this. It just lacks the excitement.
Climate Change Tuesday
On Tuesday, the President is announcing his “Climate Change” plan. For many years, various sections of our American population has latched onto a theory that 1) American individuals are responsible for weather patterns and earth’s temperature changing due to their pollution and 2) Man and government can somehow use their supernatural powers change weather patterns and cool the earth.
Throughout history there has been all sorts of predictions of doomsday related to humans and pollution. Before I go into a 5,000 word diatribe I will just link you to a long but wonderful read from Matt Ridley titled, Apocalypse Not: Why You Shouldn’t Worry About the End Times.
You can believe in this theory. I personally don’t because in the end all the things proposed con people out of their money and make guys like this become uber rich. What I do have a problem with is taking this theory and applying it to government policy that has massive consequences to everyday activities in life. Energy is the best invention ever known to man. I personally want to shake the hand of the man who got fire going back in the day. People who founded oil and coal should be given a lifetime achievement award for making our lives better in almost every action we do in life.
On Tuesday the President is going to announce new “regulation” to combat Climate Change. Here is a brief synopsis of what is coming courtesy of The Blaze:
“We’ll need all of our citizens to do our part to preserve God’s creation for future generations,” Obama noted in an online video the White House released Saturday. The president added that he’ll lay out his vision for reducing carbon pollution, preparing the U.S. for the effects of climate change and leading other nations in the global effort. Obama’s speech Tuesday afternoon at Georgetown University will come the day before he leaves for a weeklong trip to three African nations. “There’s no single step that can reverse the effects of climate change,” Obama says in the video. “But when it comes to the world we leave our children, we owe it to them to do what we can.”
So during this speech you will hear “Combatting Climate Change”. While this notion is silly like we are at war with some hidden force, what does it mean? When you turn on the news that night you will hear news anchors interview environmental groups packed full of lawyers saying the President hasn’t done anything to improve the environment. This is farthest from the truth in the sense of massive regulation that has been passed since he has been in office. I will give a few examples that has purposely flown under the radar by our truth telling media.
New EPA rules flying under the radar are making it so costly that possibly 280 coal plants will have to shutdown. Regulations have consequences and can be quite costly. Who the hardest hit you ask?
Coal-fired electric generating plants will be shut down across 32 states, with the hardest hit states being Ohio, Pennsylvania, Georgia, West Virginia, Virginia, North Carolina, Kentucky and Indiana, according to the coalition.
And yes, natural gas coming online is also making this possible but the enforcement of rules will be the most devastating. Just ask yourself, when you lose that much power, where else are you going to get it? Wind turbines and solar panels are not replacing it fast enough and have major limitations. If your a wind turbine supporter, just note that electrical and natural gas lines are hooked up to them so it can be powered when the wind’s not blowing.
What else has the President been up too? Well, just recently while no one was looking his administration slipped a regulation into a little noticed rule on microware ovens that raises the price of coal per ton. Per Bloomberg.com:
Buried in a little-noticed rule on microwave ovens is a change in the U.S. government’s accounting for carbon emissions that could have wide-ranging implications for everything from power plants to the Keystone XL pipeline. The increase of the so-called social cost of carbon, to $38 a metric ton in 2015 from $23.80, adjusts the calculation the government uses to weigh costs and benefits of proposed regulations. The figure is meant to approximate losses from global warming such as flood damage and diminished crops.
This money will not be used to “combat” or “help” the supposed fight in climate change. The government is broke and needs revenues. At the same time many within policy making has a disdain for coal as is and see this as a step to punish those who use it. Here is one example from the same article how radical or dangerous these groups are in feverishly wanting to price everyone using coal:
Laurie Johnson, chief economist for climate at the Natural Resources Defense Council says the administration should go further; she estimates the carbon cost could be as much as $266/ton.
Here is a perfect example of how this money will be used. California has their own mini model in pricing for “Climate Change” which is basically a tax. It is in the form of “Carbon Trade Auctions” and the cost gets buried in whatever good the consumer has to purchase. E&E Publishing is now reporting Gov. Jerry Brown is wanting to “borrow” up to $500 Million from this fund to help the overall general budget. This money will not be used to “combat climate change”.
California Gov. Jerry Brown yesterday proposed borrowing $500 million in revenues from the state’s landmark carbon cap-and-trade auctions and using those to help balance the general fund budget.
He also wants to break the state’s own law in doing this:
By law, the Golden State must spend the funds on efforts that reduce carbon emissions or otherwise meet the purposes of California’s climate measure, A.B. 32.
On a national scale, any implementation of pricing on the American public will just end up the same. Be fully aware of what is coming.
Another Indiana School District Battling Obamacare Regulations
More developments with Indiana school districts dealing with countless rules/regulations related to Obamacare. This story comes out of North Spencer County School Corporation. Superintendent Dan Scherry and the school board recently learned from a trade association that Obamacare would make him legally liable if fines are incurred.
Scherry said the law states an individual could be held responsible for fines incurred for an employee working full-time that isn’t offered health insurance. To give individual employees relief from that provision of the law, the North Spencer school board on Monday discussed and approved a Patient Protection and Affordable Care Act Hold Harmless Resolution.
That resolution, which Scherry said was developed by the Indiana School Board Association, basically absolves administrators or other individuals from personal liability for those fines and makes the school corporation responsible.
And how much would have someone in like Mr. Scherry faced if the rule wasn’t found and dealt with? What is the process for something like this in order for a fine to happen?
“For us, it could be a $300,000 or $400,000 fine, so you’re talking about changing lives there,” said Mr. Scherry. If an employee is working more than 30 hours a week and not covered by health insurance, Scherry explained they could make a complaint with the insurance exchange through the government, then the government could impose a fine saying the business or school district didn’t follow the law. Without this resolution, Scherry said the fine could haunt individual people, but after it is passed by school boards the school corporation would be responsible.
With school districts already facing massive budget tightening as is, this new fine process will be the new normal for local taxpayers. Even though the school districts are protecting employees from not getting fined, now the taxpayer is on the hook. Go ahead and expect school corporation budgets to be cutting more from teaching areas so they can stash a “rainy day” fund for Obamacare fines.
Here is a link to the rest of the story.
I think I will just let Mr. Scherry sum up what this bill is doing to various aspects of our economy:
“It’s just a mess,”
Hoosier Econ 