Eleven plus years ago Slabbed’s first topic and one that would dominate these pages for years involved the intersection of the insurance industry and it’s favorite taxpayer funded piggie to milk in the National Flood Insurance Program. Our focus was on the property and casualty side of the equation though we covered to a lesser extent auto insurance.
Pricing these financial vehicles are closely held trade secrets but we learned that retail insurers liked writing auto policies because the actuarial data was very reliable in predicting losses and so premiums could be, according to the insurers accurately priced versus property and casualty coverage which is accompanied by large tail risks associated with tropical cyclones. [Those interested in the concept of Fat Tail Risk should buy Nassim Taleb’s newest book or click here] Of course we also learned early on is that the insurance industry has an anti trust exemption that helps shield it from competition. Pricing thus is part an exercise in the arcane and part navigating smokescreens.
According to the Advocate, the problem is greedy lawyers and if the people would just give up more of their legal rights, Uncle Jimbo will wave his magic wand and make everything alright.
To me this was one of the most important media entries of last week. To set things up earlier this month the DOL released the employment report for February and once again, the DOL claims the economy added another 295,000 jobs to the labor market. The stock market went wild setting new highs but……
So a pattern emerges: we have an economy in which jobs and only jobs are acting as if there is a strong recovery, while everything else is sliding, disappointing economists, and in fact hinting at another contraction (whatever you do, don’t look at the Fed’s internal model of Q1 GDP).
To be sure, economists these days are better known as weathermen, and so they are quick to blame every economic disappointment on the weather. Because, you see, they were unaware it was snowing outside when they provided their forecasts about the future, a future which should be impacted by the snowfall that day, and which they promptly scapegoat as the reason for their cluelessness. Yet one wonders: why didn’t the harsh snow (in the winter) pound February jobs as well? Recall last year’s payroll disappointments were immediately blamed on the weather which was just as “harsh” as this year. Why the difference?
And yet, today this rising “anomaly” between Nonfarm Payolls “data” and everything else, hit a crescendo, and some – such as Jim Bianco – have had it with the lies anomalies, which prompted him to ask the following:
Why Are Construction Jobs and Housing Starts Telling Different Stories? Is The Problem Non-Farm Payrolls
Housing starts slumped in February by the most in four years as bad winter weather in parts of the U.S. prevented builders from initiating new projects. Work began on 897,000 houses at an annualized rate, down 17 percent from January and the fewest in a year, the Commerce Department reported Tuesday in Washington. The median estimate of 80 economists surveyed by Bloomberg called for 1.04 million. “It was just the weather, basically,” said Richard Moody, chief economist at Regions Financial Corp. in Birmingham, Alabama. Still, “my view of the recovery in single-family housing is that it’s coming more gradually than others think.”
I remember back during the bad old days of evil empires, the US media would never fail to point out that Pravda was a propaganda mouthpiece for the Soviet government whenever they quoted material in news reports from that media outlet. Along those lines I’d be remiss if I did not point out that publishing government economic data uncritically or hosting self servicing shills and blowhards as Fox 8 did Thursday night is essentially the same folks.
Mr CLS on Yahoo All bumped up an old post titled The Fiduciary Principle: “No Man Can Serve Two Masters. Somewhere in that post title is why the media should never host a stock broker opining on the economy. It is also the reason the brokerage industry is fatally flawed IMHO as the stock salesman at your local Edward Jones office that masquerades as a financial expert is in reality incentivized to sell you investments that makes them the highest commission.
I cut my blogging teeth on subjects such as these in the many years I blogged on financial issues on Yahoo and such is also the reason you see me posting as Sop to this day on Slabbed as the Sop franchise has gravitas in certain high finance circles world wide and I wanted those folks to find this project called Slabbed. And I’m likely to point other media outlets peddling propaganda as news such as Fox 8’s did in their Thursday Night lead story in the coming days.
About of a third of the way through the National Oil Spill Commission’s 400-page report, there is a 43-page chapter on the oil spill response and containment efforts that suggests that berms and boom were pretty much a bust, collecting more headlines than oil.
Along the way, the report also casts a rather unflattering light on Louisiana officialdom, singling out Gov. Bobby Jindal and Plaquemines Parish President Billy Nungesser.
And while Nungesser was cashing in with BP along with St Bernard Parish Sheriff Jack Stevens, the media was running to him for the self serving sound bite de jour, making the media in general and Anderson Cooper in particular mighty useful idiots for this corrupt local politician as we continue: