The fourth warmest winter on record, which curtailed the use of natural gas for heating, coincided with record production of natural gas. Storage facilities, filled to record levels for this time of the year, may soon reach capacity, forcing the industry to flare excess gas. This, doom-and-gloom theorists go, will force the price of gas to zero in the US. The point of maximum pain. But there’s a monumental shift, and demand is spiking.
The hoped-for April spike in personal income tax revenues for the State of California fell again below the assumptions used to get the budget to “balance.” Instead of $9.4 billion, the state collected only $7.4 billion. A 21% shortfall! Corporate taxes were also below forecast. Red in ink for fiscal 2012 is nearly $12 billion. And yet, California has a mega-project.
“Despite all of the rhetoric to the contrary, it looks like the air got let out of the balloon,” commented the members of the Survey Panel of the ISM-Chicago Business Survey; the closely watched numbers had suddenly taken a turn for the worse. But the phenomenon wasn’t limited to the Chicago area. And now there are real reasons for concern.
Tokyo, June 1996. Satoru-san, wearing a chocolate blazer, cinnamon shirt, and hazel tie, is already at the Nishi-Azabu intersection though I arrive before 6 p.m. He greets me with a handshake and a nod. “I’m sorry I’m early,” he says. Is this a translation of something that makes sense in Japanese? Or is it one more aspect of the Japanese art of turning apologies into subtle accusations?
Fighting back: Jérôme Kerviel, the meek-looking French guy who became famous in January 2008 as the junior trader who lost €4.9 billion at French mega-bank Société Générale. Accused of a litany of shenanigans, he was condemned to five years in prison, though he claimed that his bosses had known about and had tolerated his activities. He just couldn’t prove it…. until now.
“Over the past months, we experienced a worrisome trend toward re-nationalization and ‘summitization,’” said Martin Schulz, President of the European Parliament. Government leaders were becoming “more arrogant” and were attempting “to create a fiscal union outside the control of parliament.” His complaints went to the heart of democracy at the European level. And so, he said, the collapse of the EU was a “realistic scenario.”
“The US is one of two major beef-exporting countries with no comprehensive traceability system,” said Erin Borror, economist at the Meat Export Federation. The other country is India. The issue was Bovine Spongiform Encephalopathy, or Mad Cow Disease. Humans contract it by eating contaminated beef. It’s always fatal. Lack of traceability “places the US at risk if an outbreak occurs in this country,” Borror said. That was last November.
Pundits who have been announcing the imminent turnaround in housing for the last few years were disappointed once again by the Case-Shiller composite, which declined 0.8% for the month and 3.5% for the year. It has fallen to a level last seen in October 2002. Since that time, inflation has eaten up another 27%, which would take the composite back to the 1990s. And now, even a trend that supported housing for decades has reversed.
While all eyes are on Europe, California is hobbling along its own path to, well, a tsunami of last-minute bills. 665 bills are scheduled to be debated by policy committees from Monday through Thursday, the final days for 2012 legislation to get off the ground. California has some issues—its fiscal and economic policies haven’t been a raging success recently. Hence, numerous crucial proposals in that pile of bills. For example, a strip club tax.
Tokyo, June 1996. We go see the French film Le Zebre, and afterward at a dining bar we discuss it, how great it is, how French love stories have a special charm, how they’re more honest because they don’t have happy endings but French endings that leave you confused and searching for answers. Our lips are moving on autopilot while our hearts are communicating via our fingers that are intertwined across the table.