The Friday File: US album sales rose 3% in ’11, to 458 million; the first rise since ’04. Digital sales are why. They rose 20% (or by 20 million) to 103 million albums while CD sales fell 6% (14 million) to 225 million. The remaining 130 million albums consists of 1.3 billion single-track downloads, which grew by 9% (127 million): every 10 singles are counted as an “album.” British singer Adele topped the charts selling 6.7 million albums, 1.5% of all music!
Tag Archives: Elliot’s Brief Blog
A Happy and Joy-Filled 2012!
I want to take this opportunity to thank you all very much for your interest in my blog. I also wish you and yours all the best for 2012. May it be a year of health, joy, laughter and prosperity — especially in risk adjusted terms.
Are all Jobs Created Equal?
With the presidential primaries about to begin, what makes me nuts is watching Republican presidential contenders like Perry and Romney endlessly argue over who created more jobs as governor, including, gasp, government jobs. Yet out of the other side of their mouths they contend that only the private sector creates economic growth and that Obama has created no jobs at all. With displays of raw intellectual firepower like this, we’re doomed.
No Help Wanted
The labor market is suffering from sclerosis. While employers are no longer firing workers – the percentage of workers laid off or fired in 10/11 was lower than in ’07, before the recession – they also aren’t hiring. Similarly, few of the employed are quitting their jobs. Usually about 2% of all workers quit their job each month. Now, it’s just 1.5%. In combination, these two trends make it very hard for the young and the unemployed to find work.
Profits to Bank On
I am sure you will be delighted to learn that US banks earned profits of $35 billion in Q3 ’11, their best showing since before the recession. The up-tick is primarily due to banks putting aside less to cover bad loans, not due to interest from new ones; bank loan balances increased by just $21.8 billion, or 0.3%. Banks with assets greater than $10 billion accounted for 85% of earnings, yet comprise 1.5% of all banks.
Corny Ag Prices
Farmland prices have doubled since ’06. The cost per acre in IA is now almost $7,000/acre up 32% since ’10. Inflation adjusted prices are higher now than in the late ‘70s which precipitated the farm bust of the 80s. Prices are high because corn and soybeans have doubled in price since ‘06 due to demand from China and corn-to-ethanol which takes more than 33% of all corn. Even TIAA-CREF has a $2.5 billion farmland portfolio.
Let’s Make a Deal!
On 1/1/13 $1.2 trillion in spending cuts commence, the $3.8 trillion Bush tax cuts end and if the 2% Social Security payroll tax holiday is extended, it too will end. Including reduced interest costs these events reduce the deficit by $6.2 trillion over a decade. Moreover, they all occur unless a bipartisan deal to stop them is reached in ’12. A deal is needed because absent a strong economy, such contractionary fiscal policy will devastate the economy.
Guns and Butter
With the troops all out of Iraq, we can now ask what the war cost. While not easy to estimate, if you include spending to date, VA costs, veterans disability payments, interest on the war debt, foreign assistance, future medical and disability costs and added homeland security costs one easily arrives at a figure of about $3.5 to $4 trillion; about 1/4 of our debt. Worth it?
Budgeting Math
Since the Super Committee failed $1.2 trillion in mandatory budgets cuts, starting in ’13 and running through ’21, will commence. But, the $1.2 trillion in cuts are actually only $984 billion! The law assumed that by not borrowing $984 billion, interest costs would fall by $216 billion and that counts as savings! Social Security and Medicaid are untouchable, as are the salaries and benefits of the President and members of Congress.
Shop or Drop?
Consumers are spending but for how much longer? Over the past year disposable income is down, savings has fallen from 5.3% to 3.5%, household net worth has fallen by $2.4 trillion as house prices keep falling and credit card debt is up. Luxury spending is strong but chain-store sales were down in Oct and Nov as were purchases by the middle class. I don’t think households can keep spending at the elevated levels of late.