Monday, September 08, 2014

Housing Is Being Held Back By a Shortage of Skilled Labor: the Fruits of Malinvestment

How slack are labor markets? Looking at the overall unemployment rate, 6.1% in august according to the Bureau of Labor Statistics,  it would appear there is significant slack still justifying the Fed's draconian  war on interest rates.  Yet evidence indicates that in specific market segments, labor is short.  Here Bloomberg's Mike Mckee reports on home builder's lack of laborers since the recession in this August 19th “Market Makers” video. 

How are we to interpret this?   The huge overhang of housing stock and the mismatch of units built and units demanded depressed housing starts.  The housing bubble had drawn in workers who invested in skills that became redundant when the housing stock was overbuilt.  Their newly acquired human capital became stranded and these skills atrophied during the long resulting recession when the unsustainable levels prior to 2007 could not be maintained. Those workers have retired, gone on to other fields, or joined the ranks of the disabled.

Saturday, August 16, 2014

A Different Take on the Two Tier Corporate Jet Market

Michael Stothard, the FT’s Paris correspondent, reports from the Farnborough air show: Business Jets on the Rise (see the 3:51 minute August 13, 2014 video below.) After a 30 per cent fall in revenue following the financial crisis, the global business jet market is pulling out of its dive.  But as he explains in his article, there is a big difference between the market for big expensive jets and smaller ones.

Big Birds, Little Birds 

What lies behind the more horrendous drop in small plane demand (down 56%) and their continued weakness? I would argue it is yet further evidence of the root causes of America's weak recovery. The large corporations, the Fortune 500 and the next rank down have been very profitable and have gained enormously from the loose monetary policies of the Bernanke and Yellin Fed. Smaller firms have not fared well and the business climate is definitely hostile to unglamorous start-ups. Big Corporate America is buying big jets. The smaller guys are either not starting up in the first place (for the first time since the statistics have been kept more business went out of business than started up) or they can not grow to the point where a small plane would be cost effective.

In a recent Economist interview, President Obama disputes

Thursday, May 22, 2014

And You Thought the World Cup Was About Soccer! Dance Time!

rts & Entertainment Learn Brazilian Dance for the World Cup With the World Cup right around the corner, you're likely to hear some sizzling sounds that will make you want to sway those hips. After all, dancing is as much a part of the Brazilian soul as soccer. WSJ's Tanya Rivero learned some Brazilian steps at "Dancing in the Park," part of a free dance series held in New York City's Bryant Park.

Tuesday, February 18, 2014

A Cold New York and Its Cool Fashions

The New York Fashion week may have run into snow and more snow, but it did not stop fashions heading down the runway. From turtlenecks to winter tones, WSJ's Elizabeth Holmes gives tips for your cold-weather wardrobe. (Plus, two bonus buys for next year.)
 1:56 2/14/14

Tuesday, January 07, 2014

Beware: the Aussie Air-to-Phone Drone is on the way: Flirty

Some young Aussies have come up with an aerial device, a sort of drone that looks like a beanie designed by aerospace engineers, that can deliver a package right to where your smart phone is and presumably you are. They have teamed up with a textbook renter, Zookal to provide the service as you can see on this video off the News Corp. Australia site produced courtesy Zookal and the PR Group.

We do have a few questions:

Is it scalable?

Can it deliver indoors?

Friday, December 06, 2013

Jet Blue Speaking Arabic?

FlyDubai Sets Out Stall with Boeing Binge

Boeing was a big hit at the Dubai Airshow, but it was not just 777s that it sold.  FlyDubai committed to buy up to 100 737 MAX 8 airplanes and 11 Next-Generation 737-800s (Boeing's single-aisle jets.)  Presumably much of these will be made here in Wichita by Spirit AeroSystems. Hubbed in Dubai like Emirates, FlyDubai's strategy is as a low cost, shorter haul flight airline as it tries to capture destinations (particularly in the Arab/Muslim world) currently not being served by Emirates Airline, the regional powerhouse. 

In this video, WSJ's Rory Jones looks at where the company is headed and what might be some of the challenges it faces:

Photo: Getty Images

Monday, November 18, 2013

What Is the 777X and Why Are the Unions Upset?

 Boeing launched its newest version of the 777, the 777X, at the Dubai Air Show yesterday (Sunday.) The 400 seat twin aisle plane is its response to Airbus's A350. Jon Ostrower gives us a peek at the plane in this Wall Street Journal video:

The 777X is the center chessboard in a match between Boeing and its unions. Boeing had built a huge new plant at the cost of a billion dollars in South Carolina. Just as it was to open it, its union brought a complaint against it before the NLRB that claimed Boeing built the plant to break the union.  With the help of a friendly NLRB, the union was able to reach a settlement with Boeing that shifted certain work to Seattle, including some from Wichita.

Now it is Boeing's move.

When it came to deciding where to build the 777X, Boeing's last big development project, it presented a deal to the State of Washington and its union with which it would build most of the 777X in Seattle.  The state offered $8.7 billion in incentives (that is a lot of money.)  It proposed a new contact to the union that would shift to a defined contribution pension plan among other concessions. However, "the 32,000 unionized members of the International Association of Machinists and Aerospace Workers, also known as the IAM, rejected the deal by a 67% to 33% margin."  With no deal, Boeing is looking around the country and the world to decide where to assemble the new jetliner and build the wings and other parts.  Molly Mullins reports in the Wichita Eagle that there is an attempt to get some of that work here in Wichita. She reported that "Greater Wichita Economic Development Coalition officials met Thursday morning to discuss going after the 777X work for Boeing’s facility in Wichita Boeing."

Read more here:

Boeing says it will decide where to build the plan in the next two to three months.

Boeing Hits a Home Run With the 777X

At the Dubai airshow, Boeing launched its 777X Largest and manage the biggest launch in commercial jetliner history with over 200 orders. Emirates Airline placed a $76 billion order for 150 of the new 777X jets. In this video, the Wall Street Journal's Rory Jones reports from Dubai.