Political Calculations
Unexpectedly Intriguing!
November 29, 2019
Sale! - Source: Unsplash

Black Friday is another uniquely American tradition that arose as many Americans have the day off work following the national Thanksgiving holiday, which about a month before Christmas, provides an opportunity to shop for gifts for that upcoming holiday.

With so many shoppers hitting their stores, many retailers looking to claim a larger share of all the cash that will be spent on Black Friday will offer special discounts to their customers, which raises an obvious question. Are their special sale prices worth the hassle of shopping at their stores?

Hanna Pamula built a tool to find out, which Lifehacker profiled earlier this month:

It certainly feels like everything is on sale all the time these days. But not all sales are created equal. It’s especially important to recognize this during the holidays, when shopping holidays feature complex discount schemes that sometimes carry equally complex limitations.

If mental math isn’t your strong suit, check out the Black Friday Calculator. “A lot of these seemingly genuine sales are often math traps,” said Hanna Pamula, a Ph.D. student in Poland who built it for The Omni Calculator Project. She includes nine different discount scenarios —percent off, buy-one-get-one, and a discount for buying multiple items, to name a few—to help you determine whether a discount is worth your time and money.

We took the tool for a test drive, and so can you, since we've embedded it below. If you're accessing this article on a site that republishes our RSS news feed, please click through to our site to access a working version.

Black Friday Calculator

Overall, we would describe the tool as a fun personal finance application. Since it covers a number of different kinds of promotions that retailers offer, from the simple "X% off" sale to "Buy one, get Y% off a second one" to more complicated ("Get an additional W% off our Z%-off sale price") promotions, it will be useful in evaluating many of kinds of discounts you will inevitably encounter while shopping.

On that latter count, it can help you compare competing sale prices, letting you know which retailer's promotion delivers the biggest discount.

One thing we found was a bit of a hassle is the default setting for sales tax, which we would argue should be set to "No" rather than "Yes" for American shoppers, since most sale prices in the U.S. do not roll in the multiple levels of sales taxes that apply in the various jurisdictions that impose them across the nation. That's less a concern for other countries that impose national value-added taxes on sale transactions, but for Americans, it will add a couple of steps between data entry and results.

The Omni Calculator project is a site that features several hundred calculators with tools for doing math that applies across a wide variety of fields and applications. We've been in the online tool building business for a long time, where we're always happy to find new resources that online applications easier. If things slow down enough for you this Black Friday weekend, do check out their other tools!

Image credit: unsplash-logoArtem Beliaikin


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November 28, 2019

A three-minute classic, with The Muppet Show's Swedish Chef and his uncle, Danny Kaye, preparing a turkey for Thanksgiving....

Of course, the all-time Thanksgiving comedy classic belongs to WKRP in Cincinnati's "Turkeys Away" episode. Here's one of the two clips that everyone who has ever seen the show remembers, from a series that has largely been lost to time because of copyright laws and music licensing fees.

If you must talk about anything political this Thanksgiving, try copyright laws. Free WKRP!

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November 27, 2019

In the United States, the days before and after the annual Thanksgiving holiday represent busiest days for travel in the U.S. each year. If you care about the environment, what do you suppose is the mode of travel that will consume the least amount of energy on average and will have the smallest carbon footprint for how far you might travel to be with your friends and family this year?

The answer may surprise you! We've visualized data showing the trends for the average energy intensity, or rather, the average energy consumed per passenger mile, for several different modes of passenger transportation in the U.S. from 1975 through 2016 in the interactive chart below. If you're accessing this article on a site that republishes our RSS news feed, please click through to our site to access it there.

In the chart, "Light Truck" refers to any two-axle, four wheel truck, which would include anything from pickup trucks to SUVs. "Air" refers to commercial air travel, while "Intercity Rail" in the U.S. means train travel via Amtrak.

Probably the most remarkable thing is how air travel has become less energy intensive per passenger mile than both transit buses (after 1996) and cars (after 2004). The second most remarkable thing we find is how transit buses have become worse over time.

We should note however that the values in the chart represent the average for each mode of passenger transportation. Individual vehicles within each mode have a wide amount of energy intensity variation, where your carbon footprint for travel will depend on it. For example, there's a big difference in fuel efficiency between jets that began flying 25 years ago and are still in service and newer versions that have rolled off their assembly lines more recently. The same is true for all the other modes of transportation.

Environmentally speaking, the average BTUs per passenger mile for each mode is directly proportional to the amount of carbon emissions it produces, where each 1 million BTUs consumed produces the equivalent of 53 kilograms of emitted carbon dioxide. If you're traveling, the greenest thing you can do is choose the least energy intensive mode of transportation that can get you to where you need to be within the time you have available to travel.

If you're traveling to your Thanksgiving destination today, you have our sympathy!

References

Davis, Stacy C. and Boundy, Robert G. Transportation Energy Data Book. Edition 37.2. Table 2.14: Energy Intensities of Highway Passenger Modes, 1970–2016. Table 2.15: Energy Intensities of Nonhighway Passenger Modes, 1970-2016. Oak Ridge National Laboratory. [PDF Document]. August 2019.

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November 26, 2019

After answering "how big of a turkey you should get", let's tweak the question a bit and ask "how big can a turkey get?"!

Let's start answering that new question by finding out how big turkeys have already become. To find out, we've pulled 50 years of data on U.S. farm-raised turkeys from the National Turkey Federation and the U.S. Department of Agriculture, which includes finalized data from 1970 through 2018 and preliminary data from 2019.

In 2019, U.S. farms have raised an estimated population of 240 million turkeys, which if that figure holds, would be the fewest since 1987's 240.2 million.

Number of Turkeys Raised on U.S. Farms, 1970-2018, with Estimate for 2019*

Altogether, the live weight of all those U.S. farm-raised turkeys in 2019 totals 7.66 billion pounds, which would be an 0.8% increase over 2018's total and is 57% greater than 1987's total.

Total Live Weight of Turkeys Produced, 1970-2018, with Estimate for 2019*

That combination of data can only mean one thing: the size of a U.S. farm-raised turkey has grown considerably over time. The following chart shows how much, where we find the average live weight of a farm-raised turkey in 2019 is 31.9 pounds, which is 70% larger than the 18.7 pounds that the average farm-raised turkey tipped the scales at back during the stagflationary days of the 1970s.

Average Live Weight of U.S. Farm-Raised Turkeys, 1970-2018, with Estimate for 2019*

But it's also a significant increase over the 31.0 pounds the average farm-raised turkey weighed just a year ago. We think the reason for that might be attributable to an unintended consequence of the U.S.-China tariff war, where a key part of China's strategy has been to boycott purchases of U.S.-grown soybeans.

For U.S. turkey farmers, that has made higher quality soybean meal available to be fed to U.S. farm-raised turkeys at lower prices than they have been in recent years, which means that U.S. turkeys are reaching new records in how large they can grow.

As for how big a farm-raised turkey can get, we're afraid our chart doesn't provide enough information to tell, where if they were approaching a natural limit to their potential size, it would start taking on more of an S-shaped, logistic growth pattern, leveling out at a plateau with the passage of time.

But what if we assume that we're just at the halfway point for when that might happen though we don't see that in the data yet? At 31.9 pounds, 2019's average farm-raised turkey is 13.2 pounds heavier than the average farm-raised turkey of the 1970s, before U.S. turkey farmers began boosting their yield. Adding that margin onto the today's 31.9 pound average live weight suggests that another 40 years of increasing productivity could yield turkeys that regularly reach an average live weight of 45 pounds.

Is that number unreasonable? Several varieties of farm-raised turkeys, including Broad Breasted Bronze and Cornish Cross, have already produced individual birds that weighed over 50 pounds, so yes it is possible, though it would take many more years of productivity improvements in raising turkeys for U.S. farmers to achieve it.

There are crazier things afoot in the world today. Chinese hogs farmers have embarked on an effort to raise pigs that weigh as much as polar bears. That China needs to have such an effort can in part be traced in part to another unintended consequence of the U.S.-China tariff war.

Data Sources

National Turkey Federation. Sourcebook. [PDF Document]. October 2013.

U.S. Department of Agriculture. Poultry Production and Value, Final Estimates 2013-2017. [PDF Document]. June 2019.

U.S. Department of Agriculture. Turkeys Raised. [PDF Document]. 26 September 2019.

U.S. Department of Agriculture. Livestock, Dairy, and Poultry Outlook. [PDF Document]. 15 November 2019.

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November 25, 2019

It's probably no accident that when you type just the words "how big" into the Google search engine this time of year, one of the top autofill responses it suggests for you to click is "how big of a turkey should i get".

We're here to help you answer that question, using the thought process worked out by the creative minds of Delish, who balanced the needs to feed everyone at your table with the desire to have a reasonable amount of leftovers after the big meal!

Here's how they described their problem statement:

Buying the wrong size turkey for your Thanksgiving dinner is like buying the wrong size underwear—if it's too small you feel a sense of awkward desperation, but if it's too big you feel like you're swimming in it. To avoid that, we've come up with a fool-proof equation to calculate how much turkey you'll need based on the number of people you're serving.

While they put their solution into a chart, we're going to consolidate it into a simple tool, where you just need to enter how many people you're seeking to feed at your Thanksgiving dinner. If you're accessing this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool.

Turkey Dinner Guest Data
Input Data Guests
How many guests will you be serving turkey?

How Big Of A Turkey Should You Get?
Calculated Results Pounds
Optimal Amount of Turkey (Ready-To-Cook Weight) To Get
Minimum Amount of Turkey To Get (Minimal Leftovers)
Maximum Amount of Turkey To Get (Generous Leftovers)

Our turkey size tool will give you the "optimal" Ready-To-Cook weight of a turkey to get to both feed your guests and have a fair amount of leftovers, the "minimum" RTC weight of a turkey that would be enough to feed your guests and have minimal leftovers, and also the "maximum" RTC weight of a turkey that will feed your guests and let you have a generous amount of leftover turkey for future meals.

The Delish staff recommends that if you need more than 20 pounds of turkey to feed your guests, rather than get a giant bird from your grocer that might overwhelm your oven, you might instead consider cooking more than one turkey. In that situation, you might consider roasting a bone-in turkey breast along with a traditional bird if you need 8 or fewer additional pounds of turkey to feed all your guests.

And if you only need 8 or fewer pounds of turkey, roasting only a bone-in turkey breast might fit the bill, unless you really like traditional stuffing!

Turkey Dinner - Source: USDA National Agricultural Library - https://www.nal.usda.gov/exhibits/speccoll/exhibits/show/2015-calendar/item/8356

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After three consecutive weeks of setting new record highs, the S&P 500 (Index: SPX) set one more record high close of 3,122.03 on Monday, 18 November 2019 before coasting lower during the remainder of the third week of November 2019 to end the week at 3,110.29.

Overall, our observation last week that the index appeared to be slightly ahead of itself appears to have been correct and to have corrected, where one week later, the S&P 500 closed the week fully consistent with how our dividend futures-based model would set it, assuming investors are focusing 2020-Q3 (or 2020-Q1, since the alternate trajectories associated with both these future quarters are little different from each other, although we think 2020-Q3 is the dominant focal point at this time).

Alternative Futures - S&P 500 - 2019Q4 - Standard Model - Snapshot on 22 Nov 2019

We believe investors are primarily focusing on 2020-Q3 at this time because the CME Group's FedWatch Tool indicates this quarter now has better-than-even odds of being when the Federal Reserve will next act to change interest rates in the United States, with investors anticipating a quarter point rate cut in the Federal Funds Rate during this distant future quarter.

CME Group FedWatch Tool Probabilities of Federal Funds Rate Changing at Future FOMC Meeting Dates, Snapshot on 22 November 2019

For the news of the week, the prospects for a 'phase 1' trade deal between the U.S. and China continued to generate noise affecting stock prices, but if there's a theme, it's the split between comparatively positive news for the U.S. economy and the ongoing descent of gloom over a slowing global economy.

Monday, 18 November 2019
Tuesday, 19 November 2019
Wednesday, 20 November 2019
Thursday, 21 November 2019
Friday, 22 November 2019

One thing to watch for in the weeks and months ahead is the extent to which the U.S. economy might be slowed or otherwise impacted by what has been happening in the global economy during much of the past year and half, where many nations' reported economic growth is now within a margin where even modest revisions in their data would place them in recession.

Elsewhere, Barry Ritholtz listed the positives and negatives he found in the week's economics and market-related news, finding six of each, with housing in the U.S. having multiple entries on both sides of the ledger.

With Thanksgiving Week now at hand, we're looking forward to our annual tradition of celebrating the most American of all holidays throughout the rest of the week! Assuming the markets will be slow as both companies and traders switch to holiday mode, be sure to check in with us to get your annual fix of Thanksgiving-related tools and analysis, starting in 3...2...1!

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November 22, 2019

How much will the impeachment drama on Capitol Hill cost the U.S. economy?

We're always skeptical whenever we see estimates of how much a particular non-work-related activity costs businesses from lost productivity because workers are too distracted to do their jobs in the news, whether it be related to the Super Bowl, the World Cup, March Madness, or some other broadcast event, but for the first time, we've seen a report that describes how one of these estimates has come about. In this case, the context is the televised impeachment inquiry taking place in the U.S. House of Representatives, which might as well be its own category of sporting event.

Millions of Americans tuned in yesterday to watch the beginning of the impeachment hearings against President Trump — many of them while they were at work. And according to an estimate by outplacement firm Challenger, Gray & Christmas, that’s costing American businesses roughly $2.1 billion per hour in lost productivity.

The firm arrived at the $2.1 billion number by relying on the following figures: the average hourly wage ($28.18), the number of Americans who use the internet at work (90,130,268), the percentage of employed Americans who work weekdays (89 percent), and the percentage of workers who say they discuss politics at work (94 percent).

That back-of-the-envelope math provides the basis for our latest tool, which is built to calculate both the lost productivity per hour and the total lost productivity to the U.S. economy over a given number of workdays. Best of all, the tool may be adapted to the cost of lost productivity for any given event, not just impeachment proceedings, or in any country, not just the United States, so the tool is not limited to that special case. If you're accessing this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool.

Broadcast Event Data
Input Data Values
Average Hourly Wage
Number of People Who Use Internet At Work
Percentage of Employed People Who Work on Weekdays
Percentage of Workers Who Access Or Discuss Event At Work
Number of Hours Per Day Workers Are Distracted By Event
Number of Workdays Event Occurs Before Concluding

Estimated Lost Productivity Related To Broadcast Event
Calculated Results Values
Lost Productivity per Hour
Cost of Accumulated Lost Productivity Over Duration of Event

For our default analysis, since the broadcast impeachment hearings in the House are relatively new and just getting underway, we've instead used data that applies to the Mueller investigation of alleged Russian collusion with the 2016 Trump presidential campaign to estimate the total cost of lost productivity in American workplaces from that protracted political affair, but you're welcome to substitute data that applies to the similar political event of the Trump impeachment inquiry as it progresses.

Here, 547 work days passed between the time a special counsel named Robert Mueller was appointed to run an investigation into Russia's potential involvement with President Trump's successful 2016 political campaign on 17 May 2017 to the time it fizzled out with his final testimony on the investigation before the U.S. Congress on 24 July 2019. Assuming working Americans spent an average of one hour per workday talking about the Mueller investigation while on the job as it was regularly in the news, the politically-charged probe would have cost the U.S. economy an estimated $1.1 trillion in lost productivity during this period.

Let's say all of that lost productivity would have otherwise added to the U.S. economy's gross domestic product if not for what ultimately amounted to be a long-running sideshow distraction. Using GDP data accessed on 15 November 2019 for the period 2017-Q2 through 2019-Q2, we find the nation's nominal GDP rose from $19.357 trillion to $21.340 trillion over this two year long period approximately coinciding with the duration of the so-called "Russian Collusion" investigation, an average annualized growth rate of 5.0% (or 2.7% if we use the BEA's inflation-adjusted GDP figures for these quarters).

Boosting 2019-Q2's nominal GDP by $1.1 trillion to account for the productivity allegedly lost to workplace discussions about the Mueller investigation to $22.44 trillion increases the average annualized GDP growth rate during this two year period to 7.7% (or 5.4% in 'real' terms).

Is that figure realistic? We would say probably not, because it's simply too much money for serious businesses to tolerate losing without their bosses staging an intervention to refocus employees on doing their jobs by taking corrective action to minimize unproductive politics-related chatter at work.

Cover Illustration from New York Post on 13 November 2019

On the other hand, for businesses with non-serious bosses, it probably has resulted in major losses in both productivity and quality. For example, just consider how much time late night comedy talk shows have spent on politically-related topics during the last several years and how unfunny they've become as a result, and you can see the damage the corrosiveness of political obsessions has caused every weeknight. And that's with Donald Trump as President of the United States, which by all rights has got to be a comedy gold mine!

Then there's the least serious business of all, which goes on in the U.S. Congress, where politicians seem incapable of doing anything else as congressional bosses have chosen to put their political sideshows up front and center, ahead of useful things like passing spending bills to avoid government agency shutdowns, approving trade deals, et cetera. Nearly a year into its tenure, with both the Mueller investigation and now the impeachment inquiry distracting it, the 116th session of Congress is currently at risk of becoming the least productive in history.

We're on the cusp of the Thanksgiving holiday here in the United States, where many Americans can soon expect have to deal with their politically-obsessed family members at their dining table. If this year's dinner is at your house, be the serious boss and put the kibosh on entering the social disaster minefield that you will otherwise find yourself in if you're foolish enough to allow their political obsessions to dominate and ruin the experience of your Thanksgiving feast. If need be, you might consider putting your politically-obsessed guests in their proper place. At the kids' table.

Update 15 December 2019: We were wrong about treating the Mueller investigation a separate event from the House's impeachment inquiry. That's according to House of Representatives Speaker Nancy Pelosi, who confirms the House's current impeachment effort began with Robert Mueller's appointment to lead the investigation that bears his name:

Democrats showed signs of unity Tuesday after Speaker Nancy Pelosi and the committee chairs announced the plan to proceed with just two articles of impeachment.

Pelosi declined to explain why Democrats opted not to pursue an obstruction of justice article of impeachment encompassing the special counsel’s findings.

“It’s no use talking about what isn’t. This is what is,” she said Tuesday Morning at Politico’s Women Rule Summit.

Yet, Pelosi invoked the appointment of Robert S. Mueller to lead the special counsel investigation as the start of the impeachment process when defending claims that Democrats have rushed the process.

“Speed? It’s been going on for 22 months, two and a half years actually,” she said.

And there you have it. To update our tool, you just need to enter the number of workdays that have passed since the Mueller investigation began, which you can easily get from TimeAndDate's business days calculator by entering 17 May 2017 as the start date and whatever date you would like to update it through as the end date. Through mid-December 2019, we are at 646 elapsed workdays and counting.

Image Source: New York Post.



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November 21, 2019

After peaking at odds of one in nine back on 9 September 2019, we're now on the downside for the latest elevated recession risk cycle. Through 20 November 2019, the odds of the NBER eventually determining a recession began sometime between 20 November 2019 and 20 November 2020 stand at nearly one in 14, for a 7% probability, according to a recession forecasting method developed back in 2006 by Jonathan Wright, which uses the level of the effective Federal Funds Rate and the spread between the yields of the 10-Year and 3-Month Constant Maturity U.S. Treasuries to estimate the probability of recession based on historical data.

The Recession Probability Track shows where the rolling one-quarter averages of these daily measures stand as of the close of trading on 20 November 2019.

U.S. Recession Probability Track Starting 2 January 2014, Ending 20 November 2019

While the recession risk is now falling, that doesn't change where it peaked. According to Wright's model, should the NBER someday declare a recession began sometime in either 2019 or 2020, the odds are highest they will pick a month between September 2019 and September 2020. Since most of that period is still ahead of us, so is the elevated recession risk.

On a positive note, the U.S. Treasury yield curve has normalized since 11 October 2019, with the yield of the constant maturity 10-year Treasury rising above that of the 3-month Treasury. With the yield curve no longer inverted, we are next watching for the spread between the two Treasuries to grow and hold larger than a quarter point difference, after which, we will reduce the frequency for presenting these updates from every three weeks to every six, coinciding with the regular timing of meetings held by the Federal Reserve's Open Market Committee (FOMC).

Given the very low level of the Treasury yield curve spread, we are also watching for signs the recent trend of normalization might reverse. Even though the Fed has effectively restarted its quantitative easing monetary policies of the Great Recession years and has cut the Federal Funds Rate three times since 31 July 2019 while signaling it is done with additional rate cuts for now, should markets come to hold a contrary view, the Fed could be forced to resume rate cuts if the falling trend in recession risk becomes a rising one instead. Such an event would almost certainly coincide with the yield curve inverting once more.

Previously on Political Calculations


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November 20, 2019

Every three months, we take a snapshot of the expectations for future earnings in the S&P 500 at approximately the midpoint of the current quarter, shortly after most U.S. firms have announced their previous quarter's earnings.

The earnings outlook for the S&P 500 has continued to deteriorate since our Summer 2019 edition. As of data from 11 November 2019, Standard & Poor's earnings data indicates a new earnings recession has begun, with the trailing twelve month total of quarterly earnings for 2019-Q3 dropping below the level recorded for 2019-Q2.

Forecasts for S&P 500 Trailing Twelve Month Earnings per Share, November 2015-December 2020, Snapshot on 11 November 2019

S&P is currently forecasting the new earnings recession will last just a quarter, but as you can see in the chart above, S&P's earnings forecasts have a history of being overly optimistic and being subsequently revised downward.

You can see that track record of excessive optimism in the chart above, which shows the evolution of earnings through the previous earnings recession for the S&P 500 in the period from 2014-Q3 to 2017-Q2. Here, from September 2014 to September 2016, the earnings projections always looked like they were about to turn around, but either deepened or extended to draw out the length of the earnings recession instead. It wasn't until December 2016 that a recovery really began to gain traction, where it took an additional two quarters for the index to recover to the level of trailing year earnings it had achieved prior the beginning of that earnings recession.

Catching up on other changes in the updated outlook for earnings, S&P's projection for the S&P 500's trailing twelve month earnings in December 2019 has declined from $146.63 per share to $141.63. Looking further forward, out to December 2020, S&P's projections of S&P 500 earnings in 2020 has dipped by a similar amount, from the $166.51 recorded three months ago to $161.95 as of 11 November 2019.

Data Source

Silverblatt, Howard. Standard & Poor. S&P 500 Earnings and Estimates. [Excel Spreadsheet]. 11 November 2019. Accessed 19 November 2019.

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November 19, 2019

If you rented out your home, how much could you reasonably expect to collect in monthly rent?

While the answer to that question will ultimately come down to the biggest single driver of both rent and home prices in real estate, "location, location, location", we can give you a ballpark estimate of how much money renting out your house might bring in each month using historic data published in the U.S. Bureau of Labor Statistics' annual Consumer Expenditure Survey.

The following chart shows the average amount of monthly rent that surveyed American homeowners estimate they might earn if they owned an average home in the U.S. in each year from 1984 through 2018.

Average Estimated Market Value of Owned Home versus Average Estimated Monthly Rental Value of Owned Home, 1984-2018

We ran a simple regression analysis of the historic data, where the math formula indicated on the chart above will provide a ballpark estimate of what average monthly rent might be collected by an owner renting out their average valued home. And here at Political Calculations, where there's math, a tool isn't far behind! If you're accessing this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool.

Home Value Data
Input Data Values
How much is your home worth?

Estimated Rent Value
Calculated Results Values
Estimated Monthly Rent It Might Earn

Since the tool is based on the average value of owned U.S. homes and average estimated monthly rents from renting out those homes in the years from 1984 through 2018, the further you get from the average trend line, say during a housing bubble or when rents are too damn high, to coin a phrase, the less accurate the tool's estimate will be. Likewise, the same holds the further outside the period of 1984 through 2018 we are for the average home values you might enter.

Reference

U.S. Bureau of Labor Statistics. Consumer Expenditure Survey. Multiyear Tables. [PDF Documents: 1984-1991, 1992-1999, 2000-2005, 2006-2012, 2013-2018]. Reference URL: http://www.bls.gov/cex/csxmulti.htm. Accessed 10 September 2019. 


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November 18, 2019

The S&P 500 (Index: SPX) marked its third consecutive week of closing at new record high values, ending Friday, 15 November 2019 at 3,120.46, with health care stocks providing the upward momentum to close out the second full week of November 2019.

Overall, the level of the S&P 500 looks like its running a bit hot compared to where our dividend futures-based model, but since it's projecting a rising trend over the next week, it could be described as simply being slightly ahead of itself.

Alternative Futures - S&P 500 - 2019Q4 - Standard Model - Snapshot on 15 Nov 2019

The level of the S&P 500 is generally consistent with investors either focusing ahead on either 2020-Q1 or 2020-Q3 in setting stock prices, although we think 2020-Q3 is the current focus because the projected future dividends expected in that quarter has been rising over the last several weeks.

Meanwhile, there's the ever present concern about what the Federal Reserve might do with setting the basic interest rate it controls. On that count, the CME Group's FedWatch Tool is projecting the investor expectation that the Fed will cut rates by a quarter point during 2020-Q4, but it wouldn't take much to shift the probabilities of such a rate change earlier by a quarter, so 2020-Q3 will very much continue to be a forward-looking focal point for investors.

CME Group FedWatch Tool Probabilities of Federal Funds Rate Changing at Future FOMC Meeting Dates, Snapshot on 15 November 2019

Meanwhile, the flow of new information offered little in the way of negativity for the U.S. stock market during the second week of November 2019. Here are the more significant headlines we flagged during the week that was:

Monday, 11 November 2019
Tuesday, 12 November 2019
Wednesday, 13 November 2019
Thursday, 14 November 2019
Friday, 15 November 2019

Barry Ritholtz succinctly summarized the positives and negatives he found in last week's economics and market-related news, where the #1 positive is that the market keeps doing the most bullish thing it can do: keep making new highs!

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November 15, 2019

Imagine if the anti-vaccine movement succeeded in their firehosing strategy for spreading their arguments against vaccination and convinced millions of people to abandon getting protection from highly contagious diseases by rejecting vaccines. Given the state of modern medicine, would they really face that big of a risk?

We don't have to spend much time wondering what would happen in such a scenario, because there is a highly contagious disease for which no vaccine exists that is currently sweeping across national borders, killing millions that have become infected by it despite the best efforts of modern medicine. That disease is called African Swine Fever and it is responsible for hundreds of millions of deaths in the populations of swine that become infected with it.

African swine fever is a virus that infects domestic pigs and wild boars. Infected animals get a high fever and internal bleeding. Over 90 percent of infected pigs die, mostly within a week.

The disease is transmitted through contact with infected blood or the carcasses of animals that have died from the disease. The virus can remain in them for months or even years. Scientists say humans cannot be infected.

The disease has devastated China's domestic swine herds and is moving outside China's borders into other nations, with South Korea the latest to be forced to cull hundreds of thousands of infected swine in an attempt to prevent the further spread of the disease to uninfected hogs. The following map from the United Nations' Food and Agriculture Organization reveals the spread of the epidemic in southeast Asia:

UN FAO Map: ASF situation in Asia (August 2018 to 3 October 2019)

Perhaps the scariest thing about the spread of African Swine Fever in China and across southeast Asia is that it has wreaked so much havoc and caused so many deaths in the very short time since it was first detected within China in August 2018.

Since there is neither a vaccine to resist the spread of African Swine Fever nor any treatment to cure it, the only way at present to break the spread of the disease once members of a herd have become infected is to cull infected herds and to quarantine or sequester their carcasses afterward to eradicate the continued risk from infection. African Swine Fever provides a very modern example of what life without vaccines would be like.

What if there was a vaccine for African Swine Fever? How would having a vaccine reduce the risk of becoming infected and dying from the condition for the surviving population of hogs?

The answer to these questions depend on how contagious African Swine Fever is and how much of the population that might otherwise be at-risk of becoming infected has been inoculated against the highly infectious disease. The following video introduces the math that captures these factors, which makes it possible to create an effective strategy for arresting the spread of contagious diseases:

There are two main studies that provide insight into what the value of R₀ is for African Swine Fever. The first puts the value of the basic reproduction number between 1.58 and 3.24 depending on the modeling method for considering the rate of spread of the disease among Uganda's farm-raised and wild populations of swine. The second comes from an analysis of an outbreak within the Russian Federation, which found values for R₀ ranging from 4.4 to 17.3, depending upon infection rate, variable incubation periods, and hog farming practices.

The high end of that latter range is just shy of the R₀ of 18 for measles, which is one of the most infectious diseases known to modern medicine.

Using these values, we can determine what percentage of the surviving hog population would need to be vaccinated to guard against the risk of uncontrolled contagion. We've built the following tool to do that math, where you can substitute whatever R₀ value you might choose for your own analysis, where our default value of 10.9 falls in the middle of the range from the second study we noted above, since China's farm conditions are more similar to those in Russia than they are to those in Uganda. If you're accessing this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool.

Contagious Disease Data
Input Data Values
Basic Reproduction Value (R₀)

Population Inoculation Target
Calculated Results Values
Minimum Percentage of Population Needed to be Vaccinated to Minimize Spread of Infectious Disease

Our tool reveals that with an R₀ value of 10.9, at least 91% of the surviving uninfected population would need to be vaccinated to significant slow the spread of the contagious disease without having to either quarantine or cull the population to prevent its further spread.

Substituting 17.3 for the R₀ value raises that value to 94%. Although if you really cared about preventing as many hogs as you could from becoming infected, you would innoculate 100% of the population to fully get the disease under control.

Now imagine if we were talking about people. Given their track record, what have pseudoscience belief-driven anti-vaxxers done to earn trust from us in any of the things they say?

Previously on Political Calculations

Need a guide and examples you can use to debunk pseudoscience claims? Our Examples of Junk Science (EOJS) series provides a lot of insight you might find useful for dealing with all those who are the spiritual brethren of anti-vaxxers!

References

Barongo, Mike B.; Stahl, Karl; Bett, Bernard; Bishop, Richard P.; Fevre, Eric M.; Aliro, Tony; Okoth, Edward; Masembe, Charles; Knobel, Darry; and Ssematimba, Amos. Estimating the Basic Reproductive Number (R0) for African Swine Fever Virus (ASFV) Transmission between Pig Herds in Uganda. PLoS One. 2015; 10(5): e0125842. Published online 2015 May 4. doi: 10.1371/journal.pone.0125842.

Guinat, C.; Porphyre, T.; Gogin, A.; Dixon, L.; Pfeiffer, D.U.; and Gubbins S.
Inferring within-herd transmission parameters for African swine fever virus using mortality data from outbreaks in the Russian Federation. Transboundary and Emerging Diseases. Volume 65, Issue 2, April 2018. Pages e264-e271. doi: 10.1111/tbed.12748.

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