Unemployment, Oil, Iron, China, Health Care, and Misers

It's a big picture Smörgåsbord!

May 18, 2009
Health Care Cost Inflation Appears to Slow, but Statistics Can Be Misleading

Three years ago, when costs were increasing by 9.6 percent, employers shouldered most of the burden. Costs went up, but they went up less for employees, who saw the amount coming out of their paycheck to pay for health care costs increase 5.4 percent.

Today, the trend has reversed.

According to Milliman’s data, employer costs in 2009 will rise 5.4 percent; employees, meanwhile, will see nearly a 15 percent increase in the amount of money that comes out of their paycheck to pay for health care. Then add another 5.4 percent increase in the amount employees pay out of pocket (and already taxed) for other health care expenses.

Behold the hidden "benefits" of rising unemployment. Businesses no longer feel the need to shoulder as much of the burden of rising health care costs.

That isn't what truly concerns me though. It's what's on the horizon.

April 27, 2009
Obama and Bernanke Weigh in on the Economy

The road to recovery still looks bumpy, but Obama and Bernanke say the view on the horizon is going to be better in many ways. And Texas may be on the forefront of that changing economic landscape, as sectors such as construction and retail shrink but energy and education continue to grow.

How could one be possibly pessimistic with higher long-term oil prices and a glut of future college graduates? *sarcasm*

May 18, 2009
China's College Graduates Are Moving On To Unemployment

Back in 2002, China's universities graduated 1.5 million students. That number has now quadrupled, with some six million out looking for a good job come the summer. But job offers are in decline. In fact, graduate unemployment was even an issue three years ago during those heady days of double digit growth rates. So what hope now for the class of 2009? There's a perfect Chinese storm.

May 15, 2009
Chinese Dealers Hoard Iron Ore and Bet on Price Rebound

Despite the global steel industry's drastic decline, and serious production surpluses in China's steel industry, China's iron ore imports in April rose 9.45%, month on month, and 33%, year on year, to set a record high. In the first four months of 2009, China imported 188.46 million tons of iron ore, up 22.9%, year on year, most of which was imported not by steel makers but by iron ore dealers. After entry into China, it was promptly arranged into piles in China's ports, where it sits.

This doesn't exactly inspire me to hoard iron right now as a way to protect myself from rising health care costs, and I am yet somehow drawn to lumps of coal. Am I a stagflationist? Am I an deflationist? Am I an inflationist? All of the above! Let's just say that the Ghost of Christmas Past, Ghost of Christmas Present, and Ghost of Christmas Yet to Come all visit me daily.

Bah, humbug!
Here's what I like about Ebenezer Scrooge: His meager lodgings were dark because darkness is cheap, and barely heated because coal is not free.