note on the graphs used here

sometime during the third week of March, the St Louis Fed, home to the FRED graphs, changed their graphs to an interactive format, which apparently necessitated eliminating some of the incompatible options which we had used in creating our graphs, and also left us with about half the options we had available and used before the upgrade...as a result, many of the FRED graphs we've included on this website previous to that date, all of which were all stored at the FRED site and which we'd always hyperlinked back there, were reformatted, which in many cases changed our bar graphs to line graphs, and some cases rendered them blank or unreadable... however, you can still click the text links we've always used in referring to them to view versions of our graphs as interactive graphs on the FRED site, or in the case where a graph has gone missing, click on the blank space where it had been in order to view it....


Sunday, January 8, 2012

notes on Dec unemployment, LPS’s mortgage monitor, ohio’s fracking quakes, & arctic methane

 Unemployed Over 26 Weeks we'll start talking about the December unemployment report by reminding everyone what we had learned when we looked at the BLS technical notes, and most specifically, that "the confidence interval for the monthly change in total nonfarm employment from the establishment survey is on the order of plus or minus 100,000" -- just so you know when i parrot the numbers in this month's BLS employment report, or any government report for that matter, we have to realize that these apparently exact numbers are really no more than broad approximations taken from a small incomplete sampling, and that the subsequent revisions 2 months from now will be more accurate than these widely reported numbers...that said, from the broader establishment survey, BLS reports that 200,000 non farm payroll jobs were added in December, with 212,000 private sector job gains offset by the loss of 12,000 government jobs…the areas where we saw the largest job gains were transportation and warehousing (+50,000) and retail (+28,000), which brings us to our first caveat, as 42,000 of those were couriers and messengers, such as UPS drivers, which may mean we’ll lose most of those jobs next month….understand that December’s report is already seasonally adjusted, so what this is telling us is that there were 42,000 more couriers added than in previous decembers; on an unadjusted basis, there was a net gain of 718,500 retail jobs, on par with pre-recession decembers, which may hint that this month’s seasonal adjustment is skewed by lousy the decembers in 2008 & 2009; other strong sectors this month were hires in health care and “mining” which must include oil & gas…for the entire year, we’ve gained 1,640,000 jobs, which barely keeps up with the increase in the working age population; even at this month’s pace, it wouldnt be until well after romney’s second term that we’d restore full employmentFRED Graph…according to the smaller household survey, from which the widely reported unemployment percentage is calculated, the number of employed rose 176,000, the civilian labor force fell 50,000 (remember, those who give up are no longer counted) and unemployment fell by 226,000 as the number of those not in the labor force rose by 194,000, giving us an unemployment rate of 8.5% for december; U-6, which includes part-time workers who want full time jobs. fell from 15.6% to 15.2%; BLS also noted the household survey data is revised using updated seasonal adjustment factors at the end of each calendar year, which changed november’s rate from 8.6% to 8.7%, and other reports this year by 0.1% or less…the average workweek increased 0.1 hour to 34.4 hours with this report, and average hourly earnings increased 0.2% to $23.24; the 2 metrics that give us a better picture of how we’re doing, the labor force participation rate at 54.0% (adjacent chart) & the employment population ratio at 58.5%, were both unchanged this month; & the average length of unemployment is now 40.8 weeks, 2nd highest ever…the chart at the top shows the number of the unemployed who’ve been out of work for 27 weeks or more & still want a job; which is still unreal at 5,588,000 of us; noteworthy because the unemployment rations were only extended until febraury, & congress will be holding these people hostage when it returns to negotiate with the administration for a full year payroll tax cut extension…

Pipeline Ratio  LPS (lender processing services) reported this week on delinquent mortgages & those in foreclosure for November with somewhat of a strange lede: “the trend toward fewer loans becoming delinquent, which dominated 2010 and the first quarter of 2011, appears to have halted”; if we untangle that, its apparent that what they’re saying is more homeowners havent been paying on their mortgages since april than were previously…the total homeowners delinquent or in foreclosure for the month was 6,260,000, of which 2,330,000 loans were less than 90 days delinquent, 1,810,000 loans were over 90 days delinquent, and 2,210,000 homes were in the foreclosure process…given as a delinquency rate, 8.15% of mortgagees, or about 1 in 12 were not paying on their mortgages and had not yet been foreclosed on; an additional 4.16% of homeowners were in the foreclosure processforeclosure starts dropped sharply in november, down nearly 30 percent from october, which if you recall set a record as BofA nearly doubled their pace for the month...42% of those who were in foreclosure had been there for more than 24 months without action, up from 40% last month, which another new record; i couldnt find the exact average number of days that homes in foreclosure had gone without making a house payment in either the press release or the report (PDF) but extrapolating from the data given & their charts i’m guessing that also set a new record of around 645 days…as we’ve noted many times previously, mortgage servicers in those states which have have a judicial foreclosure process take considerably longer to foreclose, because for the most part they can’t prove they have that right because they either failed to record mortgage assignments &/or lost track of who owned the note during the securitization process; as of this report, foreclosure inventories in judicial states remained over 2 and a half times that of non-judicial states…their chart included here shows that; this is what they call the “pipeline ratio”, or the number of months it would take to clear the foreclosure backlog in a given state at that state’s current foreclosure rate; red are selected non judicial states; blue are judicial states; if you click on it you see that at the current rate, it would take 709 months to finish the foreclosure process in new york, and 669 months to clear new jersey…in other words, both states have a foreclosure backlog of more than 50 years..

i'm going to revisit the fracking / earthquake connection again this week, in part because this time it happened in my backyard...most of you should remember my drawing a connection between the early november swarm of record earthquakes in oklahoma & the fracking that was being done in the woodford shale in the months preceding them; however, all the evidence i presented was circumstantial, ie, the series of quakes were all at the same depth in the same area where the woodford shale gas play was being worked and the toxic wastewater was being injected into disposal wells into the bedrock...this time, geologists have a smoking gun definitively connecting the quakes to a specific injection well by seismograph readings being taken at several locations nearby...when the news broke on new years eve of a 4.0 earthquake in mcdonald ohio, just NW of youngstown and about 25 miles southwest of my location, both local & national news stories immediately made the connection between fracking and the quake, as it was the 11th in a series of minor quakes at the same location, and an investigation was already underway; John Armbruster, a Columbia University seismologist, had installed 4 seismometers at the state’s request around the site of the site of the injection well where 9 earthquakes had occurred earlier in the past year…so he was able to pinpoint with 95% accuracy (which is as good as its gets) that the 2.4 christmas eve quake and the 4.0 dec 31st quake were within 100 meters of each other, and within 0.8 kilometer of the injection well (see picture) and at the same depth where fluids had been injected…subsequently, the Ohio Dept of Natural Resources and the EPA closed the 4 injection wells in the vicinity, & ohio governor john kasich, who had been a promoter of the gas industry such that Ohio had invited pennsylvania drillers to use Ohio for waste disposal, spent most of the past week backpedalling faster than a clown on a unicycle…btw, this isnt the first time ive been on top of an injection well earthquake; in 1986 there was a 4.9 quake about 25 miles north of here that caused the evacuation of the perry nuclear power plant; which also cracked my chimney…as i was at the time marginally involved with the locals & environmentalists who opposed the 2nd plant at perry (the 345KV transmission corridor would have come close enough for the towers to cast a shadow on my house), i was told privately, off the record, by both a seismologist & by my congressman that they thought the perry nuclear quake was manmade, but it seemed so far fetched at the time that no one was willing to go public with it…

so, with the injection of toxic wastewater now clearly implicated as the cause of earthquakes, in some cases as large as Richter 5.6, the question now becomes is what does one do with the one to five million gallons of frack water per well that has been contaminated by hundreds of toxic chemical additives?  any process to treat the water would probably make it too expensive to drill using that method…the other alternative would be pretty expensive too; a thorough seismic survey to check the bedrock for potential slip strike faults below where fluid would be disposed of could help detect quake prone areas, but it would cost around $10 million per injection well…since the actual cost of producing gas is already a couple dollars more per kcf than the glutted market is paying for it, we may be at the point where the gas well investment bubble goes the way of the dot.com bubble, & all the get rich quick pipedreams of exporting gas go up in smoke...

there’s something else that was sent to me this week i want to call your attention to; below are three earth projections from an arctic view which show methane levels in the atmosphere in the northern hemisphere, from november 2002, 2010, and 2011 (their source was from a comment on a climate blog)...the colors are concentrations of methane as shown by the bar at the bottom of each map, any of which you can click on to view the measurements, with blue being the least and yellow and red showing higher amounts...quite obviously, even in these tiny versions shrunk to fit an email draft, you can see that there has been a dramatic increase in atmospheric methane in just the past year...you may recall a few weeks ago that there were a few articles included in that weeks package about russian scientists who had discovered vast plumes of methane bubbling to the surface of the arctic ocean off the coast of siberia; small columns of methane bubbles had been observed previously, but these were described as "powerful and impressive seeping structures more than 1,000 metres in diameter" and that they had observed hundreds of such plumes in a relatively small area, suggesting that there were likely thousands of them off the siberian coast...ok, so what is going on?  those who were with me last winter may recall my explanations of the unusual weather patterns in the northern hemisphere wherein lake erie was freezing before hudson bay and greenland's melt season was 50 days longer than normal; technically, we were seeing the effects of a negative arctic oscillation; the analogy i drew at the time to explain what was happening was to imagine a refrigerator door being opened, with cold air spilling down & warm air entering the top; whether this condition is becoming a new normal as it's enhanced by an ice free arctic is still a matter of speculation, but the fact is that the arctic has been bearing the brunt of climate change for years...now, both the frozen tundra and the arctic seabed contain tremendous amounts of methane, either from rotted organic matter stabilized for thousands of years in the frozen ground, or as methane-hydrates frozen at high pressure on the seabed; what appears to have happened over the past year is that the arctic ocean off the siberian coast has become warm enough to start a significant melting of the methane hydrates on the seabed, and they've begun entering the atmosphere at an increasing rate; methane is known to be a potent greenhouse gas, considered 25 times as potent a heat-trapping gas as CO2 over a 100 year time horizon, but 72 times as potent over 20 years; so we may be on the cusp of a rapid or runaway warming...i havent yet seen this connection elucidated by any scientists; obviously no one wants to seem hysterical, but the normally conservative IEA (International Energy Agency) sees us soon reaching a point where a 11°F global warming is irreversibly baked in, and James Hansen, the head of NASA's goddard institute, believes that a 5 meter sea level rise is possible this century as the greenland & antarctic ice sheets rapidly melt...  

 

 

 

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this is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me

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