The 2011 Microrecession in U.S.-China Trade Data

Last week, the U.S. Census Bureau issued the latest data it collects on the balance of trade of goods and services between the United States and China. The chart below shows what we find when tracking the year-over-year growth in the amount of U.S. imports from China and U.S. exports to China from January 1985 through September 2011, which provides an indication of the relative economic health of both nations.

What we find in the chart above is that the rate of growth of what the U.S. imports from China was very low in September 2011, at what we would describe as being "near-recessionary" values, continuing the pattern we've been observing since June 2011.

This indicates that the economic sluggishness most people perceived during the summer of 2011 was real, because a growing economy would tend to pull in more imports.

But we also see that China's economy is also going through its own slowdown, although it appears to still be growing more strongly than the U.S. economy.

Switching over to our doubling rate charts, we see that U.S. exports have sustainably doubled in value four times since January 1985, and are nearing the fifth doubling line:

We observe that the pattern of U.S. export to China since 2008 is very different from the preceding 23 years - it appears as though U.S. exports to China have begun following a seasonal pattern, with the peak in exports occurring in December.

Meanwhile, we find that China's exports to the United States have been growing at a much slower pace since 2008:

The U.S.' imports from China typically follow a seasonal pattern, with the peak occurring between the months of August through October, which coincides with the stocking of consumer goods for the Christmas shopping season in the United States. Although the value of the goods and services the U.S. imports from China is at near record levels (they hit an all-time high in August 2011), the quantity of goods being imported from China into the U.S. is falling.

So how can the value of what the U.S. imports from China be near its all-time record while the volume of goods being shipped is falling? Easy! It's because the value of the U.S. dollar is falling with respect to the value of China's currency:

To put it bluntly, the falling value of the dollar is making it relatively more expensive to buy imports from China than it was a year ago. And that's why U.S. port traffic is down, and U.S. port employees are working less, even though the U.S. appears to be spending more money on Chinese imports this year as compared to last.

And most paradoxically, President Obama is demanding China do more to allow the U.S. dollar to fall with respect to the Chinese yuan, even though it's clearly already happening and is producing the effects he desires.

But then, it's not like President Obama pays much attention to serious economic matters of any kind, unless they reinforce his mispreconceptions.

Image Credit: The Economist

Income Inequality by Age Group in 2010

Which age group in the U.S. has the greatest amount of income inequality among its members? The choices are:

1. Age 15-24


2. Age 25-34


3. Age 35-44


4. Age 45-54


5. Age 55-64


6. Age 65-74


7. Age 75 and older

We won't keep you in suspense - the chart below reveals the answer!

Are you surprised to see that teens and young adults between that ages of 15 and 24 have the greatest amount of income inequality, as measured by the Gini Coefficient?

If it helps understand why, consider that this age group really represents the point at which Americans enter into their first jobs. It covers everyone from those who haven't graduated from high school, but are working in part-time, minimum wage level jobs on up through recent college graduates in difficult, high paying disciplines like petroleum engineering.

Meanwhile, we see that the level of income inequality drops dramatically for adults between the ages of 25 and 34, which corresponds to individuals who have fully entered into their careers. The amount of income inequality by age group then increases through Age 65-74.

To a large extent, what you're seeing here is the effect of education level upon the lifetime earnings of individuals, where those with higher levels of education tend to have greater income growth over time.

But that doesn't explain it all. Most individuals hit their peak earning years in their mid-to-late 40s, which wouldn't explain why income inequality continues to increase for older individuals.

Here, we need to consider the role of investment income. Assuming that the most successful income earners also consistently save or invest a portion of their income over time, if they realize positive rates of return, they can continue boosting their income above and beyond what they earn through wages and salaries.

That's a big reason why we see that individuals Age 65-74 have the second greatest amount of income inequality by age group - the most successful individuals are benefiting from a lifetime of saving and investing, while others within this age group earn much lower amounts of income, or none, through investing.

We next see that income inequality falls dramatically from Age 65-74 to Age 75 and older. This drop largely corresponds to the depletion of retirement savings that individuals set aside during their working years, which reduces the amount of income they might receive from the reduced principal they have invested.

Meanwhile, for this age group, individuals who were less successful in establishing retirement savings benefit from government income transfer programs like Social Security, which provides disproportionately large benefits to the people who earned the lowest incomes during their working years.

We'll close by sharing Payscale.com's chart showing the typical incomes earned by individuals just graduating college with degrees in the top-paying fields of 2011:

Best Undergrad College Degrees By Salary

Methodology Annual pay for Bachelors graduates without higher degrees. Typical starting graduates have 2 years of experience; mid-career have 15 years. See full methodology for more.

Data Source

U.S. Census. Current Population Survey. Annual Social and Economic Supplement. Table PINC-01. Selected Characteristics of People 15 Years Old and Over by Total Money Income in 2010, Work Experience in 2010, Race, Hispanic Origin and Sex. Accessed 13 November 2011.

The S&P 500 Through 11/11/11: Continuing on Track

Since our last update, the S&P 500 has largely continued to move on track:

We can confirm however that investors appear to have shifted their attention to the fourth quarter of 2012, rather than 2012-Q3, in setting their forward-looking focus for setting today's stock prices:

Given small increases in the expected rate of growth of dividends per share in the fourth quarter of 2012 that have occurred since our last public update, we can expect stock prices to run to the high side of the forecast range shown on our first chart (as the purple zone). We may adjust this zone accordingly to account for that change in our next update.

Since is this the first time in a while that we've shown both these charts together, we'd like to point out that it they seem to provide a pretty good evidence demonstrating what's called the "unit root hypothesis" in economics, where the effect of a shock (in this case, the emergence of deflationary expectations at specific points of time from April-August 2010, and later in March-April 2011, and more significantly in July 2011), resulted in a significant, and so far, permanent shift in stock prices.

Overall, the trajectory of stock prices with respect to their underlying dividends per share over time more resembles a Lévy flight than they do the result of Brownian motion.

11/11/11: Creepy Number Day

Try this math at 11:11 AM today!

Take the last 2 digits of the year you were born, then add the age you will be this year.

If the result creeps you out, well, that's because you're an idiot. Before you feel insulted by this 411 though, don't you have bigger things to worry about?....

Kenya’s Potential in the Production and Export of Rabbit Meat

RECOMMENDATIONS:

• On a national scale the consumption of rabbit meat should be promoted as a healthy way of living as a way of avoiding the lifestyle diseases associated with red meat (e.g. Gout, High Cholesterol, Heart disease etc.)
• Establishment of a Rabbit Breeders Association in line with the Associations established in Ghana which led to the successful establishment of a rabbit meat industry in the country.
• A market study to establish the number and current production capacity of rabbit breeders in the country.
• Development of a database of rabbit breeders in the country
• In depth study on the potential markets of rabbit meat globally including breeds in demand and market entry tariffs and non-tariff barriers.
• In depth study on the potential markets of rabbit by products (e.g, fur) globally including breeds availability and demand.
• Commercial Attachés accredited to various identified markets to do an in market survey on the market detailing contacts, import prices and consumption patterns in the various markets.
  
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Guidelines for Entry into Meat Rabbit Production

Rabbit Production 101

Before you become a rabbit producer, it's important to learn some basic guidelines about getting started in the business. An informed producer is more likely to be a successful producer.
Rabbit production has three basic requirements: rabbits, cages, and a building-none requiring a huge investment. If you already have a farm and buildings, you can easily start to produce 20 does (female rabbits) with 2 bucks (male rabbit) and 40 individual cages for less than $1,000. This also includes the purchase of feeders, a water supply, feed, and a few other inexpensive items. You may soon wonder why the number of cages is doubling--don't forget that rabbits do multiply, and they also need daily care.

Breeds

Rabbits are generally classified according to size, weight, and type of pelt. Small rabbits weigh 2 to 5 pounds at maturity; medium breeds weigh 5 to 8 pounds; and large breeds weigh an average of 8 to 12 pounds. New Zealand and Californian rabbits are the most popular breeds for meat production. While other breeds are used, the New Zealand and Californian breeds have a higher meat-to-bone ratio. They are also very popular because their fur is mostly white, which processors generally prefer with efficient growth characteristics. A suggested stocking rate of 1 buck per 10 does should work for novice producers. Cross-breeding Californian and New Zealand breeds will result in hybrid vigor, a more "hearty" rabbit that tends to be healthier and grows out quicker. Remember to keep your source of full-blood breeding stock. Each production and management plan will vary depending on individual goals.

Cages

Cages are essential and options vary depending on farm management needs. Each rabbit must be kept in a separate cage. Rabbits are territorial and living in crowded conditions can cause them to become aggressive with each other. Cages are sold individually or in sets. The number of cages per set varies from 3 to 6. Cages need to be off the ground and set on frames or saw horses or hung from the ceiling. Hanging from the ceiling allows easy access to clean underneath.
Cage sizes vary depending on your preference and size of the rabbits. A minimal size cage per rabbit should be 24 x 30 inches. A larger cage allows for a nesting box and enough space for a doe and her litter. The nesting box is placed in a cage long enough to allow a doe to kindle (give birth) and provide housing for the young rabbits until they are weaning age. Materials are available for you to build your own cages, or you can buy them from other rabbit producers who build cages to sell.

Housing

A simple pole barn can provide adequate housing for rabbit production. A semi-enclosed barn is better, an abandoned poultry barn or hog parlor is good, or a small shed will suffice during the beginning stages of rabbit production. A 30 x 30 foot barn is a good size to produce fewer than 50 does and bucks. Having a pre-existing building on your land will help minimize fixed costs and enhance profitability of your operation.
Ventilation is also an important consideration. Easy access to electricity and fans may be necessary depending on the climate in your area. During the winter, a pole barn may need to be enclosed with tarps to provide protection from wind and cold temperatures. Don't forget that water freezes and rabbits can too. Ventilation is important in reducing the incidence of disease and other health-related problems. A combination of urine, feces, and water on the ground can allow various diseases to become problems. The strong odor of urine can irritate the esophagus and lung tissue of rabbits and humans. Spreading lime or vinegar under the cages will help neutralize urine and its odor.

Accessories

Accessories needed for rabbit production include feeders, water dispensers, resting mats, and kindling boxes. You will also need time. Feeders are often made of perforated metal, come in several sizes, and hang on the outside of the cage. Prices depend on size and vary from $4 to $8. Watering equipment comes in two forms: water bottles that hang on the side of a cage and gravity feed water lines that are less labor intensive. The water bottles with hangers cost about $6 each and must be filled frequently. A gravity feed watering system is affordable and easy to set up. All it requires is a water source, a 5-gallon bucket, water lines (similar to those used in the poultry industry), and a drip water spout that attaches to the side of the rabbit cage. You can buy all of these accessories at a farmers cooperative or feed store.

Feed

Rabbit chow is available at your local farmers cooperative or at most feed stores. A 50-pound bag of rabbit feed costs about $8. Using feed specially formulated for rabbits is recommended. Supplemental feed can include hay, steam-rolled oats and barley, and black oil sunflower seed. Rabbits will even eat turnips and other greens, but be careful to feed only small amounts of produce as treats. Focus on using rabbit chow. The feed used should provide a protein level of 16 to 18 percent.

Conclusion

As you work your way into the rabbit industry, remember that learning is an ongoing process. Progress will come as you learn from other producers, Extension specialists, or from personal experience. The information in this publication can help you can started. To be a successful producer you should join a rabbit registry or a rabbit producer group and seek credible information from sources, such as your local Extension office, the Internet, or a local bookstore or library. A good book to start with is Rabbit Production (8th ed.) by James McNitt.

CHANGING EATING HABBITS ON MEAT

A craving is brewing with an incredibly nutritious white meat that weighs in with less fat, cholesterol, and calories per grams, yet has more calcium and protein than chicken, turkey, beef, pork, lamb and even certain fish. Chefs and connoisseurs alike are reintroducing the appeal of rabbit meat to the recipes.

For more information, click on the following Link