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KEY FINANCIAL EFFECTS OVERLOOKED
FLAWED ECONOMIC METHODS, Part 1

Economic analysis is just plain hard as heck. This is the first in a series of essays intended to expose why economic forecasts are so unbelievably poor or “quality challenged.” Today a personal touch will be shared from my experiences and contacts. This is not an exact science, but rather a social science, one which contains an element of art. The craft has sadly become more complex by financial market factors and subverted by political motives. The topic explored is key financial effects, which are commonly overlooked in economic analysis. The collective result is steady large misses in forecasts. The degree of forecast error at the national level is two orders of magnitude worse than anything seen personally in the corporate world. The task is difficult, but the job done is far worse than it should be, since corrupted by vested interests. All too often, forecasts are nothing more than lazy extensions through the rear view mirror into the future, straight-line forecasts to extend into future months with no treatment or expectation of change or turns or anything unusual. Try that when driving a car and you run off the road. Economists protect some of the worst statisticians on the planet, a claim I make personally with loud voice and stern conviction. They have tarnished the image of my craft.

This essay is an attempt to begin the process of getting specific with my criticism, from a statistical analyst perspective. Personal past email to me has inquired about my regular insults directed at economists, to which a response is offered. The language will be kept clear to the layman. No mention of R-squared levels, beta coefficients, multi-collinearity, normality violations, correlated error, factor loads, orthogonal experimental designs, imbalanced designs, cross-elasticity, biased estimates, or autoregressive oscillations. Sorry, I got carried away, but nothing like what we see in govt statistical evidence to strain reality and truth in reporting. Economists get away with murder, as they soften the disaster underway, encourage consumers to press onward, and urge foreigners to keep the credit supply flowing. Promoting a constructive inflationary policy by an economist is equivalent to denying the existence of gravity by a physicist, utterly insane.  Reality first gets twisted, then things get crushed from “unexpected” falls. Blame is laid elsewhere; the public remains unaware. The rich get richer; the poor get poorer. The bond market shows signs of losing faith in the Greenspan Fed, perhaps centered on the arrival of inflation at precisely the time he spoke repeatedly about its absence. Fed statements bear no connection to the reality of quality statistical forecasts.

In all my years of travels, at least two dozen economists have come into my acquaintance. They are a curious bunch. They can be classified in two camps: the mathematicians and the soft. Being equipped with math and statistical tools is no guarantee that “quant jockeys” use them properly. Non-quantitative types, on the other hand, operate with tremendous handicaps. They make up the majority. They possess few scientific tools and must rely on instinct and pattern recognition. They tend at times to resort to guesses, assumptions, and foregone gut-based conclusions. They must detect shifting landscapes in a complex world. They tend to represent brokerage and bank firms, with clear sell-side motives. Regarding govt budgets, they tend to be advocates rather than analysts as they promote political agendas. The most revered economists pose as oracles, even though they cannot adequately explain what went wrong in the 1995-2001 years (or the Great Depression). Keynesians have taken on tribal characteristics, and shun Austrians as outmoded, rigid, impractical gadflies.

All too often, economists operate as charlatans who bask in the limelight of public light, who have sold out their integrity for power and status. Surely, many function with competence in a true spirit of adherence to the truth in data, and wish to fully utilize the leverage of refined filters from advanced statistical methods. Some of the best economists are people whom you never hear about, whose identities are unknown, whose work is designed to capture enormous profits for private brokerage firms and hedge funds. They earn salaries between 2 and 20 times greater in the private sector. Govt service attracts some competent patriots and many second best with fewer professional options. From errors, huge profit potential is created for the expert economists who have little motive to serve in public office. The system has failed us. Institutional economists have fast become a political priesthood, which has sold out solid defensible analysis methodology in favor of adaptive malleable political ideology.

FRIENDS IN THE USGOVT, PAST & PRESENT

The USGovt attracts some of the most mediocre analysts, but also an occasional superstar devoted to selfless service, not to mention the opportunists looking to eventually exploit contacts (e.g. Robert Rubin) for personal gain. From my actual experience, some of the most ordinary and the biggest analytic derelicts come from the govt agencies. They either could find employment nowhere else or chose to hold fast to the job security. One husband of a family friend worked at the Census Bureau, a fellow I would never consider hiring for my staff. Rick shined my ego and was self-critical to a pathetic degree, but justifiably. He was able to follow orders and apply a formula, but not capable of adapting to anything out of the ordinary. A competent former colleague escaped from the Bureau of Labor Statistics, replete with war stories. Steve reported first-hand experience on dynamic scoring, whereby rising components in price are substituted by more stable alternatives. We joked over lunch about substituting cat food for beef steak. He talked about the heavy hand of directors to keep the CPI low, since federal budget costs (raises, Social Security, pensions) are tied to cost of living adjustments.

A current friend used to work at the Cleveland Federal Reserve. Randy is one very sharp fellow, at work in a private consulting firm after 20 years of govt service. He boasted that the Cleveland Fed (defender of the more accurate but ignored median CPI) is where most of the statistician talent resides, but which has been relegated to a think tank used nowhere enough to support policy decisions. The Cleveland Fed is largely envied by the ruling body New York Fed, as rivalry has hurt relations and cooperative efforts. He claims the NYFed is shockingly behind the times in analytic methods, with evidence being constant mention of mfg capacity slack and productivity as excuses for low interest rates, despite large scale layoffs and the service outsource trend. Talk centers on their earned reputation of not possessing skills with the PC or email. They still live in the 1980 decade, reliant upon old formulas and assumptions no longer relevant with a fast changing economic structure disturbed by globalization forces. He joked about Greenspan’s briefcase, loaded with documents because the Fed Chairman prints everything and does not trust disk storage. However, the cohort with the finest skills was a church friend, a high caliber analyst with an Economics PhD. Mark worked for an extremely reputable economics firm near Boston, and produced “spot on” forecasts in several arenas. He was involved in one skirmish with my senior management, who chose not to spend a small amount of money in order to gain a new level of forecast precision. Two years after our association, he was chosen to serve at the USGovt Office of Management and Budget. He has not been heard of since, by friend of foe. My main question is whether Mark compromises his work in order to defend some cockeyed budget forecast totally divorced from reality

POLITICS CAN UNDERMINE ANALYSIS

There are good reasons why economists are often wrong by 100 to 200% on GDP growth estimates. In a surprising number of years, the majority of economists are wrong on whether interest rates increase or decrease! This stuff ain’t easy. There are no good reasons why of the most often interviewed economists retain such high respect and icon status.

Early decisions can make or break the research study. The preliminary steps involve a battle plan, a strategy, from which to base the analytic approach and then motivate data gathering. In my past, only a handful of analyses were sabotaged by management, who dictated that “X or Y cannot be included.” My usual reply was “what if it can be shown that X or Y are relevant?” Internal politics commonly inhibit competent effort, since few analysts enjoy total freedom.  Freedom was granted in 95% of my studies undertaken. Other times, management did not want to include a macro factor, since that macro would take unknown values in the next 12-18 months when calculated forecasts were an objective. A macro factor is defined as one coming from outside our company, from the general economy, subject to the vagaries of public policy (politics), foreign markets, international incidents, and the unexpected natural events. My choice for inclusion was argued, then to offer three separate scenarios in the future forecast (conservative, moderate, aggressive). Managers, especially senior level, often want simple answers. Further still, certain factor inclusion would widen the initial scope of the analysis project, its time duration and cost, to the displeasure of superiors. A headshake was my reaction whenever I heard that senior management did not want to complicate the decision support, out of convenience. The risk was to my reputation later. The analyst is usually blamed when forecasts are missed.

RELEVANT PERSONAL ANECDOTES

Three notable personal events occurred in my career in recent years, which affected the quality of forecasting analysis. Preface these stories with acknowledgement that many extremely competent middle managers and vice presidents built a fine burgeoning powerhouse company. As with any firm run by people, errors were made. Allow me to document some true stories about the infamous Brunhilda, whose name has been splashed on Internet pages in my past.

1) A vice president openly refused to permit the full analysis. Her heavy-handed style was disruptive, suspicious, and disrespectful. My group reasoned that the newly appointed VP “Brunhilda” did not comprehend the critical macro factors, did not want to be embarrassed, and did not want to approve added costs to a method revision. My belief was that no firm operates in a vacuum. Forecasts suffered badly in the year 2000 and beyond. My warnings about the damaging impact to sales as interest rates rose came to pass. After Fed rate increases, detrimental effects to the economy occurred. A few VP’s actually claimed that our business was immune to recession. My disagreement was made openly, at times with amusement. Executive arrogance can hurt business decisions, but also it can influence analysis harmfully.

2) A more open skirmish occurred with this VP, whose career at my old firm was vivid stark evidence of the Peter Principle. My group correctly forecasted a sequence of weeks through a Labor Day holiday, which shifted by one week from one year to the next. She and her senior group VP countermanded our forecast, revised it according to calendar week number naïvely. They demanded consistent weekly comparable sales growth with the past year. We wanted accuracy in forecast regardless of inconvenient jumpy “comps.” We were proven right as sales came in less than 1% off from our results. Brunhilda called emergency fire drills for several organizations, which we deemed needless since the huge sales misses were temporary, only to be offset by huge sales excesses in a few weeks. Then later she blamed our group to the CEO and Steering Committee in secret sessions. We had our own grapevines of information, which shocked her. We defended ourselves with my Excel file to show the senior mgmt revisions, over 90% correlated with the forecast error. Her embarrassment gave numerous people much satisfaction, including our softball team. My manager warned me that my career path might be jeopardized. A nemesis walked among us, who was greeted with smiles and opposed consistently in staff meetings like any cancer. In one meeting, my manager and I were each insulted by her in front of numerous longstanding supporters, even called “academics.” My retort made reference to a long resumé. My manager’s track record was legendary, and mine was growing. The entire phenomenon of PhD’s in industry is a story in itself. For years, my bizcard did not say PhD, as a result of numerous discriminations and blockheaded behavior by several managers in two companies. Some executives felt threatened, when we should be used for benefit to the utmost, then rewarded like engineers who submit patents.

3) VP Brunhilda later outsourced the expansion of a different successful price elasticity project of mine to a major consulting firm at 20 times our proposed cost. Our work on a prototype project generated $32 million in added profit over 9 months for one key product class, where price was adjusted according to competitive environment and scaled quality of the product choices. We engineered a 9% rise in profit margin, a huge gain. My group submitted a proposal to do expanded work, ignored by the VP, with a claim of inexperience and “no MBA degrees.” We were utterly astonished, and set out to influence the CEO through other VP’s with more established track records, to have this VP removed. We had had enough, while she had made other enemies. The glory of a hired home run delivered by a big name outside consulting firm is a powerful force in business. Just follow Arthur Anderson for examples of some disasters (e.g. Enron). Results were miserable for the expanded pricing project two years later. The big name firm failed to meet the criterion for an additional massive bonus, despite MBA pedigrees, a large staff, splendid suits, and coiffed hair. Ironically, it is reported that the bulk of added profit from price adjustments was from our original $32 million. The VP was fired months later, a tribute to the firm. The story serves as a counter-example to the “Not Invented Here” syndrome, as this VP went outside. She was one reason I left the job, due to interference, basic dishonesty, failure to reward highly successful projects, and outsourcing. The analysis suffered. My old group has operated for four years now without any senior analyst, which exposes some hidden cost to analysis from political errors and mismanagement.

After much corporate experience, it is easy for me to see how political pressure and influence can come to falsify the Gross Domestic Product, Consumer Price Index, and Jobs Reports, to make them look good. The “Survival of the Unfittest” is a powerful de-evolutionary force within some organizations. The smaller the pond, the smaller the real egos, the greater the tendency for political hindrance. Specifics on my travels and travails, some glorious, the great majority commonplace, can be provided in private email.

OVERLOOKED FINANCIAL EFFECTS

Most economic forecast models include the usual suspects like interest rates, disposable income, business investment, tax rates, federal budgets, household spending, and much more. My personal professional complaint is that many economic models are chock full of incestuous factors. They all depend on each other to such an extent that analysts insist on having several simultaneous models being estimated, all inter-related, some causal, some effectual. The statistical consequences are unstable estimates and forecasts from “structural equations” of questionable value. Small changes in the underlying factors result in large changes in the forecasts, yielding doubt to the overall meaningfulness of results. In human reproduction, we see the same results with incest. No wonder. Another complaint has to do with NOT incorporating enough “external” factors which, in our increasingly important financial sector environment, have turned out to be very important indeed, if not dominant. Each of the following is a topic by itself, so discussion will be brief.

A preface on the subject is appropriate. USDollar effects on prices for petroleum, gasoline, home heating, base metals, lumber, grains, soybeans, fertilizer, plastics, and other items are enormous. Changes in currency exchange rates bear great impact on economic forecasts. They will not be discussed here, but surely lead to economic forecasts going ridiculously wrong. Are they a factor in economic forecast models? Possibly in the most competent, but doubt it.

IPO stock issuances fund capital expenditure (capex) investment

When stocks were the rage in the late 1990 decade, countless Initial Public Offerings were sold to the public. In many cases, they funded business investment and capital expansion. This was a major detrimental factor in the lunatic over-expansion of telecom, from wireless towers to long-distance telephone to regional fiberoptic lines. Many economic models relate capex buildup to favorable interest rates dynamics and to growing customer demand, which seems to ignore a significant source of where the money comes from. Furthermore, the ebb & flow of stock market vagaries lead to amplification of business boom and bust. The cheapest form of business capital comes from equity offering, absent interest from loans and yield paid to bondholders. Are IPO’s a factor in economic forecast models? Doubt it.

Stock dilution and bond issuance add an inflation effect

Current outrage centers on stock option packages for executives, and their treatment within accounting expenses. Investors feel cheated with exorbitant multi-million dollar compensation, opportunistic insider sales, and deceptive earnings, which exaggerate quarterly SEC statements. Nowhere is the criticism for the creation of money out of thin air from corporate stocks and bonds. When bull markets flex their muscles in stocks (1995 to 2000), secondary stock issuance and option issuance are brisk. When bull markets flex their muscles in bonds (2001 to 2004), new bond issuance as well as old bond rollover is brisk. The new paper created adds significantly to the money floating around inside the US Economy. Second homes are purchased, tuition bills are paid, vacations are taken, room additions and back deck porches are built, hotrod car dreams are realized. Is corporate securities creation a factor in economic forecast models? Doubt it.

Reversal of rate swaps smothers corporate earnings

Given the inordinate pre-occupation with short-term results for corporate earnings, US firms have tightly geared their balance sheets to prevailing low interest rates. Many companies have employed swap contracts to lower than long-term borrowing costs. As rates rise, swaps will cause damage to corporate balance sheets and bring down earnings. The result will be a drag on expansion, on hiring, and might even lead to widespread layoffs. In some cases, swap damage will lead to bankruptcies. Are swaps a factor in economic forecast models? Doubt it.

Stock buybacks bleed R&D funding, product development

Investors love announced stock buybacks, for all the wrong reasons. A paid dividend might improve the reality behind a corporation’s attractiveness as an investment. Buybacks deplete capital from devotion to Research & Development, from business expansion into ripe areas to continue current success, and from properly rewarding the best contributors among employees. Several cases of abuse have been revealed, wherein long-term debt has been issued, only to be used unwisely to buy back stocks. Immediate benefit is often bought with long-term damage. Investors are illiterate largely on balance sheets, but they love the concept. Are buyback drags a factor in economic forecast models? Doubt it.

End to low-cost mortgage refinancing stalls spending

Over $1 trillion has been added to mortgages in the last three years. A significant amount of money has been extracted from home equity on refinanced mortgages. Exact tracking is impossible, but it is safe to claim that new money has gone toward critical expenses like health care, education, and household costs. Without doubt, all too much has gone toward frivolous vacations, plasma televisions, stereo systems, lakeside second homes, and extravagant lifestyle. REFI activity has fallen off the cliff recently. We are soon to witness its effect on consumer spending. More money is to be siphoned for food & gasoline, while available spending money is inhibited from the homestead “bottomless well.” Is the REFI factor in economic forecast models? Doubt it.

Low interest rates draw money toward real estate, away from real economy

Real estate speculation is like the Greek Sirens in its attraction call of capital into the financial sector. Despite no new jobs created, apart from mortgage processing and property appraisals, money pursues the great housing bull market. No distinction is typically made between a clear example of inflation from debt creation amidst absurdly low interest rates, and a celebrated bull market. Sure, money can be made, but one must be nimble, as well as deal with fixed turnover costs like broker fees. Buy or hold through the top and lose. However, wealth generation is illusory, fleeting, and not based in the creation of products, jobs, or real income. Spending home equity is actually an exercise in asset liquidation. The diversion away from new business creation in the real economy is monumental and highly destructive. Is capital feeding the rise & fall of housing prices in economic forecast models? Are REFI cashouts a key element in forecast models? Doubt it.

Asymmetric wealth loss effect indicates strong pullback in spending

Princeton Psychology professor Daniel Kahneman shared a recent Economics Nobel prize for extending the work of Amos Tversky on the asymmetric bias of spending patterns following principal loss. Spending tends to rise when wealth is gained, like with stocks, bonds, or property holdings. But spending drops off the cliff when wealth is lost, especially when income disappears with a lost job. In the upcoming year, continued housing value gains are highly unlikely, regardless of interest rates. In a tightened lending environment, a strong likelihood exists for both stocks and bonds to falter, possibly badly. All three asset groups could go into decline, in opposite direction to what we saw in the virtuous 2003. Yet, economic forecasts based on Leading Economic Indicators and projected GDP growth paint a brighter picture. An argument can be made that the LEI and S&P are better indicators for the world economy than the US Economy. If major asset groups indeed go into decline, the effect on consumer spending and corporate spending will be harsh. Are wealth loss effect factors in economic forecast models? Doubt it.

Minefield of bank derivatives threatens financial viability

The historical road is littered with the damage of derivative risks gone bad. Proctor & Gamble, Bank One, PNCBank, Orange County, and others lead the list. The effect of failed hedge strategies is enormous. What used to be the prudent offload of risk from currency risk or interest rate risk or metal price risk or grain price risk has unfortunately turned into a casino boardroom risk whose quantification is difficult. A hilarious event occurred in 2000. Ashanti Goldfields hired an accounting firm in order to determine their balance sheet risk from hedge book activity. Their forward sales hedge program had gone amok. In a letter to shareholders, Buffett tells of the difficulties of exiting the derivatives business that Berkshire Hathaway inherited in his 1998 purchase of General RE. After all this time, and diligent effort to remove what he calls “financial sewage” from the balance sheets, he has been frustrated by the stubborn effects of derivatives. In five years, he has exited two thirds of 23 thousand derivative tickets and reduced counter-parties by half. BW has booked pre-tax losses in the last two years of $270 million, even under a measured pace of liquidations. The pace was kept gradual because he did not trust the accounting, was unsure his portfolio could absorb the risk, and could not afford to ignore new opportunities. He has recently concluded that the explosion in derivatives contracts may have created serious systemic risks to our nation. Given the extraordinary bond speculation, rising rates threaten derivatives, of which bonds are the primary vehicle, a systemic risk exists which Buffet recognizes. Rising interest rates, along with Greenspan comments on bond speculation, have heightened attention on this frightening subject. Are unwound hedgebook risk factors in economic forecast models? Doubt it.

Foreign govt subsidies in a major industry can shatter a regional economy

Government finance can play a major role in the economy, far from dispute. Leave alone the obvious function of taxes, social programs, regulations, war, etc. The Iraqi War had a profound effect on the economy in 2003, perhaps the most significant factor of all to kickstart the entire economy. Economists do pay heed to such obvious elements to the forecast model. However, specific govt subsidies greatly influence individual industries. In the last decade, European subsidies of Airbus sales have been gigantic. The damage done to Boeing is well known. Whether a new 7E7 aircraft design can overcome the competitive handicap is another matter, as time will tell. Regional economies are forecasted by regional bank entities, both private and federal. Are govt subsidy factors in economic forecast models? Doubt it.

Fed monetization of debts transfers borrowing costs to systemic inflation

Discussion of the Plunge Protection Team, whose official name “Working Group on Financial Markets,” is steeped with controversy. Interference with free market equilibrium is a curse, despite how investors salivate at their rescue actions. One of the Fed’s backroom functions, hardly sanctioned by Congressional charter, is to monetize debts. They simply urge the Dept of Treasury to print new money, for the planned purpose of buying 10-yr Trez Notes, or GSE mortgage agency debt, or S&P stock futures contracts. Their actions are intended to stabilize the financial markets and international exchange rates. In the next several months, if and when long-term interest rates rise, the Federal Reserve stands ready to intervene and purchase TNotes and thus cap borrowing rates. Bond speculation is at unprecedented levels, thereby raising the risk of rates spurting higher. By monetizing bonds, the Fed would impose a collectivist measure to allow the USDollar to bear the risk in a massive transfer of risk. The financial sector’s machinery would be protected by federal devices. However, the risk is transferred to the entire system, since our national economy would have to adjust to a lower US$ value. The effect is harmful on imported materials and product costs, but positive to the meager assortment of exporters. Are dollar exchange rate versus interest rate factors in economic forecast models? Doubt it.

NEWS TIDBITS

Lucent made an offer to acquire Telica for $295 million, in hopes to replace its Voice Over Internet Protocol technology after the sale of VoIP unit Avaya in 2000. In the upcoming docket this week, 9 IPO deals are scheduled, with 5 in biotech/pharma. After 4 days of a gentleman’s strike, 130 thousand SBC employees end their action in several states in opposition to outsourced jobs. Circuit City ponders a new venture to sell used equipment on consignment over eBay. NYSE Human Resources chief Frank Ashen will testify against Richard Grasso in a lengthy civil lawsuit complaint by NY state attorney general Elliot Spitzer, which includes several defenders such as former director Ken Langone. Spitzer seeks to rescind the giant severance pay package due to deceptive disclosure. China will boast 290 cellphone users in 2004, up 60 million, to surpass the United States. Saudi Arabia announced plans to increase oil production by 2.3 to 2.5 million barrels per day, against a backdrop of little cartel support. Other OPEC producers resent Saudi statements without consultation. The oil market appears to be calling the Saudi bluff. Their ministers meet next week in Beirut on production issues. Shell reports a Gulf of Mexico platform which has lost 150 thousand barrels of output per day. A Pacific Northwest oil pipeline fire also rages. Candidate Kerry urges increased OPEC production and tax incentives for more efficient cars. Incumbent Bush urges domestic refinery improvements. Canadian stock market is closed in observance of Victoria Day.

Multiple bomb explosions hit Baghdad over the weekend. At the Green Zone’s entrance to coalition HQ known as “Assassin’s Gate,” two British civilians were killed by one bomb. In another bomb incident, Zarqawi targeted a top Iraqi security officer, who escaped with his life. Numerous reports are surfacing from military sources of dead prisoners under Army supervision in both Iraq and Afghanistan, not of natural causes. Former Iraqi National Congress official Akmed Chalabi has fallen from grace, after his home was raided. He is now suspected of passing security secrets to Iran, as well as fraud with both UN oil-for-food program and currency conversion from the Dinar. Is he a bad guy or a fall guy? President Bush speaks to the nation tonight on the Iraq power handover, complete with cuts and bruises from a bicycle fall. CNN/ USA Today/ Gallup poll of 1002 sampled Americans gives President Bush a 47% approval rating, as only 43% believe he has a clear Iraq plan, and 41% approve of his handling the war. The majority (54%) now believe the war was a mistake. Only 37% of those surveyed said they were satisfied with the way things are going in the United States.

New release “Shrek II” took the top box office spot easily with $104M, as “Troy” and “Van Helsing” rounded off the top 3 positions. Michael Moore’s “Fahrenheit 9-11” won a Cannes Film award for the controversial film on Iraq planning and oil relationships. He has hired an Albanian marketing firm for its promotion. Over the Midwest and Plains states, 18 to 19 tornadoes hit. In Paris at the DeGaulle Airport, 4 died after the partial collapse of a roof section, which may not have ended. Reggie Miller lifted the Indiana Pacers in game #1 over Detroit. Wally Szczerbiak revived the Minnesota T-Wolves to even the series 1-1 with Los Angeles. The Boston Red Sox swept the inept Toronto Blue Jays. Andre Agassi was upset in first round tennis action at the French Open. Actor Tony Randall died at age 84. Roughly 75% of frequent flyer miles go unused.

TODAY’S MARKET

Today the Dow Jones Industrials wrapped up at 9958 (-8) losing its 95 morning gain, S&P at 1095 (+2), Nasdaq at 1923 (+11). TENS yield 4.74% (-2.4 bpt). Currencies closed with Euro at 120.08 (+0.09), JYen at 88.71 (-0.45), Can$ at 72.86 (+0.16). Metals finished with gold at 385.6 (unch), silver at 599.0 (+13.2), copper at 123.25 (unch). Energy ended with crude oil at 40.92 (-0.70), natural gas at a whopping 669.5 (+34.2), unleaded gasoline at 145.5 (+3.8). Prices are at major futures contracts.

Jim Willie CB

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