My critics have often said my Swarf (British for scrap) was rubbish. I doubt that, but your swarf, those chips that are conveyed out of the machines you run, spun clean of oil and dumped in a bin awaiting the scrap recycler, may have reached the price point of nil. Steel chips today are worth almost nothing, and if the trend continues you will soon be paying the scrap company to take them away.
Very soon it may get even worse.
I was talking to the guru of metal minutiae, Miles Free of the PMPA (Precision Machined Products Association), and he informed me that a decision is coming down imminently in Europe about prohibiting lead in new products other than autos, which have their own lead codes.
I know you probably do not sell much to Brussels or Bruges, but one of those bone screws or bullets you make might migrate there one day, and the authorities might reject it because of 3% lead content.
So not only are your steel chips virtually worthless today because the Chinese have told the scrap freighters to turn back to where they came from because they are making half the steel they used to, but you are probably going to have to separate 12L14 from your 1215 if you want the scrappies to pick the chips up without charging you.
If we just step back and look at the astonishing deflation of the last year in oil, metals and iPads, it is a little wonderful and scary. In the last 18 months oil is down from $90 per barrel to $30. Gasoline in Chicago was $4 a gallon. Today it is $1.79. 316 stainless scrap is down 35% from one year ago. Molybdenum is off 40%.
I have a friend in the scrap business who is a pretty big player. He bought a piece of the first aircraft carrier, The Forrestal, which is a gazillion tons of steel. They are scrapping it out now. For his sake I hope they find some gold in the hull.
Interest rates, which everybody predicted a few months ago would rise inexorably with Fed tightening, have dropped like “lead.” The 10 year US Treasury is paying 1.74%, but in Germany and Switzerland we see negative interest rates in which you pay those governments to hold on to your money because of the expectation for further deflation and even steeper negative rates.
It is now cheaper to make plastic bottles from virgin materials than to recycle your discards. I know this is devastating for all the children who have been raised in the religion of composting and recycling, but the planet will somehow survive.
Water is another interesting commodity to watch. Carlsbad, California is building a desalination plant for a billion dollars, give or take. It is a rich community, like Santa Barbara which did the same thing 24 years ago. Santa Barbara mothballed theirs a year after it was built and Carlsbad may do the same because the drought in California may have broken with this year’s El Nino and big snowfalls in the Sierra Nevadas.
Commodities are awfully hard to predict. When you throw in the vagaries of government regulation it is even tougher.
I find it a bit sad and ironic when I hear Bernie Sanders rail so fervently about raising the minimum wage to $15 per hour and invoking the mantra of climate change that always get s a big round of applause from the kids in the front row.
Then I think about the value of a ton of steel chips that used to be worth $300 and today is worth zero.
Unfortunately, the McDonald’s that has 14 employees on a shift will only need 12 in a $15 per hour world. Economics can be cruel.
Question: Can Trump win the Presidency? If so, what could he change?
26 Comments
I certainly hop he cannot; but if he does I hope he changes his attitude!
I don’t think trump can win. What scares me are the people that believe trump would make a good president.
Well, Lloyd, come this fall we will each have one say! (Except the the big PACs, they will have millions of “says”! Hmmm . . . .
I was talking to one of my liberal friends many months ago and stated that Trump was just a side show and a circus act that would go away soon. Just like all of the experts, I was totally off. It seems like The Donald is starting to implode but one thing I hope we’ve all figured out at this juncture is not to underestimate this man……Yes, he could win. What could he change? Nothing, Washington DC has become a hot bed of greed and corruption that greatly benefits the few and the few won’t allow The Donald to change that and I doubt The Donald wants to change it!
Yes he could win, not saying I want him to.
What would he change? I think he would stop sending billions of dollars to terrorists.
Just maybe he would do something about the ILLEGAL immigration problem. No one else will.
Trump is the reason Hillary is going to be our next President. As an originalist I believe The Constitution is as relevant today as the day it was written and that in the event it needs interpreting we should refer to the notes left by the Founders. If it needs to be changed, there is a way, it wasn’t meant to be easy.
What about the Constitution?
I think he could win. I would bet there are a lot of closet Trumpers who will vote for him and deny it. He has a way of getting attention by saying what people want to hear.
There very well could be.
I know my sister has voted Republican but wouldn’t admit it.
Sometimes we have to opt for the lesser of two evils. While I do not deny finding reasons to be apprehensive about most candidates, we should remember that this is not about personalities but about principles. Who has learned from their imperfect human life history and is running for election to bring forth goodness for others from those experiences. One thing is apparent, and that is that Trump’s history and record is far more appropriate for this position than either candidates in opposing party. So far, I am searching for the lesser of the evils and the most transparent about their past history. “If we forget history, we are bound to repeat it.”
Anyone in office needs to be voted out, every time.
Whether one is an addict or substance abuser or compulsive gambler or careless money manager, etc., ‘direction’ is critical. Change, even of speed in the same direction or hopefully away from the ruinous life style and more in an appropriate existence is very difficult. Or using the analogy of turning a huge ocean liner around, certainly takes a lot of space and horsepower.
USA moving toward disaster is building speed at a critical pace.
Mr. Trump can and probably would have a positive effect on the ‘direction’ this great country moves toward.
In the current political and social climate in our country I don’t believe any Republican candidate can win. So no, unless he goes independent and then there would be a chance, similar to what happened here in Minnesota when Jesse Ventura ran as an independent and there was evidently enough discontent that he was able to beat the Republican and Democrat candidates.
Sure, Trump could be elected President. Stranger things have happened.
We elected Obama…TWICE
I think Donald is the only candidate who has the balls, or backbone to actually talk about the issues. He also has not sold his life away to raise money for office. His position is not predetermined by campaign contributors. I think it is sad to see what we have to choose from on BOTH sides in a country that has 350,000,000 people. Politics in this country has become so scummy most people would not subject their families to what it would take to run for president.
ed kays
The only reason Trump is leading in the polls is because he is running against 5 other Republicans. The true question that remains is what will happen to the votes that are now going to Kasich, Bush, and Carson (who do not have much chance to win the nomination). When only two Republican candidates emerge, will Trump have enough votes to win the nomination? Not if he only hangs on to the 35% he has now. He has very high negatives. Somehow, I don’t think many of these conservative votes will end up going for Trump. He is not my first choice, but, I will vote for anyone but Bernie or Hillary. After 7 years of a mediocre recovery, they are the last thing we need right now.
Certainly he can. People are fed up and desperate. They want change, and he is a change, for sure. I don’t want to see him elected, but then, I can’t make a convincing argument about how any other candidate on either side is a better choice.
What will change? The press will focus even more on sound bites (which will be copious), and even less on actual policy and news. Otherwise, the Donald will have zero impact on our corrupt, inert mess of government.
Too bad Mr. Free of the PMPA didn’t offer an explanation of this widespread price drop in commodities. I’ve been sniffing around for one for years with no worthwhile explanation so far offered.
What’s worse is there seems to be little appreciation for the fact that the world has been in a deflationary trend for some time. Like a couple of years.
When’s the last time anyone heard of inflation rearing it’s ugly head? Pretty long time I think and that’s with bags of qualitative easing being spread on the economy like a thick layer of butter.
Printing money is inherently inflationary and that, at the end of the day, is what qualitative easing is, inflation. But do we see much in the way of inflation in any of the usual places – commodities, consumer prices, interest rates? No.
So where the heck’s all that inflation going that the federal reserve’s causing? It’s as if the federal reserve dropped a grand piano into a pool and instead of a mighty splash there was hardly a ripple. That sort of thing demands an explanation and so far I haven’t seen any. Heck, I haven’t even seen many people ask the question.
The Republicans (and the Democrats, to a lesser degree as well) have convinced many people that their problems are the fault of the “others” – immigrants, minorities etc. In order to distract them from the truth, that multinational corporations helped by the banks and the politicians have destroyed Americas manufacturing base and with it the good paying jobs.
The American political system has become the most corrupt in the world, with the pols beholding to no one but their donors.
The donors buy the laws that benefit themselves, leaving the powerless electorate to foot the tax bill and die in their endless profit generating wars.
The corporate “news” spoon feeds insipid pablum like celebrity break ups and which movie made the most money opening weekend, instead of the moves being made in Washington to further destroy your liberty and privacy and bleed you dry with tuition costs, medical premiums, deductables, co-pays and overpriced phamacuticals.
See how they have made the word “socialism” a perjorative?
The corporations and the wealthy have rigged the system to their benefit.
America is no longer a “Democracy” if it ever was, certainly now it has become a Plutocracy or even a Kleptocracy.
Do you think Donald Trump wants to really change things?
He is a spoiled, entitled, narcisstic little boy who is an expert in gaming the system as it is now for his own benefit.
You have it backwards. Should read: The Democrats (and the Republicans, to a lesser degree as well)
You’re in favor on socialism?
America was never meant to be a Democracy, it’s a Republic.
“He is a spoiled, entitled, narcissistic little boy who is an expert in gaming the system as it is now for his own benefit”. Sounds more like President Obama.
Allen, your comment is astute. What I think is going on is the revaluing of material stuff downward such as oil, steel, copper, corn, even water. Superior technology has made such stuff cheaper to obtain which eventually pulls down the price. What people are willing to pay for is intellectual property, entertainment, novelty, excitement, education, training, connections. So the trend for commodities is long term down, with upward blips along the way as supply and demand get out of balance. This is one reason why I poke fun at the Climate Changers and the Bernie Sanders clique who are stuck in old school thinking of shortage of things made up for by a benevolent government. Will not work well in a world that values talent and entrepreneurship not oil and steel and burgers.
The Bernie Sanders diatribe against pharmaceutical firms and ndirectly entrepreneurship, creativity, and small business is what I find so offensive about him. He really is a 1930s Socialist with a Liberal Democrat’s Halloween costume on. I actually think he truly believes a lot of what he is saying and that authenticity is helping him mightily against Hillary Clinton who looks like a politician imitatating a politician. What Sanders does not get is that the dynamism of the American economy comes from the entrepreneurship and creativity which seems to to offend him. The dumb kids who seem to like him are hearing “free lunch” and are attracted to it which is a sad commentary about the attitude of the country. It is what is so similar about the slogans of Trump and the negativity of Sanders.
and Hillary is a closet limousine socialist
When Trump started opening his mouth and making himself a “yuge” distraction from the actual policies that need to be address I thought the GOP had finally figured out how to win an election. Put a foul mouth, un-principled, jerk with a pile of dirty laundry in the race. Let him suck all the air out of the media while a real debate happens and a good candidate emerges. I still hope this is the case, but more and more it seems like Trump is running from the Obama playbook and could win. He makes bold promises that can be hard to disagree with on the surface. When he’s pressed for details, he insults the questioning party “what are you stupid? we are going to fix the economy!” The lack of substance and morals is strong reflection of what is in the capital today.
We are in big trouble whoever gets elected. How will our nation react to a depression scenario? Have the Saudi’s really bought the whole world? Could a limited WW3 benefit the machining industry? Would it be prudent to balance the shop with manual and CNC equipment? What is the best back up power for the shop? Diesel or Gas or Nat Gas? Solar? Is all this uncertainty in the world creating more questions than answers? Anybody who thinks he or she has the answer will bend ears. Fear is defeated by a plan.
Yes
Trump will win, and he will Make the country great again!
He will build a wall! His ego will not allow failure.
You want to know Trump? Read his books. Start with “The Art of the Deal”.
We have been speaking about the 11 million ILLEGALS that are here for the last twenty years. So, does one die every time another crosses the boarder? I don’t think so. The real number is 50 million.
“Supply and demand” does no one remember economics 101? Or is that no longer taught.
If you flood the labor market what do you expect to happen to wages?
EVERY other candidate wants to grant amnesty WITHOUT securing our borders.
And what are Hillary’s accomplishments? Other than being supposedly married to a president, Benghazi, email security expert, Cattle future trading expert, and Senator voting in favor of the war…