This is the first blog entry that I’m writing just in order to meet the criteria of a Daily Post word, in this case: “melody.” Unfortunately the melody that I’m hearing from the U.S. economy is more like a funeral dirge. Sorry for the depressing start to my blog but it’s getting scarier and scarier “out there.” I think my favorite WordPress business writer, blogger Michael Gray, sums things up much better than I. Here are links to two of his recent blog entries:

Dated September 1, 2016

Dated August 31, 2016

Here in the United States, we have two more months until probably the most historic Presidential election since Roosevelt or Lincoln. In order to describe my feelings I will quote the Victorian Age author, Charles Dickens, from his novel “War and Peace”, “it was the best of times, it was the worst of times.”

As reflected in the title to my blog page “Mono-economy of the New Millennium,” we are all affected as individuals, families, local communities, and business entities by what’s happening globally, not just “locally” such as the everyday activities of Wall Street.

There was a U.S. television show called “Name that Tune.” This link is to a YouTube clip of the TV show dating from the 1970s: The contestant happened to win US $100,000 that night. She walked away a winner that night. She won on an “educated” guess. So I “guess” that’s what we need to do, vote with our hearts and make the best “educated” guess that we can!



My mom and I had an encounter with reality yesterday… a homeless man begging me for a dollar on our local bus service which only operates through the local streets of our village. It was a scary event. Scary because the encounter reminded me of the homeless who are panhandling around our town, scary because the homeless are the “face” of our failure as a nation. Scary for the homeless man awash in a sea of social apathy, scary because of deadlock government inaction, and a US economy which doesn’t know whether it is “up” or “down” among other things, and yes scary because he might have assaulted us or the bus driver because of his desperation. It’s a failure to “fix the problems” and the problems seem more insurmountable in every passing day. I see more homeless people “visibly.” There is a saying “the homeless are always with us”, I don’t know who said it and, for that matter, it doesn’t matter who said it.

It’s now more than 24 hours later and I am “haunted” by the memory of that homeless man. I have thought to myself in the past encounters that I have had seeing homeless people, “there but for the grace of God, go I.” I am a senior citizen and live on a fixed income. I am very worried about the ZERO percent interest rates and how the lack of income from savings is devastating the senior population. The “savers” are being punished and meanwhile others can buy cars (SUVs) at near ZERO percent interest rates because “money” is “cheap” to borrow. What is so ludicrous is that NEGATIVE percent interest rates are now being used by the European banks to try to get companies to “spend” their money instead of storing the money in banks. Basically, if you are a “saver” at a bank, you will pay the bank to hold your money for you! The Federal Reserve “isn’t there yet” but I’ve read some financial news that it could happen here in the States. As an individual and not a company, if I’m forced to spend my savings then I have “nothing”, and actually that is happening anyway because the “non-existent” inflation is very existent for me and other seniors for sure.

Here’s a blog I’ve written previously about Negative Interest Rates.

Unfortunately, my writing this blog item will not help that homeless man. Every homeless person has a “story” as to why he or she is in such a sad and seemingly helpless predicament. Am I trying to relieve my conscious? It just bothers me I guess, our whole economic “condition”. We don’t have to look at the slums of Rio de Janeiro, Brazil, (or India or other “third” world country) with disgust, horror, curiousity, or smugness (I hope not), we have the “unfortunate” right here among us, just open our eyes.

And, of course, “except for the Grace of God, go I.”

Debt – Deficit Conundrum

I listened to Mr. Trump’s nomination acceptance speech on Thursday, July 21, 2016. Many of you did also. As I listened to the litany of “initiatives” that he was suggesting for his term in office as the President of the United States, I thought “Hmmm, I’ll check out his speech on the website.”

There’s just too much to absorb and, obviously too many issues that the listener has to be aware of, in order to effectively understand those problems or challenges about which Mr. Trump is speaking. Here’s the web link to Mr. Trump’s acceptance speech as analyzed on is funded by the Annenberg Public Policy Center. There appears not to be any political influence in their funding income so hopefully we can trust analysis and commentary as “non-partisan.”

I have previously posted about the concepts of “debt”, “(monetary) deficit,” and “trade deficit.” Needless to say, all three (3) are very complicated issues of contention in the Presidential debates as well as deeply influential challenges in the U.S economy, and guide or influence many of the laws proposed or enacted by Congress (hopefully, instead of by “executive orders” from any U.S. President!)

Here they are again; each post has web links to additional information about the topic. Obviously it’s too much to absorb at one time, but this post is meant as a reference to further your research and knowledge about the above three (3) concepts. Mr. Trump’s speech contains many other issues but as my blog is centered on Economics issues, those are the ones that I highlight.

Debt vs. Deficit: What’s the Difference? In a nutshell (and that’s a bad analogy so I apologize ahead of time!) Deficits are an accumulation of debt. Please don’t stop reading here, check out my link. It’s a boring but so essential difference for us to understand while listening to the politicians and now in addition, a businessman candidate discussing them. Link to: Debt vs. Deficit:  What’s the Difference?

U.S. Debt Limit: Now, this is one of those annual brawls that the President has with Congress where the U.S. budget is “hammered out” for passage, and historically a lot of “pork barrel” shenanigans happened for special interest. I call this a “shell game” vs. nutshell! Link to U.S. Debt Limit.

Trade Deficits: Trade deficits or surpluses (I understand that they DO exist!), are a result of trade agreements. Country A agrees to buy widgets from Country B, Country B agrees to buy grain from Country A. However, it should be so simple! In actuality, the United States is involved in multiple-country trade agreement such as NAFTA. Link to: Trade Deficits.

Sketch of U.S. Economy in 2016: Following is a link to an article slideshow by Heather Long created for CNN® Money. There are  ten (10) charts depicting several statistics which represent different economic indicators such as unemployment rate, personal income, job hiring, to name just a few. Sketch of U.S. Economy in 2016

As usual I offer several reference links for further reading. The breadth and depth of these economic factors affect us all. Don’t try to read or even scan it all in one reading. I know that you won’t anyway. But I hope that you come back to read this post several times. As I mention in my profile, I’m an amateur investor just like you. “Chunking” out the information makes it easier to digest. Granted these are mammoth “chunks” but then the U.S. has a mammoth economy!

It sure needs some TLC* right now, let’s hope we choose the right and proper caregivers.

*tender loving care

It doesn’t really matter! (I guess)

What I’m referring to is the U.S. Presidential election and the U.S. stock market.

There is a saying “on Wall Street” that the stock market projects six (6) months “down the road.” This means that “the markets” are already anticipating the future or have “a forward looking view.” In other words, “the market” is probably not responding to the news which is happening now (e.g. July 20, 2016), or this week or perhaps even this last month, but rather “the markets” are acting positively or negatively towards “the future”.

The U.S. Dow Jones Industrial Average (DJIA) is bumping it’s head up against ANOTHER “all-time high.” To quote the New York Times, “The Dow Jones industrial average inched 25.96 points, or 0.1 percent, higher for its eighth consecutive gain to set another record at 18,559.01.”

Here’s how the Canadian newspaper, the Globe and Mail relates the U.S. stock market in relation to the U.S. presidential election.

CNBC has an interesting “take” on the stock market vs. presidential election phenomenon: History shows stocks rally

If you are interested in “market indicators”, here are two (2) blog posts which focus on this subject:

What are Economic Indicators?

U.S. Economic Indicators

Sketch of U.S. Economy in 2016

Here’s a short summary of what the U.S. economy “looks like”.  This slideshow was created by Heather Long for CNN® Money.

CNN Money slideshow

Generating “numbers” can be a very tricky business. Generating “accurate” numbers is in the “eye of the beholder” when it comes to who did the generating and what existing or relevant data was accumulated to do the calculating of the “final” number(s).

In previous postings, I have “talked a little” about many of the “numbers” that Ms. Long highlights.

Following are the links to my postings with reference to Ms. Long’s slideshow.

Slide #1: Unemployment Rate

The formulas, algorithms, data used to calculate unemployment  are many, here’s a link to the Department of Labor’s Bureau of Labor Statistics web site.

Bureau of Labor Statistics

Slide #2:  Is the economy growing or contracting

The Beige Book

Beginning or End of Economic Cycle

Slide #3: Employment / Hiring rate / jobs creation

Minimum Wage

Slide #4: Is personal income increasing or decreasing

Inflation or Deflation?

Slide #5: Types of jobs available or being created

Jobs and jobs training

Changing of Jobs Environment

Search for Long-term Solutions

Slide #6: Gas prices

Producer Price Index

Slide #7: Debt to GDP ratio

Gross Domestic Product

U.S. Debt Limit

U.S. Debt vs. U.S. Deficit

Slide #8: Average price of U.S. home

Links to Real Estate Information

Slide #9: 30-year mortgage rate

How are Interest Rates Determined?

Slide #10:  Are American wages growing?

Talking about Minimum Wage


Numbers #9: U.S. Economic Indicators

All you ever wanted to know about economic indicators! Well, maybe. 

Here’s the list of official economic statistics supplied by the U.S. Census Bureau:

Before we get any further into the nitty-gritty of the numbers, here are some definitions from the folks at

As if putting the raw numbers into some context isn’t difficult enough, these numbers are not “static”, in other words they can change. “The powers to be” can revise them up or down! It’s not a whimsy thing; at least I don’t think so. Factors, when seen in the “rear view mirror” look differently, so that’s why you may hear about “adjusted” economic numbers. It happens frequently! A frequent example of an adjusted economic indicator is the number of unemployed. This number is calculated by the U.S. Department of Labor:

There are three categories of economic indicators:

  • Leading economic indicators
  • Coincident economic indicators
  • Lagging economic indicators, as usual, does a good job of defining them: simplifies it a little bit by highlighting five economic indicators:

  1. Personal income and outlays
  2. Retail sales
  3. Consumer price index
  4. New-home sales
  5. Employment

Read more:

The Conference Board also publishes many economic indicators:

“The composite indexes of leading, coincident, and lagging indicators produced by The Conference Board are summary statistics for the U.S. economy. They are constructed by averaging their individual components in order to smooth out a good part of the volatility of the individual series.  Historically, the cyclical turning points in the leading index have occurred before those in aggregate economic activity, cyclical turning points in the coincident index have occurred at about the same time as those in aggregate economic activity, and cyclical turning points in the lagging index generally have occurred after those in aggregate economic activity.”  Web site:

Here’s a white paper written by the Federal Reserve Bank of Kansas City. It highlights: “Why  do  central  banks  collect  and  analyze  so  many  indicators?  To understand the answer, it is first important to recognize that monetary policy affects economic activity and inflation with long and variable lags.”

This “stuff” may be boring but it is what “drives” the political and economic policies of the United States and other countries of the world. When the politicians talk about “free trade” or interject trade policies in the country’s economic system, it affects “the numbers.” Whenever the Federal Reserve Bank interjects a change in monetary policy it affects “the numbers.” Literally nothing in our age is invoked as economic, wage, banking, foreign, national, or other “labeled” policy that does not affect other economic indicator numbers, which are the life-line indicators of our nation’s health. In an earlier posting, By the Numbers #3: Those Naughty Market Indices, They Move Up and Down!, I referenced a life-support monitor used in a hospital as a way of identifying and monitoring the health of the stock market. I guess the same analogy can be used for monitoring the nation’s economic ‘state of health”.

What’s scary is that the “life monitor” came so close to “straight-lining” in the year 2009. Below are posts that I wrote in 2015 that reference the events and “stop-gaps” that were instituted and invoked to avoid the collapse of the U.S. economy in 2009. The documentary producers  at “Frontline” did a great job of summarizing many of these actions and events.

There are several postings involved, enjoy viewing them separately as each one is an hour-long documentary. Each posting link is indicated in the posting:  Great Recession Retrospective Redux

Popcorn optional, actually a scotch and water might be more appropriate while viewing!


P.S. If you’re up to it, here’s  “A Guide to Tracking the U.S. Economy” written by Kevin L. Kliesen of the Federal Reserve Bank of St. Louis (dated 2014):



Numbers #8: Measuring the Markets

There are many “models” used to measure the pulse of the United States stock market. Below are some of them. There are over 6,000 stocks traded over the New York stock exchange (NYSE). Here’s a laundry list of some of the U.S. stock markets indices. Each index contains a different “sampling” of stocks, however, any one stock can be listed in more than one index “basket”, e.g. Apple is traded on the NASDAQ market and is also included on the Dow Jones Industrial Index of 30 stocks. To be clear, the NASDAQ is a stock trading market place and the Dow Jones Industrial Average is a listing of 30 stocks.

New York Stock Exchange (NYSE)
“A stock exchange based in New York City, which is considered the largest equities-based exchange in the world based on total market capitalization of its listed securities. Formerly run as a private organization, the NYSE became a public entity in 2005 following the acquisition of electronic trading exchange Archipelago. The parent company of the New York Stock Exchange is now called NYSE Euronext, following a merger with the European exchange in 2007.”
Read more: New York Stock Exchange (NYSE) Definition | Investopedia

“A global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks. Nasdaq was created by the National Association of Securities Dealers (NASD) to enable investors to trade securities on a computerized, speedy and transparent system, and commenced operations on February 8, 1971. The term “Nasdaq” is also used to refer to the Nasdaq Composite, an index of more than 3,000 stocks listed on the Nasdaq exchange that includes the world’s foremost technology and biotech giants such as Apple, Google, Microsoft, Oracle, Amazon, Intel and Amgen.” Read more: Nasdaq Definition | Investopedia

Dow Jones Industrial Average (DJIA)
“The DJIA is a price-weighted index, which means that the sum of the component stock prices is divided by a divisor. Instead of dividing by the number of stocks in the average, as is done in an arithmetic average, the Dow divisor is used. The purpose of this divisor, which is continually adjusted, is to smooth out the effects of stock splits and dividends. The result is that the DJIA is affected only by changes in the stock prices, so stocks with a higher share price have a larger impact on the Dow’s movements.

For example, if the DJIA rose by 50 points, it means that the cost of purchasing the 30 stocks in the index was $50 higher than the cost of purchasing those same 30 stocks yesterday, taking into account stock splits and dividends. In other words, those stocks are more valuable today than they were the previous day. Over time, the DJIA can be used as a benchmark for the economy.” Read more: What does the Dow Jones Industrial Average measure? | Investopedia

Dow Jones Utilities Index
“The Dow Jones Utility Average is a price-weighted average of 15 utility stocks traded in the United States. The DJUA was started back in 1929.” Read more: Dow Jones Utility Average (DJUA) Definition | Investopedia

Value Line Index
“A stock index containing approximately 1,675 companies from the NYSE, American Stock Exchange, Nasdaq and over-the-counter market. The Value Line Index has two forms: The Value Line Geometric Composite Index (the original equally-weighted index) and the Value Line Arithmetic Composite Index (an index which mirrors changes if a portfolio held equal amounts of stock.) These indexes are typically published in the Value Line Investment Survey, created by Arnold Bernhard, the founder and CEO of Value Line Inc.” Read more: Value Line Index Definition | Investopedia

S&P Small Cap Index
“An index of small-cap stocks managed by Standard and Poor’s. The S&P 600 SmallCap Index covers a broad range of small cap stocks in the United States. The index is weighted according to market capitalization and covers about 3-4% of the total market for equities in the United States.” Read more: S&P 600 Definition | Investopedia

S&P MidCap Index
“This Standard & Poor’s index serves as a barometer for the U.S. mid-cap equities sector and is the most widely followed mid-cap index in existence. To be included in the index, a stock must have a total market capitalization that ranges from roughly $750 million to $3 billion dollars. Stocks in this index represent household names from all major industries including energy, technology, healthcare, financial and manufacturing.” Read more: S&P MidCap 400 Index Definition | Investopedia

Russell 2000 Index
“An index measuring the performance approximately 2,000 small-cap companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000 serves as a benchmark for small-cap stocks in the United States.” Read more: Russell 2000 Index Definition | Investopedia

Dow Jones Transportation Index (DJTA)
“A price-weighted average of 20 transportation stocks traded in the United States. The Dow Jones Transportation Average (DJTA) is the oldest U.S. stock index, compiled in 1884 by Charles Dow, co-founder of Dow Jones & Company. The index initially consisted of nine railroad companies – a testament to their dominance of the U.S. transportation sector in the late 19th and early 20th centuries – and two non-railroad companies. In addition to railroads, the index now includes airlines, trucking, marine transportation, delivery services and logistics companies.”
Read more: Dow Jones Transportation Average (DJTA) Definition | Investopedia

Of further interest: By the Numbers #3: Those Naughty Market Indices, They Move Up and Down!

Signs of the Times #2: Front Porch Thieves

Have you heard about “porch pirates?” Have you been a victim of “porch pirates?” I recently watched the business news TV program Nightly Business Report on my local PBS station. Since people are shopping online and not personally shopping at a store, there is a problem with delivered purchases being stolen by “porch pirates.” To respond to this problem, dilemma, phenomenon, whatever you want to call it, there are new companies such as “Doorman” being started to help the purchaser actually get his/her purchases/paid for goods.

The link below is an ABC News story on the same delivery company.

This posting is NOT an advertisement for “Doorman” or any other delivery service. Amazon is offering delivery alternatives in some areas and UPS is trying to adapt with security measures for its customers.

I think it’s wonderful that entrepreneurs are turning a nasty unlawful behavior into a business plan but it’s another sad commentary on our society here in the United States.

My blog is focused on the economic life of the United States. I don’t think this posting is a diversion from my blog vision. In fact, I think the existence of such thieves spotlights once again the morality of our current society. What are these thieves doing with their bounty; probably selling it at a flea market or on the Internet.

There was a newspaper cartoon character called Pogo who said “we have met the enemy and it is us.” While the cartoon creator, Walt Kelly, was championing the movement toward a cleaner environment, I think another meaning could be interpreted from the Pogo quote that indeed we are our own worst enemies toward ourselves and our neighbors. I’m not going to go “all preachy” here but come-on folks what are we doing to each other?  Quote source:

Is this yet another example of the “new normal” of our economy?



Mega Eye Crosser: Trade deficits and a little bit about exchange rates

Try to bear with me on this one all the way to the bottom of the posting. It may or may not become clearer after the first reading. To coin the phrase “it’s a small, small world after all”, (Walt Disney) we all need each other to make any “trade” deal!

This is such a MEGA MEGA Eye Crosser, what else can I say!!! I will start with a disclaimer. As I mention in my “About” page, I am not an economist. I am an amateur investor (versus a professional trader, etc.). I am writing this blog to help me as well as anyone else who is interested, to hopefully, better understand our current economic conditions and circumstances here in the United States. As I sift through information and resources available on the “web”, I try to choose sources that are credible and have “currency” as far as data and informational quality.

In gathering information for the Trade Deficit topic, I feel that I have truly run into one of the most intertwining mechanisms that bind the entire world populations together. In other words, when one hears or reads of a politician saying he/she will “solve” the U.S. trade deficit situation, be very attentive to their words. Oh, and the Federal Reserve source I used also talks about the Exchange Rate and its influence upon the trade between countries. Of course that makes sense since we are measuring/comparing currencies/ values to make the trade deals. I had not intended to put the two (2) concepts together but, of course, how can one talk about one without the other!

Now, back to the subject at hand, The Trade Deficit:  The terms or concepts of “trade surplus,” trade balance,” and “trade deficit” are all encompassed within another concept called current account balance. In struggling on how to present the concept of trade deficit to you, the reader, I have decided that perhaps definition and relationship of terms would be the way to go.

Balance of Payments:  tracks international transactions of goods, services, and finances. Every international transaction is recorded as both a debit and a credit somewhere in the Balance of Payments. The result of this accounting identity is the Fundamental Balance of Payments Identity, which says that the sum of the Current Account, Financial Account, and Capital Account must be zero by definition.

There are three (3) main components of the Balance of Payments:

  1. Current Account
  2. Financial Account
  3. Capital Account
  1. Current Account: commonly referred to when trade balance is discussed. It reflects comparison of national saving and national investment. Current Account is part of the Balance of Payments first mentioned above.

Current Account Balance:   is difference between nation’s income and expenditures and any additional debt the country takes on to cover the difference. Transactions that arise from exporting or importing of goods and services enter directly into the Current Account.

  • Trade Surplus:  when a country exports more than it imports, (i.e. the difference between exports and imports is positive).
  • Trade Balance:  when a country exports exactly as much as it imports.
  • Trade Deficit:  when a country imports more than it exports.

 2. Financial Account: Countries also engage in trade in financial assets. Transactions that arise from trade in financial assets are recorded in the Financial Account.

3. Capital Account: certain other activities result in transfers of wealth between countries. These are recorded in the Capital Account; for instance, transactions such as non-produced, non-financial, and possibly intangible assets, i.e. copyrights and trademarks).

 National Income Accounting Identity:   the current account balance is equal to difference between national saving and national investment.

When a country has trade surplus (positive trade balance), national savings must, by definition, exceed domestic investment. That is, a country with current account surplus is also net lender (this country uses savings not invested domestically to make loans to foreigners).

When a country has a current account deficit, national saving must, by definition, be below investment. The country is a net borrower (as national saving is not sufficient to finance all of domestic investment, and so extra investment must be financed by borrowing from abroad).

What all of the above is getting at is that the concept Trade Deficit that I thought I would talk about singularly by itself is not a very plausible idea. The Trade Deficit is a result of a multitude of transactions and like the other Current Account items: Trade Surplus and Trade Balance, is a cumulative number. Every trade agreement that the United States signs will affect our “trade numbers”.

Just like all the other mechanisms that make up our economic and/or financial systems, calculations of trade balance are very complex and complicated. Here’s my source from the Federal Reserve Bank of San Francisco, the article  is called:   Is the U.S. trade deficit a problem? What is the link between the trade deficit and exchange rates?

There are two (2) other sources that I will give you. Both of them discuss  the concept Trade Deficit in relation to the United States. They are both short items to read. I think they will help clear the question of is a trade deficit good or bad. We sell products like airplanes, wheat, paper, abroad and the buyer must use U.S. dollars to pay the manufacturer, producer or grower. That’s where the exchange rate comes in. Countries must have U.S. dollars in order to complete a transaction. At the same time, all those U.S. dollars in the hands of other countries must be used to purchase U.S. goods or make investments in U.S. financial instruments. Over the years, China has purchased a multitude of U.S. Treasury bonds, so although we have a huge trade deficit with the Chinese, they also have owned a “ton” of U.S. Treasury Bonds:  CNBC article here.

Trade Deficits aren’t good or bad, just weird by Sabri Ben-Achour

Is the U.S. Trade Deficit Really Bad News?  By Daniel Griswold

Needless to say, getting it right with such a very complicated subject is very difficult. Constructive additions to my posting are welcome.

Author’s Addendum 9/23/2015:  Here is a link to the Office of the United States Trade Representative.  Listed are all the current trade agreements between the United States and other countries.

Difference between federal funds rate and discount rate?

Now here are two banking terms that I thought were the same.  At least in my head. The first term is “federal funds rate.” The second term is “discount rate.”

  1. The  federal funds rate is defined according to the Federal Reserve Bank of San Francisco, as “…the interest these institutions* charge one another for overnight loans of reserves, balances that are sometimes needed to meet minimum requirements.”

*All depository institutions, including banks, credit unions, and thrifts

2.  The discount rate is defined as “…the interest rate a Reserve Bank charges eligible financial institutions to borrow funds on a short-term basis, transactions known as borrowing at the “discount window.”

So, the “fed funds rate” is what banking institutions* charge each other for borrowing from one another,


the “discount rate”  is an interest rate charged by the Federal Reserve Bank to a banking institution* for borrowing money from the Fed.

The federal funds rate and the discount rate are considered part of the Federal Reserve Bank’s monetary policy. The Federal Reserve Bank of San Francisco has a short explanation of the above two (2) rates plus “what is Fed monetary policy” at their website: Federal Reserve Bank of San Francisco

And, just to bring this posting into focus, the federal funds rate is what has been dropped to Zero percent and being held at Zero percent for the past 9 or so years. This is the interest rate that is “fussed” over before every FOMC (Federal Open Markets Committee) meeting. This is the interest rate that indirectly affects all other interest rates, i.e. interest paid on your savings account.

And since “a picture is worth a thousand words,” here’s a chart from the Federal Reserve Bank of St. Louis that depicts the fed funds rate over many decades.  You can move a slider bar along the “X” axis of the chart from the year 1950 to the year 2010.