Drink to smartphones lowering birth rates for World Population Day and National Mojito Day

Happy World Population Day and National Mojito Day! Like last year, I'm combining the two today. I begin the holiday observances with the Financial Times explaining Why birth rates are falling everywhere all at once.

Smartphones and a marked change to our digital media environment are part of the reason for the demographic shift changing our world, including how low birth rates are shrinking the workforce. Chief data reporter John Burn-Murdoch presents his lastest findings on this challenge faced by most nations[.]

There's a lot to chew on here. I've been writing a lot about government policy and economics, but I don't think I've mentioned non-medical technologies in the context of falling birth and fertility rates before. That's certainly a "scifi is now" topic. I also haven't discussed lack of independent housing as a factor in demography, although I've certainly blogged about housing and real estate during the past 15+ years. I think I'll be adding those perspectives to my writing in the future.

By the way, I consider "Pennsylvania economist Jesús Fernandez-Villaverde call[ing] fertility decline the question of our time, with most other problems flowing downstream of it" to be the result of a perspective I criticized in Meditations on sustainability, part 1.

[E]conomy is dependent on society, which is in turn dependent on the environment. Without an environment, there is no society. Without a society, there is no economy. Those relationships put sustainability into perspective. They also show that the emphasis on economy above all is exactly backwards. No wonder we're in trouble.

That written, I'm not surprised the Financial Times would feature it. As I quoted from Yes, Prime Minister, "The Financial Times is read by people who own the country," in this case the U.K., so they would think it salient. As one of the commenters pointed out, "This video is for rich people. Everyone who's is struggling knows why we don't have kids." From my ecological perspective, resource use, if not outright depletion, and waste production, as exemplified by fossil fuels and climate change are the primary problems and everything flows downhill from them. As a biologist, I think limited resources primarily define carrying capacity, the maximum sustainable size of a population, and we should be examining those, especially their connections to the issues the economists identify.

DW News confronted the effect of technology on society directly when it asked Are smartphones killing birth rates worldwide?

The world is having fewer children and the pace of decline is happening much faster than expected. The reasons are complex and varied, from a lack of affordable housing to a lack of suitable partners. But could smartphones and modern tech be part of the problem? DW speaks to AI researcher Connor Leahy about how digital life may be reshaping relationships.

I was wondering if someone would bring up dating apps, the obvious technological solution to people finding partners, and Connor Leahy pointed out that their incentive is to keep people on the app, not find a permanent partner. Now I'm wondering if government matchmaking services are in our future. I suspect that would not be an unadulterated good and other causes would have to be addressed for them to be effective.

For what it's worth, the commenters to the video were hostile to the question, but I think that's because DW News didn't present the data supporting the inference, not that it helped the Financial Times video that much. Their commenters weren't as mean, but they were certainly skeptical. I'm not one of them; I think the researchers are onto something, at least as a contributing factor for the last 20 years.

I return to the U.S. for the third video, PBS NewsHour examining The potential impacts of the U.S. birth rate decline.

The U.S. fertility rate is at an all-time low, according to recent data from the Centers for Disease Control and Prevention. Researchers say this is part of a larger downward trend. Since 2007, the number of Americans having babies has dropped 23%, well below the replacement level, meaning not enough are being born to replace those who die. William Brangham discussed more with Brian Mann of NPR.

PBS NewsHour broadcast this segment and then uploaded it one month before the study on smartphones and birthrates came out, so it didn't include its findings. In that light, the decline in teen pregnancy might be less a result of good policy and more the effects of smartphones. That doesn't make it any less of an accomplishment, just an accidental one.

Reading this would be enough to make me drink if my diabetes hadn't made me lose interest in drinking, so it's time to celebrate with Michigan Public saying .

Inspired by Tracy Samilton's recent trip to Cuba, Tammy Coxen whipped up this stellar mojito - which we might claim is one of the tastiest in Michigan. Samilton explored the Michigan-Cuba connection during her time in Havana, so Coxen used white rum from the Ann Arbor Distilling Company to bring some Michigan flavor to this drink perfect for warmer weather. Cheers!

That's a wrap for today's double celebration. Stay tuned for the Sunday entertainment feature. I have an awards show my readers can vote in for free, as long as they are interested in horror and horror-adjacent science fiction movies and television.

Part of the yield curve inverts, sending a possible recession signal

I made a prediction in The tax bill and the U.S. economy in 2018 and beyond that I repeated in Dow falls 1,200+ points as bond yields rise about one of the signs of an upcoming recession.

The most likely would be an inversion of the yield curve, which means that short-term interest rates would rise higher than long-term interest rates.  The Federal Reserve has been raising short-term rates for the past two years while long-term rates have been rising much more slowly.  If present trends continue, short-term rates will rise above long-term ones within a year or two, which always signals a recession within a year.

That prediction starting coming true in October, when the TIPS or Treasury Inflation Protected Securities yield curve inverted.  This week, the next shoe fell when the short- and medium-term portion of the yield curve inverted with interest rates on 2-year and 3-year Treasury bonds rising above the rate of return for 5-year bonds.  That added to the worry in the stock markets, where all the major indexes fell more than four percent during the week, including a one-day drop of 800 points in the Dow.  It also created a lot of chatter on CNBC on Tuesday, most of which mentioned that at least this isn't the yield curve inversion to worry about, which involves the 2-year and 10-year bonds.

I begin with Here's what a flattening yield curve means for the US economy on "Squawk Box," the morning show.

CNBC's Steve Liesman reports on what the yield curve is signaling in terms of a recession. Jim Paulsen of The Leuthold Group joins 'Squawk Box' to discuss.

Continuing with "Squawk Box," I'm sharing Cramer says too early to make investments based on yield curve for the graphic showing the actual interest rates for Treasury bonds and Jim Cramer's observations on Larry Kudlow.

CNBC's Jim Cramer joins 'Squawk Box' to weigh in on the flattening yield curve and the Toll Brothers quarterly earnings.

I'm not a fan of Cramer's, as he tends to be too bullish and emotional, but I think he's absolutely right about Kudlow; he's too consistently positive to be reliable.  Remember, Kudlow is Trump's chief economic advisor, so that's a cause for concern.

CNBC resumed examining the topic on "Power Lunch," the midday program, with Yield curve a good recession indicator: Steve Liesman explains.

CNBC's Steve Liesman explains how the yield curve may indicate recession.

CNBC continued talking about the relation among the bond market, stock market, and economy in Yield curve inversion a test for Fed, says expert, where the panel discussed the current inversion involving the 5-year bond instead of the 10-year bond.

CNBC's "Power Lunch" team talks with John Augustine, chief investment officer at Huntington Private Bank, and Paul Christopher, head of global market strategy at Wells Fargo Investment Institute, about what the yield curve inversion may mean for the U.S. economy.

The panel on "Fast Money," the late afternoon show, analyzed the financial results of the day in This is the chart that just created widespread panic on Wall Street.

Stocks get slammed as the Dow drops 800 points. What's next? With CNBC's Melissa Lee and the Fast Money traders, Tim Seymour, Brian Kelly, Steve Grasso and Guy Adami.

That's enough of one day's talking heads on CNBC, but not the channel's reporting.  John Harwood wrote Thursday Donald Trump could be the first president since Jimmy Carter to run for re-election during a recession.

"A strong dollar, weaker growth abroad, mounting corporate debt, a slowdown in housing and the ongoing havoc that tariffs are wreaking on global supply chains are each taking a toll," Diane Swonk, chief economist for Grant Thornton LLP, wrote this week. "No one knows for sure which straw will break the camel's back, only that they are piling up."

Swonk has accelerated her previous prediction of recession from the second half of 2020 to the first half. In October, the National Association for Business Economics reported that two-thirds of forecasters it surveyed expect recession by the end of Trump's re-election year.

That would represent a historically rare event – and an ominous one for the president's chances of a second term.
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The last president burdened with recession as he sought a second term was Carter, in 1980. The results weren't pretty.

I made another prediction about the economy in Ten years ago, we were partying like it was 1929. Are we about to do it again?

Based on New Deal Democrat's analysis at Seeking Alpha, that should happen in the second half of next year, so I'm moving my recession call to between July and December 2019.  The bad news is that my readers and I may not know until the middle of 2020.  The good news is that it would be perfectly timed to screw up Trump's re-election, should he last that long, or Pence's should he not.  I can live with that.

The clouds of the next recession are now visible on the radar, but at least they have a silver lining.

'Abacus' wins Outstanding Business and Economic Documentary

I wrote that I would take "a brief break from the News and Documentary Emmy Awards to cover the nominees for the Critics' Choice Documentary Awards." at the end of 'Tower' wins Outstanding Historical Documentary plus five other Emmy winners covered mass shootings.  That was a week ago, so it's time to return with a winner covering ethics in government that I wrote that I would find in Americans agree on a few issues, Pew Research Center finds.  The one that comes to mind is "Abacus," which was my choice for Outstanding Business and Economic Documentary.  It won.  Watch Martha Raddatz present the award.


The ethics in government come not from the behavior of the bank, but from that of Cyrus Vance, Jr., the DA who overblew the situation.  Mark Mitten made the point again when he was interviewed in Business & Economic Documentary. "FRONTLINE: Abacus -- Small Enough to Jail".

[M]ark Mitten and the team from "Abacus: Small Enough to Jail" on PBS' FRONTLINE, winner of the Emmy Award for Outstanding Business & Economic Documentary, presented at the 39th Annual News & Documentary Emmy Awards

It's amazing that Abacus was the only bank prosecuted for the financial crisis — amazing, but probably not an accident.  As I wrote about "Abacus" late last year, "'Model minority' or not, Asian-Americans experience systemic racism, too."

I'll have more about the winners at the News and Documentary Emmy Awards along with a driving update and posts celebrating Halloween.  Trick or Treat!

Ten years ago, we were partying like it was 1929. Are we about to do it again?

I concluded Diversity and fantasy in comedy nominees at the 2018 Primetime Emmy Awards by telling my readers that I would "observe the 10th anniversary of the Lehman Brothers bankruptcy, when we were partying like it was 1929."

I begin with an examination of the collapse of Lehmann Brothers a decade ago from VOA News reporting Ten Years After the Financial Crisis: What Happened, What We've Learned.

It will be 10 years this week since the collapse of investment bank Lehman Brothers, one of the casualties of the U.S. subprime mortgage crisis. The ripple effects sent the global economy into a tailspin and brought on the worst financial crisis since the Great Depression. VOA correspondent Mariama Diallo takes a look at the impact of that turbulent economic period and the lessons learned a decade later.

That's actually a pretty good summary of the crisis from an elite perspective.  For what it looked like at ground level, I recommend US: Pains of the financial crisis still felt 10 years on by Al Jazeera English.

Saturday will have been a decade since the collapse of the Lehman Brothers investment bank triggered a global recession. While the crisis played out on Wall Street and in government ministries, its roots lay in small towns and cities across the US, where families pursuing the so-called "American Dream" of home ownership fell victim to unscrupulous banks and predatory lending schemes. While Wall Street and the banks may have recovered, many Americans are finding their road to recovery longer and more difficult. Al Jazeera's Rob Reynolds reports from Perris, California.

Thirty years ago, I lived just over the county line to the west of Perris, so this story literally hits close to home.  Speaking of which, I was fortunate to have gotten out of the housing market just in time, as I wrote in 2014.

The news on the radio in June 2005 trumpeted record home sales and prices.  I took it as a sign of the market top I'd been looking for since 2001 and immediately drove to the nearest real estate office to my home in the Irish Hills of Michigan and listed my house for sale.  The house sold in April 2006 and closed in May 2006, just as the bottom was about to fall out.
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The result was that I got out of the market just in time...then rented from 2006 until now, eight years of riding the real estate market down by staying out of it.

It wasn't all luck.  I knew the housing bubble would pop, but I had no idea how big the explosion would be.  It ended up being far worse than I expected.

Both of the above looked back at the start of the Great Recession and how it led up to today.  What about the future?  MSNBC did that in 10 Years After The Lehman Brothers Collapse, Here’s Where We Stand | Velshi & Ruhle.

10 years ago this week, Lehman Brothers collapsed, marking the largest domino to fall leading to the financial disaster of 2008. Stephanie Ruhle discusses whether or not anything has changed and if we could end up making the same mistake. Weighing in: Axios Chief Financial Correspondent Felix Salmon, Princeton Professor Eddie Glaude and the Editor-and-Chief of American Consequences, PJ O’Rourke.

Student loan debt is indeed a problem, one that I've mentioned only once on this blog thanks to Benie Sanders campaigning on the issue in Ann Arbor two years ago.  However, I doubt it will send the economy into recession the way the housing bust did in 2007-2008, as the value of housing declining contributed to reduced consumption then caused a financial crisis, which made the recession worse.  That's because the value of a college education will not decline before a recession, so that won't drag down the valuation of the debt as an asset, putting strain on the financial system and causing a panic to start a recession.  Instead, the causality will go the other way; the recession will hit first, causing people to lose their jobs and make them unable to pay.  That will cause a debt crisis in the financial system.  At least banks can't foreclose on and repossess people's educations, so the students will still have them, unlike all the people who lost their homes, although that's small consolation to the graduate whose increased earnings from their education have gone to paying off the debt to get their education.  That alone is reducing consumption and home ownership, slowing down the economy.

I conclude by observing that this is a good time to update the recession call I made in The tax bill and the U.S. economy in 2018 and beyond.  I thought then that the U.S. would go into recession by the end of this year.  That's not going to happen.  It looks like the tax bill has stimulated the economy enough that it will continue expanding into next year.  However, the next recession is still coming.  Based on New Deal Democrat's analysis at Seeking Alpha, that should happen in the second half of next year, so I'm moving my recession call to between July and December 2019.  The bad news is that my readers and I may not know until the middle of 2020.  The good news is that it would be perfectly timed to screw up Trump's re-election, should he last that long, or Pence's should he not.  I can live with that.

The financial crisis as a failure of economic facts

Remember that sustainability is about more than the non-human environment. It's also about the economy and society. In that spirit, I present to you an excerpt of an article from Bloomberg Business Week about the financial crisis by Hernando de Soto in which the author presents a unique perspective on the event.
The Destruction of Economic Facts
Renowned Peruvian economist Hernando de Soto argues that the financial crisis wasn't just about finance—it was about a staggering lack of knowledge

When then-Treasury Secretary Henry Paulson initiated his Troubled Asset Relief Program (TARP) in September 2008, I assumed the objective was to restore trust in the market by identifying and weeding out the "troubled assets" held by the world's financial institutions. Three weeks later, when I asked American friends why Paulson had switched strategies and was injecting hundreds of billions of dollars into struggling financial institutions, I was told that there were so many idiosyncratic types of paper scattered around the world that no one had any clear idea of how many there were, where they were, how to value them, or who was holding the risk. These securities had slipped outside the recorded memory systems and were no longer easy to connect to the assets from which they had originally been derived. Oh, and their notional value was somewhere between $600 trillion and $700 trillion dollars, 10 times the annual production of the entire world.

Three years later there's still plenty to be concerned about. Governments have worked to enact major financial and regulatory reforms, such as the Wall Street Reform and Consumer Protection Act ushered through Congress in 2010 by former Senator Chris Dodd (D-Conn.) and Representative Barney Frank (D-Mass.). Dodd-Frank has sought to move derivatives into clearinghouses where more data about them can be collected. It's a step in the right direction. But if you believe in the value of public memory and economic facts, the reforms leave a number of problems outstanding.

First, various groups of derivatives end users, such as nonfinancial companies and sovereign wealth funds, are likely to be exempted from the clearing process—from 40 percent of them, according to Craig Pirrong of the University of Houston's Bauer College of Business, to 70 percent, according to Michael Greenberger, a former Commodities Futures Trading Commission director. Second, the information collected would be available only to regulators because certain business data are considered "proprietary." Third, the $700 trillion worth of derivatives that ignited the recession are not covered by Dodd-Frank. Warren Buffett successfully lobbied for their exclusion, saying it would be tantamount to rewriting old contracts and would force healthy derivatives players such as his own Berkshire Hathaway to post collateral on old deals. Fourth, the clearing system is not likely to be fully operational for another 5 to 10 years. Fifth, many clearinghouses do not have the kind of complete information required by traditional public memory systems: incentives for recording that asset owners can't resist; standard classifications to facilitate identifying and governing the assets; universal access to the information; integration or linkages with other recording systems; provisions to protect third parties from negative externalities; identification of all asset holders and interested parties; limited liability provisions to improve accountability.

That's a lot of failure to digest in a single paragraph. So let's look sector by sector at the sorry state of facts in the financial system.

That's only the middle of the article. For the beginning and end, I recommend you read it in its entirety at the link in the headline.

Maybe the legislators and regulators will listen to what de Soto wrote.