What Do Cattle, Porn Starlets, Toyota and Hot Sauce Have in Common?

They're all getting out of Dodge California and heading for greener pastures- in some cases, literally.

Beset by higher taxes, above-average unemployment and among the highest cost of living in the USA, it's no secret that Californians have been moving out of state annually by the hundreds of thousands in recent years. This should come as no surprise with recent scandals and corruption involving California's political class coupled with onerous, intrusive and often absurd regulations for businesses passed on the state, county and municipal level.

Sensing discontent among Californians and business owners, Texas governor Rick Perry rolled out the welcome mat for Golden Staters with a PR blitz, offering lower taxes and a lower cost of living than California as well as business incentives for those companies who set up shop in the Lone Star state.

Although incumbent California governor Jerry Brown crassly dismissed Perry's efforts as 'barely a fart', it appears as though the Lone Star State's lobbying has been producing results. At the end of April, Japanese automaker Toyota announced that they would be moving their North American headquarters from the Los Angeles suburb of Torrance to Plano, TX starting in 2016. The move by Toyota [NYSE: TM] is expected to consolidate 4,000 employees from marketing, manufacturing and corporate operations to the suburban Dallas facility. In 2003, Toyota broke ground on a plant near San Antonio that produces the Tundra and Tacoma pickup trucks.

On a smaller scale, Irwindale, CA-based Huy Fong foods- maker of the Sriracha hot sauce- has been locked in a legal battle with the city council after the council threatened to declare Huy Fong a nuisance and threatening them with fines or closure after receiving complaints from four households regarding the fumes resulting from processing chili peppers. Although Huy Fong CEO David Tran stated publicly that he has no immediate plans to relocate the Irwindale facility, the company welcomed a delegation of Texas lawmakers in May. A company spokesman said that relocation wouldn't be as straightforward for Huy Fong because local producers of Sriracha ingredients such as chilis and vinegar couldn't pull up and move to Texas with them. However, botanists working on behalf of Tran have begun examining the soil in parts Texas to see if it's conducive to growing the variety of chilis used in Sriracha sauce. There's also concern over variables in the Texas weather such as flooding, hurricanes, drought and hail as well as competing bids from within California and other states.

However, not all the businesses exiting California have decided to head to the Lone Star state. Once considered the hub of the adult entertainment industry, California's San Fernando Valley has been hit hard by the advent of online pornography. The number of permits to film in the San Fernando Valley plummeted after a law requiring adult film stars to wear a condom while performing went into effect late last year. The measure was a Los Angeles county ballot initiative that was approved by voters in 2012. In response to the measure, studios and actors shipped themselves a few hours up Interstate 15 to Las Vegas where the cost of doing business was lower than in California and there were no regulations to mandate the wearing of condoms. Industry insiders say that its much cheaper to rent out warehouses for filming or mansions or hotel suites to accommodate talent for the duration of a shoot.

Nor are all the Californians leaving the state two-legged. Thanks to an ongoing drought and the closure of a massive slaughterhouse in the Imperial Valley town of Brawley, ranchers in California have been selling off cattle to Texas, Nevada and Nebraska. According to Reuters research, at least 100,000 head of cattle have left California in 2014- including breeding stock that's going to slaughter. Higher feed and transportation costs have also put pressure on California ranchers, although ranchers elsewhere are facing similar problems.

Although defenders of the current business climate in California often cite the entertainment industry and Silicon Valley as being the state's economic backbone as well as the primary source of fundraising for the state's democrat party, Hollywood has been shipping jobs out of state due to increased production and filming costs within the state. Special effects firm Sony Pictures Imageworks announced at the end of May that their headquarters will be moved from Los Angeles to Vancouver, Canada for post production work. Over the last 20 years, the area around Vancouver, BC has been dubbed 'Hollywood North' as British Columbia offered studios tax credits for filming on location. Although the exchange between the US and Canadian dollar isn't as favorable as it was in the 1990s, a number of studios are still drawn there for post-production work and location filming [the area around Vancouver can pass for a number of other settings depending on the type of film or scene- NANESB!].

The state's Democrat-controlled legislature also recently passed a bill that would raise the state's minimum wage to $13 an hour by 2017 and is expected to be signed into law by governor Brown. While the bill raises entry-level wages, many employers will likely end up cutting their workforce and retailers or restaurants will close down locations or increase prices to make up for any increased operating costs.

More damning, none of these jobs or businesses will be coming back or are unlikely to be replaced by new enterprise. Although California sits on considerable oil reserves in the Monterrey Shale, wealthy environmentalists with considerable backing from the entertainment industry are seeking to ban the hydraulic facture drilling process that has been so effective in recovering shale oil and gas in Texas, North Dakota and Pennsylvania. Meanwhile, state and local lawmakers continue to busy themselves with legislation concerning transgender bathrooms for schoolchildren or banning plastic bags and simply assume that they can get whatever revenue they need from the next Silicon valley startup such as Facebook.

More 0bamacare Good News! Democrats Spin CBO Report Estimating 2 Million People Will Lose Jobs as Freeing Americans From 'Job Lock'

According to a Congressional Budget Office report released this week, 0bamacare is set to push roughly 2 million Americans out of the workforce over the next three years as their hours are reduced or they leave the workplace altogether to qualify for subsidies offered by 0bamacare.

Although part of those numbers are attributed to job cuts, the vast majority represent workers who decide it makes more sense to stay home or work fewer hours, weighing the higher taxes they pay in the workforce versus their qualifications for benefits if they drop out.

“CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 to 2 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor — given the new taxes and other incentives they will face and the financial benefits some will receive,” the nonpartisan tax agency said in its economic outlook.

Although the White House and Congressional Democrats initially disputed the CBO's findings, many of them had revised their strategy shortly thereafter and claimed its actually a good thing that 0bamacare was providing Americans disincentive to work less or employers from hiring, citing the dreaded phenomenon of 'Job lock'.

Yes- that's the actual phrase House Minority Leader Nancy Pelosi used.

“What we see is that people are leaving their jobs because they are no longer job-locked,” House Minority Leader Nancy Pelosi (D-Calif.) told reporters after House votes Tuesday afternoon. “They are following their aspirations to be a writer; to be self-employed; to start a business. This is the entrepreneurial piece. So it’s not going to cost jobs. It’s going to shift how people make a living and reach their aspirations.”

Pelosi said she hadn’t “fully” seen the report, but, “this was one of the goals. To give people life, a healthy life, liberty to pursue their happiness. And that liberty is to not be job-locked, but to follow their passion.”

Using their line of reasoning, I guess I should actually be thanking the Democrats for freeing me from 'Job Lock' [not to mention 'paycheck lock'- NANESB!] for several months back in 2009. Come to think of it, maybe the Democrats can market the War on Coal as freeing most of West Virginia, eastern Kentucky and Western Pennsylvania from 'Job Lock'- assuming those jobs had something to do with mining or transporting coal.

I'm pretty sure I've seen this somewhere before: After Obama's promise to Americans of "If you like your health insurance, you can keep it" turned out to not only be untrue, but the 'Affordable Care Act' resulted in roughly 4.7 million cancellations of already-existing healthcare plans, the spin from Democrats and editorial boards at the New York Times and Washington Post was that those policies were 'junk' and the people who were previously happy with their 'junk' policies could shop around for another plan [often offering even less than the cancelled 'junk' policies for much more money- NANESB!] on the not-really-working healthcare.gov website.

Yet the Democrats and liberal pundits who somehow failed to go into detail on what made the millions of policies cancelled thanks to 0bamacare 'junk' are now opining what sort of jobs Americans find themselves 'locked' into- apparently involuntarily- when they could be spending that time with their family or pursuing a fulfilling career in interpretive dance [how exactly they still have a roof over their heads after being liberated from 'job lock' isn't really made clear- NANESB!].

Perhaps the most patronizing and insulting thing from the beltway pundits and liberal politicians who have most likely never worked a day of their life in the private sector is the assumption that Americans taking time off from work to be with family, switching jobs or quitting everything to pursue your dream job or start up your own business had never happened prior to the 2010 passage of 0bamacare. Even more dangerously, not only does the CBO report find this disincentivizes working full time but also tacitly promises success for those who strike out on their own thinking they have the Affordable Care Act to thank.

UPDATE 2/6- The Lonely Conservative points out that entrepreneurs 'liberated' from the drudgery of Job Lock could face an increase of as much as $20,000 for insurance if they cross the income level set out by 0bamacare guidelines (Calculated as roughly 400% of the Federal Poverty Level)

Greece in the Carribean- Puerto Rico Moves Closer to Defaulting on $70 Billion in Public Sector Debt

News out of Puerto Rico so disturbing that I thought I'd lead with a picture of basketball wife Evelyn Lozada at the 2012 Puerto Rico Day Parade in New York City to take the edge off.

Remember that whole 'Cyprus' or 'Greece' thing? Years of unsustainable public-sector spending coupled with lower than expected economic growth plunged both Mediterranean countries into economic chaos that threatened to trigger a domino effect throughout the Eurozone beginning in 2010.

The same factors that led up to the Greek and Cypriot economic crises have been at work in the Commonwealth of Puerto Rico and analysts say that the Caribbean island and US territory is moving towards a near certain default on more than $100 billion is public sector debt and unfunded pension liabilities.

A possible suspension on payment of the debt comes despite the progress Puerto Rico's Gov. Alejandro Garcia Padilla has made in raising taxes and reducing the territory's deficit.

Any such decision partly reflects legal complications arising under Puerto Rico's ambivalent status, which today makes a Chapter 9 filing for bankruptcy protection for local governments, such as the Detroit municipal filing last July, impossible. It also reflects the maths of a debt service burden that requires paying between $3.4 billion and $3.8 billion each year for the next four years. As doubts grow about the ability of the commonwealth to service that debt, the cost of doing so will inevitably rise.

"The numbers are untenable," said one restructuring adviser. "To issue new debt the yield would have to rise and where they can't raise new money they will have to stop paying."

If Puerto Rico is forced to take that step, the effects will ripple through the entire $4tn municipal bond market. Because the debt is generally triple tax free, in a world of zero interest rates demand is high and it is distributed widely, including in funds that imply they have no exposure to Puerto Rico.

Puerto Rico cannot really raise taxes much more, since the debt per capita is more than $14,000, while income per capita is almost $17,000, a ratio at 83 percent—that makes California, Illinois or New York—each at 6 percent—models of prudence. Meanwhile, at 14 percent, the unemployment rate is twice the national average.

While Congress could theoretically intervene and create an insolvency regime for the island [similar, in theory, to Detroit's city emergency manager- NANESB!] the current partisan divide in Congress would lead to considerable wrangling with the GOP likely prioritizing the island needing to uphold their financial obligations to creditors versus the Democrats giving priority to the pensions of unionized public sector employees on the island.

Municipal and general obligation bonds from Puerto Rico have enjoyed what's called 'triple tax free' status [i.e. they're exempt from federal, state and local taxes- NANESB!] and have proven attractive to investors, but starting last year ratings agencies have cut much of the bonds' credit ratings to one notch above junk in light of recent developments.

Adding to the island's troubles is the considerable outmigration that began back in 2000- well before the 2008 global economic crisis. Some estimates say the net population loss since 2000 is in the neighborhood of 144,000- many of them younger people going to school or looking for work in the United States.

In what is perhaps the surest sign that US taxpayers will be on the hook for the ongoing situation on Puerto Rico, the White house stated that they were not considering a bailout of Puerto Rico on Wednesday.

Public opinion in Puerto Rico in recent decades has swung from full independence from the USA to status quo to support for becoming the 51st state.

Foreign Manufacturers Expressing Renewed Interest In Opening Shop in the USA

Reversing a decades-long trend of offshoring manufacturing, foreign companies have recently started to set up facilities in the United States- taking advantage of a productive workforce, a cheaper dollar and proximity to their largest customer base.

The trend is similar to foreign automakers who have been opening up plants over the last 30 years throughout the United States- primarily in right to work states in the southeast and Texas. However, this time around, these include foreign companies that specialize in electronics, aerospace, chemicals and energy.

In 2011, British-based Rolls-Royce began making engine parts here in Virginia and shipping them to Europe and Asia to be assembled in jet engine factories. That same year, Siemens, a German company, started making power-plant turbines in Charlotte, N.C., most of which it's shipping to Saudi Arabia and Mexico.

Faced with rising demand from airlines worldwide, Rolls-Royce decided to build a new factory in Virginia to make jet engine discs and ship them across the Atlantic rather than expand similar plants in the U.K. A big reason was to be closer to its customers in the Southeast. Boeing began making 787 Dreamliners in Charleston, S.C., in 2011 and Airbus is building its first U.S. assembly plant in Mobile, Ala.

CEOs of those companies "can see that you're making quality parts in super-modern facilities with the best working practices," says William Powers, chief financial officer of Rolls-Royce North America.

The company's gleaming, $170 million factory in rural Prince George employs 100 and looks nothing like the labor-intensive textile, tobacco or furniture plants that were the region's economic lifeblood decades ago. On a sprawling, spotless white factory floor, rows of hulking computerized machines cut and shape discs that cost $25,000 to $75,000 apiece. Workers are scarce. Two can operate eight machines at a time and 12 make up a shift.

Rolls-Royce is planning two more factories on the Prince George County site.

While automation is part of the story, the Southeast also offered Rolls-Royce a flexible work environment. In Virginia and other southern right-to-work states where union representation is low, factory employees typically can both set up and operate a machine, as well as run multiple machines.

By contrast, in the U.K. and elsewhere in Europe, collective bargaining agreements often limit workers at Rolls-Royce and other companies to single, repetitive tasks, increasing labor costs, Powers and Sirkin say. Partly as a result, from 2005 to 2010, worker productivity increased much faster in the U.S. than in western Europe.

Also contributing to faster U.S. productivity gains: The country was hit harder by low-cost competition from Asia, forcing manufacturers here to cut waste and do more with fewer employees.

The kicker is that many of these products aren't even destined for customers in the USA. For example, turbines made at Siemens' Charlotte, NC plant are usually destined for Mexico or Saudi Arabia. The engine blades made at the Rolls Royce facility in Virginia are used aircraft like the Airbus A-380.

It isn't just European or British conglomerates getting in on the action. China's Golden Dragon Precision Copper Tube- one of the world's largest specialty producers of copper tube for air conditioning and small engines- opened up a $100 million plant in Thomasville, AL employing as many as 300 people back in 2011.

The deadly March 2011 Japanese tsunami has also factored into various companies' decision to shift production. The widespread devastation the earthquake, tsunami and nuclear meltdown triggered snarled the supply chain for the automotive industry. Months after the tragedy, Bridgestone Corporation announced an expansion of their Aiken County, SC plant. However, Bridgestone isn't the only tire manufacturing company in the Palmetto state to expand their footprint- French competitor Michellin broke ground on a $750 million plant in Anderson, SC last year. The plant will make tires for heavy equipment such as earthmovers.

Increased Demand for Guns and Ammunition Spark Jobs Bonanza in Firearms Industry

Looks like I was wrong- President Obama and the Democrats actually CAN take credit for creating some private sector jobs.

With the White House and Democrat-controlled Senate promising to take action on gun control- including a proposed "assault weapons" ban- civilians have been stocking up on guns, ammunition and parts for the last several months. Coupled with the recent Department of Homeland Security purchase of 1.6 billion rounds of ammunition, the increased demand has created a shortages and backlogs. In fact, the massive bulk purchase by the DHS has left local police departments across the country scrambling to find ammunition and paying more and waiting longer for the ones that do manage to find any.

The brisk sales has also had the unintended consequence of creating a significant jobs boom for gun manufacturers throughout the USA.

Mike Weddle, head of maintenance at Dynamic Research Technologies, an ammunition manufacturer in Albany, Mo., says he is adding 10 new hires to his staff of 35. DRT's machine operators make between $10 and $17 an hour -- a healthy paycheck in a region where it's tough to find a job and the cost of living is relatively low.

DRT currently cranks out 80,000 bullets per shift and operates two shifts per day. But that's not enough to meet demand. So Weddle is adding a third manufacturing shift and building an additional facility.

"Demand picked up a year ago -- it quadrupled," he said. "It just went crazy." He says .223 caliber ammo, which is for semiautomatic rifles, is particularly difficult to keep in stock.

DRT is a tiny part of an industry that employs about 240,000 nationwide, according to an estimate from Brian Rafn, who follows the gun industry for Morgan Dempsey Capital Management. And like DRT, many of the giants in the business of making guns and ammo are also expanding.

"Sturm, Ruger and Smith & Wesson have both added manufacturing capacity, which includes labor and shifts, in the past year," said Wedbush Securities analyst Rommel Dionisio.

Caleb Ogilvie, a concealed-carry instructor who works at Cabot Gun & Ammo in Cabot, Ark., said that employees at a nearby Remington plant in Lonoke are telling him that "they're running full swing up there, running 24-7."

Ironically, companies like Smith & Wesson, Colt, Mossberg and Ruger are headquartered in New England states where residents can't legally own some of the firearms those companies make. This has not gone unnoticed by officials in Mississipi and Texas who say they would gladly welcome the northern-based companies should they decide to move south. Colorado-based ammunition manufacturer Magpul has said their move out of Colorado is underway after Gov Hickenlooper signed a raft of gun control bills into law earlier this month.

Meanwhile, the northern Idaho town of Potlatch is attempting to do follow suit with some help from the Idaho department of commerce, Potlatch corp [NYSE- PCH] which owns property that housed one of their paper mills until 1981 and regional utility Avista [NYSE- AVA].

The move by PNW Arms was like a signal flare to business and political leaders in the town of 800 people, who were in the process of trying to determine what industry would be best to pursue.

"We were in the middle of doing our marketing plan at the time and decided that firearms is the niche we would recommend," said Gary White of Kennewick, Wash., a business marketing consultant who is helping develop the town's pitch to gun makers.

Potlatch, they decided, would go from timber town to gun town. It would try to lure firearms and ammunition makers, and plans also called for hunting-themed housing and retail development.

"It will help draw some out-of-towners and out-of-staters," Mayor David Brown said.

Potlatch went public in April with its come-hither pitch to gun makers.

"We've had two nibbles already and we haven't even tried," Swanson said.

Swanson acknowledged that gun manufacturers would not be welcomed everywhere. Even in Latah County, they might face opposition 15 miles away in liberal Moscow, where the University of Idaho is based.

"In Potlatch, they would be welcomed with open arms," Swanson said. "I have not heard a single person in Potlatch saying, 'We don't want them here.'"

White agreed: "If we proposed this in Seattle or Portland, I'm sure it would be entirely different. For Potlatch, Idaho, this makes absolute sense."

Busy State Highway 6 serves as the main street through the town, and the small business community actually has trouble finding workers, said Dale Spring, owner of Dale's Wagon Wheel Bar & Grill.

Spring wonders where the workers would come from for any new firearms factory. "There's no labor force," he said.

Many Potlatch residents work at the universities, or at one of the thriving private sector employers in the Moscow-Pullman area, he said.

Local economic development leaders believe good-paying jobs will draw workers.

The lure for manufacturers is the former lumber mill site, of which 26 acres is set aside for firearms and related companies, White said. The mill site is currently without buildings, but has nearby utilities, is flat and the town has plenty of water and sewer capacity, Swanson said.

Nationally, there has been a big jump in the popularity of target shooting, largely the result of a slew of television programs on that subject, White said. They expect Potlatch's plan to appeal to some of those people, he said.

The marketing effort is funded by Potlatch Corp, which still owns the mill site, by local utility Avista, and by local city and county governments.

There are relatively few publicly traded gun companies, but shares of Smith & Wesson [NASDAQ- SWHC] have gone up 7.85% since the beginning of 2013 and shares of Ruger [NYSE- RGR] are up more than 13% in the same timeframe.

New Regulations May Lead to Collapse of New England's Fishing Industry

Gretchen Ertl- New York Times

The New England Fishery Management Council this week approved drastic cuts in the catch limit of cod off the coast of New England, adding the the already beleagured industry's woes.

The New England Fishery Management Council on Wednesday approved a year-to-year cut of 77 percent on the Gulf of Maine cod limit and 61 percent for Georges Bank cod.

The cuts come on top of a slew of other reductions, ranging from 10 to 71 percent, on the catch of other bottom-dwelling groundfish species, such as haddock and flounder.

Fishermen say now they're staring at industry collapse because they've been left with far too few fish for most boats to make a living.

"We are headed down the wrong course here, of exterminating the inshore fleet, for no good reason," said David Goethel, a New Hampshire fisherman and council member.

The cuts, in effect May 1, are expected to be backed by federal managers at the National Oceanic and Atmospheric Administration. NOAA's top federal fisheries regulator, John Bullard, acknowledged the reductions will be devastating. But he said the fish stocks are struggling and the industry's steady, excruciating decline must be reversed.

"The first thing we have to do is put denial behind us," he said.

The cuts hit an industry that was crucial to the nation's early economy and remains imbued with the risk and romance of man versus nature -- depicted in the famous "Man at the Wheel" statue in Gloucester of a fisherman facing the sea.

The new low limits reduce the cod catch to just a fraction of what it once was and prevent fishermen from landing more plentiful species, such as haddock and pollock. That's because fishermen can't pull up the healthier groundfish without catching too much of the cod that swim among them.

An economic analysis by the council projected that the cuts would reduce overall groundfish revenues by 33 percent, from about $90 million in 2011 to about $60 million in 2013. But fishermen said the projection is far too optimistic.

"It's fantasy. ... I mean, I'd rather go to Disney World. I've got a better chance of meeting Peter Pan," said Goethel, who predicted the entire New Hamsphire fleet would be eliminated.

Fishermen have consistently disputed the accuracy of the science that drives regulation and that indicates the stocks are in bad shape. And they noted the industry has generally fished at or below levels recommended by science in recent years, but the advice has proven wrong.

"I've done everything they told me to do, and all of the sudden I come up here to a meeting today, and they're going to send me in a coffin out of this place," said New Bedford fisherman Carlos Rafael, who said he may have to sideline half of his fleet of 20 groundfish boats.

Federal regulators have been contemplating deep cuts or a near-total prohibition on cod fishing by New England's fishing, despite some uncertainty over whether or not there's a sustained decline of the cod population offshore.

Fishermen insist that there are plenty of cod and that the real problem is fuzzy science. They say the data are grossly inconsistent, pointing to a 2008 federal report that concluded that Gulf of Maine cod, though historically overfished, were well on the way to recovery.

The news is causing high anxiety in Massachusetts, where a wooden “Sacred Cod” has hung in the State House for more than 200 years and the fishing industry, though struggling, still figures prominently in the state’s identity.

“I can’t think of another fishery shutdown that would have the economic consequences of this,” said Steven Cadrin, a scientist at the University of Massachusetts, Dartmouth, who helped with the assessment.

From May 2010 to April 2011, commercial fishermen caught about nine million pounds of Gulf of Maine cod, according to the New England Fishery Management Council, earning more than $2 per pound on average.

Last year NOAA officials put more than 2100 square miles of prime fishing ground off limits to New England fishermen in a move to protect an estimated 90,000 harbor porpises. Despite their relatively abundant numbers, the species is under the protection of the Marine Mammal Protection Act.

Canada Actively Seeking American Workers Left Jobless by 'Obama Recovery'

Jeff McIntosh photo- Canadian Press

As the American economy continues to receive bad news amid Barack Obama's reelection and increasing concerns about the upcoming 'fiscal cliff', Canada has made it clear that it needs workers and is looking to the USA to help fill that gap [and I for one welcome our new Canadian overlords- NANESB!]

Much of western Canada is experiencing a shortage of skilled laborers- this is particularly true of the energy sector in oil-rich provinces like Alberta or Saskatchewan. Despite the fact that just under 30,000 Canadians made their way to Alberta from other provinces to find work in the last year, oil industry consultants believe they'll need more than 35,000 additional workers over the next decade for the oil sands alone. Moreover, companies will be losing a large number of worker due to attrition as statistics have shown much of the current workforce in the oil sands, exploration and refineries is middle-aged.

[...] the industry’s growth is far from certain.

“Labour shortage impacts could threaten investment, revenues and sustainability throughout the entire energy value chain,” said Peter Boag, president of the Canadian Petroleum Products Institute, which recently changed its name to Canadian Fuels Association.

The country’s energy sector industry directly employed 187,000 workers last year, and that’s set to grow exponentially.

“There will be no reprieve from current hiring challenges for oil and gas services as the sector will need to fill thousands of positions between now and 2015,” says HR Petroleum Council in a report. “Employee turnover is the sector’s greatest workforce concern as it escalates costs and exacerbates sector-wide labour and skill shortages.”

The oil sands are different in that they have to be extracted in a manner more reminiscent of mining for ore than drilling for oil. Although environmentalists opposed development of Alberta's oil sands, the oil has been naturally seeping into nearby bodies of water such as the Athabasca River for centuries. Although much less straightforward to extract, the mixture of sand, clay, water and bitumen locked in the ground are said to rival the conventional petroleum reserves of Saudi Arabia and Venezuela. Much of the oil sands activity is centered northeast of Edmonton around Fort McMurray, Alberta- a latter-day boomtown dubbed by some as 'Fort McMoney'.

As Canada continues to tap the vast energy reserves out west, employers and recruiters are looking beyond their own borders to help offset the shortfall of skilled workers- including the USA.

Since 2010, about 35,000 U.S. workers a year have been issued work permits, according to Canadian immigration statistics. That's up 13% from earlier in the decade. And that figure is expected to grow as provinces continue to loosen requirements for temporary foreign workers.

Rudolf Kischer, a Vancouver-based immigration attorney, said his firm can hardly keep up with the processing of work permits for employers hiring U.S. help.

"We're the busiest we've ever been," he said.

Many of those workers are heading to where the labor market is hottest: Edmonton.

Edmonton has become a staging ground for oil companies that include Canada's Suncor Energy Inc., Shell Canada Ltd. and Chevron Canada Ltd. The energy sector has in turn boosted industries such as manufacturing, home building and retailing.

With a population of about 812,000, Edmonton looks a lot like many American cities. There are large strip malls anchored by U.S. retailers such as Costco and Home Depot, and ubiquitous coffee shops — except here Tim Horton's doughnut shops outnumber Starbucks 3 to 1.

The biggest difference: The unemployment rate here is 4.5%, and "We're Hiring" signs are posted in almost every window.

Jobs near Fort McMurray, a remote town six hours north, are the best-paid; a welder can make up $37 an hour. (At present Canadian and U.S. dollars are almost equivalent in value.) But laborers must stay in barracks-style camps, which energy companies have upgraded to woo them. The best ones offer private rooms with flat-screen TVs, gyms, prime dining and wireless Internet access.

Workers spend as long as a couple of months at a stretch laboring before returning to Edmonton "moneyed up," as the expression goes around here. Workers then pump those dollars into the local economy.

The province of Alberta boasts a median household income of $83,000 compared with $50,000 in the U.S.

Andrew Hoggard, a 35-year-old auto mechanic who moved to Edmonton from Michigan in March, can hardly keep up with his workload. He puts in 12-hour days at a local Chrysler dealership, including some Saturday shifts.

Still, he's not complaining. In eight months, he's made $70,000. Back in Holland, MI, where he worked on commission at Nissan dealership, he relied on his parents to help him pay rent when the work slowed.

In British Columbia, an unprecedented construction boom has left the province short on workers. However, in southern California, even before the current recession there have been thousands of skilled tradesmen who remain unemployed, underemployed or are working outside their field altogether. This led to officials in Riverside County, CA to coordinate with Canadian delegations and organizations like the British Columbia Construction Association to hold a job fair slated for early December in Indio, CA.

“Some have not found work for the past four years in their trade,” said Tom Freeman, commissioner with the Riverside County Economic Development Agency’s office of foreign trade, which has helped set up a Dec. 4 job fair in Indio to recruit workers willing to move north.

Economic development specialists and others in the Coachella Valley have been very involved in what is called the “workforce mobility program,” with initial meetings taking place in Palm Springs and Desert Hot Springs, Freeman said.

The British Columbia Construction Association, which represents some 2,000 companies, will have a delegation at the job fair, as it has at similar job fairs held in Ireland and Scotland, said Abigail Fulton, vice president and an attorney with the association based in Victoria, British Columbia.

“We actually do the immigration work at no charge,” said Fulton, who noted the association is not looking for laborers but rather skilled tradesmen familiar with large commercial and industrial-type projects.

Along with competitive or even higher wages than companies are paying in the U.S., Canadian recruiters are touting steady work, retention bonuses, free universal health care and quality schools.

A flier sent out by Riverside County, the British Columbia Construction Association and the Canada California Business Council lists heavy equipment operators, iron workers, pipe fitters, mechanics, and mechanical and electrical engineers as among trades that are needed.

Of course, Canadian companies and recruiters aren't just limiting their search to the USA. Similar trade shows like the one set to take place in Indio have already been set up in Ireland and Scotland. Canadian officials have also been courting Polish immigrants in the United Kingdom, attempting to coax them into making the move to Canada. While this may sound like an unusual or way-too-specific niche, as of 2001 there are an estimated 980,000 Canadians of Polish ancestry [including Wayne Gretzky, Geddy Lee and William Shatner- NANESB!] and the UK's Office for National Statistics estimated there were an estimated 515,000 Poles either temporarily or permanently residing in the United Kingdom as of 2010.

UK Federation of Poles chairman Włodek Mier-Jedrzejowicz said he had been contacted by Canadian officials who said they were particularly keen on Poles able to fluently speak English.

While there are no doubt some drawbacks for Americans working in Canada [ie- you'd be taxed four times- US federal taxes, Canadian federal taxes, the provincial tax of wherever you live and the state tax of the last state you resided in before leaving- NANESB!] the Canadian dollar and the US dollar are roughly on par, interest rates for savings is slightly higher in Canada and provinces like Saskatchewan and Alberta enjoy more economic freedom than all but a handful of US states according to a Canadian think tank. A recent report from the Fraser institute also stated that Canada is among the top five nations in the world for economic freedom while the USA has plummeted from second place to 18th.

I find it interesting that when I was growing up, I remember that American liberals wanted the nation to follow Canada's lead as far as healthcare, military spending and gun control went. However, now that Canada is drilling for oil, sending troops to Afghanistan and rolling back gun control laws the liberals here in the USA aren't as keen to have the country be more like Canada.

San Bernardino Becomes Second California City to Seek Bankruptcy Protection; DA, Sheriff Looking Into 'Irregularities'

Irfan Khan / Los Angeles Times

The city council for California's 19th largest municipality has authorized the city attorney to seek Chapter 9 bankruptcy protection last week.

The vote gives City Attorney James F. Penman power to begin proceedings for Chapter 9 bankruptcy, which would free the city of much of its debt but maintain the mayor and council as decision-makers.

Penman also said at the meeting that for 13 of the last 16 years, the council had been given falsified budget documents. Those documents said the city was in the black when, in fact, it had been deficit spending, he said.

That period covers the tenure of multiple city managers and sets of elected officials, but it predates Acting City Manager Andrea Travis-Miller and Finance Director Jason Simpson, whom he said discovered the discrepancy.

Without filing for bankruptcy, the city - which has a deficit of $45 million - would likely be unable to meet its Aug. 15 payroll

In an earlier report to the council, Travis-Miller said the city has faced declining revenues and escalating retirement costs, with employee compensation accounting for about 75 percent of the city's general fund spending.

A bankruptcy filing would reopen negotiations on employee contracts but would not invalidate its pension payments, which Mayor Pat Morris and others have said are the main cause of the city's financial problem

The discrepancies in the city of San Bernardino's financial record-keeping has attracted the attention of the DA and San Bernardino County Sheriff who announced an investigation into San Bernardino's record keeping over the last few years.

The most recently available data from the Bureau of Labor Statistics indicates that the unemployment rate in the San Bernardino-Ontario-Riverside, CA are is at 11.8%.

With a population of around 210,000, San Bernardino is located about 70 miles east of Los Angeles and is the county seat of San Bernardino County- the largest county in the continental United States [larger than New Jersey, Rhode Island, Delaware and Connecticut combined- NANESB!]. The city is situated at the foot of Cajon Pass to the north and is an important transportation hub with the junction of I-10 and I-215 and a major BNSF railroad yard in city limits as well as a Union Pacific yard in nearby Colton. Route 66 once passed through the city- with San Bernardino getting a mention in the song orignally performed Nat King Cole and composed by Bobby Troup [and subsequently covered by Chuck Berry, the Rolling stones and Depeche Mode- NANESB!]. The city is also home to the first McDonalds, which is now a museum with itemd detailing the history of both Route 66 and the restaurant chain.

San Bernardino becomes the third California municipality to seek bankruptcy protection in a month. In late June, Stockton, CA became the largest city in the USA to file for Chapter 9 bankruptcy. Within days, the High Sierra town of Mammoth Lakes had also filed for bankruptcy protection after it was unable to make payments to their largest creditor.

Although local offices in California are supposedly non-partisan, the city of San Bernardino has had a Democrat mayor in office since the late 1990s. The current city council is a mix of Republicans, Democrats and some who declined to state party affiliation.

Weather Channel Anchor Claims She Was Fired Due To Status as Air Force Reservist

US Air Force Reserve Officer and Weather Channel anchor Nicole Mitchell is filing suit against the Atlanta-based NBC subsidiary network for not renewing her contract due to her military obligations.

The suit claims that when NBC/Universal bought The Weather Channel in 2008, Mitchell was told by the new management that her military schedule "impacts everyone."

She allegedly was harassed for meeting her military obligations, told to clear any military assignments in advance and given less desirable shifts. Mitchell said she eventually was told there was no longer a place for her at The Weather Channel. Management cited "business reasons" and said there were no performance or ratings issues with Mitchell, the press release says. Mitchell said on her Facebook page she has e-mails from the company that clearly violate the Uniformed Services Employment Act.

Currently a major-select- is assigned to the 403rd wing Hurricane Hunters at Keesler AFB [which you'd think would be a natural fit for a reservist working for the Weather Channel- NANESB], Mitchell pointed out on her Facebook account that the Atlanta-based network would be in violation of The Uniformed Services Employment and Reemployment Rights Act of 1994 by not renewing her contract due to her Air Force reserve obligations. USERRA prohibits an employer from discriminating against an applicant or current employees based on their military service. According to the suit, Weather Channel producers would often complain of having to adjust the network's schedule based on her reserve obligations.

Curiously, the Weather Channel would sometimes include images of Mitchell serving with the USAF's Hurricane Hunters in their promotional materiel prior to her contract not being renewed. It's also worth noting that the same network who decided to hire Keith Olbermann's 25 year old girlfriend in 2009 saw Mitchell's service as an imepdiment to her continued employment with the Weather Channel.

Mitchell's suit comes around the same time as an aspiring Boston firefighter and veteran of both Iraq and Afghanistan was spurned from renting an available apartment by an anti-war activist landlady who learned of his military service.

Foreign Workers Hired For Multiple Stimulus-Funded Projects

Gosh- didn't see this coming as far back as 2009 or anything.



Companies that had received funding as part of the 2009 American Recovery and Reinvestment Act are said to have hired foreign workers for their projects, according to auditors, labor unions and local press.

In July 2010, LG Chem- a subsidiary of South Korean-based LG Electronics- broke ground on a new plant that manufactured electric car batteries in a ceremony attended by President Obama.

However, Unions in Western Michigan are now saying that the plant is being built with labor from South Korea- although LG Chem initially denied the reports.

LG Chem and another company- Dow Kokam- told CBS news that the foreign workers were 'legal and temporary' and have highly specialized expertise with the equipment being involved. Dow Kokam also used stimulus funds to build a battery plant near Midland, MI. LG Chem received nearly $151 million in stimulus funds to build the Holldand plant while Dow Kokam's Midland plant received a $161 million grant from the Department of Energy as part of the American Recovery and Reinvestment Act.

Local plumbers, pipefitters and millwright unions in Michigan are saying that even if temporary, most of the positions going to the foreign workers could easily be filled by local labor. Currently, Michigan's unemployment rate is around 8.8%- higher than the national average but the lowest the Wolverine State's jobless rate has been in recent years.

Over in Oregon, it was disclosed in late 2011 that at least $7 million went to contractors that ended up exploiting legal loopholes to hire foreign workers for a stimulus-funded forestry project. The contractors said they could not find enough local labor in central Oregon, although one state Senator disputes that.

That came as a surprise to local officials, who said they often got hundreds of responses to every job opening.

"This is a timber area and we hadn't been cutting trees for years," said state Sen. Chris Telfer, R-Bend. "It really ticked off a lot of people here."

In a report on the investigation this week, the Department of Labor's Inspector General found that contractors who brought in foreign workers violated no laws or regulations, but used legal loopholes to hire foreign workers.

While legal, the hiring practices appear to violate the spirit and purpose of the $840 billion American Recovery and Reinvestment Act of 2009, better known as the stimulus, which was designed to create jobs that would jumpstart the country out of recession.

The federal investigation looked at 14 contracts to clear federal forests in central Oregon. The contracts were controlled by four Oregon companies: Medford Cutting Edge Forestry, Summitt Forestry, Ponderosa Reforestations, and G.E. Forestry. All hired foreign workers, according to the report, though they didn't all handle hiring in the same way.

The contractors applied for H-2B visas allowing them to hire workers for seasonal jobs, according to the report. In order to get clearance, contractors must prove the jobs can't be filled with local residents and that pay won't dilute local prevailing wages.

But there is a loophole. Under federal rules, notice of the job openings must be made where the job "originates." And while the bulk of the work took place in Oregon, smaller jobs originated in other states.

"Employers were not required to recruit U.S. workers in Oregon, and we were provided no evidence that they did," federal investigators said. "Workers in Oregon were likely unaware that these job opportunities were available."

In fact, although 146 U.S. workers were contacted for possible employment, investigators found that none was hired.

Contractors used another regulation to dampen response from Oregon residents, the report said. The visa regulations allowed the contractors to do all their hiring four months before work started. That made unemployed workers who needed jobs immediately reluctant to commit to temporary jobs four months later.

Despite the barriers, 29 U.S. workers learned of the jobs and asked about employment. The report did not say if they were from Oregon.

The reports from the Oregon newspaper- the Bend Bulletein- did not mention the nationality of the foreign workers. The comapnies also reportedly advertised the job openings with state employment agencies in Idaho, Arizona, California and Wyoming but not with the state of Oregnon's Employment Department.

The findings come about two years after Congress learned that funds for 'green energy' projects from the American Recovery and Reinvestment Act were going overseas to purchase solar panels and wind turbine components that were manufactured in China and other Asian countries.

[Hat Tip- Weasel Zippers; The Bend Bulletin]

Greek Melo-Drachma: Greece's Parliament Approves Unpopular Austerity Measures to Secure €130 Billion Bailout As Rioters Torch Downtown Athens

As police clashed with rioters and arsonists in Athens on Monday, Greek lawmakers voted to approve an unpopular austerity bill that was deemed necessary to secure another €130 Billion in bailout money from the European Union.

Lawmakers voted to approve the measures by a 199-74 margin with 37 lawmakers from opposition parties either voting against it, present or abstaining from voting altogether. The provisions include a 22% reduction in the minimum wage, some €300 billion in pension cuts and slashing some 150,000 public sector jobs by 2015.



Outside Parliament, police in Athens clashed with thousands of rioters as they hurled chunks of marble and firebombs at officers in riot gear.

Police said 150 shops were looted in the capital and 48 buildings set ablaze. Some 100 people - including 68 police - were wounded and 130 detained, a police official said on Monday.

There was also violence in cities across the country, including Greece's second-largest city Thessaloniki and the islands of Corfu and Crete, said the official, who declined to be named.

Greeks were shocked at the burnt buildings that included the neo-classical home to the Attikon cinema dating from 1870.

Firefighters reportedly had to be escorted by police to some of the fires as protesters would not allow them access. Roving gangs also smashed windows and looted downtown shops and cafeterias.

Stock Exchanges in Asia and Autralia reacted positively to the Greek Parliment's vote, with the All Ordinaries, Hang Seng, Nikkei and Staits Times up slightly. The trend is expected to continue once markets in Europe and North America open for trading.

Greece's EU creditors had blamed a bloated public sector with generous penions, early retirement and rife with fraud, abuse and incompetence for exacerbating an already perilous economy that had been sent reeling by the 2008 global financial crisis and having a foreign debt 144% higher than their total GDP.

The civil unrest and uncertainty of future bailout packages to Greece has begun fuelling speculation from Athens to Brussels to Berlin that Greece could wind up leaving the Eurozone in the next few years and going back to the Drachma, their official currency before the 2002 introduction of the Euro.

Even the European Central Bank is now entertaining the thought of a Greek exit publicly. Governing Council member Ewald Nowotny said he ``can't be sure'' that Greece will be able to carry out the necessary measures to remain in the currency union. Hardly words of encouragement from the one institution that has held steady in its defense of euro-zone membership.

I can say without too much exaggeration or hyperbole that this seems to be the road the United States is heading down, even though the Greeks have provided a very stark and painful object lesson on the end result of government and public sector union largess for the world to see. So far, the Obama Administration's answer to this problem is not to reduce government spending in any meaningful way- except for the military- but to lobby for tax increases on what he considers the wealthiest Americans [and if you remember back to his 2008 Presidential campaign, he had a very malleable definition of "wealthy"- NANESB!].

Even if the sight of the Monopoly Guy [aka Rich Uncle Pennybags] sends you into a near-homicidal frenzy, you gotta stop and ask yourself if an administration that has screwed the pooch as bad as this one has [i.e. the stimulus, cash for clunkers, Obamacare, the numerous subsidized 'green energy' failures to name a few- NANESB] should go ahead and reward itself by helping itself to more and more taxpayer money.

Spanish Conservative Party Ousts Socialist Zapatero in Landslide Election

Spain's conservative Popular Party won at least 186 of the 350 seats in Congress during elections throughout Spain over the weekend, sweeping aside the Socialist government of Luis Zapatero. Zapatero had been PM since shortly after the deadly 2004 terrorist attacks on Madrid's commuter railways that killed 191 people.

Incoming Prime Minister Mariano Rajoy tempered his party's win with caution, stating that "there will be no miracles" in dealing with Spain's ongoing economic crisis. The wide margin of victory- the most lopsided since Spain resumed elections in the 1980s- is seen as giving the incoming Rajoy government a mandate to implement new austerity measures and avoid any kind of a bailout altogether.

Last weekend's elections took place amid a backdrop of Spain having the EU's highest unemployment rate- nearly 23%. Last week, Spain's borrowing costs spiked to their highest levels since 1997.

Earlier this year, Portugal's socialist PM Jose Socrates resigned and his party lost the majority in Parliament after snap elections gave the PSD Social Democrats the majority.

More recently, Italian PM Silvio Berlusconi resigned after the Italian Parliament approved his austerity package while Greece's socialist PM George Papandreou stepped down to make room for a new coalition after narrowly winning a no-confidence vote from Parliament the second week of November. Papandreou's resignation came a few days after his defence minister dismissed senior level Greek military commanders from their respective posts.

Electric Car Company Building Vehicles in Finland After Obtaining US Gov't Loan From Obama Administration

The Obama Administration and Department of Energy are defending a $529 Million loan to Anaheim, CA-based electric car manufacturer Fisker after a report from ABC News on Thursday highlighted the fact that two years ago, the Administration approved the company shifting production overseas to Finland.

Vice President Joseph Biden heralded the Energy Department's $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the company's manufacturing jobs are still limited to the assembly of the flashy electric Fisker Karma sports car in Finland.

"There was no contract manufacturer in the U.S. that could actually produce our vehicle," the car company's founder and namesake told ABC News. "They don't exist here."

Henrik Fisker said the U.S. money has been spent on engineering and design work that stayed in the U.S., not on the 500 manufacturing jobs that went to a rural Finnish firm, Valmet Automotive.

The loan to Fisker is part of a $1 billion bet the Energy Department has made in two politically connected California-based electric carmakers producing sporty -- and pricey -- cutting-edge autos. Fisker Automotive, backed by a powerhouse venture capital firm whose partners include former Vice President Al Gore, predicts it will eventually be churning out tens of thousands of electric sports sedans at the shuttered GM factory it bought in Delaware. And Tesla Motors, whose prime backers include PayPal mogul Elon Musk and Google co-founders Larry Page and Sergey Brin, says it will do the same in a massive facility tooling up in Silicon Valley.

Fisker is more than a year behind rolling out its $97,000 luxury vehicle bankrolled in part with DOE money. While more are promised soon, just 40 of its Karma cars (below) have been manufactured and only two delivered to customers' driveways, including one to movie star Leonardo DiCaprio.

A department of Energy spokesman defended the loan to Fisker, saying that the company also plans on producing a $50,000 hybrid called the Nina at a shuttered General Motors plant in Delaware.

"The Department's funding was only used for the U.S. operations," Energy Department spokesman Dan Leistikow wrote. "The money could not be, and was not, spent on overseas operations. The Karma also relies on an extensive network of hundreds of suppliers in more than a dozen U.S. states."

He said the first part of the loan, $169 million, supported engineering work at Fisker's U.S. facilities as the company "developed the tools, equipment and manufacturing processes for Fisker's first vehicle" -- though that work so far has not contributed to a production line in the U.S.

But Leistikow said the rest of the loan is still supporting U.S. production of another vehicle line called the Nina.

"Fisker is using this funding to bring a shuttered General Motors plant in Delaware back to life and employing more than 2,500 workers. Fisker was attracted to this site in part by the opportunity to rehire some of the trained, dedicated workers who lost their jobs when that plant closed," Leistikow said.

However, industry sources are claiming that Fisker's production of the Nina at the Delaware site has been pushed back to mid-2013. Fisker claims that the car has been designed and built, but remains under wraps to maintain a competitive edge.

Moreover, according to a recent Forbes article, once off its electric motor (reportedly good for 32 miles) the Fisker's Karma hybrid actually gets worse gas mileage than a late model Ford Explorer SUV

Does anybody else remember the various factory and workshop tours that President Obama embarked upon during 'Recovery Summer' last year? All of them seemed to pivot around so called 'Green Jobs'- factories that made electric vehicle components, solar panels or batteries for hybrids. And it seems that this wasn't really by accident, either.

Holy Crap Carp! Startup Illinois Firm Successfully Marketing Invasive Fish Species to China

Ruled an invasive species by the US Fish & Wildlife Service in 2007, the Asian Silver carp was thought to have been introduced into the Midwest's ecosystem after an isolated pond containing them was flooded by the Mississippi River. While the fish doesn't prey on local species, it has a voracious appetite for plankton and no known natural predators in the USA and reproduces quickly, forcing out native species. Moreover, they can grow quite large- up to 20 pounds- and jump out of the water when spooked, knocking over unsuspecting boaters and fishermen.

Wildlife officials have resorted to poison and electrocution to halt the advance of the species to the Great Lakes, where they fear the species could flourish unchecked and force out even more indigenous species and disrupt the food chain.

After a failed attempt to market the fish to markets in China by an Illinois state trade envoy, an American refrigeration supplier selling equipment to Chinese customers named David Shu was approached by a Chinese customer who had heard about the problematic carp in Illinois.

"Why would they kill these great, tasty fish?" the customer asked Shu.

Shu contacted [former Illinois State Trade Director Ross] Harano, who by then was in the private sector. Illinois carp needed a marketing hook, they decided. The "wild-caught" slogan sounded good.

Asian carp have a habit of jumping out of the water, sometimes knocking fishermen from their boats. That nasty habit became a second slogan, "So much energy they jump."

Instead of targeting Chinese housewives, they would target upscale restaurants.

Chinese carp is raised on fish farms and in polluted rivers. It tastes "muddy," says Harano, who says Illinois fish taste better.

Shu and Harano secured a supply from Big River Fish, where both men now work, with Shu representing the company in China.

They interested a Chinese food distributor, who sent a fish expert to the Big River plant in Pearl.

"He pulled a fish out of the package and put the gill in his mouth, Smith said. "'This fish is two days old.' He tasted another one and said, 'This one's fresh — caught today.' He really knew fish."

Fortified by a $2 million grant from the state of Illinois, Smith is now planning to move into an 80,000-square-foot fish processing plant. The number of employees should jump from 12 to 61.

Big River is housed in a small former chicken slaughterhouse. These days, tons of carp arrive at the plant's door, are gutted and sent to a freezer. There, temperatures of 30 below zero and a 20-mile-per-hour wind freeze them solid.

[OK- the $2 million grant going to a former state official for a startup smacks of more than just a little of crony capitalism, but aisde from that, I thought it was a pretty good idea- NANESB!]

The 30 million pound order from Big River Fish co seems to be part of a trend of American companies managing to find a niche to serve Chinese markets and manufacturers after losing ground over the last decade.

Although the invasive Silver Carp seems to be finding a its place among China's noveau riche as a freshly served delicacy, there is no word yet on whether wealthy or famous Chinese such as Gong Li (above, in modified cheongsam at a movie premiere- yay cheongsams!) have given their seal of approval

Another Day, Another Heavily Subsidized 'Green Energy' Plant Shuts Down

This time it's in California by the San Francisco Bay area. Employees working the evening shift at Solyndra's Fremont, CA plant were met by the CEO who gave them the news as they were coming off of their shift Wednesday morning.

Solar-cell maker Solyndra announced Wednesday that it will close its remaining Fremont factory, lay off its 1,100 employees and file for bankruptcy.

The news marked an abrupt end for a company once considered among the most innovative in a fast-changing industry. The bankruptcy also represents a high-profile failure for a federal stimulus program that gives loan guarantees to green-tech manufacturers.

Solyndra was the first company to win one of the guarantees, receiving $535 million in 2009 to build its second factory in Fremont less than a mile from the company's original plant. Both President Obama and former Gov. Arnold Schwarzenegger toured the new plant, citing it as a symbol of the nation's economic recovery and commitment to a green economy.

But Solyndra, whose solar modules are thin tubes rather than flat panels, struggled to compete against a flood of low-priced solar cells pouring out of heavily subsidized factories in China

Solyndria had backed out of a proposed IPO on 2010 as well. As far back as February, Congress had been probing into how exactly Solyndria secured the $535 million in financeial aid.

Earlier this month, Evergreen Solar- which had recieved more than $58 million in financial aid from the State of Massachusetts- filed for bankruptcy.

How President Obama Spent The Summer- Not to Mention Our Precious Money and TIme

After the unprecedented sovereign credit rating downgrade from Standard & Poors earlier this month, President Obama took it upon himself to allay concerns over the economy and high unemployment rate by embarking upon a multi-state 100% NOT-a-campaign-tour "listening tour" through the Midwest.

Eager to demonstrate to midwestrners that he was no out-of-touch limousine liberal, Obama left the Presidential limo back in Washington D.C. and instead embarked upon his midwest road trip with two new motorcoaches that the Secret Service ordered in July 2010 for $1.1 million apiece.



And what better way to show the people of the midwest that you are serious about the economy, American job creation and living within your means than by pulling into town in a brand new, armoured Canadian made motorcoach escorted by a 40+ vehicle motorcade?

After a terse exchange with a local Tea Part activist in Decorah, IA and botching the name of one of the companies that was hosting a town hall, it was off to Martha's Vineyard- that summertime playground of the wealthy and powerful- for some well deserved R&R! But not to worry, as President Obama would manage to find time between golf games to issue two executive orders- one was regarding diversity in the federal workplace while the other would reportedly allow nearly 300,000 illegal immigrants to avoid deportation and receive work permits- not word on whether or not this amnesty-through-executive-order will include his uncle. He also hinted at announcing a new jobs plan when Congress returned from summer recess.

When he wasn't spending time with his family or golfing on Martha's Vineyard, the President managed to work in visits to wealthy donors on the island. Alas, with Hurricane Irene's approach, the President and First Family had to cut their vacation short by about 12 hours so that Obama could swoop in and take charge at the National Hurricane Center.

Despite the strong Democrat voting bloc in the Northeastern states struck by Irene, the President has made no plans to visit those states to view the damage firsthand or meet survivors, despite Democrat lawmakers in New Jersey urging the President to visit the stricken areas. Instead, Obama will be travelling out to California for more fundraising in Hollywood and silicone valley next month.

As for that highly anticipated jobs speech that President Obama had been promising since his Midwest road trip, the Administration attempted to schedule it before both the senate and House the same night as the GOP Presidential debates next week. Speaker of the House John Boehner declined the President's initial September 7 deadline pointing out that it would be their first day back from the summer recess and offered Sept 8th as an alternative. Although the White House seems receptive to that date, that Thursday is also supposed to have the season opener for the NFL with the Saints taking on the Packers.

BUMPED 8/5: USA Loses S&P AAA Credit Rating; Dow Plummets More Than 500 Points in One Day

In it's worst single day since the 2008 Subprime meltdown, the Dow Jones fell 512 points on Thursday, wiping out their gains for the year in one afternoon. The 4.31% loss would be the market's biggest single-day loss since October 2008. Declining stocks outnumbered stocks that finished ahead on the day by a 14 to 1 margin.

Meanwhile, the NASDAQ was down 2.68 on Thursday. Gold prices pulled back slightly from an all-time high to end at $1652 an ounce while oil dropped down from $92 a barrel to $83.

The losses weren't limited to the NYSE or NASAQ either. North of the border, the TSX Composite dropped 3.4% while in Asia the Nikkei was down 3.72%, Straits Time was down 3.61% and the Hang Seng index plunged 4.29% overnight.

Analysts believe that a concerns over the economy, high unemployment numbers, the recently passed debt ceiling deal and the ongoing Eurozone crisis played a part in Thursday's selloff.

The massive selloff comes a day before the July jobs report is set to be released, but investors and analysts have even less reason to optimistic as far as that's concerned.

Curiously, a number of experts that spoke out in favor of the debt ceiling cautioned that this was exactly the scenario the markets would face if the ceiling wasn't raised.

UPDATE 8/5:: The markets closed on a mixed note Friday afternoon, with the Dow-Jones up 60 (0.54%) and the NASDAQ down 24 points (0.94%). However, that was nothing compared to the bombshell that was dropped after the markets closed on Friday afternoon.

Credit rating agency Standard & Poor's on Friday lowered the nation's AAA rating for the first time since granting it in 1917. The move came less than a week after a gridlocked Congress finally agreed to spending cuts that would reduce the debt by more than $2 trillion -- a tumultuous process that contributed to convulsions in financial markets. The promised cuts were not enough to satisfy S&P.

The drop in the rating by one notch to AA-plus was telegraphed as a possibility back in April. The three main credit agencies, which also include Moody's Investor Service and Fitch, had warned during the budget fight that if Congress did not cut spending far enough, the country faced a downgrade. Moody's said it was keeping its AAA rating on the nation's debt, but that it might still lower it

Interestingly, this is the exact opposite of what Treasury Secretary Tim Geithner said would happen if a debt ceiling agreement was reached.

Not surprisingly, the Obama Adminstration has gone after the messenger by shooting it with both barrels.

WASHINGTON, Aug 5 (Reuters) - The Obama administration attacked the credibility of the analysis underlying Standard & Poor's decision to downgrade the United States' top credit rating on Friday, saying it had found a $2 trillion error.

S&P was forced to remove the number from its analysis after Treasury officials discovered that the rating agency's estimates of the government's discretionary spending was $2 trillion too high, sources familiar with the discussions said.

There was evident dismay, and some anger, within the Obama administration at S&P's decision to downgrade U.S. debt despite the errors officials said they had found in the calculations.

"A judgment flawed by a $2 trillion error speaks for itself," a Treasury spokesman said after S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits.

Also unsurprisingly, Senate Majority leader Harry Reid (D-NV) used the occasion of the S&P's Downgrade announcement to call for tax increases.

[Hat tip: Jammie Wearing Fool: Sea of Syrah]

Georgia Company Offsetting the Trade Imbalance With China, One Pair of Chopsticks at a Time

In a rather curious bit of role-reversal, a Georgia company is exploiting a shortage of wood in China and abundant resources in southern Georgia to export chopsticks to Asia.

“Right now we are making about two million pairs of chopsticks per day but we are increasing," says Jae Lee, president of Georgia Chopsticks. "End of this month, we’ll have seven machines coming in, so it’ll increase to like four million per day. End of this year, we’ll produce 10 million per day.”

Lee, a Korean-American, says the global market for chopsticks is huge because about one-third of the world’s population uses them. Japan alone goes through about 23 billion pairs of the disposable utensils each year.

Most chopsticks are made in China, where several hundred manufacturers turn out 63 billion pairs annually. But they are running short of wood.

Wood is something the U.S. town of Americus - where Georgia Chopsticks is located - has plenty of.

“Rural Georgia and the cities of rural Georgia, they’re blessed with tons of natural resources," says David Garriga, who heads the local economic development council. "The Pacific Rim, especially areas of China and Japan, they’ve run out of wood, but we have an abundance of it.”

The sweet gum and poplars that are abundant throughout southern Georgia are ideal for the production of chopsticks. The straight, pliable and lightly colored wood doesn't require bleach or chemicals to modify their colors.

Every pair of chopsticks made at Lee's Cochran, GA based company is exported to Japan, China or Korea where they are sold in supermarkets. Sumter County Chamber of Commerce head David Garriga said that he has been contacted by other businesses from the Pacific Rim interested in doing business in and around Americus, GA. The most recently available figures list the unemployment rate in Sumter county in the neighborhood of 12.5% (contrasted with Georgia's 9.7%).

In recent years, there has been something of a trend where businesses from China and elsewhere in the Pacific Rim have been looking to do business in the Southeastern USA. While labor costs are higher than in China, this is offset by lower costs for the property, utilities and certain tax credits that Chinese entrepreneurs are taking advantage of. Industrial real estate in the USA can be fetch not even 25% the costs in China while maintaining a presence in the USA also helps them respond more rapidly to any number of supply-chain issues.

Korean model in cheongsam

While exporting chopsticks to the People's Republic of China is somewhat ironic and good news for the people of Sumter county, Ga, I feel that the trade imbalance with China hasn't truly been adressed until the United States begins exporting cheongsams to mainland China.

Canada Elects Grown-Ups; Unemployment Rate Inexplicably Drops to 7.6% One Week Later

Barely a week after the federal elections in Canada that gave incumbent Prime Minister Stephen Harper a majority in Parliament, Statistics Canada announced that job growth had exceeded nearly three times beyond most economists forecasts for the month of April.

Employment rose by 58,300 after a March decline of 1,500, Statistics Canada said today in Ottawa. The jobless rate fell to 7.6 percent from 7.7 percent, as the labor force grew by 47,400. Economists forecast no change in unemployment and 20,000 new jobs in Bloomberg News surveys that had 24 and 25 estimates. The largest estimate was for 40,000 new jobs.

“While one can quibble with the underlying quality of the hiring, given that it was led by part time workers, the overall picture is one of an economy moving gradually back to full employment,” Avery Shenfeld, chief economist at CIBC World Markets in Toronto, wrote in a note to clients.

Most of Canada’s employment gains in April were concentrated in Ontario, the country’s most populous province, and Newfoundland, one of the smallest.

Newfoundland added 3,100 jobs in a province with a working- age population of 429,100, reducing the unemployment rate to 11.1 percent from 12.4 percent, the lowest since comparable records began in 1976.

“Firm crude oil prices and steady production levels are contributing to this impressive performance,” said Sonya Gulati, an economist at Toronto-Dominion Bank.

The province’s jobless rate has fallen 3.8 percentage points since July. The provincial government reported a C$59 million surplus for the fiscal year that ended March 31 as higher oil prices led royalty gains. Newfoundland had earlier forecast there would be a C$194 million deficit.

Ontario added 54,800 jobs in April, Statistics Canada said, and unemployment declined to 7.9 percent from 8.1 percent.

Contrast that with 'unexpected' high unemployment numbers and slow economic growth here in the USA that quite frankly, Stevie Wonder could've seen coming from a mile away.

The 30-year high for Canada's unemployment rate was in December of 1983 at 13.1% while the all time low was in September 2007 at 5.9% [1] - about a year and a half after Harper was sworn in as Prime Minister.

1- Trading Economics interactive chart

Unemployment Rates 'Unexpectedly' Rise, Sun 'Unexpectedly' Sets in the West

I'd say that we all should make a drinking game out of the most recent batch of economic news being classified by our media or government as 'unexpected', but I wouldn't want to be held liable for somebody ending up with alcohol poisoning.

An unexpected jolt in people applying for unemployment benefits last week raised the number of applications to a seasonally adjusted 412,000.

It was the first increase in three weeks, and could be a sign that people who stopped looking for work are coming back, but the 27,000 additional requests for assistance for the week ending April 9 put the jobless aid figure at its highest point since mid-February.

Applications near 375,000 are consistent with a sustained increase in hiring. Applications peaked during the recession at 659,000.

The four-week average of applications, a less volatile measure, rose to 395,750. Applications have dropped by about 6 percent over the past two months.

Companies added more than 200,000 jobs in March for the second straight month, the first time that has happened since 2006. The unemployment rate fell to a two-year low of 8.8 percent and has dropped a full percentage point since November.

However, a more sobering reason for the drop is that the number of people who are either working or seeking a job is surprisingly low for this stage of the recovery. People without jobs who aren't looking for one aren't counted as unemployed. Once they start looking again, they're classified as unemployed and the unemployment rate can go back up.

It's like I said back when this blog was only a few weeks old- insist that higher unemployment numbers will be the 'new normal' from here on out and that we're in a robust economic recovery nonetheless. Even some of the Wisconsin state Democrats who fled to Illinois attempted to justify their tactics by saying that Gov. Walker's budget proposal limiting public employee collective bargaining and requiring public workers to pay more towards their retirement and healthcare plans was unnecessary because the nation was supposedly in the midst of an economic recovery.

Yes- apparently LOTS of economic recoveries feature soaring unemployment, a cratering housing market, record high food, fuel and commodity prices and the dollar plummeting in value with each passing week.