Weather Is 1,557% More Harmful Than Helpful To Corporate Profits

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It's just another day in the spin factory so let's have some fun with it.

Lately 'bad weather' was cited as the reason that Walmart and FedEx earnings were disappointing.  If it isn't 'one-time' charges that happen every quarter being removed from reported results, it's the weather being blamed for somehow hurting operations.

But if the weather harms, it should also be able to help. Right?  After all weather is chaotic and random, so sometimes it should be a plus and sometimes a minus.  Sometimes it's colder and wetter than expected, and sometimes drier and warmer.

Well, if we do a quick Google search of the number of reported references to when weather helps vs. harms earnings it's no contest. 

Weather is apparently 1,557% (15.57x) more harmful than helpful for profits (after mostly filtering out energy, which cuts both ways...as you can see an oil company is still the top result for the 'helped' category).

And:

Such is the state of reporting these days...in which a completely normal thing like weather, which happens pretty much the same way every year, give or take, can be regularly used as an excuse for poor corporate results.

Of course, even if the weather truly was awful enough to prevent people from shopping or buying a house, that demand should simply show up in a later month.

That is, unless we are supposed to now believe that a bit of bad weather can cause a family to simply give up on the idea of moving, or getting a new car, or buying clothes.  If this were true, after the simply horrible winter we've had in the mid-west and New England, there should be a lot of poorly-clothed and possibly naked people walking around this spring wishing they lived in a different house.

But, alas, we won't see any such people. It's a fiction that weather has any sort of lasting impact on final sales over time.

Instead, we might suspect that poor corporate earnings are due to something simpler and far more likely: falling demand for products and services.

But if you simply read news headlines, you would be forgiven if you somehow developed the impression that weather was more than 15 times more harmful than helpful to corporate profits.

Sadly, this is the state of our self-delusional spin cycle right now.  Anything and everything needs to be painted in the best possible light, as though our economy were some ageing starlet in denial, in need of heavy makeup and dim lighting.

~ Chris Martenson

This is a companion discussion topic for the original entry at https://peakprosperity.com/weather-is-1557-more-harmful-than-helpful-to-corporate-profits/

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http://www.zerohedge.com/news/2014-02-20/thursday-trivia-why-are-wall-street-economists-paid-millions-dollars

Such a joke!

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"Sorry son, bad news. I was planning on getting you that new Playstation 4 for your birthday, but it was raining. Hey don't worry, there's always next year. Here, use this Game Boy until then, it's basically the same, right?"
SS

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How long have we been hearing about the economic recovery, or excuses why it was weak or didn't show up in a given month?
For all of those who keep repeating the mantra of economic "recovery"…

“You Keep Using That Word, I Do Not Think It Means What You Think It Means”

Mark

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My bottom line has certainly been affected. I am burning way more wood than normal. A weather program said temperatures for this month for this neck o’ da woods have been 7.7 degrees colder than normal. Snow is still covering the gardens and baseball fields. Not even the snowdrops are blooming. I usually hate March, but this one has me on the edge if insanity.
They say we are due for a warming trend. Hope springs eternal.
Doug

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double post

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Aloha! Certainly weather is a state of mind! Meaning … go to LA just about any day of the year and you will be nauseated by the major traffic jams! California is the 7th largest global economy, right? So while it is snowed in Maine in California and the Southern states there isn't much keeping consumers from consuming. Besides in winter states I would think that most people would have purchased goods prior to the winter and stocked up. 
Here at Kaimu Nursery we use FedEx to ship our products to every state in the USA and Canada Monday thru Friday and we have only had eight orders delayed or damaged due to weather. No more or less than prior years. We did have nine orders delayed due to FedEx jet mechanical problems though, which is a record. In my talks with my FedEx driver she says they have been extremely busy! A lot of product even grocery items are sold online. Make your FedEx driver endure the winter driving hazards!

It gets tiring hearing the lame excuses coming from the US Fed and its market monopolists!

Behind the weather BS is this from the US Treasury …

Meet the Four Horsemen of the Debtocalypse! In the past I called them the four largest outlay line items at the US Treasury. They are:

Social Security Medicare Medicaid Defense

As of March 21, last Friday, not even half of FY2014 the total of those four line items is $922.2BIL. Just doubling it to extrapolate for the entire FY2014 comes to $1.844TRIL!

Last year for FY2013 the total for March 21, 2013 was $897.4BIL and that was with a virtual freeze on COLA. The total for FY2013 was $1.896TRIL so the last half of FY2013 spending for those four line items accelerated past the first half of FY2013 by $100BIL.

That means we could see those four line items for FY2014 break $2TRIL for the first time in US history. The babyboomer defense costs to the two party political monopoly are rising rapidly! Add in another cold war and defense stocks will look good!

Remember that’s $2TRIL in outlays for just four line items! There are 28 more line items that also need funded! But not with tax revenues …

It seems the weather never stops the US Treasury from issuing more and more and more debt and certainly the US Congress never stops spending and spending and spending due to "weather"! Like death and taxes debt seems inevitable no matter! In fact debt welcomes apocalyptic events. Remember Katrina? Well, that created a regional construction boom paid for by "debt" and GDP went up! So bring on GLOBAL WARMING!!!!!

 

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Not to disagree with Dr. Martenson (at all) but my heart goes out to those who, on top of the worst economic recovery since the Great Depression, are now stuck with high heating bills from this past winter.  I know he's not suggesting that those with few resources felt no pain; he's correctly stating that corporations are complaining that the cold weather was the main reason they had lousy sales this winter. It's not the main reason: Peak Oil, indebtedness, decreasing demand, layoffs, wage stagnation, and an uncertain regulatory environment (read:Too-big-to-jail corporations and individuals) were the main culprits. Unusually cold weather in and of itself simply made a deteriorating situation slightly worse. Consumers were already spending less. But for those on the financial edge, high utility bills can be devastating.
The economy was already in a tailspin. Then the poor muppets got socked with higher, and longer-season, heating costs. Those in the Northeast who use oil heat, like most of my former neighbors in NY, were already paying an average of $400 a month for oil to heat their homes during the heating season. Those in the Midwest (and anywhere else that uses natgas) who had to pay inflated prices for natural gas have been socked with huge heating bills. Those who have electric heat, as do most in the South, will have significantly higher heating bills as well. For some on the edge who still have homes,  would not be surprised if these heating bills pushed them into foreclosure.

And municipalities that are already deeply in debt are now going to have to pay for plowing, salting, sanding or otherwise dealing with this past winter. I've sat in on county meetings back up in NY where county execs were tearing their hair out over how to pay for higher-than-average snow plowing costs from winters far easier than this one.

Imagine a world where there is no money for snowplows, or heating your home.

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[quote=Wendy S. Delmater]Imagine a world where there is no money for snowplows, or heating your home.
[/quote]
Imagine a world where natgas stops flowing through the pipelines into your house.  That is one of my major concerns going forward.  I currently don't have the option of moving further South, at least not with my wife in tow.  We have family obligations that we cannot handle from afar.

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They keep telling us that this isn't a record year for cold or snow.  It's only the third coldest winter in recorded history.  So what!!! It's been friggin' cold for ever!
Firewood, yes I've burned a lot, but I cut and split my own wood.  It has changed my behavior.  I have done a lot more indoor archery than outdoor astronomy.

The weather hasn't changed my outlays much one way or the other so far.  But I have a contract on the way to reserve a town house in a much warmer location for Jan-Mar of next winter.  We may not get to snow bird for long, but we are taking a break from the coming winter.  That represents a significant redirection in our annual vacation budget that analysts could fairly talk about.

Kaimu, don't forget when you talk about social security, it is not a welfare program.  For those of us who will never be paid back what we paid in, social security is a mandatory retirement investment program that has been criminally mismanaged and guess what?  I neither approved of or agreed with most of what Washington spent my money on.  One program has always gripped me.  If I want to send aid to Kasbekistan, I am free to do that.  What right does the US have to take money out of my paycheck and send it overseas?!

So is social security a ponzy scheme or protection racket?  The use of force (mandate) to collect money doesn't quite fit with a ponzy scheme.  In that scenario, a unwary investor voluntarily contributes.  Me, I've know for decades that I won't see much from social security system and yet I continued to pay in.  Why you ask?  Because I had no choice.

That raises another somewhat philosophical or semantic question.  If it's a protection racket, does that make politicians blue collar criminals instead of white collar criminals?  Inquiring minds want to know.

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I have to say that weather has had a neutral impact on the company I work for, the cold weather has been a great benefit to our energy division (propane, heating oil, etc.) but caused a slow down in our construction products division due to the weather negatively impacting construction jobs, delivery efforts, etc. We haven't' seen this kind of cold weather in 20+ years and we are no longer staffed or have the resources to service it properly due to efforts to be become as lean as possible. Although mass media is blaming everything on the weather, it has been a significant factor to our business and I'm sure to others.

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Wendy and Les
You are both right, but may be avoiding the central truth of our current predicament, which is structural, not totally the product of poor gov't choices or temporarily subpar economic forces.  What follows is largely my impressions, partially informed by long experience inside the "system."

As I have pointed out before, Social Security (SS) encompasses a number of programs, some of which are funded by trust funds kept afloat by mandatory payroll taxes, and some of which are essentially welfare programs funded by the federal budget.  The SS Retirement fund is probably the least endangered of all the programs.  Small adjustments now (reduce benefits and/or increase taxes) will make it solvent for a long time. 

Supplemental Security Income (SSI) pays both poor disabled and aged people who are not entitled to full disability or retirement benefits, and who meet means testing requirements.  These programs come directly from the federal budget.

Both of the disability programs have seen steady increases in enrollment since the 70's with a sharp spike in applications since the 2008-9 economic collapse.  At the same time, the pressure from tptb within the Federal gov't has been in favor of granting more applications.  Plus, state social service agencies have hired staffs of lawyers and paralegals to make sure welfare recipients apply for SS benefits and income to shift the burden from the states to the Feds.

Same goes for the SS retirement and old age programs.  It is no secret that the private and public sectors have been laying off older people who have the poorest chances of being rehired in a deteriorating economy.

These are trends that are a few decades old and are not going away for all the reasons discussed here on PP, particularly the disappearance of cheap energy.  There is no doubt in my mind that the increases in outlays for all the gov't social service programs are intentional at some level because tptb don't want pissed off people in the streets raising hell because they have run out of options.  The private sector cannot absorb the available labor short of some kind of serf or slavery system.  We are, after all, competing with 3rd world countries that already operate as some such systems.

And then, of course, these pressures express themselves in an insane drive to extract every ounce (if that's the right word) of fossil energy still in the ground, culminating in what is likely the true crisis of our and our children's time, climate change including increasingly variable weather and other environmental disasters.  There is still time to at least stop contributing to these impending cataclysms, but it is running short.  We need to focus on the underlying problems and, in a sense, stop blaming the problems on the victims of our deteriorating economic system.  We are all in this together.

Doug

PS, see Mark's latest on the climate change thread.

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In New England the coldest winter in thirty years seems to have had an effect on the consumer economy.  Stores and restaurants appeared less full in the weeks since New Years.  Part of this is probably due to everyone suffering from dramatically higher utility bills. I think the rest can be attributed to plain old winter induced seasonally affective disorder.  Even the heartiest among us gets a little depressed and a lot of cabin fever during this type of winter.
However, I think Chris is correct in his assessment that weather issues only delay spending instead of totally derailing it. Apart from money spent for heating, the consumers seem ready to roll.  Last weekend, Saturday was warm and sunny for the first time in months. The traffic was triple normal volume everywhere I went. It felt like people were making up for lost time and I would bet they were itching to spend some of the money saved when they couldn’t get out and about.

Looking forward to warm weather.  I promise not to complain about summer heat this year.

JT 

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Perhaps a non-deterministic relationship?  Consumers spending more on energy/heating have less disposable income to buy "stuff".  I can see where a company's bottom line could/would be affected.  Throw in the tough to predict impact on lines of shipping where a distribution end can't get goods because of disruptive weax between shipping source and final destination.
I suppose the opposite of Laplace's demon is Laplace's angel?  Entropy just isn't what it used to be…

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I have an in-law who is a long time exec at UPS.  According to him the holiday season was by far the busiest he has seen in his 30+ years with the company.  This suggests that there may be something structural going on since most of the holiday season was before this endless awful winter really got going.Doug

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Aloha! "Kaimu, don't forget when you talk about social security, it is not a welfare program." 
True … However, it is welfare when your benefits exceed your contributions as in my own Mother's case. She gets $800 per month for 21 years  and I count three jobs she had her whole life that barely lasted one year.
The first social security recipient should have been the first clue to the system …
Ida May Fuller (September 6, 1874 – January 27, 1975[1]) was the first American to receive a monthly benefit Social Security check. She received the check, amounting to $22.54, on January 31, 1940.
Fuller was born on a farm outside Ludlow, Vermont. She spent most of her life in Ludlow, working as a legal secretary, but lived with her niece in Brattleboro, Vermont during her last eight years. She retired in 1939, having paid just three years of payroll taxes. She received monthly Social Security checks until her death in 1975 at age 100. By the time of her death, Fuller had collected $22,888.92 from Social Security monthly benefits, compared to her contributions of $24.75 to the system. 
She paid in $22.54 and her first benefit check was $24.75! She collected $22,888.92 total! That's like a 93,000% return on her "investment"!
However that 93,000% "social welfare" pales in comparison to the multitude of corporate welfare, including the use of the US military to enhance corporate holdings and open doors to new holdings and/or customer base and to annihilate the competition!
Lets also not forget the "Congressional welfare" commonly known as their "pay check"!
Which leads me to the biggest CON JOB, which was the promise that the dollars I paid into the system in 1970 would buy the same goods and services as the dollars that will be paid back to me in 2019! There we have the real PONZI …
 
 

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[quote=Doug]I have an in-law who is a long time exec at UPS.  According to him the holiday season was by far the busiest he has seen in his 30+ years with the company. 
[/quote]
Hey Doug -
 
How've you been?
Why were they busy?  If I recall the pre-Christmas delivery fiasco that hit UPS and FedEx, it was in part weax related events that shut down air hubs?  At least that's what UPS "officials" said while the US Postal Service was making their deliveries.
 
http://www.politicususa.com/2013/12/26/ups-fedex-ruin-christmas-prove-republicans-wrong-killing-post-office.html
http://usnews.nbcnews.com/_news/2013/12/25/22047875-ups-fedex-draw-fire-after-christmas-delivery-problems?lite

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I'm not sure where in this country a recovery is happening but it's not here in CT.
From my point of view I see the cost of everything rising. In the last five years I've seen gas double in price, food has gone up at least 40%+, utilities are up, health insurance has doubled, but you know what's not up, wages.

My wife has been with her company for 22 years and her last raise was in 2007! Prior to that she received one every couple years like clockwork. In the last three years her company has eliminated the contribution to 401K, eliminated profit sharing (because there are none), and as people have left through attrition, they have not been replaced. The work load is still the same so everyone just works more hours. What's different is that her company has had to be more and more aggressive on bids in order to get work.

Myself, I'm self employed but I can look at my tax returns for the last 5 years and my income is flat although I've gone from about 50 hours a week to 70 just to maintain flat growth.

The people I know around town who have lost jobs in the last few years are all mostly still unemployed. Not all but easily over half, and of the half that did find some work, many of those were just part time. Some are working two part time jobs.

Our local newspaper used to have 6 or 7 pages of job listings in it, now it is less than half a page, and several of those jobs are openings at the paper to sell ad space.

So I say again, "What Recovery"?

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I don't blame the victims.  I pretty much blame the government and the puppet masters who control the government.
I don't believe for a second that climate change is the biggest problem that our children will face.  I think global economic collapse will trump all other issues for the next couple of generations.
Personally, I think the entire climate change issues lacks a certain amount of clarity.  Perhaps the main culprit in that regard is the IPCC, or perhaps the science is as confusing and complex as the make it out to be.  I read a book years ago that had a simple decision tree:

  1. The globe is warming or it's not.  If it is then:
  2. The warming is anthropogenic or it's not.  If it is anthropogenic then:
  3. Global warming is a bad thing or it's not.  If it is bad then:
  4. We have the capability to stop global warming or we do not.  If we can stop it then:
  5. The impact of stopping global warming on humanity is less that allowing global warming to continue.
    There are a lot of derailers in that decision tree.
    One believer in the global warming science pointed out that the society created by rampant use of low cost energy has made possible literally billions of human life times that would not have been possible in a lower energy consumption society.  He considerd that a benefit worth the cost.
    It's a bit of a non-issue for me.  I have reduced my carbon foot print more than most climate change proponents because of my fear of peak oil.  So convincing me I am possibly misguided doesn't gain you much.
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I can pretty much guarantee that my benefits will not exceed the contributions that I made plus the contributions that my employers made on my behalf.  I can absolutely guarantee that my benefits will not be anywhere close to what I paid in on an inflation adjusted basis.