• 200336479-013

    Heading Home

    In 1965, the US home ownership rate was 63% and rose to 65.6% in 1980. Home ownership then fell and held steady at about 64% from 1984 through 1994, when it began a meteoric rise and peaked at 69.4% in 2004. It’s since collapsed and is now 63.5%, where it was last in 1967. Demographics aside, home … [Read More...]

  • fwx-diy-big-macs_35

    Meaty Measurement

    The Friday File: Assuming exchange rates and prices eventually adjust to make the same item equally priced everywhere, the Big Mac Index was developed. In Switzerland, a Big Mac is a whopping $6.82, its currency is hopelessly overvalued. In Russia, $1.88. Putin, clearly a meaty monetary master. … [Read More...]

  • Money. AFR FIRST USE. 080428. Pic by Michel O Sullivan. Pic shows businessman with his hand out. Use for bonus, money, pay rise, salary.    Photographer  Michel O Sullivan/MAO SPECIALX 83767

    Expensive Entitlements

    In FY 2014, Medicare, Medicaid and other healthcare programs accounted for 25% of federal government spending, Social Security was 24%, welfare and other entitlements claimed 11%, and interest on the debt was 7%. That leaves 33% for discretionary spending. But defense was 17%, leaving just 16% of … [Read More...]

  • easy-money-man-rain-money

    Spending Splurge

    Household spending should remain healthy for four reasons. First, household net worth hit a record $84.9 trillion in Q1/15, up $1.6 trillion from Q4/14 and the ratio of household net worth/personal disposable income (PDI) is at its highest level since Q3/07. Second, household debt service as a … [Read More...]

  • irs-form-1120-corporate-income-tax-return

    Inefficient Income

    The US corporate tax rate of 35% is the highest in the world. In Germany it’s 16%, Canada 15% and Ireland 12.5%. Worse, it raises little money. In 2014, US pre-tax corporate profits were $2 trillion. 35% of that would be $700 billion. But due to loopholes and fancy accounting, the corporate income … [Read More...]

Aug
16

Satisfactory Spending

consumer spending

 While retail sales jumped 0.6% in July, and May and June were upwardly revised, don’t conclude that consumer spending, 70% of GDP, is necessarily great. Retail sales including food service sales equal $2.4 trillion/year, 20% of consumer spending. Consumer spending also includes $2.0 trillion in … [Read more...]

Aug
15

Domicile Dominion

home ownership

 Among western industrialized nations, Singapore’s homeownership rate is tops; 90.8%, Norway follows at 82.8%, then Iceland at 77.8%, Italy at 72.9%, Finland at 72.7%, Luxembourg at 72.5%, Belgium at 71.3%, Sweden at 70.6%, Ireland at 68.6%, Netherlands at 67.8%, Canada at 67.6%, Israel at 67.3%, … [Read more...]

Aug
14

Equity Examination

equity examination

   Collectively, US equities are currently 13% above their 25-year median price-to-book ratio, 15% above their 25-year median price-to-earnings ratio, 17% above their 25-year median expected price-to-earnings ratio, and 18% above their 25-year median cyclically adjusted price-to-earnings … [Read more...]

Aug
11

Awesome Athletes

rio olympics opening

 The Friday File: The largest sporting event in the world, by number of athletes, was the 2016 Rio Summer Olympics which included 11,237 athletes. Second was the 2015 African Games held in Brazzaville, Congo which counted 15,000 athletes, coaches, and officials. In third, the 2017 Maccabiah Games … [Read more...]

Aug
10

Minimal Manufacturing

manufacturing employment

 When western democracies hit peak manufacturing employment in the early 1970s, national income was about $20,000/person and manufacturing employment was 30% of total employment. When the next wave of nations including Brazil and South Korea hit peak manufacturing employment in 1990, income was … [Read more...]

Aug
09

Economic Expansions

as good as it gets

 While the current economic expansion is the weakest ever, averaging just 2.1% GDP growth/year, the second weakest was the previous recovery which ended with the Great Recession. The third weakest, the recovery before that, which was the longest recovery ever; 10 years. This suggests the slow … [Read more...]

Aug
08

Rate Reprieve

delayed

 Two weeks ago the Fed met and, unsurprisingly, gave no indication that a rate rise was is the offing; inflation is too weak. Instead, the Fed strongly suggested they will commence reducing their holdings of long-dated debt following their meeting in mid-September. If, however, there’s a … [Read more...]

Aug
07

Excellent Exertion

excellent exertion

 With 209,000 net new jobs in July and YTD average monthly employment gains averaging 184,000, just below the 187,000 in CY16, job growth is excellent. The employment-to-population ratio at 60.2% is at its best level since 2/09, and the unemployment rate declined to 4.3% despite a large rise in the … [Read more...]

Aug
04

Sperm Shortage

sperm

 The Friday File: Between 1973 and 2011, sperm concentration in males in North America, Europe, Australia, and New Zealand (where more and better data are available) declined by between 52% and 59%, depending on the method of measurement; don’t ask. Moreover, the decline doesn’t seem to be slowing. … [Read more...]

Aug
03

Disturbing Delinquencies

debt

 Despite a roaring labor market, the credit cycle is turning. After peaking at 4.85% in 09Q2, consumer loan delinquency rates steadily declined to 2% and remained there from 15Q1 through 16Q1. Since then, they have steadily risen and are now at 2.2%. The story’s much the same for credit card … [Read more...]