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    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...]

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    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...]

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    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...]

Oct
20

Athletic Affluence

C Ronaldo

 The Friday File: For the year ending 6/17, the world’s highest paid athlete was soccer star Cristiano Ronaldo, who earned $93 million, followed by LeBron James, who brought home $86 million. Another soccer player, Lionel Messi was third with $80 million while tennis star Roger Federer was fourth at … [Read more...]

Oct
19

Beijing Borrowings

 At present, China’s non-financial debt is 210% of its GDP. When Japan’s economy collapsed in 1992, its ratio was 210%, and when Spain collapsed less than a decade ago, their non-financial debt-to-GDP ratio was 215%. While shrinking the ratio is easy, doing so without slowing economic growth is … [Read more...]

Oct
18

Fed Front

Jerome Powell

The decision over who will lead the Fed is down to four candidates. Janet Yellen is probably in second place behind current Fed governor Jerome Powell. He would continue Yellen’s policy of gradually raising rates but would have a lighter regulatory touch. John Taylor is in third, followed by former … [Read more...]

Oct
17

Declining Dropouts

graduation

 As recently as 1996, 34% of Hispanics dropped out of high school. By 2016, the rate was just 10%! Similarly, the rate for blacks declined from 16% to 7%, while the rate for whites fell from 8% to 5%. Asians saw their rate decline too; from 5% in 1999 to 3% now. In 2016, 47% of Hispanics aged 18 to … [Read more...]

Oct
16

Global Growth

imf

 Global economic growth is expected to be 3.6% this year and 3.7% next year, up pleasantly from 3.2% in 2016. Better yet, all 15 nations that the IMF individually follows are growing. As for the US, after 1.5% growth last year, 2017 looks to show 2.1% growth and next year, 2.3%. China will grow … [Read more...]

Oct
13

Seriously Superstitious

Black Friday 13

 The Friday File: While 13% of Americans consider themselves superstitious, among those 18-25, 18% are and 15% of those 30-44 are. Among those 45-64, it’s 11%, and for those over 64, it’s 6%. Interestingly, 35% consider picking up a penny good luck, 30% consider knocking on wood good luck, and 27% … [Read more...]

Oct
12

Deficient Departures

quit

 While the number of job openings declined slightly in August to 6.08 million from July’s all-time high of 6.14 million, quit rates remain relatively low. Since 10/16, quit rates have vacillated between 2.1% and 2.2%, and are barely above the 2% rate that was first breached in this recovery back in … [Read more...]

Oct
11

Falling Fuel

gas pump

 US households spent slightly less than $2,000 on gasoline in 2016, the lowest inflation-adjusted amount since 2003. The lowest amount spent on gasoline since 1980 was $1,500 in 1998, while the highest was about $3,300 in 1980 and 2012. However, as a percent of before-tax household income, gasoline … [Read more...]

Oct
10

Powerful Pay

pow

 Despite confusion wrought by hurricanes Harvey and Irma, September’s employment report was stellar. Upward revisions to wage growth totaling three-tenths-of-one-percent for July and August and a 0.5% rise in September suggest wages are rising! Moreover, the unemployment rate declined to 4.2%, its … [Read more...]

Oct
09

New Nobelist

U.S. economist Richard Thaler poses in an undated photo provided by the University of Chicago Booth School of Business

The 2017 Nobel Prize in Economic Sciences was awarded to University of Chicago Professor Richard Thaler. Thaler’s research in behavioral economics incorporates psychology and the awareness that people are irrational in relatively consistent ways to improve decision making. His research has resulted … [Read more...]