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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...]

  • 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...]

Jun
27

Inflationary Issues

inflationary issues

 With inflation rates and inflation expectations declining and the yield curve flattening, the Fed may find it more difficult than they thought to raise rates by one-quarter of one percent this coming September. If that’s the case, the Fed could instead begin to reduce the size of its balance sheet … [Read more...]

Jun
26

Simpler Starts

housing starts_1

While May housing starts rose 2.9% compared to April, 8.9% Y-o-Y, and 12.2% YTD, sales were weak in 16Q1 making comparisons easy. Critically, the median new home price surged 16.5% Y-o-Y to $345,800 while the average jumped 16.1% Y-o-Y to $406,400, both records. Moreover, since peaking in 15Q1, new … [Read more...]

Jun
23

Underwhelming Uber

uber

 The Friday File: While the accounting is very dodgy, Uber’s revenues are up spectacularly, from $1 billion in 16Q1 to $3.4 billion in 17Q1, and gross bookings are up from $3.8 billion in 16Q1 to $7.5 billion in 17Q1. However, huge losses continue. In 2015, losses were minimally $2.2 billion, in … [Read more...]

Jun
22

Limited Labor

job offers

 With the unemployment rate at a 16-year low, faster growth requires getting people to work who are currently unwilling. To entice more women, targeted parental leave should be offered. For the elderly, reduce their income taxes by two percent for each additional year they work beyond 67. For youth, … [Read more...]

Jun
21

Fannie Freddie

fannie and freddie

Nine years after the government takeovers, there’s again talk of reforming Fannie and Freddie; good luck! Builders, Realtors, bankers, and investors want a strong government guarantee to backstop the $10 trillion mortgage market and keep the popular 30-year fixed rate mortgage. Democrats want money … [Read more...]

Jun
20

Court Count

US court

 There are 870 federal court judgeships with lifetime appointments. 122 are vacant, giving Trump the chance to appoint 13% of the judiciary, the second highest percentage an incoming first-term president has enjoyed dating back to at least 1969, a much less partisan era. Moreover, the median age of … [Read more...]

Jun
19

Hapless Housing

housing starts

 Surprisingly, Y-o-Y housing starts fell 5.5% in May. YTD, single-family starts are up 7.4% but multi-family starts are down 2.8%. Continuing that theme, total starts are progressively weakening due to MF activity plunging from a +20% Y-o-Y increase in January to a -23% decline in May; single-family … [Read more...]

Jun
16

Fantastic Fathers

adi eisenberg

 The Friday File: Father’s Day spending is expected to reach a record $15.5 billion this year, up from $14.3 billion in 2016. $3.3 billion will be spent on experiential activities, followed by $2.2 billion on gift cards and an equal amount on clothes. The most common gift; a greeting card. 54% of … [Read more...]

Jun
15

One Occupancy

single person household

In 1940, the percentage of one-person households in the USA was 7.7%, by 1960 it was 13.3%, and by 1980, 22.7%. In 2000, the rate was 25.8% and in 2016, 28.1%! DC has the highest percentage of one-person households at 42%, followed by RI at 31.8% and MT at 31.5%. Globally, Sweden, where one-person … [Read more...]

Jun
14

Interesting Inflation

fed

 While the Fed increased short-term rates by one-quarter-of-one percent, as expected, it’s their intention to raise rates again this year by the same amount that was mildly surprising. With inflation slowing across the globe and core CPI down steadily since January, the Fed needs faster wage … [Read more...]