• 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...]

  • 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...]

  • 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...]

  • 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...]

  • 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...]


National Names

 The Friday File: Of the 195 nations on Earth, 33% get their name from some older group of persons. For example, France is named after the Franks. 25% are named from an aspect of the land; Costa Rica means “the rich coast.” 13% are named for their location; Australia means southern in Latin. And, … [Read more...]


Fiscal Follies

 Neither the House or Senate tax plans will meaningfully boost long-run economic growth, but both will substantially boost future deficits and debt. Despite lower corporate taxes, growth will be stymied by a full employment economy, resulting in higher inflation and interest rates. At the … [Read more...]


Yucky Yields

 The yield spread between 10-yr and 1-yr Treasuries has shrunk from a post-recession peak of 3.4 percentage points to just 0.70 percentage points. The problem is in prior Fed rate rising cycles, the yield on the 10-yr rose as faster growth was expected; now the 10-yr yield is trendless. Moreover, … [Read more...]


Sickly Savings

 The personal savings rate fell to just 3.1% in September, its lowest level since 12/07, the start of the Great Recession. The decline is undoubtedly being caused by record gains in household net worth. As a percent of disposable income, it’s 670%, well above the Housing Boom high of 650%. Ever … [Read more...]


Miserable Mexico

 By all indications, Mexico just recently entered a recession. Business activity, sales growth, business confidence and industrial production are not only all declining but are in contractionary territory. Worse, equities are down 8% after peaking three months ago and GDP declined in Q3 for the … [Read more...]


Tweet Tracking

The Friday File: After tweeting/retweeting about 200 times/month in January and February, President Trump’s tweeting fell to a low of 150 in April. Since then, he has upped his game. In July, President Trump’s tweets hit 400 for the first time, where they have remained since. November is on pace to … [Read more...]


Thanksgiving Thanks

 This year, the average cost of a full Thanksgiving dinner for 10 persons is $49.12; 75 cents or 1.5% lower than last year, 3% lower inflation-adjusted, and the lowest inflation-adjusted price since 2010. The priciest inflation-adjusted Thanksgiving repast was $62.40 in 1986; the lowest, $44.73 in … [Read more...]


Exempt Estates

 Last year, 2.6 million Americans died. Of those, 5,219 had estates large enough, greater than $5.49 million/person, to pay estate tax. Doubling the exempted amount to $11 million/person, which the Senate proposes, would reduce the number of taxable estates to 2,204. If the estate tax is eliminated, … [Read more...]


Halting Housing

 While housing starts in October rose 13.7% compared to September, they remain 2.9% below the level of 10/16, and are up just 5.8% YTD. Technically, it’s because multifamily activity is down roughly 10% YTD. That’s because multifamily activity has returned to its pre-recession level of roughly … [Read more...]


Dear Da Vinci

 The Friday File: Earlier this week, the “Salvator Mundi” by Da Vinci sold at auction for $400 million, $450 million including fees. This shatters the prior auction price high of $179 million set in 2015 for Picaso’s “Les Femmes d’Alger”, and the all-time high of $300 million for works by Cezanne at … [Read more...]