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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...]

  • 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
02

Vehicle Volume

car sales

 After two straight record-breaking years of 17.5 million units in 2015 and 17.6 million units in 2016, car sales are retrenching. Prior to July, car sales had declined in four of the last five months, but improved to a seasonally adjusted annualized rate of 16.7 million in July, up from 16.5 … [Read more...]

Aug
01

Carrying Cash

carrying cash

 In 2015, cash was used in 32% of all consumer transactions, followed closely by debit cards at 27%, credit cards at 21%, electronic payments at 11%, checks at 6% and other at 3%. Between 2012 and 2015, cash usage plummeted by eight percentage points while all other forms rose incrementally except … [Read more...]

Jul
31

Taxing Travails

us capitol

 The Senate Republican failure to pass a “skinny” Obamacare replacement means a revenue loss of probably $150 billion over a decade. Having already nixed the border adjustment tax means the loss of an additional $1 trillion over a decade. Absent this $1.15 trillion, cutting taxes and keeping it … [Read more...]

Jul
28

Knotty Nemesis

shoelaces

 The Friday File: At last, engineers have figured out how shoelace bows come undone! There are two forces at work. The to-and-fro movement of the leg and the impact of the shoe hitting the ground. Turns out neither force is strong enough alone to unravel the knot. These forces could theoretically … [Read more...]

Jul
27

Dwelling Difference

housing starts_072717

 While June housing starts were up 8.3% M-o-M, they were up only 2.1% Y-o-Y, and 6.0% YTD. More interestingly, YTD multifamily starts are flat, while single-family starts are up 10.75%, and they are more costly than multifamily. The 10.75% rise means 90,000 new single-family starts in 2017. At an … [Read more...]

Jul
26

Vanishing Volatility

vix

 While the VIX, which measures stock market volatility (also known as the Wall Street “fear gauge”), is at quarter-century lows, so what. Corporate profits are solid, inflation is miniscule, alternative investments aren’t very compelling and it appears central banks will keep the easy money spigots … [Read more...]

Jul
25

Employment Exceptions

exceptions

Rhode Island is the latest state to finally see total employment exceed its pre-recession level. That leaves just Alabama, Connecticut, Illinois, Michigan, Mississippi, New Mexico, Ohio, and Wyoming with employment levels in 6/17 below what they were in 2008 or before. By contrast, in five states, … [Read more...]

Jul
24

Debt Debate

debt ceiling

The upcoming required legislative increase in the debt ceiling may be a nasty battle. Republicans will require Democratic support, which will be legislatively costly, all but guaranteeing a bill that won’t be “clean” or void of concessions. To that end, Trump’s budget proposal that cuts billions … [Read more...]

Jul
21

Financial Fitness

credit score

 The Friday File: 43% of women say knowing a person’s credit score would have an impact on their willingness to date someone; only 32% of men said the same. By education, 47% of college graduates say knowing the FICO score of a possible date matters compared to 29% for those with a high school … [Read more...]

Jul
20

Overprescribed Opioids

opiods

Opioid addiction (OA), including addiction to prescription painkillers and illicit narcotics (heroin), has surged 500% since 2010, while medications use to treat OA grew by just 65%. OA is up partly because 21% of Americans filled at least one opioid prescription last year and the amount of … [Read more...]