Compared to the 2006 Housing Boom peak, home prices are currently 71% higher. However, after accounting for inflation, home prices are just 10% higher. Thought of slightly differently, nominal home prices are exactly double what they were in 2004. That works out to a compound annual growth rate of 3.6%. While housing prices went crazy during Covid, over the long run price increases have been rather pedestrian.

On 4/3/24, a drawing for a $1.09 billion Powerball jackpot will occur, the fifth largest. While the chances of winning are one in 292 million, Americans spent over $100 billion in 2022 buying lotto tickets and it’s mostly the poor. In the poorest 1% of zip codes, the average adult spends about $600/year or 5% of income, versus $150/year or 0.15% of income in the wealthiest 1%. Talk about regressive.

The economy continues to pleasantly surprise, to wit, 24Q1 GDP growth is being revised up, and thus rate cuts keep getting delayed. What’s going on? Several things. The rise in home prices and equities is slightly boosting consumer spending. Second, immigration is meaningfully higher than we think. Income to undocumented workers is not reported, hurting weak GDI, but their spending is, boosting strong GDP. Lastly, labor productivity is strong.

In a move hailed as genius, the Disney Corporation is beginning to plan and break ground for a new theme park called Econoworld. It aims to combine the magic of Disney with the unbridled excitement of macroeconomics and piggyback on the growing profile of macroeconomics. Like EPCOT, there’ll be various areas devoted to, in this case, the Fed, currency, equities, banking, international trade, insurance, and more. Happy April Fool’s Day.=!

The Friday File: This past Wednesday, former senator Joseph Lieberman died; he was 82. His political career began in the Connecticut state house in 1970. In 1988, won election to the US Senate, becoming the first Orthodox Jew in the chamber. He then became the first Jewish candidate on a national ticket of a major political party when VP Al Gore selected him to be his running mate in 2000.

The FTC is challenging Kroger’s acquisition of Albertson’s. The FTC claims Walmart/Target aren’t supermarkets, that Sprouts/Whole Foods are premium stores, that Dollar stores are limited, and that Aldi/Lidl are “limited assortment stores.” FTC thus claims this merger of the top two chains will reduce competition and raise prices. Hogwash! Walmart’s share is 28.3%, Kroger/Albertson will be 16.5%. Force targeted divestures to strong competitors wherever Kroger’s and Albertson’s are both present.

The accidental destruction of the critical Francis Scott Key Bridge has rendered the Port of Baltimore unusable indefinitely. The Port is the 11th largest by container imports with 559,000/year 20-foot equivalent units. LA/Long Beach is tops at 8.2 million, then NY/NJ at 4 million, and Savannah at 2.4 million. Supply chains will manage, Baltimore will suffer. The Port directly employs 15,300 and generates $3.3 billion in personal income.

While the economy may be super and an economic soft landing may be right around the corner, U.S. households are increasingly tapping into their IRA/401(k) retirement accounts. In 2018 and 2019 that percentage was about 2%. In 2020, despite Covid, it fell to 1.66% due to all the fiscal stimulus monies. In 2021, it returned to 2%, in 2022 it rose to 2.75%, and in 2023 slightly over 3.5%.

3/21/24 marked the 625th consecutive day of the inversion of the 2-10 yield curve. This means the yield on the 2-year Treasury has consistently exceeded the yield on the 10-year Treasury since early July 2022, breaking the record of 624 days in 1978. Yield curve inversions occur when the Fed battles inflation, and are closely followed since, dating back to 1970, every inversion has preceded a recession.

The Friday File: Between 2000-2023, the average number of UFO sightings per 100,000 persons in the US was 34.3. Lincoln County, NV, where fabled Area 51 is located, is tops at 820.9. Next is Arthur County, NE at 618.6, then Alpine County, CA at 594.1. Sightings are noticeably elevated in the 13 western states and the three northern New England states. The truth, as they say, is out there.