Month: April 2011
The perception is that small business creates most new jobs. NO! The best predictor of job creation is age of firm. Younger firms create more jobs regardless of size. New firms operate in a volatile “up or out” environment. After…
A key reason why new home activity has fallen off sharply is because new homes are now about 30% more expensive than existing ones; double the typical margin. Foreclosures and short sales accounted for 40% of all sales in February…
27 The IMF has determined that China’s economy will surpass ours in 2016 – in 5 years! Many have said it will happen in the mid 2020s; they are wrong. 1) The Chinese currency is massively undervalued. 2) Using Purchasing…
The March trade deficit fell by 2.6% but, hold the applause. Imports fell 1.7% due to a fall in demand for crude oil. Exports fell 1.4% as US auto, industrial machinery & food products fell. As if the decline in…
Including the stimulus, tax cuts, bailouts, home and car subsidies and automatic stabilizers (i.e. unemployment insurance and food stamps) the Great Recession will add about $4.2 trillion to the federal debt by the time it ends. The largest contributor; automatic…
NVR, Inc., a large home builder reported lower than expected earnings as sales dropped and margins narrowed. Looking through their financials there is not much to be happy about. If, arguably, the strongest public builder in the strongest markets (DC…
The Fed via QE2 tried to generate inflation but got the wrong kind. Instead of wage inflation or real estate inflation (including house price increases) which causes people to ratchet up their spending because they feel richer, what we have…
During the housing bust banks held mortgage debt they thought was safe. It wasn’t. In the crunch, they got scared and froze; so did the economy. If Cong fails to lift the debt ceiling the chain of events will be…
Demographics 101: Over the past decade the US population has grown by 9.7% to 309m. Minorities accounted for 92% of that growth. The ranks of Hispanics swelled by 43% to 51m. The Asian population grew at the same rate to…
There has been an incentive burst of auto buying recently but in reality the majority of credit growth can be found in student loans! It is worth noting that student loans are probably the only type of loan you can…