Archive for June 2015

While single family housing starts are up 6.7% year-to-date and single family permits are up 7.5% year-to-date, new home sales are up a staggering 24%! This means that what’s being built is changing. Specifically relatively fewer custom homes and more spec homes are being built. To wit, first-time buyers accounted for 32% of existing home…

The ECB decision to cap the emergency lending program to Greece rather than take more dramatic steps, like demanding higher amounts of collateral for loans or reducing the size of the emergency loans, keeps Greek banks sufficiently alive such that if a deal is reached after the referendum next Sunday, there will still be a…

The Friday File: Congratulations to Taylor Swift, a 25 year-old music monopolist extraordinaire. In a battle over royalties during a free trial period for listeners of Apple Music, Apple blinked and will now pay artists despite receiving no revenue. Her ability to ‘shake off’ Apple is due to her profound popularity, a need by Apple…

College tuition is insanely high, but things are changing. While online learning helps, the biggest impact will be better informed buyers. Until recently, students and parents had little awareness of the financial benefits of different majors or the “value added” by different schools. They were thus unable to calculate a return on tuition investment. With…

While the US Government has strongly reiterated its policy of not negotiating with kidnappers of American citizens so as to appropriately discourage the activity, it’s now inexplicably allowing families of the kidnapped to directly negotiate with the kidnappers. While some highbrow kidnappers may care deeply who pays the ransom money, I bet most don’t. Better…

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 tax raised…

Last month the median existing home sales price was $228,700, way up from the cyclical low of $154,600 in 1/12, and less than one-percent below the all-time high of $230,400 set in 7/06, almost nine years ago. While there’s a good chance a new median sales price record will be set later this year, after…

The Friday File: The percentage of employees testing positive for drug use in 2014 was 3.9%, up from 3.7% in 2013. Prior to 2013, drug use had declined nearly every year from a high of 13.6% in 1988 to a low of 3.5% in 2012. The rise mirrors population-wide increasing drug use from 8.7% in…

Producer prices jumped 0.5% last month, due mainly to rising gasoline prices, but the 56.4% rise in chicken egg prices, the largest increase since at least 1937, helped. To date, 47 million chickens have been killed due to Avian Bird Flu, of which 38.5 million were egg-layers, 12.7% of the flock. Part of the problem;…

At today’s news conference following a meeting of the interest rate setting FOMC, Chairwoman Yellen was clear about three things. Rates will start rising later this year (my bet remains 9/17/15), rates will rise by one percentage point every 12 months for the next three years, which is unusually slow, just half as fast as…