Archive for January 2016

The Friday File: US colleges raised $40.31 billion last year, up 7.6% from 2014. Stanford raised the most; $1.63 billion, followed by Harvard at $1.05 billion, USC at $650 million, UCSF at $610 million and Cornell at $590 million. The top 20 schools (0.66% of all 4-year schools) raised $11.56 billion, or 28.7% of all…

In 2015, Brazil’s economy shrunk by 4% and it will contract 3.5% more in 2016. Moreover, inflation is 10.7% and rising quickly. Yet the central bank didn’t raise rates. This may be because debt service already consumes a whopping 8% of GDP and higher rates will make default more likely. But once investors realize this…

In today’s post-meeting statement, the Fed is trying to keep their options open and separate signal from noise. If employment and inflation continue to improve, they will raise rates in March. But given the strengthening dollar, widening credit spreads, weakening oil prices and international turmoil, the Fed will delay the next rate hike should the…

While auto sales hit 17.5 million in 2015, slightly surpassing the prior record set in 2000, the US population is now 12.7% larger! Per capita sales are falling because the percentage of persons with driver’s licenses are declining. The percentage with a license aged 20 through 24 is 77%, down from 80% in 2011 and…

Senator Sanders’ proposal of a 1% roundtrip tax on stock trades will raise less revenue than expected, as some trading will migrate to areas with no tax. Moreover, because it increases transaction costs, it will reduce trading and liquidity and thus probably increase volatility; there’s no evidence it reduces bubbles. Lastly, even buy-and-hold investors will…

The Friday File: 5.9% of college students reported smoking marijuana on a daily or near daily (DND) basis, up from 3.7% in 2007. By contrast, only 5.2% of college students smoke cigarettes DND, compared to 19% in 1999, and 4.3% of students reported DND alcohol consumption, a level that has been flat for decades. Only…

Wage and productivity growth are scant, exports, energy, agriculture and mining are weak, the manufacturing sector is in recession and unsurprisingly GDP growth is sluggish. At the same time job growth is good, unemployment is low, and the service sector is doing well. And that’s the key. As a post-industrial economy, services account for 86%…

January’s NAHB/Wells Fargo builder confidence index was 60, unchanged from December but down from the recent peak of 65 in October. Moreover, after hitting 57 for the first time since the housing bust in 12/13, the index has moved sideways despite starts rising 16% and single-family starts rising 18%. This suggests prior builder over-optimism, along…

Import prices fell 1.2% in December, led by a 10% decline in petroleum prices. Excluding energy, import prices still fell 0.3%. During CY2015, import prices fell 8.2%; non-fuel imports declined 3.4%. These deflationary numbers, along with the continuing decline in producer prices, is damping already painfully low inflation expectations. This will reduce to, at most,…

The Friday File: Measured by passenger miles, American was the #1 US airline in 2015 with 223 billion revenue-miles, followed by Delta at 210 and United at 209. Ranked by passengers, American carried 201.2 million, Delta 179.4 and Southwest 144.6 million. By market capitalization, Delta wins at $37 billion, followed by Southwest at $28 billion…