Archive for June 2019

The Friday File: The costliest divorce settlement in history is that between Jeff and McKenzie Bezos; $36 billion. A distant second is the settlement between Alec and Jocelyn Wildenstein for $3.8 billion back in 1999. That same year (a good one for divorce attorneys), Rupert Murdoch and Anna Torv agreed on a $1.7 billion settlement.…

From 2000-2007, American and Canadian debt-to-disposable-income ratios rose in tandem from 100% to 140%. They have since diverged. The US rate has steadily declined to 103%, while in Canada it’s 175%, one of the highest ratios anywhere! Canadians now spend a record 14.9% of disposable income on debt service, here it’s just 9.9%. Devoting so…

After a surprisingly strong 4/19 when new home sales hit an annualized rate of 679,000, new home sales returned to Earth in May with sales of 626,000. Nonetheless, YTD sales are up 4%. What’s worrying; new home inventories have been steadily rising and are now at 6.4 months, with the six highest readings since 8/11…

Despite being better educated, in 2016 Millennial households had average net worth of $92,000; 40% less than Gen Xers and 20% less than Boomers (adjusted for inflation) at the same point in their respective lives. 33% of Millennials are homeowners, compared with 50% of Xers and just under half of Boomers. Marriage and birth rates…

While the Trump administration ramps up its rhetoric about reforming housing finance, ignore it. Absent Congressional action, there is little that can meaningfully be done. The FHFA can allow Fannie and Freddie to keep their profits but that’s symbolic when it will easily take a decade using that approach to recapitalize both. Anything more substantive…

The Friday File: In 1980, the top 1% of touring musicians/groups received 25% of ticket revenue; the next 4% of performers collected 35%. By 2017, the top 1% of musicians earned 60% of world-wide ticket revenues, while the next 4% enjoyed 25%. The remaining 10,267 acts/groups shared 15%. In 2017, the top three acts, Ed…

The FDA has just approved the gene therapy Zolgensma (Latin for staggeringly expensive). It’s a treatment for an inherited disease called spinal muscular atrophy, a condition affecting 450 newborns/year in the US. If untreated, it typically kills its victims by age two. Its manufacturer says it will cost $2.125 million. It replaces a drug costing…

When the Fed last met, economic data was looking good. Now, not so much. Manufacturing is probably in recession, inflation is weakening, the yield curve is inverted, the dollar is strong, and trade concerns are elevated. However, equities are near records, unemployment is ridiculously low, and household spending is good. Given the mix, the Fed’s…

In April, the latest month for which data are available, there were 7.449 million unfilled jobs, a number that has been steady for a year. Meanwhile, the number of unemployed Americans was 5.824 million, the lowest level since 12/2000. For the 14th month in a row, there were more job openings than unemployed. There are…

May Chinese industrial production rose 5% Y-o-Y, weakest since 1992, and fixed asset investment growth of 5.6% is near multi-decade lows. Moreover, not only is public-sector fixed-asset investment above private sector fixed-asset investment for the first time in 15 months, but it’s rising quickly. Add weak retail sales, and soft land sales and China will…