Archive for September 2019

The number of employees impacted by work stoppages between 1/1/19 and 8/30/19 is 375,000, the second highest level since 2000. This must be partly motivating the striking GM workers. Relatedly, the share of low-income Americans, households with incomes below $60,000/year, who voluntarily changed jobs during the four months ending 7/19 (presumably for higher wages) hit…

The Friday File: Despite sitting for hours and exerting themselves in no greater way than periodically extending their arms by maybe a foot, chess players can burn up to 6,000 calories/day during a tournament! That’s three times average consumption and on par with top athletes. Mental stress causes heart rates to increase, which forces the…

After dragging GDP down for six straight quarters, housing looks to finally boost GDP, albeit slightly, in 19Q3! August existing homes sales hit their best level in almost 18 months, August starts were at their highest level since 6/07, mainly due to a sharp rise in multifamily activity, and at 713,000, August new sales are…

Given that an impeachment inquiry is just around the corner, and the chances of President Trump being impeached by year end have suddenly doubled to 42%, China now has less incentive to make a trade deal than before. However, the president has a stronger incentive to clinch a deal, even if it’s weaker, to show…

The US has recently been exposed to two supply shocks; an oil price rise and the GM strike. Both are likely to reduce growth and push up inflation, but only slightly. It’s because economy-wide spending on oil is down to 2.4% of GDP, about half what it was 40 years ago. And, because GM accounted…

Last week, the overnight repo rate, the rate at which banks and other financial players lend to each other against super-safe collateral jumped to 10% from 2%! While this also happened during the dark days of the Lehman Brothers collapse in 2008, the reasons are different. Then, it was fear of a bank collapse, now…

The Friday File: Researchers have discovered that college students were able to keep their hands immersed in cold water for an extra 40 seconds and reported less pain if they used an expletive of their choice while their hand was in contact with the water compared to using a neutral word of their choice. This…

Here’s how to shrink/fix Fannie and Freddie. First, reduce the threshold for a conforming loan to 1.5 times the median price of an existing single-family home, which is currently $284,000. Second, end support for vacation homes and cash-out refi. Third, start treating F&F like banks when it comes to disclosure rules, capital requirements, etc. This…

As expected, the Fed dropped its benchmark rate a quarter-point to stimulate the US economy against a backdrop of global slowing, rising trade concerns, and persistently weak inflation. What happens next? Seven of 17 officials expect one more cut this year; 10 think rates should be lowered no further. Markets were unphased; this information did…

China is among the most adversely impacted nations from the attack on the Saudi oil processing facility. As a huge oil importer, China faces higher imported energy prices on top of relentlessly slowing GDP, rising inflation due to tariffs and African swine fever, lousy macro data including weak retail sales, declining industrial production and flagging…