Archive for January 2021

The Friday File: Airplanes are not only expensive to buy, each B-2 costs $2 billion, they are also expensive to operate. The same B-2 costs $63 million/year to operate, the B-52 Stratofortress costs $25 million/year, and the B-1B Lancer, $24 million/year. Fighters are a bit cheaper to maintain. The F-22 Raptor, $22 million/year, the F-35A/B/C,…

While this may be nothing but a stupid bubble, created by new technology such as Reddit/chat boards and Robinhood and the unintended consequences of low interest rates and massive liquidity due to overreliance on monetary policy, it could be the Wall Street accident we are all afraid of! Bubbles can last years before bursting, think…

Existing-home sales jumped in December to a seasonally adjusted annual rate (SAAR) of 6.76 million, the highest level since 2006. Usually, sales weaken in December but due to Covid-19 seasonality has disappeared. Had December’s sales of 540,000 occurred in July, it would have resulted in a seasonally adjusted rate of just 5.3 million. The December…

The Fed, the ECB, and the BoJ have collectively increased balance sheets by $8 trillion since Sars-Cov-2’s debut. Last recession, it took the same central banks eight years to accumulate that much. With such large reserves, higher rates due to rising inflation pose a risk. If rates rise due to an improving economy, taxes will…

In December, housing starts were at a seasonally adjusted annualized rate of 1.67 million, their best since 9/06 and up 5.2% Y-o-Y. Single-family activity was up 28% Y-o-Y, multifamily starts fell 39%, both percentages being strongly Covid-19 influenced. Total starts were 1.4 million in 2020, up 7% from 1.3 million in 2019. I suspect 2021…

The Friday File: This past Wednesday, not only did President and Dr. Jill Biden move into the White House, but so did Major, a three-year old rescue German Shepard, and Champ, a 13-year old German Shepard, the First Canines. There has not been a pooch in residence in the White House since 1/20/17, as President…

Higher taxes are probably in the offing but not right now. Raising taxes while crawling out from Sars-Cov-2 is unwise. And, with razor thin majorities in both chambers and Republicans against higher taxes, the entire Democratic caucus in each chamber will have to agree. Moreover, waiting until 2022 is risky, as the party holding the…

FDR was the first president to be sworn in on January 20th. It had been March 20th until then, but the 20th amendment changed that. Harry Truman’s second inauguration (pollsters expected Dewey’s first) was the first to be televised, Carter was the first president to walk down Pennsylvania Avenue, and John Adams was the first…

For the year ending 7/1/20, the US population grew just 0.35%, the slowest rate since at least 1900! Part of the reason is Covid-19 related, but the entire decade was a demographic bust due to an aging population and limited immigration. At 6.6% the decade ending 2020 will probably exhibit the slowest growth rate since…

Initial weekly jobless claims, a proxy for job losses, rose by 181,000, its biggest rise since 8/22/20, almost five months ago. Moreover, retail sales fell for the third straight month, consumer confidence slipped slightly, and inflation be it the CPI, or producer prices, remains well in check. The Fed will not raise rates before 2023…