Archive for December 2021

I want to take this opportunity to thank you all for your continued interest in my daily economics blog. You all enrich my life in many ways, and I am deeply appreciative. I wish you and yours the best year ever in annualized, risk-adjusted terms. May it be a year of full employment, large wage…

Turkey’s plan to stabilize its rapidly depreciating currency ideally requires the lira to not depreciate vs. the dollar. If that happens amidst rampant inflation, Turkish exports will rise in price and lose share to suddenly cheaper foreign alternatives, hammering exports. If the currency continues to meaningfully decline, the government will have to cut spending, borrow,…

The latest Case-Shiller National HPI showed a 19.1% Y-o-Y increase in home prices, down from 19.5% last month, and 19.8% the month before. The 19.1% reading remains the 4th highest ever. The latest Y-o-Y reading of the Federal Housing Finance Agency Purchase Only HPI was 17.4%, down from 17.8% last month, 18.5% the month before…

In contrast to disturbing inflationary surges in the US, Canada, UK, and to a lesser extent Europe, in China and Japan inflation has largely been absent. In both nations a government-induced stimulus-fueled consumption surge never materialized. De-leveraging efforts have continued unabated in China, and in Japan, declining population and low inflation expectations allowed the 2nd…

New home sales rose in mid-2020 from a pace of 700,000/year to 975,000/year but fully returned to their 700,000/year pre-Covid pace by 5/21. Similarly, existing sales ramped up to a Covid-19 induced level of 6.75 million/year in mid-2020, from 5.4 million/year pre-pandemic, but like new sales, bottomed in 5/21 at 5.78 million/year. However, they’ve stormed…

Inflation, measured by the Christmas Price Index and based on purchasing one of each day’s items in “The Twelve Days of Christmas,” rose 5.7% to $41,206 from $38,994 in 2019, lower than the CPI rise of 6.2%. Fowl lead the price increase with geese, doves, and hens all up over 40%. If you order it…

While the Fed has commenced tapering its purchases of MBS and Treasuries by $15 billion/Month, this will only very indirectly reduce inflation. It’s because inflation is being generated primarily by supply constraints, not easy money. The best solution would be to lessen regulations, even if only temporarily, that make production more costly. Tapering and eventual…

The recently passed $1.2 trillion infrastructure bill, including $550 billion in new spending beyond the current baseline should boost long-run GDP by, at most, 0.1%, or $22 billion/year. As infrastructure spending ramps up, GDP will rise by an extra $33 billion in 2022 and peak at $110 billion of extra growth in 2026. By 2031,…

From 1949-1966, 20% of Americans moved/year. The percentage steadily declined; by the early 1980s 16% of us moved/year. In the mid-1980s the ratio recovered but has since fallen to 8.4%! Worse, through the 1960s persons steadily moved from poorer areas to wealthier ones. That stopped some time ago. Now people move to low-income cities. Why?…

November single-family housing starts fell to an annualized rate of 1.173 million, from 1.182 million Y-o-Y. Meanwhile, multifamily starts jumped from 369,000 in 11/20 to 506,000 in 11/21. Flat single-family starts amidst booming demand and the fact that the number of homes under construction rose to the highest level since 1973 suggests that material and…