Archive for July 2022

The Friday File: Batting average predicts 67% of the runs a team scores. On-base percentage, the frequency with which a player reaches base/at-bat, predicts 78%. On-base percentage plus slugging percentage (OPS), the sum of the on-base percentage and the average number of bases gained per at-bat (a measure of batter power) predicts 89%. So, ignore…

The big supermajor oil companies collectively produce about 15% of the world’s oil, with Exxon the biggest and producing almost four million bbl/day. Conversely, national oil companies produce almost 60% of the world’s crude, with Saudi Aramco at 12 million bbl/day and Gazprom at 10 million bbl/day being the biggest and together producing way more…

The pool of negative-yielding corporate and sovereign debt is down from a peak of $18.4 trillion on 12/11/20 to $2.4 trillion on 7/22/22, but up from $1.93 trillion on 6/17/22, a level first surpassed in 1/15 when the ECB and BoJ pushed rates negative to boost growth and inflation. Pre-Covid-19, negative-yielding debt had fallen from…

Investor home purchases peaked at 27.6% of sales in 22Q1, up from 24.8% in 21Q4 and 19.2% in 21Q1, the first quarter of elevated investor purchases. In 2019, investor purchases averaged 16%/quarter. Numerically, investor purchases rose from 200,000/quarter in 2019, peaked at 416,000 in 21Q3, then eased to 321,000 in 22Q1, as overall sales declined.…

June single-family housing starts fell 8.1% M-o-M and 15.7% Y-o-Y, while single-family permits declined 8% M-o-M and 11.4% Y-o-Y as they return to pre-covid levels. Conversely, multifamily starts are up 10.3% M-o-M and 15.6% Y-o-Y, while multifamily permits are up 11.5% M-o-M and 26% Y-o-Y. This is proof that single-family housing is becoming unaffordable for…

The Friday File: Very recently, a bottle of champagne sold for $2.5 million, probably obliterating the record for the costliest bottle containing alcohol ever sold. Why so much? It has five NFTs of cartoon characters on the bottle. Apparently, the combo of Premier Cru grapes (not the best) and the NFTs (which collectively cost $28,000)…

Since at least 1950, the year following US midterm elections has always seen the S&P 500 rise. During this 70-year period there have been 10 elections with a Republican president, and eight with a Democratic one. The best year for equities was 1955 (Eisenhower) when they gained about 30%, while the weakest year was 1987…

Last month, new home contract cancellations hit 14.5%, their highest level in years outside of 4/20’s Covid-tainted peak of 16.5% and are 30% above their seasonally adjusted pre-Covid rate. Similarly, the percentage of pending-home sales that fell out of contract in June hit 14.9%, their highest level in years excluding the Covid-19 induced 3/20 peak…

At the peak of the Housing Boom, nearly 20 central banks raised rates to cool off their respective economies. In the recovery that followed early in the following decade, the number of central banks that hiked rates again peaked at close to 20. Right now, the number of central banks raising rates is 40 and…

With another 75bp hike this month, a 50bp hike in September and November, plus the continuing effects of QT, and the Fed will have tightened monetary policy by a staggering 350bps in CY2022. Add deeply contractionary fiscal policy, an inverted yield curve, a steady decline in the monetary base – the only money banks can…