Archive for May 2023

While bankruptcies were low in 2021 and very low in 2022, they are now meaningfully rising. Through April, U.S. bankruptcies, are at their highest level since 2010, and the immediate aftermath of the Great Recession. The rise is the inevitable result of higher interest rates, the failure of some regional banks, rising office building vacancy…

While a compromise debt-ceiling bill is taking shape, its passage is not a done deal. Moreover, despite the heated rhetoric, the current compromise only shaves about 1.5% off the FY2024 spending as it utterly fails to attack the budget’s major cost drivers. If our politicians ever get serious about reducing the deficit it’ll require tax…

The Friday File: On 5/5/1868, the Grand Army of the Republic, an advocacy group of Union Army Civil War veterans, established Decoration Day as a day to decorate graves of the war dead with flowers. Following WWI, Memorial Day was expanded to honor those who died in all American wars, and in 1971 it became…

Voters who are fiscally and politically liberal overwhelmingly vote Democratic. Conversely, voters who are fiscally and politically conservative vote overwhelmingly Republican. Voters who are fiscally conservative yet socially liberal are too few to matter. That leaves voters who are fiscally liberal and socially conservative. They are a large group, and vote in large numbers for…

If the debt ceiling standoff continues, there are five workarounds. In order from the least bad to the worst, they are as follows: Treasury could prioritize interest and principal payments, the President could invoke Section 4 of the 14th amendment, the Fed could lend against defaulted debt, Treasury could issue premium bonds offering sky high…

Currently, there’s $57 billion in the Treasury’s General Account and $92 billion in extraordinary measures for a total of $149 billion. However, the TGA usually has a balance of $600 billion, with non-debt cash outflows averaging $30 billion/day. Come early June, the TGA will fall to $50 billion. If, however, the TGA can stay solvent…

Through 5-18-23, five companies have contributed slightly more than 80% of all S&P 500 gains YTD. The S&P 500 is a market weighted (share price times number of shares) stock index. Apple has provided 26.2%, Microsoft has added 21.8%, NVIDIA has contributed 14.2%, Alphabet another 10.6% and Meta has chipped in with 10.1%, totaling 82.9%.

The Friday File: The great Jim Brown has passed away. He played nine years in the NFL for the Cleveland Browns and was a Pro Bowler every year. He led the league in rushing eight times, was named MVP three times, won an NFL championship in 1964, and retired at the top of his career.…

As recently as 5/1/22, U.S. office building values, as measured by the share prices of office building REITS, were stable as tenants paid and occupancy rates steadily improved. However, since then values have plummeted by 50% as tenants renew for less space, occupancy rates have stalled at 50%, and interest rates are way up. For…

Historically, new houses constituted about 15% of all homes sold. While that percentage dropped to a low of 5.8% in 7/11, the worst of the Housing Bust, it’s almost steadily risen since. In 12/22 it hit an amazing 34.9% and in 3/23 was 32.8%, the highest March outside of 3/22’s 33.4%. While single-family starts are…