Domicile Deficit

Existing inventory of residential homes is currently just 1.04 million units, or 1.9 months of supply, both record lows. It is partly due to insufficient homebuilding over the past decade, Boomers aging in place, Covid-19 preventing sellers from listing, huge demand by buyers to escape dense cities … [Read more...]


Muted Money

The US savings rate jumped from 13.4% of disposable income in December to 20.5% in January. This means only 20 cents/dollar the government provided in the $600 stimulus checks was spent. This suggest most of the next round of stimi money will probably also be saved, making one question the wisdom of … [Read more...]


Asset Appraisals

Through 20Q2, the value of US farmland was $2.6 trillion, and investment grade bonds (BBB rated debt and higher) were valued at $6.4 trillion. That pales compared to Treasury bonds which were worth $19.9 trillion, and US commercial real estate at $20.4 trillion. Equities were almost double that at … [Read more...]


Impermanent Inflation

Biden’s proposed American Rescue Plan is large, almost 10% of GDP, and is a short-term, one-off event. Other similar historical events include the Korean War, at 4% of GDP, and, as far as the US is concerned, WWI at 13%. Neither of those events led to sustained inflation; inflation rose and then … [Read more...]


Likeable Legislators

The Friday File: Though wildly unproductive in the amount of meaningful legislation passed, the just finished 116th Congress resulted in members of Congress posting 1.57 million tweets and 680,000 Facebook posts, up from 1.03 million and 484,000 in the 114th. In the 114th there were 10 members with … [Read more...]


Moving Matters

In 2020, Idaho enjoyed the highest percentage of net migration, with 70% inbound and 30% outbound, a net of 40%. SC followed at 28%, then OR at 26%, AZ and SD at 24%, and AL, FL, NC, and TN at 20%. AR was 10th at 18%. CA at -18%, CT at -26%, IL at -32%, NY at -34% and NJ at -40% struggled most. … [Read more...]


Interim Inflation

While Producer Price Inflation is rising, since 1991 its correlation with core CPI is just 15%. Moreover, unemployment is high and global inflation is weak. Finally, while we are experiencing supply constraints, input prices have risen before. Recall that in 6/08 oil was $138/bbl, and as recently as … [Read more...]


Measurement Matters

While GDP will return to its pre-pandemic level in 21Q3, absent expansionary fiscal policy the labor market will take until 2024. Correcting for worker misclassification by the BLS boosts the reported unemployment rate from 6.1% to 6.9%. Correcting for the sharp labor force participation rate … [Read more...]


Sales Strength

January is normally a weak month for home sales. But not this January. Thus, the seasonal adjustments that are always made to allow for month-to-month comparisons are not valid. For example, had last month’s sales occurred in October, the season adjustment would have resulted in 4.3 million … [Read more...]


Ganga Grazing

The Friday File: While marijuana is increasingly considered harmless, there are unintended consequences. Comparing retail scanner data in counties located in CO, OR, and WA where recreational marijuana is legal to counties where it’s not, sales of high calorie foods like ice cream, cookies and … [Read more...]