Forget Forbearance

Forget Forbearance While foreclosure starts are up 32% in 21Q3 Q-o-Q and 67% higher Y-o-Y, they remain spectacularly low. In 21Q3, lenders commenced foreclosures on 25,209 units, traditionally they have numbered 40,000/month. Last year, in some months foreclosures numbered as few as 4,000/month. … [Read more...]


Rate Reduction

The yield spread between the 5-year Treasury and the 30-year has recently narrowed despite rising inflation fears. The 5-year rate is up along with inflation, the 30-yr rate has barely budged. This is because markets now expect the Fed to raise rates sooner than later. That will weaken inflation and … [Read more...]


Old Orbit

This past Wednesday, Star Trek’s Captain Kirk (William Shatner) went where almost no man has gone before, space, in a convergence of science fiction and science. At age 90, Shatner became the oldest person in space, eclipsing the record set in July by 82-year-old Wally Funk, who remains the oldest … [Read more...]


Payment Problem

During the Housing Boom peak of 7/2006, it took 42% of median household income to cover mortgage payments on a median-priced house. That percentage bottomed at 26.9% in 1/2013 and peaked at 32% in 11/18. In 2019 and 2020, the Fed lowered rates, dropping the ratio to just 28.6% in 8/2020. As of … [Read more...]


Jolting Jobs

This past August, 2.9%, or 4.27 million employees quit their jobs. This eclipsed the previous record high, dating back to 2000 when record keeping began, of 2.8% in April! In leisure and hospitality, the number quitting was 971,000 or 6.4%! That means 1-in-16 people in this sector quit in August. In … [Read more...]


Worker Worry

US employers added a disappointing 194,000 seasonally adjusted jobs in September. Worse, the unemployment rate declined because 183,000 persons left the labor force, it’s now 3.1 million people smaller than pre-Covid-19. Fortunately, July and August were collectively revised upwards by 169,000, and … [Read more...]


Nobel Notice

Earlier today, the Nobel Prize in Economics was awarded to David Card, Joshua Angrist, and Guido Imbens. This was an inspired decision! Card is one of several economists to systematically use natural experiments to better understand real world phenomena, including the impacts of minimum wage and … [Read more...]


Galloping Golf

The Friday File: In the sport of Speedgolf, Lauren Cupp is the world’s fastest female. In this sport, the score is the sum of strokes plus time. Recently, she set a new world record of 122:48. That’s a combination of a 1-under par 72, plus an 18-hole playing time of 50 minutes and 48 seconds, a … [Read more...]


Inflationary Interest

Since the inflation we are experiencing appears likely to linger somewhat longer, calling it transitory may no longer be justified. Rather, what about ephemeral? Expansionary monetary policy is coming to an end and will become contractionary by late 2022. Similarly, fiscal policy has become … [Read more...]


More Money

Absent a debt ceiling increase, the US will begin running out of money by mid-October. One solution, a $1 trillion coin made by the Treasury and deposited at the Fed. Presto, a trillion dollars! The problem - this has the President conducting monetary policy (done only by the Fed) to solve fiscal … [Read more...]