Stone Skipping

The Friday File: The world record for the number of stone skips in one throw is 88, set by American Kurt Steiner in 2013. The record he broke was 65 skips, set by Max Steiner (no relation). In Europe, where distance is what counts and where the stone must touch the water at least three times, the … [Read more...]


European Economies

One reason Europe grows slower than the US is because it’s a goods producing powerhouse. That’s because EU rules allow goods to cross borders more easily than services. Unfortunately for Europe, service companies (like Google and Microsoft) are not only hugely valuable but are also more productive … [Read more...]


Inversion Inevitability

While the inverted yield curve isn’t good, it’s not as bad an omen as before. First, post-recession regulations have forced banks to hold more bonds. Second, the Fed now holds trillions in Treasuries. Third, rates in Europe are largely negative and fourth, the compensation investors demand for … [Read more...]


Substantial Savings

From 1980-2007, US savings rates declined from about 10% to 2.5%. They have since risen and are now 8.1%. Unsurprisingly, savings rose after the recession as households rebuilt wealth. Rates may also be up due to rising economic uncertainty. But savings rates jumped dramatically after the Trump tax … [Read more...]


Brawny Breadwinners

The number of employees impacted by work stoppages between 1/1/19 and 8/30/19 is 375,000, the second highest level since 2000. This must be partly motivating the striking GM workers. Relatedly, the share of low-income Americans, households with incomes below $60,000/year, who voluntarily changed … [Read more...]


Chess Calories

The Friday File: Despite sitting for hours and exerting themselves in no greater way than periodically extending their arms by maybe a foot, chess players can burn up to 6,000 calories/day during a tournament! That’s three times average consumption and on par with top athletes. Mental stress causes … [Read more...]


Happy Housing

After dragging GDP down for six straight quarters, housing looks to finally boost GDP, albeit slightly, in 19Q3! August existing homes sales hit their best level in almost 18 months, August starts were at their highest level since 6/07, mainly due to a sharp rise in multifamily activity, and at … [Read more...]


Impeachment Incentives

Given that an impeachment inquiry is just around the corner, and the chances of President Trump being impeached by year end have suddenly doubled to 42%, China now has less incentive to make a trade deal than before. However, the president has a stronger incentive to clinch a deal, even if it’s … [Read more...]


Supply Shocks

The US has recently been exposed to two supply shocks; an oil price rise and the GM strike. Both are likely to reduce growth and push up inflation, but only slightly. It’s because economy-wide spending on oil is down to 2.4% of GDP, about half what it was 40 years ago. And, because GM accounted for … [Read more...]


Pecuniary Paucity

Last week, the overnight repo rate, the rate at which banks and other financial players lend to each other against super-safe collateral jumped to 10% from 2%! While this also happened during the dark days of the Lehman Brothers collapse in 2008, the reasons are different. Then, it was fear of a … [Read more...]