Econ70

Since the beginning of the 2016 presidential election cycle, President Trump has repeatedly argued that trade deficits with other nations are indicative of unfair trade. His contention is that if we just negotiate better trade deals, deficits would disappear, and…

While housing and autos are struggling, albeit for very different reasons, banks are doing splendidly! Net interest margin, or the difference between what banks lend and borrow at rose to 3.22 percentage points, the highest since 13Q4. Partly as a…

The Friday File: This year’s LA Dodgers are, to date, one of the best baseball teams ever assembled. Their current .714 winning percentage would put them in a tie for the fifth winningest club, and on pace to win 116…

While the 10th anniversary of the first signs of the Great Recession occurred on 8/9/17, what will cause the next recession? My list includes: geopolitical risk, Chinese overreliance on debt, a trade dispute that gets out of hand, a global…

While electric cars sell, they come with two problems. The first, a large public subsidy. When it ended, as it did in Hong Kong and the State of Georgia, sales plummeted by 100% and 80% respectively. The second problem, high…

When asked how they would spend repatriated earnings that are held abroad, the most popular answer was pay down debt, followed by repurchasing existing shares. Next was getting into mergers and acquisitions, fourth was increasing capital spending and fifth was…

Overhauling NAFTA may be very hard. First, unlike Obamacare, Congress likes NAFTA. Second, as Trump is unpopular in Canada and loathed in Mexico, granting significant concessions to the US may be politically impossible. Third, the concessions Canada and Mexico made…

The Friday File: The shortest scheduled passenger flight is between the Orkney Islands of Westray and Papa Westray. The distance of the flight is 1.7 miles, and with a good tailwind can be flown in under a minute. The cost…

Household debt rose for the 12th straight quarter in 17Q2, and is $12.8 trillion, a record. However, it’s just 67% of GDP, compared to 87% in 08Q3, when household debt last peaked. But, credit card and auto loan delinquencies are…

While retail sales jumped 0.6% in July, and May and June were upwardly revised, don’t conclude that consumer spending, 70% of GDP, is necessarily great. Retail sales including food service sales equal $2.4 trillion/year, 20% of consumer spending. Consumer spending…