Econ70

Fed purchases of Treasuries drives down rates and drives up the price of financial assets like stocks/bonds and real assets like houses. If banks are reluctant to lend, as they currently are, the money the Fed pays the banks for…

To enhance diversity (and cope with Covid-19), many colleges no longer require SAT/ACT scores from applicants. Unfortunately, admission counselors must now rely more on other aspects of applications like essays, which also advantage the wealthy. Even extra-curricular activities are biased.…

In 1/20, prior to Covid-19, annualized US household spending on goods was $4.59 trillion/year. Last month, spending was a staggering $5.45 trillion, up 18.7%. Conversely, during 1/20, annualized spending on services totaled $10.29 trillion, it’s now at its post-pandemic high…

Originally known as Decoration Day, as Americans would decorate graves of Civil War soldiers and celebrated on 5/30, Memorial Day became an official national holiday, and its date was changed to the last Monday in May effective 1971. This year,…

April existing-home sales fell 2.7% M-o-M, to 5.85 million/year, the best April sales rate since 2006. That said, it was the third straight monthly decline. While low rates and remote working still boost demand, a lack of homes, especially at…

With new lumber mills costing several hundred million dollars each, construction taking two years, consolidation, and demand for lumber very cyclical, don’t expect new supply to much reduce prices. The best that will happen, somewhat improved efficiency at existing mills.…

Bitcoin processing consumes staggering amounts of power, and due to slow and expensive transactions, its utility as currency is nil. Moreover, with central banks now focusing on govcoins, cryptos will never displace real currencies. Furthermore, crypto is way too volatile…

The US economy is currently experiencing two types of inflation, base-effect and bottleneck. Base-effect inflation is the result of collapsing prices a year ago, during the lockdown. This inflation thus manifests itself in year-over-year inflation measures and will quickly subside.…

The Friday File: In addition to semiconductor, chicken wing, and lumber shortages, you can add chlorine. When Covid-19 first, hit DIY handwashing solutions often recommended adding chlorine powder. Add to that a surge in the demand for pools, and a…

Compared to 1/1/20, the labor force participation rate (LFRP) for men with youngsters declined 1% during the lockdown; it remains unchanged. For men absent young kids, their LFPR bottomed at -4%, it’s now -2%. For women without youngsters, their LFRP…