• Debt Dynamic

    While Friday’s Treasury announcement that the debt limit will be breached on 1/19/23 is concerning, the Treasury will again employ “extraordinary measures” to keep the government functioning through early June. If the ceiling isn’t raised by then, watch out. With the House in Republican hands and … [Read More...]

  • Rent Reversal

    After climbing 2%/month in spring and summer 2021, and 1.5%/month in spring and summer 2022, in 9/22 M-o-M rents began falling. Since 10/22, all major rent indices have shown M-o-M rents falling, with the declines increasing and by well more than seasonal norms. In 11/22 national rents declined by … [Read More...]

  • Petroleum Profits

    While releases from the Strategic Petroleum Reserve totaling 180 million barrels will soon end, the benefits may not. The releases, intended to lower pump prices and which came under political pressure, were sold for an average price of $96.25/bbl. With crude prices now $74.29bbl, the U.S. is up … [Read More...]

  • Soccer Score

    Looking at all World Cup winners from 1962 through 2018, economic analysis suggests winning the WC boosts domestic GDP by at least 0.25% in the two subsequent quarters primarily due to export growth. For example, 1.12 billion people watched the 2018 WC final and that increased exposure boosted … [Read More...]

  • First-Time Financing

    With mortgage rates dipping last week by 24bps to 6.9%, the largest decline since July 2022, and home prices trending down since peaking in June, first-time mortgage applications spiked a pleasant 4.4% W-o-W for the week ending 11/11/22. Still, they remain down 39.9% Y-o-Y. As for refinancing, … [Read More...]


Ethics Estimates

The Friday File: The most ethical and honest profession is nursing. 29% of American consider them to be very highly honest and ethical and 50% consider them highly ethical and honest. Doctors follow at 17% and 45%, and pharmacists at 14% and 44%. At the other end, telemarketers are the worst at 1% … [Read more...]


Powell Pressers

After every scheduled Fed meeting to make potential changes to the Fed funds rate, a press release is provided. 30 minutes later there’s a presser. When Bernanke and Yellen were Fed heads, markets responded identically to the press release and the presser. It was that way for Powell pre-Covid. Since … [Read more...]


Fed Finale

In a move largely anticipated, today the Fed boosted the Fed funds rate by 25bps, and strongly implied that the peak rate is no more than 25bps away, suggesting maybe one more hike. However, in a nod to current conditions the Fed removed the phrase “ongoing increases in the target rate” and replaced … [Read more...]


Market Moves

In the rush to safety during the week preceding the Credit Suisse failure, the biggest gainers among commodities included silver, up almost 10%, and gold, up about 6%. The biggest decliners were crude oil, down over 10%, gasoline, down about 6%, and copper, down almost 4%. Bitcoin was a huge gainer, … [Read more...]


Monetary Moves

The Fed raises the Fed funds rate to tighten both financial conditions and lending standards. They in turn result in reduced lending and investment, which leads to slowing economic activity, and usually a recession. Since the SVB debacle, financial conditions and lending standards have quickly … [Read more...]


Indelibly Irish

The Friday File: 61% of Americans plan to celebrate St. Patrick’s Day and in the process collectively spend $6.9 billion. The previous record was $6.2 set in 2020. And it’s no wonder, 1 in 10 Americans can claim Irish heritage making it the country’s second-largest ethnic group. While Ireland has a … [Read more...]


De-inversion Drama

Ten days ago the 2-year 10-year yield curve was deeply inverted. Today the inversion is less than half what it was. The long end has fallen by half a point while the short end has fallen by over a point. Should the yield curve de-invert, watch out. Historically, from the day the yield curve is no … [Read more...]


Intractable Inflation

February CPI rose 0.4%, down from 0.5% in January, and is up 6% Y-o-Y, down from 6.4% last month. However, core CPI rose 0.5% in February, up from 0.4% in January and is up 5.5% Y-o-Y, barely down from 5.6% last month. Worse, core services CPI, the Fed’s favorite measure, is up M-o-M for the second … [Read more...]


Deposit Dollars

While distasteful, the Fed/Treasury/FDIC troika had no choice but to protect all bank deposits even in accounts with balances exceeding the $250,000 insured threshold. Absent that guarantee, depositors with holdings exceeding $250,000 would have raced to withdraw their excess monies, causing bank … [Read more...]


Bad Banks

While the failures of Silvergate and Signature are purely crypto related and meaningless, there are two lessons to be learned from the failure of SVB. First, major risks to the financial system can come from non-money-center banks, and second, borrowing short (by holding customer deposits) to lend … [Read more...]