• Trade Tariffs

    Already announced trade tariffs should reduce GDP by 0.1% at peak impact in mid-2019. If widened to include all proposed tariffs including autos, a 10% tariff on $400 billion of Chinese goods and equivalent retaliation, the temporary maximum hit to GDP would be 0.5% by summer 2019. The worst-case … [Read More...]

  • Jumpin’ Jobs

    Net June job creation was a strong 213,000, and April and May numbers were collectively revised up 37,000! The unemployment rate rose to 4% from 3.8% as the labor force participation rate pleasantly climbed to 62.9% from 62.7%. Wage growth remained quiescent at 2.7% Y-o-Y; 0.2% M-o-M. This is … [Read More...]

  • OPEC Obsolescence

    OPEC appears to be again losing control over oil prices. Oil has been rallying despite promises of higher production from the cartel. Prices are rising due to plummeting Venezuelan production, Iranian sanctions, problems in Libya and other production crises. But the key reason is major producers … [Read More...]

  • Exquisite Equation

    The Friday File: When 14 mathematicians were given fMRI scans of their brains as they viewed 60 mathematical formulas, the formula that generated the most activity in the brain area stimulated by moral, musical and visual beauty was ei pi+1=0, or Euler’s (pronounced oilers) Identity, which magically … [Read More...]

  • More Money

    In 18Q1, US household wealth increased 1% to a record $100.8 trillion, or 6.83 times disposable income, close to the peak of 6.85 set in 17Q4, and well above the pre-recession 2006 peak of 6.50. These steady increases in household wealth since early 2009 are juicing the economy less than in previous … [Read More...]

Jul
19

Mighty Moderation

While June housing starts and permits were disappointing, these data are very volatile, and YTD starts remain up 7.8%; good given the headwinds this sector faces. More interestingly, a key reason the current expansion is now in its tenth year is because housing starts were MIA the first few years of … [Read more...]

Jul
18

FICO Fix

FICO scores are determined as follows: payment history is 35%, prompt is best; amount owed counts for 30%, less is best. Length of credit history is 15%, longer is better.  Credit mix is 10%, varied debt types are superior to one type. Lastly, new credit counts for 10% and applications lower your … [Read more...]

Jul
17

Export Erosion

When tariffs are imposed on imported goods, a big loser is. . . exporters! As we reduce imports from, say, Canada, Canada’s economy and currency weaken, and its’ imports from us decline.  And, if, as desired, the tariff boosts domestic demand for a protected product (think cars), that boosts … [Read more...]

Jul
16

Monetary Melioration

In yet another sign of labor market tightness, the percentage of persons who quit their jobs in May was 2.4%, the highest level since January 2001, and higher than the 2.2% attained during the peak of the Housing Boom. 2.4% translates into 3.56 million people/month quitting their job, or almost 43 … [Read more...]

Jul
13

Illicit Intoxication

The Friday File: In 2013, coca-plant production in Colombia bottomed at 119,000 acres. It’s since skyrocketed to 361,000 acres and Columbia now accounts for 68% of global coca plant production, a new high. Not to be left out, opium-poppy production in Afghanistan is also up from 346,000 acres in … [Read more...]

Jul
12

Pyongyang Pursuits

North Korea has conducted six nuclear tests. While that does not sound like many, only five nations have conducted more such tests since 1945. The US leads the way with 1,032 tests, followed by Russia/USSR with 715, France with 210 and China and the UK with 45 each. The only other countries that are … [Read more...]

Jul
11

Kavanaugh Court

Judge Brett Kavanaugh will, whenever possible, vote to rein in federal agencies and their vast and growing rulemaking authority, absent clear congressional authorization. This includes regulations on housing, net neutrality, global warming, credit card fees, labor laws, and much more. Kavanaugh has … [Read more...]

Jul
10

Trade Tariffs

Already announced trade tariffs should reduce GDP by 0.1% at peak impact in mid-2019. If widened to include all proposed tariffs including autos, a 10% tariff on $400 billion of Chinese goods and equivalent retaliation, the temporary maximum hit to GDP would be 0.5% by summer 2019. The worst-case … [Read more...]

Jul
09

Jumpin’ Jobs

Net June job creation was a strong 213,000, and April and May numbers were collectively revised up 37,000! The unemployment rate rose to 4% from 3.8% as the labor force participation rate pleasantly climbed to 62.9% from 62.7%. Wage growth remained quiescent at 2.7% Y-o-Y; 0.2% M-o-M. This is … [Read more...]

Jul
06

Whopping Walmart

The Friday File: 55 years ago this week, a retailer opened an 18,000 square-foot discount store in Rogers, Arkansas called Wal-Mart, as the proprietor’s name was Sam Walton. Today, there’re 11,718 stores in 28 nations, and Walmart is the world’s largest company by revenue at $486 billion/year. That … [Read more...]