• 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...]

  • Deficit Decline

    While last year’s budget deficit (FY21) was $2.8 trillion, the preliminary estimate of the FY22 deficit, which ended 9/30/22, is $1.4 trillion, a decline of 50%. This total includes $426 billion for student-loan debt relief but excludes income-driven repayment relief, as those plans have not been … [Read More...]

  • Contract Cancellations

    Last month, new home contract cancellations hit 14.5%, their highest level in years outside of 4/20’s Covid-tainted peak of 16.5% and are 30% above their seasonally adjusted pre-Covid rate. Similarly, the percentage of pending-home sales that fell out of contract in June hit 14.9%, their highest … [Read More...]

  • Fuel Foolishness

    Reducing the federal gas and diesel taxes from 18.4 cents/gallon and 24.4 cents/gallon, respectively, to zero for three months, would cost the Treasury $10 billion, and probably not much help consumers. That’s because the slightly lower price would boost demand but won’t boost refining capacity, the … [Read More...]

  • Bear Behavior

    Since the start of the Great Depression, there have been 22 bear markets, defined as a stock market decline of more than 20%. The average duration of those bear markets is 11 months. The median duration is eight months. The shortest bear market was in 2020, just a month; the longest was the dotcom … [Read More...]

Dec
05

Loving Labor

November net job growth was strong at 263,000. While it’s the weakest number this year, signaling a softening market, it’s still way too strong. To wit, M-o-M wage growth rose a very robust 0.6%, the highest rate since 10/21. Moreover, the labor force participation rate has now declined for three … [Read more...]

Dec
02

Simply Soccer

The Friday File: Since the first World Cup in 1930, eight nations have won. Brazil is the only nation to have competed in all 21 World Cups (no competitions were in 1942 and 1946) and has won five. The best U.S. showing, third place in 1930 in Uruguay. Pele has won the most times, three. The … [Read more...]

Dec
01

Stupendous Shipping

Pre-Covid, the container shipping industry earned profits of $1 billion/quarter. With the arrival of Covid, however, profits soared. During 20Q4 they were $10 billion, in 21Q1 they hit $20 billion, by 21Q3 they were $48.1 billion, and in 22Q1, $58.7 billion. The peak, 22Q2 at a mind-blowing $63.7 … [Read more...]

Nov
30

High Housing

Due to rising prices, the maximum size of Fannie Mae and Freddie Mac conforming loans is now $726,200, and in high-cost areas a mind-numbing $1,089,300. If the argument is that this boosts affordability, it’s dead wrong! Raising limits allows more people to qualify for a fixed number of houses, and … [Read more...]

Nov
29

Contractionary Conditions

There are six regional Federal Reserve Bank monthly surveys of economic conditions. They are put out by the Chicago, Dallas, Kansas City, New York, Philadelphia, and Richmond banks. At present all six are in contractionary territory. Since 1969, and before this most recent occurrence, this has … [Read more...]

Nov
28

Chinese Cracks

October retail sales sank by 0.5%, the first decline since May. This is the result of the weak real estate sector, sinking exports, and the weight of China’s bizarre zero-Covid policy. At present Covid cases are breaking records daily, and the number of high-risk cities is almost 180, and represent … [Read more...]

Nov
23

Thanksgiving Thoughts

Despite many economic shocks, I’m thankful that the unemployment rate is near a 50-year low, supply chains are unsnarling, the stock market always recovers from bear markets, interest rates are up, making interest income easier to come by than any time since the Housing Bust, Covid deaths are near … [Read more...]

Nov
22

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...]

Nov
21

Low Layoffs

Initial jobless claims, a proxy for layoffs, fell to 222,000 for the week ending 11/18/22. While that is up significantly from the lows of the spring and fall, the last time first-time claims were lower than they are now in November was 1969! Firms are clearly hoarding workers as they are so hard to … [Read more...]

Nov
18

Soccer Scoring

The Friday File: With the World Cup beginning Sunday, here are my odds of victory for the top nations. Brazil 5/1, Argentina 6/1, France 7/1, England 9/1, Spain 9/1, and Germany at 11/1, and the US at 100/1. As for the tournament’s top goal scorer, Harry Kane of England is my pick at 8/1 followed by … [Read more...]