• Asset Appraisals

    Through 20Q2, the value of US farmland was $2.6 trillion, and investment grade bonds (BBB rated debt and higher) were valued at $6.4 trillion. That pales compared to Treasury bonds which were worth $19.9 trillion, and US commercial real estate at $20.4 trillion. Equities were almost double that at … [Read More...]

  • Moving Matters

    In 2020, Idaho enjoyed the highest percentage of net migration, with 70% inbound and 30% outbound, a net of 40%. SC followed at 28%, then OR at 26%, AZ and SD at 24%, and AL, FL, NC, and TN at 20%. AR was 10th at 18%. CA at -18%, CT at -26%, IL at -32%, NY at -34% and NJ at -40% struggled most. … [Read More...]

  • Power Problem

    If small changes in price lead to large changes in quantity demanded, think pizza, the item is elastic. Some goods, like gasoline, are inelastic. A change in that price does not alter the amount driven. Some things are infinitely inelastic, like electricity on a freezing day. The price per megawatt … [Read More...]

  • Minimum Money

    Had the current minimum wage of $7.25/hour increased annually by the rate of inflation it would now be $9/hour. Since the minimum wage was adopted in 1938, its inflation-adjusted value peaked in 1968 when it became $1.60/hour, about $12 today. Raising it to $15/hour would lift 900,000 out of … [Read More...]

  • Flying Funds

    The Friday File: Airplanes are not only expensive to buy, each B-2 costs $2 billion, they are also expensive to operate. The same B-2 costs $63 million/year to operate, the B-52 Stratofortress costs $25 million/year, and the B-1B Lancer, $24 million/year. Fighters are a bit cheaper to maintain. The … [Read More...]

Feb
19

Ganga Grazing

The Friday File: While marijuana is increasingly considered harmless, there are unintended consequences. Comparing retail scanner data in counties located in CO, OR, and WA where recreational marijuana is legal to counties where it’s not, sales of high calorie foods like ice cream, cookies and … [Read more...]

Feb
18

Super Spending

January retail sales jumped a smoking 5.3% M-o-M and arrested a surprising three-month decline. This was the biggest increase since June’s 8% rise when the economy was exiting lockdown, and the fourth largest bounce since at least 1992. Spending rose in all categories including bars and restaurants! … [Read more...]

Feb
17

Power Problem

If small changes in price lead to large changes in quantity demanded, think pizza, the item is elastic. Some goods, like gasoline, are inelastic. A change in that price does not alter the amount driven. Some things are infinitely inelastic, like electricity on a freezing day. The price per megawatt … [Read more...]

Feb
16

Labor Largess

Since recordkeeping began in 1939, the 4.3 million net jobs created in 1946, the start of the post-WWII expansion, was tops. However, the recently passed $900 billion Covid-19 relief bill, rising vaccination rates, and now $1.9 trillion stimulus from the Biden administration means 2021 GDP growth of … [Read more...]

Feb
15

Credit Comedown

Total American Express cardholder spending (an admittedly well-heeled group) fell 15% in 20Q4 Y-o-Y, compared to 19% in 20Q3 Y-o-Y, and 34% in 20Q2 Y-o-Y. Travel and entertainment fell 65% in 20Q4 Y-o-Y, an improvement from -69% in 20Q3 Y-o-Y and -87% in 20Q2 Y-o-Y. Non travel-related expenditures … [Read more...]

Feb
12

Happy Hearts

The Friday File: This Valentine’s Day, spending is expected to reach a whopping $27.4 billion, way up from $20.7 billion last year, and $19.6 billion in 2019. Clearly a case of pent-up pandemic demand. The average amount spent is expected to be $196.31, with men averaging $291.15 and women $106.22. … [Read more...]

Feb
11

Increasing Inflation

The combination of the $900 billion support package signed by President Trump in December, the virtual certainty of another $1.9 trillion Democratic aid package, the probability of a large infrastructure/stimulus bill in February, and the Fed’s desire to keep rates artificially low, along with … [Read more...]

Feb
10

Happy Help

The number of help-wanted ads is now 0.7% higher than its pre-pandemic level a year ago. During the worst of the pandemic, the difference was -39%. Relatedly, the number of job openings hit 6.646 million in 12/20, exceeding the 6.552 million in 12/19, also the first time the Y-o-Y difference has … [Read more...]

Feb
09

Minimum Money

Had the current minimum wage of $7.25/hour increased annually by the rate of inflation it would now be $9/hour. Since the minimum wage was adopted in 1938, its inflation-adjusted value peaked in 1968 when it became $1.60/hour, about $12 today. Raising it to $15/hour would lift 900,000 out of … [Read more...]

Feb
08

Working Well

The labor market may, emphasis on “may”, be turning a corner! After deteriorating noticeably in December and early January, the number of workers filing for first-time unemployment claims, a proxy for layoffs, eased for the third straight week to a still staggeringly high 779,000, their best level … [Read more...]