• Excellent Energy

    In an amazing turn of events, the US petroleum trade deficit in 11/18, the latest month for which we have data, was just $625 million. As recently as mid-2008 it was a record-high $40 billion/month. What happened? Lower oil prices, down from almost $150/bbl to just $53/bbl, and the fracking … [Read More...]

  • Dwelling Deficiency

    With San Francisco Bay Area housing prices in the stratosphere, the private sector is now planning to raise $500 million for affordable housing. Assuming affordable housing costs $400,000/unit, this will create just 1,250 units! The real problem: since 2010 the region has gained 700,000 jobs and … [Read More...]

  • Matrimonial Money

    While wages of men and women with at least a HS diploma are similar early in life, they diverge dramatically with age. The gap peaks at about age 50 with men earning about $76,000/year and women earning about $49,000/year. However, at all ages there is no gap between single women, single men and … [Read More...]

  • Petrol Prices

    As recently as 2010, cheap oil was great for the US as oil production was low. However, due to fracking, US production has doubled since 2010 to 11.6 million bbl/day. Lower prices reduce corporate investment which leads to reduced employment. But due to productivity gains, oil field expenditures … [Read More...]

  • Energy Exporter

    For the week ending 11/30/18, the US exported 3.2 million barrels/day of crude oil and 5.8 million barrels/day of gasoline, refined products. Those 9 million barrels/day of exports exceeded the 8.8 million barrels/day of imports, making the US a net oil exporter for the first time in decades! US oil … [Read More...]

Feb
01

Football Foretelling

The Friday File: With a prediction rate of 77%, or 40 for 52, a level any economist would be proud of, the Super Bowl Predictor is not to be ignored, despite having no intellectual validity and having been wrong three years running. The SBP states that if an original NFL team or an NFC team wins the … [Read more...]

Jan
31

Rate Reverse

Yesterday, in a surprise, the Fed strongly suggested it won’t raise rates for a while and that more hikes might be history. Autos and especially housing will be large beneficiaries. What’s troubling is that the Fed is calling timeout with Fed funds a half-point above the rate of inflation, compared … [Read more...]

Jan
30

Very Valuable

Since 1926, only 11 companies have ranked #1 by market capitalization; Amazon is the latest. Firms that become #1 remain in that position for an average of about 15 months and outperform the market by an average of 48 percentage points over the five years leading up to becoming #1. The other ten … [Read more...]

Jan
29

Dwelling Deficiency

With San Francisco Bay Area housing prices in the stratosphere, the private sector is now planning to raise $500 million for affordable housing. Assuming affordable housing costs $400,000/unit, this will create just 1,250 units! The real problem: since 2010 the region has gained 700,000 jobs and … [Read more...]

Jan
28

Nanoscopic Number

For the week ending 1/19/19, first-time claims through state programs for unemployment fell to 199,000, the lowest level since 11/15/1969! Moreover, first-time claims have been below 300,000, a level associated with strong job growth, since 3/21/15, or 200 straight weeks, the best streak since … [Read more...]

Jan
25

Spendy Spices

The Friday File: The priciest spice in the world is saffron at $5,000/lb. It takes 50,000 to 75,000 flowers to get one pound of saffron, with the best coming from Kashmir and Iran. A distant second is vanilla, which primarily comes from Madagascar and costs $600/lb. It’s so costly because the … [Read more...]

Jan
24

Declining Dwellings

December existing home sales came in at rate of just 4.99 million, the lowest since 11/15. Sales are down 10.3% Y-o-Y, 6.4% M-o-M, and the median price increased just 2.9% Y-o-Y, the weakest since 2/12, to $253,600. CY2018 sales were 5.34 million, versus 5.51 million in 2017 and the 2016 cyclical … [Read more...]

Jan
23

Closure Cost

According to Trump’s Chairman of the Council of Economic Advisors, the government closure is knocking 0.13 of a point/week off GDP, not 0.05%/week as previously assumed. If the closure last through March, and that’s a big if, 19Q1 GDP growth would fall by 1.7 percentage points, reducing 19Q1 growth … [Read more...]

Jan
22

Earning Excellence

Despite volatile equities, slowing global growth, a stronger dollar, trade disputes, and rising wages, corporate earnings look good. While 18Q4 earnings growth estimates have fallen from 20.1% to 14% over the past four months, the current ratio of negative to positive preannouncements is very low, … [Read more...]

Jan
21

Beijing Bargaining

Chinese exports to the US fell 3.5% Y-o-Y in December, while global Chinese exports declined 4.4% Y-o-Y in December. Worse, imports fell 7.6% Y-o-Y in December, suggesting domestic Chinese demand is skidding. In another sign of a Chinese slowdown, the official purchasing managers’ index for … [Read more...]