70 Words
May
27

Dwelling Decline

April existing-home sales fell 2.7% M-o-M, to 5.85 million/year, the best April sales rate since 2006. That said, it was the third straight monthly decline. While low rates and remote working still boost demand, a lack of homes, especially at lower price points, vertiginous Y-o-Y price appreciation … [Read more...]

May
26

Limited Lumber

With new lumber mills costing several hundred million dollars each, construction taking two years, consolidation, and demand for lumber very cyclical, don’t expect new supply to much reduce prices. The best that will happen, somewhat improved efficiency at existing mills. Total North American … [Read more...]

May
25

Cryptocurrency Cost

Bitcoin processing consumes staggering amounts of power, and due to slow and expensive transactions, its utility as currency is nil. Moreover, with central banks now focusing on govcoins, cryptos will never displace real currencies. Furthermore, crypto is way too volatile for institutional … [Read more...]

May
24

Interesting Inflation

The US economy is currently experiencing two types of inflation, base-effect and bottleneck. Base-effect inflation is the result of collapsing prices a year ago, during the lockdown. This inflation thus manifests itself in year-over-year inflation measures and will quickly subside. Conversely, … [Read more...]

May
21

Pool Problem

The Friday File: In addition to semiconductor, chicken wing, and lumber shortages, you can add chlorine. When Covid-19 first, hit DIY handwashing solutions often recommended adding chlorine powder. Add to that a surge in the demand for pools, and a fire in a chlorine manufacturing plant, and … [Read more...]

May
20

Post-Pandemic Participation

Compared to 1/1/20, the labor force participation rate (LFRP) for men with youngsters declined 1% during the lockdown; it remains unchanged. For men absent young kids, their LFPR bottomed at -4%, it’s now -2%. For women without youngsters, their LFRP is -1.7%, up from a trough of -3%. However, for … [Read more...]

May
19

Container Conundrum

Only 40% of container ships arrived on time in March, down from 70% pre-pandemic, primarily due to massive backups waiting to unload. Moreover, delivery delays stretch from docks to rail yards. These delays have increased the cost of moving a 40-foot sea container from China to LA 34.5% since 1/1/21 … [Read more...]

May
18

Scary Scenario

Aside of a bad Covid recurrence, here’s how a recession could occur. Due to supply chain problems and labor shortages, consumer prices and wage inflation rise quickly, spooking markets. Powell resists raising rates, but the pressure is too great and he caves. In response, equities, bonds, … [Read more...]

May
17

Infinitesimal Inventories

Traditionally, the retail inventory-to-sales ratio fluctuates between 1.4 and 1.5. In 4/20 it skyrocketed to 1.67 as we were locked down and stopped most purchases. By July, it collapsed to 1.2 as retailers stopped buying. By December, the ratio had partially recovered to 1.28 but has since quickly … [Read more...]

May
14

Happy Homeland

Happy Homeland The Friday File: The USA is the 14th happiest nation on Earth, up from 18th last year and 19th the year before. The Scandinavian nations hold five of the top eight spots, and as a result Europe holds nine of the top ten, with Switzerland, Netherlands, Germany, and Austria being the … [Read more...]