One Currency, No Leaders

The virtue of the gold standard was that countries with trade surpluses saw their gold holdings rise, which increased their money supply, raised prices and reduced exports. Conversely, countries that ran deficits lost gold, which caused their money supply to decline, pushing prices down and boosting exports. Today, euro-using Germany runs chronic surpluses, yet won’t…

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Housing Finance

With the mortgage refinancing wave largely over, mortgage originations will decline considerably in 2013, perhaps by as much as 50%. That said, home equity lines of credit will become increasingly popular as homeowners struggle to extract cash from their homes, yet preserve their 3% 30-year mortgage. Also, if the immigration bill moving through Congress changes…

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Tax Trivia

In 1934, individual income taxes were 14% of tax receipts, today they’re 47%. Similarly, social insurance and retirement receipts were just 1% but are 35% today. By contrast, corporate income taxes were just 12% in 1934, reached a high of 40% in 1943 and are now 10%, while excise taxes have fallen from 46% to…

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Happy April Fool’s Day!

In an effort to lessen the impact of the sequester on federal spending, the Interior Department will be selling corporate sponsorships to national parks. The first trial sponsorships include the Marlboro Great Smokey Mountain National Park in TN, the Skippy George Washington Carver National Monument in MO, the Delta Airlines Tuskegee Airman National Historic Site…

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Construction Employment

Despite a boom in residential construction activity, construction employment growth has remained lackluster and is up just 100,000 from the trough in early 2011. This is because residential building declined by more than residential employment resulting in value added/worker falling from about $80,000/year to about $60,000/year as employers kept their best workers. But with total…

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Building Stock

In another sign of good news for home building, TRI Pointe Homes’ IPO was the sector’s first since 2004. The firm raised $233 million selling 13.7 shares at $17 on 1/31/13. Today’s close, $18.45. And, it looks like Taylor Morrison will soon follow as it’s currently filing papers with the SEC in a deal worth…

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Nobel Chocolate

The Friday File: Flavanols in cocoa slow and even reverse age-related cognitive decline. Better yet, a nations’ annual per-capita chocolate consumption is correlated with the number of Nobel laureates. The country with the most Nobels per-capita and the greatest per-capita chocolate consumption: Switzerland, followed by Sweden and Denmark. The U.S. was in the middle. To…

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Nutty Situation

The Friday File: Skippy Peanut butter, first sold in 1933, has been bought by Hormel Foods of MN from Unilever for $700 million in cash. Skippy, with an 18% market share, is the number two peanut butter brand in the US, sandwiched between Jif (at 34%) and Peter Pan. Skippy had $370 million in sales,…

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Gimmie Growth

June’s trade deficit swelled 18.8% to $49.9 billion, the highest since 10/08 and much worse than economists (what do they know) predicted. If annualized, the June deficit would be almost $600 billion. That data along with recent inventory data suggest Q2 growth will very sluggish; 1.5%-1.7%. While certainly not recession territory, we have an economy…

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How Much Government

Children Bicker, the small minded squabble. When these verbs are used to describe what Boehner, Reid or Obama do it’s implied that they’re arguing about trivia. NOT! They are adults with very different ideas trying to shape public policy as best they can. They argue about vast flows of $ and policies with huge consequences.…

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