Archive for January 2018

Oil prices have, somewhat surprisingly, more than doubled since 1/1/16. OPEC and Russia have cut supply by two million bbl/day, random outages and steadily declining Venezuelan production have helped, and geopolitical concerns (Iran) have pushed up prices. The biggest factor, however, is brisk global demand due to faster growth, despite US oil production that will…

Markets are currently pegging the odds of a government shutdown this Friday at midnight at 30%. If there is a shutdown, the average duration of the 11 that have occurred since 1977 is less than 4 days, and the cost to the economy is between $1 billion/day and $1.5 billion/day, with the losses rising the…

While the yield on two-year Treasuries is up due to Fed action, and ten-year Treasuries are up due to small observed rises in inflation readings that are overdue – which markets may be reading too much into – inflation-linked rates aren’t up. This means markets currently expect higher future inflation but not better growth. If…

The Friday file: The six-pack was invented in 1923 by the Coca-Cola company to spur sales. While the first beer company to sell product in six-packs is hotly debated, the plastic six-pack ring currently used was invented in 1960 in St. Louis. Denver-based Declaration Brewing Company brewery made the latest breakthrough; selling its beer in…

After setting records in 2015 and 2016, car sales slipped 1.8% in 2017, the first decline since the recession. One reason, the huge number of three-year old leased cars that are off-lease. The price gap between those vehicles and new ones: $14,200, up from $10,500 in 2010. 12% more cars will come off-lease in 2018…

17Q4 is shaping up to be surprisingly strong, with US GDP growth possibly as high as 3% for the third straight quarter. Employment growth is solid, auto sales are down but still strong, construction spending is good, surveys of manufacturers are profoundly positive, and inflation remains pleasantly subdued. Globally, Europe continues to surprise to the…

In 2017, 1.2 million houses were started. While that’s double the number of starts in 2009, the worst year on record, it’s still 400,000 starts below what’s needed based on population, job growth, and teardowns. This means we’re currently underbuilt by 4,500,000 units, with the gap widening, albeit more slowly now than before. Until the…

While December’s net job growth of 148,000 was slightly disappointing, it’s understandable given the dearth of unemployed workers! To wit, the unemployment rate for African Americans hit 6.8%, its lowest level since record keeping began in 1972, and the rate for Hispanics/Latinos at 4.9% is one-tenth of a point from tying its 2006 all-time low.…

The Friday File: For the first time, a majority of Democrats, 72%, Republicans, 51%, and independents, 67%, support legalizing recreational marijuana. Collectively, 64% of the population backs legalization. As recently as 2004, only 35% of Democrats, 20% of Republicans and 47% of Independents supported legal weed. Support crossed 50% for the first time in 2012.…

Through 12/21/17, President Trump signed 94 bills into law, slightly fewer than the 102 George W. Bush signed, putting Trump in 10th place compared to the nine most recent occupants of 1600 Pennsylvania Avenue whose terms coincided with the start of a congressional session. In 8th is Obama with 118. George H.W. Bush signed 242…