Archive for April 2020

First-time mortgage applications have fallen for five straight weeks and Y-o-Y activity is now down a painful 35%. Add to that a 42-point fall in the NAHB Housing Market index for March to 30, the lowest level since 6/12 and the biggest decline in the Index’s 35-year history. With March housing starts down 22%, it’s…

Continued Contraction In 20Q1, GDP probably declined at an annual rate of 5%. In 20Q2, the decline will be an ugly 24%. In 20Q3 GDP grows by 2% and in 20Q4 by a strong 7%. In total, GDP will contract by 5% in 2020. While some see a V-shaped recovery, a U-shaped or a checkmark-shaped…

In Fed Chairman Jay Powell’s press conference last week he put down several critical markers. First, rates are low and will stay low for a long time! Second, the Fed will make purchases as large as necessary to keep markets functioning! Third, he delicately implored the administration to have a thoughtful plan prior to re-opening…

In the first half of FY20, the deficit was $746.6 billion, up 7.6% compared to the same period in FY19; the 8th largest deficit/GDP ratio since 1947. Tax receipts were up 6% to $1.604 trillion, outlays rose by 7% to $2.347. Even in a good economy, the deficit was huge and growing. In FY2020, the…

The Friday File: The biggest cruise ship, the Symphony of the Seas (2018) with gross tonnage of 228,081 and a maximum capacity of 6,680 people. The next largest, the Harmony of the Seas (2016) with gross tonnage of 226,963 and with a capacity of 6,687. In third, Oasis of the Seas at 226,838 but with…

While initial jobless claims for the week ending 4/3/20 hit a stunning 6.6 million persons, and raises to a colossal 16.8 million the number who have lost jobs in the last three weeks, the Fed is offering new lending facilities totaling $2.3 trillion to help households, state and local governments, and small and mid-sized business;…

The profoundly ill-timed oil market price-war between Saudi Arabia and Russia has not only pushed oil prices to twenty-year lows but is also pushing up storage costs. The current elevated production rate combined with depressed demand means storage facilities will run out of space by early August. Unless supply soon dramatically falls, and it will,…

With a new Conronavirus bill possibly working its way through Congress, the key thing it (and the $2.2 trillion CARES act) must do is help workers stay attached to employers, help small businesses stay solvent as they lose income due to social distancing, and help the vulnerable, healthcare workers and state and local governments. No…

In a usual month, about a million jobs are created in the US and about 800,000 are destroyed, with net job growth of +200,000. The reason the March job report looked relatively bad at -700,000, is because there was reasonably normal job destruction in March, but absolutely no hiring! This is because no jobs were…

The Friday File: Girl Scouts sell about 200 million boxes of cookies/year. At $5/box, that’s $1 billion in sales, more than the annual US sales of Oreos, the best-selling US cookie. Thin Mints are the favorite of 24% of Americans. Samoas/Caramel deLites are next at 16%, while Tagalongs/Peanut Butter Patties are third at 10%. The…