Archive for September 2020

Taxes paid to state and local governments are currently deductible up to a maximum of $10,000/year. There is now talk of eliminating the cap. Why? 96% of the benefits of repeal would go to the top 20% of income earners, reducing their taxes by $2,640/year, 57% of benefits would benefit the top 1%, a tax…

While the CPI rose by 1.3% Y-o-Y and core CPI, which strips out volatile food and energy, is up 1.7% Y-o-Y, their highest levels since Sars-Cov-2 arrived, inflation will not be a concern for years. Inventory shortages, which have been a meaningful contributor will soon dissipate, and high unemployment, weak demand, and excess industrial capacity…

In 7/20, 52% or 26.6 million adults ages 18-29 lived with at least one parent, up from 47% or 24 million in 2/20. This is the highest percentage since at least 1940 when it was 48%. This percentage bottomed at 29% in 1960 and has steadily risen since. Importantly, unmarried college students living in college…

The Friday File: In 20Q2, liquor imports totaled $1.8 billion, down from $2.5 billion in 19Q2. The decline has been severe for whisky and cognac/brandy; vodka and gin sales haven’t budged. With bars/restaurants closed, demand for high-end cocktail hooch is on ice. Trump’s tariffs imposed on European spirits in late 2019 also hurt. Vodka and…

In 2013, Exxon’s market capitalization was $415 billion, and it was the most valuable firm in the world. Today, it’s worth $180 billion. In 2008, energy comprised 13.3% of the S&P 500, today, it’s 2.5%. Recently, the Dow Jones Industrial Average bid adieu to Exxon, the longest tenured firm in the index dating back to…

Despite new auto sales being down but rebounding nicely, car prices are regularly setting price records. In August, the average new vehicle went for $35,420, up 6.1% Y-o-Y. The combination of limited inventory, cheap money, longer-term auto loans, inexpensive gas, and a desire to avoid public transit, is fueling demand. Regrettably, younger buyers are literally…

August’s employment report was strong. 1.4 million new jobs, a higher labor force participation rate, and a decline in the unemployment rate to 8.4% from 10.2%! Ignoring the hiring of 238,000 temporary Census workers, job growth is still down from 4.8 million in June, 1.7 in July. Permanent job losses are rising, and even at…

The Friday File: This Labor Day 67% of us will grill, 36% will watch a movie, 35% will enjoy quiet time, 27% will do an outdoor activity, 26% will attend a party, and 23% will go shopping. In the Before Days, we went to ball games, music & food festivals, county fairs, block and pool…

Prior to the Housing Bust, the US Debt-to-GDP ratio was 35%, and prior to Sars-Cov-2 the ratio was 82%. By the end of 20Q2, it was 105.5% of GDP, a staggering rise resulting from $2.8 trillion in new spending and a decline in GDP of 9%. The last time the ratio was this high –…

After making $2.8 billion in airline ticket change fees in 2019, 15% of all revenue, the three legacy carriers have largely eliminated them (until they reimpose them). Carriers are desperate to encourage air travel, as the airline recovery stalled in early July. Worse, while cheap vacation travel has somewhat recovered, high-priced business travelers, who paid…