Archive for December 2020

While the amount of global trade depends heavily on tariffs, it also depends mightily on the cost of transporting goods, and specifically that those costs fall faster than domestic production costs do. If both decline by, say 10%, trade levels won’t change much. If trade costs fall faster (due to steam engines and containerization) than…

The most cited manufacturing index, the ISM Manufacturing index, is at 57.5, just slightly below its two year high of 59.3, and consumer spending on goods is 8.4% above its pre-pandemic high. Yet industrial production is 4.9% below its 2/20 level and manufacturing activity is down 4.4%. The only explanation for this anomaly; manufacturers’ customers…

In 2016, Trump/Pence received 62.98 million votes, 46.1% of the total; Clinton/Kaine received 65.85 million, 48.2% of all votes, a 2.1 percentage point differential. This time, Biden/Harris received 81.23 million, Trump/Pence received 74.22 million, a 4.5-point difference. Had Trump/Pence gained 0.7 percentage points more of the popular vote they would have won 269 Electoral College…

The Friday File: The last Civil War veteran to die was Albert Woolson (1850-1956). The last Civil War bride to die was Maude Hopkins (1914-2008), who at 19 married William Cantrell, age 86. The last person to receive a Civil War pension, $73.13/month, was Irene Triplet, who died this past June at 90. Amazingly, her…

Yesterday the Federal Trade Commission and 46 states filed two separate lawsuits against Facebook, and earlier this year the Department of Justice sued Google. It’s about time! While these firms seemingly offer free services, they are anything but. By chocking off any nascent competition, consumers end up with fewer alternatives, less privacy protection, reduced innovation,…

Through 20Q3, GDP is down 3.5% from 19Q4. Assuming GDP grows at a seasonally-adjusted annualized rate of 3.3% in 20Q4, which shouldn’t be tough, GDP will be just 2.7% shy of where it was pre-pandemic. But, by 12/31/20, total nonfarm employment will probably be down by 9.9 million persons or 6.4%. This huge discrepancy is…

Through November, 93.6% of renters living in large, professionally managed market-rate apartment buildings paid their November rent. Last year, the percentage was 95.2%, a 1.6 percentage point decline. In October, the decline was 1.8 percentage points, in September 0.9 points, in August 1.3 points in July 0.9 points and in June just 0.1 points. While…

While November net employment grew for the seventh straight month, it’s been declining for six straight, and from a peak of 3.6 million. Employment grew by 245,000, a number that normally would be lovely. While the unemployment rate fell, it was solely because labor force participation dropped. Given Sars-Cov-2’s resurgence and flagging stimulus (hello Congress?),…

The Friday File: For the first time since 1943, US butter production will top two billion pounds. From 1910-1940 per-capita butter consumption was 18 lbs/year. It then steadily fell to a low of 4.5 lbs/year between 1975-2005. Butter sales collapsed because between 1940-1975 margarine sales rose from 2 lbs/year to 11.5 lbs/year. Since then, butter…

In the weeks since the first vaccine announcement, the stock market has rallied, but not Treasuries; the 30-year is lower today than a month ago. Why? With limited fiscal stimulus, if any, coming from D.C., the need is for more monetary stimulus. That means lower rates due to deliberate Fed buying of long-dated Treasuries becomes…