Archive for October 2022

The interest rate on the 10-Year Treasury has risen for 11 straight weeks. This is the first time this has happened since at least 1978. Until this recent streak, the longest such run had been nine weeks on just two occasions, once in the 1980s and once during the aughts. Eight weeks rate rises occurred…

The Friday File: Earlier this week, the Chemistry Nobel Prize was awarded to the trio of Carolyn Bertozzi, Morten Meldal, and K. Barry Sharpless for click chemistry and bioorthogonal chemistry, whatever they are. The key, this is Shapless’ second Nobel in chemistry, making him the third dual winner in one field (along with John Bardeen…

August UK GDP declined for the second time in three months. Moreover, service activity also fell in August, and industrial production and manufacturing activity are sinking. Additionally, option bets on further pound weakness are at their most extreme since Brexit and markets have lost confidence in the government. Were it not for repeated massive emergency…

While last year’s budget deficit (FY21) was $2.8 trillion, the preliminary estimate of the FY22 deficit, which ended 9/30/22, is $1.4 trillion, a decline of 50%. This total includes $426 billion for student-loan debt relief but excludes income-driven repayment relief, as those plans have not been finalized. Total receipts were $4.9 trillion, up 21% Y-o-Y,…

House prices peaked in late 1979 and it took 6.5 years for inflation-adjusted prices to recover. They next peaked in mid-1989 and this time it took 11 years. When they topped out again in mid-2005, it took until late 2020, 14.5 years, for prices to regain their pre-Housing Bust peak. Once home prices start falling,…

Employers added 263,000 jobs in September, an unsustainably fast pace. The unemployment rate fell from 3.7% to 3.5%, matching a 50-year low, partly because 57,000 persons dropped out of the labor force, reducing the labor force participation rate from 62.4% to 62.3%. This is a very tight labor market, and the Fed is zero percent…

The Friday File: The singular of agenda in Latin is agendum, just like candelabra, stamina, insignia, and trivia have undergone grammatical change to become singular in English. This fate is (regrettably) befalling data and will eventually befall memoranda and strata. Others Latin words like stadium and ultimatum retain their Latin singular form, but rather than…

To regain control of oil prices that have fallen 33% since mid-June, yesterday OPEC+ announced a 2 million bbl/day production cut. However, OPEC+ is currently underproducing by several million bbl/day. Thus, the cut will probably reduce actual production by about 800,000 bbl/day. In response, President Biden will release 10 million more barrels from the Strategic…

Yesterday, the S&P 500 rose more than 2%, a good day by all measures. That said, this was the 27th time this calendar year that equities have performed this well or better, yet the Index remains down 20% YTD. Do not confuse these bear rallies for a bull market.

Uninsured losses from Hurricane Ian probably total $40-$50 billion including infrastructure damage and cleanup costs. Insured losses are another $65 billion. Lost wages and corporate profits due to closed airports and destroyed facilities probably add another $15-$20 billion in Florida with minimal losses elsewhere. As GDP ignores wealth losses, it will knock 22H2 FL GDP…