Housing Affordability Down, Inventory Up

For those believing this is the pause that refreshes, James Stack thinks otherwise. “Housing could be heading for its worst year since the last housing crash," Stack, 67, said told Bloomberg in a phone interview. “Expect home sales to continue on a downward trend in the next 12-plus months. And there’s a significant downside risk to housing prices if a recession takes hold.”

End This “Expansion” Now Chairman Powell!

The central bank creates expansions and then murders its darlings, to borrow a phrase.  Austrian economists say booms are the problem, with low interest rates breathing life into ill-conceived ventures and, once hatched, keep them from death’s door, wasting capital to the detriment of society.  Recessions and depressions cleanse the economy of these malinvestments, re-aligning production with society’s collective time-preference.

Trump's Gut Feeling

The fact is, our bodies react to news and risks quicker than our brains do. Conscious thought is left in the dust when we react and especially when we take risks. Of course neoclassical economists would poo-poo the notion of our bodies reacting to threats and risks, after all, we’re all rational beings, doing what’s rational at all times. Yeah, right.  

The Old Fashioned Fed Chair

Trump would like Volcker’s height, 6 foot 7 inches, as opposed to Janet Yellen, who was fired for her lack of it, at 5 foot 3 inches.  However, while Trump has his eye on the stock market, Volcker always kept his on the price of gold. The ex-Fed Chair mentions the yellow metal often in “Keeping at It: The Quest for Sound Money and Good Government.”   

Less Fed, Less Bubble

We often hear that rich are getting richer and everyone else is being left behind.  However, it is only the Austrians who point to the Fed’s policies as creating this great divide in wealth and incomes.  

Tariff Man Breaks Windows

Boehm points out that the 300 hundred jobs came to life after “American companies have paid about $690 million in tariffs to the federal government.”  That works out to $2.3 million per job we know about or $300,000 per possible job.

The Trouble with CoCo

CoCos are similar to trust preferred debt that community banks in the U.S. stuffed balance sheets with in the early 2000s.  While trust preferred was debt, the terms were so liberal, banking regulators allowed banks to count the debt as equity.

Golf Goes the way of Wrestling

Golf is game that is dying with the Greatest Generation and Baby Boomers.  Golf peaked even before 2009 when Woods wrapped his SUV around a tree, escaped then wife Elin’s attempt to take a divot out of the 14-time major champion.  

Irrational Apartment Exuberance

Those “high rents” I referred to are now commonplace around the Las Vegas valley.  I toured a project recently, located far from the strip, but with all the bells-and-whistles the Lotus has, and the owner told me he is earning $1.80/sf a month.  He told me his project wasn’t for sale. We’ll see.

Dicey Bloated Government

This time, Lewis manages to find diligent, creative federal government employees (he had two million to choose from) to tell the story of Trump’s transition, or lack thereof. The thesis is, we are all at risk due to the President’s neglect. Legions of earnest federal workers were ready to smoothly hand over the monstrosity that is the federal government, and, well, no one showed up.

The NFL: Land of the Caligulas

It is “the Membership,” who are the “puffed-up billionaires who own the store,” writes Leibovich.  “These are the freaks, the club that Trump couldn’t crack.” On the next page, the author refers to the Membership as “bespoke Caligulas.”  He goes on about how much TV time the owners receive as “presiding plutocrats.”