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The Banking Crisis May Not Be Over
Interestingly, the Fed removed the following statement from Wednesday’d FOMC statement: “The U.S. banking system is sound and resilient.” We bring that up because New York Community Bank (NYCB) fell over 40% earlier that day. Therefore, we must ask- are the banking problems from last year resolved, or is the Fed worried? NYCB reported a […]
Feb 2, 2024
The Taylor Swift Gold Rush
“Call it a gold rush” started a Washington Post article, The Economy (Taylor’s Version), detailing the amount of money Taylor Swift’s tour is making for herself and how much economic activity it generates. For starters, the article estimates that Taylor Swift will personally rake in over $4 billion from her Eras Tour. The following statistics […]
Feb 1, 2024
The Treasury Has Plenty Of Flexibility, Despite The Warnings
Bond bears have warned that the Treasury will overwhelm the market with debt, pushing yields much higher. For more on why we disagree with the narrative, check out our article, Context and Facts. The Treasury is keenly aware of the narrative and worried that such a mindset could significantly increase their borrowing costs. The Treasury […]
Jan 31, 2024
The ASA Staffing Index
We believe that the clearest sign of a coming recession is weakness in the labor markets. Thus far, we haven’t seen anything overly concerning in employment data. Hence, to help us assess the labor markets, we follow many government and private employment gauges. The ASA Staffing Index was recently brought to our attention. A reader […]
Jan 30, 2024
As Goes Rent Goes Inflation
On a few occasions, we have shared data on the differences between real-time rent inflation versus the rental price index used in CPI. In a nutshell, almost all private sector rent indexes are flat to slightly lower. However, the CPI rent index is growing by 0.4% monthly, or nearly 5% annualized. In a telling article, […]
Jan 29, 2024
Is Another Price Wage Spiral Like The 1970s Likely?
We recently published Part Two of a series comparing inflation in the 1970s to today. Part Two discusses the price wage spiral that helped fuel higher prices in the 1970s. To wit- “In the 1970s, workers demanded higher wages to offset the rising cost of living. Simultaneously, business owners, having to pay higher salaries, responded […]
Jan 26, 2024
Profit Margins Are Normalizing
Since peaking in the first quarter of 2022, the net profit margin on the S&P 500 has generally trended lower. During the pandemic, many companies could increase prices more than their rising input costs and improve their profit margins. Strong demand due to pent-up savings and fiscal stimulus also helped. However, with inflation normalizing and […]
Jan 25, 2024
Unemployment Claims May Not Be As Low As You Think
Last week’s initial unemployment claims were 187,000. Since 1967, there have only been 21 weekly instances of a total of 2,976 times in which unemployment claims were lower than the current reading. The low number of unemployment claims indicates a robust job market. Is it? In recent years, there is a new factor to consider. […]
Jan 24, 2024
Is Trueflation A Better Gauge Of Inflation?
We have frequently lamented the CPI index as its underlying prices tend to lag real-time data significantly and cause it to misrepresent what is happening. For instance, shelter costs, representing about 40% of CPI, lag real rent and imputed rent prices by over six months. Further, energy costs lag by three months. Additionally, the BLS […]
Jan 23, 2024
Bitcoin ETF – Buy The Rumor, Sell The Fact
The price of Bitcoin rose over 10% in the first two weeks of 2024, peaking on January 11th. Driving the performance were rumors that the SEC would finally approve Bitcoin ETFs. On January 10th, they approved 11 Bitcoin ETFs. Spot Bitcoin backs these ETFs. Such means that each new share of the ETF is directly […]
Jan 22, 2024
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