“$430,000 for THAT?” My colleague, Chris Reilly, nearly spat coffee on his laptop when I showed him the house my mom just sold. It’s the white door on the right: This was the house I grew up in. It gets damp and moldy in the winter. The walls have water damage. The paint is peeling. And it’s tiny—with two rooms upstairs and two rooms downstairs. It measures just 678 sq. ft. It’s not in some swanky Beverly Hills-style neighborhood, either. A few murders take place on the surrounding blocks every year. It’s the type of place where “the Pitbulls go around in pairs,” as my grandad would say. Yet ..read more

According to some business owners and Wall Street pundits, US employers can’t hire enough people because unemployment benefits are too high. We’re paying people not to work, they say. Certainly, some people who could work are milking the system. That’s sad, but is it the only reason all those jobs are unfilled? Probably not. Nonetheless, several governors have decided to end the federally funded enhanced benefits. Instead of the planned September expiration, they will now disappear as soon as next week in some states. If, in fact, benefits are what’s keeping people from working, labor shortage ..read more

According to some analysts, higher inflation is on its way. Americans will spend like crazy and drive prices higher as the pandemic recedes. That’s the theory. It may be right, for a while, but we also have other problems. For one, the pandemic hasn’t ended; it’s simply become optional. Most US adults can now “opt out” by getting vaccinated. The shots, while not perfect, are proving highly effective. Unfortunately, many are opting to stay vulnerable. We also can’t yet vaccinate children under 12. This may be an economically significant problem soon. But even if the virus disappears, we are goi ..read more

New guidance from the Centers for Disease Control and Prevention guidance says the 43% of Americans who are fully vaccinated can safely stop masking most of the time. But the CDC also says masking should continue in healthcare facilities, on planes and other public transport, and in businesses that require them. And masks are still recommended for the unvaccinated population—which (for now) still includes almost all children under age 12. The CDC focuses on keeping the whole population safe. But that’s not the same as keeping individuals safe. A policy can reduce overall risk while simultaneou ..read more

There is an inflationary connection among energy, housing, and wages. Louis Gave, co-founder and CEO of Gavekal Research, recently said that most economic activity is simply transformed energy of one sort or another. Modern economies developed as we found more efficient energy sources, moving from coal to oil to natural gas and nuclear. Now we want to transition from carbon to renewables like solar and wind. This may ultimately bring great benefits, but for now it has produced under-investment in fossil fuel production capacity. Just look at US shale production. It plunged last year and hasn’t ..read more

James Bianco, president of Bianco Research, thinks most of the near-term inflation he foresees will be demand-driven. The fact that a lot of people have a lot of spending money will push prices even higher. At Mauldin Economics' 2021 Strategic Investment Conference, he posed the question: Where did this cash come from? Check out this chart... Source: Bianco Research The blue line shows the percentage of personal income from government transfer payments. This includes Social Security, disability benefits, unemployment insurance, and various other programs. It also includes the three pandemic ..read more

Not all inflation is created equal. Peter Boockvar, CIO at Bleakley Advisory Group, has his finger on the economy’s pulse. And for the last year or so, he’s felt an inflationary heartbeat. Peter, who is the author of The Boock Report, in which he flash-analyzes the latest economic data in handy bite-size multiple emails per day, makes an important distinction between goods inflation and services inflation. At Mauldin Economics' 2021 Strategic Investment Conference in May, Peter explained that they have been behaving differently. Looking at services inflation (ex-energy) within the Consumer Pri ..read more

When it comes to the US jobs situation, the “One of these things is not like the others” song from Sesame Street comes to mind. We have two competing narratives. Official data says millions are unemployed and seeking work. At the same time, businesses say they can’t find enough workers. A skills mismatch between the workers who need jobs and the job openings themselves isn’t unusual. But many of today’s available jobs don’t require advanced education. More Than a Paycheck Another explanation, popular with investors and politicians, is that enhanced unemployment benefits discourage work. Many w ..read more

If you own a home or you're thinking about buying one, I have some bad news. Even after you pay off the mortgage, you still don't own the property. Not fully, anyway. From a philosophical standpoint, you're renting the house from the government. That payment comes due in the form of property taxes. Property taxes are the worst kind of taxes. However… I'm Happy to Pay Another Kind of Tax It isn't income taxes. When you tax people's work and efforts, they want to work less. It's just like taxing their property. You discourage people from wanting to own any. But when you tax sales, you're discour ..read more

Disasters, wars, and pandemics should be times in which everyone works together against the common threat. We’re all in the same boat, so to speak. Except we’re not in the same boat. Some have been able to work at home, have food delivered, and largely avoid the threat. Others—including those who made it possible for the first group to stay safe—remained exposed. The vaccines were supposed to equalize us by protecting everyone. So far, they’re proving very safe and effective, including against the known variants. That was a big concern back in January. Better yet, the latest studies show fully ..read more