Asking important questions..........

 

How Much Has the U.S. Government Borrowed to Pay Back What It Owes Itself?

-deficits matter if you plan on living past 2033

Interesting................

 

..............Us boomers are now outnumbered by our kids.  Back story is here.

a long-term holding.............

     Our problem is that we're ticker watchers of our own lives.  Happiness (however we individually define it) is not best measured by looking at the ticker, zooming in and magnifying moment-by-moment or day-by-day movements.  We would be better off thinking about our happiness as a long-term stock holding.  We would do well to view our happiness through a wide-angle lens, striving for a long, sustained upward trend in our happiness stock, so it resembles the first Berkshire Hathaway chart.

-Annie Duke, Thinking in Bets:  Making Smarter Decisions When You Don't Have All the Facts

About the housing affordability problem.......

 

............................there are two main culprits.   The first is the huge swath of the local building companies that could not survive the Great Recession.  Since we decided several decades ago that every high school graduate needed to go to college, there was no back filling in the building trades.  No local builders building equals a shortage of supply.   The second is the following chart.  Don't let anyone tell you differently, very low interest rates are inflationary for the single-family housing markets.  Since buyers tend to pay based on their monthly payment, low interest rates enable buyers to borrow more, thus pay more, which is a great boon to sellers.   Very low interest rates combined with limited supply quickly allowed the sharp increase in home values.  Voila—an affordability "crisis".

chart courtesy of this post

From your lips...................

 

Our national debt is just shy of 100% of GDP ($31 trillion), but we are not on the brink of a fiscal abyss. On the contrary, it is not unreasonable to think that Congress can manage some degree of spending control, and it is not the case that the economy faces a crushing burden of debt in any event, as Chart #13 shows. The true burden of debt is not the size of our national debt, but the cost of servicing that debt as a percent of our national income. Today that burden is significantly less than it was during the 1980s, mainly because interest rates are far lower than they were back then. If Congress exercises even modest restraint and the Fed doesn't have to raise interest rates (which they won't have to if inflation remains under control), then we can gradually reduce our deficits and the burden of our debt

All things considered, things don't look so bad at all!

-Calafia Beach Pundit, from this chart-filled post

In praise (sort of) of........................

 

...............................us baby boomers:

It’s also true that Father Time is undefeated.

Interesting...................

 

via

Baby boomers aging...........................?

 

via

I have no regrets.......................

 

..................................about being a History major in college (of course 1973 was a long time ago).

In case I needed it.....................

 ...........................more proof I'm getting old.  Younger investors and real estate agents are bemoaning the "high" current mortgage rates.  For half of our career, we would have been thrilled with this sort of rate:

A little context:

What happens when information................

 .........................is widely available:

More information led to a more functional market for both suppliers and consumers. Profits increased and consumers experienced far less volatility in the price of the fish they were eating. Plus there were fewer fish going to waste.

A good question................

 Our friend Ben Carlson opines on, Why Higher Interest Rates Haven’t Mattered (Yet).  Included with this post is this handy pie chart:

The proposition is that the overwhelming majority of home borrowers have locked in very low rates and are unaffected by the recent rate increases.

It is hard to disagree with that, but we're pretty sure it doesn't tell the whole story.  Most commercial and investment loans are variable rate mortgages.  Typically, they are fixed for a three- or five-year period, then they adjust to reflect the current market conditions.  We believe that there is a bit of turmoil ahead as those loans adjust over the next year or so.  As an example, we recently had a five-year adjustable-rate mortgage adjust from 3.75% to 8.25%.  Yeow.  Fortunately for us, we were able to pay the loan off.  Not all borrowers we be as fortunate.  Stay tuned.

This chart measures.................

 .........the growth of interest payments on the U. S. debt.  Hang on.  It will be an interesting ride.

I'm sure this makes sense...............

 Let's hope this continues; let's hope the Fed doesn't feel compelled to squeeze the economy just because inflation is a little higher than they would like to see. The truth is that on the margin, inflation pressures are receding (and by some measures inflation is already back down to 2%—see Chart #1 in this post) and the best way to keep inflation low is to allow the economy to continue to grow while keeping interest rates high enough to keep the demand for money from plunging. A greater supply of goods and services, after all, will help absorb any extra money that is still sloshing around. 

-via the Calafia Beach Pundit

Staying calm is a super power............

 Think about all the bad news, economic or otherwise, of the past twenty-two years that might have caused you to stop investing, or to pull your money out of the market.  Just as a reminder: the Dow was 10,540 at the end of January, 2000.  It is 32,134 today.   For a more readable copy of the chart, go here.

Home sales go oops...............................

 

explanation and enlargeable graph here

Supply and demand.................

 

The construction business is trying its hardest to catch up to the demand for housing.  In our market, anyway, most of the existing available building lots are either under contract or have recently sold.  Faithful readers may remember we had a whole passel of wondrous, wooded building lots available - seemed like for years.  Thankfully, over the past twelve months, almost all of them have sold.

charts may be found here

Fun with statistics.................

That vertical line at the end of the chart represents the money supply - a 450% increase.  Scary? Inflationary?  Maybe, but not so fast.  Morgan Housel weighs in with some context:

Money supply has increased from $4 trillion a year ago to $18 trillion today.

A 450% increase!

That’s something you might see in a third-world country with hyperinflation.

But before you dump life savings into gold and build a bunker, here’s the punchline: The huge majority of the increase you’re seeing in this chart is not money printing or new money creation.

It’s an accounting rule change. . . .

Of the $14 trillion increase in M1, $11.2 trillion (80%) came from an accounting rule change that shifted money from savings accounts to checking accounts.

There was a time in my life (1975-6)..............

 ...............when I thought I wanted to be a journalist.  Once given the opportunity, however, I found I didn't want it as much as I thought.  Anyway, this chart may be of interest:

         more fun here

Guilty, Your Honor.................................

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