Blog Archives

Running the Numbers to Accept Short-Term Pain for Long-Term Gain

Gary CWS Annual Investor Meeting

Last week we had our annual investor meeting. It was the first time we met in person since 2019. It was so nice to be together again. Despite not communicating the rosiest of messages, it was an evening that had great positive energy.

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Down with Housing

Down with Housing

With the renewed runup in interest rates, I thought it would be appropriate to revisit the homeownership market via a frenzy of charts. Of course, all real estate is local, but these overall trends are pretty powerful, so it would be unusual for most markets to be immune to them.

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Deconstructing Construction Employment

Construction Employment

Give me a word

Give me a sign

Show me where to look

Tell me, what will I find?

What will I find?

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And Yet

And Yet Labor Economy Government Bonds

Last week was pretty important in confirming the trend change in interest rates and solidifying a slowdown in economic activity. Evidence of the economy slowing is reflected in more U.S. firms cutting their earnings guidance versus raising them.

Number of US firms with corporate guidance announcements in 2022

As the above chart shows,

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Turning a Liability into Asset via the Sale of a 100 Year Old House

Starting in 2012, my late wife and I began to invest in residential real estate beyond our primary residence and CWS investments. In 2013 Roneet decided that she wanted to have a small weekend place in Laguna Beach. I thought it was an idea definitely worth exploring,

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From Housing to Labor and Back Again

From Housing to Labor and Back Again

I think this chart is what keeps Jay Powell up at night. If he were convinced beyond a reasonable doubt that we were still in the same low inflation regime that had been present for decades prior to Covid,

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Seeking Shelter from Shelter

CPI 7.7% - shelter housing B

Last Thursday was an incredible day for virtually all markets. That is when the CPI report was released, and inflation came in a bit lighter than expected which in turn lit a fire under the bond and stock markets. The NASDAQ was up by more than 7%,

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Powell's Conundrum: Demand and Supply

Jay Powell Conundrum

In my 35 years working at CWS and the years before that in college, when I first started taking economics classes, the most common term to find the equilibrium to determine optimal price has been “supply and demand.” I have also come to learn that words matter,

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Labor, Housing, and Fed Policy

It’s becoming even more clear that in order to stifle inflation, the Fed is going to have to induce a recession.

The following chart shows that it takes a recession to stamp out inflation or bring it down even more,

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China Syndrome

China Syndrome

The evidence seems to be increasingly persuasive that economic growth is slowing materially. This is from the Economic Cycle Research Institute, which has a good track record of identifying turns in the business cycle. Its Weekly Leading Index is clearly showing a negative growth rate.

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