Blog Archives

Afghan Realities and Applications to Planning

Taliban Afghanistan

One of the reasons I am such a big fan of Charlie Munger is that he is ruthlessly realistic. He and Warren Buffett believe that the key to Berkshire Hathaway’s incredible success is that they are built for rationality.

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What Is Top of Mind? Housing or Inflation?

Housing Inflation

The answer? See for yourself, is it inflation or housing or both?

If Google Trends are any indication then inflation has been a top-of-mind topic.

Inflation

CPI – Consumer Price Index

This is not surprising as one has to be a survivalist living far away from civilization and fully self-sufficient to have not been impacted by rising prices and slower delivery and service times.

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Hot and Hotter

hot housing market and apartment market

I wanted to return to the subject of housing and share some of the latest graphs related to the single-family and multifamily markets. I’ll start with the single-family sector.

Demand continues to be strong but it has decelerated from the torrid Covid-catalyzed pace of 2020.

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The Cost of Verbosity Amplified by Succinct Graphical Displays of A Strongly Improving Apartment Market

Apartment Market

Mark Twain once said, “I didn’t have time to write you a short letter, so I wrote a long one.”

When writing (and speaking) it’s fairly easy to let the words flow without much regard to precisely communicating. If one gets into a stream of consciousness state it can be helpful for the writer and speaker to release what’s welling up inside but this may not be what’s best for the reader or listener in terms of communicating clearly,

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You Can't Divorce the Observer from the Observed

separating the observed from the observer

I keep focusing my blog posts on economic data via chart representation because we’re in one of those times that needs to be monitored closely for trend reversals (disinflation to inflation) and a change in the Fed’s reaction function (supporting Main Street vs Wall Street).

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Housing - No Bubble but Hitting a Wall?

no bubble housing

Given how hot the housing market is there are understandable concerns as to whether we are in a bubble. Bloomberg Businessweek had a good article addressing some of these concerns that included some interesting charts.

This first one shows how the cumulative appreciation over the last five years has matched that of the bubble years of 2002-7.

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D(ata)-Day

Data D(ata)

I have been turning to charts more regularly for my weekly blog posts than I have in the past. Like most people, I see many of the challenges and price pressures resulting from the massively disrupted global supply chain. It shows up in terribly unreliable contractors (I’m having a pool built so I am experiencing this first hand) and the significant increase in the cost of materials that are leading to the rationing of some goods like plywood and even chlorine.

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Transitioning to Transitory Inflation?

Transitory Inflation

The multi-trillion dollar question is whether inflation is transitory. The Fed and other central bankers believe it is as this chart depicts.

Fed Still Declaring Transitory Inflation Z-Scored Rolling 1-year Average 2000 - 2020

As I’ve written about before, the Fed’s reaction function has switched from a forecasting-based approach to one that is now outcomes-focused in terms of needing to see tangible improvements occurring on Main Street even if it leads to speculation and large rewards on Wall Street.

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A Muddled Approach to Guesstimating Libor's Next Peak

LIBOR Guesstimating Libor's Next Peak

Although I’m in the camp that the Fed will stick to its word and not raise short-term interest rates until after 2023 at the earliest, the market is betting differently. Rather than focusing on when the Fed will start raising rates, let’s assume that they will.

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Stuck Ships and Chips

stuck ships in Suez Canal March 2021

[UPDATE] 3:00 PM Egypt – 6 AM PST the Ever Given was refloated and is on the move again. Credit is given to the full moon bringing the spring higher tides, 14 tug boats, and the 27,000 meters of sand removed. The following was written prior to this news.

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