When the latest CPI number came in hot at 0.4% for March and the annual core CPI inflation rate held at 3.8%, Betsey Stevenson, professor of economics at the University of Michigan appearing on CNBC’s Squawk Box said nonchalantly “Three percent inflation is no big deal.” The comment got a rise out of co-host Becky Quick who reminded the professor that the three percent was adding on to the already higher prices consumers continue to suffer with. To Ms. Quick’s point, the latest Grant’s Interest Rate Observer cites once-upon-a-time Fed Chair William McChesney Martin who said (approximately) “the purchasing power lost to inflation is never regained.” Grant’s cites a paper entitled “The Cost of Money Is Part of the Cost of Living: New Evidence on the Consumer

Day-to-day we don’t hear much about the commercial office property crash. As The Fed’s Michael Barr said at an event hosted by the National Community Reinvestment Coalition in Washington, “This is the kind of thing where it’s likely to be a very slow-moving train as the financial sector and commercial real estate market move forward,” he said, adding that refinancing deals will play out in the next few years. “It’ll take some time.”Barr, the vice chair for supervision said “There are pockets of risks in the system. We’re looking at things like, what’s the level of unrealized losses on the balance sheet from securities? We’re looking at banks that have particular kinds of concentration in commercial real estate.” Wolf Richter at wolfstreet.com, citing Trepp,

Yeah, the other night I laid sleeping And I woke from a terrible dream So I caught up my pal Jack Daniel’s And his partner Jimmy Beam And we drank alone, yeah With nobody else Yeah, you know when I drink alone I prefer to be by myself ~George ThorogoodI poured hundreds of “Jack and Cokes” when I tended bar from the late 70’s to mid 80’s. It was beyond me how anyone could tell the difference between Jack Daniels Old No. 7 and anything else when mixed with coke or whatever carbonated cola was coming out of the gun. Turns out Dr. Fauci and the Center for Disease Control did Brown-Forman, the makers of Jack, a solid by shutting down America and cooping everyone up. More than some whiled away the hours with their old pal Jack Daniels. People may have had to work from

Followers of the Austrian school of economics know that the term inflation refers to increasing the quantity of money or money substitutes. The result being a rise in the price of goods and services or a fall in the value of money. But, in the modern era, this rise in prices is called inflation and as Ludwig von Mises wrote, “This semantic innovation is by no means harmless.” The semantic change has people looking everywhere but where they should to blame for higher prices.Bloomberg’s Enda Curran writes, “A prolonged period of elevated inflation has left consumers cranky and eager to cast blame.” With the term inflation evidently getting tiresome, Curren lists some new price increase buzzwords and phrases.“Shrinkflation” This is the President’s favorite. He even

For lower income folks the landing is already hard. Chief investment strategist at Charles Schwab Liz Ann Sonders posted on X (and reported by Almost Daily Grant’s) that the tally of domestic temporary help employees slipped to a three-plus-year low of 2.748 million down from 3.181 million as of March 2022. The 14% comes in 4th in the category’s downward drops percentage-wise since 1990; to the early 2000s, the 2008 financial crash and the Covid debacle, each coinciding with a recession. Outplacement firm Challenger, Gray & Christmas reports nationwide layoffs totaled 84,638 last month, the largest February sum since 2009. The Federal Reserve Bank of New York’s Survey of Consumer Expectations for February finds that respondents give themselves a 14.5% chance of

One would guess the folly of rent control regulations needn’t be explained any further. If rents are held in place by government edict, landlords have no incentive to maintain apartment units to attract renters, the housing stock ultimately deteriorates, and homelessness increases. But, as Bloomberg reports, “Tougher rent control, returning worldwide, destroys $75 billion in property value. Cash-strapped tenants cheer as they maintain a foothold in the city.”That was the article’s subtitle. The title of the piece authored by Patrick Clark and Prashant Gopal screams that New York City apartment values have been cut in half. In 2019, alarmed about the decline in affordable housing, New York State lawmakers made rent control laws tougher. They sharply reduced how

Something’s rotten under the Las Vegas Convention Center and it turns out it’s a chemical sludge with the “consistency of a milkshake,” reports Bloomberg Businessweek. This sludge is a byproduct of Elon Musk’s Boring Company tunneling from the Las Vegas Convention Center to the Encore and Westgate hotels. These tunnels don’t feature rapid transit but instead individual Teslas ferrying carloads of convention goers at just 40 mph. Workers are being burned by the sludge and the Nevada’s Occupational Safety and Health Administration (OSHA) is investigating. Bloomberg Businessweek obtained a copy of the report under the Freedom of Information Act.Leaving aside the worker safety issue, Musk has been, shall we say, aspirational about the Boring Company’s prospects for

Tu ne cede malis, sed contra audentior ito

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The number of U.S. commercial foreclosures spiked to 635 in January 2024 from a low of 141 in May 2020 reports real estate data firm ATTOM. The January count was up 17% from the previous month and roughly twice as many as in January 2023. “Commercial property deals in the US are picking back up at deep discounts—and forcing lenders to face just how far real estate prices have fallen,” notes Sarah Holder on Bloomberg’s “Big Take” podcast.Bloomberg commercial real estate reporter Natalie Wong detailed a New York office building at 1740 Broadway purchased and renovated by Blackstone at considerable cost and the company has walked away with the debt that’s behind that building being marketed at a 50% discount. Ms. Wong said,So you’re seeing these massive discounts on

Prices will always increase, some small banks will fail, and the Fed was asleep at the switch when the run on Silicon Valley Bank occurred. Fed chair Jerome Powell admitted those three things in response to Scott Pelley’s questions on 60 Minutes.
“But the overall price level doesn’t come down. It will fluctuate. And some . . . goods and services will go up, others will go down. But overall, in aggregate, the price level doesn’t tend to go down except in fairly extreme circumstances,” Powell said.
Of course, what Powell is referring to doesn’t exist. Murray Rothbard wrote,
There is no such thing as a single, scientific index of the movement of general prices. All such indexes are strictly arbitrary, and there are a huge number of possible indexes, all of which

The wordsmiths at the Federal Reserve wisely omitted the line about a “sound and resilient” banking system in its statement on January 31. That same day shares of New York Community Bank plunged when the bank announced a loss of thirty-six cents per share when analysts expected earnings of twenty-seven cents a share for the fourth quarter.
Internal or external auditors occasionally comb through individual loans in a bank’s portfolio and make judgments as to whether those loans are worth what the bank says they are worth due to lower appraised values and other issues either particular to an individual property or the market as a whole. Bankers then, begrudgingly, set aside earnings for potential loan losses.
In the case of the real estate loans at New York