What I’m Reading
Parched: The federal government has declared a first-ever shortage on the Colorado River, announcing mandatory water cutbacks next year for Arizona, Nevada and Mexico. The river provides water to 40 million people and California could be impacted by 2024.
This is going to have massive ramifications on growth in the southwest as more building will be curtailed in areas that cannot provide water. At the same time, it will likely drive up the cost of existing housing options in areas that do have a reliable water supply. The Desert Sun
Second Look: For decades now, we have been warned by economists that exploding deficits would result in higher interest rates. In reality, exactly the opposite has happened. When the market response doesn’t fit a widely accepted position, we need to re-examine what is really driving the fixed income market. The answer: its all about aging demographics. Full Stack Economics
Evolution: After years of being scapegoated for destroying department stores, Amazon is planning on opening large brick and mortar retail locations throughout the US. While this will be covered in the business press as Amazon getting into the department store space, I’m not sure that brick and mortar retailing is what is the ecommerce giant is really targeting with this move. Instead, Amazon is most likely looking to use department store-like locations to enhance its last mile delivery network as hybrid facilities.
One of the last true advantages that traditional retailers like Walmart have over Amazon is the ability to leverage well-located retail locations in their logistics network. Its difficult to build warehouses in many well-established neighborhoods but much less so to build retail. Opening more well-located retail locations will allow Amazon to close this gap. Wall Street Journal
Christmas (Possibly) is Cancelled: Massive container ship backlogs may spell trouble when it comes to getting Christmas presents on time this year. The Conversation
Reaching: High net worth investors are buying high risk credit products that banks won’t touch through new products being offered by the likes of Blackstone, Carlyle and Apollo. The desperate search for yield continues, unabated. Bloomberg
Chart of the Day
The Treasury market is pricing in the debt ceiling risk. A technical default could occur in about three months when the US Treasury exhausts its sources of liquidity (if Congress doesn’t raise the limit). Investors demand higher yields on T-bills maturing after that point.
Source: The Daily Shot
WTF
Prudes: Subscription porn site Only Fans is banning…..porn. For context, this would be like the NFL banning football and expecting to stay viable. TAM just dropped to zero, basically. Variety
That’ll Speed Things Up: An “impatient” customer tired of waiting to buy beer pulled a pistol and shot a store clerk multiple times in the groin and legs in North Carolina. (h/t Adam Siegel) Yahoo News
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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