What I’m Reading
Pancaked: The yield curve has been flattening quickly with short rates rising and long rates falling. This could leave the Fed in a bind as the yield curve trajectory suggests that it could be inverted before a hiking cycle ever begins. All Star Charts Interesting to note that this is happening just as the Fed tweaks its messaging on inflation to be more hawkish. Also recall that long rates historically have fallen once tapering commences and its happening again this time, despite elevated inflation readings and a lot of other noise.
Here to Stay: The record volume currently being experienced at west coast ports will become the “new normal” if consumption stays elevated. Ajot IMO, volume will remain elevated until the next major consumption inflection point where people switch back to consuming experiences over goods.
Zoom Out: A decline in ships waiting just offshore of Los Angeles/Long Beach continues to be touted as a sign that port congestion is easing despite the fact that the number of ships waiting to enter the ports has not, in fact declined. The real reason: Since mid-November, a new queuing system has encouraged ships to wait outside of a specially designated Safety and Air Quality Area (SAQA) that extends 150 miles to the west of the ports and 50 miles to the north and south. These ships are still very real but are not counted in the backlog. In fact, there are more ships outside the SAQA than inside the port’ 40-mile zone. Freight Waves
Stumbling Out of the Blocks: Newly public WeWork announced that it will revise its financial statements for three quarters after finding that it misclassified some of its public shares. WeWork disclosed that it previously counted certain shares as permanent equity, but those shares should have been called temporary equity. The Real Deal Its always the ones you most expect.
Outperformer: Short term rental demand continues to boom, even as portions of the hotel industry struggle to recover from the pandemic. Globe Street
Chart of the Day
Residential and nonresidential construction spending trends in the US continue to diverge.
Source: The Daily Shot
WTF
Mother of the Year: A woman was arrested after shooting a bullet into the front door of her home then heading to a bar, leaving her baby in the crib home alone on Thanksgiving because Florida. Tampa Free Press
Hot Dog: A man was arrested for exposing himself at a McDonalds drive thru window because Florida. Tampa Free Press
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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