What I’m Reading
Perfect Storm: Supply chains are experiencing a massive bullwhip from the COVID economy and have resulted in a build up in inventory levels. At the same time, a slowdown in consumer spending caused by inflation could result in a recession. Freight Waves IMO, consumer discounts are coming.
The Long Game: Supply constraints, exacerbated by Russia’s war in Ukraine this year, account for about half of the surge in US inflation, with demand currently making up a third of the increase, according to new research from the Federal Reserve Bank of San Francisco. Bloomberg
Rolling Over: In the latest sign that US economic growth could be losing steam, consumers are showing signs of scaling back spending on services like vacation travel and dining out. Washington Post
Tailwind: US single family rents surged by another record in April, largely fueled by household formation, coupled by a lack of affordability in for sale housing. Bloomberg
Hitting a Wall: Los Angeles is projected to lose an estimated 11,000 income qualified affordable residences over the next decade as protective covenants expire. Of course, the amount of new units being built ro replace them are a drop in the bucket as it now frequently costs $1m to build a single unit. Bisnow
Chart of the Day
The reverse wealth effect is coming: “The equivalent of 60% of GDP has been wiped out from US bonds & equities markets alone in less than 8 months. It’s the biggest financial drawdown as % of GDP ever experienced over the last 40 years.”
Source: Alfonso Peccatiello
WTF
Last Wish: A Colorado Avalanche fan has been banned from home games after spreading his friend’s ashes on the ice at a game. The Denver Channel Honestly, this guy may be the best friend of all time. Free this man.
Revenge: A child who was on a fishing trip with his parents had to be taken to the hospital after suffering a vicious attack from a catfish because Florida. (h/t Steve Sims) iHeart
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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