What I’m Reading
Out of Balance: Households boosted spending in April but drew heavily on savings in order to do so. Higher-income consumers are likely healthy enough to continue funding their spending through savings for a while as their excess savings are significant. However, lower income households do not have this savings buffer and will have to cut back on discretionary purchases soon. Wall Street Journal
Fire Sale? Mortgage REITs are raising capital in hopes of buying bonds at a discount when the Fed begins selling its holdings. Wall Street Journal
Time to Go: The Foreign Dredge Act of 1906 bans underwater digging – to repair ports, or build bigger ones, or fix waterways – unless the boat doing the digging was built in the US, and is owned and operated by Americans. Unfortunately, American firms lag far behind in dredging technology, which is holding our ports back versus those in the rest of the world. Its time to enter the 21st century and get rid of this relic. Zvi Mowshowitz
Brain Drain: The US welcomes STEM students from around the world, only to watch them leave for other countries over H-1B visa lottery immigration issues. The Dispatch
Big Shift: The composition of consumer spending is shifting from goods back to services, which should be good news for the supply chain crisis. However, the recovery in service spending has been uneven. “Fun” spending categories with pent-up demand such as food services, air travel and hotels have rebounded over the past year, others have lagged behind. Services that cater to white-collar professionals have also been slow to recover. Mass transit spending is about 50% down from what it would have been, absent the pandemic; laundry and dry-cleaning revenues are 20% below trend. The Economist
Chart of the Day
Damn.
Source: St Louis Fed
WTF
Poof: A man blew himself up at a graduation party – witnesses say he didn’t have explosives and don’t know how he did it because Florida. CBS 2
Object of Affection: A 23 year old woman who is sexually attracted to objects has announced that she is in a relationship with an airplane and wishes to marry it because Germany. The Mirror
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
Visit us at RanchHarbor.com