What I’m Reading
On Watch: There is a strong correlation between a dramatic rise in oil prices and recessions. Historically, not every recession is preceded by a 50% rise in oil but every 50% rise in crude has resulted in a recession but not for the reason that you may think. A 1997 paper co-authored by Ben Bernanke showed that it’s not the oil shock itself, it’s the Fed’s response to the oil shock that caused the recessions. It seems like history may be on the verge of repeating again. Full Stack Economics
Tug of War: Cold storage inventories are at unprecedented levels. However, a combination of soaring labor and energy prices have been a drag on performance. Expect a stronger push towards automation in the space. (h/t CJ Collins) Seafood Source
Free Fallin: Home sales in China are plunging in 2022. However, unlike what we are experiencing in the US, this is due more to limited demand than limited supply. Chinese developers are an overleveraged mess and mortgage rates in the country have been falling since October but have not yet spurred demand. YiCai Global
FOMO: Scarcity is a key attribute of real estate that attracts investors. With an infinite supply of digital land across a number of virtual worlds, you would expect low prices, but that is not what is happening. Medium
Sticky: Two years into the pandemic, US tech jobs remain concentrated in a handful of coastal hubs. But a new set of cities – including Atlanta, Dallas, Denver, Miami, Orlando, San Diego, Kansas City, Mo, St. Louis, and Salt Lake City – are gaining ground. Wired
Chart of the Day
There is a lot more capital allocated to real estate – especially in North America – than there was before the Great Recession.
Source: Alex Vespoli
WTF
Cold Dead Hands: A 400 lb Russian man chained himself to a Moscow McDonald’s in a futile effort to keep the store open after the company announced it would temporarily close its stores in the country due to the Ukraine invasion. NY Post
Shoot Em Up: A 40-year-old woman is facing battery charges after she shot her neighbor with a squirt gun for walking “on her street” because Florida. WJTV 12
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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