What I’m Reading
Running on Empty: Record low diesel inventories on the east coast of the US could lead to rationing with truck stop giants Love’s and Pilot Flying J already warning truckers of an imminent shortage. Much of this is being driven by “insane” prices in Europe that are drawing large shipments from Gulf of Mexico producers, coupled with refinery shutdowns in the north east. Freight Waves If this comes to pass, it would be an absolute catastrophe for the economy as pretty much the entire global supply chain runs on diesel fuel.
Space Needed: Rampant demand for industrial space coupled with supply chain delays, has reduced the available inventory of warehouses to historic lows, according to a new report from Prologis. At current rates of supply and demand, logistics tenants could burn through available inventory in 16 months, according to Prologis, a record-low benchmark for inventory. Prior to 2021, the rate had never dipped below 32 months. As a result, the warehouse giant now sees market rents increasing a whopping 22% for 2022. Bisnow
Draw Down: Markets have lost $35 trillion of total value over the past three months or 14% of global wealth. In 2008, financial wealth fell by 19%. Pragmatic Capitalism This is hardly inflationary and will eventually start showing up in the real economy.
Foreign Invasion: Forget Boise, Phoenix and Austin. California expats are moving to Portugal in droves thanks to a great climate, rich amenities, affordable cost of living and relatively lax visa requirements. Of course, resentment is also growing among locals as wealthy expats drive the cost of housing up, while also contributing to economic growth. LA Times
Well Positioned: Private credit boomed amid low yields. Now its poised to flourish even more in a rising yield environment thanks to its floating rate structure. Institutional Investor
Chart of the Day
Record high retention rates are a good indication that market-rate rental affordability is not at a breaking point.
Source: Jay Parsons
WTF
Cause and Effect: CA governor Gavin Newsom is proposing an $18.1 billion “inflation relief package” while apparently having no clue what inflation actually is. Oh yeah, because California. CA.gov
Darwin Award: A pickup truck towing an inner tube from the bank of a pond into a parking lot at high speed resulted in the death of the passenger of said inner tube because Florida. WHIO 7
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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