respublica

Change is good?

Heard on the news tonight that there is a change shortage which is troubling businesses and banks. Businesses don't have enough change to give people, change for what they buy with cash. "That's right, America doesn’t have enough physical change to go around. And yep, you can blame that on the pandemic, too. In short, coins aren’t circulating through the economy as readily as they once were since people are going out and spending less–and opting for digital or contactless payments wherever they can."

Well, let me just give a personal experience. We have lots of change, a serious amount of change. We've emptied pockets and purses and wallets of change into jars, buckets, baskets, and even rolled a bunch into those paper coin things for years. The problem we've experienced is banks really do not want to waste time tossing all of this into their counting machines. And as to rolls, forget it, they must be emptied and put into the machine as well. I would love, love, to take our change to a bank and get it counted and credited to my checking account. But dealing with eye rolls from bank tellers in past years keep me from bothering.

The country wants change? Just ask and we will be there.

One hilarious, over the top, prediction

This headline and story seems like a reach to me:

"Consumers may not see lower prices until the latter half of 2022."

How on earth could they know this?

"This" turned out to be not singular

A story headline this morning read, "The Price of This Household Item is Soaring".

I'm a sucker for this sort of thing since I shop for household items every week. But it turned out that the soaring price item was every item you can think of, 50 actually. Everything is seeing a price increase.

Don't we know it. But the number one item with the most increase is rental cars and trucks.

Surprised not surprised

It seems as though Housing, the surprise of the pandemic is leading the economy out of the recession.  Single family home starts were 9.5 percent higher than last year at this time. There are several guesses as to why this is, including the low interest rates (3 percent!), stimulus checks, and millennials getting to the age where they begin wanting out of rentals and into their own home.

It's also true that this pandemic, with more people stuck at home, are wanting to have work done on the homes they own. Anyone deciding to, for example, wanting a new fence put up, or a roof, or even a tree cut down would find themselves on quite the waiting list. Occupations which do much of the work outdoors or in empty spaces were busy.

It's amazed me how many items we needed for the house, even as simple as a filter for the shop vac, were sold out. I learned this lesson as we went looking to replace our stove and dryer. People everywhere were buying home improvement things constantly.

The fact that all this has helped the economy is one good thing to come out of it.

The Inverted Yield

The bond market must have fallen big time yesterday and the term 'inverted yield' is all over the news. What the heck is it? I have no idea because the entire financial world is a mystery to me. But a business editor named Heidi Moore has laid it all out. All being what the stock market means and how much more important the bond market is to investors. And thus the worry over yesterday's news.

Here is a sample but you need to click the link to read the whole thing:

So first the context: Why the bond market tells you more about the economy than the stock market. We all hear about the stock market every day. The S&P 500, the Dow Jones Industrial Average. What is the stock market? Think of it as a literary device.

The stock market is a way that people tell short stories about companies. So for instance: When a stock is up, people are telling positive stories about that company. When a stock is down, people are talking smack about that company.

When the "stock market" is up: Well frankly that is meaningless. No one knows why it goes up or what it means. When it goes down, yes everyone is cranky. But we still don't know why. It could be literally anything. It's never ONE thing.

So the stock market is actually a tiny fish. The big fish is the BOND market. TRILLIONS of dollars. What are bonds? They are how companies and governments borrow money. Every bond is a contract that says "we'll pay you back with this interest on this date."

Bonds ALSO tell a story about a company or a government. But it's a BETTER story, a novel rather than a short story. That's because selling stock is pretty casual but borrowing money requires a lot of proof and documentation. Bond investors are SKEPTICAL.

There's more to read and maybe very worth the time.

Everyone wants Amazon

Yesterday a story broke which reported that Amazon is scouting North America for a second headquarters with as many as 50,000 jobs, and St. Louis officials said they plan to make a strong bid to be in the running for the $5 billion construction project.

St. Louis would love to have this company and the mayor and other officials are creating what they hope will be THE proposal which will bring the company here. Other cities have been doing the same. How many cities? Here is a US map with red dots depicting all the cities hoping to tempt Amazon to themselves.

Re-shuffling the consumer mindset

Here is a bit of short range forecasting of the economy/spending trends/job opportunities coming in the next decade. "You've probably got more of a chance walking dogs for a living than teaching kids in the coming decade's labor market." This is due to the aging of baby-boomers who are and will be, retiring and wanting to shower their money and attention on their pets."

The outlays on education will lag, though, as the potential student population comprising five- to 24-year-olds grows very slowly due to the downsized, post-Millennial Generation Z.

So the large baby boomer population is getting older, looking to have someone else do their home repairs, yard work, etc and will eat in more often than the younger generation who like to eat out. Also they won't be buying clothing like younger people do.

The large numbers of baby boomers v the smaller numbers of the coming adults will mean something different in spending and job types. This has probably long been true with changes every decade or two.

I will say, thought, that these characteristics of aging baby boomers is probably spot on.

The fallout from low gas prices

I was talking with an executive of a large grocery store chain last night and the conversation turned to the low gas prices. This person said it was not a good thing. One reason, which surprised me, was that with a bit more money to spend because fuel was so low, many people are going out to eat more and grocery store revenues are down. Consumers are shopping for fewer groceries and stores have the data to show this.

In which case eating places are probably of the belief low gas costs are a good thing. It's never an either or when it comes to fuel.

Black Friday sales fell this year

This is kind of interesting if you like to fool around with numbers....which I don't. Here's the story:

"Brick and mortar sales on Black Friday fell from $11.6 billion in 2014 to $10.4 billion in 2015. Sales on Thanksgiving fell from just over $2 billion to $1.8 billion. Both decreases are attributed to the increase in online sales, the Associated Press reports.

Meanwhile: "Online sales jumped 14 percent on Black Friday from 2014, bringing in $2.72 billion altogether. 

Now the way I do the math, 2.72 billion plus 10.4 billion plus 1.8 billion for the two days is: 14.92 billion which is higher than last year in total sales. Whether in the store or online, money is money being spent as retailers commandeer Christmas for their own yearly bottom line.

What do they want from us anyway?

Actual headline

"How Pot and Hippie Beer Explain the Future of the American Economy"

A lesson in small business start-ups and how Oregon is helping them succeed.