From a small northwestern observatory…

Finance and economics generally focused on real estate

Archive for August 2019

Huh… busy week and it’s only Monday

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China buys two things from the United States:  agricultural products and Treasury bonds.  Thanks to our misguided attempts at a trade war, they’ve announced today that they’re going to quit buying one of those two items.  Indeed, for the past two decades, China has been working to expand their sources of basic resources, including foodstuffs. Other countries are happy to oblige.  Since 1970, Brazil has cut down about 20% of their rainforest, mainly for agriculture.  Most of the deforested Amazon is used for cattle grazing, and about 80% of that beef is exported (guess who buys it?).  Brazil is now also the world’s 2nd biggest producer of soy beans.  (Guess who buys THAT?).  Thanks to our U.S. trade policies, Brazil is poised to leap into first place.  By the way, the impact on the global biosphere is devastating, but that’s almost an afterthought.

Is this likely to cause a recession?  Coupled with the yield curve inverting, a slow-down in housing sales, and w-a-a-a-a-y too much Federal deficit spending, and all the signs are certainly there.  If there is one redeeming thing, it’s that so many of us recognize that a recession is likely at this point.

Written by johnkilpatrick

August 5, 2019 at 1:54 pm

Posted in Uncategorized

Lowe’s is laying off thousands

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Well, by itself, this is a startling headline (click here for the full story).  The CNN story blames it on needing to catch up with Home Depot and also right-sizing their inventory (which is, admittedly, huge).  Indeed, for several years, home remodeling has been the bright spot in the retail sector.

However, I’d also remind readers of my note about the remodeling sector from not long ago (click here for that story).  The homebuilding and home sales sectors have been reporting some softness, mainly cost driven, and that’s inexorably tied to home remodeling.  Intriguingly, the folks being laid off are generally in the assembly biz.

As a personal anecdote, I purchased a house in Key West not long ago, and immediately bought a new grill from Home Depot.  Not withstanding my normal “do-it-yourself” attitude about things, this particular grill was a multi-person job.  Home Depot was on the spot, and sent over a team to do the job (kuddo’s to the Home Depot in Key West, Florida!).  Had I not bought a house there, I wouldn’t have bought the grill, and the assemblers wouldn’t have had a job.  You do the math, folks….

Written by johnkilpatrick

August 1, 2019 at 1:01 pm

Posted in Uncategorized

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