Month: January 2024

How's the housing market doing? There are two good measures: (a) total home sales and (b) mortgage applications. Here they are:

The top chart is home sales adjusted for population. It shows total home sales at the lowest level since the depths of the 1981-82 recession.

The bottom chart is unadjusted raw numbers for mortgage applications, and it shows they've dropped to their lowest level since 1995. If it were adjusted for population it would be very similar to the top chart.

So both measures agree: Home sales have dropped to lows we haven't seen for three or four decades.

This is not a great picture, but I had to hike for a good long time to take it. So by God, you're all going to see it.

This is Balcony House, one of the ancient cliff dwellings at Mesa Verde National Park. The only way to see it is to take a trail that curves around outside the right hand of the frame and then circles back on the other side of the canyon. When you get to the end, you have a long distance view of the dwelling.

Thanks to my bum hip and CAR-T fatigue I'm not much for long distance walking these days, and the trail is unmarked by any signage telling you how far you've gone or how far you have left. As it happens, it only took about half an hour to get to the overlook, but it felt like I was walking forever. And then I had to walk back! But at least on the way back I had some idea of how far I had to go. In the end, I was fine and my hip was none the worse for wear. And I got the picture.

The LA Times draws my attention today to one of my pet topics: working at home. Gensler Research recently conducted a survey of office workers to find out if they were happy with their home-office split. They weren't, but not in the direction you'd think: on average, they said they spend 48% of their time in the office and would prefer to spend 63% of their time there. But why do they value more office time? Here's the breakdown:

Among all age groups the top reason was the same: to focus on work. Surprise! It's harder to focus on work at home than in the office, and apparently people are figuring this out. This gibes with time-use studies showing that people generally get less done at home than in the office.

Will this eventually lead to a broader retreat from working at home? Stay tuned.

Israel sent a drone into Beirut a couple of days ago to kill a senior Hamas commander. Hezbollah has said it will retaliate. Today the US sent a missile into Baghdad to kill a militia commander linked to Iran who had claimed responsibility for attacks on American troops. In the Red Sea, it seems only a matter of time before the US Navy takes aim at Iranian ships that are providing targeting information for Houthi attacks on Western cargo freighters. If that happens, Iran will undoubtedly launch reprisals.

President Biden has been an unshakeable ally of Israel in the Gaza war, but he's also desperate to keep the war from widening into a regional conflagration. It's starting to look less and less likely that he can thread this particular needle.

30-year mortgage rates are generally higher than long-term Treasury yields because mortgages are riskier. Usually the spread is around 1.7%, but for the past year it's been close to 3%. However, the Wall Street Journal informs us that the spread is coming down, which indeed it is. But not by much:

The Journal promises to tell us the "hidden force" behind the decline in the spread, but tell me if this makes any sense:

These days, investors have lots of reasons to demand more yield. For one, there is the risk that mortgages extended today won’t be around tomorrow. If rates fall, as many expect, homeowners will refinance into lower-rate loans.... The central bank last month signaled it is likely finished raising rates and could cut rates this year as inflation has been falling and the economy has remained strong. That is reviving investor demand for mortgages somewhat and pushing down the spread.

We are told that (a) the spread is high because rates might fall in the future and homeowners will refinance, and (b) the Fed could cut rates and this is pushing down the spread. Huh?

I have no idea what's really going on, but I suspect this is little more than the usual Journal practice of desperately looking for trend pieces based on tiny amounts of data. Elsewhere today, they have an article about panic among investors because the stock market was down for the first two days of the year.

POSTSCRIPT: The New York Times has a reputation for publishing a lot of iffy trend pieces, but the Journal really wins the prize here. The Journal's trend pieces are typically less sexy because they're related to finance and economics, not avocado toast, but if anything they publish more of them and rely on even thinner evidence than the Times. Our nation's CEOs are apparently desperate to consume a constant stream of faddish business trends and don't care much if they're true as long as they tell them what they wanted to believe in the first place.¹

¹Examples: inflation is a threat, it's impossible to find good workers, millennials are slackers who think they're owed a job, Gen Z's weird habits are destroying some market or another, colleges have gone soft, it's getting harder and harder to make a profit, a bull market is right around the corner, etc. etc.

According to Democrats on the House Oversight Committee, foreign governments trying to curry favor with Donald Trump spent nearly $8 million in stays at Trump's hotels during his presidency. As a public service, I have made a chart out of the top ten sycophants with the columns colored in beautiful Trump gold:

China is #1 by a mile at $5.6 million, but this is an unfair comparison since they're a lot bigger than the others. Here is per capita spending among the top ten:

Qatar is the winner! For its size, China is a relatively modest crook—and not a very effective one, either. Still, it's all pocket change for these guys.

How is Joe Biden doing in a trial heat against Donald Trump? In particular, how is he doing with young voters and Black voters? Take your pick:

Both polls were in the field at nearly the same time. But the Suffolk poll says Biden is behind with young voters 33%-37% while the YouGov poll says he's ahead 51%-33%. That's a net swing of 22 points.

The big difference is that in the Suffolk poll 30% of young voters say they're undecided or would vote for a third party. In the YouGov poll only 12% say that. This is a difference of 18 points, and accounts for most of the disparity between the two polls.

Among Black voters, the two polls largely agree. Suffolk says Biden has a +51% lead while YouGov says he has a +52% lead.

In the end, I doubt these two polls really disagree that much. For some reason, the Suffolk poll picked up a much larger protest vote among young people, but that's not likely to stand the test of time.

I'm not generally a New York Times hater, but they sure do know how to overdo things. I mean, is the resignation of Harvard's president really worth five front-page pieces in a single day? I get that their target audience is upper middle class northeasterners, but come on.

For the past year or so, the new hotness on the right has been an all-out attack on DEI—Diversity, Equity, and Inclusion. They object to it pretty much everywhere, but most of their attention recently has been focused on universities.

As usual, this got me curious. Unfortunately, it appears all but impossible to get reliable figures for the growth of DEI staff at universities. The best I could come up with was a Heritage Foundation study that tickled me because the authors chose to examine schools in the Power 5 football conferences.¹ Here it is:

I can't vouch for the accuracy of this, especially since it relied on web searches, but it probably gives a rough idea of things. It's just a snapshot, though, and doesn't show trends. Here's a trend chart for Ohio State University:

Put these two things together, stir in the fact that everyone thinks DEI administration has skyrocketed, and it's a pretty good guess that it really has skyrocketed—even more than overall university administration has.

Now, it's a little hard to figure out exactly why the right has such a big problem with this. It's not because they care deeply about university budgets, nor is it because this is related to curriculum. These are administrators whose job is mostly to recruit and retain minority students. They claim, of course, that it's just part of their dedication to a colorblind society, but that doesn't really hold water either. So as much as I hate to jump on the racism bandwagon here, it's hard to take this as anything other than general conservative opposition to anything that helps non-white people.

But how about on the left? I have a problem with DEI administration too. Here it is:

Over the past 20 years DEI programs have expanded considerably but they haven't really accomplished anything. The college enrollment rate of white and Asian students is down slightly while the the enrollment rate of Black and Hispanic students is dead flat.

Ditto for graduation rates. They're up for Black and Hispanic students, but no more than they are for everyone else. Universities have apparently gotten better at pushing kids over the finish line, but the Black and Hispanic gap hasn't closed more than a hair.²

So do DEI programs even work? Last night I wrote about the truism that "nothing works," and I suspect this is an example. It's all well intentioned, but what's the point if the end result isn't more students and graduates of color?

¹Soon to be the Power 4, of course.

²The authors of the Heritage report also claim that there's no correlation between a large DEI staff and student satisfaction with the campus DEI climate (among both white and nonwhite students).

From Mark Lezama, a patent attorney, about recent announcements that Steamboat Willie (aka Mickey Mouse) will be starring in several horror films now that Disney's copyright has expired:

The main thing is to be sure you’re not using Mickey in promotional materials in a way that would make someone think the film came from Disney. I don’t think that should be too hard, especially if Mickey is portrayed as a bloodthirsty sadist.