My Current View on the Economy

I follow many of the top ecomomic thinker blogs and in a recent post on Calafia Beach Pundit, Scott Grannis summarizes my thoughts exactly on current market conditions. 

Conditions in the US look fantastic these days. Prices for lots of goods and services are soaring. Retails sales are at all time highs. Job openings are at record highs. Financial markets are awash in liquidity, and financial market conditions in general are about as good as they have ever been. Debt service burdens for most people are at all-time lows. The stock market is on the cusp of new all-time highs. Corporate profits are booming. Air travel is surging.

“Private sector jobs have recovered almost 70% of what they lost due to the Covid-19 shutdown. ”

The economy has recovered just about all it lost to the Covid-19 crisis. Household net worth is at all-time highs in nominal, real and per capita terms. Private sector jobs have recovered almost 70% of what they lost due to the Covid-19 shutdown. Vaccines and natural immunity have all but vanquished Covid-19. Conditions are improving daily, with no near-term end in sight. On the inflation front, expectations currently remain reasonably anchored at around 2.5%.

REIT Stocks: Post Covid

The open air REITs have nearly recovered all of their COVID losses. The average open air REIT's stock is currently only about 10% below their pre-COVID levels. At this price level, the stock market is indicating that open air centers are currently worth about 5% less than their pre-COVID prices. We predict a full recovery by the end of 2021. Onward!

Larry Paige

I said to
Larry Paige…

"I fix networks, the real ones, not the online ones, we call them "shopping centers"

Larry Paige, the founder of Google once asked me what I did at a TED conference. I said, "I fix networks, the real ones, not the online ones, we call them "shopping centers" and they are the lifeblood of the US economy and its consumers." "That's cool." he said.

Population Growth

The United States is projected to grow by nearly 79 million people in the next 4 decades, from about 330 million to 404 million between 2020 and 2060. The population is expected to grow by an average of 1.8 million people per year between 2020 and 2060. The US needs population growth and productivity growth to fuel economic growth. Over 60% of the population gains will result from immigration and the balance will be from new births. Imagine 400M in the US - what an opportunity. Onward!

“Imagine 400M in the US - what an opportunity.”

It’s Been 13 Years Since The Last Recession

History is on our side - they may well be the "roaring 2020's". The average time between recessions has grown from about two years in the late 1800s to five years in the early 20th century to eight years over the last half-century.

It’s been 13 years since the last recession began in Dec. 2007. That’s the longest we’ve gone without starting a new recession ever, going back to before the Civil War. Hopefully, the roaring 2020's will be a decade without any downturns.

Onward!

World Population

When I was born there were only 3.0B people. Today there are nearly 8.0B and somehow, in the last 60 years, we managed to thrive. The world population is projected to reach 9.9 billion by 2050, an increase of more than 25% from the current 2020 population of 7.8 billion. Total fertility rates are below the replacement level of 2.1 births per woman in 91 countries and territories, mostly in Asia and Europe, as well as in the United States. What a great time to be alive. Notice that the world's population growth rate is dropping like a rock. America is still the leader. Let's all help keep it that way.

“The world population is projected to reach 9.9 billion by 2050, an increase of more than 25% from the current 2020 population of 7.8 billion”

How can we restart the US growth machine?

http://scottgrannis.blogspot.com/

Unfortunately, economic growth is not about to set any long-term records. For 50 years, from 1966 through 2007, the US economy grew at an average annualized rate of about 3.1%—a great and dynamic expansion which saw the economy almost quintuple in size. Then came the Great Recession of 2008-09. Not only did the economy fail to recover to that long-term 3.1% trend in subsequent years—for the first time ever, following a recession—it went on to post only slightly more than 2.1% annual growth in the decade from 2009 through early 2019. It was the weakest economic expansion on record, and it looks set to continue for the foreseeable future.

Scott Grannis challenges us to think about the big problems - how can we restart the US growth machine?

No, Chicken Little the Sky is not Falling!

No, Chicken Little the sky is not falling! There as 50,000 open air retail centers in the US. Last year, as the economy reeled each shopping center lost on average 1-2% occupancy or in other words, on average, they LOST ONE SMALL TENANT! Yes, there were 50,000 more store closings in 2020 than openings, but it had little or no impact.