Buybacks, Score Specifics & Intoxication Information


In yet another sign of labor market tightness, the percentage of persons who quit their jobs in May was 2.4%, the highest level since January 2001, and higher than the 2.2% attained during the peak of the Housing Boom. 2.4% translates into 3.56 million people/month quitting their job, or almost 43 million employees/year. Those who switched jobs in May experienced median wage growth of 3.8% versus 2.9% for job stayers.


There is currently a record amount of share buyback activity. While many find this development troubling, it isn’t. First, buybacks really aren’t financial engineering. They total just 2% of stock market value/year, and only 25% of the largest firms that are re-purchasers have EPS as part of their executive pay plans. Second, buyback activity is dominated by firms that specialize in intellectual property, and they can’t productively reinvest all earnings.


While June housing starts and permits were disappointing, these data are very volatile, and YTD starts remain up 7.8%; good given the headwinds this sector faces. More interestingly, a key reason the current expansion is now in its tenth year is because housing starts were MIA the first few years of the recovery, due to a glut of foreclosures, and have risen unusually slowly since their recovery began in mid-2011.


FICO scores are determined as follows: payment history is 35%, prompt is best; amount owed counts for 30%, less is best. Length of credit history is 15%, longer is better. Credit mix is 10%, varied debt types are superior to one type. Lastly, new credit counts for 10% and applications lower your score. 200 million consumers have a FICO score, just under 3 million have a perfect 850.


2016 was the first year since at least 1790 that the white, non-Hispanic population of the US declined. The number of whites fell by 9,000 between 2015 and 2016, and by 31,000 between 2016 and 2017. Conversely, the minority population increased by 4.7 million between 2015 and 2017. Also, there are for the first time more children who are minorities than whites at every age from zero to nine.


In 2013, coca-plant production in Colombia bottomed at 119,000 acres. It’s since skyrocketed to 361,000 acres and Columbia now accounts for 68% of global coca plant production, a new high. Not to be left out, opium-poppy production in Afghanistan is also up from 346,000 acres in 2010 to 815,000 acres in 2017; more than doubling opium output to 9,000 tons. Cocaine and opium prices should be falling!

Source: Elliot Eisenberg, PhD., Chief Economist for GraphsandLaughs, LLC, an economic consulting firm serving a variety of clients across the United States. All rights reserved.

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