Global Macro Monitor

Yup, we are with Krugman on this one. Always have been. Now Saturday Night Live is mocking crypto.  

My hard working nurses were duped and sucked into the hype. Here’s to hoping people go to jail.  Doubtful. 

No doubt I’ll hear from many people still insisting that I don’t get it. But it really looks as if there never was an it to get. – Paul Krugman

It is difficult to free fools from the [block] chains they revere. — Voltaire

I am very into astrology and I know some are going to say it’s not real, but I say, how’s that crypto going? – Keke Palmer, SNL, Dec 3rd

Jobs Exceed Forecast,  Avg Hourly Earnings 2x Expectations

Share Of Prime Age Workforce Falling

Share Of Americans Working Still Below Pre-COVID Levels

Post-COVID Shift In Male/Female Labor Force 

Small Business Leads In Layoffs

Jobless Claims Remain Low

Personal Income Strong 

Excess Savings Remain High As Savings Rates Revert To Normal

Average Gas Prices 

Share of Renewables As % of Electricity Generation

Diesel And Heating Oil Costs

The Fed’s Relatively Rapid Tightening Cycle 

This should sound very familiar to GMM readers!

OOTD = Quote of the Day

Interesting quote but don’t discount the deleterious wealth effect on aggregate demand of a “so-called” asset class wiping out $2 trillion in wealth in the past year.  We have always maintained that the value expansion of an asset class with no parallel increase in production is inflationary.   The same holds for stock market valuations driven primarily by multiple expansions rather than profit generation.  

“Crypto space…is largely circular,” Yale University economist Gary Gorton and University of Michigan law professor Jeffery Zhang write in a forthcoming paper. “Once crypto banks obtain deposits from investors, these firms borrow, lend, and trade with themselves. They do not interact with firms connected to the real economy.” – WSJ

Thank goodness we didn’t buy that hot dog stand on 17th and Pennsylvania in downtown Washington!

A key problem is federal government employees are still largely at home. President Biden vowed in March that “the vast majority of federal workers will once again work in person.” Months later, it’s not even close to that. According to the Office of Personnel Management (OPM) Federal Employee Viewpoint Survey, nearly 40 percent said they work fully remotely or at home three or more days a week. Another 17 percent say they are at home one or two days a week. The DowntownDC Business Improvement District’s tracking indicates fewer than a quarter of federal workers are back in the office. Mayor Muriel E. Bowser (D) has been imploring the White House to change this. Allowing each agency to set its own rules was a mistake. Mr. Biden needs to set a clear policy of at least three days a week on-site for all federal workers who aren’t already back more than that.

They are the linchpin for downtown. When they aren’t around, lawyers, consultants, lobbyists and other workers also see little reason to return. While many big marquee law and other firms that have long dominated downtown D.C. have policies stating their workers should be in the office three days a week, few are enforcing it.

The fallout is evident. Walking along K Street Northwest from 14th Street to 20th — prime real estate near the White House — reveals 21retail spaces for rent and 10 office spaces for lease. At “happy hour” on a recent Friday, many bars along this stretch had plenty of available seats. This desolate scene would have been unimaginable a few years ago. – Washington Post

We are always intrigued by how the financial media cherry-picks nominal and real data.  Though this week’s national average gas price tops all observations in the following chart, the current real gas price in 2012 dollars is roughly $2.81, down about 20 percent in real terms from Thanksgiving Week 2012. 

In more practical terms,  the average hourly earnings of production and nonsupervisory employees can now purchase 7.7 gallons this Thanksgiving versus 5.8 gallons during the same holiday week in 2012.  Some good news that will be buried in our holiday doom scrolling.  

Gasoline prices are down sharply since briefly hitting a nationwide average of $5 per gallon in June, but motorists are still facing record Thanksgiving costs, Ben writes.

The big picture: While average pump prices heading into the holiday are above the 2012 mark, that’s not stopping a busy travel period.

• AAA expects nearly 49 million Americans will drive to their destinations this week.
• “Despite higher gas prices, travelers are hitting the road in a big way this holiday, for what is expected to be the third busiest Thanksgiving since 2000,” the group said in a release. – Axios

Global Recovery 

Inflation Forecasts

PPI

Thanksgiving Dinner Inflation Running + 20%

Retail Sales

Auto Sales Bouncing Back 

Wage Price Spiral

Rich Chinese Buying Singapore Condos

Emerging Market Default Probabilities

EM Defaults

Treasury Market Liquidity

Public Debt Trajectory

Walmart Reports

Household Credit Developments

Globalization Shocks

FAAMG Weightings In The S&P500

Natural Rate Of Unemployment