VP Kamala Harris wants to control grocery prices

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By comparison, U.S manufacturing is holding steady, recovering a bit more than its pre-covid total level in employment.

Here's the Oregon Catalyst article pointing out the degree to which Oregon is lagging behind in manufacturing - relative to the U.S wide manufacturing sector in terms of total employment:   Oregon manufacturing has gone flat | The Oregon Catalyst 

(posted by Elvis Clark on August 1, 2024)

This evening, August 1, 2024, reported dismal financial results and its stock price is selling off sharply, down over 15%.  Intel has lost over 30% of its corporate value in the last twelve months while the tech sector to which Intel belongs is up over 20% in the same 12 months.  Intel has a fairly big semiconductor research and production center in Hillsboro, Oregon.

Oregon's state legislature and Governor gave Intel over $100 million in public funds in 2023, and now that choice of favoring one company, namely Intel, is looking a bit dubious.  It is akin to Oregon betting on one horse to win the Kentucky derby and having a good chance of losing its bet and taxpayer monies.

Intel is lagging way behind other semiconductor chip companies in terms of advanced chip technology, and Intel is spending a bunch of its corporate monies to compete in what is really a commodity business dominated by Tawain Semiconductor company.

I have heard rumors that Intel promoted a bunch of Diversity, Equity, and Inclusion employees, discriminating against their staff of white men engineers and other out-of-favor types, hurting morale at Intel.

At one point in the year 2022, U.S Consumer Price inflation ran as high as 8% year-over-year; but now, two years later, we seem to be approaching the Federal Reserve's target of 2% annual inflation.  In June 2024, the monthly increase in consumer goods, excluding energy and food, increased only 0.1% which if sustained for an entire year would result in inflation of less than 2%.

The hike in Mortgage interest rates, the last two years, seems to have now slowed the rate of increase in rents and other shelter costs, at least nationally.  

(posted by Elvis Clark on July 11, 2024)

With today's Consumer Price Index report (chart in panel to the left of here), the interest rate for the U.S ten-year treasury note (charted just above) is dropping to closer to 4% (annual yield).  This should help lower the typical thirty-year mortgage rate, decreasing it, say, from its recent high of 7% down towards 6%.

So, I would expect with a return to the 2% rate of inflation (the Federal Reserve's target rate of inflation), that mortgage rates would fall back eventually towards the 5% range.  After a few months of lag, housing prices should start to pick up again by next Spring (2025) in response to lower mortgage rates, I suspect.

Meanwhile, if the Federal Reserve cuts interest rates like it is expected to, the interest cost to the federal government for paying on its massive 35 trillion-dollar debt should - I suspect - decrease moderately.  But it remains to be seen whether the U.S Congress and president can resist spending any savings on U.S debt interest payments - thus offsetting any savings in U.S federal government interest costs.

(posted by Elvis Clark on July 11, 2024)

Mortgage rates, nationally, this last full week of April 2024 are back above 7% for a 30-year fixed rate mortgage.  Mortgage rates are reacting to the uptick in inflation so far this year (see panel to the right of here).

Because of the uptick in inflation this year, what with inflation now rising back towards an annual rate of 4% from the 2% range, the U.S Federal Reserve (central bank) is seen not cutting interest rates anytime soon - disappointing the economic expectations of investors and economists alike.   

The dip in interest rates earlier in 2024 has helped keep housing prices from sinking, and actually rising a bit in recent weeks.  The uptick in mortgage rates could slow housing prices in the coming weeks.

(The above chart is that compiled by the St Louis Federal Reserve bank.)

U.S economic growth slowed considerably in the first three months of this year, with U.S GDP growing at a 1.9% annual rate (down from nearly a 3% rate in the last three months of 2023).

The annualized inflation rate for the U.S economy during the first three months of this year is 3.7% - well above the Federal Reserve's 2% inflation rate target.

Jamie Dimond, head of the U.S most prestigious bank (JP Morgan) says that the U.S may have entered a period of stagflation, where economic growth is subpar, and inflation elevated by over-regulation (cost push inflation).

(posted by Elvis Clark on April 25, 2024)

Oregon suffers in its overall CATO freedom rating in large part because of its very restrictive Land Use regulations, most probably the fallout from Oregon's Urban Growth Boundary framework.  Oregon also is in the bottom half of states for state and local taxation and for occupational regulations.  It is in the bottom ten of states for labor market regulations.

To Govenor Tina Kotek's credit she did try to soften Oregon's land use restrictions and got a very small incremental step towards this with legislation enacted by the Oregon legislature this month (March 2024).  But the legislation is a pittance towards materially easing Oregon's artificial land shortage - the relatively fixed Urban Growth Boundary helping create Oregon's artificial land shortage.

(posted by Elvis Clark on March 28, 2024)

Milwaukie's Oregon House of Representative, Mark Gamba (former Mayor), pushed a law to help create a bank to be owned and run by the state of Oregon government.

Governor Kotek vetoed this legislation, for good reason I believe, as reported by the Willamette Week newspaper - linked here:  

By Vetoing Task Force on Creation of State Bank, Kotek Sends a Signal (wweek.com)

Only one other U.S state has a state owned and managed bank - that of North Dakota.  North Dakota created its bank over 100 years ago in 1919.

North Dakota Bank is not federally insured but only state government insured.

Oregon governments deposit their cash holdings in private banks currently and earn something like close to 4 to 5 % interest on their deposits.  There is good reason to believe that a state bank could not pay such high rates of interest on government deposits, especially if the state bank is loaning money to social oriented causes (as Gamba cites as reason to create state bank).

Looking at the above stock market share price chart for regional publicly traded banks, the banking sector is not demonstrating a whole lot of profitability - as against Gamba's assertion that there is big profit to be had by creating a state bank.

Given state of Oregon money losing schemes like the Oregon Liquor Commission, it is only right for Kotek to be wary of the creation of a state bank.  Here's a news reporting on the money losing ways of one Oregon government enterprise (the OLCC):

  Latest liquor scandal costs taxpayers tens of millions | The Oregon Catalyst

Then too, the Oregon Constitution forbids the creation of a state bank.  Gamba wants a study approving the creation of a state bank so he can push the idea to Oregon voters.

(posted by Elvis Clark on August 25, 2023)

Nationally recognized Economic Scholar Kenneth Rogoff suggests that a federal government Debt-to-GDP ratio of 1.0 or less is a sustainable level of federal government debt.  (GDP being a measure of U.S aggregate economic income and the divisor for measuring the ability of U.S citizens and their Federal Government to repay federal government debt.)

So, the U.S federal government seems to have reached the limit of its ability to sustain over the long haul continual splurges in federal government deficit spending, like which occurs even now but especially occurred during the 2020 Covid-19 pandemic.

***  But I wouldn't call the U.S teetering on the cusp of a federal government debt crisis, as yet.    **** 

 It wouldn't take much for the U.S to get its federal debt to GDP ratio back down to 1.0 from its present 1.2 ratio.  Speeding economic growth by deregulating the energy industry and other industries would probably be all that is needed, as this would boost growth in GDP to maybe 3% per year from the sluggish 2% range of the last ten years - plus cutting near-term deficit spending from the current pace of $1.4 trillion down to $0.7  trillion (or halving the current level of federal deficit spending).

A number of banks are being squeezed by the cost of keeping depositors from taking their savings to other banks and institutions (namely, the federal government) paying depositors higher interest rate yields.

The Federal Reserve and federal government may have to bail out banks to the tune of a trillion dollars, in order to stop the current uptick in bank failures.  The Federal Reserve could cut interest rates to stop depositors from fleeing banks.... but inflation is still historically high - near 5% and higher; and the key way for the Federal Reserve to fight inflation is to hike interest rates and tighten money supply.

But all of these potential economic problems aren't very predictable because if the Federal Reserve and Federal Government can calm the nerves of depositors then maybe this will be all that is needed to manage through the current spate of banking difficulties.

(posted by Elvis Clark on May 5, 2023)