Brett Kavanaugh’s Supreme Court Appointment Hits a Snag… A woman accused Judge Kavanaugh of assaulting her at a party when he was 17 and she was 15.
What it means – You would think we all know the facts by now, but that’s not so clear when you read the back pages of The Wall Street Journal and The New York Times on the same subject. It’s as if they’re reporting from different universes. The WSJ would like to see the accuser get her opportunity to present her case and views while keeping the nomination process on track. The NYT would like to see the entire process come to a screeching halt, start a thorough independent investigation, and not start anew until after the mid-terms, when a potentially Democratic majority in the Senate would see things differently.
The only certain outcome is that both sides will claim the other sacrificed honesty and integrity in the name of politics. It would make for great theater during a slow economic week if it didn’t tragically upend the lives of two people.
President Trump Imposes 10% Tax on Additional $200 Billion of Chinese Goods… The president followed through with his commitment to impose the tariffs. The Chinese vowed to retaliate.
What it means – The 10% tax stays in place until January 1, at which time it jumps to 25%. Trump noted that if the Chinese retaliate he’ll implement taxes on an additional $267 billion worth of goods, which would bring the total near $500 billion. That represents most of the goods we buy from China, but don’t cry for all the importers. Many have applied for, and received, exemptions from the tariffs.
Still, there will be pain for us. Tariffs make resources and goods more expensive, which are eventually paid for by the end client. This will show up in our lives as inflation, first for wholesalers and then for consumers.
We can only hope that Trump and his Chinese counterparts come to a resolution before this goes much further.
Housing Starts Up 9.2% in August, Driven by Multifamily Units… Multifamily starts rose 29%, while single-family starts grew just 1.9%.
What it means – Single-family starts are more important because it takes more material and labor to put up those homes, which means they add more to GDP. At a measly +1.9%, we’re not getting a lot of traction in this area. Single-family starts remain a smidge below last year’s level, down 0.2%.
Ominously, total permits are down 5.5% over last year, with multifamily permits off 17.7% and single-family permits up just 2.1%.
With both single-family starts and permits hovering around unchanged for the year, there’s no reason to expect a ton of new housing supply to hit the markets in the months ahead.
Existing Home Sales Flat in August… Both single-family homes and condo sales came in at the same level as July, which ends four months of declining sales.
What it means – Over the last year, sales are down 1.5% overall, which again marks the same level as last month. The median sale price dipped 1.7% to $264,000, but that’s not a trend. The median sale price is 4.7% higher than this time last year.
It still feels like we’re at the breaking point of affordability, as price growth has outpaced wage growth for more than five years. Now that we’re stalling out on growth, something will have to give if we don’t want sales to dip lower.
Democrats Propose Law Extending Electric Vehicle Rebate for 10 Years, with no Cap on Producers…The measure will allow consumers to receive the federal tax rebate on any newly purchased electric car, no matter what company produces it.
What it means – This is the Tesla-Subsidy Law. Under current rules, car buyers can get a federal tax rebate of $7,500 on an electric vehicle purchase until the manufacturer has produced 200,000 cars. Then the rebate phases out very quickly. Tesla is close to the 200,000 limitation, so those who buy Teslas after this year will get a smaller rebate and then none at all.
Clearly, that won’t do. It’s obvious that people buying $100,000 Model S and X vehicles, and even those buying the pricier, sport Model 3s, need the extra push to get them to pull the trigger. Enter the American taxpayer, who has graciously, but not always wittingly, forked over thousands of dollars to help such buyers make that decision.
This is elitist. Why not go the other way? Remove the tax rebates completely, for every manufacturer. This fall, Jaguar iPace electric vehicles will hit showrooms in North America, and you and I will be forking over $7,500 to every American buyer. Then we’ll do the same thing when Mercedes, Volvo, and the other luxury manufacturers ramp up their electric vehicle sales. It’s hard to see where this serves a national purpose. Do those buying such cars really need our help? If this tax rebate was put on a national ballot, would voters pass it as a national priority? With our budget deficit. Just sayin’.
Data supplied by Dent Research/Delray Beach Publishing
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