Did You Know? 9-7-22

DID YOU KNOW?

Global equity funds had outflows of 9.4 billion dollars in the week to Aug. 31, the 4th-largest redemptions in 2022. US equities had the biggest exodus in 10 weeks, while $4.2 billion left global bond funds. US unemployment increased in August, something the Fed is hoping to achieve with higher rates to reduce labor cost inflation pressures. (Bloomberg)
Homes in August sat on the market an average 5 days longer than they did a year ago, FIVE DAYS! The median listing price in August dropped to $435,000 from $449,000 in July. The average home sold for less than its list price for the first time in more than 17 months during the 4 weeks ended Aug. 28th, then again, what is average? (CNBC)
What might be the TOP 10 cities for Gen-Z-ers? 45 cities were scored on the Unemployment rate, Internet speed, Affordability, Number of parks, Educational enrollment, Population of Gen-Z-ers, Recreational and dining establishments, and Public transportation availability. (moveBuddha) -Atlanta, GA -Minneapolis, MN Boston, MA -Tucson, AZ -Raleigh, NC -Columbus, OH -Seattle, WA -Austin, TX -El Paso, TX -New York, NY
A 4-acre waterfront estate with two large properties totaling 25,000 sf in Miami’s Coconut Grove area has sold for $106.875 million, setting a record for Miami-Dade County and becoming the first Miami home to cross the nine-figure price threshold. All the proceeds from this sale will be donated to charity. (WSJ)
Sometimes short-term ‘damage’ can reap long-term benefits: some wildfires can be nature’s way of removing future fire fuel and allowing the sun in to allow certain plants to thrive that remain dormant in shade. The Black Forest in Germany used to be managed by a form of Swidden, slashing, and burning, in the 19th century. (FT)
England has around 434 dwellings per 1,000 people, and France has 590. Of the UK’s total GDP, only 10% is building, while the G7 average is 12%. Some overzealous environmentalists are preventing lots of development in the UK, and making housing less affordable. (Economist)
Solid surfaces prevent water absorption: in an environment where more frequently rainstorms are heavier, builders and developers need to use pervious surfaces as much as possible to limit runoff. Green roofs and pervious paved driveways cool the environment and prevent erosion and excessive water runoff. (EPA.gov)
Of all weather-related fatalities, excessive heat is the deadliest: around 1,300 deaths per year in the US can be attributed to heat-related causes, significantly more than hurricanes, tornadoes, winter weather, and winds. (EPA.gov)
Congestion pricing may be coming in 2023 to New York City to ease the excessive traffic, similar fees in London, Stockholm, and Singapore have reduced traffic by up to 25%. I wonder if this will help reduce inflation. (NY POST)
Many fear higher inflation is a long-term trend, mostly fueled by deglobalization. Making and producing things locally is bound to cost more. But in a world where many are realizing their reliance on others who produce stuff cheaply elsewhere is risky, we should expect local production of all sorts of things to grow. (FT)

6 Long-term Trends Not Going Away

There will always be periods where markets correct and re-adjust and re-balance. We are in the midst of one of these moments right now. They are a CERTAINTY of economic cycles and are often triggered by shocks. We have had enough of those in the past few years: How long they last and how deep they go is an uncertainty. Uncertainty is scary for most, but it doesn’t have to be. While this is happening I’m keeping my eyes peeled on these 6 LONG TERM trends:

UNDERBUILDING: The US has under-built for a decade. Now as rates rise builders are cutting production, when we should be increasing it!
NEXT-GEN BUYERS: All of us need shelter, an essential need. 130 million Millennials and Gen-Z-ers are just entering or have already entered the prime household formation age. 130 MILLION!
WEALTH TRANSFER: Over $10 TRILLION – with a T – of wealth will be transferred in the next decade in the US alone.
INFLATION. Even with inflation at 2%, building new homes keeps getting more expensive.
MORE BUYERS: Wealthier baby boomers are buying two and three homes. Private equity is buying up homes traditionally bought by individuals.
REPLACEMENT: Repairing and replacing existing homes due to extreme weather and an aging housing stock are bound to use up lots of resources for building new homes.

Yes, corrections matter and can be unnerving at times. They cannot be willed away by pretending or burying your head in the sand. It is during these times that steadfast resolve and fast and decisive – sometimes painful – action steps are required to weather storms. But all storms pass. Always. Keeping the focus on being the very best you can be – and improving consistently – allows you to emerge from storms less scathed and much stronger for future growth and prosperity. While some obsess with short-term trading, keep focused on long-term INVESTING!

- By Leonard Steinberg