The Buzz on Business for August 20th 2024

Vice President Harris announced, late last week a series of proposals designed to combat inflation, particularly inflation in food prices and in housing. It is that later category we focus on here.

To her credit, Harris seems to understand that the problem with rising housing prices is that too few houses are being built. And this is most definitely true. Housing starts have never recovered from the 2006—2007 financial crisis and have been in steady decline for the last two years.

Harris has set a goal of building 3 million new houses in four years, which is more than have been built in the last four years but nothing like what is necessary to solve the problem and not even close to the level that were being built 20 years ago.

She aims to do this by cutting red tape, a good idea. But she also proposes that these new houses be built with subsidies, for builders that qualify, that they be energy efficient and include a range of other requirements. Perhaps laudable goals in and of themselves but not if your goal is to cut red tape.

Earlier this year, President Biden previously proposed building 2 million new homes this year using an array of subsidies and tax credits. That’s not going to happen. It seems to us that all of this misses the point.

Home builders are some of the most entrepreneurial business owners. They don’t need subsidies; they don’t need incentives. Those things get in the way. They need a rejection of the Not in My Backyard ethos that has taken over every community, it seems, as city councils and mayors assert their power to the detriment of their citizens.

Let builders build. Government should build the roads and the schools. Let builders build and watch housing grow more affordable and the economy grow as a result.

VP Harris also proposed a $25,000 grant to first time home buyers. We’ll discuss this idea tomorrow.

Stock Market Report

A pretty good day on Wall Street. Stocks were up sharply, across the board, advancing stocks edged decliners by just shy of 3 to 1 and volume managed a gain from Friday’s level, although it is still low. Too low if you ask us!

• The Dow Jones Industrials gained 237 points, that’s 0.60% and they closed at 40,897.
• The S&P 500 was up nearly 1.0%. It gained 54 points and closed at 5,608.
• The NASDAQ Composite was up 1.4%, a good day for the techs. It closed at 17,877, for a 245 gain.
• And the small caps were up 1.20%. That’s 26 Russell 2000 points and they start the day today at 2,168.

Bond Market Report

Interest rates were mixed but mostly little changed.

• The yield on the 2-year treasury was up 2 basis points and settled at 4.074%
• The 20-year was down 1 tick, and it closed at 4.236%

Oil, Gold, and Bitcoin

• Oil had another rough day. It fell $1.70 and closed at $73.83. Oil was ten dollars a barrel higher than it is today as recently as the 4^th of July.
• Gold was off a minuscule $2.60, and a troy ounce will now set you back $2,543.90.
• And Bitcoin gave back $747.51 and at 4:00 PM ET stood at $58,995.61

No News from the Earnings or Economic Calendars Yesterday or Today.

Just two companies reported earnings on Monday. Both exceeded expectations.

Today we expect three earnings reports, including Lowes, which can move markets from time to time.

The economic calendar was blank yesterday and its blank today!

We’ve given everybody here at the Ministry of Truth the day off. With pay, such as it is, so they’ll be ready when things heat up again, later on this week.

In the meantime, we plan to talk more about the economic proposal of the two presidential candidates. You don’t want to miss it. You can’t afford to miss it. And you won’t if you keep it right here on the Buzz.