Category: Econolypse

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We All Need a Smiley Break

Flashback two years, to May 2, 2020: SARS-CoV-2 (severe acute respiratory syndrome Coronavirus 2)/COVID-19 lockdowns compelled Californians to avoid anyone and to otherwise practice so-called safe social distancing. The seeming hardship would pale compared to racial riots that would erupt weeks later.

One of my neighbors literally put on a happy face—among several encouraging, or funny, street decorations to adorn this University Heights property and/or the sidewalk straddling Meade Avenue. Seems like every time I walked by something different greeted. Thank you.

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Pop Goes Another Housing Bubble

The current housing bubble—and there absolutely is one—bears only modest resemblance to the previous catastrophe, which I warned about in a lengthy August 2005 analysis. Rising mortgage rates already are deflating the 2020’s-decade bubble, but the pop is unavoidable without fundamental changes in the actual market or the myths used to explain existing dynamics.

Since before anyone heard of SARS-CoV-2 (severe acute respiratory syndrome Coronavirus 2)/COVID-19, which economic and societal disruption super-inflated the housing bubble, I had warned about a dangerous trend that ignores common sense observation of national demographics: Among the two largest segments, Baby Boomers are dying off and Millennials aren’t having many kids. As population growth stalls, there will be less demand for housing because there will be fewer people to buy. Meaning: All the babbling about not enough inventory has set into motion an overbuilding frenzy that is sure to deflate home values in the not-so-distant future. Before pandemic lockdowns, I had thought within 10 years. I now expect less than five—if we’re lucky.

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What is Inflation?

Everywhere you look, there are reports about rising inflation, which is presented as increases in prices of goods. As a longtime journalist with a reputation for making complex concepts simple and straightforward to understand, I must correct the glaring mistake made by the majority of news reports: Inflation and rising prices are not the same, although there is an undeniable relationship between the two.

Inflation isn’t prices going up but the value of money going down. Spending power decreases. The classic case is late-1923 Germany, when, because of hyperinflation, “a loaf of bread cost 140 billion marks. Workers were paid twice a day, and given half-hour breaks to rush to the shops with their satchels, suitcases, or wheelbarrow, to buy something, anything, before their paper money halved in value yet again” (source: “Loads of Money“, Economist).

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Return to Nextdoor

I last quit Nextdoor on July 28, 2020, protesting the ridiculously ambiguous tenets of the so-called “Good Neighbor Pledge”. My account is now reactivated. Testing the limits of that pledge is one of my goals in what may be a temporary return. Why bother? You ask the right question.

Burgeoning crude oil per-barrel costs, surging inflation, rising prices on seemingly everything, the Russian-Ukraine war, and potentially devastating consequences (globally) from the West’s sanctions against Russia are precursors to economic crisis of frightening magnitude. S-o-o-o, my neighbors and I may have reason to buy and sell or barter items some time in the not-so-distant future.

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The Difference Between Today and Yesterday

Gasoline prices continue their relentless rise here in San Diego. Regular unleaded now is $1 or more per gallon than on Feb. 24, 2022—when started Russia’s Ukrainian invasion. The Featured Image and companion compare changes over one day. The Arco is located at El Cajon Blvd and Texas Street, where North Park and University Heights meet.

But 30 cents a gallon more than yesterday, or the day before, isn’t the bigger difference. I awoke this morning to news alerts that Joseph Biden banned importation of Russian oil. Price to pump fuel is least of the problems. This sanction, on top of the others, leads to one conclusion, and a single consequence: The United States and Russia are unofficially at war. All that remains is declaration by one side or the other.

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The Price of Gas Rose 24 Cents Overnight!

Let me be the first to (sarcastically) thank the oligarchs—whether they be the Russian ruling class or one-percent of people holding the most wealth—for rushing to grub as much money as possible from we whom they regard as chattel. The invasion of Ukraine, and the West’s (ah-hum) finger-wagging recriminating sanctions, couldn’t possibly have disrupted the flow of oil yet. But why wait, when profits are to be had and war is a convenient excuse for puffing them.

Yesterday, regular, unleaded gasoline sold for $4.46 a gallon at all three of my San Diego neighborhood’s three economy filling stations. That’s cash price; credit costs more. As you can see from the Featured Image, price is now $4.70. That shocker greeted my wife and I this morning when we stopped to top off the tank.

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Welcome to the San Diego Housing Boom (I Mean Bubble)

Gulp. San Diego home prices are skyrocketing far worse than my recent essays report. For some unexplainable algorithmic reason, a short news clip from the local Fox affiliate popped up in my YouTube feed, reporting rapid rise in the median home price. One year ago: $671,000. One month ago: $800,000. Currently: $825,000. The clip doesn’t cite a source and my quick online news search didn’t find one. By my math, the annual increase is 22.9 percent. Yikes.

Let’s look at one property on North Avenue in my neighborhood of University Heights. On Dec. 29, 2019, I captured the Featured Image, which because of uncharacteristic underexposure by Leica Q required extensive post-production correction and refinement. Vitals, aperture manually set: f/5.6, ISO 100, 1/125 sec, 28mm; 10:21 a.m. PST.

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San Diego County Partly Reopens, But Not Soon Enough for Some Businesses

One year ago today, California bars, breweries, and eateries stopped serving customers indoors, shifting to delivery and take-out services only—as ordered by Governor Gavin Newsom. On March 19, 2020, he issued a “stay-at-home” order for all Californians that went into effect the next day. Restrictions would later lift only to be reimposednearly as harsh during the Thanksgiving and Christmas holidays as the pandemic‘s early-declaration days.

Today, after months of onerous prohibitions upon local businesses, San Diego County rose from the most restrictive tier, which permits malls and retailers to operate at 50-percent capacity; aquariums, churches, movie theaters, museums, restaurants, and zoos to allow customers indoors at 25-percent capacity; and gyms and hotels to operate at 10-percent capacity. Oh joy. Beat me with the stick, because it feels so good compared to the baseball bat you were whacking with.

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Surely There is a Better Way to Help the Homeless

I specifically shot the Featured Image, yesterday using Leica Q2, to illustrate this essay. Vitals, aperture manually set: f/5.6, ISO 100, 1/400 sec, 28mm; 11:22 a.m. PST. The carts belonged to one of three homeless men gathered together a few meters away on the Hillcrest side of Vermont Street Bridge (University Heights is on the other). For sure, San Diego has a significant indigent population. But I write about San Francisco and something that surprises me—and perhaps will you, too.

According to the SF Chronicle (sorry, subscription required), the city is “currently sheltering more than 2,200 homeless people in about 25 hotels” and the “monthly program costs range from $15 million to $18 million”. By my math, that works out to between $6,818.18 to $8,8181.82 per person each month. If these people were paid, the equivalent annual salary would be between $82,000 and $98,000. Oh, and looks like the United States government will cover costs through the end of September 2021.

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What a Sign Foreshadows

Across the country this Thanksgiving holiday, the dire circumstance is businesses closing forever because of SARS-CoV-2 (severe acute respiratory syndrome Coronavirus 2)—also known as COVID-19—local lockdown and stay-at-home orders that keep away customers and choke revenue. In this County, SanDiegoVille keeps a running list of restaurants and pubs permanently shuttered during 2020—the majority since the pandemic’s start. I count 109 entities, but more when accounting for establishments with multiple locations.

Many businesses that had reopened during the summer are closing again as states seek to combat rising Novel Coronavirus cases. For the record, the use of cases is grossly misleading; the numbers actually refer to positive tests, which doesn’t mean that someone is sick—and most likely not. Eighty percent (or more) of people contracting COVID-19 are asymptomatic or mildly ill. Regardless, restrictions are everywhere, placed by (hopefully) well-meaning governors.

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Park Your Butt, Not Your Car

Southern California continues to suffer from the self-inflicted economic devastation imposed by our esteemed governor, Gavin “Gruesome” Newsom. He has imposed a partial, second statewide shutdown in response to increasing confirmed SARS-CoV-2 (severe acute respiratory syndrome Coronavirus 2)—also known as COVID-19—cases. Pandemic deaths aren’t rapidly rising, which, in my journaled opinion, is the metric more important to making policy that harms millions of businesses and leads to massive job losses.

What is the harm? Locally, according to San Diego Regional Economic Development Corporation: “Forty-one percent of businesses surveyed saw revenues decline by 81 to 100 percent; 93 percent saw staffing declines of one to 50 employees”. Additionally, “minority-owned small businesses have been disproportionately impacted by COVID”. Explicitly: “More than 90 percent of minority-owned businesses have seen their revenue decline, with most experiencing steep revenue declines of 81 to 100 percent”. EDC released the most recent data—collected May 28 to June 8, when the state started reopening—on July 1, or 13 days before Newsom reimposed new closure measures.