Data centers...................

 

Data centers are electricity hogs, substantial water users, take up very large tracts of land on which they build very large buildings, and they offer very few (non-construction) jobs. They also pay a premium for sites they want, forcing land values up.  Western Licking County is already home to data centers for Facebook, Google, Amazon, and more. Micro Soft just purchased two large tracts of land in central Licking County to build two more of them.  They paid a lot.  A mixed blessing.  As long as AI continues is growth pattern, we will undoubtedly see more in our future.  We don't have to like it, though.

chart from

One more thing he got right......................

 

The failure of Western governments to achieve their proclaimed objectives has produced a widespread reaction against big government. . . . The reaction may prove short-lived and be followed, after a brief interval, by a resumption of the trend toward ever bigger government.  The widespread enthusiasm for reducing government taxes and other impositions is not matched by a comparable enthusiasm for eliminating government programs—except programs that benefit other people.

-Milton & Rose Friedman, Free To Choose

Life is full of tradeoffs:..............

 

 .............if we want more "big data" and artificial intelligence then we might have less green energy.

Data centers consume massive amounts of electricity.  They are sprouting up all over Central Ohio.  If the push for all electric vehicles doesn't fade, there is little chance the electric grid will be able to keep up.  Sooner or later, we need to reconsider building new nuclear power plants.

Trends....................................

 

.........................................in the housing market (and other worthwhile stuff to think about).

There are 70 million baby boomers and they control something like $70 trillion in assets. We’re looking at 10-15 years of boomers buying places in Florida, Arizona, the Carolinas and other warm destinations.

Most of them have paid off mortgages and an obscene amount of home equity. Good luck betting against this trend.

Editor's Note:  There is nothing obscene about home equity.

This could catch on...........

 

But not all of us........................

. . . we have 10,000 baby boomers retiring every day from now until the end of this decade.

-from this Ben Carlson post, in which he offers answers to six significant questions about the economy

It is early in the game, but "Unprecedented" has jumped to an enormous lead to be 2023's "Word of the Year".........

 We live in unprecedented times. The recession in 2020 was not so much a recession as it was a lockdown. Using “normal words” to describe the economy in the last 3 years, we believe, does not make sense. 

-Brian Wesbury

Supply and demand..............

       The housing market has been unbelievably unbalanced over the past two years.  Probably has not been this difficult to buy a new home since three million GIs came home from World War II, got married, and started a baby boom.  If you don't build very many new houses for a dozen years, and a generation coming of age finally decides they want a home, well, at that point no supply meets excess demand.  Anyone trying to buy a house in the past two years is painfully familiar with the story: very few choices, inflated prices, multiple competing offers, sale prices well over list price.  To call this housing market chaotic might be charitable.  Rising interest rates may have started a cooling trend.  Buyers needing mortgages suddenly can't afford to pay as much as they could have six months ago.  Will sanity (from the viewpoint of those of us who prefer calmer markets) return?  Tough to say.  There is still a significant lack of supply to meet any kind of demand.

      Michael Batnick, a fairly bright finance guy, takes a stab at understanding what is going with this blog post.   Love his conclusion:

Eventually the market will find an equilibrium, but right now the housing market is drunk and needs time to sober up.

a burgeoning trend......................

 Those who say that indefinite growth is impossible, or at least unsustainable, in a world of finite resources are therefore wrong, for a simple reason:  growth can take place through doing more with less.

      Much 'growth' is actually shrinkage.  Largely unnoticed, there is a burgeoning trend today that the main engine of economic growth is not from using more resources, but from using innovation to do more with less:  more food from less land and less water; more miles for less fuel; more communication for less electricity; more buildings for less steel; more transistors for less silicon; more correspondence for less paper; more socks for less money; more parties for less time worked.

-Matt Ridley, How Innovation Works:  And Why It Flourishes in Freedom

this triple trend...........................

The first digital camera, built in 1976 by Kodak engineer Steven Sasson, was the size of a toaster oven, took twelve black-and-white images, and cost over $10,000.  Today, the average camera that comes with the average smartphone shows a thousand-fold improvement in weight, cost, and resolution over Sasson's model.  And these cameras are everywhere.  In cars, drones, phones, satellites, and such, and with an image resolution that's downright spooky.  Satellites photograph the Earth down to the half-meter range.  Drones shrink that to a centimeter.  But the LIDAR sensors atom autonomous cars capture just about everything—gathering 1.3 million data points per second.
     We see this triple trend of decreasing size and cost, and increasing performance everywhere.  The first commercial GPS hit shelves in 1981, weighing fifty-three points and costing $119,900.  By 2010, it had shrunk to a $5 chip small enough to sit on your finger.  The "inertial measurement unit" that guided our early rockets is another example.  In the mid-sixties, this was a fifty-pound $20 million device.  Today, the accelerometer and gyroscope in your cell phone do the same job for about $4 and weigh less than a grain of rice.

-Peter H. Diamandis and Steven Kotler,  The Future Is Faster Than You Think:  How Converging Technologies Are Transforming Business, Industries, and Our Lives

A good question........................

On what principle is it that with nothing but improvement behind us, we are to expect nothing but deterioration before us?

-Thomas Babington Macaulay

Long may she live......................

via whose link leads here

Creeping and crawling...........................

While the trend line looks okay, the recovery of the single-family residential construction business has been painfully slow.    Isn't it about time you built a new home for yourself, people?    Please.

Have I told you lately that we have some fabulous, reasonably priced, wooded home sites available?

enlargeable image here

It's not a question I would have thought to ask....

Is it time for the music business to reconsider its marginalization of musicianship?


...............but then, I don't watch MTV or listen to radio.  If you care about such questions, this essay is one to read.  A few snippets follow:


"If you go to a Stones concert, the audience is still using drugs, but they have substituted blood pressure medication for the LSD. I love those gray-haired old-timers, but they can’t help solve the industry’s problems, even if they still can sell albums."


"The situation in pop music today isn’t much different from the early 1950s, when the blandness and sameness of the offerings were obvious to any discerning listener. In 1953 or 1954, you might not have predicted the rise of rock ‘n’ roll, but you did know that this shallow and vapid music on the airwaves wouldn’t last forever."


 "And the next time the music revolution comes, it won’t be televised on MTV."


via

Just in case you forgot......................................

...............us people heavily invested in real estate are still more worried about deflation than inflation. It might even be safe to say that we are rooting for a bit more inflation.   Here is a chart from Calculated Risk (which, by the way, is a wondrous blog) showing inflation trends for the past 15 years:

enlargeable graph, and back story, here

Votey McVoteface...............................

The Economist takes note of the growing trend towards referendums.  Color them skeptical.  To wit:


Because referendums treat each issue in isolation, they allow voters to ignore the trade-offs inherent in policy choices and can thus render government incoherent. California, which has had referendums for a century, has been crippled by voters’ simultaneous demands for high spending and low taxes. A second danger is that fringe groups or vested interests use referendums to exercise outsize influence, particularly if few signatures are needed to call one and voter turnout is low

Cheerleading.....................

"American GDP per capita is now about $56,000," he said. "As I mentioned last year that – in real terms – is a staggering six times the amount in 1930, the year I was born, a leap far beyond the wildest dreams of my parents or their contemporaries. U.S. citizens are not intrinsically more intelligent today, nor do they work harder than did Americans in 1930. Rather, they work far more efficiently and thereby produce far more. This all-powerful trend is certain to continue: America’s economic magic remains alive and well."

-Warren Buffett, as culled from here

Confusion reigns.........................

........................Can't decide if this is another sign of the Apocalypse or just a really cool thing.

Occupying prime display space at the Barnes & Noble at Easton

Good to know........................

"The American consumer is astute and far more intelligent than they are given credit for. "
-Scott Rothbort, as culled from this post on "the death of the American mall."

Along the journey.............................

"Tendency is not always destiny, and knowing the tendencies and their antidotes can often help  prevent trouble that would otherwise occur."
-Charlie Munger

cartoon via