What we’re reading (6/15)
“Wall Street Isn’t To Blame For The Chaotic Housing Market” (Vox). “The fundamentals of low supply of houses, low mortgage rates, and the entry of millions of millennials into the housing market armed with higher personal savings help explain most of why the housing market has careened out of control over the past year. According to the National Rental Home Council, a single-family home rental lobbying group, ‘single-family rental home companies accounted for less than 0.14 percent of homes purchased’ and just 0.09 percent of net homes if you count the fact that many single-family rental investors sold homes as well.”
“Fed Officials Could Pencil In Earlier Rate Increase At Meeting” (Wall Street Journal). “Federal Reserve officials could signal this week that they anticipate raising interest rates sooner than previously expected following a spate of high inflation readings. In March, the last time they released quarterly economic forecasts, most officials expected to keep the Fed’s benchmark interest rate near zero through 2023 to encourage the economy’s recovery from the pandemic. Officials are set to release updated projections Wednesday after a two-day policy meeting.”
“Lumber Prices Post Biggest–Ever Weekly Drop With Buyers Balking” (Bloomberg). “Prices in Chicago fell 18% this week, the biggest decline for most-active futures in records going back to 1986. Lumber has has now dropped almost 40% from the record high reached on May 10. Sawmills appear to be catching up with the rampant homebuilding demand in North America that fueled a months-long rally, bringing some relief to a market beset by supply shortages and price surges. Buyers are balking at still historically elevated prices and awaiting additional supplies, setting off a cascading sell-off, analysts said.”
“What Lordstown’s Meltdown Means For SPACs” (DealBook). “Lordstown Motors’ founder and C.E.O., Steve Burns, as well its C.F.O., Julio Rodriguez, abruptly resigned yesterday. The departures came as the electric vehicle manufacturer, which went public via a SPAC last year, said a board investigation had found “issues with the accuracy” of claims about orders for its yet-to-be-released electric truck. Shares of Lordstown fell sharply. The Securities and Exchange Commission is looking into SPAC regulations, but last week said the review wasn’t due until April 2022. In the meantime, what, if anything, can be done to stop this from happening again?”
“Business Is Booming As Regulators Relax Drone Laws” (The Economist). “Although drones, or uncrewed aerial vehicles (UAVs) as they are also known, were originally developed for military target practice and surveillance, the civilian versions that have emerged over the past decade have created a thriving new industry. Commercial UAVs, especially the hovering type, are now used for jobs ranging from inspecting power lines, buildings and crops, to aerial photography, transporting medical supplies and, in some places, delivering pizzas. The worldwide value of this business reached $22.5bn last year, according to Drone Industry Insights, a German research firm with its eye on the market. By 2025 that figure is expected to be more than $42bn.”
