The Big Picture |
- The FRBNY Staff Underlying Inflation Gauge: UIG
- ISIS Thanks John McCain for Making their Rise to Power Possible
- When Josh Brown isn’t trading
- 10 Monday PM Reads
- Masters in Business: Michael Mauboussin
- European Economy Guide
- Welcome to the Muppet Economy
- 10 Monday AM Reads
- Inversion of the Money Snatchers
- Why Are Young Adults Living with Their Parents and When Will They Move Out?
| The FRBNY Staff Underlying Inflation Gauge: UIG Posted: 05 Aug 2014 02:00 AM PDT |
| ISIS Thanks John McCain for Making their Rise to Power Possible Posted: 04 Aug 2014 10:30 PM PDT ISIS Terrorists Credit the Iraq War for Their Success
We've noted for months that the ISIS terrorists wouldn't have been able to take over Iraq if we hadn't launched the idiotic Iraq war and "regime changed" the country. But don't take our word for it … the ISIS barbarians just agreed. Breitbart reports:
Walid Shoebat – the self-described former Islamic terrorist who converted to Christianity – says:
And Chris Maume writes at the Independent, "It was better to live in Iraq under Saddam." Postscript: We've made every single country we've regime changed worse. |
| Posted: 04 Aug 2014 02:00 PM PDT This is a charming little vignette about my partner Josh and his family. Its very cute:
When Josh Brown isn’t trading – he’s all about family. He uses a misbehaving puppet named Richard, with a British accent, to teach his kids right from wrong. See why Josh Brown is even funnier at home than he is on television. |
| Posted: 04 Aug 2014 01:15 PM PDT My afternoon train reads:
What are you reading?
California's Exceptional Drought Just Keeps Getting Worse
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| Masters in Business: Michael Mauboussin Posted: 04 Aug 2014 10:30 AM PDT Michael Mauboussin began his career at Drexel Burnham Lambert in the 1980s through what he describes as a random stroke of good luck. He worked closely with Bill Miller, former chairman of Legg Mason Capital Management, and is now head of global financial strategies at Credit Suisse. He is also an adjunct at Columbia University School of Business. The role of luck and randomness in the investing process has fascinated Mauboussin for years. Some of his earlier work looked at problems of cognitive bias and why investors find it so difficult to change their minds, even when presented with overwhelming evidence of error and failure. He is the author of numerous books, most recently “The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing.” You can listen to the full interview with Mauboussin here or below; You can download an MP3 of the podcast here. This is the fourth episode in our new series “Masters in Business” that I’ve created with Bloomberg Radio and Bloomberg View. You can listen to the show on Bloomberg AM on weekends and nationally on Sirius XM channel 119. Our previous interviews are here. Next week I’ll speak with Jack Brennan, former Vanguard chief executive officer and current chairman emeritus.
Books:
See also: |
| Posted: 04 Aug 2014 09:00 AM PDT Click for an interactive graphic. |
| Posted: 04 Aug 2014 07:00 AM PDT Slipping back into my regular routine is sometimes a challenge after a few days of traveling. The first day back in the markets — especially following a week like we had to end July and begin August — can be a bit of an adjustment. A few days away allows the accumulation of jaded skepticism to wane a bit. Hence, the surprise that registered this morning when I read a Wall Street Journal article on "How Individual Investors Can Invest Like a Hedge Fund." The article goes on to look at three possible ways that an ordinary investor can deploy their capital "like a hedge fund without hefty expenses." What it failed to explain is why ordinary investors would or should want to do this.
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| Posted: 04 Aug 2014 06:00 AM PDT My morning train reads (continues here):
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| Inversion of the Money Snatchers Posted: 04 Aug 2014 04:00 AM PDT 7/30/14 – (8:55) |
| Why Are Young Adults Living with Their Parents and When Will They Move Out? Posted: 04 Aug 2014 03:00 AM PDT The increase in adult children living with their parents has raised important questions regarding household formation and its impact on owning, renting, and the demand for new housing construction. The percent of young adults, aged 18 to 34, who are living with their parents has increased from an average of 27 percent between 1990 and 2006 to 31 percent in 2013 (a total of approximately 22 million).1 Because young adults, especially the older ones, traditionally represent a substantial share of first-time homebuyers, their delayed decision to form a household has contributed to a depressed rate of household formation and housing demand. Young adults also have been experiencing higher rates of unemployment and delayed marriages. 2 In the latest National Housing Survey Topic Analysis, Fannie Mae's Economic and Strategic Research Group examines the reasons why young adult children are living with their parents.3 In this study, we analyze National Housing Survey data based on responses from parents about their young adult children who are living with them. The National Housing Survey interviews adult financial decision makers of a household; therefore all responses are from the parents' perspective. To provide further insights, we analyzed parents' responses for two age groups of young adults living with them, 18-22 year olds (“younger adult children”) and 23-34 year olds (“older adult children”). Financial Concerns Are the Primary Reason Survey results (see Chart 1) show that financial reasons are the primary response given by parents for why their adult children are not living in a separate home. Parents say by a large margin that the younger (age 18-22) adult children are living with them because “they are saving money while enrolled in school.” Also, given that the vast majority of this younger age group has been reported in our survey as “not currently employed in a paying job” or “employed part-time,” this impedes their ability to live on their own. When asked about their older adult children (age 23-34), parents’ responses were more diverse. Their top responses include:
Overall, financial concerns, in aggregate, also are the primary reason among the older age group for living at home, even though half of this group is employed full-time. Chart 1
Most Parents Prefer Adult Children to Live with Them The results also suggest that parents may play a role in encouraging their adult children to live with them. As Chart 2 shows, 68 percent of parents with adult children living at home responded that they prefer their adult child to continue living in their home. Chart 2
Interestingly, the survey shows a difference in financial situation attitudes among parents with younger adult children compared to older adult children living at home. A higher share of parents with younger adult children responded that their past personal financial situation has gotten better and/or their future personal financial situation is expected to get better (5 percent and 11 percent higher, respectively) compared to parents with older adult children. The parents with younger adult children also are more often employed full-time, which could be due partially to age differences among the population of parents, though reported rates of retirement are similar. The analysis also shows significant differences between the attitudes of parents with younger and older adult children regarding the potential for their children to move out of the parental home. As Chart 3 shows, 52 percent of parents with older adult children expect their children to move out in less than 2 years, whereas parents with younger adult children were almost evenly split between less than 2 years (38 percent) and 2 to 5 years (34 percent). For both age groups, the majority of adult children living with parents expect that they will more likely rent than buy a home when they move out of their parents' house. Interestingly, the 2012 American Community Survey (ACS) shows for those householders 34 years old and younger that the percentage of those renting was 67 percent and the homeownership rate was 33 percent. When we adjust Fannie Mae's National Housing Survey results to be more comparable to the ACS results by considering only the rent and buy populations, the data show 66 percent are more likely to rent and 34 percent are more likely to buy for those 34 years old and younger – very similar to the ACS results. This could imply that young adults currently living with their parents may not have a substantial impact on shifting the near-term homeownership rate when they do move out of their parent's home. It is important to note, however, that a recent National Housing Survey study found that more than 90 percent of young renters said they are likely to buy a home at some point in the future. Chart 3
Overall, results suggest that a combination of personal financial constraints, age of the adult child, and parental preferences encourage young adults to live with their parents. Given most parents' preference for the adult children to remain at home and the potential for a mutually beneficial experience, we will see if this becomes a more permanent lifestyle trend that slows household formation even as the economy improves. Given that financial reasons account for the vast majority of parents' responses for why their young adult children are living with them, it seems likely that these young adult children, especially older young adults, will start to form their own households once they feel confident about their financial situation and future prospects. To learn more about this study, read our Fannie Mae National Housing Survey Topic Analysis. Stephanie Postles |
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