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This could be millennials’ big chance to finally buy houses

April 16, 2021

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Today's Agenda

Millennials May Buy Houses Soon

We have written often about how the millennial generation is cursed to live in an era of repeated financial crises, wars, plagues and probably locusts. Or monkey people. Did you see this? Why are they making monkey people? 

Anyway, growing up in an age of one bad thing after another means millennials have accumulated even less wealth than Gen Xers, long identified as a bunch of slackers:

Repeated economic blows have kept millennials from buying houses, which is the usual way Americans accumulate wealth, writes Justin Fox. There is a sliver of hope this could finally change with the pandemic, just in time for millennials to start turning 40. Maybe they can work remotely from relatively cheap locales. Maybe big-city real estate will get a little more affordable. At least until the monkeys take over. Read the whole thing.

Consumer Spending: So Good That It's Bad?

Was the 80 gazillion dollars Americans have gotten from the government in the past year stimulus or merely relief to tide them over through the pandemic? The answer may surprise you! 

Actually, it's yes on both counts. Retail spending is booming right now, which in an economy that is 70% consumer spending makes for a pretty darn stimulated economy. Americans spent money on pretty much everything in March, Sarah Halzack writes, and will probably keep on doing that through the summer:

Not only are we still buying stuff we bought in the pandemic — video games and basketball hoops — but we're also now buying stuff we didn't buy in the pandemic — special clothes for the office and drinks with friends. And soon enough a lucky few of us will be buying trips to Greece and such. (Italy is still a no-fly zone, Rachel Sanderson points out, because that Mario Draghi still cares about coronavirus, if you can imagine.)

But there are only so many trips to Greece or drinks with friends or basketball hoops one can buy. Meanwhile, the bulk of the 80 gazillion dollars we've received has been saved or used to pay down debt, writes Lisa Abramowicz. That means it wasn't spent on basketball hoops, which means it wasn't stimulative. But that's fine! Good, even! It fulfilled the government's main mission, which was to keep people afloat during a pandemic. 

It also means stimulus checks aren't going to fuel the runaway inflation many people see behind every bush. A true inflationary death spiral starts with wages, notes Conor Sen, and it's still not clear that's happening. Some service industries are struggling to hire for various reasons, pushing wages higher. But those reasons, from Covid fears to unemployment checks, are temporary, meaning the wage spike might be, too.

All this government largesse has ironically been mildly perturbing for the banking industry, writes Brian Chappatta. To be sure, banks continue to rake in plenty of profits. You can stop worrying about that. But people stashing stimulus checks in bank accounts while also not needing to take out loans hits interest income from both ends. They will probably be fine with their own gazillions of dollars.

Putin on the Fritz

Vladimir Putin has been running Russia for almost 22 years, and recent constitutional changes conveniently made it possible for him to stay in power for a total of 36 years, a feat not managed since Ivan the Terrible back in the 1500s. But being ruler for life can make one sloppy. And Putin lately is making mistakes that could cost him, writes Clara Ferreira Marques. His saber-rattling over Ukraine and jailing of opponents aren't helping his popularity at home, which was already hurting from the pandemic. They're also not making him any more popular with the rest of the world.

Further New Cold War Reading:

Telltale Charts

All the good economic news lately is bad news for bonds, which is good news for bonds, explains Brian Chappatta. While the stock market eats the checkers, the bond market is playing 23-D Go.

Playing second fiddle to other tech behemoths in key markets has helped Microsoft avoid scrutiny, despite its massiveness, writes Tae Kim. Second place is a pretty cozy place to be. 

Further Reading

Corporate America has (mostly) spoken up for voting rights. We'll soon see how real its commitment is. — Tim O'Brien 

Seventy-five years after a cop blinded a Black vet, wearing the nation's uniform still doesn't protect Black men from police abuse. — Robert George

It's not yet clear whether Coinbase is a legit FANG stock or just another meme. — Lionel Laurent 

To avoid falling victim to the next Bernie Madoff, don't be afraid to ask seemingly embarrassing questions. — John Authers 

ICYMI

Unused vaccines are piling up as some U.S. regions resist. 

Regulation is coming for crypto.

How Amsterdam recovered from bubonic plague. 

Kickers

School once named for a Confederate is renamed after Hank Aaron. (h/t Ellen Kominers)

Strange creature in tree is actually a croissant. (h/t Mike Smedley)

High-quality audio makes people sound smarter.

I cannot stress this enough: monkey people.

Notes: Please send croissants and complaints to Mark Gongloff at mgongloff1@bloomberg.net.

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