If you sneak out of work early today, you won’t be the only one.  Millions will head out for what’s functionally the real start of summer, regardless of what the “official” calendars might claim about June 21st.

The price of gas is over $4-bucks now in a lot of places, and in New York over $5 a gallon.

Seems like everything is going up, too.  Take home prices…  Here’s a story about how “Home values have risen at the fastest rate in 12-years.”  One has to be careful with such stories, however.  For one, I don’t think the value has gone up.  People are often fuzzy on the difference between price and value.

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A price is what will be paid for a home.  Whereas the value is more a judgement call as to worth. Let’s just set that point aside.

Along with prices going up, the Fed has been trying to force interest rates back up.  As a result, mortgage rates have been going up at the fastest rate in 50-years, says this report.

If you own a home, everyone’s got their hand out.  Yesterday, our homeowner’s insurance policy came in the mail.  This year the company wants $1,806 where last year, the home insurance was $1,636.  That’s a 10.4% increase.

That led to a “come to Jesus” discussion with the insurance outfit.  What I heard was the usual BS:  “If you’re home were destroyed, Mr. Ure, the cost of lumber to rebuild it has gone up, you know, and so our rates have to reflect that…”

I cut the woman off in mid-excuse.

“See here?  Says the structure cost of our mobile home was $97,000 last year and you have it as $105,000 this year.  I get 8.2% more coverage and you get 10.4% more money.  Sounds pretty one-sided to me…”

We ended agreeing that she’s check with underwriting and see if they’d keep last year’s valuation and I’d pay last year’s price.

For those who don’t know, mobile and modular homes are really screwed-over by insurance companies.  A stick-built home will generally pay a third to half the rate of a mobile or modular…even if the modular has been substantially rebuilt, as ours has been – including much of the wiring.

Which gets me to a point about mobile/modulars being underwired with #14 instead of the higher ampacity #12 is just beyond me.  OK, sure it saves a few cents, but in the long-haul, false economy for the owner because the higher fire rates of mobile homes bites in the long-run with higher insurance rates.

Mobile/modular builders crapped in their own bed years back when they started trying to shave savings on wiring with the disastrous aluminum wiring experiment.  The NY Times did a story on this back in 2008 (here) but people will do anything for a buck.

Including kill people.  Which is later denied but a chorus of lawyers, but our friendly advice is if you see aluminum wiring, run from the deal as fast as you can.  Our home is all-copper and we wouldn’t have it any other way.

Talk to firemen, if you don’t believe it.  We reckon this wiring deal to be the reason mobiles not only don’t hold their value, but also end up paying double the prevailing stick rates on insurance.

Now, where were we?

Oh, yes…

Durable Goods Tank

We’ve been mentioning for a good while that at some point, we will see the end of the “Trump Bump” in the economy.  Could it be starting now with the decline reported in Advance Durable Goods?

“New Orders
New orders for manufactured durable goods in
April decreased $4.2 billion or 1.7 percent to $248.5 billion,”

Actually, the picture makes more sense:

The market looks to open down 50-60 after the news.

Fed Inflation Planning

The latest Fed H.6 Money Stocks Measures tell us the Fed is still trying to push rates up.  One way to do this is to slow the printing of new money at the M1 (cash and equivalents) level.

In the period through the end of March, the annualized rate of increase for the three months was 1.8 percent.

Turns out in the sliding window through May 14, it’s back up to 2.9 percent, so their foot is coming off the brakes a bit.  Still, odds are pretty good there will be another rate hike at the June meeting.

The 10-year Treasury note is up to about 3% now and the Fed seems to have their eye on something closer to 4%.

Not that they’re greedy (but show me a banker who isn’t!) but their problem is that while this will shove the Public Debt higher than the $21-trillion mark, the reality is Pension Funds are on the verge of melting down because they were all planning on a 7-percent rate world until the Second Coming.

Of course, as rates (and prices) go up, that will bring the dollar down, but for now the dollar is going up because of our US military, mainly.

As an insider once-upon-a-time told me: “First you have a Navy…”

Speaking of Wars and Money

There are three “problem areas” to be keeping your eye on tomorrow and Sunday.  (I mention these dates because the US market is closed for three and that’s the best financial timing for starting a war…)

One is what Russia is up to.  People in Norway are getting concerned about higher levels of Russian naval activities.

War Candidate #2 would be a flash Israeli strike on Iran where it’s believed by a many in intelligence circles there are centrifuges running more than just fuel-grade enrichment.  Israel would likely use holiday timing to advantage.

And behind curtain #3, we have the end of the peace process in Korea.  At least for now.

Also, pay particular attention to this Reuters Exclusive: China Inc tightens reins on debt, raises specter of slowdown/.”

That would be one of those deals where “China sneezes and the world catches cold….

Must Be Present to Win Dept.

A couple of key health stories are out.  And since living is one of the first things we check for in the morning, it’s sad to find that “No amount of alcohol, sausage or bacon is safe according to cancer experts>’

I promise to look into this after breakfast. I won’t ask about ham…  Hot dog for lunch?

Antidepressants are now being linked to dementia.

A list of risky meds is online here...highest risks in the right-hand column.

Time to go light up a lawnmower…see you here Monday and remember, I will be doing work on the website this weekend….so bear with us…

Melt-Up? Or, Melt-Down?
Coping: How to Fill the Holiday