This week’s economics articles cover micro topics but also includes a few on the economic health of Europe. Investment news is centered on reporting showing the poor performance of stock pickers. We also look at savings, the environmental cost of Bitcoin, and some research on housing costs.

Economics

• This is an interesting piece by Economist Claudia Sahm that addresses people’s perception of the state of the economy, news reporting, and psychology. (StayAtHomeMacro)
• In the U.S., consumers are falling behind on their payments. Enter the repo man. (Reuters) 
• Have U.S. consumer goods companies become too greedy, using rising input costs and supply chain issues as an excuse to keep raising prices? When will consumers say no? Investors urge them to stop. (Reuters)
• Here is an interesting look at inflation in Western Europe. The U.K. tops the chart, literally! Makes the U.S. not seem so bad at 5%. (Reuters)
  
• In light of this inflation information, the ECB, Bank of England and Fed are still figuring out what to do about it. (Reuters)
• And more economic news out of Europe shows that economies are recovering. And index measuring economic health jumped unexpectedly to 54.4 in April (anything over 50 means growth.) (Reuters)

Investing

• If you ever need to demonstrate the wisdom of sticking to Index funds, Ben Carlson gives you the data you need in this Wealth of Common Sense article looking at all sorts of funds’ performance in comparison. Morningstar would concur.
• Morningstar suggests that long-term bonds may have a rightful place in your portfolio again.

Savings

• Apparently Apple is offering a great interest rate on savings. The catch is you have to have an Apple credit card to access it. (CNBC)
• We have reported on the drain of cash from banks to money market funds. (EconExtra) Banks are finally feeling pressure to increase the rates they are paying depositors. (WSJ-subscription may be required.)

Bitcoin

• As China drove out major bitcoin mining, the U.S. has taken up the slack. Bitcoin mining requires so much electricity, there is a huge cost to the environment aand the public is paying the price. (This is a rather long article but you can listen to it if you prefer. (NYT)

Housing

• A Wealth of Common Sense attempts to answer the question of whether or not we will ever get to a point where housing is affordable. They look at research that distinguished between the factors contributing to the sharp increase in housing costs (rental and purchase) during the pandemic. One key was the household formation among millennials.
• More on millennials and their financial/housing situation can be found in the Atlantic article. (subscription may be required)

About the Author

Beth Tallman

Beth Tallman entered the working world armed with an MBA in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducts student workshops, and develops finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.

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