Some Things We Have Run Across Recently…

The demilitarized zone between North and South Korea has always interested me, not because of the military standoff but because of its ecological history and now, its economic development. The DMZ is not a fence or a Berlin Wall. It is an enormous swath of land, 528 square miles in size. Because there has been virtually no human encroachment for over 60 years, the region is a pristine ecological park with migratory birds and animals flocking to the region. Of course there has to be some tiptoeing going on  by the animals since the land is laced with over 800,000 landmines!

Today the region is also becoming an investment hotspot. The asking price for farmland within the zone was $2 a square foot in February. With just the whiff of peace now, speculators have arrived and the price of land has doubled or more. No matter the time or the place, Greed and Fear are very much alive in this world, even in the landmined DMZ.

A second news item that caught our attention has to do with Alexa from Amazon (and also Siri, Cortana and Assistant). We use these devices for all sorts of things, to ask about the weather, play music, answer questions. But there is a dark side to all this. Hackers have figured out how to put hidden commands in the music the devices play. The commands are not detectable to the human ear but are detectable to Alexa. So as you are listening to your soft rock or head banging stuff, Alexa is busy transferring money from your account to some Russian bank or opening the front door of your house. Ugh, so much for the joys of Artificial Intelligence. 

And a final item deals with serious economics. We are all looking for the Holy Grail indicator which will predict when economies are going to turn up and when economies are going to turn down. Now Money Magazine claims to have come up with the one single simple economic signal - New Home Construction. Home builders are reluctant to begin a project or break ground on a house until they have a buyer. And if they don’t have a buyer, this might indicate the economy is in a slowing phase.

So New Housing Starts is what we need to follow. What does the data show today? In February new home construction fell 7% and the most recent figure through April also indicates a decline. So we may be heading  towards a slowdown but as they say in life, there are lies, damn lies and statistics. Over the past year new home construction is up 10.5% so perhaps the most recent data is just noise. Caveat emptor, the world is complicated.