The Supply Crunch in Luxury Homes 

The difference between a mortgage rate of 3%, where rates were four years ago, and 5.5%, where they are today, can make a significant difference in the monthly mortgage payment for middle-income buyers. Many are not able to buy homes they could have bought four years ago. So, they have a choice: Buy less of a house. Or don’t buy at all.

For high-income home buyers, that sort of interest-rate differential is not significant, and the demand for luxury homes is still strong. The problem, says California realtor Ken DeLeon, is that “the lack of supply almost perpetuates the lack of supply because sellers don’t have anywhere to go.” (Since 2000, the average monthly number of active existing-home listings has dropped 45%, according to a recent report.)

If you are interested, you can read more here.

 

A Different Kind of Dumb: How the US Sabotaged Itself in 1992

In this concise and amusing little essay, Bill Bonner explains how, in 1992, the US stood on top of the globe, with the world’s largest and strongest economy, a relatively happy and productive workforce, a strong dollar and a vibrant stock market, and what looked like the beginning of a new era of world peace.

But then…

Click here to enjoy Bill’s summary of how we F-ed it up.

 

Chart of the Week: The Speed of Compounding

When our nieces and nephews were young, K and I opened accounts for them. We deposited an amount of money that was not great, but enough so that if they wanted to, they could have used it to buy a late-model used car. However, we told them that we didn’t want them to spend it. We wanted them to save it. If they did, we explained, they would end up with a lotta, lotta money that they could use to add to the enjoyment of their lives when they retired.

This week, Sean gives us several charts that explain the “miracle” of compound interest. What happens, as you can see, is that it begins steadily and slowly. But then, after 20 and 30 years, it ascends steeply. The end numbers are truly mind-blowing. – MF 

Most people reading this have heard about the power of compound interest.

Compounding is a simple investment strategy in which you put your money in an investment that pays a cash return, such as a dividend.

You then take your cash return and reinvest it. Your reinvested dividend, or interest, then earns a return, too.

For a comparison, think about a snowball. As you roll the ball through the snow, the surface area gets bigger. The more surface area on the snowball, the more snow it picks up. The snowball gains mass slowly at first… but pretty soon, it’s so large you can’t stop it from rolling.

Now, you have probably heard that analogy before. But I don’t think it drives home just how crazy it gets when you’re able to compound wealth over a long period of time.

Because in reality, compounding does more than cause money to grow. It also causes the time you need to make money to shrink!

Imagine saving $10,000 every year and earning 7% compound interest.

The blog Four Pillar Freedom provides an exceptional chart of how this looks in action.

It will take you 7.84 years to crack the $100,000 level this way.

A long time!

But look what happens next…

With the same investment and interest rate, it only takes 5.1 years to get the next $100,000.

Over time, the gap between $100,000 increments becomes shorter and shorter.

Although you’re still investing $10,000 per year, the money you’ve already saved has continued to compound.

By the time you’re going from $400,000 to $500,000, it only takes 2.5 years.

If you crunch the numbers, it takes more time (7.84 years) to go from $0 to $100,000 than it does to go from $600,000 to $1 million (6.37 years).

Isn’t that incredible?

That’s the hidden power of compounding.

Compounding does more than generate money faster and faster.

Compounding actually buys you more and more time the longer you take advantage of it.

This chart also shows why Charlie Munger was so adamant about scrimping and saving to get to your first $100,000 invested…

Because after that? It’s when compounding kicks into full gear, and your wealth goes crazy.

But the key to get there, as with most things, is consistency.

If you haven’t been putting aside any money before, now’s the second-best time to get started.

– Sean MacIntyre

Click here for a great video lesson on investing from Sean. 

And check out his YouTube channel here.

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“Wrong decisions are part of life. Being able to make them work anyway is one of the abilities of those who are successful.” – Warren Buffett

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Five Quick Bites 

Interesting. How Ronald Reagan reacted to “mostly peaceful” student protests. Click here.

Fun. The Hobbit read in what is apparently the style of a BBC Radio 4 Shipping Forecast. Click here.

Interesting. Did you know that the FBI has a “Head of Diversity?” Click here.

Interesting. Dubai experienced unprecedented rains a few weeks ago. Click here to see what the flooding looked like from space.

Fun and Interesting. Click here to watch the Boston Typewriter Orchestra in action. (Imagine these guys, typewriters in hand, assembling every Tuesday night at one of their homes to practice.)

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A lion at Luján Zoo in Buenos Aires, Argentina 

The zoo provides a home for animals rescued from circuses, animal trafficking, and private collections. Losing its main source of money due to the effects of the pandemic led to its closure. Only the owner and one employee now care for the animals.

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From Steve Leveen, following the publication of my piece on bilingual children in the May 1 issue: 

“Thanks for this story. I’m delighted that Nazario has his family here, as I thought they were still back in his country.

“You express an oft-told story of precocious children impressing adults with their linguistic powers. The stories are true, but they can also serve to discourage adults from attempting to learn another language themselves, believing that it’s too late for them. And that’s a pity since it’s based on an incorrect interpretation of what you’ve described.

“What these young children are displaying is not the power of children but the power of humans. We all are born with the ability to learn multiple languages and can continue to do this throughout our lives, until the onset of dementia.

“What children have over adults are two things. First, they have exceptional hearing, which begins to decline as early as our late teens or twenties. Second, they have time. Adults are busy doing adult things, whereas children are devoting all their waking hours to hearing and repeating languages. If adults spend comparable time in similar language immersion situations, they generally make faster progress than children.

“And finally, children talk like children. What often amazes adults is how children can communicate well with one another, and with adults on basic topics, often with refreshing and even clever language use, but they have nowhere near the language abilities of adults who have tens of thousands of hours of language use, so that they include idioms, quotations, literary references, evoking of popular culture, etc. They also talk with other adults about abstract concepts out of reach of children.

“So, let’s enjoy these little humans and marvel at their growing language skills, but instead of being discouraged, be reminded of the skills we all have.”

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“Being Liberal Isn’t Fun” 

I’ve said before that the best humor is that which unites, not divides. In the past several years, many of America’s best-known comedians have ceased performing at college campuses for fear of telling a politically incorrect joke. Because a second standard I have for great humor is that it must be brave enough to address difficult subjects, including political and social biases, I’ve developed a prejudice against those that were not attacking the Woke Left.

Last night, I came upon this stand-up routine by Andy Haynes, and he proves me wrong. He addresses some hot-button issues – from a liberal’s perspective – and yet, he’s really funny!

Enjoy!

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Taylor Swift: What’s the Big Deal? 

I’ve been trying to understand the Taylor Swift phenomenon – how she became perhaps the most successful pop star of all time.

Here are some of the facts:

* She is the “most-streamed artist of all time” on Spotify. (In 2023, her songs were streamed 29.1 billion times.)

* Her debut tour – “Fearless” (2009-2010) – at Madison Square Garden sold out in one minute.

* “Eras,” her most recent tour, is the first-ever to gross $1 billion in ticket sales.

* She was the first and only artist to have four albums sell over 1 million copies in the first week.

* “Speak Now” (2010), her third album, was the first album to have all its songs hit the Billboard charts.

* Her fifth album – “1989” (2014) – spent a full year in the top ten on the Billboard Top 200.

* With her seventh album – “Lover” (2019) – she was the first female artist to have six albums sell more than 500,000 copies in a single week.

* She has won the most American Music Awards (40), the most Billboard Music Awards (39), the most Grammys for “Album of the Year” (4), the most MTV Video Music Awards (4), and the most IFPI Awards for “Global Recording Artist of the Year” (4).

* She was TIME Magazine’s 2023 Person of the Year, and is the only female artist to have been featured on the cover of the magazine four times.

* At 26, with a net worth of $250 million, she was the youngest person to be included in Forbes’ “America’s Self-Made Women List” (2016). And she currently has a net worth of $1.1 billion.

And there’s more. Lots more. She has won more awards and been on more “best” lists than I have space for. Click here to see them all.

Now here’s the thing…

I don’t think I’ve ever listened to any of her songs. I listen to music as much as the next person. It seems there is also music playing in the background, whether I’m home or at work. And yet, I have never heard Taylor Swift. Or if I have, I did not realize that’s what I was listening to.

I formed an impression of her from snippets I came across in the mainstream media. She seemed to me a contemporary reincarnation of Madonna, but less challenging of mainstream conventions, more accepting of social norms, and less interesting as a musician and songwriter than Madonna was in her prime.

And I had a prejudice against her that was brilliantly articulated by Ben Shapiro, when, on one of his podcasts, he said something like: “I have nothing against her, but I find it odd that a 34-year-old woman is still writing songs about teenage romance.”

The photographs I had seen of Taylor Swift confirmed my prejudice. She looked tall, lanky thin, and pretty in a very ordinary way – a long-haired Midwestern Girl Next Door dressed up like a cheerleader. Her style, as a pop star, seemed surprisingly bland to me. And that was another puzzle. Perhaps the look was conscious – a homogenized, inoffensive blend of her audience. Not what you would expect from a member of the “Tortured Poets Department” (the title of her most recent album).

There was nothing about what I knew about Taylor Swift at that point that gave me a hint about why she is, by all objective standards, the most successful pop musician of all time.

Then, a week or so ago, I found myself in a conversation about her. I don’t remember how she came up, but I remember being surprised to learn that three of the adult women I was speaking with had a favorable impression of her. And one of those women was in her sixties!

Gee, I thought. There are things going on here that I don’t understand. Contrary to my superficial impressions, was Taylor Swift a much better lyricist and singer than I had presumed? And if she wasn’t, what kind of amazing marketing strategy did she use to propel herself to the very top of the mountain of pop music stardom? How did this seemingly white-toast pop singer get bigger than The Beatles?

The world certainly is not in need of another opinion of or about Taylor Swift’s success – and especially not from a 73-year-old White guy. Nevertheless, I set about to find answers to those questions for… for… In case I was asked to make a speech about her one day?

I read a half-dozen magazine stories about her, and even skimmed a book about her, sitting in the corner of a bookstore last week. (No, I didn’t buy the book. I hadn’t the nerve to hand it to the checkout clerk.) I also spent at least six solid hours listening to about 30 of her most popular songs.

And, like it or not, I have formed an opinion of Taylor Swift – about her fame and her talent – which, since I haven’t yet been invited to make a speech about her, I decided to publish as this “Special Issue” of my blog. (And “Special Issue,” as I’ve told you, means: “You may want to skip this.”)

First, a disclaimer: I have no expertise in music or musical talent. My sole credential is that I have listened to thousands of rock-and-roll, country, pop, soul, R&B, and even rap songs for about 60 years now. But as I say in the disclaimer at the bottom of every issue, I have no problem talking about things I know very little about.

So, let’s get to it. Here’s what I think:

Taylor Swift is a good and maybe even very good singer. But she is not by any means, a great singer.

She has an impressively wide vocal range. Not amazingly wide like, say, Mariah Carey, Prince, or Whitney Houston. But wider than I would have guessed. And more than sufficient to convincingly deliver the songs she writes.

She also has impressive control of the tonality of her voice, which she uses to add depth and emotion to her lyrics –the sort of depth and emotion that appeals, as Shapiro suggested, to teenage girls.

As a lyricist, I would rate her as good to very good. Her lyrics, and especially the way she puts her lines together, are much, much better than I expected. As I listened to different songs from different albums and times, I could see that she understood (and still understands) the importance of keeping her stories a bit obtuse, to give them at the same time a touch of mystery and the possibility of universality – i.e., allowing listeners to fill in the narrative blanks, or even reconstruct the stories and the meanings entirely for themselves.

As for her look, her style, and all that – the impression I have of her now hasn’t changed from my uninformed, earlier impression. It is, at best, unremarkable. Not too cold, but not too hot. Somewhere early in her career, she seems to have consciously decided to go neutral in the style department and do her work through her lyrics, her melodies, and her voice.

So, cheers to Taylor Swift for all of that. But it doesn’t explain all of her unparalleled accomplishments.

I won’t presume to have an answer for that, but I do think that her greatest strength as a pop star is that she is acutely aware of what her audience wants from her and equally aware of how she can deliver it to them.

She very well understands the image she projects. She also – and this may be more important – understands her audience, the millions of girls and young women that she writes and sings for. And because she is aware, she smartly limits her repertoire to melodies within her strongest vocal range that create the mood that she knows works so well for her them.

That mood, I think, is key. After listening to a couple dozen of her songs, I could recognize it, and even feel it to some extent. But I don’t have the technical vocabulary to describe it. The best I can do is say that it is a softish, almost melancholy, combination of anguish, longing, and hurt.

To her credit, from the little studying I’ve done, it seems fair to say that Taylor Swift has ventured beyond her early thematic, lyrical, and melodic boundaries. Like other enduring pop stars, she has been able to alter her music output over the years as the musical landscape of pop has changed, but in a way that continues to appeal to her older fans, while also attracting younger ones and thus ever widening her base.

She seems also to have been purposeful in the topics and themes she chooses, as well as the diction she employs. (She uses the F-word smartly in many of her softest songs.)

One thing I was particularly impressed by was the way she uses rhymes and near-rhymes. Many, if not most, of her songs are held together by rhyme, either end rhymes or internal rhymes. Rhyme is normally an obstacle to pop lyricists. Used carelessly, it banalizes the emotionality and dumbs down the thought content to the very elementary level we expect of pop music.

But she counters that by inserting secondary stories into her main stories, and secondary themes into her main themes, each one a logical unit to itself, but woven together almost randomly. In this respect, she is more Joni Mitchell than Bruce Springsteen, and more Bob Dylan than Judy Collins, if you know what I mean.

The through line to all this is that Taylor Swift has maintained in all her later music the tone and emotionality that made her successful at her start. And she has been able to do that because she is so self-aware as a musician and performer and so aware of what her fans want from her.

In short, Taylor Swift is a sensitive, intelligent, and skillful singer and songwriter whose enormous success comes from having accidentally or purposefully discovered a way to tap into a kind of girlish, teenage angst and yearning that is deep and universal among young women, but also something useful that women carry into adulthood to feed and soothe their inner girls.

Final Note: Taylor Swift’s main audience is, of course, girls and women. But I know that she has a big homosexual following, too. And I’ve read that she has a growing following among young men and even adult men. This doesn’t surprise me. I’ve come to “sort of” like listening to some of her songs.

Here are a few things to read, if you care to read more:

* “It’s OK to Critique the New Taylor Swift Album” (Amy Odell)

* “9 Times Taylor Swift Crushed 2023” (Forbes)

* “So what exactly makes Taylor Swift great?” (Harvard Gazette)

* “Lead Like Taylor Swift: 5 Top Secrets of Her Superstar Success” (Forbes)

* “9 Ways Taylor Swift Has Changed the Music Business” (Billboard)

 

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Learning About Languages 

Steve Leveen, founder of the America the Bilingual Project and author of America’s Bilingual Century, an excellent book, is a friend of mine.

He recently copied me on an essay he posted on his America the Bilingual Project website titled “Cratering Language Enrollments Reveal America’s Linguistic Divide.” It began with a quote from Guadalupe Valdés, a professor emerita in Stanford’s Graduate School of Education:

“Bilingualism has always been a gift the rich have given to their children.”

That’s ironic, I thought. Because in America today, it can be said that bilingualism is a gift that the poor, those who migrate here, give to their children!

I should know better by now. But I find that I’m still stunned by how quickly the children of our migrant Latin American employees at Paradise Palms (the botanical garden we’re establishing in Western Delray Beach) become fluent in English.

One of our Guatemalan workers, Nasario (who Steve tutored for a while), has a five-year-old daughter who did not speak a word of English. Despite their trepidations, Nasario and his wife enrolled her at a nearby (to Paradise Palms) public school in September. (Their main concern was that it did not have a functioning TEFL-type program for monolingual Spanish speakers.)

On her first day, I watched her get on the school bus that stopped for her in front of Paradise Palms. As I said, she spoke zero English. My heart broke thinking about what hardships lay before her.

Just this morning, eight months after that day, I encountered her in our “Kids Park.” I started a conversation with her in Spanish. She switched immediately to English. And she spoke both fluently and without an accent. In fact, had I not known otherwise, I would have assumed she grew up in an English-speaking home.

This should not have surprised me.

In the late 1970s, I lived in N’djamena, Chad, as a Peace Corps volunteer teaching English Lit at the University of Chad. To make a few dollars on the side, I took a job teaching English to the teenage daughter of a French father and English mother who had decided, since the official language of Chad was French, to speak English at home to help their children learn the language.

The first time I met this girl, who was five or six years old at the time, I began the conversation in French. (My French at the time was strong.)

But she answered me in English.

I tried to continue the conversation in French, but she insisted on responding in English.

Frustrated, I thought I’d shake her up a bit by switching to Chadian Arabic (which I had a functional control of).

She looked at me derisively and said, in her perfect English, “Why are you trying to speak to me in the language of gardeners?”

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Hate Speech? Or Legitimate Call for Resistance? 

SH sent me this article from The New York Times about Khymani James, a student at Columbia who was barred from the school’s campus after comments he made on social media went viral.

SH included this video of parts of James’ social media post.

“In my humble opinion,” SH said, “this is where social media has, again, a huge problem in allowing a totally misguided schmuck like this to post real ‘Hate’ online!”

I see it differently.

Because this jackass had his comments captured by social media, someone like SH can see them and be outraged, and then forward them to someone like me, who can then forward them to his friends or even publish them in his blog in a context that perhaps will wake up those people that still believe the pro-Palestinian movement is a socially conscious, liberal-minded cause.

What is going on right now on campuses all over the world is becoming, frighteningly and increasingly, a movement that has to remind us of the history of antisemitism in Germany and much of the rest of Europe prior to the Holocaust.

By now, we all understand what the pro-Palestinian chant – “From the river [Jordan] to the sea [Mediterranean], Palestine will be free” – means. It means: “Get rid of Israel.”

In recent months, these protests have become larger and more aggressive, with more specific antisemitic language, physical confrontations, and arrests.

What has also proliferated, according to Jarrett Stepman, a reporter for The Daily Signal, is the slogans themselves. The scariest one (for me): “There is only one solution: Intifada revolution!”

Click here to read Stepman’s account of an April 23 protest (participated in by NYU students and faculty) in New York’s Washington Square.

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