Opinion Today

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Today’s Agenda

Rolling out the welcome mat.
Paramount, what was THAT?
Black women are lying flat.
A hedge fund where profits are fat.

Housing Math

Welp, it seems like the American dream of building a home has morphed into the American dream of building a bear:

I never thought that we’d be experiencing a Build-A-Bear renaissance in 2025, but I’m not mad about it! The stuffed animal retailer is on a tear:

I am mad, however, that a lot of those cuddly teddy bears don’t seem to be living in their owners’ dream homes: “With mortgage rates still near 7%, even relatively wealthy households are choosing to rent rather than buy,” Jonathan Levin writes. “The combination of high home prices and elevated mortgage rates has hit affordability hard, and inventories are mounting.”

Before you resign yourself and your teddy bear collection to a life of landlords and rent checks, hear Jonathan out: “Provided real estate follows its usual pattern and appreciates in value over time, buying may still deliver the best financial outcomes.”

At first glance, that chart looks rather bearish — the puns write themselves — yet Jonathan says the outlook is “nowhere near as pessimistic as it was from 2010-2012 (the latter years of the housing bust), the second quarter of 2020 (in the throes of the pandemic) or early 2023 (after the initial surge in mortgage rates).”

Still not convinced that buying is better than renting? Take a look at his math:

Let’s say you’re new to Austin, Texas, and shopping for a primary residence. A median priced home is running at around $560,000, and you’ll have to pony up something for a deposit (let’s use the classic 20%) and incur upfront fees (appraisals, loan origination, etc.). Even after parting with all that cash, you’ll still be paying around $4,200 a month toward a fixed-rated 30-year mortgage payment at the prevailing 6.7%, including typical property taxes and homeowners insurance. You’ll also have to account for maintenance costs, bringing your total monthly outlay up to around $4,700. Ouch! You can rent something similar for $3,100.

Seems like renting would be a no-brainer, but wait:

Using Redfin’s calculator, buying still ends up being a better deal after about five years if you assume the 3.3% home price appreciation scenario. That’s largely because of the capital gains and the tax advantages of homeownership.

Even factoring in “opportunity costs” — i.e. the investments you could be making with that $112,000 downpayment — buying beats renting if you’re willing to stick it out for 7+ years.

In sum: “Don’t bank on a rental revolution replacing the American homeownership dream,” Jonathan writes.

About That Paramount Lawsuit ...

The big story of the day is that Paramount agreed to pay President Donald Trump $16 million to settle a frivolous lawsuit that Stephen L. Carter says “should have been tossed on First Amendment grounds after about two minutes of scrutiny.” And the big question of the day seems to be: Why did it open up its pocketbook?

Although the TV network claims the settlement is “completely separate from, and unrelated to, the Skydance transaction and the FCC approval process,” Matt Levine says people are tossing around the b-word — bribery — because Paramount would obviously like its Skydance merger to happen, and it needs the green light from the Trump administration.

Regardless of whether the two are connected, it sets a dangerous precedent: “We may have officially entered a troubling era in which politicians of both parties use lawsuits against media outlets as a weapon in the war to control the narrative in an increasingly fractured information environment,” writes Erika D. Smith. Just last week, California Governor Gavin Newsom filed a defamation lawsuit against Fox News host Jesse Watters —not the type of thing you want your elected officials to be preoccupied with.

“Even though we may seem to be slipping into Bizarro World,” Stephen sees “a teensy-weensy silver lining” from the settlement. Going forward, when a candidate is taped for an interview, the public will have access to the full transcript. “My attraction to the idea should not be taken to reflect any mistrust of the editorial judgment exercised by major news organizations. My motive is the opposite: I do trust their judgment, I don’t think they’re generally trying to hide anything, and I want them to behave in a way that exemplifies this quality,” he concludes.

Bonus Presidential Reading: Trump is governing as if he believes all the constraints that limited him during his first term have collapsed. — Ron Brownstein

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The “Great Black Step Back”

At first, Nia-Malika Henderson was skeptical when she heard stories about Black women taking a breather from politics. But when Michelle Obama appeared on NPR’s “Wild Card with Rachel Martin” and said, “I am not going to be in politics,” she started to take the trend more seriously.

“I’m not giving another political speech. I’m not campaigning for another candidate. But I’m here,” the first lady said. By “here,” she was referring to her podcast, IMO, which stands for “in my opinion” or “I’m Michelle Obama,” which she hosts with her older brother. “In leaving behind official political platforms and engagement, Obama sounds like so many other Black women right now,” Nia writes. “This fight, for democracy, fairness and social progress, is no longer theirs in the way that it has been for decades.” This phenomenon, referred to as the “great Black step back” by the New York Times, is the political equivalent of the “lie flat” movement for Black women.

Obama’s decision to quit politics and focus on her podcast isn’t exactly a swan song, though. Remember the Joe Rogan vs. Call Her Daddy podcast-off during the 2024 campaign season? Yeah, that probably didn’t have an influence over the election at all.

Telltale Hindsight-Is-Everything Charts

Nobody can predict the future — not even Japanese comic book authors, according to Gearoid Reidy — but the good people at Hindsight Capital don’t need to make educated guesses about what happens next; they already have the inside scoop! Hindsight Capital is, of course, John Authers’ imaginary hedge fund, which “places big macro bets at the start of the year, with the benefit of knowing what will occur.” Given the wild and wacky nature of 2025, John thought it’d be wise to pay a midyear visit to make sure his quants weren’t slacking off.

Here’s one long-and-short bet that worked well: Despite Trump’s desire for a Detroit comeback, the S&P 1500 automakers index is down 23% so far this year. European defense manufacturers, meanwhile, are up 68% because the continent is bulking up on wartime weapons. “Put these together, and a Long European Defense/Short US Autos trade made a profit of 117% in six months,” John writes.

If the promise of doubling your money in six months isn’t enough to excite you, let me introduce you to Rheinmetall, Europe’s biggest and baddest arms manufacturer. “Popular anger with the US administration meant Germany would have to buy local if possible — which meant a huge rally for the Düsseldorf-based firm,” John writes. When paired with Tesla — which took a bruising amidst the Musk-Trump bromance blow-up — you can quadruple your money. Boom! Just like that: