We Can’t Guarantee All Deposits

Welcome to This Week’s Leyendecker View

There are decades where nothing happens,
and there are weeks where decades happen.
– Vladimir Lenin

THOUGHTS FROM DOUG

Maybe the Fed will stop raising rates when the Consumer Price Index falls below interest rates.

I wonder how many of those criticizing the Fed today were also recently trying to warn that venture capital and tech were in an unsustainable bubble.

Hedge fund star Bill Ackman remains convinced that the Fed needs to guarantee all deposits or more bank runs will happen. Maybe he hasn’t noticed that total US bank deposits eclipse $17T. Where is the Fed going to get $17T?

We’re now finding out that “forever chemicals” are essential to chip-making. So does this mean chipmakers and anything with a chip in it are failing the “E” in ESG?

Inflation may drop fast if recession comes. But inflationary forces—including higher costs of capital, higher wages, higher energy costs, less productive supply chains and a more tense geopolitical situation—will remain. 

Maybe deflation is now a temporary phenomenon.

This past week, the UN suggested that time is running out to tackle climate change. A couple weeks ago, Nikki Hailey, presidential candidate and former US Ambassador to the UN, called the UN a farce. The Secretary General of the UN is a lifelong socialist. Hmmm…Why are we even listening to the UN?

All the big auto companies have giant plans for the EV market, but something has caught my eye. A $6,250, solar-charged EV is coming to the US. How can the major automakers compete at this price point? I’ll bet a good number of their vehicles have a $6,250 profit. 

In considering history, has rational thinking always prevailed? If not, what thinking are we doing today that really isn’t rational?

THE ECONOMIC VIEW

Fed raises rates a little
And acknowledges banking stress.

Leading economic indicators declined
For the 11th month in a row.

The tech collapse
Is starting to spill into the economy

The banking crisis
Is hurting the mortgage market

A BANKING CRISIS???

Next challenge for banks is credit risk
Recessions always create loan problems.

Total US bank deposits over $17T
Can the Fed guarantee $17T?

Four ways to fix the bank problem
Better regulation, to start.

SVB insiders borrowed $200MM+
Right before the bank collapsed.

THE INFLATION BOGEYMAN

Europe may raise rates higher than US
German central bank is very hawkish

UK inflation is back to rising
Food costs are soaring.
Bank of England raises rates

The Dollar Tree
Can no longer afford to sell eggs

THE LABOR VIEW

Pay has been soaring
Most notably for low-wage workers.

Jobless claims fall a little
How resilient is this economy?

America’s top 100 large employers
The nice places to work.

Do CEOs need to take more risks with labor
In order to find the most productive structure?

MEANWHILE IN EUROPE

February EU inflation down to 8.5%
Will the downward trend continue?
While wages are rising fast
Faster than in the US.

EU climate agenda is at risk
The Germans push back the bureaucrats.

Europe to restart mining
To cut reliance on China.

GLOBAL

The strong dollar 
Makes global commodities more expensive

Are Western companies now less global?
The new trend toward country sustainability.

The happiest countries in the world
What makes them so happy?

PLAYING WITH FIRE

IMF loans Ukraine $15.6B
How is this war going to end?

Ukraine doubles down
On defending Bakhmut.
While Russia keeps killing civilians

Turkey joins Western sanctions
Supposedly.
While India’s Russian exports grow

THE NEW COLD WAR

Iran, Russia and China
Are becoming better buddies
Pakistan wants in the club

China ready to flex its power
Xi is the new global statesman.

Japan cozies up to India
Lining up friends, just in case.

THE FINANCE WORLD

SVB bankers are finding a home
Building up Stifel’s venture biz

Performance-based fees work
Will this become the new fee standard?

Some public pensions pulling out of PE
Is an institutional asset realignment coming?

Private credit takes the stage
Be careful being in the spotlight.

REAL ESTATE

Homeowner affordability
Is at a decades low

Home prices fell year over year
For the first time in 11 years.

Commercial real estate
The next banking problem?
JPM Asset Manager is worried

TECHNOLOGY

Some want to ban “forever chemicals.”
But they are essential for chipmaking

Istari’s CEO report on cyber resilience
Are we anywhere near ready enough?

We need to slow down AI
Good luck with that.

THE CHAT ON CHAT

No revenue, no problem.
You can still be worth $1B

Publishers are ready for battle.
AI is stealing their intellectual property
But maybe there is a solution

Regulators can’t keep up with AI
Just wait until something breaks.

THE NEXT NORMAL

Our children’s future is not bright
So think the majority of Americans.

Over the last 50 years
The marriage rate has dropped 60%

Peak TV streaming is over
What’s next?
Peak subscription services is also here

THE WAR ON CARBON

EU wants more local solar panel content
Which would slow down solar installs.

Sticker shock coming to New England
Renewable costs are not cheap.

Scientists want to block to the sun
To reduce earth’s temperature.

THE NEW ENERGY TRANSITION

Europe wants more solar power.
But China supplies 75% of their panels

A tractor that runs on manure
Now that’s innovation!!!

India exports more crude to Europe
Crude that comes from Russia.

THE EV DREAM

Ford projects big EV losses.
$3B loss for 2023

Chinese EV maker is doing great
Watch out world, Chinese EVs are coming.
Chinese lithium prices drop 50%

Looking into the EV future
What the past can teach us.

Better batteries are coming
Will they give EV sales more momentum?
How do EV batteries actually work?

THE CHINA SYNDROME

How China lost Asia
It’s hard for bullies to make friends.

American car companies in China
Look headed for big trouble

As Western companies leave China
The rest of the world competes to get in

THE WASHING-TONE

What’s the beef with TikTok?
Here’s the inside story

Utah enacts social media law
The technology backlash begins.

It’s really easy to subscribe to something.
The FTC wants it easy to cancel

MAKING A BETTER YOU

Remain in peak health as you age
Because biotech will keep us alive for longer.

How love changes the brain
Time for a Beatles revival.
“All You Need is Love”

Art helps you grow as a person
At least Nietzsche thought so.

HOW ABOUT A BREAK

The best day hike in every state
Get your plan together.

What do dogs do
When you’re not at home?

How will the universe end?
Do we really want to know?

SONG OF THE WEEK

For the SVB and tech folk…
Roy Orbison performs “Crying”
Lyrics are poetry, you know.

And a bonus…

“Clair de Lune” on piano
For an 80-year-old elephant.

CASTING AROUND THE PODS

The difference between equity and equality
Glenn Loury interviews John McWhorter.

VIDEOS OF THE WEEK

Japan beats USA for baseball title.
Here are the highlights

When dads go unsupervised
The fun starts!

Ren – Hi Ren
A very interesting musical performance.

FROM THE HEADHUNTER’S KITCHEN

The full English breakfast
Yummy, but maybe overwhelming.
Here’s its history

And now, for your late night snack.
A new sleepy time cereal

Yelp’s top 100 US restaurants
To make your taste buds smile.

IN CASE YOU MISSED IT

AI Will Be Your Master Now
March 17, 2023

Has the War in Space Already Started?
March 10, 2023