The Fed Is Losing Money

Welcome to This Week’s Leyendecker View

…the people with the greatest reputations [for knowledge] were almost entirely deficient, while others who were supposed to be their inferiors were much better qualified in practical intelligence.

– Socrates in “The Apology”

THOUGHTS FROM DOUG

There is no progress without failure along the way. Failure compels us to create a more productive path. 

If democracy is dead, then long live bureaucracy! 

It appears that only 25% of unemployed people actually file for unemployment benefits. Are the rest stupid, or are they patriots or just fiercely independent?

More regulation is coming to banking. As a result, higher interest rates and banking consolidation may be trends for some time. This seems only natural after a gold rush bust. My question is whether the gold rush bust is in technology or in all financial assets.

According to Chinese Premier Li Qiang, China is “the anchor for world peace.” I assume this means peace on China’ terms, which means they get Taiwan and anything else they want.

When bank depositors move their money into crypto, it weakens our banking system. I wonder if the regulators in Washington have figured this out. Maybe so. And then…

Given AI’s new capabilities, how soon will it be before a porno video comes out with Donald Trump as the lead? Or when will we see a video of Chinese President Xi handing a briefcase full of money to Joe Biden? Or…just use your imagination.

It sounds like we can expect that, in the future, reality will no longer be real.

I wonder how many tech companies ChatGPT is in the process of putting out of business?

There are consequences to all change, but unfortunately those consequences usually don’t make themselves known until they’ve created a big problem.

Eighty years ago, our heroes were soldiers saving the free world from tyranny. Today our heroes seem to be people who have supposedly been harmed by the values those soldiers fought to protect.

Given our recent economic resilience, it seems that the lag effect from interest rate rises have not yet kicked in.

THE ECONOMIC VIEW

Consumers are a bit more confident
Do they think the banking crisis is over?

The accounting fraud indicator
Says trouble is coming

The percentage of banks tightening lending
Is signaling recession.

A BANKING CRISIS???

Don’t look too close.
The Fed is actually losing money

The fallout from our banking problems
Will be a credit squeeze
It’s already happening

Many banks have mark-to-market losses
Is a slow banking crisis coming?
Small banks have a sustainability problem

THE INFLATION BOGEYMAN

The PCE index keeps falling
Inflation is subsiding for now.

Inflation deconstructed
Nice little graph.

Copper prices could hit record high
Would this be inflationary?

THE LABOR VIEW

Recent jobless claims
Don’t suggest economic stress.
Many sectors struggle to find workers

The hottest job right now pays $330K+
Can you be an AI “prompt engineer”?

The pay transparency trend
May be backfiring

WFH has come to an end
For millions of workers.
Or is it becoming more mainstream?

MEANWHILE IN EUROPE

Eurozone banks
Are throttling back lending

Is Italy scaling back their climate goals?
Necessity is the mother of change.

China lectures the EU
But they aren’t listening

European institutional investors
Demand companies communicate climate plans.
UK pension funds want to destroy O&G

GLOBAL

Can India change the world?
Are they the new global influencer?

$770 a month for a year
South Korea needs more babies.

The World Bank turns pessimistic.
The global economy has lost its fuel

IT’S JAPAN WEEK

30+ years of Japanese monetary stimulus
May soon end…and cause problems

Japan will limit some exports to China.
They won’t send sensitive chip equipment

Japan wages are finally rising
Will inflation follow?

PLAYING WITH FIRE

Russia’s technology war
Is full of hacking and disinformation

Ukraine has a peace proposal
Backed by Sec of State Blinken.

Is Spain taking China’s side
On their Russia-Ukraine proposal?

The Russian economy is struggling
How long can they last without the West?

THE NEW COLD WAR

China is lining up a Brazil agriculture deal
Is it to replace US producers?

Russia embraces China’s renminbi
As an alternative to Western currency.
As their China trade booms
And their militaries cozy up

Russia arms sub-Saharan Africa
Replaces China as top arms supplier.

THE FINANCE WORLD

2022 Wall Street bonuses collapse
What will make them rebound in 2023?

Is there a shadow banking problem
Not in China, but in the US?

There’s a big IPO boom
Happening in the Middle East.

Apple introduces buy now-pay later
Is an Apple bank around the corner?

REAL ESTATE

Office vacancy in Manhattan hits record
Is the urban experience overrated?

The warehouse market remains strong
Rents are up almost 19% YoY.

While distress builds
In the high-end commercial office market

TECHNOLOGY

The teen mental health crisis
Is a reckoning for big tech

The SVB collapse
Will lead to less VC funding
The VC boom is now a bust
VCs taking a $500B haircut

Pentagon woos Silicon Valley
A new customer with deep pockets.

THE CHAT ON CHAT

Does AI threaten the future of life?
Elon Musk and others are worried.

Generative AI could boost GDP
But also destroy millions of jobs.
The jobs most at risk right now
Knowledge workers, watch out!

AI will change what’s “real”
Fake news and fake real are about to explode.
And of course, porn is embracing AI
Open AI’s CEO says the risks are huge

THE NEXT NORMAL

The police surveillance state
Is only growing globally.

The values that made America great
Are collapsing
As well as faith in a college education

Men are backing away from ambition
Is that a good thing?

THE WAR ON CARBON

The EU wants a strict climate law
Do government bureaucrats know best?

UN-sponsored institutional investor group
Wants to eliminate all hydrocarbon investment

The carbon credit market
May be full of greenwashing

THE NEW ENERGY TRANSITION

Where are clean tech products made?
China, China and…China.

Hungary wants more nuclear power
They’ve asked France to help out.

2022 US oil exports hit a record
Global demand to outstrip supply soon

THE EV DREAM

The new EV Hummer moves like a Porsche
Why not just buy a Porsche?

EV makers could have a big problem
Buyer interest may be waning.

Used Tesla prices are slumping
While Ford commits big to EVs

EVs need paper thin steel.
And it’s in short supply

THE CHINA SYNDROME

China’s cities are buried in debt
And they keep piling it on.

China has another loan problem.
Belt & Road loan holders can’t pay them back
Countries most indebted to China

Taiwan’s president visits US
How will China react?

THE WASHING-TONE

They’re trying to ban TikTok.
Do they know about Lemon8?

Debt ceiling and budget talks
Are ongoing but fraught with conflicts.
House passes energy bill

We passed our IRA act.
Now South Korea passes theirs

MAKING A BETTER YOU

We’ve got happiness all wrong.
Here’s a better perspective

How to apologize best
Because we all mess up.

The joys of a walking trip
Open the mind and improve health.

HOW ABOUT A BREAK

30 billion times the mass of our sun
The biggest black hole has been found.

Are coincidences real?
How should we think about them?

America’s most underrated beaches
Summer is coming!

SONG OF THE WEEK

“What I Like About Texas”
Gary P. Nunn sings it.
Lyrics are poetry, you know.

CASTING AROUND THE PODS

GPT-4, ChatGPT, and the Future of AI
The OpenAI CEO tells all to Lex Fridman.

VIDEOS OF THE WEEK

Asteroid City trailer
The next Wes Anderson classic.

The Jesus Revolution trailer.
It’s a box office darling.

Seven Kings Must Die trailer
Completing the Last Kingdom saga.

FROM THE HEADHUNTER’S KITCHEN

Do you love breakfast?
Here are some keen egg recipes

Italy wants to ban lab grown meat
It upsets their sensibilities.

The best thing on sliced bread
In each of our 50 states.

IN CASE YOU MISSED IT

We Can’t Guarantee All Deposits
March 24, 2023

AI Will Be Your Master Now
March 17, 2023