Can the US Become the Next China?

Welcome to This Week’s Leyendecker View

You never get a second chance to make a good first impression.
– Will Rogers

THOUGHTS FROM DOUG

Some people ask me, “Why is your firm so small? Why after 40 years have you not grown into a large national search firm?” Only this week did I figure out the answer.

I want to be a great painter, not an art gallery owner. Pablo Picasso worked up to the day he died at age 91. As far as I’m concerned, I’m mid-career.

Will AI stymie new job growth in the technology sector as it simultaneously kills off old tech jobs?

Last week, IBM paused hiring, suggesting AI would destroy around 7,800 company jobs. This week, IBM released its own version of AI. I guess programmers can now get jobs at Starbucks.

Let’s talk about the current debt ceiling negotiations…

In case you didn’t know, total US federal debt today is almost $32T. The Central Budget Office (CBO) projects a 2023 federal budget deficit of $1.4T, and they project annual deficits of over $2T a year from 2024 to 2033.

Given that the US population is around 330 million—about 73 million of whom are children—each of us, children included, is on the hook for about $100K. And we have future deficit spending for the next decade that will far exceed population growth.

Now how many US citizens, children included, can afford to cut a $100K check today, or even borrow that in order to pay off their portion of our debt?

Deficits of $2T a year for the next ten years mean that, in 2033, total federal debt will be about $50T. The CBO projects the population to grow at 0.3% a year through 2052.

So, in 2032, we should have a population of about 340MM people. This means in 10 years each US citizen will be on the hook for about $150K.

What are we supposed to think of this?

Something I’ve learned from personal experience: The longer the party lasts, the worse the hangover.

THE ECONOMIC VIEW

Maybe the Fed isn’t done raising rates
Wall Street won’t be happy with that!

Barclays projects no 2023 Fed rate cut
Unless there’s a severe recession.
Goldman agrees

US exports are rising
Manufacturing construction booms
Can the US become the next China?

The job market stays resilient
Higher rates haven’t dented it much.

A BANKING CRISIS???

First Citizens, SVB’s buyer
Makes a giant profit! Thanks, Fed!
Is PacWest the next victim?

Is it a banking crisis
When banks report $80B in profits?

Is the banking crisis just starting?
Hmmm…

THE INFLATION BOGEYMAN

Iron ore prices are falling
Oil prices are falling
The global economy weakens.

US meat costs are coming down
While Italy has a pasta crisis

And now, travel inflation.
Airfares soar
While Airbnb sees weakness

THE LABOR VIEW

Job satisfaction at 36-year high
Work is fun!

Worker productivity is declining
Is this why?
Either way, not good for profits.

Women are leaving executive roles
What’s behind the “great breakup”?

Work from home on Wall Street.
Few firms require full-time in office

MEANWHILE IN EUROPE

EU bureaucrats
Don’t seem to care about voters

Europe dodged a natgas bullet last winter.
But may not be able to do so this winter

You “need to accept” that you’re poorer
Says Britain’s chief economist to citizens.

GLOBAL

Has Chile been saved by voters?
Freedom lovers fight back

Early signs of “reglobalization”
Are starting to show up in trade data

Turkey’s Erdoğan faces re-election challenge
So he ups wages 45% for 700K workers

LET’S VISIT SOUTH KOREA

Wanna be a Korean street vendor?
Here’s what it’s like

South Korea has some quirky cafes
Like a “poop cafe.” Yep, you read that right.
If that’s not your speed
Here’s the best bibimbap in Seoul

What it’s like to visit the DMZ
On the border between South and North Korea.
North Korea’s “Peace Village”
A surreal Potemkin Village visible from the DMZ.

PLAYING WITH FIRE

Ukraine holding back on counter offensive
Gonna be an interesting summer.

South Africa supplies Russia with arms
So says the US.

There are 4MM Ukrainian refugees.
Here’s where they have gone

THE NEW COLD WAR

Russia has billions of Indian rupees.
And it can’t use them for anything

China cozies up to the Taliban
Holding trade and security talks.

Iran, Russia and China
Autocrats becoming friends.

THE FINANCE WORLD

Fundraising is hard today
Even for the big established funds.

Giant institutional investor
Says investor consolidation is coming

Active, fixed-income strategies
Are being replaced by passive investment

Is there a looming bankruptcy boom
In private equity portfolio companies?

REAL ESTATE

How much NYC office space is sitting empty?
26 Empire State buildings worth

Warehouse development sizzles
The current gold rush market.

Home values are falling
Duh, interest rates are rising.

TECHNOLOGY

Today, it’s all about AI.
Tomorrow, will it be all about military tech?

Physicists have created a particle
That remembers its past.

A Swiss start-up
May soon be collecting space trash

Desalinating water
May start to get easier

THE CHAT ON AI

Get a girlfriend for $1 a minute.
Snapchat influencer creates AI self

AI is a bigger threat than climate change
Says the godfather of AI.

AI makes mind reading possible
Great, now where will that lead us?

THE NEXT NORMAL

Better tasting vegetables? 
Coming soon to a store near you

25% of adolescents have insomnia.
Here’s what to do

The company town may be making a comeback
And so may the company doctor

THE WAR ON CARBON

Carbon capture projects boom
But it’s actually very hard to do

French oil company sues Greenpeace
Claiming they report bad data.

The big push to go green
Is poisoning the Amazon river

THE NEW ENERGY TRANSITION

Offshore wind in California
Faces some big hurdles.

Microsoft bets on fusion
That will be ready in 5 years.

The most valuable US power company
Is making a big bet on hydrogen.

THE EV DREAM

Who’s the hot outsider making EVs in China?
Why, it’s Toyota.

Global lithium producers merge
Building economies of scale.

Tesla breaks ground on giant lithium refinery
Musk stays ahead of the competition.

Cheaper and more available than lithium
Making batteries with sodium.

THE CHINA SYNDROME

China threatens the EU
Don’t be mean to us!
Italy to exit Belt and Road pact

Canada expels Chinese diplomat
For threatening a Canadian lawmaker.
As China raids more Western company offices

China’s largest trade fair
Fails to meet expectations

THE WASHING-TONE

How would you solve the debt-ceiling standoff?
WSJ asks voters what to do

Biden working on a new immigration policy.
It may resemble Trump policy
The Mexican border is a giant mess
What’s driving all these people to the US?

Biden considers an Iran thaw
Let the bad guys off the hook.

MAKING A BETTER YOU

You should seek fun, not happiness
‘Cause fun makes us happy.

How to want less
‘Cause it will also make you happier.

More on becoming a better writer
What you write is the real you.

HOW ABOUT A BREAK

He’s fathered 550 children
The Dutch want him to stop.

Tom Hanks is now a novelist
What a life he’s had!

Doing drugs in the 1800s
Was not uncommon.

SONG OF THE WEEK

Ed Sheeran wins the copyright lawsuit over…

Marvin Gaye’s
“Let’s Get It On”
Lyrics are poetry, you know.

You be the judge…

“Thinking Out Loud”
The Ed Sheeran song that triggered the lawsuit.
More poetry here.

CASTING AROUND THE PODS

Enes Kanter Freedom: Forced out for speaking up
The former NBA star tells his story of choosing principle over profit.

VIDEOS OF THE WEEK

Fond of stupid silly monster movies?
Then Meg 2 is purrrfect for you!

Want to laugh out loud?
Watch this bird of prey trainer

You may need some wood milk
Maybe you can invest in it?

FROM THE HEADHUNTER’S KITCHEN

Delicious pasta a limone
Simple, easy and wow!

When you eat spicy food
What happens to your body?

Going to London soon?
Maybe try their XXL sandwiches

IN CASE YOU MISSED IT

Money Is Moving Out of ESG
May 5, 2023

There Is No Failure
April 28, 2023