Climate Change Policies Are a Bust

Welcome to This Week’s Leyendecker View

The best thing a human being can do is help another human being know more.
–Charlie Munger, RIP

A BIG THINK

There’s an old saying on Wall Street: Buy on rumor, sell on news.

Given that we just closed out November with a yearly high for the Dow Jones Industrial Average, it seems plausible that numerous investors are buying on the rumor that the Fed has stopped raising interest rates and will soon reverse course and start cutting them.

In essence, the “smart money” gets in before all the rest of the world figures out money is soon going to be cheaper and maybe more plentiful. The cheaper and more plentiful money is, the higher stock prices, and other financial asset values, generally go.

Given the current euphoria over lower inflation and possibly lower interest rates, it seemed like a good time to review another old Wall Street perspective: Bob Farrell’s 10 Market Rules. 

Over 45 years, Robert “Bob” J. Farrell became a famous investment analyst at Merrill Lynch. Toward the end of his career at Merrill, Bob came up with his 10 rules of investing. Many investment professionals are familiar with these 10 rules, but many outside of such lines of work are not. Here they are:

Bob Farrell’s 10 Market Rules

1. Markets tend to return to the mean over time.

 2. Excesses in one direction will lead to an opposite excess in the other direction.

3. There are no new eras—excesses are never permanent.

 4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.

5. The public buys the most at the top and the least at the bottom.

6. Fear and greed are stronger than long-term resolve.

7. Markets are strongest when they are broad, and weakest when they narrow to a handful of blue-chip names.

8. Bear markets have three stages—sharp down, reflexive rebound, and a drawn-out fundamental downtrend.

9. When all the experts and forecasts agree—something else is going to happen.

10. Bull markets are more fun than bear markets.

THE ECONOMIC VIEW

Consumer spending slowed in October
Yet Thanksgiving day shopping sets record
Overall spending up 2.5%, per Mastercard
Consumers remain resilient.
But are they close to maxing out?
Buy now, pay later purchases up 42.5%
Who are the buy now, pay later providers?

Will our children be better off than us?
Most Americans say “no”

Durable goods orders decline 5.4%
That’s a recession signal.

THE INFLATION BOGEYMAN

OPEC wants higher oil prices.
They agree to cut production

Inflation has come down.
But absolute prices remain high

Americans need an extra $11,400 today
Just to afford the basics.

The world’s banana supply is in trouble
A deadly fungus is decimating crops.

THE LABOR VIEW

The UAW goes after Toyota and Tesla
Has a new age of labor unions started?

The global operational stock of industrial robots
3.9MM and counting.

How to succeed in a post-career world
Look for meaning in life.

MEANWHILE IN EUROPE

Is Europe’s energy crisis over?
Have they permanently shifted supply?

Europe’s 15-year slump
Where it fell behind the US and China.

Immigration backlash hits Europe
It’s straining social and economic infrastructures.

THE GLOBAL GAME

Canada’s economy shrinks 1%
The global economy may be fragile.

Turkey raises interest rates to 40%
And we’re whining about rates over here?

Argentina’s Milei backtracks on dollarization
Dutch election winner goes moderate
Wow, those were fast turnarounds.

THE UKRAINE FIRE

Russia has been stockpiling missiles
Ready to unleash hell on Ukraine this winter.

Putin stakes Russian resources on victory
Can Ukraine’s Western allies match him?
Are Russian soldiers all in?

NATO must ramp up arms making
Advises UK foreign secretary.

THE GAZA FIRE

Hamas terrorists shoot up bus stop
US destroyer attacked off Yemen
Cease-fire is now officially over

Saudi Arabia wants Iran to quit supporting proxies
If it does, then Saudi Arabia will invest in Iran.

The invisible electromagnetic radio war
Ukraine’s drones are falling from the sky.

EVOLVING GEOPOLITICS

India adds a $5B aircraft carrier
Indonesia ups military spending 20%
Is China on their minds?

Finland joined NATO.
And now Putin is harassing them

Iran buys strategic arms from Russia
Bulking up for war?

FINANCE

Barclays looks to fire IB clients
Are they not making money off them?

Banks are desperate to get into private credit
Nothing could go wrong here. Nope.
Loan amendments at record high
How private credit competes with banks

BlackRock expects long-term borrowing costs
To be higher for longer

REAL ESTATE

Apartment rents down 4 months in a row
Inflation should keep falling.

Home prices hit another record
Household wealth hits another record, too

Shipping containers for the homeless
San Jose pays $150K per unit.

TECHNOLOGY

Life is really better without the internet
This couple tells you how.
It’s time to log off
Say psychology experts.
She was addicted to social media
Now she’s suing Big Tech.

Can AI predict health problems?
Magic pills are coming
Health care advances could boom soon.
More gene editing is coming
With new investment opportunities.

THE CHAT ON AI

70% of jobs can be automated
Says McKinsey’s AI thought leader.

Who is behind the Emirati AI firm G24?
Do they support China?

Sam Altman’s return to OpenAI
Tells us an AI explosion may be coming
The billionaires have won
Damn the unintended consequences of AI.

THE NEXT NORMAL

You probably can’t keep your doctor
Health care needs a big fix.

2022, a record year for suicides
Are dystopian narratives an influence?

The most charitable countries in the world
Americans are no longer charitable.
Giving is at a three-decade low
But our government is the most charitable

THE WAR ON CARBON

Climate change policies
Don’t pass the cost-benefit test

Carbon capture over promises and under delivers
But it gets government subsidies!

Brazil wants the world’s money
To pay for preserving the Amazon.

THE NEW ENERGY TRANSITION

Germany and Italy to develop hydrogen project
Pipeline from North Africa to Germany.

Google’s geothermal project is up and running
Is more geothermal in our future?

Swedish company has a new battery
That doesn’t require lithium.

THE EV DREAM

Used EV prices are falling fast
What’s a used EV even worth?

Battery prices are falling
As lithium prices fall dramatically.

Toyota boasts it has a 745-mile battery
With a 10-minute charging time.

THE CHINA SYNDROME

To crack the North American market
Chinese auto companies are headed to Mexico

Money is flowing out of China
Into gold bars and Tokyo apartments.
China’s economy caught in vicious down cycle

China’s acute respiratory infection problem
Are they telling us the truth about it?

THE WASHING-TONE

The Newsom-DeSantis debate on Fox
Told us that…they aren’t Donald Trump.

Guess who’s trying to sneak across the border?
Lots of Chinese immigrants.

The members of Congress retiring
2024 is going to be a busy election year.

MAKING A BETTER YOU

How to improve your attention span
Just takes a little practice.

Want to improve your life?
Take advantage of the gift of awe

Wisdom of the ages.
Why great leaders adore Shakespeare

HOW ABOUT A BREAK

Is time travel actually possible?
An astrophysicist opines.

How math built the modern world
Let’s not forget the engineers!

Hearing spoken poetry
Is much more impactful than reading it

SONG OF THE WEEK

“Time in a Bottle”
Jim Croce
Some lyrics are poetry, ya know.

CASTING AROUND THE PODS

Israel, Islam and the new Cold War
Historian Niall Ferguson lays it out.
Three ways to win Cold War II

VIDEOS OF THE WEEK

Season 3 Slow Horses trailer.
Can’t wait to watch it!

The Leo trailer.
Adam Sandler is a natural in animation.

Lizuna Fair
Get lost in this animated Japanese story.

FROM THE HEADHUNTER’S KITCHEN

Velveting beef
How to tenderize any cut of meat.

Braised short ribs
Oh man, delish!

The top cheeseburger in each state
Now here’s a bucket list!!!

THE RANDOMS

How long until the giant anticompetitive tech behemoths that addict us to their products and services, and game the system to extract more and more money out of consumers, get broken up?

Disney’s challenges make me wonder if our society has reached its limit on over-the-top entertainment experiences. Maybe simple is the next new trend.

After separating from the Soviet Union, Estonia ripped apart and restructured its education system. Now they are a global leader in math, science and reading. What can the US learn from Estonia’s experience?

Why do people call wind and solar clean energy? There’s nothing clean about manufacturing wind turbines and solar panels. And there won’t be anything clean disposing of them.

According to this article, you can fit up to 2,000 solar panels on an acre. There are 640 acres per square mile. Doing the math suggests you can fit 1,280,000 solar panels in a square mile.

The company Sun Streams is planning to cover 13 square miles of desert with solar panels. This solar farm will be able to power 300,000 homes. Those 13 square miles could fit 16,640,000 solar panels. How are we going to dispose of 16+ MILLION solar panels once they’re spent?

If you think recycling solar panels is the solution, then you’re probably not aware that recycling does not really move the needle. Never mind that most solar panels go straight to landfill.

By the way, a nuclear power plant requires 50 acres and can power up to 1.5 million homes.

You gotta love this article from the WSJ about the “good news” on climate and renewable energy. Just look at the lead photo. Maybe they didn’t realize that the photo also tells us the bad news about jobs.

Forty-one states allege that Meta intentionally designed products to capitalize on teens’ vulnerabilities. If this complaint from these states’ attorneys general advances to a lawsuit and trial and Meta is found guilty, will anyone from Meta go to prison for destroying lives?

How can the average person determine what they should believe these days? 

IN CASE YOU MISSED IT

It’s All About the Kolache
November 24, 2023

Is Deflation Our Next Worry?
November 17, 2023