Happy 4th of July!

Welcome to This Week’s Leyendecker View

Ask not what your country can do for you—ask what you can do for your country.
– John F. Kennedy

A BIG THINK

To err is to be human.

There was a big bust in last week’s A Big Think. Blame it on vacation. I was mostly off grid last week on a fishing trip in southern Mexico. The environment was conducive to relaxing, less so to working. Hence the error. 

Here’s the bust:

“According to annualized BLS data, there were 131.4MM service industry jobs and 21.2MM goods producing jobs in 2022. This means each service providing job contributes $135 of GDP, while each goods producing job represents $361 of GDP.” 

Here’s the fix:

According to annualized BLS data, there were 131.4MM service industry jobs and 21.2MM goods producing jobs in 2022. This means each service providing job contributes $135,000 of GDP, while each goods producing job represents $361,000 of GDP. 

That’s a pretty big change in the amount each job represents in our GDP. But the ratios remain the same. The economic value of a goods producing job today is 2.66 greater than that of a service providing job.

And the trend in service providing job growth over production job growth also remains:

In 1990, we had 3.62 service providing jobs for every one goods producing job. But in 2022, we had 6.2 service providing jobs for every one goods producing job.

One of the possible consequences of this massive shift toward service providing over goods producing jobs may be seen in our debt to GDP. According to the St. Louis Federal Reserve, in 1990 US debt to GDP was about 50%.Today, it’s almost 120%.

Service jobs increase more than goods producing jobs as debt to GDP rises. Correlation or causation? Whatcha think?

So what should our economic policy be?

THE ECONOMIC VIEW

US economy stays resilient
Why the economy can’t crash
Baby Boomers have too much money.

US economic center of gravity
Has gone south.

37% of companies
Now have a debt problem
The American “dream” is ever more debt

THE INFLATION BOGEYMAN

Rates need to be higher for longer
Seems to be the Fed’s conclusion.
The economy shrugs off current higher rates

The cost of concrete
Keeps rising and rising

The BIS cure for inflation?
Cut public spending and/or raise taxes

THE LABOR VIEW

150 years of US employment history
Good graphic from Visual Capitalist.

A record number of CEOs
Are heading for the exits.

People still working in their 80s
To flee boredom and irrelevance

MEANWHILE IN EUROPE

The ECB says rates will stay high
Europe’s inflation may be sticky.
As German inflation rises again

Southern Europe
Is swinging to the political right

EU seeks new approach to economic security
Risk management takes center stage.

GLOBAL

Everyone in South Korea is about to get…
Younger. Huh? What? 

Developing countries are in trouble
Struggling to rebound from pandemic shocks. 

China’s MENA economic influence
Is measurable
But the US has been gaining ground

INDIA, THE NEW CHINA?

Modi’s visit to Washington
Seemed to boost our relationship
GE to produce jet fighter engines in India
Tesla to get there “as soon as possible”
GDP growth estimated at 6.7% through 2027
Surpassing China’s GDP projections

An economic miracle in India
It’s real. Will it spread?

PLAYING WITH FIRE

It’s not 1917 all over again in Russia
It’s 1604.

Russian oil keeps flowing to China
They are now China’s largest supplier. 

Russian ships keep using Turkey’s ports
Stressing out the Western alliance.

THE NEW COLD WAR

Autocratic competence
Is nothing but a myth

Iran and Venezuela sign 25 agreements
Autocrats ban together

Countries up nuclear weapons investments
Getting ready for what?
China adds the most new warheads

FINANCE

Investment banking is in a drought
Will that end when rates start declining?

Is quantitative easing back so soon?
This op-ed author thinks so

The leveraged-loan market is down 40%
A credit crunch in PE lending.
PE liquidity events are down big

REAL ESTATE

Pending home sales decline
Because of higher mortgage rates?

US Airbnb revenues are collapsing
Will a sellers’ panic follow?
Wait, Airbnb says this isn’t true

Home values post annual decline
For the first time since 2012.
But prices are starting to rise again

The office building slump
May not recover by 2040

TECHNOLOGY

We need more data centers
Yet they are energy and water hogs.
Are photonic-based chips the answer?

Microsoft wants to own gaming
It’s ready to outspend rivals.

A golden age for medicine.
Has it just started?

THE CHAT ON AI

59% of Internet users use ChatGPT
Is chat the new crypto?

An AI-designed drug
Is already in clinical trials

Can AI accelerate the circular economy?
Can it turn waste into wealth?

THE NEXT NORMAL

Psychedelics have gone mainstream
In Silicon Valley.

Global street prices for cocaine
Fentanyl deaths have exploded

Our education system
Gets another failing grade

THE NEW ENERGY TRANSITION

Renewable energy is booming
But it’s not denting fossil fuel demand
OPEC sees oil demand growth to 2045

The small nuclear power plants
Need more funding.

Corporate jet business booms
What about those corporate ESG goals?

THE EV DREAM

China is coming for Europe’s EV market
A battle for customers is heating up.

How an EV battery works
But what happens to spent batteries?

Biden seeks to force EV sales on Americans
US automakers object.
The general public does, too

THE CHINA SYNDROME

Revised Chinese law
Grants the state greater business control.
While the Chinese economy gets weaker
Is China becoming a muddling mess?
Chinese premier wants old globalization

Chinese jets penetrate Taiwan airspace.
Taiwan activates air defense systems

Who relies on Taiwanese trade?
The US, big time

THE WASHING-TONE

SCOTUS makes a dramatic change
Striking down Affirmative Action.
And Biden’s student loan forgiveness scheme

Biden considers banning AI chip sales to China
Collaborative and cooperative is out the door.
As China mobilizes its AI forces

The growing push to tie Medicaid to work
Georgia seems to be leading the effort.

MAKING A BETTER YOU

A little morning silence
Is key to good mental health

Cutting out small talk
Is not a good idea.

Want to age slowly?
Here’s what to eat

HOW ABOUT A BREAK

The 9 most common surnames in the world.
Here’s where they came from

Is the universe a giant neural network?
Maybe so.

An essential intro to Buddhism
In 8 profound quotes

IT’S VACATION TIME

The most beautiful hikes in the world
Ten hikes for your bucket list.

Turkey has an amazing Aegean coast
No wonder civilization flourishes there.

A hidden Malibu beach
Is now open after 40 years

SONG OF THE WEEK

“Sunday Morning”
The Velvet Underground
Lyrics are poetry, you know.

CASTING AROUND THE PODS

Climate change drives global inflation higher
And not just from higher energy costs.

VIDEOS OF THE WEEK

New Indiana Jones trailer
80 year olds can still be heroes!

Watch this hungry eagle
Grab a fish and eat it in the air

A journey of early photography
Some of the oldest photos you can see.

FROM THE HEADHUNTER’S KITCHEN

It’s gonna be the 4th of July.
WSJ ranks the 7 best hot dogs
Boar’s Head uncured pork and beef
Are my favorite.
In these Martin’s potato buns
With Woeber’s sweet and spicy mustard

The Mediterranean diet
Still the top-of-the-food-chain way to eat.

The 50 best bars in the US
For those trend setters out there.

THE RANDOMS

How many billions did Putin promise Prigozhin to back off?

Given that interest rates and inflation may be higher for longer, the valuation of future cash flow streams (financial assets) may be lower for longer.

But then there’s another view: After 40 years of massive monetary and fiscal stimulus, we have created a damned if you do, damned if you don’t economic stimulus environment.

Is post-pandemic revenge spending about over? 

The 1970s had two periods of inflation. Could that be the natural inflation cycle?

China thinks we need to appreciate their culture and economic system better. Why aren’t we telling China they need to appreciate our culture and economic system better?

The race is on to improve synthetic human embryos. Synthetic human embryos??? Would you call that human progress?

If you don’t have enough to worry about, then consider that some scientists think human activity has shifted the earth’s tilt.

IN CASE YOU MISSED IT

Charity Has Declined Measurably
June 23, 2023

Top 13 AI Innovators
June 16, 2023