Happy Holidays!

Welcome to This Week’s Leyendecker View

One of the most glorious messes in the world is the mess created
in the living room on Christmas Day. Don’t clean it up too quickly.
– Andy Rooney

THOUGHTS FROM DOUG

Organisms in nature have survived and thrived for three and a half billion years, and they’ve done it without any kind of planning or predicting, or anything that we spend so much of our time doing.
– Dr. Rafe Sagarin 

Is the EU’s massive climate policy going to doom their economy? If actually adhered to, their new carbon import tax is only going to raise inflation. Looks like Europe will need to sell a lot of debt soon to pay for what they can’t afford.

Are climate change policies actually anti-human? Low energy prices have taken us to a peak in global prosperity. Higher energy prices are going to do the opposite.

Over the last 40 years, the Western world turned a blind eye to human rights and environmental damage to access cheap foreign labor and cheap products. Now it looks like we’re going to turn a blind eye to human rights and environmental damage to access more “clean” energy.

Remember, inflation is a rate of change, not a level. Inflation looks to be falling from here on, although we’ll see if China’s reopening changes that. But even if the inflation rate falls, the absolute level of many prices probably won’t. 

Wages will need to catch up to higher prices. But if wages catch up, won’t companies raise prices to pay for those higher wages?

US debt to GDP today is above 120%. It was around 40% in 1980. Now a lot of economists talk about how inflation can reduce our debt to GDP. Okay, let’s assume that can work, but won’t it cause pain and suffering for our middle- and lower-income population? So there’s another way to reduce debt to GDP…We can grow GDP faster. Who has ideas on how we can do that?

Because of higher interest rates, big institutional investors may start buying bonds. If so, that leaves less money for stocks.

Here’s the chart on historical interest rates. Notice 1980 to present. Here’s a chart on the stock market. Look at 1980 to present. What do you see when comparing the two? Correlation or causation?

There’s one simple key to success: Always exceed expectations.

THE ECONOMIC VIEW

Consumer confidence rebounds
It’s that cheerful time of year.
November spending up a bit

Micron chip sales could drop 50%
Canary in the economic coal mine?

Farmers expect windfall profits
Should we tax them?

THE INFLATION BOGEYMAN

Egg prices skyrocket
As bird flu decimates flocks.

Oil prices are climbing again
Let’s not celebrate inflation’s defeat.
Daniel Yergin sees $120+ oil

Fed Chairman focuses on pay
Service sector wages keep growing.

THE LABOR VIEW

English nurses strike
Holiday strikes in UK and France
Here comes the higher pay trend.

Krispy Kreme to automate donut making
More automation coming in fast food

The triple-peak workday
Includes working in the evening.
Most people want hybrid work
WFH demand and supply don’t match up

MEANWHILE IN EUROPE

Massive Europe debt growth expected
Large subsidies, high energy costs, slower economy.

In the global microchip race
Europe has to play catch up

Europe’s climate change policy
Has cost it $1T in higher prices so far.
Now they want to limit gas prices

The EU wants a US free trade agreement
They don’t like the IRA.

PLAYING WITH FIRE

Putin says they have “no limits”
On financing for the war.

Zelensky visits Washington
The Kremlin isn’t amused

Russia tries to freeze Ukraine
By hammering their power grid.
As they destroy its culture

GLOBAL

Japanese bonds getting hit
As inflation at 41-year high
Global bond markets are jittery

Global optimism about 2023
Still optimistic, but at a lower level.

Sri Lanka wants an IMF bailout
What’s their collateral?
Ghana can’t pay their debt

THE FINANCE WORLD

S&P annual returns
From 1928 to present.

Buying the stock market dips
Has resulted in a 2022 thrashing
Yet individual buyers persist
Forget about 2023 stock projections

US IPOs at 32-year low
While recent IPOs struggle
What will revive investor interest?

REAL ESTATE

Monthly existing home sales down 7.7%
Amounting to a 35% drop from a year ago.
Housing affordability is awful
Household equity is huge
Falling house prices won’t be good.

Some good housing graphs
From the National Association of Realtors.

Apartment rents down 1%
Third straight monthly fall.

TECHNOLOGY

AI is finally good at stuff
And that’s a problem.

What really is blockchain?
McKinsey explains it.

Is relying on technology
Making us more stupid?

THE CRYPTO MEME

Looks like SBF will go to jail.
As two lieutenants admit to fraud

Public crypto mining firm goes bankrupt
The carnage continues.

Is Binance.US a fake exchange?
It’s books are a black box
Is more crypto soap opera coming?

THE NEXT NORMAL

US life expectancy keeps falling
We must be having less fun.

AI can do your school work
Who needs to know anything anymore?

Everyone is sick right now
Flu infections at all-time high
Are we strengthening our immune systems?

THE WAR ON CARBON

Coal is keeping people alive
Imagine that.

Global coal use to set a record
Renewables can’t handle energy demand.
Yet the earth is greener than 20 years ago

The shipping industry can’t go green
It’s nowhere near ready to do so.

THE NEW ENERGY TRANSITION

Japan to restart nuclear reactors
Gotta get energy from some place.

Is lithium toxic?
The EU fears saying it is.

Here’s a great new energy investment:
Candles

THE CHINA SYNDROME

China backed off covid curbs.
But their city streets are empty
And schools are shutting down
As pharmacies run out of medicine
Are they hiding their death count?
It could be huge
Get your lemons before they’re gone

Xi, the diplomat
Recently visited the Middle East.
He wants to pay for oil in yuan
The Middle East is China’s friend

China targets global fish supply
As they’ve overfished their waters.
While Japanese food supply is fragile

THE WASHING-TONE

Our new spending bill
Is only 4,155 pages long.

IRA bill EV implementation has stalled
Foreign pushback causes delay.

What is Title 42?
The US is in an immigration crisis.

MAKING A BETTER YOU

The hobbies of 5 geniuses
Even geniuses need a break.

What’s inside a cell?
A whole universe.

The perfect performance power nap
NASA approved!

HOW ABOUT A BREAK

An average guy with average income
Gives away $125MM.

Living life on their own terms
The Quebec cow story.

10 insightful visuals
About psychology and life.

SONG OF THE WEEK

“So This Is Christmas”
John Lennon in the holiday spirit.
Lyrics are poetry, you know.

VIDEOS OF THE WEEK

Tom Cruise is insane.
Watch him practice a stunt

The best chef in the world
Was happy to sell her restaurant.

Creating a wormhole in a lab
CalTech profs do it with quantum computing.

CASTING AROUND THE PODS

What alcohol does to our brains
Dr. Andrew Huberman lays it out.

FROM THE HEADHUNTER’S KITCHEN

2022’s most popular recipes
From the NY Times.

Tired of holiday food?

The pizza of Puerto Rico
Is oh so yummy!

You like-a pizza?
Here’s the tour to take

Make your own yummy pizza
Instead of ordering take-out.

IN CASE YOU MISSED IT

The Dangers of Over-Tightening
December 16, 2022

“We Will See Spectacular Failures”
December 9, 2022