Just a Pound a Year

Welcome to This Week’s Leyendecker View

I have two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent.
– Dwight Eisenhower

THINKING OUT LOUD

Just a Pound a Year

Ahhhh…the good ole days.

Remember when you thought 40 years old was, like, ancient? I remember, back in my teens and early twenties, thinking, Will I ever get that old? Well, I did, and now it’s been 40ish years since I graduated from college.

Oh me, oh my! What happened to those days of misspent youth? Where did my free spirit go?  When did I lose it? I can’t even remember. And where did this waistline come from? Oh me, oh my.

Yeah, my waistline isn’t the same as it was when I graduated college. Back then I was an athletic 165 pounds. I could play any ball sport with the best of ’em. I delighted in being able to tame a few bigger, stronger and more cocky folk. 

But then I graduated from college and began a professional life. That free spirit was replaced by more and more responsibilities—wife, children, mortgages, autos and furniture and landscaping and vacations to keep up with the neighbors. Time once free for pick-up ball now went to earning money to afford an expanding life. As my parents and siblings aged and my siblings had kids, there were more and more celebrations—weddings, birthdays, anniversaries and holidays. Not to mention my own family members’ birthdays, anniversaries and holidays. More, more and more gifts—and way too many celebrations with cake.

Forty years after graduating college, I coincidentally was forty pounds heavier. Of course I didn’t notice any change from one year to the next. It was just a pound a year. There wasn’t a measurable, incremental change in any given year. But then forty years later, it was obvious.

Just a pound a year. Just a pound a year. No big deal, right? But then 40 years’ worth of one pound a year, and it is not pretty. It happened slowly…and then all at once, as the saying goes.

This “just a pound a year” experience is not so different from our federal debt—

A little spending here for this crisis. A little there for that crisis. A little here for these voters. A little there for those voters.

On a yearly basis, the growth in government deficit spending hasn’t been all that noticeable (until recently). No big deal, right?

The federal debt to GDP ratio in 1984 was about 37%. The federal debt to GDP ratio in 2023 was about 120%.

Just a pound a year. Just a pound a year. Who notices until that heart attack shows up, eh?

Lucky for me, I started to change my diet, eating and exercise routine. Weight started to come off but only a little at a time. Then I got some weird rouge virus and ate almost nothing for over two weeks. Now I’ve lost 20 of those 40 extra pounds. It took admitting I needed to make changes. And then it took discipline, focus, commitment in making those changes—and a pretty serious illness. 

What’s it going to take for this country to lose all the “weight” it’s gained the last 40 years?

THE ECONOMIC VIEW

Low-income consumers cut food budget
Starbucks sales fall
McDonald’s is feeling the pinch
Shoppers bargain hunt
Consumer sentiment falls
After the stock market fell
Is the stock market our best economic barometer?

Ultra-low rate days are gone
The Fed holds rates steady
They’ll be lower one day, but not ever-lower.

The next big economic stimulus
Could come from mortgage reform

INFLATION, DEFLATION, OR BOTH?

US cattle prices are dropping
Is bird flu scaring off consumers?

California fast food sticker shock
Who’s ready for $15 Big Macs?

America’s crippling home insurance market
Thank climate change hysteria and inflation.

THE LABOR VIEW

Wages are rising faster than expected
Not good news for the Fed
But job growth undershoots expectations
What’s the Fed to do?

The new age of location-agnostic work
Is great for some companies and people.
Remote work helps the rural world

Domestic offshoring benefits second-tier cities
Only managers can afford to live in expensive cities

MEANWHILE IN EUROPE

Over regulation driving Europe to irrelevance
So says Ericsson’s CEO.
Time to start subsidizing industries

G7 agrees to stop using coal by 2035
Then they gave Germany and Japan a pass

Europe depends on Russian fertilizer
What, they can’t just eat bugs?
German growth is picking up
How sustainable will it be?
German inflation picks up
As subsidies end.

THE GLOBAL GAME

Is Cuba’s communism about to collapse?
Their private sector is starting to grow

Is the yen’s fall troubling?
Did the central bank prop it up?

Will India become a superpower?
How Modi is changing India
India could dominate the world
Or it could collapse on itself.

THE UKRAINE FIRE

Has Russia been using chemical weapons?
The US seems to think so

Ukraine breaks Russian Black Sea hold
Russia isn’t backing down

Ukraine aid to bolster US economy
Because we make the weapons here.

Ukraine still has a chance
Suggests NATO chief.

THE GAZA FIRE

Turkey halts all trade with Israel
Are they Iran’s ally?

US builds floating pier for Gaza.
Only costs US taxpayers $320MM

Biden wants/needs a ceasefire.
Israel doesn’t seem to care
Israel gives Hamas a week to cut a deal

THE SLIPPERY SLOPE

Biden calls ally Japan “xenophobic”
Replace that teleprompter!

Ukraine is the frontline of a global problem.
The West is a mess

Iran hosts African get together
Lining up non-Western buddies.

FINANCE

Missing the mark on interest rate calls
How the pros flubbed it up.

How’s the PE winter looking?
Are higher rates creating existential risk?

Does the stock market keep going up
Because there are fewer stocks?

The evolution of global stock markets
By country and market cap, from 1899.

REAL ESTATE

Home mortgage rates hit 7.22%
Existing homes sales dip
But prices keep rising.

Defaults on office mortgage loans
Are approaching a record

Americans went all-in on self-storage
Now demand is waning.

TECHNOLOGY

The battle for data privacy.
Really begins when you die

Apples VR marketing head retires
It ain’t no iPhone!
Meta wants their VR in schools
What could go wrong?

The US chips boom is real.
$327B of investment announced so far

THE CHAT ON AI

Great AI creates lazy humans
Oh, really?

Here’s where AI regulation is going
How would Trump handle AI?

Billions of AI investment
Is going to upgrade tech plumbing

OUR GOOD FRIEND, FAILURE

The friendship recession

400% increase in friendlessness in recent years.

Norway banned cell phones in schools

And it’s proving to be a good thing.

US retirement system is broken

Here’s an interesting fix proposal

THE NEXT NORMAL

Atlanta may be on to a new new thing.
It’s called roller skating

TikTok has captured our small children
Who controls their brains now?
The smartphone backlash has started

Americans want mass deportation
Should this surprise us?

THE WAR ON CARBON

The world’s biggest banks
Are quietly ditching ESG

Qatar signs huge LNG deal with China
China to build 18 giant LNG tankers.

Net zero gets kicked in the teeth again.
As Scotland admits it’s not feasible

THE ENERGY TRANSITION

Don’t count out nuclear
How would a nuclear revival play out?

The holy grail of next-gen nuclear
Must battle “regulatory marathons”

German greens lied about nuclear plant risks
In order to get them shut down.

THE EV DREAM

Ford is losing $132,000
On every EV it sells

China’s EVs keep getting better
How can the West compete?

US EV subsidies are at risk.
Because China controls battery-grade graphite

IT’S GETTING MUSKY IN HERE

Tesla guts its charging team
Not good for national EV charging.

Tesla says it will make a cheaper EV.
Here’s a review of their plan

Musk takes self-driving tech to China
Good luck with that.

“Tesla is not a car company”
Elon Musk wants a new narrative.
Is self-driving software his goal?

THE CHINA SYNDROME

Wealthy Chinese
Are starting to move to Japan

China pursuing a “boiling frog” strategy
Suggests US Navy Pacific Commander.

Xi wants to break the US-Europe alliance
Is his strategy going to backfire?

THE WASHING-TONE

US Treasury suspends Russian oil sanctions
Until November 1…like, before the election.

The Biden administration’s new tax plan
Soak the rich and corporations.
Bye bye, lower investment taxes

An au pair for senior care
This might be a good idea!

THE ELECTION DISTRACTION

Biden wants to legalize marijuana
Yale says pot causes mental health problems
Create zombie voters you can control.

Immigration is still top voter concern
The sorry state of government is next.

Biden agrees to debate Trump
Will it happen? Would it set viewership records?

MAKING A BETTER YOU

The Eisenhower matrix
A great productivity hack.

Like a cocktail before bed?
Maybe try this mocktail

Some “super-agers” have great memories.
What’s inside their brains?

HOW ABOUT A BREAK

The big cicada hatch.
Here’s where it’s happening

NASA’s best photos of the year
Super cool!

The Webb telescope makes curious discovery
There’s alcohol out in space?

SONG OF THE WEEK

Khruangbin vibes…
“A Calf Born in Winter”

A bonus golden oldie…

ELO’s “Mr. Blue Sky.”
RIP, Richard Tandy.

CASTING AROUND THE PODS

“What the hell happened [in the 1970s] that money became everything?”
A meandering interview with Jerry Seinfeld
He’s been promoting his new movie, out today: Frosted.

Notoriously reticent to talk politics
Seinfeld’s had it with the PC police killing comedy

VIDEOS OF THE WEEK

Furiosa, a Mad Max Saga trailer.
Tighten your seat belts, folks!

The Fall Guy trailer.
Barbie’s Ken gets the girl.

Screams Before Silence
An October 7th documentary.

FROM THE HEADHUNTER’S KITCHEN

It’s Kentucky Derby time.

Classic mint julep
Classic boulevardier
Classic French 95
Million dollar deviled eggs
Green bean and potato salad
Kentucky burgoo
John Wayne casserole
Kentucky hot brown mac & cheese
Southern pimento cheese
Pimento cheese grits
Low-country shrimp and grits
Bourbon chocolate walnut pie

THE RANDOMS

What do you think the chances are of a terrorist event in Paris during the Olympics?

The Fed said this week they weren’t ready to cut interest rates, but they also don’t expect to raise them more. Given that, at the beginning of the year, everyone saw six rate cuts in the Fed “dot plot points,” maybe we shouldn’t get too optimistic that there won’t be more rate increases.

Nearly all the protesters wreaking havoc on college campuses across the country and in some companies all wear covid masks. What are they hiding from, the fact that 20 years from now everyone will know how stupid they looked as protestors?

Or is it that they want their cake and eat it, too—declare their desire for intifada (that old thing), but not risk losing their Ivy degrees and cushy employment prospects? At least the revolutionaries of the 1960s had the courage to show their faces. And throw up a power fist when arrested.

What exactly will we be asking our supposedly inevitable AI assistants that will help us make better decisions faster?

The US Treasury just suspended sanctions on Russian banks supporting its oil, gas and other natural resources activity until November 1. The Biden administration is obviously trying to keep energy prices from influencing inflation until AFTER the election. Got it, folks?

Services account for 70% of the US GDP. This implies that the cost of a car or a TV has much less to do with inflation than it does with service workers’ wages. Will other parts of the country and other industries follow California in mandating an increase in service wages?

Exactly how are the situations in Ukraine and Gaza going to end with every party satisfied? Since this seems unlikely, won’t war just continue until one party surrenders unconditionally? Wouldn’t this eventually require US and/or European troops to get involved? 

If the future is one where there is no difference between a woman and a man—you know, true gender equality—will this lead to better overall social outcomes or just more social confusion?

IN CASE YOU MISSED IT

The Keynesian Trap
April 26, 2024

The End of the West?
April 19, 2024