There’s Good News

Welcome to This Week’s Leyendecker View

There are more regulations on sandwich shops than there are on AI companies.
– Stuart Russell, UC Berkeley computer science professor

A BIG THINK

There’s Good News

A newsletter reader recently sent me a note saying, “Doug, is there no good news to report?” That got me thinking. After some pondering, I’ve decided there is some good news to report. Actually, some very good news.

When a very successful and rich, tech-bro Democrat starts to praise Donald Trump and suggest he was a much better president than many know, it makes me believe the woke world may finally be waking up from its stupor. (You can watch the full episode from which that clip was taken here.)

The good news is that more and more people in our country seem to be returning to common sense thinking. This is certainly good news, but it will take time for this new social awareness to spread over a critical mass of the population and then turn into better government policy and better decision making by all manner of people.

One would think it’s about time, as America’s trust in media is at a new low, America’s trust in government is close to a new low, suicide rates are at record high, the country is in a mental health crisis and more and more people can’t afford to live a normal life so they are living in their cars.

So yes, there is some good news out there. The country is starting to wake up from its self-absorption, consumption-addiction, meme-following and woke-worshiping stupor. It is of course profoundly unfortunate it took an evil and atrocious massacre to remind us that life is not all about YOLO and FOMO.

THE ECONOMIC VIEW

Q3 economy boomed, grew 4.9%
YOLO and FOMO consumer spending led the way
What happened to the soft landing?
Are economic forecasting models broken?

Car loan payments fall behind at record pace
US savings rate keeps falling
A sign of trouble ahead?

Advanced economies face fiscal reality
Cut spending, raise revenue and grow the economy.

THE INFLATION BOGEYMAN

Business insurance rates are climbing
Much faster than inflation.
Lloyd’s of London warns of climate pain
Are insurance rates about to explode?

Grocery stores pitch “sales”
Consumers still say prices are too high.

Homeowner costs in NYC
Are rising at 3X inflation rate.

THE LABOR VIEW

CEOs are quitting in record numbers
Cashing in their equity before what happens?

Work from home rates
State to state.

Ford and UAW work a deal
25% pay increase over 4 years, plus more.
Does the UAW know the robots are coming?

MEANWHILE IN EUROPE

Europe’s economy stalls out
Is a recession close?

While US debt keeps exploding
Europe’s been more disciplined

German producer prices collapse
Less inflation because of fewer orders.

GLOBAL

Brazil raises taxes on the rich
A sign of things to come?

13 Mexican law officers murdered
Are drug cartels domestic terrorists?

Germany is about to eclipse Japan.
And become 3rd largest global economy

PLAYING WITH FIRE

The Russians are raping and torturing
And executing soldiers that don’t follow orders
Do they have a conscience?

The root of all evil in the Middle East
Emanates from Iran

Turkey president supports Hamas
Should Turkey really be in NATO?

Ukraine is using commando raids
To unnerve the Russians.
Ukraine seeks to grow its arms industry

EVOLVING GEOPOLITICS

Xi courts Colombian president
As he tries to gain allies.

Turkey ready to let Sweden into NATO
But can NATO manage its growth?

Is the dollar at risk?
Check out this chart

FINANCE

Private debt market to grow significantly
So suggests BlackRock.

Active money managers, a dying breed
Assets keep moving to passive management.

PE is kicking in more equity
As they refinance portcos at higher rates.
And start to attract individual IRA savings
While they prepare to pay themselves big bonuses
Even as their portfolios are losing value?

REAL ESTATE

New homes sales at 19-month high.
While median sales price is down 12.3%

America’s downtowns are in trouble
How can they be fixed?

Revenge of the Rust Belt
The country’s hottest housing market.

TECHNOLOGY

Is social media bad for kids?
The surgeon general thinks so

Meta is accused of preying on children
Don’t you just love this company?

The Techno-Optimist Manifesto
VC Marc Andreessen gives us his utopia.

THE CHAT ON AI

AI funding soars to $17.9B
As the rest of venture flounders.

AI growth is “utterly reckless”
Suggests some AI “godfathers.”

The world wants to regulate AI.
But doesn’t know how

THE NEXT NORMAL

Our mental health crisis
Has put libraries on the front lines

Healthcare has a worker problem
More workers are burning out.

Don’t mix business with politics
Say more and more consumers.

THE WAR ON CARBON

Global climate talks collapse
Rich countries are not ready to pay up.

BlackRock’s $3B+ carbon project canceled
Couldn’t get it past regulators and landowners.

A fertilizer shortage is spreading desperate hunger
Imagine the global famine without oil and gas.

THE NEW ENERGY TRANSITION

Solar stocks at three-year low
Demand for solar is dropping.

The green power grid just isn’t coming
It’s too expensive and too dirty to build. 

Solar panel waste will cost many millions.
States would like industry to pay the cost

THE EV DREAM

GM walks back its EV goals
Consumer demand isn’t as expected.

Ultra-cheap EVs are available
Would they decimate US automakers?

Repairing a Tesla
Is way more expensive than you’d think

THE CHINA SYNDROME

China looks to expand its nuclear arsenal
Making the same mistake the Soviets did?

Mitsubishi exits China
Will other Western car makers follow?

Corporate retreat from Hong Kong accelerates
Western companies continue to leave.

THE WASHING-TONE

We have a new speaker of the House
And he wants to cut spending.

Illegal immigration is a bigger problem than ever
Smuggling migrants to the US is big business

US budget deficit doubles in 2023
Does the US have a debt crisis coming?

MAKING A BETTER YOU

The best decision-makers
Follow these two principles

Grow your brain and learn easier.
Use “adaptive plasticity”

Avoiding stupidity
Is easier than seeking brilliance

HOW ABOUT A BREAK

The cost of trying to live much longer
Quality of life continues to decline.

Ancient statues were originally painted.
Here’s what they might have looked like

The secret life of Druids
Did they know something we should learn?

SONG OF THE WEEK

“Butterfly” from Jon Batiste’s new album.
Some lyrics are poetry, ya know.

CASTING AROUND THE PODS

The Dual Challenge: Energy and Environment
Some practical thoughts from Dr. Scott Tinker.

Bonus podcast:
ExxonMobil’s 2050 forecast and overall energy thoughts
Veriten interviews Exxon’s director of economics and energy.

VIDEOS OF THE WEEK

The ancient demons of Mesopotamia
And how they dealt with these monsters.

The Conker World Championship
Does this sport have global potential?

The reefer gold rush of 1977
When a drug plane crashed in Yosemite.

FROM THE HEADHUNTER’S KITCHEN

The Bombay sandwich
New to me, seems worth a try.

15 15-minute dinner recipes
From Martha Stewart.

Chicken soup for the soul
As well as the immune system.

THE RANDOMS

Is the Fed waiting for something major to break in the economy before lowering interest rates?

I am not yet convinced that a recession has been avoided. If it’s not caused by higher interest rates breaking some important part of the economy, then it may come because consumers are tapped out of YOLO and FOMO spending.

A possible reason we’ve not yet entered a recession, despite the Fed pushing up interest rates as far and as fast as they did, is that our federal government is about to end its fiscal year with a $1.7T deficit. That $1.7T in government spending trickles down to a lot of YOLO and FOMO spending.

One of the newsletters I read did an analysis of the last seven periods of Federal Reserve tightening. Based on these examples, the average time between when the Fed started raising rates and the start of a recession was 26 months. For this cycle, the Fed began to increase rates in March 2022. Do the math.

Once Israel starts moving into Gaza, it will be interesting to see if some Muslims in Europe and/or the US start creating domestic problems.

In case you hadn’t noticed, there are a lot of potential jihadists already living in Western democracies. A Hamas terror chief actually lives in public housing in the UK. And at the US Southern border, a record number of people on our terror watch list have been arrested this year trying to enter the country. You think a few other bad folks were able to sneak in?

And in case you don’t know the real enemy to peace in the Middle East…

“The Zionist regime is a deadly, cancerous growth and a detriment to this region. It will undoubtedly be uprooted and destroyed.” That’s right from the mouth of Iran’s Supreme Leader Ayatollah Ali Khamenei.

Sure seems like the head of the snake is not in Gaza or Syria. It’s in Iran.

When I read the calls to “decolonize” Israel, it makes me think that, if we extend that logic, then every American whose family immigrated here since Columbus needs to pack up and leave this country, too.

IN CASE YOU MISSED IT

Welcome to War
October 20, 2023

America’s Most Strategic City
October 6, 2023