Welcome to War

Welcome to This Week’s Leyendecker View

A man who procrastinates in his choosing will inevitably have his choice made for him by circumstance.
–Hunter S. Thompson

A BIG THINK

Welcome to War

Over a year and a half ago, war started in Europe, and now there is war in the Middle East. These are real wars, where not just soldiers but also civilians get killed. These are wars that decimate cities, towns, villages and all manner of infrastructure. These are wars that ultimately change the course of history, possibly even the boundaries of countries.

Yet, so far, we in the United States remain little affected. We’re still focused on trying to figure out if now is the right time to buy that new iPhone, the EV DC wants us to own, or stocks or bonds. Thank goodness the recession, that so many have been worried about, hasn’t happened.

We American citizens have it good. We have it very, very, very good. We have it so good that we can continue to obsess over our consumption choices and politics. Sure, when it comes up in conversation, we can debate why these wars were started and who we should or should not fund or provide weapons. But no American soldier is going to Ukraine or Gaza, at least not yet.

If history is any teacher, when an era of war arises, it does not quickly fade away. World War I started in Europe in July 1914. The US didn’t enter that conflict until April 1917, almost three years later. World War II started in Europe in September 1939. The US didn’t enter that conflict until December 1941, two years later. I’m not suggesting that American soldiers are destined to be fighting some place in the world soon. I’m just suggesting that wars like these seem to feed off themselves until the US is forced to intervene

Why have modern human civilizations not yet eliminated the need for war? To ask this question is to reveal an ignorance of history, particularly the history of other parts of the world and history that goes back hundreds, even thousands of years—far beyond the very short history of the United States.

And why should we Americans care about people on the other side of the world we don’t personally know? Why should we care that they hate each other? Why should we care if they run around killing innocents in the name of some cause we don’t understand?

Because if we don’t, who will? Who but the United States is going to stand up for good against evil? And if no one else will, then we can be sure that the evil that motivates war today will be evil standing in our own country one day.

THE ECONOMIC VIEW

I live in my car
More and more people can’t afford a home.
While Goldman reports $2B in quarterly profit
And Harvard frets over $51B endowment returns
Is something wrong with this picture?

US recession is no longer a given
Will the Mideast war change this?
Fed pauses on rates

US consumers keep splurging
Does consumption define who we are today?
Personal savings keep declining
And credit card debt keeps rising

THE INFLATION BOGEYMAN

Health insurance cost are going up
It now costs $24K a year to insure a family.
Higher health care wages are a catalyst

Ikea is cutting prices
Falling inflation or lagging sales?

Fun inflation is soaring
But today fun is a need not a want, right?

THE LABOR VIEW

WFH rates are lowest since pandemic
Yet office occupancy rates are at 50%
While employees embrace their sick days

The salad chain Sweetgreen
Is replacing people with robots

Health care unions work out a deal
With Kaiser Permanente.
While new doctors’ union is formed

MEANWHILE IN EUROPE

Poland votes for dramatic change
Can they unwind an “illiberal democracy”?

Italy jumps on the stimulus train
With tax cuts and pay raises

Back off climate and industrial regulation
Says European parliament chief.

GLOBAL

Brazil embraces the migrant crisis
It wants more cheap labor.

India is getting a new mega port
Will it steal trade from China?

Gang violence in Sweden
Elicits calls for army on the streets

Australia votes against
Recognizing indigenous population
New Zealand swings conservative
Reality over idealism sets in.

PLAYING WITH FIRE

Russia tries major offensive
And suffers major casualties.

Americans strongly support Israel
But there are racial and generational divides.

Crypto finances Russia and Hamas
Why do we let this happen?

How Israel was created
This is a complicated situation, folks.

EVOLVING GEOPOLITICS

Xi welcomes “dear friend” Putin to China
Do US presidents have “dear friends”?

International arms sales are booming
Countries are preparing for what?

Gaza is changing the global balance
Do China and Russia have the upper hand?

FINANCE

What if Wall Street doesn’t bounce back?
Did we reach peak Wall Street with peak stimulus?

Investor issues warning on private credit
Are insurance companies taking on too much risk?

Corporate America has a debt addiction
Will higher rates for longer eventually cure it?

Private equity exits are evaporating
Lowest volume in over a decade.
Lowest values in a decade

REAL ESTATE

Real estate broker fees at risk
Could the universal 6% fee be gone soon?

Housing affordability at 37-year low
30-year mortgage rate hits 8%
But home prices are holding up
Home building starts are now falling
It’s cheaper to rent than to buy
2022 home sales worse than 08/09 bust
Are home values finally about to fall?

TECHNOLOGY

Kids sue social media in California
They feel preyed upon and used.

The VC industry is a big mess
Time to rip up the old playbook.

Global smartphone market is in a slump.
Q3 sales are the worst in a decade
Apple’s iPhone not selling well in China

Indian billionaire introduces $12 smart phone
But is it as cool as owning an iPhone?

THE CHAT ON AI

The chatbots are now talking to each other
Buckle up.

OpenAI’s revenue passes $1.3B
Last year it was only $28MM.

AI is out of control
And it just got started.
Bad guys are flooding the internet
With racist images
And child pornography

THE NEXT NORMAL

ACT test scores at 32-year low
Might as well legalize marijuana.

The internet has made gambling easy.
And now teens are becoming addicted
Teens spend 4.8 hours a day on social media

Disney is going all in on sports betting
What would founder Walt think of this?

THE WAR ON CARBON

EU backtracks on emissions reduction pledge
Energy reality is kicking in.

The EPA is swamped.
From 14 to 119 CCS permit applications
People want that free government money!

The great cash-for-carbon hustle
Is fraught with corruption.

THE NEW ENERGY TRANSITION

European airlines balk at fossil fuels phase-out
It is not yet practical.

Climate tech investing drops 40%
Is the IRA bill picking up the slack?

Brazil wind farms
Could lead to wild cat extinction
Just as wind seems to be doing to whales

THE EV DREAM

BYD may soon pass Tesla
As the world’s largest EV maker.
As Tesla’s profits fall

GM delays opening EV truck factory
Demand is just not there.

Sales of Ford’s F150 EV disappoint
Time to lower production volumes.

Buyers are reluctant about EVs
Carmakers do not know their customers.

THE CHINA SYNDROME

China’s economy gets boost from stimulus
But headwinds remain.
It’s selling US Treasury securities
To support the falling yuan.
Is a Chinese financial crisis coming?

China’s global Belt and Road reach
Growing influence in emerging markets.
But is it working well for China?
The industries they’ve invested in

The EU feels marginalized by China
They want to be taken more seriously.

THE WASHING-TONE

Biden seeks $100B for Ukraine and Israel
What the heck, it’s all funny money anyway.

Biden cuts another deal with a dictator
Will Venezuelan oil help keep inflation down?

US tightens curbs on AI chip exports to China
You think China won’t find a work around?
Nvidia is not happy

MAKING A BETTER YOU

Want to improve your mental health?
Consider “news sobriety”

What happens when you stop drinking?
All kinds of great stuff.

How to make healthy habits stick
It takes a little work and discipline.

HOW ABOUT A BREAK

Super chickens are coming
Bird flu may be a thing of the past.

People have feared tomatoes for 600 years
Blamed for witchcraft and werewolves.

Free will is an illusion
Dr. Robert Sapolsky agrees
Maybe this is not a bad thing.

SONG OF THE WEEK

How about a 1960’s groove?
“96 Tears” by the ? and the Mysterians.
“Hang on Sloopy” by The McCoys.
“California Dreamin’” by The Mamas & the Papas.
“Crimson & Clover” by Tommy James and the Shondells.

CASTING AROUND THE PODS

The New Axis of Evil
Bari Weiss interviews Condoleezza Rice.

Bonus:
Jared Kushner on Lex Fridman
Time to give Trump’s Middle East policy a second look?

VIDEOS OF THE WEEK

Kraven the Hunter trailer.
Is Aaron-Taylor Johnson the next James Bond?

Anarchy may be a good thing
To keep liberal democracies fresh.

Ridley Scott is bringing us
Joaquin Phoenix as Napoleon.

FROM THE HEADHUNTER’S KITCHEN

Before dessert, try a burger au poivre
Gotta try this one out.

French silk pie recipe
Open this link at your peril.

For tasty and personal au gratin potatoes
Use a muffin pan

THE RANDOMS

When will the lag effect of higher interest rates really kick in to slow down the economy?

Many investors, particularly private equity and real estate investors, are feeling the pain of higher interest rates. They can’t wait for lower interest rates. Unfortunately, when the cost of capital declines, it’s likely because the economy is in decline.

Has the quest for billions in profit and the chance to be a billionaire, business media darling crushed the will to care about how technology is disrupting and destroying lives?

“Who cares about the little people, I need a yacht bigger than Bezos’s!”

The Wall Street Journal recently asked tech leaders how AI will change the work world. Veteran VC Vinod Khosla suggested that within 10 years AI will be able to do “80% of all jobs we know of today” and that “the need to work in a society will disappear in 25 years.” Universal basic income (UBI) will obviously be needed to help people pay their expenses, but where will that money come from? Are tech companies going to pay enormous taxes? Good luck with that.

And what of the basic human need for self-esteem and feeling of value to society? Can we fulfill these needs without work? Do we need to keep in mind that old saying, An idle mind is the devil’s workshop?

ChatGPT was thrust upon us about a year ago. And, according to some, the time to regulate it has already passed. Per University of California, Berkeley researcher Scott Emmons: “Companies try to release AI for good uses and keep its unlawful uses behind a locked door. But no one knows how to make a lock.”

It is unfortunate, but it seems that the only way to defeat terrorists is to make them fear you even more than you fear them.

IN CASE YOU MISSED IT

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