Media Worth Consuming – July 2023

Top Five Articles

Profit and volume downgrades in the chemical industry point to a looming global slowdown.

America’s government statistics on poverty deliberately overstate the problem.

The Austrian Business Cycle theory explains how central bank intervention has created boom and bust cycles.

The technology used for fracking could be repurposed for geothermal power generation.

Millions of dollars of cash were likely tossed in the trash when a New York City government survey included a $5 note inside each blank survey form.

Finance

The Bear market that began in early 2022 has been almost erased by recent gains. When stocks are overvalued by historical measures, you can rely on bulls to make arguments that “this time is different”. The Nasdaq 100 index will be adjusted to reduce the concentration of the largest stocks, with the top three stocks accounting for over 30% of the index. Vanguard has struggled to gain market share in Europe, often assuming that what works in America will automatically sell in Europe. Office isn’t the only property sector facing difficulties in the US.

Leveraged loan issuance has slumped this year helping banks clear their backlog. The high yield and leveraged loan markets are shrinking due to rating upgrades and the growth of private debt. Two US CLOs have reset their margins indicating a slight thawing of conditions for the sector. Moody’s rated borrowers have recorded 53 defaults so far in 2023 compared to 36 in all of 2022. Citadel and Jane Street are ramping up their trading in American investment grade and high yield bonds. The SEC has declined an obvious opportunity to provide an opinion on whether leveraged loans should be classified as securities. However, the agency is forcing money market funds to hold higher levels of liquidity.

A British billionaire has been charged with insider trading for giving tips to his girlfriends, pilots, friends and work colleagues, even lending them $500,000 to buy the stocks. Tesla’s directors have paid back $735 million to the company to end a lawsuit that argued they overpaid themselves.

How a Chinese miner and refiner came to dominate the trading of a string of obscure but critical metals. Evergrande has finally delivered its financial reports for 2021 and 2022, which show a combined loss of $113 billion.

Politics & culture

An internet poll found that a Trump/Kennedy presidential ticket would attract widespread support. A candidate for the US Presidency is offering a $20 gift card to people who donate at least $1 to his campaign, so he can hit a donations threshold to be part of the upcoming debates. The FBI had validated Hunter Biden’s infamous laptop months before the 2020 election but said nothing when politicians and “experts” claimed it was a hoax. Following in the footsteps of Joe Biden, Mitch McConnell is showing signs of mental decline.

China’s demographics are likely to be much worse than the government has been admitting. The Chinese city of Zunyi is the latest example of overbuilding of infrastructure and housing. Vietnam has banned the Barbie movie because it includes a map with the phony nine dash line. Microsoft and Google are storing data in Saudia Arabia, where they could be forced to handover data to a government known for attacking dissidents. The US government has destroyed the last of its chemical weapons stockpile.

The US Supreme Court has ordered an end to universities using race as a factor to determine admissions. Before Bud Light was hit with a conservative boycott, the NBA suffered a ratings slump when it focussed on identity politics. YouTube took down the maiden speech of an NSW parliamentarian because it included criticisms of Covid lockdowns and vaccines. A Canadian dental hygienist was convicted of sexual abuse and lost his licence to practice because he cleaned his wife’s teeth. It takes bravery to support whistleblowers when they first make the allegations, rather than decades later when everyone agrees with what they did.

Economics & work

Excessive net migration will continue to put upward pressure on Australia’s CPI. The incoming RBA chief owns five properties, which is arguably a solid incentive to keep interest rates low. It is possible to slow inflation without substantially raising the unemployment rate if idle people enter the workforce or if governments cut spending. The US jobs market is still strong, but wage inflation is slowing. Eurozone core inflation remains high driven by inflation on services. The ECB raised its overnight interest but slashed the interest rate paid on regulatory reserves to 0%. During World War One, the Australian and UK governments dumped the gold standard so they could print money, kicking off the modern era of inflation.

Bloated governments around the world need to learn from the spending restraint shown by Grover Cleveland when he was a mayor, governor and president. In the early 1990’s, Poland dumped Communism and has recorded strong economic growth ever since. The income gap between Americans and Europeans keeps expanding with Europe’s welfare state dragging it down. 10 suggestions to reduce poverty. 12 foundational economics articles.

China’s youth unemployment rate has topped 20%. A small but growing portion of professional employees are “overemployed”, juggling multiple jobs at the same time. Shopify has created a meeting cost estimator based on employee salaries to discourage employees from holding lengthy or pointless meetings.

Miscellaneous

Two recent studies found that “most likely lockdowns represent the biggest policy mistake in modern times” and that greater constraints on government powers and greater guarantees of individual freedoms are needed. A doctor switched his diet to mostly ultra processed foods and wrote a book about the negative outcomes. NASA researchers have created a lighter battery that can store more than double the amount of energy.

A Harvard professor is the latest in a string of academics studying dishonesty to be busted for falsifying data. An Italian teacher was sacked after being absent from work for 20 years. Homeschooling in America has jumped from 3.3% to 11.1% over the last five years.

Brazilian bank robbers used explosives, machine guns, drones, and hostages as human shields in a raid on three banks. After almost 20 years of broken promises, Virgin Galactic finally took paying passengers into space. Five platforms looking to take users away from Twitter.