Media worth consuming – July 2024

Top Five Articles

America’s national debt has reached $35 trillion, up from $22 trillion in 2020.

The Secret Service repeatedly denied Trump campaign requests for greater resources prior to the assassination attempt, then lied about it at a press briefing.

The Australian dream used to be owning a home on a quarter acre block, but rented capsules are becoming the affordable reality.

The difference between negotiating for the long term and the short term.

Hilarious and insightful cartoons about the nature of big government.

Finance

US IT stocks have surpassed their pre-tech wreck peak as a proportion of market cap, while defensive stocks are at a record low percentage. American corporate insiders are selling their shares at the fastest pace in a decade. US CPI has had consecutive softer monthly readings, but the solid falls in durable goods prices are unlikely to last in the medium term. The mountain of private equity dry powder has reached $2.62 trillion.

American companies have taken advantage of strong investor demand to reprice more than 25% of leveraged loans this year. Leveraged loan investors are starting to require protections to stop companies stripping assets to secure new debt. Defaults are expected on around a dozen single asset commercial mortgage securitisations, with rating agencies likely to face heat for granting AAA ratings to tranches that are now suffering principal losses.

PIK debt issuance is growing rapidly, but it is often the riskiest debt for both the borrower and lender. Ghana’s bondholders are set to take a 37% haircut in a deal to stabilise the country’s debt. An academic paper on sovereign debt defaults finds the average haircut is 45%, with defaulting countries increasingly requiring multiple rounds of haircuts. Iceland sold a €50 million gender bond to fund affordable housing and government services for women. Some arguments for and against private credit’s key claims.

Citigroup was fined $136 million for failing to fix its systems that record key risk data, four years after it was fined $400 million for the same issues. The collapse of fintech Synapse, which has seen millions of dollars of funds go missing, is causing problems for other companies that relied on it to provide bank like services to their customers.

Politics & culture

France has banned its athletes from wearing hijabs at the Olympics. The organisers of the Paris Olympics have apologised for using drag queens to parody The Last Supper. Instagram has blocked the account of a Paralympian shooter who posted photos of herself with her competition rifle.

JD Vance advocates for the same flawed economic policies as Joe Biden and Kamala Harris. Kamala Harris has advocated for more government intervention and higher taxes than Joe Biden, but she also advocates for freer trade. Joe Biden and Kamala Harris have proposed rent controls, ignoring decades worth of evidence that they are counter-productive. The US Government knew the Gaza aid pier was a bad idea, but still spent $230 million for a pier that was functional for only twelve days. Calvin Coolidge was one of America’s best presidents because he cut spending, cut taxes and cut government debt.

Special Counsel Robert Hur’s description of Joe Biden as an “elderly man with a poor memory” is a conclusion many Democrats now agree with after Biden had repeated senior moments during the first Presidential debate. Democrats regularly claim that “democracy is on the ballot this election” while trying to block Trump and third party candidates from appearing on the ballot.

The US Supreme Court has overturned the Chevron defence, which is expected to result in regulatory bodies losing some of their power to act without legislation. An explanation of why the Chevron defence had to be overturned. Joe Biden is a blatant hypocrite on immunity from prosecution for American Presidents. California’s Supreme Court has blocked a ballot that proposed taxpayers having veto powers over government tax increases.

The UN has blocked women from attending its Afghanistan conference to secure the attendance of the Taliban. Some companies are ditching DEI, choosing instead to focus on MEI – merit, excellence and intelligence.

The term “far right” is often overused in European politics to denigrate parties that typically prioritise law and order, affordable housing, affordable climate change action and basic human rights that establishment parties have failed to deliver. A German magazine has been raided and shutdown on ministerial decree, with court cases expected to test the legality of the actions. An Italian journalist was fined €5,000 for mocking the Italian Prime Minister’s height.

Free speech is increasingly being throttled by biased content moderation services. After seven years, an online “fact checking” website has finally corrected its article that claimed Trump called neo-Nazis “very fine people” in 2017. Wales is considering introducing laws that criminalise lying by politicians, which could perversely be used by politicians to attack criticism of them. The UK’s first past the post voting system delivered disproportionate outcomes on the number of members elected for each party. British parents are prepaying years of school fees to avoid a looming 20% tax on school fees.

In a bizarre turn of events, an American woman charged with spying for South Korea is married to a man who promulgated the Trump-Russia conspiracy. American journalist Evan Gershkovich has been sentenced to 16 years jail for spying in what is widely believed to be a sham Russian trial set up to create a prisoner swap. The UN Secretary General has said Gaza is operating in “total lawlessness” with no clear authority in most of the territory.

Economics & work

A new study on universal basic income found that recipients of extra welfare worked less and earned less but spent more time on leisure. The increased prosperity from the industrial revolution largely eliminated child labour, well before Western governments passed laws banning it. The poorest decile of households in the US and Sweden have similar income, but for every other decile US households are better off. If China wants to halt the decline of its economic growth rate, it needs to increase free markets and reduce government intervention. Free markets and property rights lead to lower crime by citizens and by governments against citizens.

Nineteen partisan Nobel winning economists signed a letter backing Joe Biden, arguing that high levels of government spending will increase productivity and GDP growth when evidence suggests it has done the opposite. Thirteen of the nineteen also signed a 2021 letter that claimed Biden’s spending programs would reduce inflation, right before inflation soared.

Japan is replacing a key currency official after the Yen topped 160 to 1 US dollar. Argentina’s President understands that the cure to inflation is to cut government spending and money printing, with these changes slashing Argentina’s inflation rate. The American middle class is shrinking with most departures landing in the high income category.

Excessive spending and population growth by Australian state and federal governments are putting upward pressure on inflation, making the RBA’s job much harder. Older Australians are living it up as their investment income has jumped, while younger Australians are being belted by higher rents and mortgage payments. Based on median house prices divided by median household income, Sydney and Melbourne are the second and seventh least affordable housing markets in the world. On population and gas, the Grattan Institute has consistently argued for government policy that favours its donors at the expense of ordinary Australians.

Miscellaneous

Bill Gates is planning to put billions of his own money into developing nuclear power plants. Scientists have discovered the production of “dark oxygen” on the sea floor thousands of metres below the water surface. July 22 was the hottest day recorded, with a global average temperature of 17.15 degrees Celsius. Sceptics are arguing that AI is more expensive and less efficient for most tasks than widely thought.

While some researchers believe that Covid caused excess deaths in Australia in 2023, others say that deaths are back to normal levels after adjusting for age. A report found that British children are getting shorter, fatter and sicker with ultra-processed foods blamed. The Ohio Supreme Court ruled that boneless chicken wings can have bones, denying a man compensation after her was seriously injured after eating a wing bone. For $3,600, Chinese chemical suppliers will sell Americans the precursor chemicals to make $3 million of Fentanyl.

Some North American athletes are choosing where they work based on state taxes. Canada’s national soccer teams have been busted for using drones to spy on their opponents practice sessions, with the penalty for the women’s team blocking them from progressing in the Olympic tournament. Olympic swimmers admit they frequently pee in the pool, blaming their heavy consumption of water and tight swimwear.