Media Worth Consuming – September 2023

Top Five Articles

The US is heading towards an age of austerity due to higher interest rates, high levels of debt and an ageing population.

An IMF study of over 100 episodes when inflation spiked found that inflation typically takes longer than expected to revert to target levels and requires interest rates to be kept higher for longer.

Private equity firms are adding new layers of leverage at the management company and fund level.

Substack is filling a critical gap in journalism by breaking major stories that mainstream media outlets ignore.

What the research says about how to improve your sleep and how much you need.

Finance

Leading indicators, declining excess savings and the restart of student loan repayments all paint a gloomy picture for US economic growth. Walmart has cut pay for new hires as retailers look to cut costs amid weakening demand. Professionals in China’s major cities are taking pay cuts, putting further pressure on consumer spending.

A summary of the Yale Model of investing and a summary of Warren Buffet’s way of identifying long term winners. The history of the Vix index. The 25 stocks that have destroyed the most shareholder wealth. The market for hit songs is slumping, with several funds being forced to sell recently purchased catalogues to repay debt. Tiger Global has a reputation for writing VC investment cheques faster than its peers, one of several factors that led to its downfall.

US high yield bonds are now predominantly being issued as secured debt, as borrowers seek to reduce their interest rates. McKinsey has a lost a series of legal cases over its failure to disclose conflicts of interest when undertaking bankruptcy work. A Turkish court has sentenced the founder of a failed crypto exchange to 11,196 years in prison.

24% of office space in major Chinese cities is vacant, above the 18% in the US. China’s property industry has over five years’ worth of sales stuck part way through construction. The chickens are coming home to roost for China’s property sector with this likely to impact Australia’s economic growth. Surprise defaults and poor communication from Chinese borrowers are causing some naïve investors to finally question the investability of China’s bond market.

Politics & culture

Jacinda Ardern’s speech at the UN included the claim that censorship is necessary to protect free speech. The Albanese Government wants to ban what it considers to be misinformation, but the proposed law includes an exemption for government information. Facebook has temporarily suspended Melbourne’s RMIT from its fact checking program for consistent bias in its “fact checks”. The BBC’s disinformation correspondent was caught lying on her CV.

The Trump campaign released a video montage of Democrat leaders disputing elections results as part of his defence against charges linked to questioning the integrity of 2020 Presidential election. YouTube demonetised a channel, claiming a video of Democrats challenging election results violated its “violent criminal organisations policy”. A CNN fact check confirmed that Joe Biden’s family members and associates received $20 million in dubious proceeds, the exact issue that that led Republicans to initiate their impeachment inquiry.

Canada has accused the Indian government of being involved in the murder of a Canadian citizen and Sikh community leader in British Columbia. Narendra Modi is set to open a Hindu temple where a mosque stood for over 200 years before it was destroyed by Hindu rioters in 1992.

An industry has emerged to take advantage of the US Government’s Covid era employee retention tax breaks. Several high profile musicians exploited loopholes in US Government stimulus programs to grab millions of taxpayer dollars. A Chicago TV crew was robbed at gunpoint while recording a story on the city’s surging crime rate. Chicago’s Mayor is proposing government run supermarkets to replace for-profit supermarkets that closed due to high crime rates. Costco has been far less impacted by theft than Target, with Costco’s larger products and different store setup making it much harder to walk out with stolen goods.

LeBron James opened a school with plenty of money and promises, but the academic results have been disappointing. Substantial research shows that teaching phonics is helping kids become better readers, but some states are reluctant to give up old teaching methods.

The US Department of Justice is suing SpaceX for failing to hire refugees, despite US law requiring the company to only hire citizens or those with a green card. Elon Musk is threatening to sue the Anti-Defamation League, claiming they raised accusations of racism against Twitter when he refused to donate to their organisation. The meaning of Gadsden flag, which sparked furious debate when a Colorado school boy was ordered to remove it from his backpack.

The US military has made it clear that men cannot avoid the draft by identifying as a woman. A Californian school’s equity and inclusion committee has been criticised for organising a playdate that deliberately excluded white children. Australia’s ABC has apologised for providing archival footage in support of the Yes campaign.

Australia needs to hold a broad inquiry into government Covid responses so that the medical, economic and personal freedom disasters are never repeated. Sweden’s lower excess death rate demonstrates that broad lockdowns were a disaster. A German judge has been given a two year suspended sentence for “perverting the law” after he ruled that government mask mandates were unenforceable in 2021. A British Court ruled that a conscious 19 year old patient should be denied life sustaining care and the opportunity to pursue experimental treatment.

Economics & work

Conservative governments in the UK have increased government spending as a percentage of GDP, locking in lower productivity and economic growth. If you want to balance a government budget with the least impact on economic growth, cut spending instead of raising taxes. The last decade has seen politicians and some economists reject basic economic principles and the consequences are now playing out. Global government debt levels continue to increase but household debt levels have fallen.

Poor economic management since the breakdown of the USSR has seen Russia fall behind many of the states it once controlled. Justin Trudeau is threatening to increase taxes on grocery chains if grocery prices don’t stabilise, ignoring the substantial impact his government has had on making groceries more expensive. China’s lack of economic freedom is now an obvious drag on its economic growth. Turkey is yet another example of the disaster that MMT brings.

US CPI remains well about 2%, with some favourable adjustments set to cease in October. US core services inflation remains above 5%, while durable goods inflation is negative. After adjusting for inflation, US median household income fell for the third year in a row. Higher for longer bond rates are a return to the old normal. Capitalism encourages charity whereas socialism involves taking someone else's money to spend on your pet projects. There is little moral basis for “a right to strike”.

Auckland substantially loosened zoning restrictions in 2016 with house prices and rents rising less in the following years as more houses were built. Australia’s very low residential vacancy rate is driven by excessive net migration. Australia’s job market is struggling to keep up with the enormous flow of migrants.

Miscellaneous

The hype around AI has seen many companies jumping on the bandwagon. Axon, known for making Tasers, likes to test them on its employees. Hundreds of scientists including two Nobel Laureates have signed a declaration that “there is no climate emergency”. The pursuit of lower costs results in modern furniture breaking sooner than old furniture.

Semaglutide drugs might end being used for much more than weight loss. Milk made from sugar cane is being tested for commercial production. Long covid is very similar to chronic fatigue, with research making little progress in understanding how to cure it. Australia is the most expensive country in the world to buy cigarettes, fuelling a booming trade in illegal tobacco.

Gen Z is more than twice as likely to be scammed or hacked than their grandparents. NFT’s have experienced a massive bust with a study finding that 95% of collections have effectively no value. The Swedish underworld is using Spotify to launder its proceeds from crime.

An Iranian man was arrested off the coast of Florida attempting to travel to London in a human hamster wheel. Air Canada had passengers forcibly removed from a plane after they refused to sit in seats with vomit residue. A supermarket chain in the Netherlands introduced “chatty checkouts” as a way to reduce loneliness. A fake steakhouse listing on Google turned into a one night only pop-up restaurant.