Daily Economic Update: December 11, 2024

Inflation data begins with CPI today, with estimates for YoY core inflation at 3.3% and headline ticking up to 2.7%.  Stocks have been little changed to down ahead of CPI.  Small business seems opitimistic adding to post-election data sets that show solid expectations for 2025.  The 3Y note auction tailed slightly with weak indirects.  Heading into CPI, the 2Y is 4.16%, the 10Y is 4.22%.

In Asia, Chinese record low yields are in place despite Monday’s stimulus announcement. The stimulus headlines kind of remind me of Evergrande headlines that were seemingly recycled for 2 years (more?) as the real estate market collapsed.   Also in APAC, the RBA held rates, though indicated a case for cutting rates in February, of course dependent upon the data.

You don’t have bird flu yet, so that’s good.

CPI is the highlight and the 10Y auction is also on the docket.  If you're into Canada we get a BoC decision too. 

XTOD: A smaller share of Americans moved in 2023 than ... ever.  New from @uscensusbureau

 at https://census.gov/data/tables/2023/demo/geographic-mobility/cps-2023.html

XTOD: "SpaceX Share Sale Values Company at About $350 Billion  Tender offer includes $1.25 billion of stock at $185 a share. " Bloomberg  Employee liquidity FTW!

XTOD: US TREASURY SECRETARY YELLEN: I AM CONCERNED ABOUT FISCAL RESPONSIBILITY, DEFICITS NEED TO BE BROUGHT DOWN......a parting gift? You can't make this **** up!

XTOD: Bitcoin has totally lost its way. The purpose of Bitcoin "A Peer-to-Peer Electronic Cash System" as Satoshi Nakamoto designed it was for a stateless, decentralized, permissionless payment mechanism that was capable of scaling to VISA-level transactions that were cheap enough to support both sub-cent micro-payments as well as large payments. This is the true value proposition as widespread adoption of payments through this system would literally free people from both the banking system and some degree of government coercion while it's fixed scarcity would also limit the #inflationary monetary malfeasance common with central banks. Nowhere in the Bitcoin whitepaper is it mentioned that Bitcoin was intended to be HODLed by a very few in order to drive the price up so that then, financial con-artists like @saylor  could bamboozal the world through reckless financial engineering. Nowhere in the whitepaper was it mentioned that it would be really great for Bitcoin to "go to the moon" after retail investors used  @BlackRock  ETFs to access only the price of Bitcoin without any possibility of custody of their own Satts. Nowhere in the whitepaper is it mentioned that there was no real way for it to scale (because of artificial block size limits) and therefore in order for Bitcoin to actually empower transactions for all, we would need some diminutive technology ignorant anarcho-gobblin like @jackmallers  to come along and create a new layer that somehow, magically would make good on the promise of global cheap transactions at scale. All we are seeing today is a massive speculative orgy with almost no real adoption and certainly no hope for the true vision of Satoshi Nakamoto.

XTOD: Stop trying to be spectacular. Start being consistent. https://pbs.twimg.com/media/GecX55RXUAARhIQ?format=png&name=900x900

Daily Economic Update: December 10, 2024

Today's post was written while large unidentified drones surveilled my laptop...add that to your 2024 bingo card.

Equity markets traded lower as news of Nvidia being under investigation for monopoly by China seemed to dampen the mood.  Bond yields rose slightly as oil continued to trade higher on the back of middle east instablity.  The 2Y is 4.13% and the 10Y is 4.20%, both relatively range bond as we approach inflation data and major central bank decisions over the next week. 

With Nvidia in the news, relating to AI, I thought this was an interesting take from Marathon Asset Management's podcast The Capital Cycle Podcast. The guest, Kai Chen, provided the following: 

"I always think in the technology world, in the semiconductor world, there is Moore's law and then in AI there is the scaling law.  And at Marathon we have the law of capital cycles, which suggest excessive investment is often followed by poor returns.  And I think this is kind of what we are observing.  There is a huge amount of investment fueled by the idea that the scaling law will continue.....but if the scaling law starts to slow down, then what we are going to end up with is massive overcapcity."

In economic "data", the NY Fed SCE was out and generally showed optimistic consumers who are increasing their inflation expectations at all horizons.  While inflation expectations rose, so did uncertainty about inflation.  In general consumers think they'll keep their jobs and get paid more in the coming year.  These two summary points might tell you all you need to know about where we are in terms of risk perception in the economy:  The share of households expecting a better financial situation in one year from now rising rose to its highest levels since February 2020, while the share expecting a worse financial situation fell to its lowest level since May 2021. The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.3 percentage points to 40.4%.

Within economics, I always enjoy economist Allison Schrager and her latest piece she expresses concerns that the economy might not fully grasp what a prolonger period of higher interest rates after such a prolonged period of low interest rates.  She calls out recent homebuyers using ARMs and Private Credit as two areas of potential concern.  She concludes her section of concerns with this: 

"On a related note, the push to get more retail investors into private assets needs to stop. I’m not against private markets—they provide value and have a role in institutional portfolios. But private equity and credit have likely grown beyond optimal size, another byproduct of near-zero rates. Shrinking them back to size might create challenges."

Away from markets, though tangental I suppose, there is a suspect in custody in the murder of the United Healthcare CEO Brian Thompson.  The suspect is a 26 year old as was reportedly carrying a three-page document which suggests, “He seems that he has some ill will toward corporate America,” police said.  In addition it appears he was a fairly recent graduate of UPenn.  The closest historical account that comes to mind as a parallel to this sort of vitriol toward corporate executives is the attempt on the life of "robber baron" Henry Clay Frick of Carnegie Steel back in 1892.

Further afield you have Jay-Z now firmly entangled with Diddy via allegations filed in court...just mentioning so you don't have to hear about geopolitics in this post.

Speaking of entanglements, have you ever heard of "quantum entanglement"?  It's over my head, but quantum entanglement is the backbone of quantum computing.  Google made some announcements in quantum computing with a chip called "Willow"  I don't know enough but does this mean crytpo won't really be secure?  

3Y Note sale is the highlight today.

XTOD: Me waking up my 8 year old son tomorrow at 4 am to hit the batting cages after Soto got $750 mil.

XTOD: Luigi Mangione, the champagne antifa loser who attended Penn and the $40k-a-year private Gilman prep school before murdering Brian Thompson in New York last week, appears to be a beneficiary of the vast Mangione family real estate empire in Baltimore founded by his grandfather.  Among other Mangione family assets in Baltimore that supported Luigi's expensive private education were the Lorien Health Services chain of nursing homes, the Turf Valley Resort, the Hayfields Country Club, and numerous other holdings of real estate, hotels & radio stations.

XTOD: A record $140 billion pumped into US equities since the election, dwarfing any other time (Source: FT).  Huge incremental demand (this money must be used to buy stocks) + Limited supply (few are selling) = Stock prices go up. Ceteris paribus, it’s just how it works.

XTOD: If you're hungry but too lazy to prepare healthy food, you'll consume junk food. If you're hungry for knowledge but too lazy to seek out the truth, you'll consume misinformation.

XTOD: Time is money but money is not time.

Daily Economic Update: December 9, 2024

"I survived the Hawk Tuah meme coin crash of 2024".  If you're interested in a T-shirt, feel free to post a comment.   

Will Buffett and Munger's critiques of Bitcoin and other cryptocurrencies which they variously described as "rat poison squared", comparing them to "some venereal disease" and "trading turds" while lamenting that the whole industry is "disgusting and contrary to the interests of civilization", prove valid?  I guess time will tell, but I'm pretty confident Hawk Tuah's coin won't be the last collapse (fraud???) we'll see this cycle.

Friday's Payrolls headline was +227k, with October and September both revised higher.  The unemployment rose to 4.2% largely driven by new entrants to the labor force.  Average hourly earnings rose and remained robust at 4.5%.   Debate still exists around the impact of immigration and the birth and death of businesses in the data. Nonetheless the data seemed solid.   Away from jobs data, the UofM was very strong with a surge in the current conditions component along with some increasing in inflation expectations.

With labor data out of the way the focus will move to this week's inflation data as the Fed enters blackout before their meeting next week. 

Away from economics, the Tik Tok ban was currently upheld creating some uncertainty for the future of ownership of the platform and operations in the U.S. by mid January.  As of the time of this writing the shooter of the United Healthcare CEO remained at large with search shifting to Atlanta due to tips. In geopolitics, Syrian President Assad resigned and fled the country.  Trump has urged the U.S. to stay out of Syrian affairs.  You generally know the other major geopolitical and political topics, so no need to rehash.

On the week ahead the highlights are:

Mon: Inventories, RBA rate decision

Tue: Small business optimism and productivity

Wed: CPI,  Bank of Canada Rate Decision

Thur: ECB Rate decision, PPI, jobless claims

Fri: Import Prices

XTOD: Bottom line: another unclear report w/ strength in one survey & weakness in the other. I would make wage growth the tie breaker and it has unambiguously been strong. Some may be catch up from poor performance earlier but also bolsters case for last mile / no landing scenario....Back to the big picture, employment  and jobs remain well above pre-pandemic forecasts. This is mostly the inflow of immigrants.

XTOD: The almost 400k decline in household survey employment came from private sector. The 785k boost in government employment from September which we trace to election has not yet reversed. That is to come.

XTOD: Weekly hot takes:

1. Whoever was short mid cap SaaS got blown out 

2. Risk is mispriced -> I was really close with Eric Sheridan when he was at UBS and no one knew him. We use to have a “hot tub scale”. How many people were in the hot tub? I can firmly say … this markets hot tub is completely full 

3. We are no where near prior cycle highs in Bitcoin vs MAG7. Something to watch. Different this time?

4. AI continues to split into subsections. AI Datacenter. AI Energy. Now… AI Agenttech factor needs to be added to risk models 

5. APP is now $150bn cap 

6. ACHR is up +140% in 20 days 

7. ARKK smoked Value 

8. People ignored all FED talk this week

9. I got pitched degenerate meme coins in the gym by some anon (to be fair they didn’t know what I did) which makes even funnier 

10. Levered ETFs are at historical high inflows and capital while puts and skew at 100 yr lows

XTOD: Former Milwaukee Bucks owner Marc Lasry says he is actively trying to buy college football and basketball teams. Lasry says certain colleges could sell a 51% stake in their teams at a $500M to $750M valuation and then use that money for NIL and facility upgrades.  Crazy times.

XTOD: Bitcoin was also created out of thin air.  Here's an old post (also created out of thin air): https://andolfatto.blogspot.com/2011/03/out-of-thin-air.html

Daily Economic Update: December 6, 2024

Jobs Day in 'merica.  Markets estimate 214K increase in the headline number, but the end of strikes and waning imapct of hurricanes seem to be justifying a higher "whisper number".  

BTC 100K is all the rage.  Remember when about two months ago the HBO's documentary "Money Electric: The Bitcoin Mystery" was going to unveil Satoshi and change the world?  Maybe it did.  Anyway it still feels somewhat incongruent to me that people measure Bitcoin wealth in Dollars and still largely go through large intermediaries to transact and exchange their Bitcoin back to spendable currency.  I don't know if I'm correct, but when it comes to crypto I find it paradoxical that so much of crypto is reliant on systems it allegedly seeks to disrupt, including large intermediaries, even moreso now with crypto ETFs.  We also tend to overlook the fundamental reliance cryptocurrencies have on stable electrical grids, internet and much of the modern technology infrastructure, including compute. Human behavior seems be largely timeless, greed, fear, etc. and it will be interesting to see if crypto can defy the odds that prevail in history, such as the fact that when large institutions start to profit massively from something, that tends to led to centralization, rarely decentralizing.  Time will tell if this time will be different and the original aspirations of Bitcoin can come to fruition.

In data, jobless claims rose, but remain benign. Away from data we got a new post from Roaring Kitty on X, with some fake Time Magazine cover picture that some speculate might be related to Google. Major stock indexes fell and bond yields were little changed.  We head into Jobs with a 2Y at 4.15% and a 10Y at 4.18%

In international news, Macron faces calls for resignation, as the government collapses, but he vows to stay in office and name a new PM soon.  However, with both ends of the political spectrum largely aligned against Macron is likely to make for an interesting next several days and weeks.   We also still don't know what happens next in S. Korea.

Closer to home we had an offshore earthquake that originally sparked short-lived tsunami warnings for parts of northern Cali and Oregon, there were no initial reports of major damage.  As of the time of this writing, the assassain of United Healthcare's CEO remains at large, with the police providing that shell casings contained the words “deny,” “defend” and “depose” which are phrases associated with criticism of the health insurance industry's reputation of denying services and payment.

On the day ahead it's all about J.O.B's.

XTOD: “Hawk Tuah girl released a shitcoin and scammed her audience? That could never be me, I’ve got my money in low cost mutual funds and T-bills earning a stable coupon”

XTOD: JOHN WALSH: "I don't think the shooter was a pro. I never came across a really good pro, because if they were a good pro, you wouldn't know. A real pro would have worn sunglasses. His gun was half-assed probably built off of YouTube. Someone may have paid him, but you never know when people are hurting. This company hurt a lot of people, so it may be someone out of control who knows someone who died."

XTOD: There ain't no such thing as a free Strategic Bitcoin Reserve free lunch: the BITCOIN Act's plan for financing such a reserve will actually add _more_ to our nation's debt burden than if the Treasury financed the purchase through outright borrowing.

XTOD: Jeff Bezos: “Thinking small is a self-fulfilling prophecy” 

Bezos is asked where he gets the confidence to even attempt to build companies of such massive scale, like Amazon and Blue Origin.

He responds:  “I think it’s generally human nature to overestimate risk and underestimate opportunity. And so I think entrepreneurs in general would be well-advised to try and bias against that. The risks are probably not as big as you perceive, and the opportunities may be bigger than you perceive… You say it’s confidence, but maybe I’m just accepting that human bias and trying to compensate against it. The second thing I would point out is that thinking small is a self-fulfilling prophecy.”  Video source:  @nytimesevents  (2024)

Daily Economic Update: December 5, 2024

If you don't like this blog, feel free to call me so the Chinese can have a record of your disapproval, or at least have all the metadata associated with your disapproval.  I'm pretty confident that there is nothing more important to the Salt Typhoon hacking group.  Oh, you didn't know about the hacking of 8 U.S. telecom providers?  I wonder if any market related information has been acted on as a result of this hack?

More record highs hit on the bing card again today.  Tech led by Salesforce won the day.  Following data, Powell and Beige book, the 2Y ended at 4.13% and the 10Y at 4.19%.

Powell was the main event yesterday.  His comment that the Fed can "afford to be a little more cautious as we try to find neutral" was one that made headlines and appeared a little less dovish than the comments from Waller early in the weak.  He also said that "The economy is strong, and it's stronger than we thought it was going to be in September."  Aside from his comments around the economy, his comments about Bitcoin as a competitor to gold, not the dollar made probably the most headlines on social media.

The lowlights were the apparent assassination of United Healthcare's CEO in Midtown Manhattan, just horrific, and the collapse of the French government.  There is no resolution to whether or not S. Korea President will be impeached.  Cuba barely has power.  Syria is a mess.  I think that covers most of the negative bases for the day.

In data,  ADP was largely in line (depending on what estimates you looked at) at +146k. Services hiring and hiring by large firms led the way while manufacturing lagged overall despite what looked like a decent construction increase.  The data also showed a 4.8% YoY increase in wages.   Friday's jobs report will likely have more effects from people returning from strikes and hurricanes, but we'll see.

The ISM Services index declined by more than forecast with weaker than expected business activity, new orders and employment readings.  Prices paid rose.  The commentary indicated overall positive tone with some concerns around the impact of tariffs on the forward looking picture.

The Fed's Beige Book showed slow, but accelerating economic activity and expectations for continued growth in business activity in 2025.  Tariff concerns were noted but overall the use of the word "slowness" declined materially in the report.

On the day ahead it's jobless claims as the highlight as markets position for Jobs Day on Friday.

XTOD: Cubans woke up to darkness as the Caribbean island's electrical grid collapsed, the latest in a string of nationwide blackouts https://reut.rs/3D14jYb

XTOD: Quick Syria Update:

- On Monday, Pentagon Press Secretary Maj. General Pat Ryder announced that the U.S.-Russian military-to-military deconfliction hotline was used to prevent a future miscalculation. The tempo of both U.S. and Russian operations has increased significantly in the past week. 

- The Russian base in the Tartus region of Syria comes under significant threat from advancing opposition forces. As of late yesterday, opposition forces, led by HTS, were just ~20 km from the Latakia Naval Base. Most recently, repeated explosions have been reported in the local region. 

- It’s become increasingly clear that opposition forces are seeking to isolate the city of Hama in order to make the position of the SAA forces tasked with its defense untenable. A number of key heights and ground lines of communication (GLOC) on the outskirts of the city have been taken. Such successes will only serve to potentiate opposition efforts to isolate the city. Fighting has already been reported within the city limits.

XTOD: We now live in a World where the CEO of a Dow Jones component ( $UNH)  is gunned down in Broad Daylight in NYC and the stock goes Up... Just another sign post along the way

XTOD: Saw mainstream news coverage about the killing of the CEO of United Healthcare on TikTok and I think political and industry leaders might want to read the comments and think hard about them

XTOD: “I have every possession I want. I have a lot of friends who have a lot more possessions. But in some cases, I feel the possession possesses them, rather than the other way around.”  — Warren Buffett

XTOD: Don’t feel qualified? Nobody does.  You can only be qualified to do that which you have already accomplished or trained for.  Anything new is accomplished by unqualified people.

Daily Economic Update: December 4, 2024

If you guessed new record highs for equities, you would be correct. 

What is being dubbed by some as the "great stay", JOLTS showed stronger than expected job openings, with low hiring and low firing.  The biggest gainers in job openings were in business and professional services.  The quits rate rose slightly in an encouraging sign.  Overall it looked like a fairly healthy picture for the labor market and this was the October reading, so it will be interesting to see if the November data gets any sort of "pro business" election outcome push. 

Fedspeak was largely all doves and they were all in favor of moving towards a more neutral over time and of course that they'll be watching the incoming data.   Markets are pricing in ~70% chance of a 25bp cut at the December meeting. We'll see what Powell has to say today.

S. Korea's President declared martial law over impeachment threats that the President claims are tied to N. Korean sympathisizers in the opposition party, a martial law that lasted about 3 hours.  Add that to the collapsing French government, all the various conflicts in the middle east and the ongoing war in Ukraine.

On the day ahead it's ADP, ISM Services and Powell.

XTOD: The slow-to-hire, slow-to-fire labor market continues. Private-sector hiring and firing rates ticked down in October.   Quits edged up while job vacancy rates are holding steady below 5%.

XTOD: China bans exports of gallium, germanium and antimony to the US. Beijing says the commodities have "dual-use" military use. The Chinese guidance is a bit unclear, saying the "in principle" ban only applies for sales to "military users." 

https://mofcom.gov.cn/zwgk/zcfb/art/2024/art_3d5e990b43424e60828030f58a547b60.html

XTOD: Extreme birth rate collapse is the biggest danger to human civilization by far

XTOD: A timely reminder that in the end productivity is everything.  All else passes. The trend is not automatic. Each step is hard-won. To non-economists: Covid was not great for productivity and we should all get sick. Less productive workers were fired. Beautiful composition effect.

XTOD: the foreign exchange market resulting from the developed economies’ decision to allow the liberalization of cross-border capital flows starting in 1980. Prior to that, the main participants in this market were importers and exporters.  Their transactions automatically served to lower the value of currencies of trade deficit nations and increase the value of currencies of trade surplus nations. This helped prevent excessive growth in trade imbalances. speculators became the main participants in the forex market, and as they stepped up their purchases of high-yield dollar assets, the greenback rose to levels that could never be justified given the size of US trade deficits."  Koo is reminding us of what Keynes argued decades ago. A world of unfettered capital flows is inconsistent with a world of free trade because the former can overwhelm the latter, leading to distortions that suppress wages and undermine manufacturing in deficit countries. He also notes that within the US, this is a conflict between those on Wall Street who benefit from this highly distorted form of globalization, versus those who pay the cost, manufacturers and workers.   "Globalization," he notes, "has brought great benefits...to capitalists, companies, and consumers, but it has had serious adverse effects on the workers in domestic manufacturing and agriculture who must compete with inexpensive products produced overseas."

XTOD: Ernest Hemingway said F. Scott Fitzgerald had a "romantic awe of [the rich] ... He thought they were a special glamorous race and when he found they weren’t it wrecked him as much as any other thing that wrecked him."

Daily Economic Update: December 3, 2024

Record closes for equities yet again. In data, the ISM PMI beat expectations with solid new orders.  Across the pond, French government as on the verge of collapse. Other than that is it just me or are food recalls at an all time high?

In Fedspeak, Bostic calls policy restrictive and is biased towards easing over time, but doesn’t necessarily believe a December rate cut is preordained.   Waller had a cool line: “Overall, I feel like an MMA fighter who keeps getting inflation in a choke hold, waiting for it to tap out, yet it keeps slipping out of my grasp at the last minute,” while stressing that they will get the eventual tap out.  Ultimately he’s leaning toward 25bps in Dec. but of course that’s data dependent.  We also had Williams late in the day explaining why the Fed can continue to cut rates: "The simple answer is that while growth in demand has been strong, growth in supply has been even stronger. Specifically, robust growth in both the labor force and in productivity has meant that the economy can expand at a higher pace than we saw before the pandemic, without creating inflationary pressures."  Of course he's also data dependent.

Yields rose some wiht the 10Y at 4.20% and the 2Y is also at 4.20%, almost back to inverted.

On the day ahead it's JOLTs and more Fedspeak.

XTOD: Art Cashin,  @NYSE   fixture for decades, dies at age 83. In the intensely competitive world of stock market  commentary, he was that rarest of all creatures: a man respected by all. He was a great drinker and a great teller of stories, and a great friend.\

XTOD: Biden's Hunter pardon riles Democrats who defended US justice system http://reut.rs/3Zy0PFb

XTOD: Missed a chance to make 4x on Biden corruption? Here is a 10x opportunity on Biden pardoning Fauci ahead of the inevitable perp walk https://pbs.twimg.com/media/Gdz4COGXAAEdaNh?format=png&name=900x900

XTOD: The world is full of foolish gamblers, and they will not do as well as the patient investor." 

— Charlie Munger

XTOD: When I came across Pareto’s work one late evening, I had been slaving away with 15-hour days seven days per week, feeling completely overwhelmed and generally helpless.  

I would wake up before dawn to make calls to the United Kingdom, handle the U.S. during the normal 9–5 day, and then work until near midnight making calls to Japan and New Zealand. 

I was stuck on a runaway freight train with no brakes, shoveling coal into the furnace for lack of a better option. Faced with certain burnout or giving Pareto’s ideas a trial run, I opted for the latter. 

The next morning, I began a dissection of my business and personal life through the lenses of two questions: 

1. Which 20% of sources are causing 80% of my problems and unhappiness? 

2. Which 20% of sources are resulting in 80% of my desired outcomes and happiness? 

For the entire day, I put aside everything seemingly urgent and did the most intense truth-baring analysis possible, applying these questions to everything from my friends to customers and advertising to relaxation activities. Don’t expect to find you’re doing everything right—the truth often hurts. The goal is to find your inefficiencies in order to eliminate them and to find your strengths so you can multiply them.  

In the 24 hours that followed, I made several simple but emotionally difficult decisions that literally changed my life forever and enabled the lifestyle I now enjoy. 

The first decision I made is an excellent example of how dramatic and fast the ROI of this analytical fat-cutting can be: I stopped contacting 95% of my customers and fired 2%, leaving me with the top 3% of producers to profile and duplicate.

Daily Economic Update: December 2, 2024

Unless you got debanked during it and couldn't invest, November was the best month of the year for the major indexes.  With December upon us, we enter yet another Jobs week, with the Employment Report on Friday.   Trump's pick of Bessent as Treasury Secretary seemed to help calm treasury markets on the week.  The 10Y yield is 4.17% after being up above 4.40% for a good part of November.  The 2Y yield which is more sensitive to the Fed fell to 4.16%.

Helping bond yields was the fact that PCE was largely in line with estimates. The headline PCE is running 2.31% YoY while the Core is running at 2.80% YoY.  Personal income and spending remain solid.  The ATL Fed GDP estimate for 4Q remains a healthy 2.7%.  The FOMC Minutes also didn't indicate anything to indicate the Fed is overly concerned with inflation, and overall offered little you haven't already heard from Fed officials, such as the idea that they'll continue to gradually move to a more neutral policy rate if the data comes in as they expect.

Away from markets, we had Buffett's philanthropic announcement where he announced he has designated 3 individuals as eventual successors to his 3 children in giving away his wealth.  As usual his announcement came with a dose of his own wisdom:

• our belief that hugely wealthy parents should leave their children enough so they can do anything but not enough that they can do nothing
• I’ve never wished to create a dynasty or pursue any plan that extended beyond the children. I know the three well and trust them completely. Future generations are another matter.
• I have one further suggestion for all parents, whether they are of modest or staggering wealth. When your children are mature, have them read your will before you sign it. 
• Charlie and I also witnessed a few cases where a wealthy parent’s will that was fully discussed before death helped the family become closer. What could be more satisfying?
• the real action from compounding takes place in the final twenty years of a lifetime. By not stepping on any banana peels, I now remain in circulation at 94 with huge sums in savings – call these units of deferred consumption – that can be passed along to others who were given a very short straw at birth.
• we shared a view that equal opportunity should begin at birth and extreme “look-atme” styles of living should be legal but not admirable. As a family, we have had everything we needed or simply liked, but we have not sought enjoyment from the fact that others craved what we had. 

In politics and perhaps economices, we had Trump promising additional tarrifs on Mexico, Canada and China if they don't help stop drugs and people flowing into the U.S.  Additionally he threatened BRICs nations with 100% tariffs if they ever decide to de-dollarize.

In geopolitics, Isreal and Hezbollah cease fire, while Syrian rebels take Aleppo.  

On the week ahead the highlight is Jobs Day, but before we get there we get ISM, JOLTs and Fedspeak.

Monday: ISM Mfg, Waller and Williams

Tuesday: JOLTs, moar Fedspeak

Wednesday: ADP, ISM Services, Powell, Beige Book

Thursday: Jobless claims

Friday: Jobs Day, UofM, moar Fedspeak

XTOD: But the system is out to de-bank us ...  Of course that’s your contention. You skimmed Breaking Banks once, so naturally, you think it’s a grand conspiracy—when really, it’s your port cos client lists being full of Balkan criminals failing AML 101. Next month, you’ll be shouting about how ‘Silicon Valley Bank was targeted,’ but the truth is if you’d read ALM by Farhvash, maybe you’d stop blaming the Fed for your bank buying 30-year MBS with 1-day deposits (which you pulled out). And by next year? You’ll be talking about, you know, how Basel III is a globalist scheme designed to choke innovation and crush the entrepreneurial spirit of the modern tech utopia.  https://pbs.twimg.com/media/Gdt3GYVWoAAhiFW?format=jpg&name=900x900

XTOD: Trump's defense of the dollar's reserve currency status is disconsonant because it's a key reason for the structural  trade deficit. Demand for dollar assets creates a capital account surplus that induces the U.S. to run a current account deficit. (Triffin dilemma, anyone?) Losing that status would reduce the dollar's value and the trade deficit. It would also mean higher interest rates.

XTOD: Great point.  If BRICs are going to be penalized for not buying USD fiat why would the SBR be a thing.  That's literally doing the same thing as the BRICs are doing.

XTOD: Third, and by far more importantly, China cannot simply sell US assets. It can only exchange them for other assets, but which assets? If it sold USD and bought RMB, the result would be an immense surge in the value of the RMB along with...a very disruptive contraction in the Chinese trade surplus. After all, the only reason China must buy foreign assets is to maintain its high trade surplus, and a refusal to do the former means the inability to do the latter.

XTOD: Jump. It’s not as wide as you think. https://pbs.twimg.com/media/GdVc7_8WMAA4UYl?format=jpg&name=360x360