Information is only as valuable as its application. We as a society tend to be better at knowledge consumption than implementation, which is more detrimental to our bottom line than helpful. Here’s a brilliant thread and framework for actually acting on wise advice and applying it to your decision-making modus operandi:
- Jumbo US home loan originations are surging to pre-2008 crisis levels as property prices have skyrocketed during the pandemic, up almost 20% from a year ago. Public mortgage lenders are offering loans up to $625k to match the anticipated fed guidelines for 2022. Credit in the American housing market has expanded but still remains relatively tight since millions of U.S. homes ended up in foreclosure in ‘08. Read more here.
- The increase in wages isn’t closing the labor shortage gap, and small and large businesses alike can’t obtain parts and supplies fast enough to keep up with demand. Companies are having to raise prices to try to recoup some of their expenses. Ultimately it’s eating into profits or costing the business additional sales. All worrying signs for the US economy. Read more here.
- In light of the last point, wages are increasing, but not at a rate to meet or beat inflation. That means purchasing power for the average person is down. The only people who like inflation are the ultra-rich and those who don’t understand asset valuation. If you are rich or poor the game is the same. Convert your US Tokens into assets. Read more here.
- Office-building use is slowly rising as many businesses are requiring employees to return for at least part of the workweek. Some employees are even returning voluntarily after the end of summer vacation. Office occupancy has significantly risen in NYC, where usage increased to 30%, up from 21% at the beginning of September. Read more here.
- The Private Jet Industry is taking off (because let’s be honest - who would want to fall prey to Southwest’s current fiasco?). Jet company NetJets’ demand is higher than it’s ever been, averaging 500 chartered flights a day compared to less than 400 in 2019. However, the boost in business is met with labor and supply-chain burdens as operators scramble for workers and materials. Read more here.
WHAT TO WATCH
- Zillow is continuing to compete in the RE market and is now using AI to do it. They’re currently working on a floor plan generator that takes the images that sellers upload and generates a floor plan of the house. They’re then using that information to create VR tours and produce a Zestimate to make accurate cash offers for houses. They must be confident that their AI is strong, otherwise, they’d be losing big money. Read more here.
- Every crypto-dip over the last several months has been bought up. It is a raging bull market for leading cryptocurrencies BTC and ETH (see this tweet). Interestingly, JP Morgan Chase is touting crypto as a better hedge against inflation than gold (read more here). But JPM’s CEO Jamie Dimon says Bitcoin is “worthless,” (read more here). Even more fascinating is this chart on BTC’s performance measured against Dimon’s opinion on BTC over time.
- Bank issues in Lebanon. Chaos in Australia with a complete lock-down and tons of riots. Things are escalating globally and people are sure to question government-issued fiat currency. BowTiedBull thinks decentralized crypto assets are the solution. Read more here.
- Bank stocks are among 2021 leaders but are expected to start trending down. Wells Fargo, Citigroup, and JPMorgan closed over 250 branches in the first six months of this year to offset low rates and sluggish loan demand. Analysts anticipate more cost-cutting to come as high expenses clash with slower revenue growth. Covid-era trends are wearing off, markets are cooler, 60% of the reserves the big banks set aside for bad loans have been returned, and loan demand is still weak. Read more here.
- Goodr is using the blockchain technology to help food businesses track and manage surplus food and organic waste, and see tax savings. Goodr’s blockchain-enabled platform also provides an IRS audit-friendly donation record, real-time food waste analytics, and community impact reports. It’s exciting to see more businesses utilizing blockchain tech to move the needle. Listen to more here (15:09).
“There are many ways of handling risk. In the financial markets, the oldest is the simplest: “fundamental” analysis. If a stock is rising, seek the cause in a study of the company behind it, or of the industry and economy around it. Study harder, and predict the stock’s next move.” - The Misbehavior of Markets, by Benoit Mandelbrot & Richard L. Hudson
The two most important words here: study harder. If you can understand cause/effect in the market you will be much better at forecasting, mitigating risk, and hedging your downsides.
Subscribe to Market Movers Digest
Subscribe to emails so you never miss a digest.