Name One Thing The Government Does Really Well
Take your time, there must be a huge list somewhere.
As you must know by now, we are living during historic times for many reasons. This is not news to you if you have been reading a bit, and just simply paying attention to the world around us.
At the end of 2022, CNBC reported that the Nasdaq had closed out its first four-quarter slump since the dot-com crash. A lot has changed in technology since the dot-com boom and bust.
The internet went mobile. The data center went to the cloud. Cars are now driving themselves. Chatbots have gotten pretty smart.
But one thing has remained. When the economy turns, investors rush for the exits. Despite a furious recent rally, the tech-laden Nasdaq finished in the red for a fourth straight quarter, marking the longest such streak since the dot-bomb period of 2000 to 2001. The only other negative four-quarter stretch in the Nasdaq’s five-decade history was in 1983-84, when the video game market crashed.
This year marks the first time the Nasdaq has ever fallen all four quarters. It dropped 9.1% in the first three months of the year, followed by a second-quarter plunge of 22% and a third-quarter decline of 4.1%. It fell 1% in the fourth quarter because of an 8.7% drop in December.
The parallels to today are quite stark.
In 2022, the company formerly known as Facebook lost roughly two-thirds of its value as investors balked at a future in the metaverse. Tesla fell by a similar amount, as the carmaker long valued like a tech company crashed into reality. Amazon dropped by half.
A Sign of The Times
Do you remember when people were offering to buy homes for more than the listing price? Sure you do, it was just a short while ago. (What could go wrong?)
Last week, Wells Fargo fired hundreds of mortgage bankers as part of a broad round of layoffs brought on by the bank's most recent strategic change.
According to those with knowledge of the matter, the layoffs, which were announced on Tuesday, included a number of top producers, including a few bankers who exceeded $100 million in loan volumes the previous year and who just attended an internal sales conference for high achievers.
Wells Fargo, which formerly dominated the US mortgage market, is scaling back its involvement in certain segments of the business under CEO Charlie Scharf. The bank is primarily concentrating on providing services to current clients and underserved neighborhoods, rather than attempting to increase its proportion of American home loans. The change follows a fall in loan volumes caused by dramatically increased interest rates. - CNBC
Meanwhile, What Has BlackRock and Vanguard Been Up To
As you know, the train disaster in Ohio has been a nightmare for countless people living in the area. This will be a permanent issue for the good folks who make their home near the wreckage.
For the people who invest their retirement assets with BlackRock and Vanguard, read on.
Vanguard and BlackRock, giant asset management firms known for their commitment to investing in liberal Environmental, Social and Governance (ESG) causes, aren’t just the top two shareholders of Norfolk Southern, whose train derailment created an environmental disaster, they’re also among the top shareholders of the parent companies of the broadcast networks that have abandoned coverage of the ongoing toxic threat.
“The fact that ESG-obsessed companies are tied to the Norfolk Southern disaster blows their eco-virtue signaling on sustainable investment completely out of the water and makes the Big Three (ABC, CBS, NBC) prematurely dropping the coverage look even more despicable.
“Could it be that the Big Three are doing everything they can to protect their shareholders’ investment in Norfolk Southern?” - CNS News
Paying Attention to Inflation
If you go back to my blog posts three years ago, I told you about the challenge the FED would be having the longer it took them to even start trying the fix this historic problem they helped create.
Federal Reserve officials said inflation is too high and may take time to cool, even as fresh price data came in hotter than expected and new research suggested they may need to raise interest rates as far as 6.5%.
According to a US government report, the Fed's favored indicator of price pressures increased by 5.4% in the 12 months leading up to January. That was much above the Fed's target of 2% and up from 5% the previous month. Economic experts had anticipated a steady reading.
The semi-annual congressional testimony of Chair Jerome Powell on March 7 will be influenced by the inflation report and comments made by policymakers that inflation may continue to be stubbornly high. In order to cut prices without sending the economy into a recession and destroying the finest job market for American workers in decades, Powell will have to justify his strategy.
Derek Tang, an economist at LH Meyer/Monetary Policy Analytics in Washington, said: "That is all heading to the March testimony, and he needs to have a response about how they are getting through this and it is not obvious they have." "A slowdown, if not a recession, is at least necessary as part of the reduced inflation story,"
My list of things which capture my attention, every day.
Investment markets, inflation, the war in Ukraine that seems to be getting worse each day, etc.
