My Investing Muse

Daily Mail UK has reported the following in a recent 28 August 2023 news article : Growing numbers of Americans are being left without access to basic financial services as banks have axed more than 1,000 branches this year,  DailyMail.com  can reveal. Data from S&P Global Market Intelligence shows a total of 1,144 national and regional banks were closed between January 1 and July 31 across 49 states - and firms are pulling out of some areas faster than others. Accelerating closures run a risk of communities becoming so-called 'banking deserts' - when they are without access to a bank or credit union within 10 miles - leaving residents increasingly vulnerable to falling prey to high-fee lending options such as payday loans.    The axings are not limited to small banks in rural communities - they are also happening to large legacy banks in highly populated areas.   And plenty more are planned. This month Wells Fargo filed with the Office of the Comptroll...

  (Update as of 04 Apr 2023 - about US default. More details in the following section) Following the various banking issues, there is an interesting thread from Twitter user Mr David Sacks. When the Fed spiked interest rates from ~0 to ~5% over the past year, it had 3 main effects:  1. Undercut value of bonds, especially long-dated bonds.  2. Made lending more expensive, particularly for large purchases like real estate that have to be financed. 3. Increased government borrowing costs.  These effects are just math and have to play out through the financial system. I think they will roughly correspond to the 3 stages of the financial crisis we’re in:  1. Small/regional bank crisis precipitated by unrealized losses on long-dated bonds.  2. Commercial Real Estate (CRE) crisis precipitated by credit markets seizing up for new loans and impairment of existing CRE loan portfolios (which are also unrealized losses).  3. Government debt crisis precipitated by ...

  A strong job report implies that inflation is not coming down soon. Strong job reports imply that people find employment. With employment comes spending. The spending typically supports the demand & indirectly the inflation. We can look at 3 primary macro data - Gross Domestic Product (GDP), inflation & unemployment. Fuel price is trending up, too. This will affect goods & services, transport and utilities. Let's monitor. A strong job report implies that the Fed can remain hawkish too. What is more of a concern is the debt, increasing interest rate, coming debt default, and resumption of student loan repayment after suspension. With de-dollarization, it is not trending in the right direction for the US. Let's monitor. To get a more comprehensive understanding, let us look at the various asset classes. These include real estate, equities (shares), bonds, cold hard cash, commodities like gold & silver and alternative assets like cryptocurrency. I am following se...