The Sunday Drive - 06/04/2023 Edition

Musings and Meanderings of a Financial Provocateur

Jun 04, 2023

👋🏼 Hello friends,

This weekend we gathered in my wife’s hometown for a Celebration of Life for both of her parents. Her dad passed away at age 90 in December of 2020 during the height of Covid. At the time, we were only able to have a very small funeral service for just the immediate family. My wife’s mom outlived her husband by two years and three months, passing away in March of 2023 at the age of 93.

They were married for 65 years. That’s worth celebrating - and that’s just what the whole family and many others from this wonderful community in western NY did this weekend. What a tribute to an amazing couple.

Now, let's take it easy and enjoy a leisurely Sunday Drive around the internet.

Vibin'

Well, after much political theater and gamesmanship, it looks like we narrowly avoided a U.S. government credit default this week.

Fine.

Unfortunately, in my opinion, this latest dramatic episode has only planted more seeds of doubt about our political will to deal with this country’s fiscal problems. We came closer than we ever have to the brink of default, and created worry in the minds of investors and stakeholders around the world about the next time.

The credit worthiness of the U.S. government has long been without question. Global assets of all categories are valued against the risk-free rate, i.e. U.S. Treasury securities. That the risk is now there may not be a “risk-free rate” calls into question how we should value all manner of financial assets.

While not necessarily something to act on at the moment, it certainly is something to ponder.

With that in mind, this week I’m vibin’ to some southern guitar rock from Molly Hatchet. I hope you enjoy Flirtin’ with Disaster, the title track from their 1979 album of the same name.

I’m outta money, outta hope.
It looks like self destruction.
Well how much more can we take
with all of this corruption?

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💭 Quote of the Week‌

“The older I get, the greater power I seem to have to help the world; I am like a snowball — the further I am rolled the more I gain.” – Susan B. Anthony

📈 Chart of the Week

Typically, market returns (light blue line) track investment flows (dark blue line) pretty tightly. However, there are times when the market can perform quite differently than than the overall flow of liquidity.

Given the recent divergence in flows versus market performance, we will likely soon see a convergence of the two. It could go either way - performance moderates while flows catch up, or flows accelerate to catch up with performance.

However, with continued strength in the labor market, an anticipated pause in the Fed’s interest rate hikes, and overall continued strength in corporate earnings, I place the higher likelihood of investment flows catching up with the market, propelling it higher in the near to intermediate term.

🚙 Interesting Drive-By's

🤔 How to Use ChatGPT as Your Personal Intern - from Stephen McBride

ChatGPT has been “live” for less than six months… and it’s already transforming careers.
It gives you the tools to build fully functioning websites and games… even if you’ve never written a line of code in your life.
You can “hire” it as a lawyer… doctor… or dietitian to get valuable second opinions (folks have saved thousands of dollars doing this).
ChatGPT even rescued a dog’s life. Its owner told the AI their sick dog’s blood test and symptoms, and it correctly diagnosed the problem a “human” vet missed. The owner concluded: “I can’t image what medical diagnostics will look like 20 years from now.”
It’s clear AI is one of the most powerful technologies in history. And it’s already becoming a must-know skill.

🎤 Why Taylor Swift is the new Grateful Dead, and what it means for the future of live entertainment - from Spencer Ante

My daughter desperately wanted one present for her Sweet 16: to see the Taylor Swift concert with a good friend. Unfortunately, tickets to the recent Eras Tour were sold out on Ticketmaster, and resale prices were in the thousands for even nosebleeds. In a last ditch, but calculated, effort, my wife took her and her friend to the stadium in Philadelphia, hoping to snag tickets right before the show when the scalpers cave, and prices typically dive on the secondary market.
But due to the extraordinary demand, prices only dipped slightly for 10 minutes around the start of the opening band, and then proceeded to rise again. My wife frantically tried to buy some tickets and even placed an order, only to find that the seller rejected the offer. Then not long after, the apps said, sorry there are no tickets left to sell. Tears flowed.

📈 What is “Longevity Escape Velocity” and Do I Want This? - from Chip Conley

Nowadays, there are a lot of products being marketed to enhance your Longevity Escape Velocity (LEV), which is the idea that a person’s life expectancy can increase at a faster rate than their biological aging. For example, if you were 55 with a life expectancy of 86 and achieved Longevity Escape Velocity, your life expectancy could rise to 88 (or higher) by the time you turn 56, adding a year or more to your life span.

🚊 Social Security: Congress is Playing Chicken with a Train - from Brenton Smith

As the debt limit negotiations near resolution, the specter of a default recedes. But the lesson is that both sides were willing to play chicken with the train.
In terms of Social Security, the media has given considerable space to the possibility that benefit checks going to seniors might be disrupted in July. But that possibility should be the least of your clients’ concerns about the exhaustion of the government’s line of credit.

👋🏼 Parting Thought

If you’re old enough to remember the Clearinghouse Sweepstakes, this will make sense. 😉

If you have any cool articles or ideas that might be interesting for future Sunday Drive-by's, please send them along or tweet 'em at me.

‌I hope you have a relaxing weekend and a great week ahead. See you next Sunday...

Your faithful financial provocateur,

-Mike‌

If you enjoy the Sunday Drive, I'd be honored if you'd share it with others.‌‌

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