📑 Research Notes for 2022-07-04
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📑 Research Notes for 2022-07-04
This week, we look at the U.S. in a recession, Fed's policy errors, the Ponzi nature of these policies, and the impact of global inflation from the Sri Lankan perspective.
We conduct extensive investment research and share the most interesting content that we come across every week. Here is a curated list of this week’s top observations.
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Atlanta Fed GDP Shows The U.S. Economy Is Very Likely In A Recession.
Most Wall Street economists have been pointing to an increased chance of negative growth ahead, but figure it won’t come until at least 2023. However, the Atlanta Fed’s GDPNow measure, which tracks economic data in real time and adjusts continuously, sees second-quarter output contracting by 2.1%. Coupled with the first-quarter’s decline of 1.6%, that would fit the technical definition of recession.
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The Fed’s Twin Policy Errors.
For the first 95 years of its history, the Fed never touched interest rates past the overnight rate. They certainly didn’t loan tens of millions of individuals and institutional investors almost free money with which to speculate on houses. They have created a bubble in housing that is even impacting the labor market. Two million Americans have left the workforce – mainly from the wealth effect of home prices going up 38% in the past two years. This will be painful to unwind.
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Is the Fed Running a Ponzi scheme?.
Pantera Capital CEO Dan Morehead on whether the Fed is running a 'Ponzi scheme' in the mortgage-backed bond market.
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Sri Lanka Hit By Worst Economic Crisis Since Its Independence.
Sri Lanka is experiencing its worst economic crisis since its independence. No industry has remained untouched by this crunch. The tea industry, one of the most crucial industries for the country's GDP, is facing a double whammy: the economic slump and ill-thought of policy decisions.
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Last Week’s Market Performance Heatmap
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Curated by Joseph Lu, CFA®
Joseph is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder.
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