Hey! Maybe we can grow our way out of the problem! || All images from Aleph Blog At one point in time, I was a Fellow in the Society of Actuaries, a Life Actuary specializing in investment issues. Eventually, I was hired by a hedge fund to analyze all types of insurance stocks. I knew ..read more

Picture Credit: sevoo || I’m not dead yet… In my view, these were my best posts written between August 2017 and January 2018: The Crisis at the Tipping Point A reprise of what some people knew in advance of the Great Financial Crisis. Includes a link to what I wrote 10 years earlier, where I ..read more

Credit: Aleph Blog || Really, we should be expecting a bubble as the Baby Boomers retire. As of December 31st, 2023, the S&P 500 was forecasting a return of 1.34%/year over the next ten years, with no adjustment for inflation. As of the close on May 10th, 2024, that figure was 0.32%/year. Why so glum? US entities are overinvested in stocks and private equity. Since 1945, the fraction of total wealth in stocks today is in the 98th percentile. The pension funds of many states are counting on equities to allow them to fulfill their promises. They have the added advantage of higher interest ra ..read more

I know I haven’t been blogging for a while. I also haven’t been tweeting. I am shut out of X-Twitter because of two factor authentication issues. As such, I am doing a post today that is Twitter-like, giving my thoughts on a variety of news articles. Here we go: President Xi’s hero, Chairman Mao said “Women hold up half of the sky.”  And, that randy guy Mao certainly “held up half the sky” with many of them.  But women in China will not “hold up half the sky” for President Xi.  Women in China increasingly do not want to marry and have children.  If present trends continue f ..read more

Image Credit: Aleph Blog || Has the return on assets for public equities permanently risen? The return on bonds has risen for now. From the last piece: “At March 31st, 2023, the S&P 500 was priced to return 2.41%/year over the next ten years. Given the rally since then, that return has shrunk to 0.49%/year. Currently the 10-year Treasury yields 3.76%. In investment grade corporates, you could earn more than 5% with considerably lower risk.” There was an error in that statement, the return had only shrunk to 1.64%/year. A similar adjustment would have to be made to the second graph, which w ..read more

Image Credit: Aleph Blog || Has the return on assets for public equities permanently risen? At March 31st, 2023, the S&P 500 was priced to return 2.41%/year over the next ten years. Given the rally since then, that return has shrunk to 0.49%/year. Currently the 10-year Treasury yields 3.76%. In investment grade corporates, you could earn more than 5% with considerably lower risk. But, maybe it’s different this time. Yes, I know the danger of the phrase. What if AI increases total productivity of assets and labor by 1%/year on net, permanently? Will companies make more money as they need fe ..read more

Picture Credit: David Merkel, with an assist from Bing Chat in Creative mode || Twitter bird is disappointed that he is short, like this post Artificial Intelligence A computer science student has figured out how to get ChatGPT to respond to prompts it would normally rebuff https://bloomberg.com/news/articles/2023-04-08/jailbreaking-chatgpt-how-ai-chatbot-safeguards-can-be-bypassed  Where there are locks, there will be lockpicks. Apr 9 The ChatGPT King Isn’t Worried, but He Knows You Might Be https://nytimes.com/2023/03/31/technology/sam-altman-open-ai-chatgpt.html  A ..read more

Picture Credit: David Merkel, with an assist from Bing Chat in Creative mode || Twitter bird shops for groceries Market Dynamics Transcript: Matt King Sees a $1 Trillion Liquidity Drain Coming to Markets https://t.co/kr9SMaMV9b  Monetarism, with bank reserve flows driving the market for risk assets. Mar 31, 2023 Battered banks have been the most lucrative short bet in US stocks this quarter, while surging technology companies delivered the steepest losses https://t.co/2joY6G7xTn  It’s tough to make money shorting. Mar 31, 2023 Citi’s Matt King sees a $1 trillion liquidity ..read more

Picture Credit: David Merkel, with an assist from the YouImagine AI image generator || Introducing one AI to Another This is another experiment of mine. Please bear with it. ============================= David: Would it theoretically be possible for you to have a discussion with OpenAI’s ChatGPT-4, which is now available to me? Bard: Yes, it is theoretically possible for me to have a discussion with OpenAI’s ChatGPT-4. ChatGPT-4 is a large language model that can generate text, translate languages, write different kinds of creative content, and answer your questions in an informative ..read more

Picture Credit: David Merkel, with an assist from the YouImagine AI image generator || Twitter bird visits China Banking Saba Capital’s Boaz Weinstein talks bank CDS; Carvana exchange falters; Evergrande reveals restructuring plan https://t.co/SFUXCBASiZ  Thinks bank sub debt is overpriced in general… Mar 24, 2023 US authorities guarantee bank deposits as high as $250,000. That could soon change https://t.co/PHS0cpK0R0  Will solve some short-term problems, and create bigger long-term problems. Mar 24, 2023 The banking precedent that matters for where we are now isn’t 2008 ..read more