#185 - It's All A Confidence Game, GPT 4 and and The Future Golf Balls
#185 - It's All A Confidence Game, GPT 4 and and The Future Golf Balls
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Market update
Confidence game and how banks depend on it
Foxconn forecasting a slowdown
GPT4 release and the importance of understand how to use AI
Golf Ball Restrictions
Recommendations and Predictions
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📈📊Market Things💵📉
This weeks show and newsletter is heavy on the links and recommendations.
Next weeks podcast is going to be super informational and were going to cover the new Canadian budget in depth - so don’t forget to tune in.
However, this week is all about banking and its crisis.
To understand this banking crisis well I want to point everyone in the direction of Matt Levine at Bloomberg - his Money Things column is the best financial news writing on the internet and he’s doing phenomenal work recapping the banking crisis were currently experiencing. He makes complex subjects seem simple.
Canadian Housing - from RBC
It increasingly looks like Canada’s housing market is finally finding its footing—at least from a transaction volume perspective. The precipitous slide in home resales has been easing significantly in recent months. February results even showed a slight 2.3% increase from January to 403,400 units (annualized). We think it points to a nearby bottom in many local markets.
This isn’t stopping the price correction for now, though. The national composite MLS Home Price Index fell another 1.1% m/m in February, marking the 12th-straight monthly decline. The pace did ease a little from an average of -1.5% in the previous six months but for the most part the trajectory is still unambiguously down, especially in Ontario and British Columbia.
A sharp drop in new listings and concomitant tightening in demand-supply conditions in February could signal a moderation in price declines over the coming months. If sustained, it would support our view that prices will bottom sometime in the summer or shortly thereafter (with the timing varying by market).
Energy - from DER
EIA Annual Energy Outlook 2023: EIA projects that the US “will remain a net exporter of petroleum products and natural gas through 2050 in all cases”
In its Annual Energy Outlook (AEO) 2023, which addresses long-term energy trends in the US, the Energy Information Administration (EIA) expected US production to remain “historically high” due to growing finished product exports amid rising global demand. This will also keep US refinery runs strong as the local refinery sector stays competitive in the global market “through 2050 in all cases,” the EIA said. See Figures (1) and (2) below as published in the AEO report.
Figure (2)
Source: EIA, 2023
Moving to the gas sector, the EIA said in its AEO2023 report that domestic natural gas consumption will remain “relatively stable – ending recent growth in most cases,” this is despite the growing share of renewable sources and batteries in power generation. But the EIA notes that natural gas production will keep growing in some cases due to global LNG demand, “supported by associated natural gas produced along with crude oil.”
“Given the combination of relatively little growth in domestic consumption and continued growth in production, we project that the United States will remain a net exporter of petroleum products and natural gas through 2050 in all AEO2023 cases,” the EIA said.
Figure (3)
EOA’s Main Takeaway:
There is strong evidence to support the natural gas projection, but we doubt the EIA’s forecast regarding petroleum products. We believe that US production will be lower in the long run, while demand for petroleum products will likely be higher, leading to lower exports.
💸Reformed Millennials - Post of The Week
Concession stand prices at Candlestick park in 1971:
I’ll never understand how the baby boomers did it. It was so darn expensive back then. My gosh.
$30k for a 1,000 sq ft house…
$1.50 for a boxed lunch
$5.00 for 10 beers
🎙Podcast & YouTube Recommendations🎙
The best explainer video I’ve found for the bank contagion from 2 greybeards. (2 ex-bridgewater hedgefund managers)
Peter Attia Goes on to the Tim Ferris Show to talk about his new book:
🔮Best Links of The Week🔮
"One of the hottest apps in the U.S. right now is TikTok’s lesser-known sibling that is also owned by Chinese parent ByteDance. App trackers show that CapCut, a video-editing tool that helps people quickly create online videos and memes, has been downloaded more in recent weeks than TikTok... CapCut allows people to edit videos easily with various templates, filters, visual effects and music. Users say it helps them produce clips that look more professional and have a better chance of going viral on TikTok and other platforms such as Meta's Instagram and Alphabet's YouTube." - WSJ
Banks Borrow $164.8 Billion From Fed in Rush to Backstop Liquidity
UBS, Credit Suisse Oppose Idea of Forced Combination, Sources Say
Credit Suisse and Silicon Valley Bank’s problem is an addiction to clients
Schwab Clients Pull $8.8 Billion From Prime Funds in Three Days
TikTok Sale Likely to Be Rejected by China
ME Finds Some Nickel Underlying Its Contracts Is Missing
Madison Square Garden Owner Feuds With Part-Time Liquor Inspector
👉 For specific investment questions or advice contact Joel @ Gold Investment Management.