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MiB: Stephanie Kelton on US Fiscal Policy and the ‘Deficit Myth’

The Big Picture

This week, I speak with Stephanie Kelton , Professor of Economics and Public Policy at Stony Brook University and Senior Fellow at the Schwartz Center for Economic Policy Analysis. Senate Budget Committee, and was senior economic adviser for Bernie Sanders 2016 and 2020 presidential campaigns.

Economics 201
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Collapse in Prospective Home Buyer Traffic

The Big Picture

The four largest drops occurred during distinct periods of economic distress: 1990 (recession), 2006-09 (GFC), 2020 (pandemic/recession), and today (FOMC 300 bp rate hike). The current collapse is to a measure of 25, from a November 2020 peak of 77; the pandemic saw a fall to 13 from 58, and the GFC saw a collapse from 55 to 7.

Budgeting 363
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The Greatest Missed Opportunity of Our Lifetimes

The Big Picture

As the Peterson Institute noted: In June, the Congressional Budget Office (CBO) projected that annual net interest costs would total $663 billion in 2023 and almost double over the upcoming decade, soaring from $745 billion in 2024 to $1.4 Note that this is not hindsight bias , but rather discussions we had repeatedly here in the mid-2010s.

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Does the ISM Services Index Really Reflect the Real World?

Mish Talk

Please consider the November 2022 Services ISM ® Report On Business ® Economic activity in the services sector grew in November for the 30th month in a row — with the Services PMI ® registering 56.5 The fall in output was the solid overall and the second-sharpest since May 2020. ISM data and discussion by permission from ISM.

Economy 190
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Fed Vice Chair Philip Jefferson on Housing Dynamics

Calculated Risk

Economic Outlook and Housing Price Dynamics. As shown in figure 4, 30-year fixed-rate mortgage rates were close to 3 percent when the federal funds rate was near the zero lower bound in 2020 and 2021. This is because housing costs make up such a large share of household budgets. From Fed Vice Chair Philip Jefferson: U.S.

Economy 189
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Markets stall as investors are reminded about the continued headwinds

Nationwide Financial

Hedge fund managers are also quite pessimistic, with net futures positions for the S&P 500 near the lowest level since June 2020. The report on retail sales showed consumers are still spending, but at a slower pace, and are shifting their budget to necessities versus discretionary purchases, reinforcing the tone from retail executives.

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A Few Thoughts On Diversification Strategies

Fortune Financial

Here below are a few simple diversification strategies that I think enhance a portfolio’s resilience through market and economic turbulence: I. Beware Factor Concentration You don’t have to be a stock picker to find yourself overweighted a given factor; the current stock market structure in the U.S.