The United States of America is Worth Saving

Total U.S. fixed income (FI) issuance declined -34% y/y to $8.8 trillion during 2022 as interest rates ramped up.

Banks have been parking excess deposits in various forms of government debt that are subject to interest rate risk & in risky crypto bets. This is causing systematic risk.

Consumers are combating the higher price of living & higher interest rates by driving less, buying store brands & taking on more debt.

Since the 2008 Great Recession, 134 banks with assets of $1.25 Trillion have been closed by regulators. At the same time, the Fed’s ballooning balance sheet now amounts to nearly 50% of total domestic bank deposits.

Don’t assume that SVB’s difficulties are symbolic of the entire banking industry.

The Saudi minister of finance announced that the Kingdom was ending the petrodollar. “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal”. Yikes!

We have a choice of how to tame inflation, cut government spending, or throw people out of work.

As households with annual incomes >$70k drive 62% of total food-away-from-home sales, it is more important than ever to focus on this demo especially as spending from the lower-income demo slows.

You can learn a lot about someone by how they spend their money…

Ukraine aid payments of $77B through 1/15/23 represent the equivalent of a 5% dividend on LTM S&P 500 earnings.