Sat.Mar 04, 2023 - Fri.Mar 10, 2023

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How Much Money Buys Happiness?

The Big Picture

I love the idea of convergence — those rare times when multiple stories about very different issues seem to all land on the same “Grand Truth,” albeit from very different perspectives. Yesterday brought just such a three-part convergence into focus. It’s about money and happiness, which is very much the intersection of where I spend much of my time: Capital Markets , and Behavioral Finance.

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SVB

The Reformed Broker

The spectacular blow-up currently taking place at SVB and its primary subsidiary, Silicon Valley Bank, is the biggest story in the markets this week. SVB is systemically important for the technology sector and its Northern California ecosystem. As Jim Cramer put it last night, the Federal Reserve has been firing a machine gun at the economy for the last 12 months but it hasn’t hit anything yet.

Economy 279
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Saturday links: in pursuit of self-compassion

Abnormal Returns

Environment How carbon credits have made biochar into a viable business. (wsj.com) Your toilet paper is full of forever chemicals. (fastcompany.com) Not every glacier is falling apart. (sciencenews.org) Technology How AI will change, i.e. break, the business of search. (slate.com) ChatGPT will make misinformation easier and more impressive. (msn.com) Science What cosmologists are learning from the JWST.

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Weekend Reading For Financial Planners (March 11-12)

Nerd's Eye View

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that President Biden released his latest budget proposal this week, which calls for a range of tax increases on higher-income and wealthier taxpayers to fund deficit reduction and the president’s spending priorities.

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Register Now: Sneak Peek Into Close Automation SkyStem Web Demo

Technology is rapidly changing the way accountants perform and manage month-end activities. Spreadsheets, email, and shared drives no longer have to slow us down. Join us as we present a "sneak peek" recorded demo of SkyStem's month-end close solution – ART. In under four weeks, your team can start reaping the benefits of month-end close automation by vastly reducing spreadsheets, cut down on reconciliation work, speed up the month-end close, and better manage your remote team.

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The Fed is Breaking Things (and it could get worse)

The Big Picture

Armchair quarterbacking the decisions of the Federal Reserve long ago became a blood sport. With the benefit of hindsight, we all are genius central bankers. I particularly loathe managers who lay all the woes of the world at the feet of the Federal Reserve. For more than a century, America’s central bank has been a key part of the investing environment, and it’s your job as an active manager to incorporate their probable policy decisions into your strategy.

Banking 341

More Trending

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Friday links: breaking things

Abnormal Returns

Markets When markets get volatile and chaotic, there's often no benefit to moving first. (thereformedbroker.com) 0DTEs now dominate S&P 500 options trading. (marketwatch.com) Corporate profit margins are coming in, but not all that quickly. (tker.co) Strategy Investing off headlines is a fool's errand. (theirrelevantinvestor.com) Don't try to invest like Yale, unless you have Yale-like resources.

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The Latest In Financial #AdvisorTech (March 2023)

Nerd's Eye View

Welcome to the March 2023 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors! This month's edition kicks off with the news that Conquest, a Canadian financial planning software provider (founded by the prior founder of NaviPlan) has raised $24M (CAD) of private equity capital in preparation for expanding its reach into the US &

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10 Sunday Reads

The Big Picture

Avert your eyes! My Sunday morning look at incompetency, corruption and policy failures: • The age of the Silicon Valley ‘moonshot’ is over :Big Tech’s cost-cutting and layoffs are another nail in the coffin for the industry’s most ambitious and costly projects. ( Washington Post ) • Rupert Murdoch’s deposition in $1.6 billion defamation case is ‘a nightmare’ for Fox News, legal experts say : First Amendment scholars say defamation case against Fox News is “unusually strong.” ( Grid ) see also

Medical 284
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This Week On TRB

The Reformed Broker

And if you haven’t subscribed yet, don’t wait. Check it out below or wherever fine podcasts are played. . The post This Week On TRB appeared first on The Reformed Broker.

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2024 Lending Outlook: Innovations and Evolutions in the Financial Sector

As we step into 2024, the lending landscape evolves rapidly with technology, regulations, and market dynamics driving change. For banks and financial institutions to stay competitive and meet the evolving needs of their customers, these drivers must be understood and engaged with. Lenders can anticipate significant transformation fueled by technological advancements, regulatory shifts, and changing consumer behaviors.

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Longform links: confused chatbots

Abnormal Returns

Books A Q&A with Emily Hund author of "The Influencer Industry: The Quest for Authenticity on Social Media." (vox.com) An excerpt from “The People’s Tongue: Americans and the English Language” by Ilan Stavans. (wsj.com) A Q&A with Emre Soyer, co-author of "The Myth of Experience: Why We Learn the Wrong Lessons and Ways to Correct Them." (davidepstein.substack.com) Behavior Smartphones are to blame for the rise in unhappiness, until further notice.

Media 215
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Factor Investing And Its (Behavioral) Persistence: Facts and Fiction About The Zoo Of Factors

Nerd's Eye View

In the early days of investing, stocks were often evaluated in a vacuum: Investors assessed the plusses and minuses of each company’s stock based on its own merits, with little consideration of the relationship between one stock’s performance and that of the market as a whole. Then, in the 1960s, with the advent of the Capital Asset Pricing Model (CAPM), investors began to look at stocks (and by extension, pooled investments like mutual funds as well as entire portfolios) through the

Investing 169
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10 Friday AM Reads

The Big Picture

My end-of-week morning train WFH reads: • Crypto Bank Had a Boring Collapse, Also Silicon Valley Bank : Elsewhere in boring maturity mismatches and a lack of deposit diversification. ( Money Stuff ) • Why daylight saving is so hard on the body — and what to do about it : Every process within the body, from sleep to metabolism, runs on an internal clock, known as circadian rhythm.

Startup 281
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Update: Framing Lumber Prices Down 72% YoY, Below Pre-Pandemic Levels

Calculated Risk

Here is another monthly update on framing lumber prices. This graph shows CME random length framing futures through March 3rd. Lumber is currently at $369 per 1000 board feet. This is down from the peak of $1,733, and down 72% from $1,441 a year ago. Prices are down 8% compared to the same week in 2019, and below the pre-pandemic levels of around $400.

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Banking on Loyalty: Holistic Financial Advice for Unparalleled Business Growth

Speaker: Joe Buhrmann, MBA, CFP®, CLU®, ChFC® Senior Financial Planning Practice Management Consultant eMoney Advisor

During an era of evolving consumer preferences, the banking sector is undergoing a profound shift. As customers continue to broaden their perspectives, banking professionals must support their customers' financial wellness by providing holistic financial advice that aligns with individual goals and circumstances. Without adapting, financial institutions will find that loyalty may crumble amid uncertainty.

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Top clicks this week on Abnormal Returns

Abnormal Returns

Top clicks this week Some of the best nuggets from Warren Buffet's latest shareholder letter. (investmenttalk.substack.com) Do stocks always outperform bonds over the long run? (mailchi.mp) Eight personal finance debates you can pretty much ignore. (thomaskopelman.com) Is it really a mistake to have saved too much for retirement? (humbledollar.com) A look at how to 'avoid financial disasters' for HNW individuals.

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Credit Risk Happens Fast – a SVB Postmortem

Discipline Funds

One of the themes I’ve been discussing lately is how inflation risk has been evolving into credit risk. What I mean by that is that we’re currently navigating the economic bust portion of the cycle where inflation is a falling risk and credit deflation risk arises, in large part, because the Fed has reacted so quickly to bring inflation in.

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10 Monday AM Reads

The Big Picture

My back-to-work morning train WFH reads: • Silicon Valley Confronts the End of Growth. It’s a New Era for Tech Stocks. Silicon Valley could use a reboot. The biggest players aren’t growing, and more than a few are seeing sharp revenue declines. Regulators seem opposed to every proposed merger, while legislators push for new rules to crack down on the internet giants.

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February Employment Report: 311 thousand Jobs, 3.6% Unemployment Rate

Calculated Risk

From the BLS : Total nonfarm payroll employment rose by 311,000 in February, and the unemployment rate edged up to 3.6 percent , the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, retail trade, government, and health care. Employment declined in information and in transportation and warehousing.

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Navigating Financial Storms: Strategies for Building Resilient Balance Sheets

Speaker: Carolina Aponte - Owner and CEO, Caja Holdings LLC

In today's rapidly changing business environment, building a resilient balance sheet is crucial to the survival of any business. A resilient balance sheet allows a company to withstand financial shocks and adapt to changing market conditions. To achieve this, companies need to focus on key strategies such as maintaining adequate liquidity, managing debt levels, diversifying revenue streams, and prioritizing profitability over growth.

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A Reverse Minsky Moment

The Irrelevant Investor

I will remember this week for the rest of my life. As an investor, you get used to stock market volatility. Economic volatility on the other hand has a way of sticking with you. In the aftermath of the pandemic, the Fed was driving an overheating economy at 150 miles per hour. And when it realized it was going too fast, it jammed on the brake pedal as hard as it could.

Economy 135
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How Much Do Americans Have Saved For Retirement?

A Wealth of Common Sense

According to the Bureau of Labor Statistics, nearly 70% of private industry workers had access to a workplace retirement plan in 2021. Just 51% of them participated in those plans. It’s estimated more than 100 million Americans are covered by a defined contribution retirement plan. Those plans hold something like $11 trillion. That’s a lot of money but is it enough to retire comfortably?

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10 Tuesday AM Reads

The Big Picture

My Two-for-Tuesday morning train reads: • A 120-Year-Old Company Is Leaving Tesla in the Dust : Tesla had me convinced, for a while, that it was a cool company. fundamentally, its cars had no competition. If you wanted an electric car that could go more than 250 miles between charges, Tesla was your only choice for the better part of a decade. ( New York Times ) see also Tesla Offers an Unprecedented Look at the Bench Behind Elon Musk : In a clear response to investor criticism, the CEO shared t

Food 272
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BLS: Job Openings Decreased to 10.8 million in January

Calculated Risk

From the BLS: Job Openings and Labor Turnover Summary The number of job openings decreased to 10.8 million on the last business day of January , the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations changed little at 6.4 million and 5.9 million, respectively. Within separations, quits (3.9 million) decreased, while layoffs and discharges (1.7 million) increased. emphasis added The following graph shows job openings (black line), hires (dark

Numbers 139
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Finding “The One:” The Ultimate Guide to Selecting Financial Software

Speaker: Nancy Wu, Head of Sales and Customer Success at SkyStem

As finance and accounting practitioners, you are expected to complete daily operations as well as to manage next generation tools and resources to support a business that is growing in complexity. Having the right software can be critical in juggling and meeting those high expectations. The path to the right software, however, is paved with challenging decisions.

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Why So Bearish?

The Irrelevant Investor

Something interesting happened this week that has never happened before. According to Ryan Detrick, three weeks ago, AAII bulls made a 52-week high. And then stocks fell, and bulls went into the fetal position. Bears now outnumber bulls almost two to one. This about-face happened at a breakneck speed never before witnessed. Here’s the chart from Liz Ann Sonders.

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A Financial Planner Takes ChatGPT for a Test Drive

Advisor Perspectives

I took ChatGPT for a test drive by directing it to write an article summarizing important tax rule changes introduced by SECURE Act 2.0. The essay it produced was an epic failure.

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10 Weekend Reads

The Big Picture

The weekend is here! Pour yourself a mug of coffee, grab a seat outside, and get ready for our longer-form weekend reads: • You Are Not a Parrot And a chatbot is not a human. And a linguist named Emily M. Bender is very worried what will happen when we forget this. We go around assuming ours is a world in which speakers — people, creators of products, the products themselves — mean to say what they say and expect to live with the implications of their words.

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Realtor.com Reports Weekly Active Inventory Up 61% YoY; New Listings Down 26% YoY

Calculated Risk

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report released today from Chief economist Danielle Hale: Weekly Housing Trends View — Data Week Ending Mar 4, 2023 • Active inventory growth continued to climb with for-sale homes up 61% above one year ago. Inventories of for-sale homes rose again, but the gain was the lowest we’ve seen since December.

Sales 136
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Transforming Lending: Understanding the Power of Digital Platforms

Digital platforms can provide you with plenty of solutions, yet many are still intimidated by them. It's time to end that worry and embrace what could make a major difference for your bank. Understanding how they work and how to best utilize them for your banks is key toward success. In this article, Biz2X breaks down all things digital platforms, including the many advantages of embracing them.

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Fear Sets In

The Irrelevant Investor

This post is for people outside of the financial services industry who might be wondering how one bank (Silvergate) lost 42% today while another one (Silicon Valley Bank) fell 60%. Silvergate banked virtually the entire crypto industry, including FTX. The largest banks had no interest in dealing with crypto companies, so Silvergate stepped in and experienced enormous growth over the last few years.

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Rising bond rates blunt stocks’ allure

Nationwide Financial

While the recent rise in interest rates has meant higher borrowing costs for households, homebuyers, and businesses, it’s also meant higher risk-free bond yields for income investors, who now have a real alternative to equities and less incentive to chase riskier yields. For example, the six-month Treasury bill yields around 5.12% as of this writing – the highest level since 2007.

Assets 111
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MiB: Maria Vassalou, Goldman Sachs Asset Management

The Big Picture

This week, we speak with Dr. Maria Vassalou , co-chief investment officer of multi-asset solutions at Goldman Sachs Asset Management. Previously, she worked at Soros Capital Management and with Steve Cohen at SAC Capital. Prior to her career in asset management, Dr. Vassalou was an associate professor of finance at Columbia Business School, which she joined in 1995 and where she established many of the investment principles she employs today.

Assets 176