Where High Earners Are Moving 

The number of high-earning American households continues to grow. And the migration of these high earners in or out of a state can have a significant effect on tax revenues and property values.

Click here for the results of a 2023 study from Smart Asset.

 

At the Other End of the Economic Spectrum… 

61% of Americans say they’re living paycheck to paycheck. That’s the same number as last year, despite cooling inflation. Click here.

 

Woof! 

Nestle will invest $3.5B over the next three years to expand its pet nutrition operation. Pet products are the company’s fastest growing product line. The same is true for Purina and Friskies. Apparently, as we Baby Boomers shuffle off the mortal coil, we want to spend our remaining bucks spoiling our house pets. Click here.

 

Jeepers! 

A scary revenue drop for Jeep just isn’t stopping. The brand has now seen eight straight quarters of falling sales. Five years ago, Jeep was sixth among US auto sales. Now, it’s in ninth place. Click here.

 

“Unfortunate but Not Surprising 

Alas, after 99 years of growth and profits, Yellow Corp. is shutting down and letting go about 30,000 workers. In 2020, it received a $700 million loan from the federal government, but that failed to do the trick. In the last quarterly report, the company was in the red to the tune of $700 million.

Market Sentiment Is Up. But Why? 

2022 was a bad year for stock investors.

Finishing at 33,147, the Dow was down 3,191 points for the year. (In percentage terms, that’s a drop of 8.8%.) That made 2022 the worst year for the Dow since 2008. But in October of last year, the US Stock Market Index rose from 28,692 to 29,795 at the end of the month. It then shot up to 35,605, where it stayed until the end of the year. And then it dropped to 31,851 in mid-March, where it began a climb upwards.

What’s perhaps more interesting is that the speculators are coming back. Meme stocks are up, some as much as 100%, and Riot Platforms, a Bitcoin miner, is up 458% for the year.

What does that mean? I’m not sure. My guess is that it is a response to the liquidity being pumped into the economy and all the media excitement about the advent of a new economic age led by artificial intelligence.

Go Woke and Go Broke 

Sales for Bud Light took a dive after the marketing VP in charge of the brand deciding to boost sales by getting away from the “frat boy” image and going for a new target audience: beer drinkers that are also fans of Dylan Mulvaney. (See “Notes From My Journal,” above.)

A month after the news broke, and despite a slew of macho ads to counteract the transgender idea, sales are still down nearly 20%.

Read more here.

 

Beware the Digital Dollar

A colleague recommended this blogger as someone with “above-average” knowledge of cryptos and the crypto market today. I watched this clip and several others. Probably because of sheer stupidity, I wasn’t able to find his name. But he is knowledgeable and a good communicator, so I’ve been following him for a few weeks.

Here, he talks about a general threat to the crypto market, one that I’ve been talking about since the beginning.

Check him out and let me know what you think.

What It Takes to Be Middle Class in America 

I’ve shared studies like this before. But I found this one from SmartAsset to be particularly useful.

Take a look at these facts, for example:

* It’s much harder to be middle class in the north than the south. Particularly along the coasts. You can be middle class in Florida with an income between $50,000 and $60,000. But in New York, Connecticut, and New Jersey, it will take between $80,000 and $100,000.

* New York is the worst. The middle class there don’t earn enough to keep up with the rising cost of living. While other notoriously pricey cities have a middle-class income that trends closely with the state’s general cost of living, NYC wages lag behind. Of all cities examined, the cost of living in Queens, Brooklyn, and Manhattan are 43%, 70%, and 138% higher than the national average, respectively.

* Incomes that put one in the middle of the middle class are highest in the West Coast tech cities. Three out of the top five cities with the highest income thresholds for the middle class are in the San Francisco Bay Area. To earn in the middle of the middle class there, you need to be making more than a hundred grand.

* The hardest place to earn more than a middle-class income? That award would go to Fremont, California, where $300,000 isn’t enough. (The middle-class income range there tops at $311,936 per year.)

Click here to read more of the study results.

$190,000 for Doing Nothing? 

When Musk fired so many twitter employees and nothing obviously bad happened to the business afterwards, I wondered, “What were all those fired people doing?”

It turns out that unproductive employees are a feature of many big tech companies. Example: Madelyn Machado, 33 years old, was hired in 2021 by Meta for $190,000 a year to work as a recruiter. But she was told not to expect to hire anyone in her first year, given that she would still be learning the recruiting ropes.

Click here.

Reporting on this in The Free Press, Nellie Bowles wrote, “I’m convinced that every big tech company is five really sweaty guys in a basement and then gleaming, open-plan offices of people like me: delightful humanities grads who have meetings about the best protein powder for our green smoothie (pea!) and the gender implications of unread messages being bold (masculine aggression). Every once in a while, one of the five tries to leave the basement and we quickly convene a series of meetings to get him fired.”

 

Hunter Biden for President in 2024

It’s unfair to accuse Hunter Biden of wrongdoing, my liberal friends and family members say. It’s all fake news. It doesn’t matter that there is now proof that he received tens of millions for “consulting services” from Russia, China, and Ukraine when his father was VP.

That doesn’t prove anything, they say. And his documented history as an alcoholic and drug addict? He’s bravely gotten beyond that, they say. He’s channeled the pain into his artwork, you see. And he’s a great artist. Which is demonstrated by the high prices various undisclosed patrons pay for his work.

But here are two facts that they can’t reconcile. Joe Biden has a net worth of $9 million, which makes him about the poorest president since Jimmy Carter. But Joe’s son, this kid that barely got through college, got kicked out of the Navy, and spent a large part of his life partying with hookers? He is worth $160 million!

I wonder – do the people that rationalize this, do they have any idea how much you must make to acquire a net worth of $160 million?
One guy is so impressed with what Hunter’s achieved that he is saying that Hunter, not Joe, should be the Democrat’s nominee for president in 2024. Click here.

 

Mexico Has a New Industry: Renting Wombs 

There is a new – well, not quite new, but an industry in Mexico that is growing really fast. It’s in the “health care” field. They call it surrogacy. It boils down to this: affluent but childless American couples paying poor Mexican women to grow babies for them from fertilized eggs.

The eggs are not the mothers’ eggs. They are from the “adoptive” mothers. Or, in the case of gay couples or adoptive mothers that can’t produce healthy eggs, from third-party donors. What it amounts to is a sort of womb rental program.

If that sounds weird, know this: According to the source below, it’s making a lot of couples happy, and conveying millions of dollars to poverty-stricken Mexican women.

Here’s how it works.

Americans Are Working Less

In one of the news feeds I read, an essay titled “Working hardly or hardly working” caught my eye. According to the author, burnout among American workers is “running rampant.” The reason? “The average American works 400 more hours a year than Germans do.” The good news, he says, is that “the trend is changing…. A University of Maryland study shows average US workweeks dipping 30+ minutes since 2019.”

Some key figures:

* High-earning young men were at the top of this trend. Their average reduction is the highest at 1.5 hours.

* Self-proclaimed workaholics are down, too. From 55 hours a week to 52.

The rise in virtual employees since the pandemic shutdown is obviously another important factor.

“The trend’s stickiness is hard to estimate,” the author says, “but it’s great news for the nation’s collective mental health as long as it lasts.”

True. Unless you believe that productive work is the cornerstone of wealth building, and that an essential component of mental health and happiness is working purposefully. (Which should include one’s job, since that takes up the largest share of one’s work time.)

Are Housing Prices Out of Whack? 

Housing prices have risen 40% since 2020. They peaked last autumn and have edged down since then, but only by a total of 5%. They are still, by long-term historical standards, very high. In 1971, as Bill Bonner points out in a recent edition of Bonner Private Research, it took the average American about 36 hours of labor each month to pay an average mortgage on an average house. Now, the figure is 110 hours.

“Things that are out of whack have a way of getting back into whack,” Bonner says. “Economists call it ‘regression to the mean’…. It’s one of the most powerful forces in finance…. A recession in [today’s] housing market would make it a lot easier for people to keep a roof over their heads.”

Bill’s been mostly right about real estate prices since I’ve been reading him. (About 30 years.) And I’m inclined to agree with him on this. If you are looking to sell, do it soon. If you are looking to buy, you might do better to wait.

Is “Social Audio” a Thing of the Past?

In 2021, Clubhouse was an application everyone was talking about. Many of my colleagues in the internet infotainment world were getting involved. Back then, the audio chat room had 10 million users, which gave it a huge valuation and spurred numerous well-funded competitors. Today, those competitors have disappeared, and Clubhouse is only a shadow of its former self.

Click here.

Ready for an Uncomfortable Conversation?

Let’s Take an Honest Look at Our Secretary of the Treasury 

This is painful to watch.

Janet Yellen, who was appointed by the Biden administration to lead the Treasury Department, is responsible for “formulating and recommending domestic and international financial, economic, and tax policy, participating in the formulation of broad fiscal policies that have general significance for the economy, and managing the public debt.”

She has an impressive resume. She got a PhD in Economics from Yale University. She taught at Harvard. She served as a staff economist at the Federal Reserve, became head of the Federal Reserve Bank of San Francisco, and served in various capacities under the Clinton and Obama administrations. After a spell with the Brookings Institute, Biden invited her to head the Fed in 2020.

Since then, we’ve seen the US economy weaken in almost every important sector, while inflation rises to historical levels and the strength of the dollar dwindles to the point where it could very well be replaced.

That’s not entirely her fault. Nor is it entirely the fault of the old guy that appointed her to her office. The enfeeblement of the economy and the destruction of the dollar began half a century ago when Nixon disconnected the value of the dollar from the price of gold, which allowed the government to spend money it didn’t have to fight wars we couldn’t and didn’t win. Not just the proxy wars generated by the military-industrial complex, but the war on drugs and the war on poverty, which haven’t worked – at all – but devalued the US’s greatest economic advantage, the universal belief in the US dollar.

What bothers me about Yellen is how painful it is to watch her try to defend the futile and insanely expensive bad economic policies that have caused so much destruction. Despite her distinguished education and long years of experience, the poor woman is no longer capable of answering basic questions about economics. Let alone defend what the Treasury has been doing these past two years.

Click here for a clip that shows how very incompetent she is. (There are MANY similar clips. I’ve included a few in past issues.) How can anyone with a modicum of economic intelligence watch this poor old lady try to defend what the Treasury Department is doing and not feel sorry for her?

If you disagree, please write to me, and defend her any way you can. I’d love to believe that she knows what she is doing.

Update on the Digital Dollar

The greatest threat to freedom and democracy in the US is not domestic terrorism from the radical right. Nor is it woke-ism coming from the radical left. In my mind, the biggest and most serious threat is the coming of the digital dollar.

I’ve written about it many times. And the story continues.

Last week, South Dakota Governor Krisi Noem vetoed a bill that redefined currency and created rules for a Central Bank Digital Currency (CBDC) that would block all other digital currencies from being used in the state. When asked why her legislators would have passed such a bill, Noem responded that the bill had been constructed by lobbyists, and they likely did not read it.

What’s especially ominous: This isn’t an isolated case. Similar bills have appeared in 20 states.

Read more here.

Zuckerberg’s Corporate Poetry 

“Flatter is faster,” Mark Zuckerberg is claiming. That’s his way of putting a positive spin on Meta’s plan to cut 10,000+ jobs in the next month after cutting 11,000 jobs earlier this year.

What does this say about the future of Big Tech for the rest of 2023 and beyond? See what the editorial staff of The Hustlehas to say here.

Collectible Investment Secret

Middle Age Crisis + Wealth = Peak Values 

I’ve written a fair amount about investing in collectibles. But one thing I don’t think I ever mentioned was an ingenious strategy I learned from one of my favorite investment analysts: Steve Sjuggerud.

Many years ago, he pointed out that there is one area of collecting where future values are nearly guaranteed. Because things that are considered cool by teens and preteens often become even more desirable when they’re adults.

I’ve found this to be pretty much true. When I was in my 50s, for example, the top collectible cars were the 1950s Corvettes and Thunderbirds that I admired as a teenager. Ten years later, 1960s and 1970s vintage cars rose to the top of the bidding ladder. And today, sports cars from the 1980s are hot.

The same is true of many collectibles. Click here for an article from The Hustle about collectors that spend big bucks on Hot Wheels.

The Cost of Retiring Comfortably

If you have less than a million in your retirement account, but still dream of retiring without having to worry about running out of money, you might want to begin your planning by figuring out where you want to live. Click here for a survey of the most affordable places to retire in the States and worldwide.

 Why Are US Banks Collapsing? 

I was going to write something this week about Silicon Valley Bank and the subsequent bank failures. But then I came across this amusing explanation by my colleague and partner Sean MacIntyre. Click here to see what he says.

Were You in the Right Investments Last Year? 

In general, 2022 was not kind to investors. But some hard assets and collectible investments did well. Museum-quality art, for example, rose in price by an average of 29% over the course of 2022 – well above the stock market ROI and the US inflation rate (6.5%) added together! Click here to see all the categories that did well.

When the Truth Finally Comes Out 

This is amazing. Listen to what this woman is saying. She believes, actually believes, that the $1.7 billion written into the “Inflation Reduction Act” was deficit reduction, rather than tax increases! Click here.