To The Moon

News and my thoughts from last week (07Oct24) - debt, supply chain issues & supply chain

How long more before households are crushed under a 28% credit card interest rate? - Forbes

US national debt JUMPED $345 BILLION in 3 days and hit a WHOPPING $35.7 TRILLION, a new all-time high. Since 2020, federal debt SKYROCKETED by $12.5tn while the US GDP by $7.1tn. Debt is rising almost TWICE as fast as the economy. - X user Global Markets Investor

• Debt is one of the likely culprits to bring down the economy. Avoid leverage.

Real estate debt bubble in the US in 2007 looks almost cute in this chart. - X user Michael A. Arouet

• A staggering 75% of inbound containers return to their origin empty, illustrating the complexities of U.S. trade dynamics - QZ

• More than 20,000 shipping containers have tumbled overboard in the last 15 years. Their contents have washed onto shorelines, poisoned fisheries, animal habitats, and added to the ocean trash. Most containers sink to the sea floor. - Independent UK

• Shipping tensions continue after the Houthi drone attack on M/T Cordelia Moon - G Captain

Drewry's World Container Index decreased 5% to $3,489 per 40ft container and routes from Shanghai decreased up to 9% this week. - X user Drewry Shipping

• After Kamala announced that FEMA is providing $750 to households devastated by Hurricane Helene, people were quick to point out how that compares to aid the U.S gives other countries. So far this year, the U.S has given: - $24,400,000,000 to Ukraine - $11,300,000,000 to Israel - $1,950,000,000 to Ethiopia - $1,600,000,000 to Jordan - $1,400,000,000 to Egypt - $1,100,000,000 to Afghanistan  - $1,100,000,000 to Somalia - $1,000,000,000 to Yemen - $987,000,000 to Congo - $896,000,000 to Syria - $9,000 per illegal immigrant that has entered the U.S - X user Mario Nawfal

Port employers are preparing a sweetened offer with an almost 62% pay increase to get striking dockworkers back to work and reopen shuttered ports. The strikes have caused nationwide economic panic, could this be the end of the strike? Source: StockMKTNewz

• What would be the resulting inflation that hits the market? Who else would ask for wage adjustment? Would this lead to a series of wage surges?

• Inflation is a function of federal spending We’d all do well to remember the wisdom of Milton Friedman, who taught that the cost of the federal government is measured not by the tax rate, but the rate of federal spending Congress spends too much That’s what’s driving up prices - X user Mike Lee

• Port strike ends as workers agree to tentative deal on wages and contract extension - CNBC

• Should the strike last 4 weeks, causing almost 7 % of the Global Fleet to be tied up along the US East Coast, the overall impact on the supply and demand equation will be very significant,” commented Sea-Intelligence CEO Alan Murphy. - Sea Trade Maritime

The gap between contract and spot truckload rates just hit a 3-year low of $.43, with contract rates at $2.15/mi and spot rates at $1.72/mi. A $0.30 gap could signal the end of the market cycle. Watch rejection rates closely for the first signs of a shift! Data Source: SONAR_FW

Federal Reserve posted its biggest loss in history of $114 billion last year.

In Q3, the company spent $4.1B buying 414mm shares/52mm ADRs. Reduced shares outstanding by 2.1%. Bravo bravo!!!!

• Warren Buffett and Berkshire Hathaway $BRK.B ended Q2 with 276,900,000,000.00 in cash and cash equivalents How much cash do you think Buffett ended Q3 with?

• U.S. ports from Maine to Texas shut down Tuesday. A lengthy shutdown could raise prices on goods around the country and potentially cause shortages & price increases at big and small retailers alike as the holiday shopping season. - AP News

• Danish shipping giant Maersk has warned that just a one-week shutdown could take four to six weeks to recover from, "with significant backlogs and delays compounding with each passing day." - CNBC

• He was concerned about the “layered leverage” that private equity firms were using to return cash to investors and urged regulators to insist on more transparency about complex forms of debt. From FT.

Delinquency rates of office mortgages backing commercial mortgage-backed securities (CMBS) spiked to 8.4% in September - Wolf Street

• Supply chain is the blood of the economy. They have grounds for their pay hike. To push back automation & innovation will set USA back. There is a place where we can co-exist.

Some highlights from X user The Kobeissi Letter

US homebuyer demand declined by 7% year-over-year in September, building on a similar sized drop in August 2024. Since the 2022 peak, homebuyer demand is now down by a whopping 35%. Meanwhile, Google searches for “home for sale” fell 16% year-over-year and 8% month-over-month. Currently, mortgage demand sits near its lowest levels since 1995. With high interest rates and even higher prices, the housing market is frozen.

Total money supply in the US, the Euro Area, Japan, and China has reached a new record of a MASSIVE $89.7 trillion. Global money supply has skyrocketed by $7.3 trillion over the last year. This marks the largest increase in 3 years and a similar jump to the initial pandemic response seen in the first half of 2020. In the US alone, the amount of money in circulation has surged $410 billion year-over-year, to $21.2 trillion. To put this into perspective, at the beginning of 2020 the US money supply was 27% below current levels. Global money printing is back.

The mortgage demand index reached 142 this month, recording the worst September since 1994. Since 2020, mortgage applications declined 55% and sit 44% below pre-pandemic levels. This is despite mortgage rates falling by 1.1 percentage points since May, to 6.1%, the lowest level since September 2022. Meanwhile, pending home sales have declined for a third consecutive year and hit another record low in August. Lower rates are not helping in housing.

@TigerStars

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