Syz the moment

Not all fiscal policy has to be a bad thing... this could indeed lead to a big increase in the productivity we will see over the coming years due to this. Source: Ryan Detrick, Carson * CHIPS Act -> In July 2022, Congress passed the CHIPS Act of 2022 to strengthen domestic semiconductor manufacturing, design and research, fortify the economy and national security, and reinforce America’s chip supply chains. The share of modern semiconductor manufacturing capacity located in the U.S. has eroded from 37% in 1990 to 12% today, mostly because other countries’ governments have invested ambitiously in chip manufacturing incentives and the U.S. government has not. Meanwhile, federal investments in chip research have held flat as a share of GDP, while other countries have significantly ramped up research investments. To address these challenges, Congress passed the CHIPS Act of 2022, which includes semiconductor manufacturing grants, research investments, and an investment tax credit for chip manufacturing. SIA also supports enactment of an investment tax credit for semiconductor design.

To put this in perspective, 2023 defense spending was $821 billion. This means the US is on track to spend 34% MORE on interest expense than defense spending. In 2023, the US government produced $4.4 trillion in revenue. This means that 25% of receipts in the entire 2023 are equivalent to Uncle Sam's annual interest expense. Rising rates and falling tax revenue are both occurring at the same time. A tricky combination

Source: WinSmart, The DailyShot

Is the slowdown in restaurant activity signalling that a FED pivot Indicators of restaurant activity continue to show signs of weakness in the US. Interestingly, this has been almost perfectly correlated with the Fed raising rates. Restaurant activity in the US hit an all time high in August 2021. Since the Fed started raising rates in March 2022, restaurant activity has moved in a straight line lower. As excess savings are depleted and inflation remains an issue, consumers are cutting back. And more credit card debt is not the solution here.

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‘We’re aware of reports regarding attacks on the USS Carney and commercial vessels in the Red Sea and will provide information as it becomes available,’ the Pentagon said, according to the Associated Press.” Meanwhile, "Gulf of Tonkin" is trending on X in the US. Source: Fox News, www.zerohedge.com

The US housing market is having its historical moment. Indeed, Real home prices in the US are currently almost 10% MORE expensive than they were in 2008. In fact, real home prices are now 80% ABOVE the 130-year historical average, according to Reventure. This means that even on an inflation adjusted basis, home prices have never been more expensive. Meanwhile, housing supply is 40% below the historical average. All while mortgage demand is at its lowest since 1994 and the median homebuyer now has a $3000/month payment. Source: The Kobeissi Letter, Reventure

Unrealized losses on investment securities held by US banks hit $684 billion in Q3, according to the FDIC. This marks a 22.5% jump compared to unrealized losses seen last year. The jump was primarily driven by rising mortgages rates reducing the value of mortgage-backed securities held by banks. Despite these challenges, the FDIC states that banks remain "well capitalized." This comes as usage of the Fed's emergency funding facility for banks hit another record high of $114 billion. Source: The Kobeissi Letter