Fed Chair Jerome Powell: “We have tightened policy significantly over the past year.” “Inflation has moved down from its peak…it remains too high” “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident”

Categories2023q3 Issue-3



  • “It is the Fed’s job to bring inflation down to our 2 percent goal, and we will do so. We have tightened policy significantly over the past year. Although inflation has moved down from its peak—a welcome development—it remains too high. We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”
  • “But food and energy prices are influenced by global factors that remain volatile, and can provide a misleading signal of where inflation is headed.”
  • “Twelve-month core inflation is still elevated, and there is substantial further ground to cover to get back to price stability.”
  • “The final category, nonhousing services, accounts for over half of the core PCE index and includes a broad range of services, such as health care, food services, transportation, and accommodations. Twelve-month inflation in this sector has moved sideways since liftoff”
  • “Two percent is and will remain our inflation target. We are committed to achieving and sustaining a stance of monetary policy that is sufficiently restrictive to bring inflation down to that level over time.”


Saw this elsewhere and thought it summed it up well (Joey is corporate media…)

Also, while you are here, please check this out and consider commenting:

U.S. Department of the Treasury, IRS Release Proposed Regulations on Sales and Exchanges of Digital Assets by Brokers. OPEN for comment!


Full Speech:

Good morning. At last year’s Jackson Hole symposium, I delivered a brief, direct message. My remarks this year will be a bit longer, but the message is the same: It is the Fed’s job to bring inflation down to our 2 percent goal, and we will do so. We have tightened policy significantly over the past year. Although inflation has moved down from its peak—a welcome development—it remains too high. We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.

Today I will review our progress so far and discuss the outlook and the uncertainties we face as we pursue our dual mandate goals. I will conclude with a summary of what this means for policy. Given how far we have come, at upcoming meetings we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks.

The Decline in Inflation So FarThe ongoing episode of high inflation initially emerged from a collision between very strong demand and pandemic-constrained supply. By the time the Federal Open Market Committee raised the policy rate in March 2022, it was clear that bringing down inflation would depend on both the unwinding of the unprecedented pandemic-related demand and supply distortions and on our tightening of monetary policy, which would slow the growth of aggregate demand, allowing supply time to catch up. While these two forces are now working together to bring down inflation, the process still has a long way to go, even with the more favorable recent readings.

On a 12-month basis, U.S. total, or “headline,” PCE (personal consumption expenditures) inflation peaked at 7 percent in June 2022 and declined to 3.3 percent as of July, following a trajectory roughly in line with global trends (figure 1, panel A).1 The effects of Russia’s war against Ukraine have been a primary driver of the changes in headline inflation around the world since early 2022. Headline inflation is what households and businesses experience most directly, so this decline is very good news. But food and energy prices are influenced by global factors that remain volatile, and can provide a misleading signal of where inflation is headed. In my remaining comments, I will focus on core PCE inflation, which omits the food and energy components.

On a 12-month basis, core PCE inflation peaked at 5.4 percent in February 2022 and declined gradually to 4.3 percent in July (figure 1, panel B). The lower monthly readings for core inflation in June and July were welcome, but two months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal. We can’t yet know the extent to which these lower readings will continue or where underlying inflation will settle over coming quarters. Twelve-month core inflation is still elevated, and there is substantial further ground to cover to get back to price stability.

To understand the factors that will likely drive further progress, it is useful to separately examine the three broad components of core PCE inflation—inflation for goods, for housing services, and for all other services, sometimes referred to as nonhousing services (figure 2).

Core goods inflation has fallen sharply, particularly for durable goods, as both tighter monetary policy and the slow unwinding of supply and demand dislocations are bringing it down. The motor vehicle sector provides a good illustration. Earlier in the pandemic, demand for vehicles rose sharply, supported by low interest rates, fiscal transfers, curtailed spending on in-person services, and shifts in preference away from using public transportation and from living in cities. But because of a shortage of semiconductors, vehicle supply actually fell. Vehicle prices spiked, and a large pool of pent-up demand emerged. As the pandemic and its effects have waned, production and inventories have grown, and supply has improved. At the same time, higher interest rates have weighed on demand. Interest rates on auto loans have nearly doubled since early last year, and customers report feeling the effect of higher rates on affordability.2 On net, motor vehicle inflation has declined sharply because of the combined effects of these supply and demand factors.

Similar dynamics are playing out for core goods inflation overall. As they do, the effects of monetary restraint should show through more fully over time. Core goods prices fell the past two months, but on a 12-month basis, core goods inflation remains well above its pre-pandemic level. Sustained progress is needed, and restrictive monetary policy is called for to achieve that progress.

In the highly interest-sensitive housing sector, the effects of monetary policy became apparent soon after liftoff. Mortgage rates doubled over the course of 2022, causing housing starts and sales to fall and house price growth to plummet. Growth in market rents soon peaked and then steadily declined (figure 3).3

Measured housing services inflation lagged these changes, as is typical, but has recently begun to fall. This inflation metric reflects rents paid by all tenants, as well as estimates of the equivalent rents that could be earned from homes that are owner occupied.4 Because leases turn over slowly, it takes time for a decline in market rent growth to work its way into the overall inflation measure. The market rent slowdown has only recently begun to show through to that measure. The slowing growth in rents for new leases over roughly the past year can be thought of as “in the pipeline” and will affect measured housing services inflation over the coming year. Going forward, if market rent growth settles near pre-pandemic levels, housing services inflation should decline toward its pre-pandemic level as well. We will continue to watch the market rent data closely for a signal of the upside and downside risks to housing services inflation.

The final category, nonhousing services, accounts for over half of the core PCE index and includes a broad range of services, such as health care, food services, transportation, and accommodations. Twelve-month inflation in this sector has moved sideways since liftoff. Inflation measured over the past three and six months has declined, however, which is encouraging. Part of the reason for the modest decline of nonhousing services inflation so far is that many of these services were less affected by global supply chain bottlenecks and are generally thought to be less interest sensitive than other sectors such as housing or durable goods. Production of these services is also relatively labor intensive, and the labor market remains tight. Given the size of this sector, some further progress here will be essential to restoring price stability. Over time, restrictive monetary policy will help bring aggregate supply and demand back into better balance, reducing inflationary pressures in this key sector.

The OutlookTurning to the outlook, although further unwinding of pandemic-related distortions should continue to put some downward pressure on inflation, restrictive monetary policy will likely play an increasingly important role. Getting inflation sustainably back down to 2 percent is expected to require a period of below-trend economic growth as well as some softening in labor market conditions.

Economic growthRestrictive monetary policy has tightened financial conditions, supporting the expectation of below-trend growth.5 Since last year’s symposium, the two-year real yield is up about 250 basis points, and longer-term real yields are higher as well—by nearly 150 basis points.6 Beyond changes in interest rates, bank lending standards have tightened, and loan growth has slowed sharply.7 Such a tightening of broad financial conditions typically contributes to a slowing in the growth of economic activity, and there is evidence of that in this cycle as well. For example, growth in industrial production has slowed, and the amount spent on residential investment has declined in each of the past five quarters (figure 4).

But we are attentive to signs that the economy may not be cooling as expected. So far this year, GDP (gross domestic product) growth has come in above expectations and above its longer-run trend, and recent readings on consumer spending have been especially robust. In addition, after decelerating sharply over the past 18 months, the housing sector is showing signs of picking back up. Additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy.

The labor marketThe rebalancing of the labor market has continued over the past year but remains incomplete. Labor supply has improved, driven by stronger participation among workers aged 25 to 54 and by an increase in immigration back toward pre-pandemic levels. Indeed, the labor force participation rate of women in their prime working years reached an all-time high in June. Demand for labor has moderated as well. Job openings remain high but are trending lower. Payroll job growth has slowed significantly. Total hours worked has been flat over the past six months, and the average workweek has declined to the lower end of its pre-pandemic range, reflecting a gradual normalization in labor market conditions (figure 5).

This rebalancing has eased wage pressures. Wage growth across a range of measures continues to slow, albeit gradually (figure 6). While nominal wage growth must ultimately slow to a rate that is consistent with 2 percent inflation, what matters for households is real wage growth. Even as nominal wage growth has slowed, real wage growth has been increasing as inflation has fallen.

We expect this labor market rebalancing to continue. Evidence that the tightness in the labor market is no longer easing could also call for a monetary policy response.

Uncertainty and Risk Management along the Path ForwardTwo percent is and will remain our inflation target. We are committed to achieving and sustaining a stance of monetary policy that is sufficiently restrictive to bring inflation down to that level over time. It is challenging, of course, to know in real time when such a stance has been achieved. There are some challenges that are common to all tightening cycles. For example, real interest rates are now positive and well above mainstream estimates of the neutral policy rate. We see the current stance of policy as restrictive, putting downward pressure on economic activity, hiring, and inflation. But we cannot identify with certainty the neutral rate of interest, and thus there is always uncertainty about the precise level of monetary policy restraint.

That assessment is further complicated by uncertainty about the duration of the lags with which monetary tightening affects economic activity and especially inflation. Since the symposium a year ago, the Committee has raised the policy rate by 300 basis points, including 100 basis points over the past seven months. And we have substantially reduced the size of our securities holdings. The wide range of estimates of these lags suggests that there may be significant further drag in the pipeline.

Beyond these traditional sources of policy uncertainty, the supply and demand dislocations unique to this cycle raise further complications through their effects on inflation and labor market dynamics. For example, so far, job openings have declined substantially without increasing unemployment—a highly welcome but historically unusual result that appears to reflect large excess demand for labor. In addition, there is evidence that inflation has become more responsive to labor market tightness than was the case in recent decades.8 These changing dynamics may or may not persist, and this uncertainty underscores the need for agile policymaking.

These uncertainties, both old and new, complicate our task of balancing the risk of tightening monetary policy too much against the risk of tightening too little. Doing too little could allow above-target inflation to become entrenched and ultimately require monetary policy to wring more persistent inflation from the economy at a high cost to employment. Doing too much could also do unnecessary harm to the economy.

ConclusionAs is often the case, we are navigating by the stars under cloudy skies. In such circumstances, risk-management considerations are critical. At upcoming meetings, we will assess our progress based on the totality of the data and the evolving outlook and risks. Based on this assessment, we will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data. Restoring price stability is essential to achieving both sides of our dual mandate. We will need price stability to achieve a sustained period of strong labor market conditions that benefit all.

We will keep at it until the job is done.

What stocks?

Categories2023q3 Issue-3

u/ No-Fig-8614 writes:

At the end of the day the stocks to pay attention to are:

The Chips Needed to Make these: Intel, Nvidia, AMD

The Fabs that produce them: TSCM, Samsung, Intel

Then there are companies producing the software: Epic, Blender, Unity. Adobe

The Streaming Services: Netflix, Disney+, Max (Warner Bros) — then you have youtube material being turned into its own streaming service like Curiositystream Inc.

The Companies that specialize in building AI Model with datasets: OpenAI (Microsoft), Google, Facebook, ByteDance, etc.

Then there are the host of startups creating custom chips for these tasks (ASICS), newer software, and existing VFX studios who know how to power them all. Which is where the money will be for future stocks.

Massive Misconception About the Writers Strike

Categories2023q3 Issue-3

u/ No-Fig-8614 writes:

What most people do not realize is that the majority of the major studies are owned by larger entities that do not suffer from this. Sure its small term pain knowing that certain projects are on hold. There is a lot of content in the coffers that they can still continue to produce without additional writing.

Most of the major studios also have other revenue streams that power them through. Let’s just take Disney to start. They have $8.3B coming in from parks. They have $5.5B coming in from Streaming. They have 1.9 Billion coming in from cord deals.

Look at Comcast, they have Peacock streamers, they have their existing cable business, they have their internet business (mixed with cable subscribers), they have their mobile unit.. they have plenty to keep powering their way through.

Then you have weird companies like Apple and Amazon who can take virtual losses forever in entertainment and not care. Netflix is weird because of all its custom content but has a massive catalog of back content to keep subscribers happy for a while.​

What stocks to look at are the ones that rely only on content to stay alive. Those are the companies to be paying attention too. For instance I’d be very interested in how Warner Bro’s/Discovery are going to be doing. I’d also look at Sony who owes a lot to their entertainment divisions for profits (sure they do electronics and niche other areas), but they own some of the larger studios.

I also don’t want to make this a political topic but the Writers guild really needs to re-think their leverage. Sure the major studio’s wont have new content coming out and already put a massive backlog and delays to projects. The major studios now are conglomerates that own so many other businesses they can keep moving along. They also don’t realize that these studios will keep generating revenue but don’t have to pay any of the writers, actors, production, etc… they have a freeze on money coming in but also a freeze on money going out. The problem with industry consolidation + multi-faceted businesses is you lose your negotiating leverage.

Would love to hear other peoples thoughts on this. What do you think?

Especially their fear of AI As they know will becoming after their jobs. Netflix already was using it to determine what shows and themes would be the most productive for returns. Disney/ILM started using it to replace opening credits. Disney even hired the group that for the end of Mando Season 2 were Luke showed up, another group of people showed they could do a better Deep Fake and they hired them. If I’m not mistaken Netflix used AI to write one of black mirrors episodes.

AI is coming and I can see why writers are so fearful. People are so naive on the idea that AI is coming for jobs even creative.

If anything I’d love to hear from people some of the VFX studios if they are public? That would be were I would start putting money into. Ones that are progressive and have a massive catalogue. It sucks ILM is private (Disney owned), Pixar (Disney Owned), Dreamworks, etc.

I wish Epic which powers the majority of games but also the Volume that is used in almost all new TV productions…. was public but they are private for now.

At the end of the day the stocks to pay attention to are:

The Chips Needed to Make these: Intel, Nvidia, AMD

The Fabs that produce them: TSCM, Samsung, Intel

Then there are companies producing the software: Epic, Blender, Unity. Adobe

The Streaming Services: Netflix, Disney+, Max (Warner Bros) — then you have youtube material being turned into its own streaming service like Curiositystream Inc.

The Companies that specialize in building AI Model with datasets: OpenAI (Microsoft), Google, Facebook, ByteDance, etc.

Then there are the host of startups creating custom chips for these tasks (ASICS), newer software, and existing VFX studios who know how to power them all. Which is where the money will be for future stocks.

Minutes of the Federal Open Market Committee, July 25-26, 2023: “Various participants commented on risks that could affect some banks, including unrealized losses on assets resulting from rising interest rates, significant reliance on uninsured deposits, and increased funding costs.”

Categories2023q3 Issue-3, Gamestop.

Source: https://www.federalreserve.gov/monetarypolicy/fomcminutes20230726.htm

Developments in Financial Markets and Open Market Operations:

The manager turned first to a review of developments in financial markets over the intermeeting period. Market participants interpreted data releases as generally demonstrating economic resilience and a further easing of inflation pressures. The market-implied peak for the federal funds rate rose in response to data pointing to a robust economy but retraced part of that move after the June consumer price index (CPI) release was interpreted by market participants as softer than anticipated. Even as market prices shifted to indicate a slightly more restrictive expected policy path, broader financial conditions eased a bit, reflecting in large part gains in equity prices and tighter credit spreads. Notably, share prices for bank equity also appreciated over the intermeeting period as concerns about the banking sector continued to dissipate. Spot and forward measures of inflation compensation based on Treasury Inflation-Protected Securities were little changed over the intermeeting period at levels broadly consistent with the Committee’s 2 percent longer-run goal, and longer-term survey- and market-based measures continued to point to inflation expectations being firmly anchored. Market-implied peak policy rates in most advanced foreign economies (AFEs) rose further this period, and the dollar depreciated modestly.

Respondents to the Open Market Desk’s Survey of Primary Dealers and Survey of Market Participants in July continued to place significant probability of a recession occurring by the end of 2024. However, the timing of a recession expected by survey respondents was again pushed later, and the probability of avoiding a recession through 2024 grew noticeably. Survey respondents anticipated that both headline and core personal consumption expenditures (PCE) inflation will decline to 2 percent by the end of 2025.

There was a strong anticipation, evident in both market-based measures and responses to the Desk’s surveys, that the Committee would raise the target range 25 basis points at the July FOMC meeting. Most survey respondents had a modal expectation that a July rate hike would be the last of this tightening cycle, although most respondents also perceived that additional monetary policy tightening after the July FOMC meeting was possible. As inferred from their responses, survey respondents expected real rates to increase through the first half of 2024 and to remain above their expectations for the long-run neutral levels for a few years.

The manager then turned to money market developments and policy implementation. The overnight reverse repurchase agreement (ON RRP) facility continued to work as intended over the intermeeting period and had been instrumental in providing an effective floor under the federal funds rate and supporting other money market rates; those rates remained stable over the period. Following the suspension of the debt ceiling in early June, the Treasury Department issued securities, notably Treasury bills, to replenish the Treasury General Account (TGA). The resulting greater availability of Treasury bills, which were priced at rates slightly above the current and expected ON RRP rates, induced a net decline in ON RRP balances for the period. A further decline in ON RRP balances was deemed probable amid sustained projected Treasury bill issuance, further reductions in the size of the Federal Reserve’s balance sheet in accordance with the previously announced Plans for Reducing the Size of the Federal Reserve’s Balance Sheet, and a possible further reduction in policy uncertainty that could incentivize money funds to extend the duration of their portfolios. In the July Desk Survey of Primary Dealers, respondents expected lower ON RRP balances and higher bank reserves by the end of the year, compared with the June survey.

By unanimous vote, the Committee ratified the Desk’s domestic transactions over the intermeeting period. There were no intervention operations in foreign currencies for the System’s account during the intermeeting period.

Staff Review of the Economic Situation:

The information available at the time of the July 25–26 meeting suggested that real gross domestic product (GDP) rose at a moderate pace over the first half of the year. The labor market remained very tight, though the imbalance between demand and supply in the labor market was gradually diminishing. Consumer price inflation—as measured by the 12-month percent change in the price index for PCE—remained elevated in May, and available information suggested that inflation declined but remained elevated in June.

In the second quarter, total nonfarm payroll employment posted its slowest average monthly increase since the recovery began in mid-2020, though payroll gains remained robust compared with those seen before the pandemic. Similarly, the private-sector job openings rate, as measured by the Job Openings and Labor Turnover Survey, fell in May to its lowest level since March 2021 but remained well above pre-pandemic levels. The unemployment rate edged down to 3.6 percent in June, while the labor force participation rate and the employment-to-population ratio were both unchanged. The unemployment rates for African Americans and Hispanics, however, both rose and were well above the national average. Average hourly earnings rose 4.4 percent over the 12 months ending in June, compared with a year­-earlier increase of 5.4 percent.

Consumer price inflation continued to show signs of easing but remained elevated. Total PCE price inflation was 3.8 percent over the 12 months ending in May, and core PCE price inflation, which excludes changes in energy prices and many consumer food prices, was 4.6 percent over the same period. The trimmed mean measure of 12-month PCE price inflation constructed by the Federal Reserve Bank of Dallas was 4.6 percent in May. In June, the 12‑month change in the CPI was 3.0 percent, while core CPI inflation was 4.8 percent over the same period. Measures of short-term inflation expectations had moved down alongside actual inflation but remained above pre-pandemic levels. In contrast, measures of medium- to longer-term inflation expectations were in the range seen in the decade before the pandemic.

Available indicators suggested that real GDP rose in the second quarter at a pace similar to the one posted in the first quarter. However, private domestic final purchases—which includes PCE, residential investment, and business fixed investment and which often provides a better signal of underlying economic momentum than does GDP—appeared to have decelerated in the second quarter. Manufacturing output rose in the second quarter, supported by a robust increase in motor vehicle production.

After falling sharply in April, real exports of goods picked up in May, led by higher exports of industrial supplies and automotive products. Real goods imports fell, as lower imports of consumer goods and industrial supplies more than offset higher imports of capital goods. The nominal U.S. international trade deficit narrowed, as a sharp decline in nominal imports of goods and services outpaced a decline in exports. The available data suggested that net exports subtracted from U.S. GDP growth in the second quarter.

Indicators of economic activity, such as purchasing managers indexes (PMIs), pointed to a step-down in the pace of foreign growth in the second quarter, reflecting fading of the impetus from China’s reopening, continued anemic growth in Europe, some weakening of activity in Canada and Mexico, as well as weak external demand and the slump in the high-tech industry weighing on many Asian economies. Incoming data also indicated that global manufacturing activity remained weak during the intermeeting period.

Foreign headline inflation continued to fall, reflecting, in part, the pass-through of previous declines in commodity prices to retail energy and food prices. Core inflation edged down in many countries but generally remained high. In this context, and amid tight labor market conditions, many AFE central banks raised policy rates and underscored the need to raise rates further, or hold them at sufficiently restrictive levels, to bring inflation in their countries back to their targets. In contrast, central banks of emerging market economies largely remained on hold, and some indicated that a rate cut is possible at their next meeting.

Staff Review of the Financial Situation

Over the intermeeting period, market participants interpreted domestic economic data releases as indicating continued resilience of economic activity and some easing of inflationary pressures, and they viewed monetary policy communications as pointing to somewhat more restrictive policy than expected. The market-implied path for the federal funds rate rose modestly, and nominal Treasury yields increased somewhat at shorter maturities. Meanwhile, broad equity prices increased, and spreads on investment- and speculative-grade corporate bonds narrowed moderately. Financing conditions continued to be generally restrictive, and borrowing costs remained elevated.

Over the intermeeting period, the market-implied path for the federal funds rate rose modestly, while the timing of the path’s slightly higher peak moved a little later, to just after the November meeting. Beyond this year, the policy rate path implied by overnight index swap (OIS) quotes ended the period modestly higher. Yields on Treasury securities increased modestly at shorter maturities but only a bit at longer maturities. Measures of inflation compensation rose only slightly for near-term and longer maturities. Measures of uncertainty about the path of the policy rate derived from interest rate options remained very elevated by historical standards.

Broad stock price indexes increased and spreads on investment- and speculative-grade corporate bonds narrowed moderately over the intermeeting period. The VIX—the one-month option-implied volatility on the S&P 500—edged down and ended the period near the 25th percentile of its historical distribution. Bank equity prices increased and outperformed the S&P 500 modestly. Stock prices for the largest banks fully recovered from their declines in the immediate wake of the failure of Silicon Valley Bank, while those for regional banks remained below the levels seen in early March.

Short-term interest rates in the AFEs increased modestly, on net, over the intermeeting period as foreign central banks continued to raise policy rates and signal the potential for further tightening. Increases in yields were tempered, however, by downside surprises to both inflation and PMIs from some economies. Risk sentiment in foreign markets improved somewhat, with most foreign equity indexes increasing and foreign corporate and emerging market sovereign bond spreads narrowing. The staff’s trade-weighted broad dollar index declined moderately, with the largest moves following releases of weaker-than-expected U.S. labor market data and lower-than-expected U.S. inflation data.

Conditions in domestic short-term funding markets remained generally stable over the intermeeting period. Spreads in unsecured markets narrowed modestly amid slight increases in OIS rates. Following the suspension of the debt limit, the Treasury Department partly replenished the TGA via a large net increase in bill issuance. Auctions of Treasury bills were met with robust demand, as shorter-term bill yields increased relative to other money market rates. Money market funds increased their holdings of Treasury bills and reduced their investments with the ON RRP facility. ON RRP take-up declined notably—about $390 billion—over the intermeeting period, reflecting more attractive rates on some alternatives to investing in the ON RRP facility. Despite reduced ON RRP take-up, money funds maintained relatively high asset allocations in overnight repurchase agreement investments amid still-elevated uncertainty about the future path of policy.

In domestic credit markets, borrowing costs for businesses, households, and municipalities were little changed over the intermeeting period and remained elevated by historical standards. Yields on agency commercial mortgage-backed securities (CMBS) were little changed.

The banking sector’s ability to fund loans to businesses and consumers was generally stable during the intermeeting period. Core deposit volumes at both large and other domestic banks held steady at the levels that they reached in early May, after having declined sharply in March and April amid the banking-sector turmoil. Banks continued to attract inflows of large time deposits, reflecting higher interest rates offered on new certificates of deposit. Meanwhile, wholesale borrowing—which primarily consists of advances from Federal Home Loan Banks, loans from the Bank Term Funding Program, and other credit extended by the Federal Reserve—had fallen since May by domestic banks of all sizes, partially reversing the surge at the onset of the bank turmoil in March.

Credit availability for businesses appeared to tighten somewhat in recent months. Credit from capital markets was somewhat subdued but overall remained accessible for larger corporations. Issuance of leveraged loans remained limited, reflecting low levels of leveraged buyout and merger and acquisition activity as well as weak investor demand. In the municipal bond market, gross issuance was solid in June, as both refundings and new capital issuance picked up from a somewhat subdued May. Commercial and industrial (C&I) loan balances contracted modestly in the second quarter, and commercial real estate (CRE) loan growth on banks’ books continued to moderate.

In the July Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS), banks reported having tightened standards and terms on C&I loans to firms of all sizes in the second quarter. The most cited reason for tightening C&I standards and terms continued to be concerns about the economic outlook. Banks also reported expecting to tighten C&I standards further over the remainder of the year.

The July SLOOS also indicated that standards across all CRE loan categories tightened further in the second quarter and that banks expected to tighten CRE standards further over the second half of the year. Meanwhile, CMBS issuance picked up a bit in May and then ticked down in June after recording low volumes earlier in the year.

Credit in the residential mortgage market remained broadly available for high-credit-score borrowers who met standard conforming loan criteria. Only modest net percentages of banks in the July SLOOS reported tightening standards for mortgage loans eligible to be purchased by government-sponsored enterprises, while a moderate net percentage of banks reported expecting to tighten lending standards further for these loans over the second half of the year. Meanwhile, the availability of mortgage credit remained tighter for households with lower credit scores, at levels close to those prevailing before the pandemic. Banks reported in the SLOOS that they had tightened standards for certain categories of residential real estate loans to be held on their balance sheets, such as jumbo loans and home equity lines of credit. In addition, banks reported expecting to tighten standards for jumbo loans during the remainder of 2023.

Conditions remained generally accommodative in consumer credit markets, with credit available for most borrowers. Credit card balances increased in the second quarter, though at a somewhat slower pace than in previous months. In the July SLOOS, banks reported expecting to continue tightening lending standards for credit card loans.

Overall, the credit quality of most businesses and households remained solid. While there were signs of deterioration in credit quality in some sectors, such as the office segment of CRE, delinquency rates generally remained near their pre-pandemic lows. The credit quality of C&I and CRE loans on banks’ balance sheets remained sound as of the end of the first quarter of 2023. However, in the July SLOOS, banks frequently cited concerns about the credit quality of both CRE and other loans as reasons for expecting to tighten their lending standards over the remainder of the year. Aggregate delinquency rates on pools of commercial mortgages backing CMBS increased in May and June.

The staff provided an update on its assessment of the stability of the financial system and, on balance, characterized the financial vulnerabilities of the U.S. financial system as notable. The staff judged that asset valuation pressures remained notable. In particular, measures of valuations in both residential and commercial property markets remained high relative to fundamentals. House prices, while having cooled earlier this year, started to rise again, and price-to-rent ratios remained at elevated levels and near those seen in the mid-2000s. Al­though commercial property prices moved down, developments in the CRE sector following the pandemic may have produced a permanent shift away from traditional working patterns. If so, fundamentals in the sector could decline notably and contribute to a deterioration in credit quality.

The staff assessed that vulnerabilities associated with household and nonfinancial business leverage remained moderate overall. Aggregate household debt growth remained in line with income growth. While nonfinancial businesses remained highly leveraged and thus vulnerable to shocks, firms’ debt growth has been relatively subdued recently, and their ability to service that debt has been quite high, even among lower-rated firms. Leverage in the financial sector was characterized as notable. In the banking sector, regulatory risk-based capital ratios showed the system remained well capitalized. However, while the overall banking system retained ample loss-bearing capacity, some banks experienced sizable declines in the fair value of their assets as a consequence of rising interest rates. Vulnerabilities associated with funding risks were also characterized as notable. Al­though a small number of banks saw notable outflows of deposits late in the first quarter and early in the second quarter, deposit flows later stabilized.

Staff Economic Outlook
The economic forecast prepared by the staff for the July FOMC meeting was stronger than the June projection. Since the emergence of stress in the banking sector in mid-March, indicators of spending and real activity had come in stronger than anticipated; as a result, the staff no longer judged that the economy would enter a mild recession toward the end of the year. However, the staff continued to expect that real GDP growth in 2024 and 2025 would run below their estimate of potential output growth, leading to a small increase in the unemployment rate relative to its current level.

The staff continued to project that total and core PCE price inflation would move lower in coming years. Much of the step-down in core inflation was expected to occur over the second half of 2023, with forward-looking indicators pointing to a slowing in the rate of increase of housing services prices and with core nonhousing services prices and core goods prices expected to decelerate over the remainder of 2023. Inflation was anticipated to ease further over 2024 as demand–supply imbalances continued to resolve; by 2025, total PCE price inflation was expected to be 2.2 percent, and core inflation was expected to be 2.3 percent.

The staff continued to judge that the risks to the baseline projection for real activity were tilted to the downside. Risks to the staff’s baseline inflation forecast were seen as skewed to the upside, given the possibility that inflation dynamics would prove to be more persistent than expected or that further adverse shocks to supply conditions might occur. Moreover, the additional monetary policy tightening that would be necessitated by higher or more persistent inflation represented a downside risk to the projection for real activity.

Challenge my Thesis, “Copper is the Opportunity of the Decade”

CategoriesIssue 2023Q3, Issue 2023Q3-2

u/ goobint  writes:

Both the supply and demand dynamics in the copper market are looking incredibly favorable.

From a 2022 Goldman Sachs report, “Copper is so integral to the green transition – a global effort underpinned by government support – that the supply requirements necessitate a spike in copper prices”

Demand will increase

  • EVs, EV charging, electrical transmission, and renewables all use a lot of copper, and are set to grow for the foreseeable future.
    • For example, an EV uses at least 2x more copper than a gas powered car.
  • There also isn’t a clear replacement for copper in these products, meaning the price can continue to rise without destroying demand.
    • Aluminum is the most likely potential replacement, but not nearly as efficient (it would require a much higher volume of aluminum to do the same job).

Supply will not keep up

  • Supply is expected to fall well short of demand in the 2nd half of this decade.
  • Ore grades are declining at many of the largest copper mines and there have been almost no major new discoveries in recent years.
  • New copper mines can take 10 years to get up to full production, so they would not contribute to the supply equation until 2033.

TL;DR: the world is going to need a lot of copper, there is no viable substitute, and the supply wont be there.

Disclosure: I am long COPX, FCX, IVPAF and IE, though these do not constitute a large % of my portfolio yet.

What are your thoughts? Am I missing anything? The most likely threat to the thesis above as far as I can see would be a breakthrough in extraction technology that dramatically increases supply.


GS Report “Copper is the New Oil”


Copper Stocks List


IEA Critical Minerals Market Review


Escondida Ore Grade Decline


2.4B GME net-short shares have accumulated, at weighted average price of $20.38, since July 2019

Categories2023q3 Issue-3, Gamestop., Issue 2023Q3

From: https://www.reddit.com/r/Superstonk/comments/15nkbse/update_24b_gme_netshort_shares_have_accumulated/?rdt=34376

The honorable u/  tinyDrunkElf writes:

Update: 2.4B GME net-short shares have accumulated, at weighted average price of $20.38, since July 2019. This 2.4B shares is NOT short interest, it is the aggregation of each day’s net short volume.

first off, this is NOT short interest

it is the aggregation of each day’s net short volume

yes, these numbers are the same as last time

Short average price has changed a bit as well as long average price, but the counts are essentially the same as two weeks ago.

The Charts

  1. Close price, 50-day simple moving average, weighted short open price
  2. Daily volume as a % of outstanding.
  3. Short volume as % of daily volume. Bubbles scale to % of volume of outstanding. 50-day simple moving average.
  4. Accumulation of: addition of short volume greater than 50%, subtraction of short volume less than 50%.

wut mean

  • ever wonder if shorts have closed? this is a look into daily short volume
  • this is two data sets, (1) price and volume, and (2) daily short volume
  • assuming that short volume below 50% means long buys outnumber short orders (and that shorts are closing)
  • we can capture the bits over or under 50% we can add or subtract to a running tally of the “net shorts”.
  • an example, 66% short volume on 1M shares
    • 66% – 50% = 16%
    • 16% * 1M = 160k
    • 160k is the amount of new “net shorts” for the day
  • the close price can also be factored in to the daily “net short” to get a weighted average of the price where the shorts were opened
  • check my previous posts for more in-depth explanation

why do

I’ve invested and lost money in the stock market, and can now clearly see the market is manipulated and do not like that.

Neither paid to do or not do. I am invested in GME.

GME Analysis (image link):


Symbol Industry Reason included
‘popcorn’ entertainment common comparison
‘car van uh’ automobile meme stock, a XRT holding
GME retail, electronics, gaming, entertainment meme stock, the SuperStonk, a XRT holding
‘yellow tag retail’ retail, electronics stable comparison
‘eff motor co’ automobile superstonk suggested
‘gee ee’ electronics superstonk suggested
‘gaming cards and CPUs’ electronics, gaming stable comparison
‘big blue retail’ retail stable comparison
‘fancy ecar’ automobile meme stock
‘smile box’ retail stable comparison
’em ess eff tee’ tech stable comparison
‘ex arr tee’ retail equal weight ETF, holds many retail companies
‘towel’ retail meme stock, cellar box example, failed company example
‘yello trucking’ retail, shipping recent market activity, failed company example


TICKER net-short_aggregate / outstanding total net-short minus net-long total daily net-short shares total daily net-long shares net-short w-avg net-long w-avg outstanding d start d end total volume total-short volume total-short w-average total-long volume total-long w-average current market cap short price * net short total shares last close * net short total shares short agg profit/loss
‘popcorn’ 1.33 688.05M 3.67B 2.98B $10.98 $15.25 519.19M 8/10/2018 8/9/2023 39.18B 19.94B $13.29 19.25B $14.03 $2.54B $9.14B $3.37B $5.77B
‘car van uh’ 5.93 629.05M 832.22M 203.16M $52.24 $48.26 106.07M 8/10/2018 8/9/2023 6.51B 3.57B $44.88 2.94B $43.02 $4.4B $28.23B $26.07B $2.16B
GME 7.87 2.4B 3.63B 1.24B $19.55 $11.55 304.68M 8/10/2018 8/9/2023 24.78B 13.59B $20.38 11.19B $19.67 $6.07B $48.83B $47.76B $1.08B
‘yellow tag retail’ 0.97 212.07M 324.42M 112.35M $82.76 $92.56 218.05M 8/10/2018 8/9/2023 2.4B 1.31B $86.31 1.1B $88 $17.24B $18.3B $16.76B $1.54B
‘eff motor co’ 0.79 3.14B 6.31B 3.17B $8.74 $14.17 4B 8/10/2018 8/9/2023 64.81B 33.97B $11.48 30.83B $12.31 $50.92B $36.04B $39.97B -$3.94B
‘gee ee’ -0.87 959.62M 337.75M 1.3B $69.44 $63.98 1.1B 8/10/2018 8/9/2023 10.42B 4.73B $65.84 5.69B $65.2 $123.39B n/a n/a n/a
‘gaming cards and CPUs’ 1.68 2.71B 5.72B 3.01B $71.36 $71.06 1.61B 8/1 ‘yello trucking’ -0.79 41M 41.79M 82.8M $3.19 $6.02 51.98M 2/8/2021 8/9/2023
0/2018 8/9/2023 61.67B 32.19B $74.44 29.48B $74.69 $178.01B $201.38B $298.85B -$97.47B
‘big blue retail’ -0.28 764.64M 240.87M 1.01B $126.1 $133.95 2.7B 8/10/2018 8/9/2023 6.76B 3B $130.67 3.76B $131.84 $433.76B n/a n/a n/a
‘fancy ecar’ 2.3 7.29B 11.83B 4.54B $121.99 $145.91 3.16B 8/10/2018 8/9/2023 111.82B 59.56B $132.95 52.27B $136.56 $766.31B $969.3B $1.77T -$796.39B
‘smile box’ -0.36 3.69B 2.16B 5.85B $121.97 $122.16 10.26B 8/10/2018 8/9/2023 57.57B 26.94B $124.43 30.63B $124.17 $1.41T n/a n/a n/a
’em ess eff tee’ -0.25 1.88B 764.6M 2.65B $210.3 $223.65 7.44B 8/10/2018 8/9/2023 19.48B 8.8B $218.21 10.68B $220.13 $2.4T n/a n/a n/a
‘ex arr tee’ 239.18 1.47B 1.5B 31.72M $56.04 $72.13 6.15M 8/10/2018 8/9/2023 4.18B 2.83B $58.24 1.36B $61.01 $405.84M $85.67B $97.07B -$11.4B
‘towel’ 12.12 1.1B 1.69B 586.42M $8.39 $12.21 90.71M 8/10/2018 5/2/2023 15.69B 8.39B $7.93 7.29B $8.16 $6.81M $8.71B $82.56M $8.63B
‘yello trucking’ -0.79 41M 41.79M 82.8M $3.19 $6.02 51.98M 2/8/2021 8/9/2023 931.39M 445.19M $3.75 486.2M $4.18 $88.37M n/a n/a n/a

This is NOT short interest

  • As has been pointed out many times, by myself and by others: This is NOT short interest.
  • This is an analysis and interpretation of the daily short volume.
  • Short interest is very very special and FINRA has special rules for what it is and how it is reported.

NOT short interest? Then what is it?

This is a short volume artifact (or “indicator”). There is known unreliability due to self-reported nature of the data.

Come with me on a journey of the discovery of electricity. Starting with silk and amber in 600BCE, then frog legs, then electric ticklers, and eventually a connection to magnetism and motors, lights, and batteries. Total time to get there? Just, like 2,400 years… Sometimes the incremental bits have no point, and need to be built upon.

I’m not a TA master-of-the-dark-arts, I am just exploring some of the raw data in a fairly simple way. It seems unlikely that this method would been unexplored. However, if it has been done, it doesn’t seem like it’s widely referenced.

My previous posts explain this artifact and methods used.

My basic summary of the value of GME

  1. Current Value. GME company value as a ‘normal’ specialized retail company who sells games and gaming products to an established and growing market. Fundamentals, Quarterly numbers, assets, etc.
  2. Future Value. Shareholder belief, belief in the mission/essense of the company. Is GME more than a video game retailor? Can it be more?
  3. The Squeeze. Based on 1 and 2, have shorts and market makers oversold the company?
  • DRS is a factor that has removed shares from liquidity, a reported ~25% of outstanding have been DRSed and removed from the liquidity pool at the DTC.
  • Continued low volume
  • Market maker / short hedge fund activities
  • When gamers see an exploit or advantage in a game, they lean into it – same as anyone, find a loophole and exploit it. SHFs leaned into their shorts. Retail investors are leaning back.

While I’ve got my soapbox out:

for RC: Seems like GME has a tricky problem. How do you get people to work on a rocketship and stay? From what I can see, you need to hire those who have transcended space and time who ride the rocket for the sheer joy of it.

for LC:


r/Superstonk - You guys are trying to prove things?
You guys are trying to prove things?

Power to the players. Power to the creators. Please. Help us help you. Help us help ourselves.

Data interpretations

There’s been a bit of a plateau since my last post, the numbers are surprisingly the same, net shorting seems to have evened out a bit, especially with low volume.

Added a few more columns to the table, multiplying share counts and prices to get estimates for outstanding quantities.

$20.38 is the weighted average short open price for the total 13.59B short shares since July 2019. This can be thought of as representing bearish sentinment.

$19.67 is the weighted average long open price for the total 11.19B total long shares since July 2019. This can be thought of as representing bullish sentiment.

13.59B – 11.19B = 2.4B.

2.4B net shares shorted have accumulated on the public feed since July 2019. This is the aggregate “short minus long” for this time period. – this is important, this 2.4B number is NOT short interest – this 2.4B number is simply the accumulated net short volume since July 2019, it is not short interest


“$1.08B” paper gain for shorts as of close on 8/9/2023

  • (2.4B shares TIMES (20.38 – 20.74))
  • assuming the $20.38 average short price is valid.

Put another way: every $1 dollar in price below/above $20.38 is $2.4B in gain/loss/liability. $10 up to $30.38? $24B loss. $15 more to bring us to $45.38 (battle for $180 territory)? $25 * 2.4B = $60B loss. Peak squeeze at ~$483? 483/4 = 120, 120-20.38 = $99.62. $99.62 * 2.4 = $239B loss.

Based on this analysis, this ($1.08B) is the total potential gain/loss/liability shorts were sitting on when the price closed Wednesday 8/9 at $19.93.

“-$869.17M” (2.4B shares TIMES (20.38 – 19.93)) Based on this analysis, this ($869.17M) is the total potential gain/loss/liability shorts were sitting on when the price closed Tuesday 8/8 at $20.74.

Sold, not yet purchased

Shares sold but not yet purchased, at fair market value.

What does that even mean? It means market makers can sell shares that don’t exist to provide liquidity. The idea is that they will then buy them back at a similar price at which they sold them, when they are able. Naked short selling by market makers isn’t illegal.


r/Superstonk - Update: 2.4B GME net-short shares have accumulated, at weighted average price of $20.38, since July 2019. This 2.4B shares is NOT short interest, it is the aggregation of each day's net short volume.


it may take a market maker considerable time to purchase or arrange to borrow the security…


$20.38 weighted average short open price for the total 13.59B short shares since July 2019. This can be thought of as representing bearish sentinment.

$19.67 is the weighted average long open price for the total 11.19B total long shares since July 2019. This can be thought of as representing bullish sentiment.

2.4B net shares shorted have accumulated on the public feed since July 2019. This is the aggregate “short minus long” for this time period.


Price can’t rise, because margin.

Shorts can’t close because price rises when buying.

Shorts never closed. Still probably can’t. Wut du?

Swap ’em and lock ’em. Then hide the key for 50 years?

Fitch downgrades U.S. long-term rating to AA+ from AAA

CategoriesIssue 2023Q3, Issue 2023Q3-2
  • Fitch Ratings cut the United States’ long-term foreign currency issuer default rating to AA+ from AAA.
  • The agency had placed the country’s rating on negative watch in May, citing the debt ceiling fight in Washington.
  • “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.
  • U.S. stock futures opened lower Tuesday evening after the downgrade.

Full story: https://www.cnbc.com/2023/08/01/fitch-downgrades-us-long-term-ratings-to-aa-from-aaa.html

Sam Zeloof makes CPU’s in his garage

CategoriesIssue 2023Q3, Issue 2023Q3-2

Wanted to save the bookmark of this dude’s website for future reference: http://sam.zeloof.xyz/

He also has a youtube channel. The gist of it is that he does photolithography, the process by which chips are manufactured, in his garage. This demonstrates that small chip manufacture is possible. Not top of the line EUV chips, but some old chips, that are still useful, can be produced without capital investment in the order of millions of dollars.

Related, the RISV-V chip architecture is relevant here.  On the one hand, ARM and NVDA architectures are proprietary and costly, at the same time as the world is inter-connected enough that “free and open” software efforts are increasingly powerful and useful. On the other hand, RISC-V is a CPU architecture that allows peer contribution, and lacks certain licensing restrictions, to finally offer the architecture and platform to, possibly, maybe, even rival NVDA’s CUDA.

To pursue the goal of developing and using RISC-V for AI, the company Tenstorrent has received $100M in strategic funding. You can take a look at what they do here: https://tenstorrent.com/

If chips are indeed the future of everything, does that mean that now is the time to attempt to seriously boost production of *tools to produce* the chips (not the chips themselves)? And if so, how complicated is that, can a garage-style small-manufacture plant actually create chips that are useful in actual appliances?

RISC-V is an open CPU architecture. NVDA is a monopoly, so everyone wants to *not* use NVDA but unfortunately that’s not possible. NVDA’s CUDA driver for AI is proprietary, and the entire AI industry runs on it.

Then, the transition from DUV to EUV, smaller light beams for lithography, means that (1) ASML is the monopoly manufacturer of these, and (2) I think you don’t need the latest and best, to make the world turn. Tesla itself is phasing out the newest chips for slightly outdated chips, and if EUV chip-printing machines are unavailable, everyone can still pretty much use the old tech. For example my two cars are 1996 and 1999, that’s 1/4 of a century old and they work just fine.

All in all, these are quite interesting developments! I look forward to observing the next steps in the AI evolution, and hopefully being a part of it somehow. It appears to be a lot of work but then again – if our collective future livelihood critically relies on this sub-segment of technology, it makes sense to pour a lot of effort into it.


Gamestop announces they’re shutting down the NFT wallet

CategoriesCrypt0, Issue 2023Q3, Issue 2023Q3-2

From NFT.gamestop.com :

u/ Positron49 comments:

SEC doesn’t like centralized exchanges for a different reason than this. In the stock market (which they consider well regulated) a company issues shares to the transfer agent, which then assigns the appropriate amount to Cede & Co. Cede & Co stores those equities in its vault and produces securities (polaroid copies) for everyone under the DTCC to trade with. This is why they are called a “Depository”.

The SEC doesn’t like that Coinbase does ALL of this under one roof. Coinbase buys cryptocurrencies in the market and stores them on one side of its balance sheet. It then generates “securities” aka tickers of the same name as the crypto that only work internally on their platform that follow the price of the asset. SEC says you cannot be the creator of the security and the platform on which it trades.

This sounds like GameStop is aware the SEC is being picky for no reason. Because GameStop wallet is a self-custody wallet and GameStop also owns the NFT Marketplace, it sounds like they are being abundantly cautious that the government won’t like both being active…. even though the combination of the two is far more secure than anything in the stock market today.

u/ TwoTeefDown adds:

Honestly, I feel this is a smart move. The GameStop NFT market is doing really well and has a lot of projects on it doing really well despite only being in alpha/beta stages. it’d be dumb to have an app ruin that due to some stupid, unforeseeable loophole or regulation. So every precaution is necessary to protect this project.

Also, if you only ever used the wallet on mobile, it’s really easy to recover it on PC using your secret phrase via loopring wallet or metamask (your Nfts are on the block chain). The GameStop market place customer service is very helpful and replies quick ime.