Money For the Rest of Us

What we can monitor and do now in preparation for a 2030s depression, which may or may not arrive.

Topics covered include:

• Why ITR Economics has been predicting a 2030s depression for over a decade.
• What are the early warning signs we can monitor for increasing risk of economic and financial turmoil
• What are U.S. and global population predictions by the Congressional Budget Office and the United Nations
• What is the status of Social Security and what would it take to make it more sustainable
• What are the impacts of a slowing or shrinking population
• How should we invest, and what other financial actions should we take in the face of long-term depression forecasts

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Show Notes

Top 5 Causes of the 2030s Great Depression—ITR Economics

The Demographic Outlook: 2024 to 2054—Congressional Budget Office

Testimony on Social Security’s Finances—Congressional Budget Office

World Population Prospects 2024—The United Nations

World Population Prospects 2024: Graphs/Profiles—The United Nations

America is uniquely ill-suited to handle a falling population—The Economist

Suddenly There Aren’t Enough Babies. The Whole World Is Alarmed. by Greg Ip and Janet Adamy—The Wall Street Journal

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479: National Debt Master Class Finale – What To Do

468: Lessons from Japan’s 34 Years of Stock Market Underperformance

395: How Population Trends Will Impact Growth, Inflation, Investing and Well Being

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Gambling in the stock market is increasing, with most traders losing money while generating billions of dollars per year for brokerages and wholesalers. Will all this trading lead to big market swoons?

Topics covered include:

• Why sports gambling has grown so much
• How gambling in the stock market is measured, and how prevalent is it
• Why most traders lose money but continue to trade anyway
• How uninformed traders improve market liquidity and encourage trading by informed trading
• Why being an asset allocator is more rewarding and as intellectually stimulating as trading

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Show Notes

How Stocks Became the Game That Record Numbers of Americans Are Playing by Claire Ballentine—Bloomberg

MURPHY, GOVERNOR OF NEW JERSEY, ET AL. v. NATIONAL COLLEGIATE ATHLETIC ASSN. ET AL. SYLLABUS—The Supreme Court of The United States

America's Sports Betting Boom by Felix Richter—Statista

Searching for Gambles: Gambling Sentiment and Stock Market Outcomes by Yao Chen, Alok Kumar, Chendi Zhang—SSRN

Stocks as Lotteries: the Implications of Probability Weighting for Security Prices by Nicholas Barberis and Ming Huang—SSRN

Day Trading for a Living? by Fernando Chague, Rodrigo De-Losso, Bruno Giovannetti—SSRN

Computer based trading system and methodology utilizing supply and demand analysis—Google Patents

Retail Trading in Options and the Rise of the Big Three Wholesalers—Svetlana Bryzgalova, Anna Pavlova, Taisiya Sikorskaya—SSRN

Amateurs Pile Into 24-Hour Options: ‘It’s Just Gambling’ by Gunjan Banerji—The Wall Street Journal

Retail Traders Love 0DTE Options... But Should They? by Heiner Beckmeyer, Nicole Branger, Leander Gayda—SSRN

Related Episodes

482: Unlocking the Power of Positive Skewness: Strategies for Investing, Business, and Creativity

239: How to Be a Successful Trader

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Buffer ETFs protect against the downside while capping the upside. We examine them closely to see if they are worth it.

Topics covered include:

• How buffer ETFs are structured and some current examples
• How buffer ETFs have performed over the past five years
• What are the risks of buffer ETFs
• How loss aversion and narrow framing contribute to the popularity of buffer ETFs
• Are buffer ETFs worth it and what are some alternative strategies that could be used instead

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Show Notes

BlackRock Enters Booming Market for Stock ETFs With a 100% Hedge by Emily Graffeo—Bloomberg

New Stock ETF Offers 100% Hedge as Buffer Funds Nab $46 Billion by Emily Graffeo—Bloomberg

The Dynamics of Defined Outcome Exchange Traded Funds by Luis García-Feijóo and Brian Silverstein—SSRN

Monetizing Loss Aversion for Fun and Profit—Paul Kedrosky

Thirty Years of Prospect Theory in Economics: A Review and Assessment by Nicholas C. Barberis—Journal of Economic Perspectives

Prospect Theory: An Analysis of Decision Under Risk by Daniel Kahneman and Amos Tversk—ECONOMETRICA

Investments Mentioned

Innovator U.S. Equity Ultra Buffer ETF - January Series (UJAN)

Innovator U.S. Equity Ultra Buffer ETF - June Series (UJUN)

iShares Large Cap Max Buffer Jun ETF (MAXJ)

Innovator U.S. Equity Accelerated 9 Buffer ETF (XBJL)

SPDR S&P 500 ETF Trust (SPY)

Related Episodes

465: Transforming Financial Regrets into Portfolio Gains: Five Strategies for Navigating Investment Emotions

460: Should You Be Invested 100% in Stocks Before and During Retirement? A Recent Study Says Yes. 

451: How Much Should You Invest in Stocks? The Art of Position Sizing in a Volatile Market

394: How to Get Better at Risk Taking

321: How to Analyze Complex Investments

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Seven ways to increase the odds of living long into your retirement years (if you choose to retire).

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Show Notes

Podcast Stats: How many podcasts are there?—Listen Notes

Quality Over Quantity Is A Growth Strategy by Steven Goldstein—Amplifi Media

Slow Productivity by Cal Newport—Penguin Random House

Why our brains crave beauty, art and nature by Jemima Kelly—The Financial Times

Why southern Europeans will soon be the longest-lived people in the world—The Economist

What I’ve learnt from two decades eating in Paris by Simon Kuper—The Financial Times

Getting Good Sleep Could Add Years to Your Life—American College of Cardiology

Close friends can help you live longer but they can spread some bad habits too by Maggie Mertens—NPR

United we thrive: friendship and subsequent physical, behavioural and psychosocial health in older adults (an outcome-wide longitudinal approach) by E. S. Kim, W. J. Chopik, Y. Chen, R. Wilkinson and T. J. VanderWeele—Cambridge University Press

Why I’ve hung up my wellies and given up the country cottage by Tom Hodgkinson—The Financial Times

An Emersonian Guide to Taking Control of Your Life by Arthur C. Brooks—The Atlantic

Why you should never retire—The Economist

It’s not so ‘terribly strange to be 70’ by Anne Lamott—The Washington Post

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Millions of fintech app users have lost access to their cash. In this episode, we explain why this happened and show you how to protect yourself when placing cash with traditional banks, neobanks, and fintech platforms.

Topics covered include:

• The mass chaos in the fintech space spawned by the bankruptcy of Synapse Financial Technologies
• What are FBO accounts, and why they are so troublesome
• What is the difference between a traditional bank, a neo bank, and a non-bank
• What to look for and protect yourself when investing your cash savings

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Show Notes

CHAPTER 11 TRUSTEE’S INITIAL STATUS REPORT BY UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SAN FERNANDO VALLEY DIVISION—CourtListener

Fintech platform Synapse raises $33M to build ‘the AWS of banking’ by TechCrunch—Synapse

X Post by Jason Mikula—X

"Full Reconciliation... May Not Be Possible," Synapse Trustee Says by Jason Mikula—Fintech Business Weekly

Mercury Seeking $30M From Synapse, Emergency Court Filing Reveals by Jason Mikula—Fintech Business Weekly

Infighting among fintech players has caused TabaPay to ‘pull out’ from buying bankrupt Synapse by Mary Ann Azevedo—TechCrunch

Fintech startup Copper forced to discontinue banking services amid Synapse fiasco by Taylor Soper—GeekWire

a16z-backed Tellus wants to offer consumers a much better savings rate. Here’s how. by Mary Ann Azevedo—TechCrunch

FDIC Demands Three Companies Cease Making False or Misleading Representations about Deposit Insurance—FDIC

Related Episodes

440: Beware of Platform Risk

424: Are More Bank Runs Coming? The Collapse of Silicon Valley Bank

412: Where to Invest Your Cash Savings for Higher Yields

304: A 15% Guaranteed Return? Lending on the Fringes of Finance

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How a few high-impact successes drive up overall average outcomes in investing, business, and creative projects. How to harness positive skewness using a barbell approach. Learn when to mitigate risks and when to embrace them.

Topics covered include:

• What is positive skewness and how does it manifest in investing, business and creative endeavors
• How power laws and the 80/20 rule work
• Why we shouldn't beat ourselves up if we aren't incredibly successful
• When should we reduce positive skewness and when should we embrace it

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Show Notes

Long-Term Shareholder Returns: Evidence from 64,000 Global Stocks by Hendrik Bessembinder, Te-Feng Chen, Goeun Choi, K.C. John Wei—SSRN

Long-Horizon Stock Returns Are Positively Skewed by Adam Farago and Erik Hjalmarsson—SSRN

Wealth Creation in the U.S. Public Stock Markets 1926 to 2019 by Hendrik Bessembinder—SSRN

The Coffee Can portfolio by Robert G. Kirby—csinvesting

Active vs Passive Investing U.S. Barometer Report—Morningstar

Table 7. Survival of private sector establishments by opening year—U.S. Bureau of Labor Statistics

How Many Podcasts Are There? (New 2024 Data) by Josh Howarth—Exploding Topics

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Why are homeowners seeing home insurance premiums increases of up to 70%, as David has? What can you do if your insurer drops you, you get a huge premium increase, or you can no longer afford coverage?

Topics covered include:

• What are the primary drivers of home insurance price increases
• Why these increases don't show up in the U.S. consumer price index
• How the reinsurance market works and why reinsurers are passing on 50% premium increases to property and casualty insurers.
• What percentage of home insurers self-insure
• What else can homeowners do

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Show Notes

Home Insurance Is Clobbering Consumers. Yet It’s Barely Counted in Inflation. by Jeanna Smialek—The New York Times

NIPA Handbook: Concepts and Methods of the U.S. National Income and Product Accounts: Chapter 5: Personal Consumption Expenditures—Bureau of Economic Analysis

The crippling home insurance crisis hitting America by Rana Forhoohar—The Financial Times

The Hidden Driver of Soaring Home Insurance Costs by Jean Eaglesham—The Wall Street Journal

When Disaster Strikes: Preparing for Climate Change by Seán Nolan and Krishna Srinivasan—IMF Blog

Home insurance was once a ‘must.’ Now more homeowners are going without. by Patrick Cooley—The Washington Post

Homeowners Perception of Weather Risks 2023 Q2 Consumer Survey—Insurance Information Institute

Insurance Companies Feeling the Pressure in Iowa and the Midwest by Jerry Theodorou—Insurance Journal

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Why stock, ETF, and bond trades are optimized to settle in less than a day, allowing investors quicker access to their cash and securities. What are the benefits and costs of optimization in the relentless drive for cheaper, faster, and more profitable.

• Why countries are moving to T+1 settlement from T+2 for security trades
• What will it take for secur
• How BlackRock and Franklin have launched Treasury funds that are tokenized and trade on the Etherium network
• How optimization works and what are the tradeoffs
• How we can use satisficing and rules of thumb in order to cope with the complexity of the world

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Show Notes

About the ‘T+1’ Rule Making US Stocks Settle in a Day by Lydia Beyoud and Greg Ritchie—Bloomberg

SEC Chair Gensler Statement on Upcoming Implementation of T+1 Settlement Cycle—SEC

What faster trading cycles will mean for US markets by Jennifer Hughes and Harriet Clarfelt—The Financial Times

Speedier Wall Street Trades Are Putting Global Finance On Edge by Greg Ritchie—Bloomberg

BlackRock closes in on crown of world’s largest bitcoin fund by Will Schmitt and Brooke Masters—The Financial Times

Optimal Illusions: The False Promise of Optimization by Coco Krumme

Financial Statement Analysis with Large Language Models by Alex G. Kim, Maximilian Muhn, and Valeri V. Nikolaev—The University of Chicago

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457: AI’s Fork in the Road: Societal Bliss or Existential Threat

329: Meme Stocks, GameStop, Short Squeezes, and Bubbles

228: How Tokenization Will Radically Change Investing

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In part three of our national debt masterclass, we share a simple debt dynamics formula we can monitor to help guide our investment choices.

Topics covered include:

• How much has the national debt grown over the past fifties years, and what are the underlying drivers
• How the budget deficit, interest rates, and economic growth determine the level and growth in the national debt
• Under what circumstances will the U.S. default on its debt
• How should we invest to protect ourselves from the uncertainties of the national debt situation

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Show Notes

Jerome Powell: Full 2024 60 Minutes interview transcript—CBS News

Yellen says she disagrees with Moody's outlook on US debt by Ann Saphir and David Lawder—Reuters

IMF Steps Up Its Warning to US Over Spending and Ballooning Debt by Christopher Condon—Bloomberg

WHEN DOES FEDERAL DEBT REACH UNSUSTAINABLE LEVELS?—Penn Wharton

The Long-Term Budget Outlook: 2024 to 2054—Congressional Budget Office

PUBLIC DEBT AND LOW INTEREST RATES by Olivier J. Blanchard—NBER

Bond vigilantes snooze as Treasury market shrugs off vast US borrowing by Kate Duguid—The Financial Times

Term Premium on a 10 Year Zero Coupon Bond—FRED

Instantaneous Forward Term Premium 10 Years Hence—FRED

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In part two of this national debt series, we explore how households and businesses, including commercial banks, can choose not to participate in what some call a national debt ponzi scheme. We also look at how central banks and federal governments monetize the national debt using quantitative easing.

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Show Notes

Credit and Liquidity Programs and the Balance Sheet: Federal Reserve liabilities—Board of Governors of the Federal Reserve System

As of and for the Years Ended December 31, 2019 and 2018 and Independent Auditors’ Report—The United States Federal Reserve System

Different types of central bank insolvency and the central role of seignorage by Ricardo Reis

How do central banks control inflation? A guide for the perplexed by Laura Castillo-Martinez and Ricardo Reis

Can the Central Bank Alleviate Fiscal Burdens? by Ricardo Reis

Ricardo Reis Tweets on Monetizing the National Debt

M2—Federal Reserve Economic Data

Assets: Total Assets: Total Assets: Wednesday Level—Federal Reserve Economic Data

Assets: Securities Held Outright: U.S. Treasury Securities: All: Wednesday Level—Federal Reserve Economic Data

Americans Reported Strong Personal Finances Late Last Year, Fed Finds by David Harrison—The Wall Street Journal

A Complete Guide to Understanding and Protecting Against Inflation—Money For the Rest of Us

A Complete Guide to Investing in TIPS and I Bonds—Money For the Rest of Us

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