How we measure wealth, riches, abundance, and well-being is more important today than ever.

Topics covered include:

• How late 18th century philosophers Adam Smith and the Earl of Lauderdale defined wealth and the role of capital. Why they worried about income inequality and excess profits
• What led to the dramatic increase in life expectancy and wealth in the 20th and 21st centuries
• How a long life expectancy and well-being can be attained at much lower levels of wealth
• Why John Maynard Keynes was right about the expansion of the economy but wrong about how many hours we would work
• How the U.S. expanded its wealth relative to the rest of world, and at what cost
• Why natural capital should be included in measuring wealth

For more information on this episode click here.

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Show Notes

An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith—Early Modern Texts

About Adam Smith—Adam Smith Institute

An Inquiry Into the Nature and Origin of Public Wealth and Into the Means and Causes of Its Increase by The Earl of Lauderdale—McMaster University

Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail by Ray Dalio—Simon & Schuster

The Economics of Biodiversity: The Dasgupta Review—GOV.UK

Less Is More: How Degrowth Will Save the World by Jason Hickel—Penguin Random House

Economic Possibilities for Our Grandchildren by John Maynard Keynes—Yale

America’s economic outperformance is a marvel to behold—The Economist

How Much is Enough? Money and the Good Life by Robert Skidelsky and Edward Skidelsky—Penguin Random House 

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282: Is GDP the Best Measure of Happiness and Well-Being?

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With a total U.S. inflation rate of 14% in the past two years, we review how various inflation hedges performed over the past twenty-four months.

Topics covered include:

• What were investors' and the Federal Reserve's inflation expectations two years ago
• What led to the big inflation increase
• Why was the Federal Reserve forced to raise its policy rate by almost 5% in a year
• How successful were inflation-index bonds, stocks, commodities, and real estate in beating inflation over the past two years
• How did two active ETFs that set out to protect against inflation perform
• What is the current outlook for inflation, and what should investors do

For more information on this episode click here.

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Show Notes

CPI Inflation Calculator—U.S. Bureau of Labor Statistics

Inflation Beneficiaries ETF—Horizon Kinetics

Quadratic Capital Management

Investments Mentioned

iShares TIPS Bond ETF (TIP)

Vanguard Short-term Inflation Protection Securities ETF (VTIP)

Invesco DB Commodity Index Tracking Fund (DBC)

Vanguard Total World Stock ETF (VT)

Vanguard Total Stock Market ETF (VTI)

WisdomTree U.S. High Dividend Fund (DHS)

WisdomTree Global High Dividend Fund (DEW)

Horizon Kinetics Inflation Beneficiaries ETF (INFL)

Schwab U.S. REIT ETF (SCHH)

Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL)

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How accelerating bank deposit withdrawals could harm the economy, including real estate prices. How dollars slosh around the financial system but always seem to end up at the Federal Reserve.

Topics covered include:

• How many deposits have left banks since the Silicon Valley Bank collapse
• How much have banks borrowed from the Federal Reserve to meet deposit withdrawals
• Why exiting deposits are harming bank profits and causing them to make fewer loans
• How the credit crunch could hurt commercial real estate values
• How money market mutual funds differ from banks
• How today's banking crisis is similar to the 1980s savings and loans crisis
• What should investors do to protect their wealth

For more information on this episode click here.

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Show Notes

Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks—The Federal Reserve

Assets and Liabilities of Commercial Banks in the United States—The Federal Reserve

All U.S. Banks Net Interest Margin—BankRegData

Current Treasuries and Swap Rates—Chatham Financial

Options trading surges as investors brace themselves for US regional bank volatility by Stephen Gandel and Nicholas Megaw and Colby Smith—The Financial Times

Bank Turmoil Squeezes Borrowers, Raising Fears of a Slowdown by Jeanna Smialek—The New York Times

Banks' Demand for Reserves in the Face of Liquidity Regulations by Jane Ihrig—Federal Reserve Bank of St. Louis

Money Market Funds: Investment Holdings Detail—The Federal Reserve

Deposit Outflows Shine Light on Fed Program That Pays Money-Market Funds by Eric Wallerstein and Nick Timiraos—The Wall Street Journal

ICI Research Perspective: Trends in the Expenses and Fees of Funds, 2022—Investment Company Institute

FAQs: Reverse Repurchase Agreement Operations—Federal Reserve Bank of New York

US Resolution Trust Corporation by Aidan Lawson and Lily Engbith—SSRN

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What has been the impact on trade and the trade deficit since the U.S. implemented tariffs on steel, aluminum, and goods made in China?

Topics covered include:

• Has the shipping backlog been reduced at U.S. ports
• What are the dangers of running too high of a trade deficit
• How large is the U.S. trade deficit
• What has been the impact of U.S. tariffs on trade, domestic production, and prices
• How Chinese direct-to-consumer retail companies Shein and Temu are driving prices of goods ever lower
• Why consumers should demand greater visibility on how products they purchase are made

For more information on this episode click here.

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Show Notes

The ‘ship backup has ended’ at Los Angeles, Long Beach ports by Alejandra Salgado—Supply Chain Dive

America’s Trade Deficit Surged in 2022, Nearing $1 Trillion by Ana Swanson—The New York Times

Industry study tracks China tariffs’ added costs to importers and consumers by Ben Unglesbee—Supply Chain Dive

Costs of Trade Wars: The Distributional Consequences of US Section 301 Tariffs Against China by Kara M. Reynolds—SSRN

Certain Effects of Section 232 and 301 Tariffs Reduced Imports and Increased Prices and Production in Many U.S. Industries by USITC—United States International Trade Commission

Economic Impact of Section 232 and 301 Tariffs on U.S. Industries by USITC—United States International Trade Commission

The other Chinese apps taking the US and UK by storm by Chelsea Bailey—BBC

Secretive Shein Founders Build $40 Billion Fortune in Rapid Fashion by Venus Feng and Pei Yi Mak—Bloomberg

Shein sets ambitious revenue target ahead of IPO by Rachel Douglass—Fashion United

Shein copycats chase its explosive growth by Eleanor Olcott, Qianer Liu, and Gloria Li—The Financial Times

Temu’s Big Haul by Ella Apostoaie—The Wire China

The High Price of Fast Fashion by Dana Thomas—The Wall Street Journal

Stealing More than Just Designs: Utilizing Environmental Law as a Remedy to Design Piracy by Fast Fashion Brands by Spencer Kluth—SSRN

Shein’s Cotton Tied to Chinese Region Accused of Forced Labor by Sheridan Prasso—Bloomberg

Worn: A People's History of Clothing by Sofi Thanhauser—Penguin Random House

More than ever, our clothes are made of plastic. Just washing them can pollute the oceans. by Brian Resnick—Vox

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413: What if the World Stopped Shopping?

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David has a fascinating discussion with Kristof Gleich about active management, indexing, and how ETFs and mutual funds really work.

Topics covered include:

• Should individual investors even try to select active mutual funds
• Is there an indexing bubble
• Why are there so many new ETFs
• Should we be worried about an ETF flash crash
• What do ETF market makers and authorized participants do
• Do SEC yields for international equity mutual funds and ETFs reflect the impact of dividend withholding taxes

As the president and CIO of Harbor Capital Advisors, Inc. Kristof Gleich oversees all Investment, Distribution & Marketing and Executive Office functions at Harbor. He provides insight while helping lead Harbor’s strategic growth plan.

Previously, Kristof was a managing director and global head of manager selection at JP Morgan Chase & Co. He has a degree in Physics from University of Bristol. 

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"If something is profitable, it will be done," says Martin Wolf of the Financial Times. We explore how profits will drive the energy transition and how and where water from the Colorado River is used.

Topics covered include:

• How profits have led to higher energy market share for natural gas and renewal energy
• What is hindering a faster transition to renewables
• What is contributing to a water shortage in the southwestern U.S,. and how will it be resolved
• Why big infrastructure projects often aren't the best solution to solve a problem
• Why some regulation is helpful

For more information on this episode click here.

Show Notes

The market can deliver the green transition by Martin Wolf—The Financial Times

Where the Water Goes: Life and Death Along the Colorado River by David Owen—Penguin Random House

Economics may take us to net zero all on its own by John Burn-Murdoch—The Financial Times

The Gregor Letter by Gregor Macdonald—Substack

The Inflation Reduction Act: Here's what's in it—McKinsey & Company

Management of the Colorado River: Water Allocations, Drought, and the Federal Role by Charles V. Stern and Pervaze A. Sheikh—Congressional Research Service

The Supreme Court wrestles with questions over the Navajo Nation's water rights by Becky Sullivan—NPR

As the Colorado River Shrinks, Washington Prepares to Spread the Pain by Christopher Flavelle—The New York Times

Can Western States Agree on the Future of the Colorado River? by Matt Vasilogambros—Pew

A matter of priorities by DeEtte Person—Know Your Water News

Average monthly water prices in the United States as of July 2022, by selected state—Statista

Election to Designate AMA for the Douglas Basin—Arizona Department of Water Resources

Arizona Is in a Race to the Bottom of Its Water Wells, With Saudi Arabia’s Help by Natalie Koch—The New York Times

Arizona gets serious about piping water from Mexico in nonbinding desalination resolution by Brandon Loomis—AZ Central

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What caused Silicon Valley Bank to collapse in only 44 hours, and how likely will the contagion spread, leading to other bank failures?

Topics covered include:

• How losses on bonds blew up SVB's balance sheet
• How is Silicon Valley Bank similar and different than other regional banks
• What the FDIC and Federal Reserve are trying do to restore confidence and stop bank runs
• How a weakening of the Frank-Dodd bank regulation act set the stage for SVB's failure
• Why bailing out uninsured depositors is controversial
• Three scenarios of what might happen next
• Actions we can take to protect ourselves when private money fails

For more information on this episode click here.

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Show Notes

Silicon Valley Bank launches $2.25bn share sale to shore up capital base by Joshua Franklin and Antoine Gara—The Financial Times

US Bank Capital Regulation: History and Changes Since the Financial Crisis by John Walter—Economic Quarterly

SVB's 44-Hour Collapse Was Rooted in Treasury Bets During the Pandemic by Brian Chappatta—Bloomberg

Remarks by FDIC Chairman Martin Gruenberg at the Institute of International Bankers—FDIC

How Silicon Valley Turned on Silicon Valley Bank by Ben Foldy, Rachel Louise Ensign, and Justin Baer—The Wall Street Journal

SEC Filings Details—Silicon Valley Bank

FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California—FDIC

Uninsured Silicon Valley Bank depositors seek fire sale of assets by Joshua Franklin, Sujeet Indap, Colby Smith, and George Hammond—The Financial Times

Join Statement by Treasury, Federal Reserve, and FDIC—Federal Reserve

FDIC Acts to Protect All Depositors of the former Silicon Bank, Santa Clara, California—FDIC

US regulators are setting a dangerous precedent on SVB by Sheila Bair—The Financial Times

Back-to-Back Bank Collapses Came After Deregulatory Push by David Enrich—The New York Times

Will another bank fall? by Robert Armstrong—The Financial Times

Shares in US regional banks close sharply lower over fears of deposit flight by Jennifer Hughes, James Fontanella-Khan, Ortenca Aliaj, and Brooke Masters—The Financial Times

Charles Schwab shares drop 12% even as the firm defends financial position by Yun Li—CNBC

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How leveraged loans and CLOs work and how to invest in them. What are the risks and opportunities with the new CLO ETFs.

Topics covered include:

• What are the characteristics of leveraged loans and how David has invested in them in the past, both professionally and personally.
• Why LIBOR reference rate for leveraged loans is being phased out
• What is the current investing climate for leveraged loans
• How collateralized loan obligation work
• Why insurance companies are fighting over CLOs
• What are the different ways to invest in CLOs

For more information on this episode click here.

Show Notes

Companies, Lenders Clash Over Loan Spreads in Switch from Libor by Mark Maurer—The Wall Street Journal

Libor: The Spider Network—The Wall Street Journal

Collateralized Loan Obligations (CLOs) Primer by Jennifer Johnson—NAIC and The Center for Insurance Policy Research

Investing In The Middle: Tapping Into Opportunities in Middle Market Lending—AllianceBernstein

Top 10 US CLO Managers: CLO AUM (30 Nov 2022)—CLO Research

Default, Transition, and Recovery: 2021 Annual Global Leveraged Loan CLO Default And Rating Transition Study—S&P Global Ratings

U.S. BSL CLO And Leveraged Finance Quarterly: Is Winter Coming? by Stephen Anderberg, Daniel Hu, Et al.—S&P Global Ratings

Risk Assessment of Structured Securities - CLOs by Eric Kolchinsky, Charles A. Therriault, Marc Perlman—National Association of Insurance Commissioners (NAIC)

Monthly US CLO Index - December 2022—Fitch Ratings

Private equity-backed insurers under US scrutiny over risky loans by Antoine Gara and Sujeet Indap—The Financial Times

Private Equity Taps Insurers' Cash to Speed Up Growth by Matt Wirz and Leslie Scism—The Wall Street Journal

Investments Mentioned​

Virtus Seix Floating Rate Income Fund (SAMBX)

Virtus Seix Senior Loan ETF (SEIX)​

Invesco Senior Loan ETF (BKLN)​

DoubleLine Flexible Income Fund (DFLEX)​

BlackRock Debt Strategies Fund (DSU)

BlackRock AAA CLO ETF (CLOA)

iShares Treasury Floating Rate Bond ETF (TFLO)​​

Janus AAA CLO ETF (JAAA)

Janus B-BBB CLO ETF (JBB)​

VanEck CLO ETF (CLOI)

Eaglepoint Credit Company (ECC)

Oxford Lane Capital Corp (OXLC)

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Do activist hedge funds including Carl Icahn's add value? Should you invest in Icahn Enterprises L.P., a conglomerate with a 15% dividend yield and a stake in Carl Icahn's hedge fund?

Topics covered include:

• How Icahn Enterprises' (IEP) investment performance compares to Berkshire Hathaway
• How to analyze individual stocks and why it is challenging
• What are activist hedge funds and do they make a positive performance difference
• What are the risks and opportunities of investing in IEP

For more information on this episode click here.

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Show Notes

Icahn Enterprises L.P.

The Activism of Carl Icahn and Bill Ackman by Jason D. Schloetzer and Richard Lee—SSRN

The Long-Term Effects of Hedge Fund Activism by Lucian A. Bebchuk, Alon Brav, Wei Jiang—SSRN

Did They Live Happily Ever After? The Fate of Restructured Firms After Hedge Fund Activism by Jongha Lim and Wonik Choi—SSRN

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242: Should You Let Warren Buffett Manage Your Money?

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Why long-term U.S. stock market outperformance could be because it has avoided major catastrophes. Does an over-reliance on historical U.S. stock returns when modeling retirement outcomes lead to spending rates that are too high?

Topics covered include:

• Why you might consider earthquake insurance
• What is survivorship bias and what are some examples
• Why the U.S. is an outlier when it comes to stock market performance
• Why the 4% retirement spending rule might be too high
• If the 4% spending rule is too high, what can retirees do instead to have enough for retirement
• Why the size and scale of the U.S. economy provide some resistance to catastrophes

For more information on this episode click here.

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Show Notes

Homefacts

Survivorship Bias—Matt Rickard

Is The United States A Lucky Survivor: A Hierarchical Bayesian Approach by Jules H. van Binsbergen, Et al.—SSRN

The Financial History of Emerging Markets: New Indices by Bryan Taylor—SSRN

The (Time-Varying) Importance of Disaster Risk by Ivo Welch—Financial Analyst Journal

The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets by Aizhan Anarkulova, Et al.—SSRN

The 2.7% Rule for Retirement Spending by Ben Felix—YouTube

Trends in Retirement and Retirement Income Choices by Tiaa Participants: 2000–2018 by Jeffrey R. Brown, Et al.—SSRN

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250: Investing Rule One: Avoid Ruin

326: The New Math of Retirement Spending and Investing

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