Good For The Economy | The Daily Peel | 4/6/22

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Market Snapshot

It was a team effort yesterday as both bond and equity traders conspired to sink literally everyone’s portfolios, from your mom’s 401(k) to your $69.42 on Robinhood. JPow’s almost-replacement as Fed Chair, Lael Brainard, issued hawkish commentary that sent both bonds and equities lower, ultimately exposing why she didn’t get Joey B’s nomination — the Fed Chair’s job is, of course, to pump calls, not turn us into bears. By close, the Nasdaq fell 2.26%, while the S&P lost 1.26%, and the Dow sank 0.80%. 

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Let’s get into it.

Banana Bits

• The most dovish governor at the Fed Brainard says to expect rate hikes, balance sheet reduction, and hella losses in your PA.
• Once left for dead, Hertz has done more than just live since declaring bankruptcy, they’ve thrived, signing a deal for another 65,000 EVs this week
• We were tired of no value middlemen and illiquidity in the commercial real estate market. So, here's a little gift for you. Besides, tax-advantaged opportunities, check. Unfettered access for all, check.
• The highest concentration of d-bags in the entire world, Sequoia Capital, names a new Chief D-Bag
• Despite a million meetings and a million and one lectures from Greta Thunberg, the climate is still f*cked. Maybe we should ramp up the ACs?
• After a rousing hearing filled with hissy fits and productive discussion on things like racist babies, Ketanji Brown's SCOTUS confirmation looks guaranteed

Macro Monkey Says

Have Sex, It’s Good for the Economy — Sure, there’s a couple nice things about sex I guess, but none better than the economic growth it creates. And in the US, let’s just say we’re not doing a great job getting laid.

Another economic record was set in 2021, but it’s getting much less attention than deserved. The U.S. birth rate fell to the lowest level ever. Did you hear me? In the entire history of the United States, going back to 1776 when they didn’t even know god damn dinosaurs existed, no year has seen lesser births relative to population than last. I cannot stress this enough: That is not good.

Forget about inflation, rates, unemployment, the men's underwear index, and all those other important indicators for a minute. Today, we’re talking about population. For much of the 2010s, the US population grew by ~2mn people per year, not bad. In 2020, we added 1.1mn, but in 2021, that number went skydiving and fell to just 393,000.

A key to any modern, functioning economy as we know it is population growth. There are so many factors to consider when it comes to driving a nation’s population growth, and we’ll touch on a few. But before we get there, allow me to insult your intelligence: just know that populations are affected by three things: births, deaths, and immigration.

Global birth rates have absolutely plummeted alongside the expansion of human development. Basically, it seems that as countries develop, birth rates fall. We can’t force people to have children (I hope that’s obvious) so we’ll have to look to the other two to answer our prayers for more people.

Millennials in general have recognized that children correlate with poverty. So what did they do? They kept it in their pants… compared to their parents at least. This is widespread across the world, regardless of the color of your passport.

Even Elon is a proponent of reproduction, advocating that the planet’s population is not growing at a sustainable rate to support life on this planet and beyond!

This might be a controversial take, but I’m actually anti-death. Despite these beliefs, the c-virus came along and took the lives of about 1mn Americans. Outside of the pandemic, US life expectancy has been horribly impacted by deaths of despair induced by things such as the opioid epidemic, obesity-induced cardiovascular disease, and diabetes.

Every time McDonald’s sells another Big Mac, we get a little bit more obese and help drive the leading causes of death in things like heart disease.

Like, we’ve already recognized, the only way populations grow is through positive net migration or having more immigrants than emigrants. With births, US immigration has nosedived in recent years for a plethora of reasons, but none have superseded basic policy decisions.

Described as a “superpower” for the US, immigration fell by 75% between 2016 and 2021, taking in just 250k immigrants last year. Of course, some of that is due to the pandemic, but the primary driver has been the Federal government’s classic incompetence in drafting effective laws, this time with respect to immigration. As we stand now, things don’t look great for 2022.

The formula is pretty simple: more people = more economic growth = more money. We all want this, but we can’t seem to figure out how to get there. If this trend of slowing population growth continues or dips negative, the super-long-term outlook for the US economy is a scary sight, like most other developed economies.

It’s pretty easy, apes; just have sex, stay healthy, and let in another immigrant or two. We got this, right?

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What's Ripe

Spirit Airlines ($SAVE) — If you like flying the $hittiest of coach experiences with seats that don’t recline, oh, have I got news for you! Even though Spirit airlines has been in like an 8-year downward spiral, JetBlue has made a $3.6B all-cash offer to acquire the low-budget, no-budget Spirit Airlines.

This unsolicited “out of the JetBlue” offer has sent the budget airline’s stock soaring, up more than 22.4% yesterday to levels it hasn’t seen since early February of this year.

What's Rotten

Thought Banana

On Twitter → In Twitter — Inflation is hitting hard, and as a result, many Americans have been forced to take on additional jobs. Just looking at one example, a very average and everyday man from Austin, TX, recently had no choice but to take on his like 8th job just to feed his family. Even crazier, this man was forced to spend around $2.75bn just to get the job, proving how crazy the labor market really is, too.

But despite the egregious cost, it does look like a pretty sweet job. The man, who goes by the name Elon Musk, purchased his way to a spot on the Board of Directors of Twitter. And Elon actually has quite the history with and following on Twitter, racking up 80.5mn followers and approximately infinite fights with low-level celebrities and organizations like Sen. Bernie Sanders and the Securities and Exchange Commission.

Now, Mr. Musk is ready to take his Twitter fighting skills to the next level: by fighting Twitter itself. Already, Musk and CEO Parag Agrawal have publicly demonstrated their, uhh… let’s call it “sensitive” relationship.

Not much is known about little-known Musk’s plans for the service. Pretty much every human being ever is in agreement that Twitter is the Derrick Rose of social media platforms; coming out strong, but then struggling and never really living up to its full potential.

Wise Investor Says