Dear valued client,
Markets posted slight losses this week as investors have shifted their attention from inflation to recession concerns. There is some logic behind this as higher interest rates have put an uncomfortable squeeze on the economy. Housing has been disproportionately affected; U.S. home sales fell 7.7% in November, a record 10th straight month of declines, as high mortgage rates are pushing buyers out of the market.
Key economic news was released this week; U.S. GDP grew at 3.2% in the third quarter of 2022, compared to -1.6% in Q1 and -0.6% in Q2. Data was also released on consumer spending, which is the main driver of economic growth. The PCE index (personal-consumption expenditures) rose 5.5% in November, down from 6.1% in October. This is positive news for the Federal Reserve, indicating consumers are reducing their spending amid higher interest rates.
In geopolitical news, Ukrainian President Volodymyr Zelensky traveled to Washington, DC. on Wednesday – his first foreign trip since Russia’s invasion began. During his stay, he met with President Biden and addressed Congress. The main reason for his visit? Weapons. Zelensky has been convincing allies to supply the sophisticated weapons needed to fend off Russia’s intense attacks on Ukraine’s cities as well as its energy infrastructure. As a result, Congress announced a $45 billion package in Ukrainian aid.
News broke this week that the Taliban, the ruling body in Afghanistan, have added more restrictions on women’s access to education. Women are now prohibited from attending public and private universities in Afghanistan. This degree comes after women’s prohibition from attending middle- and high school, as well as going to parks and gyms.
In light of Afghan women’s plight, I’d like to share a passage from the book Skin in the Game, by Nassim Taleb (which I highly recommended). The quote centers around the essential ingredient of a free society; freedom of speech. It reads,
“The very idea behind the First Amendment of the Constitution of the United States is to establish a silver rule – style symmetry: you can practice your freedom of religion, so long as you allow me to practice mine; you have the right to contradict me so long as I have the right to contradict you. Effectively, there is no democracy without such an unconditional symmetry in the right to express yourself, and the gravest threat is the slippery slope in the attempts to limit speech on grounds that some of it may hurt some people’s feelings. Such restrictions do not necessarily come from the state itself, rather from the forceful establishment of an intellectual monoculture by overactive thought police in the media and cultural life.”
I would like to leave you with one other passage from Skin in the Game as Christmas – a religious-derived holiday – is at our doorstep.
“When we look at religion, and, to some extent, ancestral superstitions, we should consider what purpose they serve, rather than focusing on the notion of ‘belief,’ epistemic belief in its strict scientific definition. In science, belief is literal belief; it is right or wrong, never metaphorical. In real life, belief is an instrument to do things, not the end product. This is similar to vision: the purpose of your eyes is to orient you in the best possible way, and get you out of trouble when needed, or help you find prey at a distance. Your eyes are not sensors designed to capture the electromagnetic spectrum. Their job description is not to produce the most accurate scientific representation of reality; rather the most useful one for survival.”
Have a terrific weekend and Holiday season.
PW
