Nvidia, US Treasuries & The American Consumer | Recession 2024: Part 1
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- Опубліковано 16 тра 2024
- What do Nvidia, US Treasuries & the American Consumer have in common? That IS what we’ll be talking about because all three of these will help us answer the ultimate question in Part I of our two-part Recession 2024 mini-series - what has our country done right so far & why hasn’t a US recession happened yet?
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Part II: • Recession 2024 (Part I...
TIPS vs I-Bonds: • Buy I-Bonds or TIPS 20...
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*Sources can be found in first pinned comment
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Our Bond Courses vs UA-cam Membership | Which Is Right For You: ua-cam.com/video/H5h4Eyh0hjo/v-deo.html
Bond Beginners Course Sneak Peak | I-Bonds vs TIPS: ua-cam.com/video/uXPzbje1g2E/v-deo.html
Bond Masters Course Sneak Peak | How To Build A Bond Ladder: ua-cam.com/video/p90IDmXn19s/v-deo.html
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Here is the overview for Bond Beginners:
1. Bond Basics
What A Bond Is & How A Bond Works
Why Invest In Bonds
New Issue vs Secondary Market Bonds
Interest Rates & Bond Prices
Current Yield & Yield To Maturity
Always Remember This!
Buying At Par, Above Par & Below Par
Different Types Of Bonds
Wrap-Up
2. The Risks Of Bond Investing
Seven Key Bond Risks
Credit Risk
Interest Rate Risk
Reinvestment Risk/Call Risk
Inflation Risk
Liquidity Risk
Currency Risk & Country Risk
Bond Risk Mitigation Strategies
Wrap-Up
3. US Treasuries Overview
What Are US Treasuries
Why Invest In Treasuries
Where Can You Buy Treasuries
How Are Treasuries Taxed
Wrap-Up
4. Treasury Bills
What Are Treasury Bills (T-Bills)
When Do T-Bill Auctions Happen
Where Should You Buy At Auction
Auto-Roll When Buying At Auction
Where To Find Recent Auction Results
High Rate vs Investment Rate
Reopening Auctions
Cash Management Bills (CMBs)
Buying & Selling On Secondary Market
Wrap-Up
5. Treasury Notes & Bonds
What Are Treasury Notes & Bonds
When Do Auctions Happen
Buying Treasury Notes & Bonds
Auction High Yield vs Interest Rate
Floating Rate Notes (FRNs)
Treasury Zeros (STRIPS)
Wrap-Up
6. TIPS (Inflation-Protected)
What Are TIPS
When Do TIPS Auctions Happen
Nominal vs Real Yields
Negative Yields
How Do You Adjust TIPS For Inflation
Taxes On Phantom Income
Secondary Market Liquidity
Wrap-Up
7. I-Bonds (Inflation-Protected)
What Are I-Bonds
How Does I-Bond Interest Work
I-Bonds vs TIPS
The Annual I-Bond Limit
Wrap-Up
8. Agency Bonds
The Universe Of Bonds
What Are Agency Bonds
How Are Agency Bonds Taxed
Treasuries vs Agencies
Who Might Want To Consider Agencies
Yield-To-Call & Yield-To-Worst
Where Can You Buy Agency Bonds
Wrap-Up
9. Municipal Bonds
Our Bond Universe Gets More Complex
What Are Municipal Bonds
How Safe Are Munis
How Are Munis Taxed
The De Minimis Rule
Social Security & Medicare Premiums
Treasuries, Agencies & Munis
Who Might Want To Consider Munis
Wrap-Up
10. Corporate Bonds
Our Bond Universe Is Complete
What Are Corporate Bonds
How Safe Are Corporates
Corporate Bond Hierarchies
Five Key Features Of Corporate Bonds
How Are Corporates Taxed
Treasuries vs Corporates, Etc.
Who Might Want To Buy Corporates
Wrap-Up
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Here is the overview for Bond Masters:
1. Stocks vs Bonds
Historical Performance
Are Bonds Really Less Volatile
Why Invest In Bonds
Accumulation vs Decumulation
Allocation of Stocks vs Bonds
Wrap-Up
2. Which Bonds Might Be Right For You
Treasuries & Other Types of Bonds
Nominal vs Real Yields
Inflation vs Non-Inflation-Protected
Taxable vs Tax-Advantaged Accounts
Wrap-Up
3. Bond Ladders & Other Bond Strategies
Normal vs Inverted Yield Curve
What Is A Bond Ladder
5 Important Bond Laddering Questions
Laddering When Rates Are Rising
Laddering When Rates Are Falling
Laddering When Rates Are Uncertain
What Is A Bullet
What Is A Barbell
Wrap-Up
4. Holding to Maturity vs Selling Early
Why Hold to Maturity
When To Sell Early Before Maturity
Tax Implications Of Selling Early
Wrap-Up
5. Individual Bonds, Bond Funds, Etc.
Why Buy Individual Bonds
Why Buy Bond Funds
Bond Fund Considerations
Key Bond Fund Concepts
CDs vs Treasuries
Other High-Yield Investments
Wrap-Up
6. Our B.E.S.T. Model Portfolios By Age
Our B.E.S.T Model Portfolios By Age
Model Portfolios In The Industry
B.E.S.T Model Portfolio Difference
How Much Do You Need To Retire?
How I Use The Rules of 100, 110, & 120
B.E.S.T Model Portfolios (20s)
B.E.S.T Model Portfolios (30s & 40s)
B.E.S.T Model Portfolios (50s & 60s)
B.E.S.T Model Portfolios (70s+)
Wrap-Up
7. The Decumulation Phase
What Is The Decumulation Phase?
Bear Markets & Recessions
What Can You Do In Bad/Bear Markets
Decumulation Tax Considerations
The 4% Rule
The Bucket Strategy
The Flooring Approach
Jen’s Bucket Strategy With A Twist
Wrap-Up
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SOURCES FOR TODAY'S VIDEO:
home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics
www.wsj.com/economy/global/us-economy-strongest-world-imf-projections-8e707514
finance.yahoo.com/quote/CNY=X/
companiesmarketcap.com/
www.techopedia.com/top-10-countries-leading-in-ai-research-technology
data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CN
www.whitehouse.gov/briefing-room/statements-releases/2023/08/16/fact-sheet-one-year-in-president-bidens-inflation-reduction-act-is-driving-historic-climate-action-and-investing-in-america-to-create-good-paying-jobs-and-reduce-costs/
www.whitehouse.gov/briefing-room/statements-releases/2024/03/20/fact-sheet-president-biden-announces-up-to-8-5-billion-preliminary-agreement-with-intel-under-the-chips-science-act/#:~:text=Thanks%20to%20President%20Biden's%20CHIPS,jobs%20are%20making%20a%20comeback.
www.whitehouse.gov/briefing-room/statements-releases/2023/08/09/fact-sheet-one-year-after-the-chips-and-science-act-biden-harris-administration-marks-historic-progress-in-bringing-semiconductor-supply-chains-home-supporting-innovation-and-protecting-national-s/
fred.stlouisfed.org/series/DPCERE1Q156NBEA
fred.stlouisfed.org/series/PSAVERT
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Looking forward to part 2 of this series. I appreciate how you bring out pros and cons of an issues. A balanced approach backed up by facts is appreciated by me.
I don't have anything to say except what a beautiful video this is.
Govt spending to keep the economy afloat is like the right hand doesn't know what the left hand is doing. There is a leak in the ship but as long as the ship stays on plane then it won't sink. Though I think the ship will slow and the leak will become a more major issue.
Stay tuned for Part II
The problem is the “Inflation reduction Act” focus on clean energy which might not be needed because we already have nuclear power. The Chips act is not innovative it just tries to bring an existing technology away from Taiwan to the safety of US soil. These massive government spendings cannot be compared to the previous innovative US government investments in things like the internet. IMHO the Inflation Reduction Act and the Chips act are just a huge waste of money that brings nothing to the US.
Name a country that doesn't spend. New technologies require it.
Jennifer, I really appreciate not only your information, but your teaching style. You know the points you want to make and you make them very clearly. I’m eagerly awaiting parts two and three in this series. The content is exactly what I’m interesting in knowing right now.
Later, a video I’d be interesting in, is one on the relative safety of banks vs. brokerage accounts in the event of a collapse. If the FDIC can’t deliver in such a catastrophic event, are brokerage firms like Fidelity in better positions to weather the storm?
Thank you again!
Many brokerage firms offer SIPC insurance protection up to $500k per account. If you are worried about the cash, you can easily just buy T-bills in your brokerage, which is 100% backed by the US govt.
If the US govt or US dollar fails, the entire global stock mkt would fall as well and we got bigger issues.
I wasn’t clear in explaining my concern. I’m not confident in the FDIC being able to keep their bargain and cover peoples losses in the event of a widespread banking crisis. Same goes for brokerage accounts.
Excellent and insightful video.
Your content is a breath of fresh air.
I look forward to part 2. Everyone seems to be convinced we can just print our way out of any hiccup - also known as the "Fed put". This has driven asset prices to crazy high levels because everyone believes the printing presses will turn on and we will therefore always choose inflation at the expense of the dollar. I'd love to hear the counter to that.
You work SO hard....better you than me 🙂
Very insightful, thank you!
Thanks for another very well-done video. Looking forward to part 2!
I find this video is very informative. Thank you.
Great job AGAIN! You have a great talent to explain complex things in a clear and concise way.
Jen,
Thanks for a great and informative video. Looking forward to #2
You're a great teacher Jenn, thank you for the info.
Thanks for doing this interesting video. I'm really looking forward to Part II.
Very informative video. Thanks
You are a blessing Jennifer! I was literally thinking to myself yesterday "I wish a familiar, trustworthy content creator would share some updated thoughts on our economic situation"
Thanks!
We need to recognize that U.S. leads globally in both innovation and entrepreneurship. This is due to reasonable levels of taxation and government spending. Also consistent application of rules to business. If the U.S. moves away from these in terms of excessive taxation, large deficit spending and crony capitalism. We will emulate those slower economies of EU and Asia.
Looking forward to part two.
An outstanding informational video about the USA and world economy. I learned a lot. thanks
Excellent. Thank you. Maybe you can have a video on the de-dollarization push and its impact, if any, in our lifetime
Stay tuned - it's already on the list, but may take us some time to get through. I know it interests quite a few in the community.
Superb analysis, analysis like no other. It was logical and clear like no other. Better done than any of the talking heads on the finance TV channel. Better than any politician, of either party. I can't wait for Part 2!
Jennifer, you are awesome, I learned to trade T Bills by watching your videos.
👋👋👋👋👋Great speech!
Great video ...
I'd love to learn more!
Great information and I am looking forward to part 2 when the other shoe drops.
All good. Great analyais. (But I wouldn't believe any hype from the White House, no matter who occupies it.)
You're seeing the sunny side in Part I :-) Stay tuned for Part II next week!
I was going to vote in the poll but I literally have no idea. The LEI has been predicting a recession for almost 2 years, the longest ever. The yield curve has been inverted for so long. It seems like the most predicted recession that hasn’t happened. So I’m not sure of anything at this point.
Weren't economists thinking that we have QE (from government spending) to thank for 'no recession' but it is why inflation has been very sticky. (going down very slowly)
I believe we have a QE vid coming up soon
Thank you Jennifer. I watched a video last week that referenced when the dollar value had some correlation to the value of gold. I kinda of understood the explanation. If you have any feedback on that topic it would be interesting.
Take care.
Hi Michael - We will add it onto our list of video topics. It requires more depth than I can cover in a comment!
Interesting
I have enjoyed and learned from your past videos but this video elevates you to an even higher level. Anyone who can explain Economics as clearly as this video deserves a lot of 👏. The Biden administration and campaign could learn from you what they need to convey to the American people about economic strategy and the state of the US economy.
Thank you so much for such excellent content. I really learn a lot from your channel. This was a great video.
I am currently sitting in Fidelity's money market fund (SPAXX) with cash earning 4.96%. It seems that this is much easier than buying and rebuying 4 and 8 week t-bills, etc., while earning essentially the same yield. I may look at locking in rates with some longer term bonds but while short terms rates are this high sitting in this MMF seems like a good idea. Since this hasn't been brought up as an option in any of your videos that I have seen I'm afraid I might be missing something? Is this a bad idea?
If you live in a state that taxes income, you will pay federal and state taxes on your MMF earnings. On Treasuries, you only pay federal taxes (no state tax) regardless of your state thus increasing your returns. Something to consider.
Really good point. But it's in an IRA. Do you know if I buy treasuries in an IRA do I avoid state taxes when I start withdrawals?
Amazing video! Nice work! It just needed some bald eagles. 🦅🦅🦅
Vanguard's long term economic outlook is also based on AI''s performance (or failure). It's going to be an interesting ten years.
I pass the word onto our editing team about the bald eagles
I want to learn more !!
Another great video Jennifer however, I can’t agree with you on the merits of all the government spending and giveaways that have been happening in this country since 2020. I can’t help but think our big run up in the National Debt is not going to end well. I especially worry for my children and grandchildren. Also, I thought I heard on several business shows that consumer credit card debt is climbing like a rocket and that sounds bad. I hope your rosy view is right but I fear it’s not.
My takeaway from this video was primarily an explanation of why we’ve avoided a recession so far - not that these fundamental reasons will prevent it from happening in the future. I don’t think Jennifer claimed the government and consumer spending won’t create its own problems going forward (it seems reasonable that it could worsen the severity of an eventual recession), and any “rosy” outlook was mainly about the foundation of innovation driving the economy.
1. What Tyler said (thank you Tyler btw)
2. Please stay tuned for Part II
3. There are a lot of details to the CC data that is quoted which may change the narrative (e.g., most cc numbers are nominal meaning they include inflation, some include CC debt that is PAID off every month, etc) - I cover this in the consumer spending section with the FRED data
Yes, and CC debt also has the highest delinquency rate.
Great video . Wondering ... Who is your primary target age demographic? Young or nearly retired investors? Also, are you primarily in bonds or do you have a Channel that focuses on Equities?
At the moment, this channel focuses primarily on bonds
Well done! Next likely innovation which generates economic growth is quantum computing.
Any insights on the declining population and any impact on the economy would be interesting.
Great video, Jen. I’m hoping I can get your thoughts on this regarding portfolio diversification. Vanguard, Fidelity, Schwab, Blackrock, etc tend to recommend longterm portfolios with market weighted global diversification. That’s about 38% for a total international equity index and 62% for a total U.S. equity index. Do you recommend international diversification or do you believe it’s unneeded? I’ve back-tested a lot and while internationals occasionally outperformed the US it’s often not significant and over long periods of time I don’t see how it’s been of benefit to a portfolio vs just going 100% US. Thoughts
Stay tuned for Part II next week - especially the part towards the end about how we're changing our personal strategy
@@DiamondNestEgg Thanks. I know fixed-income products tend to be your focus here, but I'd love to know your thoughts regarding my original question on ex-us equity diversification. All the best and looking forward to part II.
Thanks much for sharing. Good analysis. Still there are worries. What's your take on the BRICS situation? How do we understand how the dollar fits in to this new gameplan? What is the gameplan? Eeesh. What about all of us dinosaurs?
Thanks again.
The number of jobs being created by those acts, even as self estimated by the Govt, is not that large a number to really impact avoiding recession. One months amount of openings? This is minor compated to the other 2 factors in my opinion.
Thank you Jen. I really enjoyed your presentation and analysis on the subject. Unfortunately many here do not realize the majority of government spending does not go to those in our society that need it most. Those so called "hand outs" are often mischaracterized and laid to blame for the deficit. Why, because the needy don’t have a voice in DC. Healthcare, education and housing in a country as wealthy as ours is woefully lacking and underfunded. The devil is in the details of the budget allocations and inequitable tax revenues. I digress thanks again and I look forward to your next presentation.
It is a good synopsis of the current environment. However I believe as we move past the 2024 election & into 2025, the deficit spending, especially the higher defense spending will catch up to the U.S. economy.
This is a great informative view on the state of the economy. There is so much misinformation and chest pounding out there in regards to the economy. Thank you 👍🏻👍🏻
Yes if you guys went a bit into economics I wouldn't mind.
In American history, every single time bond yields have been inverted this long there's been a recession. It's now been inverted one of the greatest number of days in our history. It only has some of the worst recessions ever including the Great depression to exceed.
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What is your opinion on BRICS? 🤔
Its not even worth mentioning
Oh man this video is going to piss off a lot of the US haters lol. Appreciate the video though. Very informative. Think you!
Probably, but there are enough other channels they can go to see what they wish. This series is for our DNE folks. Glad you enjoyed the vid!
I can support your analysis of the strength and importance of the U.S. dollar. The current 'death of the dollar' meme is not supported by the largest currency dynamics. They are:
1) The U.S. economy: 330+ million people exchanging goods and services, denominated in dollars in payment
2) International trade: The U.S. is #1 or #2 trading partner with practically every economy. That trade is denominated in dollars
3) The Eurodollar market: this gets little attention, but it is (probably) $26T (yes, trillion). They are loans issued by non-U.S. banks, denominated in dollars. The principal and interest must be paid in dollars. BTW, this market is not regulated. And the third largest eurodollar lender is...China.
These three factors each imply enormous demand of the dollar.
The fact that China has been selling U.S. Treasuries has attracted a lot of attention, but the cause has been misinterpreted. There is a coming dollar shortage, and China can see it coming. They need dollars, and must liquidate Treasuries to obtain dollars. They anticipate that the 7.25 Yuan could become the 14.50 Yuan slowly, then all at once. And then, what?
The US CHIPS Act (EU has similar program) in practice (so far) is not innovation investing but supply chain risk mitigation for US economy. US semiconductor contribution to GDP is less than 1%, however an estimated 12% of US GDP is semiconductor dependent. Taiwan is leading manufacturer and China supplier of most of the rare earth materials. My guess is that like COVID much of this money will benefit the awardee companies but in the end unproductive to the intended goal to double US capacity.
Let's see - only time will tell. Stay tuned for Part II.
Wonder how BRICS will affect all this in the future...
We've added this onto our video list
Burning Q: Tofu press or weights?
Tofu press - less messy
@@DiamondNestEgg 😊
Great video, but I would not have used the White House's press release statistics as a source.
Never bet against America. Rumors of our demise have been greatly exaggerated.
The internet is full of anti-american trolls
Mark twain once made a comment about his death being done the same
Hope I am NOT foolish for buying treasuries. My wife and now have a boatload.......🥴
We also own a boatload...
We may not have a recession in2024 due to presidential cycle
hahahaha, like a President actually can micromanage the economy.
@@stephenharper6638 saying you don’t know what the presidential cycle is with out actually saying it.
Debt payments recently overtook Medicare payments. I think we have entered uncharted territory.
Stay tuned for Part II
I just sold all my Tesla stock and bought Nvidia.
Our government is the worst thing about this great country. It’s amazing we remain so productive given their endless meddling and insane spending.
China BYD super cheap RVs are only $10K with better technology,most functions with voice control and good interior and longer mileages than model 3, but politicians won't let ordinary Americans have it at low cost. all the Consequences of abusively printing dollars are finally taken by us. Let's see.........
Those cars are catching fire in China
They dont pass rigorous safety standards which is why they are banned in the USA.