Economics Matters — Newsletter/Podcast/Financial Riddler
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What was President Trump’s approval rating 100 days into his second term?
a) 51 percent
b) 48 percent
c) 41 percent
d) 37 percent
e) 33 percent
And the answer is …
The answer is 41 percent. This is the lowest rating recorded in the past 70 years.
How much has the stock market dropped since President Trump took office?
a) 27.7 percent
b) 24.4 percent
c) 21.8 percent
d) 17.7 percent
e) 8.7 percent
And the answer is …
The answer is 8.7 percent. This is a much smaller decline than one might think given the 18.9 percent drop in the market between February 19th and April 8th. Hence, if you don’t want to “sell at the bottom” (as if anyone could know the bottom, this is currently not at a very low bottom), you may want to jump off or mostly off the stock market rollercoaster and design a safe or at least safer financial future. Specifically, this may be the time to reduce your equity exposure and engage in Upside Investing — a combined investment and spending strategy, described in this podcast. Upside Investing entails your spending only out of safe assets. Risky assets are assumed to be lost until they are found. When found (sold), they are converted to safe assets (TIPS (Treasury Inflation Protected Securities) providing you a higher living standard floor. MaxiFi Planner’s Upside Investing shows you the trade off between a putting less in the market and more in TIPS, the safest asset around. With Upside Investing you spend only out of TIPS and do so on a sustainable basis. I.e., Upside Investing generates a living standard floor. The more you tell MaxiFi you are allocating to TIPS (and, thus, the less to the S&P 500), the higher your floor and the lower the upside to your future living standard and vice versa. MaxFi shows this trade off. MaxiFi’s Upside Investing is super simple to run. But if you want me to run you through MaxiFi, including Upside Investing, please click the button below.
Leaving aside COVID, is Consumer Sentiment at its lowest value since the index was initiated in March 1978?
a) No
b) Yes
And the answer is …
The answer is no, but it’s pretty darn low. It was somewhat lower prior to the 1981-82 recession and the Great Recession.
In President Trump’s first 100 days, did the dollar fall relative to the Euro, Yen, and Pound by 16 percent or more?
a) Yes
b) No
And the answer is …
The answer is yes. The dollar’s decline since the start of the year is the largest since 1971, the year the U.S. abandoned the Gold Standard.
According to Torsten Slok, Apollo Global Management’s Chief Economist, the probability of a recession is
a) 50 percent
b) 60 percent
c) 70 percent
d) 80 percent
e) 90 percent
And the answer is …
The answer is 90 percent. You can hear Torsten discuss the economy at this Economics Matters podcast.
Trump has imposed massive tariffs on Chinese imports ranging, on some goods, as high as 245 percent. Most containers with Chinese imports enter the U.S. through the Port of Los Angeles. Compared with last year, how much have bookings for standard containers dropped?
a) 17 percent
b) 24 percent
c) 36 percent
d) 45 percent
e) 77 percent
And the answer is …
The answer is 45 percent.
What happened when the U.S. embargoed oil to Japan in August 1941?
a) Japan started using rice oil
b) Japan switched to solar power
c) Japan ended its invasion of China
d) Japan attacked Pearl Harbor
And the answer is …
You needed an easy one. Trump’s tariffs on China represent, effectively, a trade embargo on that country as well as an excuse for China to invade Taiwan. That could kick off a shooting war. Another terrible possibility: The tariffs are so high that China may tell other countries they can trade with China or the U.S., but not both. Many countries may choose China over the U.S. Chile’s exports to China are, for example, twice the exports with China that with the U.S.
How many robots does China use in manufacturing?
a) 1.7 million
b) 1.4 million
c) 1.1 million
d) .8 million
e) .5 million
And the answer is …
The answer is 1.7 million. Over a quarter of a million robots are being installed annually in China. China uses the most robots of any country in the world.
How is the approval rating as high as 41%? It may be the lowest in 70 years, but its being that high reflects quite badly on the American public.
What is the answer to #7?
(and, thank you for posting these riddlers, it is a good way for me to judge just how insulated I am from world economics)