The Financial Riddler -- 8-16-24
This will be embarrassing. Hide your answers from your children.
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Is the S&P 500 at its all-time peak?
a. Yes
b. No
And the answer is …
The answer is no. It’s close though. The peak — 5,667 — was reached on July 16th. Yesterday’s close was 5,554, just 2 percent lower. The S&P fell 8 percent between July 16th and August 5th and then rose 7 percent in the following 11 days. Year to date, the S&P has risen a whopping 17 percent!
In December 2021, 30-year TIPS were yielding negative one half percent, a record low. In October 2023, the yield was 2.6 percent — a 14-year high. What is the current yield on 30-year TIPS?
a. 3.2 percent
b. 2.7 percent
c. 2.4 percent
d. 2.0 percent
e. 1.7 percent
f. 0.3 percent
And the answer is …
The answer is 2.0 percent. This is still extremely high compared to what we’ve seen over the past 14 years. This podcast shows you how to build a TIPS ladder to help floor your retirement income.
If last month’s inflation rate persists each month for the next 11, what will be the inflation rate between July 2024 and July 2025?
a. 5.7 percent
b. 4.9 percent
c. 3.4 percent
d. 2.4 percent
e. 1.1 percent
And the answer is …
The answer is 2.4 percent. This is close to the Federal Reserve’s long-run 2.0 percent inflation target.
How many states have constitutional amendments on their ballots this November that protect or extend the right to abortion?
a. zero
b. Two
c. Four
d. Six
e. Eight
And the answer is …
The answer, as of today, is eight. Since 2022, when the Supreme Court nullified Roe v. Wade, 14 states have banned abortions under any or essentially any circumstances. The electorates in seven states — California, Kansas, Kentucky, Michigan, Montana, Ohio and Vermont — have already ratified abortion rights. Currently, the right to an abortion is on the November ballots of Colorado, Florida, Maryland, Nevada, New York, South Dakota, Arizona, and Missouri. Nebraska, Montana, and Arkansas may join this group. Note that abortion, except for medical emergencies, is currently entirely banned in Missouri. Florida has a ban after 6 weeks. In Arizona, the limit is 15 weeks.
Has the total number of U.S. abortions risen or fallen since Roe v. Wade’s nullification?
a. Risen
b. Fallen
And the answer is …
The answer is risen. Compared with 2020, total abortions in 2023 were 11 percent higher. The U.S. population grew by 1 percent over this period. Hence, population adjusted, abortions are 10 percent higher than before the Supremes’ ruling. The source for this stat appears highly credible. It includes both abortions performed by clinicians and those based on prescription medication. The question is why? With 22 states having either banned or restricted abortion access in 2022, what’s going on? One answer is that not all the bans and restrictions were in place in 2023. For example, Florida’s ban only went into effect in May. Perhaps the vocalized outrage by the majority (64 percent) of women supporting abortion rights led more of those considering having an abortion to decide to do so. Or maybe putting abortion in the public eye made clear to women in states with earlier abortion deadlines that they needed to act before the deadline or to have an out-of-state abortion. Expanded telehealth and expanded Medicaid coverage may also play a role.
By how much did the violent crime rate rise between 1993 and 2022?
a. 33.1 percent
b. 27.8 percent
c. 19.4 percent
d. 13.3 percent
e. 5.7 percent
And the answer is …
The answer is none of the above. (I’m not to be trusted.) Violent crime fell by half over this period! See the chart below from the Pew Research Center. Moreover, big cities saw a 13 percent decline in homicides in the first half of this year compared with the same period in 2020. But in some cities, homicides have soared. Portland leads the pack. It’s murder rate is 278 percent higher!
How large is projected 2024 global GDP?
a. $29 trillion
b. $41 trillion
c. $57 trillion
d. $95 trillion
e. $110 trillion
And the answer is …
According to the IMF, 2024 global GDP will total $110 trillion. U.S. GDP is projected at $28.8 trillion or roughly one quarter of world output. China is the world’s third largest economy with projected 2024 GDP of $18.5 trillion. The world’s second largest economy is the European Union with $18.8 trillion in projected 2024 GDP.
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