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HEADLINE NEWS 👀

Argentina’s Wild Ride Default to Hedge Fund Darling

The latest hot trade on Wall Street isn’t crypto or AI, it’s Argentina. Yes, the country infamous for nine debt defaults since 1816. Hedge funds are diving in, betting big on President Javier Milei’s radical reforms.

Milei, known for waving a chainsaw at rallies to symbolize his drastic spending cuts, has slashed public works, trimmed subsidies, and narrowed Argentina’s currency gaps. His "shock therapy" is painful, poverty is up, but inflation is down, and the economy is finally growing.

The payoff, Buenos Aires stocks are 2024’s best global performers, up over 160%, with government bonds soaring 90%. Hedge funds are cashing in, calling it Argentina’s "breathtaking U-turn." Milei’s moves may not be for the faint of heart, but for investors, they’ve been nothing short of electrifying.

America's Productivity Miracle Key to Prosperity

The U.S. might be on the brink of another productivity boom, reminiscent of the tech fueled surge of the 1990s. If true, it could reshape the economy, and help tame the ballooning national debt.

Productivity, essentially how much output workers produce per hour, is a critical engine for economic growth. When it rises, the economy can expand without fueling inflation, and government debt becomes more manageable.

Recent data shows promise. For five straight quarters, productivity has grown at or above 2%, exceeding the pre pandemic average of 1.6%. Economists credit better job matches post pandemic and companies investing in labor saving technologies. Add artificial intelligence into the mix, and experts like Jeff Schulze and Ed Yardeni see potential for sustained growth of 2.5% to 3.5%. Levels not seen since past booms driven by highways, computers, and the internet.

If this momentum holds, it could slash future debt to GDP projections and fuel a modern “Roaring ’20s.” Still, Washington's role, whether through tax policy or public investments, remains hotly debated. One thing is clear, productivity will be the number to watch as the U.S. bets on its economic future.

Tale of Two Holidays Splurging Or Scraping By

This holiday retail season underscored a growing divide. Inflation weary Americans spent more on gifts, food, and decorations, but it was the higher income households, those earning over $100,000 a year, who powered the splurge. Lower income families struggled, pinched by rising costs for essentials like groceries and child care.

Retailers navigated the turbulence unevenly. The Container Store and Party City filed for bankruptcy days before Christmas. Nordstrom’s founding family seized the moment to take the struggling department store private.

Chris Peterson, CEO of Newell Brands, summed it up, “There’s a real split in the market.” His company, which sells Sharpie pens and Oster blenders, is abandoning innovation for its cheapest products to focus on high end offerings. We will have absolutely “100% of our innovation” “at the medium and higher price point next year,” he said.

Consumers spent 3.8% more this season, with online sales up 6.7% and in-store sales rising 2.9%, Mastercard reported. Restaurants saw a 6.3% boost, though discounts drove much of the spending. Upscale retailers like Williams Sonoma thrived, while discount chains like Dollar Tree felt the strain.

“Lower income families just don’t feel like they’re thriving,” said Joanne W. Hsu of the University of Michigan’s consumer survey. Meanwhile, sentiment among wealthier Americans rebounded quickly.

The contrast played out in pricing strategies. Some brands, like L.L. Bean, cut prices to appeal to budget conscious shoppers, while high end retailers banked on affluent buyers. Real Flame slashed prices on fireplaces, and Made by Gather redesigned its $19.99 toaster to cut costs and attract buyers.

Even big spenders like Erik Soell near St. Louis hunted for deals. “Santa will be generous,” he said, but only after snagging bargains like a discounted iPhone.

In beauty, the divide was stark. Luxury brands like Gucci fragrances thrived, while drugstore staples struggled. Citi’s Filippo Falorni put it bluntly, “When you’re struggling, you consume less. The prestige side is doing better.”

This holiday season, the message was clear. The divide between the haves and have nots is growing, and retailers are adjusting their bets accordingly.

Microsoft’s AI Like It or Not You’re Getting Copilot

Microsoft is pushing its AI assistant, Copilot, onto users by default. In Australia and parts of Southeast Asia, the tech giant bundled Copilot with its Microsoft 365 subscription, raising prices along the way. Users who don’t want the feature? Too bad.

Australian YouTuber Alistair Fleming noticed Copilot’s logo popping up after every line as he wrote scripts about 1990s Japanese wrestling. “It was very keen to be used, and this was irritating,” he said. Fleming’s monthly subscription cost also jumped from A$11 to A$16.

On social media, some users likened Copilot to Clippy, Microsoft’s infamous 1990s Office helper, notorious for its uninvited advice.

Microsoft declined to explain the forced rollout or whether it plans to expand the approach. But it’s clear the company is doubling down on its $14 billion investment in OpenAI’s technology. Copilot, which helps write emails and create presentations, is central to CEO Satya Nadella’s AI strategy.

The premium version of Copilot costs U.S. users $20 a month on top of the $7 Microsoft 365 subscription. Enterprise customers pay $30 per user. Despite mixed reviews, Microsoft claims nearly 70% of Fortune 500 companies use Copilot, contributing to its AI revenue nearing $10 billion annually.

Still, Copilot is struggling against ChatGPT, its biggest competitor. Since May, Copilot was downloaded 37 million times compared to ChatGPT’s 433 million. Critics have questioned Copilot’s accuracy and value, with some businesses hesitant to justify the cost.

For some individuals, the frustration is already too much. Fleming tried to disable Copilot but found no option. He canceled his subscription and switched to Google Docs. “It’s not worth it,” he said.

For Microsoft, the bet is clear, make Copilot ubiquitous now to pave the way for its next AI frontier, automated tools for complex tasks. But as Fleming’s story shows, forcing AI on users might win the battle, but it could lose the trust war.

💰️ Smart Money Matters 💰️ 

Culture Corner

For Many Americans Homeownership Math Ain’t Math’in

Rising Costs Push Homeownership to Breaking Point. Skyrocketing insurance premiums and property taxes are squeezing homeowners across the U.S., rewriting the financial math of owning a home.

Insurers are hiking rates due to mounting disaster losses and costly repairs, while surging home values have driven property taxes higher. In September, 32% of the average single family mortgage payment went to taxes and insurance, an all time high, according to Intercontinental Exchange.

In some cities like Miami and Omaha, one in four homeowners spends more than half their monthly mortgage on taxes and insurance. Nationwide, 9% of homeowners face this burden, up from 4% in 2014.

The financial pinch isn’t just hitting new buyers. Older homeowners on fixed incomes are struggling to keep up. “Even retirees who paid off their mortgages years ago didn’t budget for these kinds of increases,” said Joshua Stewart of housing nonprofit Fahe.

Take Michael and Lisa Landry of New Orleans. They bought their home in 2015, paying $725 a month for taxes and insurance. Today, that figure is $2,448, more than their mortgage payment. “Had I known this, we wouldn’t have moved here,” said Michael, who fears they’ll have to sell when he retires.

Many are already opting out. In Florida, for example, the number of uninsured homeowners has risen sharply, with 21% of Miami homeowners forgoing insurance in 2023. But skipping coverage could spell disaster after a storm.

Rising costs are also eating into housing affordability. High taxes and insurance premiums are forcing some to lower asking prices, while others struggle to qualify for refinancing. “You have less budget for the mortgage itself,” said Andy Walden of Intercontinental Exchange, “which drives down home prices.”

For now, homeownership remains a costly dream for many, and for some, it’s turning into a nightmare.

SMALL BUSINESS OWNERS NEWS

Corporate Transparency Act (CTA)

Federal Courts Hit Pause on Beneficial Ownership Filings—For Now

UPDATE Dec 22, 2024: Businesses just got a reprieve, or maybe a ticking time bomb. For now, the federal government isn’t enforcing the Beneficial Ownership Information (BOI) filing requirement under the Corporate Transparency Act (CTA). But the situation remains fluid.

What Happened: The CTA, effective January 1, 2024, requires over 30 million businesses to report ownership details to FinCEN by January 1, 2025, under threat of fines and jail time. Its aim is to Combat money laundering and terrorism. But lawsuits challenging its constitutionality quickly followed.

Alabama and Texas Rulings: In March 2024, an Alabama court ruled the CTA unconstitutional, allowing local plaintiffs to skip compliance. On December 3, 2024, a Texas court escalated matters with a nationwide injunction, calling the CTA an overreach. FinCEN has since halted enforcement, sparing businesses penalties, at least for now.

What’s Next: On December 13, the DOJ appealed to overturn the injunction, with a ruling expected by December 27. A reversal could force businesses into a last minute scramble before the January 1 deadline, or prompt FinCEN to extend it.

What Should Businesses Do?

Here are your options:

1. Monitor Developments: Hold off filing until the legal dust settles.

2. Prepare Documents: Gather BOI data to stay ready.

3. File Early: Avoid uncertainty and meet potential deadlines.

The Unknowns: The incoming administration might abandon the appeals, shelving the CTA entirely. Until then, the courts have offered businesses a temporary reprieve, but no certainty. Stay tuned.

ECONOMY

Big Federal Debt Cutting Is Easy But Unpopular

Last week, Congress passed a slimmed down spending bill, 118 pages replacing 1,547. Elon Musk, co-head of Trump’s Department of Government Efficiency (DOGE), hailed the move as a win for fiscal responsibility. Yet, the bill still carried $100 billion for disaster relief and $10 billion for farmers. Separately, Congress approved $200 billion in new Social Security benefits.

The federal deficit hit $1.8 trillion last year, a peacetime record. Musk and Trump promise to slash spending, but the math is brutal. Cutting civil servant jobs and regulations won’t save much, salaries make up just a fraction of federal spending. The real money lies in benefits like Social Security, Medicare, and Medicaid. Programs deeply popular with voters.

Mandatory spending, at $4.1 trillion, dwarfs discretionary spending and grows faster. While administrative cuts sound appealing, they’re drops in the bucket. Big savings require rewriting social programs or reversing Biden era executive actions, like expanded subsidies and costly tax credits.

Trump could block Biden’s proposed Medicare coverage for anti obesity drugs, potentially saving $140 billion. But slashing benefits won’t win applause. Trump’s platform avoids hard choices. To cut the deficit while keeping voters happy, he’ll need to break that habit.

Tough decisions loom. The question becomes will they make them tough decisions?

FINANCE

Elon Musk’s Fortune Reaches Galactic Heights as SpaceX Soars

In the ever expanding galaxy of Elon Musk’s ventures, SpaceX has just launched his net worth into orbit. The trailblazing aerospace company, famous for turning rocket science into a spectacle and satellites into a booming business, has reached a jaw dropping valuation of $350 billion a 67% black hole leap since June.

Thanks to this meteoric rise, Musk’s personal fortune has rocketed to a staggering $443 billion, firmly planting him atop the global wealth leaderboard. The man who once dreamed of Mars is now worth more than the GDP of some countries. It seems the sky isn’t the limit for Musk, it’s just the launchpad.

POLITICS

Is America Ready? Can A Woman Win The White House

Former President Bill Clinton and Senator Lindsey Graham don’t agree on much, but they share a belief, America’s first female president is likely to come from the right.

“If you have a Republican female nominee, they would have a good shot of being the first woman president,” Graham said recently on Capitol Hill. Clinton echoed the sentiment, adding that ideological alignment often overrides gender barriers for conservative voters.

This shared prediction highlights a persistent frustration in American politics, women breaking into the highest office. Since Hillary Clinton’s 2016 loss and Kamala Harris’s recent defeat, Democrats have grown wary of the lingering impact of sexism on presidential races.

Despite nine female candidates vying for major party nominations since 2008, only Clinton and Harris succeeded, and both fell short. Harris’s campaign avoided emphasizing her gender, yet many Democrats believe sexism played a role in her loss. Critics also point to traditional campaign missteps, economic concerns, and poor running mate choices.

Republican women haven’t fared much better. No GOP woman has captured the nomination, though Nikki Haley made history with primary wins in 2024. Some, like Graham and Senator Susan Collins, argue that a female leader in the “Margaret Thatcher mold” might overcome gender bias.

Still, many remain doubtful. Senator Elizabeth Warren, reflecting on her failed 2020 campaign, wrote about donor hesitations tied to Clinton’s loss. When asked recently if a woman could win the presidency, Warren sighed, “Someday.”

For now, America waits. Glass ceiling intact.

THE GRIND FACTORY ⚙️

UNIQUELY INTERESTING

💡 Epiphany Moments

At midnight on New Year’s Eve, the world sings Auld Lang Syne, often with more heart than harmony. But where did this nostalgic anthem come from?

The phrase Auld Lang Syne translates to “old long since” or, loosely, “for old times’ sake.” It’s a toast to friendships and memories. The song’s roots trace back to Scottish poet Robert Burns, who wrote it down in 1788, claiming he’d heard it from an old man. Its melody comes from traditional Scottish folk music, ensuring its sentimental charm.

Fast forward to the 1920s, Canadian bandleader Guy Lombardo turned it into a New Year’s staple. His orchestra played it every December 31 during radio broadcasts, and by 1929, it became the song for ringing in the new year.

Its magic s in its Simplicity. Auld Lang Syne is a global reminder to cherish the past while welcoming the future. So when the clock strikes twelve, and you belt it out with linked arms, you’re not just singing, you’re part of a centuries old tradition. Cheers to that 🥂 

 🍎 One Smart Apple

Kay Jewelers began in 1916 when two brothers, Sol and Edmund Kaufmann, opened a quirky little shop in Reading, Pennsylvania. Back then, Kay sold more than jewelry, think eyeglasses, radios, and even silverware. But diamonds, as it turns out, really are forever, and the brothers soon pivoted to focus exclusively on fine jewelry.

Fast forward, Kay grew into a national darling for engagement rings 💎 and sparkly sentimentality, powered by its catchy slogan, “Every kiss begins with Kay.” In 1987, it joined the Signet Jewelers family, leveling up into a jewelry giant. Now, with stores everywhere and a thriving online shop, Kay remains America’s go to for marking life’s big moments, one kiss (and diamond) at a time. 🍏 

 HEALTH & LONGEVITY •ᴗ•

Two Life Anchors That Support Longevity

The two most important components of achieving longevity are physical health and mental well being. To successfully achieve your goals of attaining longevity place these two lifestyle components at the top of the priority list.

1. Physical Health: Consistent exercise, a balanced diet rich in whole foods, adequate sleep, and preventive healthcare are essential. These habits reduce chronic diseases, improve cardiovascular health, and support the body’s resilience over time.

2. Mental Well-Being: Stress management, meaningful social connections, and a sense of purpose are critical. A positive mindset and emotional health significantly influence longevity, as they help reduce stress related illnesses and improve overall quality of life.

Together, these components create a balanced foundation for a longer, healthier, more enjoyable life.

 HAPPY NEW YEAR 💋

Protect Your Brain Like a UFC Fighter: The EMF Solution for Peak Performance and Recovery

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