If You’re Not Buying In The Same Market, Then It’s Tough To Swallow

The Economist – Too many adults are absolutely clueless.

Need to change a tyre or file your taxes? In America, “adulting” courses can help.

https://archive.ph/uO530#selection-1133.0-1137.81

THE TEACHER starts with the basics: how to thread a needle. Then, over the course of the next 30 minutes, she shows the students a few different stitches, along with how to mend a torn shirt and beautify a frayed hem. This is not a lesson at some fusty finishing school. The sewing class is part of a free, one-day course at Austin Community College (ACC) called “Adulting 101”. The students range in age from their late teens to mid-40s.

ACC has been running such programmes for six years. The workshops are designed to help people “successfully navigate adulthood”, even those who, legally and practically, have been navigating it for quite some time. The topics run the gamut from basic—how to dress appropriately for a job interview—to advanced, such as how file income taxes. (That subject will surely be top of mind for Americans as their tax filings are due on April 15th.)

In this way, institutions are helping people grow up. Across the country community colleges, public libraries and civic centres are offering adulting classes; those who want to learn how to manage their home from the privacy of their own can stream a class on YouTube. Adulting courses are not yet standard university fare, though perhaps in time they will be. Financial-literacy classes were once considered too basic to offer, especially at elite colleges, but they are spreading.

Adulting courses are not a uniquely American phenomenon—in Britain they are labelled “life skills” classes—but they do tackle three areas in which Americans, in particular, seem to be falling short: the home, relationships and money. Compared with other countries, adults in America spend less time doing household chores such as mopping and ironing; they also get divorced more frequently than their counterparts in Britain, Canada or Germany. Less than half of Americans understand basic financial principles.
The courses are often set up by individuals taken aback by the “unexpected trials of early adulthood”, as Traci Bakenhaster has put it. She runs Adulting University, which teaches teenagers how to write CVs and manage their time, among other things.

Raffi Grinberg, an author, created and taught “Adulting 101” for two years at Boston College. The inspiration for his class came from his first day working at Bain & Company, a management consultancy, soon after leaving university. He and his cohort had to decide which health-insurance plan to choose, how much of his salary to devote to saving for retirement and other financial details. “Every one of us went out into the hallway and called our parents,” he admits. “We were graduates of really elite schools, and we still didn’t know what to do.”

He has distilled his 14-week course into a new book called “How to Be a Grown Up: The 14 Essential Skills You Didn’t Know You Needed (Until Just Now)”. It imparts wisdom on matters practical (budgeting) and philosophical (how to think about rejection). Mr Grinberg writes with a positive, technocratic tone that will be familiar to anyone who has gone to business school, but his book is genuinely informative. A financial naif will grasp the basics of investing. A mansplainer will come away reminded of the rewards of listening.

Rachel Weinstein, a psychotherapist, ran the Adulting School in Maine for several years. She found that her patients in their 20s were looking at “other people’s Instagram accounts and feeling like everyone else just has it together and they’re lagging behind”. She set up informal classes over beers at happy hour; students decided what they wanted to learn. One session would cover money management, the next how to sharpen your knives.

Why are such books and courses needed? To many, these skills will sound like basic common sense. Yet, as the aphorism goes, common sense is not so common.

The rise in need for adulting classes reflects, in part, the changing nature of childhood and adolescence, which have grown more digital and less physical. American teens spend up to nine hours each day on screens. TikTok and YouTube do offer handy tutorials on all manner of household chores. But most young users of these platforms are more interested in dancing than dishwashers.
In “Infantilised: How Our Culture Killed Adulthood”, Keith Hayward of the University of Copenhagen argued that there has been a generational shift and that young people are less mature than their forebears were at the same age. They are shrinking from responsibilities such as marriage, homeowning and child-rearing because “adulting is hard”, as one of his students put it. Western culture, Mr Hayward wrote, indulges childish fancies.

He adds that young people today are also less interested in what their elders have to offer: “Parents and grandparents are seen as morons who can’t work the Wi-Fi.” If parents are not providing advice on life’s many essential tasks, “You’re left with these classes picking up the slack.”

Such sentiments may ring true. But young people are remaining in education for longer, meaning that financial independence, partners and children necessarily come later. And parents have always had gaps in their knowledge. Some know their way around an investment portfolio but not a car engine; others are the opposite.

And adulting is, in fact, hard. The world is more complex than it was a couple of generations ago. Take financial decisions. People opening their first bank account have to choose between a convenient main-street branch and an array of online banks and bank-like institutions, all offering different yields and fee structures. What makes one better than another, and why? At a time when the financial landscape is already volatile, trial and error is not an ideal strategy.

Romance has also grown more complicated. Less than 15 years ago, American couples usually met through friends, but today most meet through dating apps. Old singletons may not know where to start; young ones may find the shift from online banter to the real kind daunting. The prospect of having any mishaps blasted out on social media is nerve-racking.

Many will see adulting classes as proof of youngsters’ stunted development. But coddled children do not acknowledge the gaps in their knowledge and try to fill them. Only a grown-up would willingly spend precious free time doing something as dull as learning how to mend a shirt. ■

The Economist – America’s financial system came close to the brink.

Chaotic markets threatened to trigger a full-blown crisis.

https://archive.ph/uHfSr#selection-1133.0-1137.57

For a good few hours on April 9th, disaster beckoned. Share prices had been falling for weeks. Then the market for American Treasury bonds—normally among the safest assets available—started convulsing, too. The yield on ten-year Treasuries leapt to 4.5% (see chart 1), up from 3.9% days earlier. That meant bond prices, which move inversely to yields, had cratered. The failure of both risky and supposedly safe assets at once threatened to destabilise the financial system itself.

Then everything changed. Late in the day, Donald Trump blindsided investors by saying he would delay many of the tariffs that had sparked the panic, for 90 days. Share prices surged:
America’s S&P 500 index closed up 10%, marking its best day since 2008. Treasury yields remain elevated, but as the chaos elsewhere subsides, that has less potential to cause damage.

The financial system came perilously close to the brink, and it is important to understand why, since the turbulence may well return. Warning bells have been ringing everywhere. Volatility gauges, derived from the insurance premiums traders pay to protect themselves from wild swings, have soared, though after Mr Trump’s announcement they fell back somewhat (see chart 2). For risk managers at banks and hedge funds, such moves can be a prompt to tell trading desks to offload risky positions, lowering the chances of a big loss. If this happens at many institutions at once, the selling can make markets even wilder. The dash for cash even sent the gold price down for a time.

Such stresses are deeply uncomfortable because they recall the last time the Treasury market seized up, at the onset of the covid-19 pandemic. Back then, heavy trading led to a liquidity shortage, meaning the difference between “buy” and “sell” offers widened sharply and the market became much less able to absorb large orders. Trades that could take place moved prices far more than they normally would have done, adding to the volatility. Eventually the Federal Reserve had to buy large quantities of bonds to stabilise the market.

“Swap spreads” suggested a similarly alarming dynamic was in play this week. These measure the gap between Treasury yields and interest-rate swap rates, which are the average of the overnight rates traders expect. The two usually move together, since an alternative to buying a Treasury bond and receiving its fixed yield is to deposit money in the overnight market and earn a rolling interest rate there instead. But on April 9th yields on ten-year Treasuries rose to a record-breaking 0.6 percentage points higher than the rate on equivalent swaps. The growing gap suggested that usual customers were reluctant to buy, given the enormous uncertainty haunting markets, according to Martin Whetton of Westpac, an Australian bank.

Fire-sales probably exacerbated the damage. Wall Street banks have hit their hedge-fund clients with the steepest margin calls since 2020, meaning they must stump up cash to cover their lossmaking positions across asset classes. Government bonds are among the easiest things to sell to raise the necessary funds (as is gold). Yet if it is losses on these positions that triggered the margin calls in the first place, selling can make things worse. It pushes prices down further, creating a self-reinforcing “doom loop” in which margin calls prompt sales, which prompt yet more margin calls. This is what happened in 2022 when British pension funds rapidly offloaded holdings of gilts to meet margin calls, sending prices down and yields up even faster. Eventually the Bank of England had to step in to break the spiral.

A particular worry in the Treasury market is that a doom loop could arise from the “basis trade”. This is popular with hedge funds and has minted fortunes at some of America’s largest. It attempts to profit from the difference in price between Treasury bonds and Treasury futures contracts, caused by high demand for the futures from asset managers. Traders exploit this by buying Treasuries and selling futures contracts. To amplify the returns, they borrow using the Treasuries they have bought as collateral, then recycle the cash into even more Treasuries. Thanks to this procedure, hedge funds are short some $1trn-worth of Treasury futures.

The trade is profitable for as long as the cost of borrowing, and meeting margin calls, remains lower than the difference between Treasury bonds and futures. With lots of leverage, it can generate vast returns. But “it is like picking up nickels in front of a steamroller”, bristles one hedge-fund manager. Funds can get squashed when markets plummet, either because credit dries up and leaves them unable to renew their borrowing, or because they must suddenly meet large margin calls on positions that have plunged into the red.

Crack of doom

When the bet is unwound, perhaps because yields have moved sharply and unexpectedly, funds are forced to sell Treasuries fast—compounding the selling to meet margin calls in other asset classes. In 2020 dealer banks were overwhelmed by the volume of Treasuries being sold, meaning that liquidity dried up. Something similar may have happened this time, too. Before the ructions, banks’ inventories were already stocked full of Treasuries, giving them little capacity to handle more selling.

Should trading seize up once again, the Fed would have to intervene, acting as buyer of last resort and offering emergency loans to systemically important firms in need. Today’s political backdrop would put central bankers in an invidious position, however. It was one thing for policymakers to backstop Treasuries when the problem they faced was a liquidity crunch brought on by covid lockdowns. This time, it is anyone’s guess how much of the move in Treasury yields was down to the system malfunctioning, and how much reflects a loss of faith by investors in the bonds themselves. After all, Mr Trump’s assault on the global trading system has dented confidence in American policymaking. It is only natural to conclude that the country’s sovereign debt has become less safe, and that Treasury yields should accordingly incorporate more of a risk premium.

Were the Fed to intervene in markets, in other words, it would prompt questions over whether it was simply protecting financial stability or also trying to suppress such a risk premium. Then there is the question of how far central bankers can use monetary policy to ease financial conditions and reduce the risk of systemic damage. Under other circumstances, they might opt for rapid rate cuts. Yet even though Mr Trump delayed his tariffs, investors are still betting inflation will rise. They fear stagflation—a nasty combination of inflation and stagnant growth—that would constrain any doves at the Fed.

The greatest threat surely still comes from politics. Even as some trade barriers have been postponed, those between America and China have been ratcheted to ludicrous levels. And it would be reckless to assume the shocks are over, or that foreign investors’ faith in American assets, now shaken, can be magically restored. How much more can the system take before something really does break?

When the globalist scum media clutches its pearls and bemoans DOGE funding cuts to “the arts,” rest assured that any taxpayer-funded “art” commissioned by commies is promoting degeneracy, Satanism, “wokeness,” etc.

https://x.com/defense_civil25/status/1910489730673705233

Border Hawk
@BorderHawkNews

A Mexican illegal has been charged with driving without a license for a third time after she crashed into a marked patrol car, injuring a Florida police officer, authorities say

Paula Hernandez Lazaro, 30, has lived illegally in the US for at least 11 years

Full story coming

1:35 PM · Apr 11, 2025

https://x.com/BorderHawkNews/status/1910748513622777991