Friday

Estate planning in America may not feel as glamorous as life on a Chanel runway, but it matters as much for ordinary families as it did for Karl Lagerfeld and his famously pampered cat, Choupette. After Lagerfeld’s death in 2019, attention shifted to the idea that his blue-cream Birman might inherit a portion of an estate possibly worth hundreds of millions.

This was potentially a telling week for interest rates in America on the extreme ends of the yield curve. Way out on the right of the curve is the 30-year treasury bond. Its yield is what lenders to the American government can expect to be paid for the long-term loan. It reached 5.18% earlier this week, the highest level since 2006 (see chart above).

Around the world, governments are pouring money into national security. This can take many forms. Governments, for instance, might spend their tax revenues on militaries, cyber security, or defense against terrorism.

America has been at war with Iran for roughly two months. This has dramatically impacted the global energy markets, mostly by pushing the costs higher.  Most households here at home have felt the pressure at the pump. Further down the horizon, we may all feel other knock-on effects as firms deal with higher transportation and production prices cutting into margins.

Growing up I was told that burger patties made at Wendy’s were square because the founder, Dave Thomas, didn’t cut corners. They also had the memorable “Where’s the beef?” commercials where a group of ladies expressed their dissatisfaction with the amount of beef on their burger from another restaurant.

We’ve all learned that the shortest distance between two points is a straight line. That tends to lead one to believe that the scenic path (e.g., longer route) will take more time to travel. But what if that is not the case? As it turns out, Newtonian physics shows this intuition is wrong.

Metaphorically, the Federal Reserve is like a crane operator for the American economy. They are trying to deliver the economy to a sweet spot that is neither too hot nor too cool. The boom of the crane helps move an object horizontally while the hook causes vertical movement.

This note was on the calendar because it is that time of year, but then Atlas had to rip up the script when the war in Iran started because seasonal issues alone were no longer driving the price of fuel higher.  Initially this note was going to help remind readers that changes to the blend of fuel would be taking place soon as the weather warms.

Periodically rumors about the demise of the U.S. dollar crop up, often making their way through the cesspool of social media. Atlas recently came across one such claim and thought you might have as well. After looking into it, the death of the U.S. dollar has once again been greatly exaggerated.