TGIT: Inflation Subsiding? Consumers Aren't Buying It.

A controversial cure for inflation, why consumers are skeptical, a look at Bank Of America, Bitcoin, McDonald's, Ticketmaster disasters and much more.

Thank Goodness it's Thursday! We woke up today to good economic news as retail sales for July came in hot. Plus, it’s on the heels of positive labor and inflation numbers.

Closer to home, we were thrilled last week to introduce our newsletter to you. Since then, we’ve been besieged with emails from subscribers lamenting the loss of Luckbox in print. We may have lost our print magazine, but we’re lucky we still have our jobs. 

That's a takeaway from the AI4 (artificial intelligence) conference in Las Vegas. Yesterday, technologist and former presidential candidate Andrew Yang told the 5,000 attendees that if we’re among the roughly 35% of Americans with a college degree, we’re part of an "elite oversupply" of citizens educated to perform jobs that aren't going to be around much longer. But the situation doesn’t look much better for the other two-thirds of Americans, either. Yang expects AI to replace millions of hospitality, clerical, retail and manufacturing jobs.

But he floated a proposal to placate the soon-to-be-unemployed—wealth redistribution funded by taxing the computer infrastructure that supports AI. We would all share the wealth created on the servers at companies like Amazon, Google and Microsoft. It’s where they house the data large language models used to create the AI platforms that will replace you.

I don't know about you, but we can't wait to get my monthly check from big tech!
Btw, we have added a link below in More Cowbell. You can use it to tell us how you feel about the new format and share your thoughts on other timely topics.

Now, it's time to get lucky.

Even though inflation is slowing, prices remain high—often prohibitively high for lots of Americans. In fact, sticker shock is stinging shoppers so smartly that they’re postponing nonessential purchases and meeting some of their needs by substituting cheaper alternatives. Is this a new consumer trend to be concerned about? Not according to the president of the Federal Reserve Bank of Richmond, Virginia. He believes consumers have the power to control inflation. Read Full Story

Consumer confidence in the economy recently fell to an eight-month low.

— The University of Michigan Consumer Sentiment Index

While economic reports suggest inflation is easing, consumers continue to feel financially stretched and economically fatigued. Maybe the disconnect is aggravated because the government’s method of measuring inflation is flawed. Read Full Story

The stock market usually bounces back after chaos. And in early August, anyone who bought the dip was quickly rewarded when the market rebounded from its latest downturn. But, the volatility left some scars as Warren Buffett’s Berkshire Hathaway reduced its stake in Bank of America (BAC). Read Full Story

What’s up with the huge recent downside move in bitcoin? Is this a buying opportunity or the beginning of the end? Watch and learn.

A quantitative approach to stocks requires a rigorous understanding of the numbers. But conviction to a trade means understanding the company behind the ticker. Contributing editor Garrett Baldwin offers a simple framework for what makes a company successful and argues that at current prices, McDonald's is a prime target.

A risk metric called gamma measures how much an option's delta changes over time in relation to a one-point change in the price of the underlying asset. Think of gamma as similar to acceleration in physics, while delta is similar to speed. Our friends at Unusual Whales illustrate gamma in action.

Live Nation-Ticketmaster—an Alleged Monopoly Achieves Record Growth 🎤 🎫 🎵

Live Nation-Ticketmaster and other ticketing platforms like StubHub are accused of price-gouging, hidden fees and monopolistic power, but that’s not deterring them from conducting business as usual. Live Nation just finished a record-breaking quarter with revenue up 7% to over $6 billion. Read Full Story

My Healthcare Provider? I’m on the Flavor Flav Plan. 🥇 🩺 🇺🇲

American Olympics bronze medal winner Ariana Ramsey went viral during the games—but not for her prowess on the rugby pitch. Instead, it was her excited visits to the Olympic village’s free healthcare clinic that were featured on her TikTok and have amassed over a million views. It’s been enough to turn Ramsey into a genuine healthcare advocate.

She began her new career when she found out the Olympic Village has offered all athletes and their delegations free healthcare since the 1932 Los Angeles Games. She was shocked. After all, she’s from the only high-income country without universal healthcare, according to a 2022 study by the Commonwealth Fund. But there’s more. The summer games not only captivated the nation but also revealed the financial strain of being an Olympian. Some American athletes are even seeking crowdfunding help to pay their Olympic costs. The U.S. is one of three countries whose elite athletes receive no government funding.

Upon finding out about the American Olympians’ fate, ’80s hip hop icon Flavor Flav took it upon himself to sponsor the entire women’s water polo team for the next five years and has since bailed out several other athletes who were struggling financially. He also made a bronze version of his signature clock necklace for gymnast Jordan Chiles after her medal was stripped in a first-of-its-kind controversy. You’ll get it back from our cold dead hands, IOC. Fight the power!  —Vonetta Logan 

A Quarter Percent Rate Cut on 9/18 = +20% Return 🪙 ✂️ 🎱

The Federal Effective Fund Rate is 5.33% this morning, and the July CPI suggests disinflation should persist through the rest of the year. Prediction market traders are signaling the CPI report provides the data required for Federal Reserve officials to gain confidence that inflation is headed sustainably back to 2%, clearing the way for a rate cut in September. Traders are assigning an 83% probability the fed will cut rates at least a quarter of a percentage point. Luckbox thinks the rate cut is even more likely and sees an expected value play on “Yes” shares on 25 basis points (bbps) on Kalshi’s "Fed Decision on Sept. 18" market.

More Cowbell

This just in: Consumer spending jumped in July.

No, last week's big sell-off was not caused by the yen carry trade. 

And, the subsequent rebound may still fizzle.

Trump + Musk = 1 billion views on X. 

Did Trump shaft Isaac Hayes? 

No, Burning Man is not a sell out.

The DOJ has won its big case. So, is Google breaking up?  

Sitting on some losing trades? Try this. 

Ok, it's our turn. We have a few questions for you. 

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Now go on, get lucky.

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