💭 Quote of the Day

“The process of getting inflation down is going to be a gradual one”

Jerome Powell, Federal Reserve Chair

What Really Matters

🔎 Goldman Sachs is in Hot Water

Double dipping during a crisis: The Fed and the SEC are investigating Goldman Sachs’s role in purchasing SVB’s securities portfolio as it was also working on its failed capital raise before the bank’s failure.

• The regulatory organizations are looking to see if there was improper communication between Goldman’s investment banking division and trading division in relation to the SVB failure

• SVB hired Goldman to help achieve its capital raise while Goldman’s trading division bought SVB’s $21B portfolio of available-for-sale debt securities at a steep discount to its market value

In the end, SVB announced the sale of their securities portfolio at a steep discounts and as it went to raise money, through a capital raise, the bank’s stock tanked it its inevitable failure.

🎟️ Prices Up Front

No more hiding: President Biden has taken a stand and is urging industries, such as ticket sellers and airlines, to get rid of hidden fees to simplify the ticket selling process.

• Commitments from major corporations, such as Ticketmaster and Seat Geek, aim at making pricing more transparent for users by eliminating “junk fees”

• The change would push ticketing platforms closer to marketing the “all in” price for tickets which has received support across major market players

Overseas Market Movements

📉 China's central bank cut its benchmark lending and deposit rates on Monday, the second time in two months, in a fresh effort to prop up the country's slowing economy.

• The People's Bank of China (PBOC) said it would cut the one-year loan prime rate (LPR) by 25 bps to 4.45% and the one-year deposit rate by 20 bps to 2.75%

• The move comes as China's economy is facing headwinds from a number of factors, including the U.S.-China trade war and a slowdown in global growth

Personal Finance Quick FAQs

Q: Why is Inflation Bad?

What is Inflation

Inflation is a general increase in prices and a decrease in the purchasing power of money. It is a measure of how much prices have risen over time. Inflation can be caused by a number of factors, including an increase in the money supply, a decrease in the supply of goods and services, or an increase in demand for goods and services.

Problems with Inflation

• Erosion of purchasing power: Inflation erodes the purchasing power of money, meaning that the same amount of money can buy less goods and services over time. This can make it difficult for people to afford basic necessities, such as food, housing, and transportation

• Uncertainty: Inflation can create uncertainty in the economy, making it difficult for businesses to plan for the future. This can lead to investment and job losses

• Inequality: Inflation can lead to inequality, as those with fixed incomes, such as retirees, are hit hardest by rising prices

How Can We Control Inflation?

• Monetary policy: The central bank can use monetary policy, such as raising interest rates, to slow down the growth of the money supply

• Fiscal policy: The government can use fiscal policy, such as cutting spending or raising taxes, to reduce aggregate demand

• Supply-side policies: The government can use supply-side policies, such as deregulation and tax cuts, to increase the supply of goods and services

Disclaimer: This newsletter provides general information and is not financial advice. It discusses current events and personal finance topics for educational purposes only. Consult a qualified financial advisor before making any financial decisions. The accuracy and timeliness of information cannot be guaranteed. Use this newsletter as a starting point for research, but conduct due diligence and seek professional guidance for your specific financial needs