{"id":1309,"date":"2023-12-28T13:40:28","date_gmt":"2023-12-28T13:40:28","guid":{"rendered":"https:\/\/aqqute.com\/blog\/?p=1309"},"modified":"2023-12-28T13:40:28","modified_gmt":"2023-12-28T13:40:28","slug":"musks-x-rated-transformation","status":"publish","type":"post","link":"https:\/\/aqqute.com\/blog\/2023\/12\/28\/musks-x-rated-transformation\/","title":{"rendered":"MUSK\u2019S X-RATED TRANSFORMATION"},"content":{"rendered":"

A little more than a year ago, Elon Musk walked into Twitter\u2019s San Francisco headquarters, fired its CEO and other top executives, and began transforming the social media platform into what’s now known as X.<\/span><\/p>\n

Since then, the company has been bombarded by allegations of misinformation, endured significant advertising losses, and suffered declines in usage.<\/span><\/p>\n

\"\"<\/p>\n

Disney, Comcast, and other high-profile advertisers stopped spending on X after the liberal advocacy group Media Matters issued a report showing that their ads were appearing alongside material praising Nazis. (X has sued the group, claiming it \u201cmanufactured\u201d the report to \u201cdrive advertisers from the platform and destroy X Corp.\u201d)<\/span><\/p>\n

The problems culminated when Musk went on an expletive-ridden rant in an on-stage interview about companies that had halted spending on X. Musk asserted that advertisers that pulled out were engaging in \u201cblackmail\u201d and, using profanity, essentially told them to get lost.<\/span><\/p>\n

\u201cDon\u2019t advertise,\u201d X’s billionaire owner said.<\/span><\/p>\n

HOUSING’S MISERABLE YEAR<\/span><\/h2>\n

The U.S. economy and job market largely avoided pain in 2023 from the Fed\u2019s relentless campaign against inflation \u2014 11 interest-rate hikes since March 2022.<\/span><\/p>\n

Not so the housing market.<\/span><\/p>\n

As the Fed jacked up borrowing rates, the average 30-year fixed-rate mortgage rate shot up from 4.16% in March 2022 to 7.79% in October 2023. Home sales crumbled. For the first 10 months of 2023, sales of previously occupied homes sank 20%.<\/span><\/p>\n

Yet at the same time despite the sales slump, home prices kept rising. The high mortgage rates and rising prices made homeownership \u2014 or the prospect of trading up to another house \u2014 unaffordable for many.<\/span><\/p>\n

Contributing to the squeeze was a severe shortage of homes for sale. That, too, was a consequence of higher rates. Homeowners who were sitting on super-low mortgage rates didn’t want to sell their houses only to have to buy another and take on a new mortgage at a much higher rate. Mortgage giant Freddie Mac says 60% of outstanding mortgages still have rates below 4%; 90% are below 6%.<\/span><\/p>\n

CRYPTO CHAOS (CONTINUED)<\/span><\/h2>\n

If 2022 was the year that the cryptocurrency industry collapsed, 2023 was the year of the spillover from that fall.<\/span><\/p>\n

The year’s headlines from crypto were dominated by convictions and legal settlements as Washington regulators adopted a much more aggressive stance toward the industry.<\/span><\/p>\n

A jury convicted Sam Bankman-Fried, the founder and former CEO of the crypto exchange FTX, of wire fraud and six other charges. Weeks later, the founder of Binance, Chengpeng Zhao, agreed to plead guilty to money laundering charges as part of a settlement between U.S. authorities and the exchange. Among the other crypto heavyweights that met legal trouble were Coinbase, Gemini, and Genesis.<\/span><\/p>\n

Yet speculation that crypto may gain more legitimacy among investors helped more than double the bitcoin price. After years of delays, regulators are eventually expected to approve a bitcoin exchange-traded fund. Whether that would prove sufficient to sustain Bitcoin\u2019s rally over the long run remains to be seen.<\/span><\/p>\n

BANKING JITTERS<\/span><\/h2>\n

Historically, high-interest rates benefit banks; they can charge more for their loans. But in 2023, higher rates ended up poisoning a handful of them.<\/span><\/p>\n

The industry endured a banking crisis on a scale not seen since 2008. Three midsized banks \u2014 Silicon Valley Bank, Signature Bank, and First Republic Bank \u2014 collapsed.<\/span><\/p>\n

For years, banks had loaded up their balance sheets with high-quality mortgages and Treasurys. In an era of ultra-low rates, those mortgages and bonds paid out puny interest.<\/span><\/p>\n

Enter the specter of inflation and the Fed\u2019s aggressive rate hikes. As rates jumped, the banks’ bonds tumbled in value because investors could now buy new bonds with much juicier yields. With pressure on the banks mounting, some anxious depositors withdrew their money. After one such bank run, Silicon Valley collapsed. Days later, Signature Bank failed. First Republic was seized and sold to JPMorgan Chase.<\/span><\/p>\n

Investors remain concerned about midsized institutions with similar business models. Trillions of dollars in commercial real estate loans that remain on these banks\u2019 books could become problematic in 2024.<\/span><\/p>\n

GLOBAL MARKETS RALLY<\/span><\/h2>\n

From Austria to New Zealand, stock markets rallied through 2023. As inflation eased, stocks climbed despite sluggish global economic growth.<\/span><\/p>\n

A tumble in crude oil prices helped slow inflation. A barrel of Brent crude, the international standard, dropped 14% through mid-December on expectations that the world has more than enough oil to meet demand.<\/span><\/p>\n

An index that spans nearly 3,000 stocks from 47 countries returned 18% in U.S. dollar terms as of Dec. 11. Healthy gains for Apple, Nvidia, and other U.S. Big Tech stocks powered much of the gains. So did the 45% return for the Danish pharmaceutical company Novo Nordisk, which sells the Wegovy drug to treat obesity, and the 33% return for the Dutch semiconductor company ASML.<\/span><\/p>\n

The bond market endured more turbulence. Bond prices tumbled for much of the year, and their yields rose, over uncertainty about how far central banks would go in raising rates to curb inflation.<\/span><\/p>\n

The yield on the 10-year U.S. Treasury briefly topped 5% in October to reach its highest level since 2007. Yields have since eased on the expectation that the Fed is done raising rates.<\/span><\/p>\n

WORLD ECONOMY’S RESILIENCE<\/span><\/h2>\n

Over the past three years, the global economy has absorbed one hit after another. A devastating pandemic. The disruption of energy and grain markets stemming from Russia\u2019s invasion of Ukraine. A resurgence of inflation. Punishing interest rates.<\/span><\/p>\n

And yet economic output kept growing in 2023, if only modestly. Optimism grew about a \u201csoft landing\u201d \u2014 a scenario in which high rates tame inflation without causing a recession. The head of the International Monetary Fund praised the global economy for its \u201cremarkable resilience.\u2019\u2019<\/span><\/p>\n

The United States has led the way. Defying predictions that high rates would trigger a U.S. recession, the world\u2019s largest economy has continued to grow. And employers, fueled by solid consumer spending, have kept hiring at healthy rates.<\/span><\/p>\n

Still, the accumulated shocks are restraining growth. The IMF expects the global economy to expand just 2.9% in 2024 from an expected 3% this year. A major concern is a weakened China, the world’s No. 2 economy. Its growth is hobbled by the collapse of an overbuilt real estate market, sagging consumer confidence, and high rates of youth unemployment.<\/span><\/p>\n

THE U.S. ECONOMY (TAYLOR\u2019S VERSION)<\/span><\/h2>\n

Taylor Swift dominated popular culture, with her record-shattering $1 billion concert tour, her anointment as Time magazine\u2019s Person of the Year, and her high-profile romance with Travis Kelce, the Kansas City Chiefs football star.<\/span><\/p>\n

The Swift phenomenon went further yet. It extended into the realm of the national economy. Her name came up at a July news conference by Fed Chair Jerome Powell when Powell was asked whether Swift\u2019s blockbuster ticket sales revealed anything about the state of the economy. Though Powell avoided a direct reply, Swift’s name came up that same month in a Fed review of regional economies: Her tour was credited with boosting hotel bookings in Philadelphia.<\/span><\/p>\n

Economist Sarah Wolfe of Morgan Stanley has calculated that Swifties spent an average of $1,500 on airfares, hotel rooms, and concert tickets to her shows (though it\u2019s perhaps worth noting that Beyonce fans spent even more \u2014 an average of $1,800).<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

A little more than a year ago, Elon Musk walked into Twitter\u2019s San Francisco headquarters, fired its CEO and other top executives, and began transforming the social media platform into what’s now known as X. Since then, the company has been bombarded by allegations of misinformation, endured significant advertising losses, and suffered declines in usage. …<\/p>\n","protected":false},"author":1,"featured_media":1310,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,2],"tags":[],"class_list":["post-1309","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-new-features","category-technology-trends-and-news"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/posts\/1309","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/comments?post=1309"}],"version-history":[{"count":0,"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/posts\/1309\/revisions"}],"wp:attachment":[{"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/media?parent=1309"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/categories?post=1309"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/tags?post=1309"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}