🏦🇺🇸 Warren Buffett Called in to Save Us
Hi all,
One of the most contentious points of discussion in the past week is around the question: “How much money do you need to make per year in order to be happy?”
According to my YouTube community poll, the majority voted that you need to make more than $125k per year in order to be happy. In my research, there are two kinds of happiness. The first being how you feel on a day-to-day basis (are your basic needs met?), and then secondly, how fulfilled are you with your life?
A famous 2010 study concluded that day-to-day happiness plateaus after $75,000 a year. I asked people on the street yesterday what they thought - and the answers ranged from $50k a year to $300k a year, with the median being closer to $125-150k per year. Of course, this also depends on where you live as well.
What’s crazier is that the same researcher from the 2010 study recently reversed his findings and found that more money = more happiness all the way up to $500K/year. We’re making a YouTube video this exact topic so be on the lookout for that in the coming weeks, but for now — how much do you think YOU need to be happy? Let me know by replying directly or commenting.
I hope you had a wonderful weekend and a Happy Saint Patrick’s Day.
— Humphrey & Team
Market Report
In February, US consumer prices saw the largest increase in five months. Overall CPI increased by 0.4% in February, primarily due to rising shelter costs, and by 6% from a year earlier. The Bloomberg survey of economists had predicted a monthly advance of 0.4% for both overall CPI measures.
While some sectors, such as food prices, rose less than expected, inflation in shelter costs was a significant driver of the overall increase. Over 70% of inflation growth was due to shelter inflation.
Major US banks have pledged to provide $30 billion in fresh cash to First Republic Bank in order to counter the turmoil that has led to depositors fleeing from regional banks and caused instability in the country's financial system.
First Republic has been exploring strategic options, including a possible sale, and its shares have been hit hard following regulators' seizure of Silicon Valley Bank and Signature Bank over the past week.
Truist CEO Bill Rogers called the joint effort "a powerful step to bolster liquidity and reflects our confidence in the critical role of regional banks in our economy and across the communities we serve".
First Republic, which specializes in private banking and has built up a wealth-management franchise with some $271 billion in assets, has tried to differentiate itself from SVB Financial Group's Silicon Valley Bank. The bank said that no sector represents more than 9% of total business deposits, unlike SVB, which counted startups and venture firms among its biggest clients.
First Republic also said it is "focused on reducing its borrowings and evaluating the composition and size of its balance sheet" and will suspend its stock dividend while it recovers.
UBS agreed to acquire Credit Suisse in a government-brokered deal valued at more than $2 billion. The deal will be priced at a fraction of Credit Suisse's value at the close of trading on Friday when it was worth about CHF 7.4 billion ($8 billion).
The Swiss National Bank will also offer a $100 billion liquidity line to UBS as part of the deal. The plan aims to address the huge slump in Credit Suisse's stock and bonds in the past week following the collapse of smaller US lenders.
UBS has had plenty of problems over the years but the problems escalated as clients had pulled more than $100 billion of assets in the last three months of last year as concerns mounted about its financial health.
Warren Buffett, CEO of Berkshire Hathaway, has been in contact with senior officials in President Biden's administration over the past week as the US regional banking crisis unfolds. The conversations are centered around the possibility of Buffett investing in the regional banking sector.
Buffett has a history of investing in banks in crisis, including providing liquidity to Bank of America and Goldman Sachs during the 2008 financial crisis. The administration is looking to orchestrate backstops that do not require direct government spending from taxpayers.
Forecast Ahead
Big Number
An analysis of 76 of the largest US cities by financial information provider SmartAsset has revealed that $100,000 in take-home pay does not go far in many cities. New York ranked last, with take-home pay of $35,791 after taxes and adjusting for cost of living, with other expensive cities like San Francisco, Washington DC, Los Angeles, Boston, and Seattle joining it in the bottom 10.
The analysis applied federal, state, and local taxes to an annual salary of $100,000 and adjusted the remaining amount for the local cost of living, including the price of housing, groceries, utilities, transportation, and other goods and services. High prices, high taxes, and rising rents have caused many residents of big cities to reconsider, with over 300,000 people leaving New York City alone from July 2020 to July 2021.