πŸ“ˆ Shadowy US Sports Betting Boom

Plus: How well does tax loss harvesting work?

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We have a packed edition for you today, with economic woes surfacing in China and some analysts fearing that the US sports betting boom could eventually face regulatory crackdowns and penalties!

If you stick with us until the end, we've got a fantastic guide by Nick Maggiulli on navigating the process of purchasing a home in the current landscape

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Markets

China's economic woes mount as home prices fall (3 minute read)
Amidst the ongoing concerns surrounding China's property sector crisis, recent developments have introduced new elements of worry. A prominent Chinese trust company, Zhongrong International Trust, known for its significant involvement in real estate, has experienced missed payments across numerous investment products, as disclosed by a senior official to investors over the past month. This comes against the backdrop of a decline in home prices. The impact of these occurrences on China's economy, which is already navigating a delicate phase, has raised eyebrows. China's shadow banking sector faces the possibility of a series of defaults which sends ripples of concern, especially given that many retail investors are linked to these attractive high-yield trust products. As missed payments accumulate, they have the potential to dampen consumer confidence, further underscoring the need for robust measures from Beijing to restore stability and confidence in the market.

Unveiling the Shadowed Facets of the US Sports Betting Boom (4 minute read)
Amid the flourishing landscape of regulated online betting in the US, a worrisome trend has emerged: a growing number of problem gamblers. Following a pivotal Supreme Court ruling that lifted the ban on sports betting five years ago, the online gambling industry has boomed, amassing a staggering $12 billion in revenue in 2022. As advertising for these platforms becomes an integral part of American cultural life, a hidden challenge of addiction has surfaced, its scale yet to be fully understood. Experts are sounding alarms about the potential for a "regulatory Groundhog Day." This alludes to a situation akin to the UK's experience, where the relaxation of gambling laws alongside the advent of smartphones led to the world's largest regulated online gambling market but also a surge in problem gambling and related issues. This ultimately triggered a regulatory crackdown and substantial penalties for operators, raising concerns of a similar trajectory in the US.

Investing

The Ticking Time Bomb Behind Strong Retail Sales (3 minute read)
Defying expectations, U.S. consumers have remained resilient amid the Federal Funds rate's climb from zero to around five percent over the past year and a half, maintaining an impressive spending pace regardless of rate hikes. The sustainability of this trend and its potential to underpin a long-term "soft landing" scenario are key concerns for investors. This spending tenacity is attributed in part to a pandemic-fueled "YOLO" (You Only Live Once) attitude. Notably, within the period of rising interest rates, U.S. credit card debt has surged over 30%, surpassing $1 trillion in under two years, a phenomenon reminiscent of pre-financial crisis levels in 2006 and 2007, prompting caution.

How Well Does Tax-Loss Harvesting Work? (12 minute read)
Taxes, the inevitable companions of life, extend their grasp to investors through capital gains taxes, particularly in years when cherished investments fetch a hefty sum upon sale. These taxes can take a substantial bite out of post-tax income. However, there's a silver lining – the intriguing dance between capital losses and gains. The provision allowing capital losses to offset current or future capital gains, plus a snippet of regular income, up to $3,000, creates a tax-smart incentive to engage in "loss harvesting." This art involves selling securities that have plummeted in value since purchase, aiming to offset gains. But beware the wash-sale rule. On a side note, it's worth mentioning that Tax Loss Harvesting (TLH) isn't without its fair share of debates.

Money

Wealth vs. Income (4 minute read)
Eight decades have swept by since Fred Schwed penned "Where Are the Customers' Yachts," and the landscape has transformed significantly. Globalization has blurred cultural distinctions, rendering much of western society a delightful mishmash, though one wonders if the Brits harbor a more enlightened financial outlook – or maybe not? Amidst this, a peculiar paradox emerges: the majority's perspective on wealth seems tailored to its swift departure rather than its preservation. Grasping a sizable sum of money merely as a ticket to spend it all is a surefire route back to empty pockets. An intriguing twist in American consumer culture is the misconceived notion that retirees are inherently less affluent than the broader populace.

How to Save for a House: The Comprehensive Guide to Homeownership (18 minute read)
Dreaming of your own cozy corner but feeling daunted by the prospect of saving for a home? You're in good company. The journey to home ownership, a monumental financial step, naturally comes with a side of jitters. And nowhere is this truer than when facing the challenge of squirreling away funds for that all-important down payment. With U.S. home prices soaring by more than 40% since January 2020, this savings quest has transformed into a formidable task, reminiscent of bygone eras. Adding a sprinkle of spice to the mix, the 30-Year fixed-rate mortgage has scaled past 7%, tinging affordability with concern for aspiring homebuyers. Black Knight Inc. chimes in with a notable stat: the mortgage payment to income ratio hasn't soared this high since the shoulder-padded era of the 1980s. This trusty guide is here to be your companion, walking you through the art of saving for a home in today's environment.

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