The DC Today - Monday, January 29, 2024
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 29 January 2024
⏱️ 14 minutes
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Summary
Today's Post - https://bahnsen.co/48OKdeA
Ask David “What is the best argument for why the distributed independent decisions of individuals, families, and businesses create more beneficial outcomes for most people than the top-down, centralized decisions of government, especially the federal government?” ~ David K.
My argument is one of incentives and one of knowledge. These are two different arguments, even if they do overlap at points. Fundamentally, I believe better outcomes take place when the decision-makers reap benefits from their decisions and when decision-makers feel pain from bad decisions. I do not believe “disinterested third parties” (Thomas Sowell’s term) have the incentives to allocate and adjudicate risk and reward the way those with “skin in the game” do.
But beyond the classical incentive argument, I am very much a believer in what Friedrich Hayek referred to as the “knowledge problem.” Knowledge is widely dispersed throughout a society and no central entity possesses the knowledge needed to properly steward the affairs of a diverse economy. I read the masterful essay, The Use of Knowledge in Society, by Friedrich Hayek while in high school. It was the beginning of a lifetime journey for me through Hayekian thought, particularly around Hayek’s thesis of the “fatal conceit” of central planners.
Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the DC Today, your daily market synopsis of the Dividing Cafe, |
| 0:05.8 | brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets. |
| 0:15.4 | Well, hello, and welcome to the Monday edition of the D.C. today. |
| 0:19.5 | We just have a few days left in this first glorious month of 2024. |
| 0:25.8 | January will come to an end. Wednesday of this week. In the meantime, the last Monday of January is behind us. |
| 0:33.6 | And I am going to walk through the fun in the market from today, as well as all of our normal Monday categories. |
| 0:41.9 | So buckle up because this is about as much fun as you can have. |
| 0:46.6 | Okay. |
| 0:47.4 | Let's just get the market stuff out of the way. |
| 0:49.2 | The futures last night as the Detroit Lions were being coached out of a appearance into the Super Bowl, |
| 0:58.5 | opened up 85 points to the downside, and then got better throughout the evening. |
| 1:04.6 | And this morning, very early, we're only down about 40. |
| 1:08.9 | And then the market actually opened up about 40 points. |
| 1:12.3 | And then it really did just sort of mosey around the flat line through most of the day. |
| 1:19.1 | And then the very final hour of trading, it popped up and the Dow closed up 224 points, |
| 1:26.5 | which is about 60 basis points as a percentage. |
| 1:30.4 | But the S&P closed up 75 basis points and the NASDAQ up over 1%. |
| 1:36.6 | And what really happened with about an hour to go in the trading day was that the Treasury |
| 1:43.7 | Department announced that they were going |
| 1:47.0 | to borrow, I want to get the numbers right, 700, let's see, I'd do this to myself. |
| 1:54.7 | They were going to borrow $760 billion in Q1. Now, remember, that's new issuance of new debt to fund deficits, but then a big portion of that is always money being borrowed to replace maturing debt. |
| 2:11.6 | So they need money to pay off old debt. |
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