Tuesday's Markets Update (November 21, 2023)

21 Nov 2023 by rate3

On Tuesday, the Chicago National Activity Index and sales of existing homes decreased, the Nasdaq dropped, and there was a subdued trading day in Wall Street as investors processed unfavorable earnings reports from major retailers Lowe's, Kohl's, and Best Buy. Traders was also looking for insights into the future of monetary policy from the FOMC minutes. Meanwhile, Bitcoin and Ethereum fluctuate close to their year's top.

Details

In October, the Chicago Fed National Activity Index dropped to -0.49, the lowest in seven months, indicating a decline in economic growth. All four categories contributed to this decline, with production-related indicators falling to -0.33 and employment-related indicators dropping to -0.10. Additionally, the personal consumption and housing category decreased to -0.02, while the sales, orders, and inventories category fell to -0.04.

Sales of existing homes fell 4.1% in October to their lowest level since 2010, below forecasts. Tight inventory and high mortgage rates continue to weigh on the market, though starter and mid-priced homes still see multiple offers. Inventory rose slightly from September but remains down from a year ago. The median home price rose 3.4% from a year earlier to $391,800. Sales declined in the Northeast, South, and West but were flat in the Midwest.

Argument

In the journey of human progress and economic growth, the interaction among entrepreneurship, innovation, and regulations has been a continuous focus. Human talent for entrepreneurship flourishes in open spaces. Historical examples like the development of North and South America and Australia show how such spaces fostered innovative economies over 400 years. Yet, in today's world, such spaces are rare, hindering organic entrepreneurship.

Fostering entrepreneurship in modern, orderly countries faces challenges. Strict law and order perspectives, often from traditional views, lead to numerous regulations. These regulations, meant for societal order, unintentionally stifle entrepreneurship by removing necessary elements of anarchy and risk in the innovative process. Governments historically tighten regulations as innovative endeavors grow, hindering progress with excessive bureaucratic control.

In the recent cryptocurrency industry incident, regulators disproportionately affected a sector of 100 million people. This reflects a broader pattern of governments reacting to innovations challenging established norms. The decentralized nature of the crypto industry clashed with traditional regulations, raising questions about the balance between regulation and entrepreneurial growth.

To address challenges in conventional settings, we propose a solution: "Entrepreneurial Cities" with minimized regulations, allowing maximum freedom for capital and innovation. Similar to societies accepting activities like gambling in designated places, establishing cities exclusively for entrepreneurs is a constructive step, better than extreme measures like "private armies" or nuclear weapons.