Category: Economy

The U.S. economy expanded at a 3.2% annual rate from October to December, driven by strong consumer spending, according to a revised report from the Commerce Department. This update slightly adjusts the growth rate down from an initial 3.3% estimate.

After experiencing a vigorous 4.9% growth rate from July to September, the final quarter’s GDP growth marks a slight decrease. Nonetheless, the U.S. has maintained a growth rate above 2% for six consecutive quarters, so far surpassing concerns that high interest rates might lead the economy into a recession.

In contrast to predictions of a downturn, the economy saw a 2.5% growth throughout 2023, improving upon the 1.9% growth observed in 2022.

Consumer expenditures, which form about 70% of U.S. economic activity, increased at a 3% annual rate in the last quarter of the year. Additionally, state and local government spending surged at a 5.4% annual rate during the same period, marking the fastest increase since 2019. A rise in exports also played a significant role in the quarter’s economic growth.

The report further indicated a softening in inflation pressures. The Federal Reserve’s preferred inflation gauge — the personal consumption expenditures price index — climbed at a 1.8% annual rate in the fourth quarter, a decrease from the 2.6% rise seen in the previous quarter. Excluding the more volatile food and energy sectors, core inflation saw a slight uptick to 2.1% from a 2% rise in the third quarter.

Looking ahead to 2024, the U.S. economy is expected to continue its growth trajectory. The International Monetary Fund projects a 2.1% expansion for the U.S., which is over double its growth predictions for other major advanced economies, including Japan, Germany, the United Kingdom, France, and Italy.

Additionally, it’s an election year and we all know how those typically impact the economy…

Recent surveys from two major highlight that fiscal prudence and financial planning are considered appealing qualities in a partner.

In the United States, a comprehensive survey revealed that a notable percentage of the younger population finds the concept of owning a savings account attractive.

In Japan, a staggering three-quarters of high school students surveyed expressed a strong interest in investment, with nearly 5% already taking their first steps into the investment world at a young age.

Having private savings is not merely a prudent practice for individuals or couples aiming for financial security; it is fundamentally the backbone of wealth creation in society.

A OnePoll survey, involving 2,000 U.S. adults in serious, engaged, or married relationships, found that traits such as having a savings account (40%), being debt-free (38%), and possessing a five-year plan (29%) are deemed attractive in a partner.

A significant 78% of those surveyed agree that a future-oriented individual is more appealing than one who lives moment to moment.

Additionally, over two-thirds (69%) of respondents acknowledge that their sense of preparedness is influenced by their partner, with motivations ranging from providing protection (35%) to offering a sense of security (34%).

This survey, conducted for Assurance IQ, also aimed to explore the evolution of love with age and how couples plan for their future together.

A separate survey by Studyplus Trend Kenkyujo, associated with Tokyo’s Studyplus Inc., revealed that over 70% of Japanese high school students show an interest in investing, with 4.7% already embarking on their investment journey.

Highlighting the power of compound interest, the study underscores the advantage of early investment or savings for financial growth over time.

This investigation engaged 512 high school students at the close of the 2023 academic year, finding that nearly 4.5% of those already investing were influenced or assisted by parents or other relatives.

The researchers highlighted the importance of adults, including parents and teachers, in providing proper financial education and guidance to the youth.

Unlike many subjects taught in American high schools, financial literacy is a crucial skill that all students will inevitably need, yet it remains underemphasized in the curriculum.

The practice of saving wealth has been pivotal in the evolution of human societies from nomadic hunter-gatherers to today’s advanced technological civilizations. Savings not only afforded people the time to innovate but also laid the foundation for improved living and working conditions.

In contemporary society, the principle holds true: private wealth saved in financial institutions enables lending for societal improvement, from business startups to infrastructure development, illustrating the critical role of savings and investment in societal progress.

It’s a well-known fact that typos can be embarrassing and frustrating, and as ride-sharing company Lyft recently discovered. They can also make people forget about the good news in a financial report.

Lyft’s press release announcing its fourth quarter and full-year 2023 financial results, published before the company’s call with investors, initially caused its stock to soar more than 60% after-hours, reaching a high of $19.70. However, the company’s CFO, Erin Brewer, quickly corrected a crucial typo in the earnings call, stating that the adjusted EBITDA margin expansion for 2024 was meant to be 50 basis points (0.5%) instead of 500 basis points (5%).

This correction caused the company’s stock to tumble, dropping to $14.05 by Tuesday evening and $12.13 in early morning trading on Wednesday, down 2.18% from the previous day’s close.

Despite the disastrous typo, the financial report itself was quite positive. Lyft reported that gross bookings grew to $13.8 billion, a 14% increase year-over-year, while revenue grew to $4.4 billion, an 8% increase from last year. The company also had more riders than ever in its history, with 40 million people using the service, and it expected to generate positive free cash flow in 2024 for the first time.

“We’ve entered 2024 with a lot of momentum and a clear focus on operational excellence,” said CFO Erin Brewer in the earnings call.

Unfortunately, the typo overshadowed the good news in the report, leaving many to wonder what could have been if not for the unfortunate mistake.

Artemis V: Advancing Lunar Exploration
Scheduled for 2029, Artemis V continues the expansion of the Lunar Gateway with the delivery of the ESPRIT module. This mission is another crewed mission and will enhance the Gateway’s capabilities by providing additional refueling infrastructure, telecommunications, and a viewing port, akin to the cupola on the ISS. Furthermore, Artemis V includes plans for another crewed lunar landing, continuing the program’s commitment to ongoing lunar exploration and scientific discovery.

ESPRIT: Enhancing Gateway’s Capabilities
The ESPRIT module, developed by the European Space Agency (ESA), represents a significant addition to the Lunar Gateway. It stands for “European System Providing Refueling Infrastructure and Telecommunications”, its role being to support extended lunar missions and enhancing communication capabilities.

The Artemis Program: A Stepping Stone to Mars
Beyond the immediate goals of lunar exploration, the Artemis missions lay the groundwork for humanity’s next giant leap: manned missions to Mars. The technological innovations, international partnerships, and lunar experience gained through Artemis will be instrumental in planning and executing the first human journey to the Red Planet.

Looking Ahead: Artemis 6-12
NASA’s vision extends beyond Artemis V, with plans for missions Artemis 6 through 12 already in the works. These future missions will continue to build on the program’s successes, further exploring lunar resources, testing new technologies, and preparing for the eventual human exploration of Mars. Through Artemis, NASA aims to establish a sustainable presence on the Moon, creating a blueprint for future exploration of Mars.

The Artemis program represents a bold and ambitious journey back to the Moon. With each mission, we move closer to unlocking the mysteries of the Moon, Mars, and beyond, marking a new chapter in humanity’s quest to explore the cosmos.

I hope you enjoyed this 5-part series and are as excited as we are about the next few years of lunar exploration!

Mastercard has announced the development of a cutting-edge generative artificial intelligence (AI) model, designed in-house to enhance fraud detection across its extensive network of banking partners. This innovative AI tool, named Decision Intelligence Pro, aims to provide banks with the capability to more accurately evaluate suspicious activities on Mastercard’s network, facilitating real-time determinations of transaction legitimacy.

In an exclusive dialogue with CNBC, Ajay Bhalla, the president of Mastercard’s cyber and intelligence business unit, shared insights into the technology underpinning this advancement. According to Bhalla, Decision Intelligence Pro leverages a bespoke recurrent neural network, a key element of generative AI technology, meticulously crafted by Mastercard’s cybersecurity and fraud prevention teams. This model incorporates transformer models to harness generative AI’s capabilities, offering a robust solution constructed entirely in-house utilizing diverse data sources within the company’s ecosystem.

“We are using the transformer models which basically help get the power of generative AI,” Bhalla told CNBC “It’s all built in house we’ve got all kinds of data from the ecosystem. Because of the very nature of the business we are in, we see all the transaction data which comes to us from the ecosystem.”

Bhalla revealed the strategic use of open-source resources as necessary, but the bulk of the technology was developed internally. The proprietary algorithm undergoes training with data from approximately 125 billion transactions processed through Mastercard’s network each year. This vast dataset enables the AI to discern patterns between merchants, focusing on transactional relationships rather than textual analysis, to pinpoint potential fraud.

Mastercard’s algorithm uniquely assesses the likelihood of a cardholder visiting a merchant involved in a transaction, using merchant visitation history as a basis for analysis. This approach generates a predictive score through the network, akin to a heat-sensing radar, to gauge transaction authenticity within an impressive timeframe of just 50 milliseconds.

Bhalla highlighted the technology’s significant impact, with financial institutions witnessing an average fraud detection rate improvement of 20%, and in some cases, up to 300%. Over the past five years, Mastercard has allocated over $7 billion towards cybersecurity and AI technologies, including strategic acquisitions like the purchase of Swedish cybersecurity company Baffin Bay Networks in March 2023.

The company’s efforts in AI innovation parallel those of its competitors, such as Visa, which recently established a $100 million venture fund focused on generative AI startups in October 2023. Mastercard anticipates that its AI model will not only enhance fraud detection capabilities but also offer substantial cost savings for banks by reducing expenditures related to the investigation of fraudulent transactions.

Bhalla envisions the technology’s long-term potential to identify and predict emerging fraud trends within the global payment ecosystem, leveraging the comprehensive transaction data from Mastercard’s worldwide customer base. This development comes amidst a wave of AI-driven innovations in the payments and digital banking sectors, highlighted by companies like PayPal introducing new AI-based features and enhanced checkout processes.

Certain types of AI get the majority of attention, namely the Large Language Models (LLM) like ChatGPT and Grok, as well as AI art. But there is actually a whole world of AI applications and innovations that do (generally) more specific and useful tasks. We have covered some of these awesome applications such as advanced farming that could completely change monoculture farming, to a AI fire-detection system that reduced forest-fires by an amazing amount.

Overall, this is a fantastic example of AI being used for something good! Having experienced credit card fraud myself last year, I’m really glad to see Mastercard addressing this issue.