Good morning. It's Friday, Feb. 23, and we're covering the modern monetary theory, home equity hazards, Ryan Serhant on the discipline that built him, and much more. | First time reading? Sign up here. | Stock Market Update | | | | | Market Performance: February 22, 2024. | Nvidia (NVDA.O), opens new tab added $277 billion in stock market value on Thursday, Wall Street's largest one-day gain in history after the heavyweight chipmaker's quarterly report beat expectations and reignited a rally fueled by optimism about artificial intelligence.
The company's stock soared 16.4% to close at $785.38, a record-high close, lifting its market capitalization to $1.96 trillion after its January-quarter report late on Wednesday showed demand for its specialized chips used in AI computing continued to outpace analysts' already-high expectations.
The Santa Clara, California-based company's results fed new fuel to a global rally in technology stocks linked to AI, propelling the S&P 500 (.SPX), opens new tab, Europe's STOXX 600 (.STOXX), opens new tab and Japan's Nikkei share average (.N225), opens new tab to record highs. |
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| | Financial Maverick Insights | | | | | Home equity hazards: The risks of tapping into your property's value | Home equity loans can help homeowners take advantage of their home's value to access cash easily and quickly. Borrowing against your ownership stake could be worth it if you're confident you'll be able to make payments on time, and especially if you use the loan for improvements that increase your home's value.
However, there are several caveats to be considered with these loans. While all loans come with some level of risk, of course, the fact that home equity financing is a type of secured debt — secured by your home, to be precise — means you should approach it with an additional layer of caution.
Risks of home equity loans
There are two main types of loans that use your home equity as collateral: home equity loans and home equity lines of credit (HELOCs). Here's what can happen with both or one of them.
Your home is on the line
The stakes are higher when you use your home as collateral for a loan. Unlike defaulting on a credit card — whose penalties amount to late fees and a lower credit score — defaulting on a home equity loan or HELOC could allow your lender to foreclose on it. There are several steps before that would actually happen, but still — it's a risk.
Home values can change
With mortgage rates on the rise, the steeper cost of borrowing and resulting higher monthly mortgage payments have dampened buyer enthusiasm.
As a result, home price growth has stagnated, and even fallen in some places. |
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| | | | | | Modern Monetary Theory (MMT): Definition, History, and Principles | What Is Modern Monetary Theory?
Modern monetary theory (MMT) is a heterodox macroeconomic supposition that asserts that monetarily sovereign countries (such as the U.S., U.K., Japan, and Canada) which spend, tax, and borrow in a fiat currency that they fully control, are not operationally constrained by revenues when it comes to federal government spending.
Put simply, modern monetary theory decrees that such governments do not rely on taxes or borrowing for spending since they can print as much money as they need and are the monopoly issuers of the currency. Since their budgets aren't like a regular household's, their policies should not be shaped by fears of a rising national debt.
Several other differences also exist between mainstream monetary theory and modern monetary theory, the most important being the sequence of events that emerges from loans and deposits, and from government spending and taxes.
Core Principles of Modern Monetary Theory (MMT)
The central idea of modern monetary theory is that governments with a fiat currency system under their control can and should print (or create with a few keystrokes in today's digital age) as much money as they need to spend because they cannot go broke or be insolvent unless a political decision to do so is taken. |
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| Real Estate News |  | Ryan Serhant on the discipline that built him | After "Million Dollar Listing New York" made him part of a "real estate-pop culture zeitgeist," Ryan Serhant was launched into fame. |
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|  | Helpful Tips For How To Better Protect Yourself From Real Estate Fraud | A recent report from CertifID, a company that provides security solutions for the banking industry, found that one out of every three real estate transactions may be targeted for some form of real estate fraud. |
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|  | How to Become a Real Estate Agent After 50 –AARP | Many real estate agents come to the role as a second career. In fact, the median age of all real estate agents who belong to the National Association of REALTORS® is 60. |
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| | Personal Finance Tips | :max_bytes(150000):strip_icc()/shutterstock548307841vc-5bfc2b2d46e0fb0083c06c19.jpg) | What Is Bitcoin Cash (BCH), and How Does It Work? | Bitcoin Cash is a cryptocurrency created in August 2017 in a hard-fork blockchain split from Bitcoin. Its aim is to decentralize crypto again. |
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|  | Free Cash Flows and Innovation | Amazon Web Services | Customers often ask us how Amazon manages to sustain its pace of innovation. It is truly an amazing pace: on average, AWS releases a major new feature or service approximately once every five hours, day and night, 365 days a year. |
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|  | Finding hidden value with order-to-cash optimization | Too often, organizations lose significant value in order-to-cash and inside-sales operations. A deeper understanding of process break points can unlock significant hidden opportunity. |
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| | Alternative Investing |  | 2024 is a year of reckoning for AI | The frenzied hype around AI kept expectations high. The earnings calls disappointed. 2024 is going to be a year of reckoning. |
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|  | Bitcoin ETF Custody: What Is It? How Does It Work? Who Holds The Keys To Crypto Security? | Spot bitcoin exchange traded funds (ETFs) finally hit the market in January after the Securities and Exchange Commission on Jan. 10 approved their launch. |
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|  | Human implanted with Neuralink brain chip 'can control computer mouse just by thinking', Elon Musk says | In the first update since January, Musk said the patient is making "good" progress. The billionaire hopes the technology will eventually be able to treat obesity, autism, depression, and schizophrenia. |
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| | Do you believe 2024 is a year of reckoning for AI? | | | Reach Over 100,000 Financial Mavericks | Advertise with Financial Maverick to get your brand in front of the Financial Gurus in the world. The Mavericks are high-income and highly knowledge people who are always looking for an interesting product or tool. | | | Share Financial Maverick | Calling all Financial Mavericks! To help out a family and friend in need by sharing this newsletter. Tell you what if you ever wanted to be a Hero, Financial Guru, or a Nice Person this is your time! | | | DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research. | |
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