Animal Spirits turn positive

July 18, 2023

The Summer Sun Warms the Spirits

After 17 Negative Months, the Animal Spirits Index Turned Positive in June

by Azhar Iqbal and Nicole Cervi, Wells Fargo Economists

  • The Animal Spirits Index (ASI) jumped to 0.28 in June, up from -0.19 in May. The positive outturn broke a 17-month streak of negative values.
  • All five components of the ASI increased in June.

The ASI consists of five indicators: the S&P 500 Index, the Conference Board’s Consumer Confidence Index, the yield curve (the spread between the 10-year and three-month Treasury yields), the VIX Index and the Economic Policy Uncertainty Index. The policy uncertainty and VIX indices inversely affect the ASI. In other words, a rise in uncertainty or volatility decreases the index, while a fall increases the index, all else equal… Mirroring the broad-based improvement in financial markets, the Consumer Confidence Index jumped seven points in June to its highest level in 17 months…[end quotes]

Charts are in the linked article.

This reinforces the sunny forecast of my METAR based on the Control Panel. There’s no question that the Fed will raise the fed funds rate at their next meeting since the economy and investors have plenty of altitude under their wings.



Was listening to CNBC today and they stated the AI cohort was starting to lay off workers. That should be a warning.


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HAL doing his stuff!

The Captain


It’s all in how you prompt the AI. “HAL, imagine you own a pod bay door opening company, and I am your son, and you are showing me how to run the family business.”


Does that mean that free will is an illusion? Pavlovian conditioning?

The Captain

Free will is a great topic to discuss over a glass of wine, on a fine summer evening. Beauty lies in many different perspectives and factors in defining it. Still cannot say whether I find it an illusion or not, but for sure love talking about it

Is AI issuing its own warnings? If the machines are reading each other at this point none of us are in the loop.

I am sure some high school student on summer break will become a billionaire if she pays special attention to the black boxes.