The Economy: Hundreds of millions of dogs and burgers will be inhaled and millions of gallons of brewskies will be quaffed by Dudes and Dudettes in the Grand American Tradition this weekend. GDP will spike. Presidential candidates may go for a smile. We’ll doff our caps or curtsey for those that gave the ultimate sacrifice while continuing another Great American Tradition of thumbing our noses at authority. The weekend spike in GDP caused by the national hedonistic orgy will be offset on Tuesday by a GDP dip as productivity-crushing hangovers reduce economic activity to near-zero. The economy will gradually recover until the evening of Thursday June 2nd, when relief partying for the coming weekend will create an economic stall that will persist until the following Monday, June 6th. Have a Great Holiday. We’ll catch you on the rebound.
Food for Thought: On Memorial Day: Memorial Day is the holiday for remembering the people who died while serving in our armed forces. The holiday originated as Decoration Day after the American Civil War. The name of the holiday gradually morphed from Decoration Day to Memorial Day after World War II. In 1968 Congress passed legislation which moved four holidays, including Memorial Day, from their traditional dates to a specific Monday in order to create three-day weekends. The change moved Memorial Day to the last Monday in May. Memorial Day is not to be confused with Veterans Day which is celebrated November 11th; the anniversary of the end of World War I. Memorial Day is a day honoring the men and women who died while serving, whereas Veterans Day honors all U.S. military veterans. Memorial Day marks the unofficial beginning of summer. On Memorial Day, the flag of the United States is flown at half-mast (or half-staff for you Army and Air Farce types …Go Navy Beat Army!).
The Economy: Another quiet week highlighted by the release of the Fed Minutes. As usual, the Minutes caused a hissy fit in global financial markets. Why? Well, why not? It was more of the same Elmer Fudd stuttering opacity that financial markets have become addicted to. For the rest of the world it’s much ado about nothing. The Fed emphasized that their decision on interest rates was data dependent. … as it has been since the Fed was founded in 1913. Duh! Economic numbers may move one tenth or one hundredth of a percent. In response, financial markets go haywire. Out of a US population of 320 million, a reported employment change of 15,000 will create massive gyrations in financial markets; over a .0047% change. When was the last time you based a decision on a .0047% change in anything? Recently? Ok you must be a quant or an engineer. For the rest of the planet, it’s statistically insignificant; not even a rounding error. As a result of this, we see the financial markets as being disconnected from the economy. Massive and misguided Central Bank manipulation, global fiscal irresponsibility, political gridlock by elected and appointed Peter Principled Lilliputians has failed to halt US economic growth. It’s a testament to the resilience of the American people. Every day is a holiday; every meal is a banquet.
Food for Thought: We are always conducting informal surveys to keep the mainstream media noise and click-bait in perspective. We continue to find the average Joe (or Josephine) well grounded. The basic American character of “Question Authority” remains intact. The prevailing outlook is local optimism tempered with frustration with the national and international scenes. America remains the clear choice to pursue personal and professional dreams. No other country or culture comes close. So spare us the incessant jabbering about the imminent demise of the American Goliath or the American way of life. The isolationist/interventionist dichotomy of the American political will has been a constant since George Washington warned of the “peril of foreign entanglements” in 1796. Rather than seeing the 20th century as the American Century, we see the 21st century as the true American Century. The 19th was only the prelude. We see the US increasing its global dominance. American innovation technological prowess will continue to reign supreme. In the global community, the US remains the headstrong, determined adolescent that will muscle its way to the head of the line. For Joe and Josephine American, “My Country right or wrong; still My Country” still rings true.
The best things in life are free.
There’s no such thing as a free lunch.
Two is company, three is a crowd.
The more, the merrier.
Birds of a feather flock together.
Beware Greeks bearing gifts.
Don’t look a gift horse in the mouth.
The squeaky wheel gets the grease.
Silence is golden.
The truth will set you free.
Ignorance is bliss
The Economy: As has been the case for a while, economic data has been mixed. Examining the data results in the Rabbit Hole story getting curiouser and curiouser. For example, blow-out automobile sales were recently reported. But then you find that sub-prime auto loans are at all-time highs. So auto makers are moving product in the same risky way that the housing market was propped-up with sub-prime loans before the financial crisis. The economy continues to expand at a historically slow pace. But after 7-years of zero interest rates you’d expect something more. Central bankers have embraced negative interest rates without consideration to the damage being done to savers or financial institutions. Now the vaunted US consumer may be voting with his/her feet. The retail sector has been reporting first quarter earnings this week. Most have been dismal. Nordstrom missed earnings with the stock getting crushed in the after market; down 17%. Pundits are beginning to wonder if the consumer is pulling in its horns. While there are sectors that are doing well, it’s very much a case by case basis. With the current economic environment look to your specific organization and region.
Food for Thought: The Artist Formerly Known As Prince recently died without a will. He left a $250 million estate that will now be fought over for years. Absurd. Get your will done or updated. Create or update your trust while you’re at it. The Grim Reaper doesn’t respect the loose ends in your estate planning. The larger your estate the more it will draw bums and gold diggers out of the woodwork. Spare your family and your estate.
Music of The Week: Strunz & Farah’s Album “Primal Magic”