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- The traditional method of determining the status of economic cycles has been the Gross Domestic Product output on a quarter-by-quarter basis. A recession is technically defined as “two consecutive quarters with zero or negative GDP growth”. The problem as stated in this blog previously is that manufacturing output is no longer relevant as a statistical measure for this purpose. Permit us a history lesson: from 1949 to 2022 manufacturing payrolls as a measurement of GDP fell from 33% to slightly over 8% while the services index rose slightly or stayed the same. Our point: manufacturing is less of an American activity by about 80% compared to what it was in 1949. And yet the definition of recessions has not recognized this obvious fact. If you doubt this–consider: after COVID subsided businesses were hiring everywhere. But the jobs were largely in service industries. Our unemployment rate was at historic lows–3.4%. (This low was achieved even with the tech industry constantly announcing huge layoffs.) Why–because manufacturing jobs are not as big a part of our economy. And therefore–if you see hiring at this pace and unemployment at this level–you will not have a recession. Remember, the big worry with a recession is that the economy will contract and people will lose their jobs. That simply hasn’t happened.
- The latest crazy (we tried to think of a more professional term but couldn’t) move by Trump is the production and sale of bobbleheads that depict him as a super hero. Does anyone not see how he continues to try to “capitalize” (make money) on his name? Picture if you can ANY former president doing the things he has done. Can you see Abe Lincoln printing trading cards? How about Ronald Reagan writing a “tell-all” book without getting the OK of his closest confidants? And I’m sure John Kennedy would not issue a bobblehead of himself and his family. Wake up–all you who are numb to these kinds of antics–IT’S ALL ABOUT MONEY!!!
- We seldom comment on foreign affairs but the current French fiasco has our attention. First, you cannot compare our system of retirement at age 65 (considered as normal) against any other country. The various cultures around the world have been established over hundreds of years and they carry their own nuances. But this pension system seems to have a simple answer. President Macron wants to increase normal retirement to age 64 but the people want it to remain at age 62. Secondly, Macron should take the issue to a voting referendum. There is a cost involved. Tell the people what the cost is to remain at age 62 and what it would save to move to age 64. Then show them what age 63 would cost. Macron should indicate that whatever additional cost is OK’d by the majority will be assessed as a payroll tax. Let the majority vote determine which age–and what cost–is acceptable to most people. If France is a democracy and people know the impact of what is at stake they will/should respect majority rule and the issue should resolve itself.
- The professional golf world is still about money (big surprise huh?). A recent Saudi tour event suffered from very low TV ratings. And the potential sponsor withdrawal threat hangs over its head. But the US PGA tour–even with tripled purses in their tournaments–still cannot match the Saudi tournament money. So newspapers have decided NOT to display winning amounts side-by-side. This festering wound will all come to a head in early April when the Masters Tournament is held at Augusta, Georgia. Enough insults and lawsuits have been hurled that will make this golf “major” event a week to remember. Even if you’re not a golfer you may find the happenings very interesting. We’re sure the boys have been told to play nice but–boys will be boys.
- For those of you still keeping the COVID stats on your radar, the national average of positive COVID test results/100,000 of population is now 10. There are 17 states over that average. 14 of those are “red states” and 3 are “blue states”. Without turning this into a political discussion suffice it to say that COVID killed more people, produced more hospitalizations and still is more evident in GOP-controlled states than in Democratic-controlled states. These are CDC facts. You, of course, are free to disagree but it won’t change reality.
- One final note on the Trump legal issues. Trump worked exclusively with Deutsche Bank as he managed his way through mounds of mortgage applications. But no one at this point has asked the question of Deutsche Bank “did you lay off or cede any of the mortgage obligations to other lending institutions behind the scenes?” The point we make is: are there other financial lenders who will suffer serious harm if Trump is jailed? It is very difficult to believe that the Trump empire was able to float all its money needs through one bank. Can you imagine the exposure of a CEO and Board of Directors if Deutsche Bank swallowed the whole load without spreading its risk? Think about it. Do you invest all of your retirement money in one security?
- The Major League Baseball season is about to start. So it’s appropriate to reflect on 2022 and observe the past so we can intelligently evaluate 2023 possibilities. Stats are always a good place to begin so let’s look at offensive category (hits, doubles, triples, Home runs, etc.) winners from 2022. We find that 70% of the offensive category winners played on Division winning teams in 2022. And, in looking at the most lucrative free agent signings in the off-season, we find that 60% of the highest paid free agent signings were captured by those same division winners. Conclusion” expect the same division winners this year. The rich get richer and the poor get whatever the rich don’t want.
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