Is it Safe to go back Outside?

 Is it safe outside ad

What a long, strange trip it has been, to quote Jerry Garcia.  Do we have stories to tell our grandkids!  At the risk of getting mildly political, we find ourselves in a negative feedback loop.  Thirteen months ago, we penned an article accurately laying out the economic challenges we were facing for 2022.

In our letter written on Nov 14, 2021, “How will ESG Impact Your Investments”, we discussed:

  • Global energy demand and prices
  • Inflation
  • The Federal Reserve (global central banks) and interest rates


In the months that followed, energy prices rose dramatically, and the White House tapped the Strategic Petroleum Reserve to dampen stress.  Russia invades Ukraine in February, sending shockwaves through the energy and food markets.  Inflation is on the march to records we haven’t seen in over 40 years.

The Federal Reserve passed off the inflation story for months as transitory, as inflation gripped the US and world.  The Federal Reserve then stepped in with an unprecedented 3.75% of rate hikes.  However, once the genie is out of the bottle, it is hard to reverse course…kind of like toothpaste.  From our letter last year:

INFLATION Some economists are worried about a 1970 style inflation/stagflation type environment. We are not going to make predictions here. What we do see are corporate challenges including – wages (new power of labor to demand higher wages), transportation costs (supply chains), and energy costs (oil, gas, coal). This trio of issues may leave a bright red stain on corporate earnings reports.

read more icon


Popular posts from this blog

Listen to the Music

Image
In the ’70’s, Michael McDonald and The Doobie Brothers released a number of great hits.  One of those hits was “Listen to the Music” which was released in ’72 on the Toulouse Street album.  This ties in with our theme for this newsletter where we are suggesting that you listen to the Markets. Don't you feel it growing, day by day People getting ready for the news Some are happy, some are sad Oh, we got to let the music play What the people need Is a way to make 'em smile It ain't so hard to do if you know how Gotta get a message Get it on through Oh now mama, don't you ask me why Whoa, listen to the music Whoa, listen to the music Whoa, listen to the music All the time Well I know, you know better Everything I say Meet me in the country for a day We'll be happy And we'll dance Oh, we're gonna dance our blues away While it may appear to be February 2nd (Movie reference:  Groundhog Day), every day as the AI (Artificial Intelligence) craze continues to dominate...
Read more

How will ESG Impact Your Investments

Image
Davos, Switzerland is small mountain village with a population of 11,000 people.  Most Americans are not familiar with Davos.  Why is this little ski resort so important? Each February the Ruling Class – bankers, business leaders and the global elite – descend upon Davos for the World Economic Forum (WEF) hosted by the World Trade Organization (WTO). These are the central planners and “thought leaders” of our time, and they are responsible for many of today’s social policies. They discuss important topics such as climate change, “global society”, and monetary policy.
Read more

De Do Do Do, De Da Da Da

Image
  From the álbum Zenyatta Mondatta, the British trio, The Police break into the Billboard Hot 100 with this song.  Sting claims that it is their most misunderstood song.  I must admit that I never really listened to the lyrics over the past 40 years until I searched for a title for this article and this song played on WNKO. The song cautions us on how we use and interpret words.   As Robert Plant shared with us, “Sometimes words have two meanings”.  2024 could be a very interesting year for the markets and leave a profound influence on 2025 and beyond. Just think about the second verse about Poets and ‘our’ politicians.  The policies at the Department of Treasury are likely to shape our market in ways that we haven’t seen in markets of old. It is a Presidential Election year, and the gloves are off. What does the Federal Reserve do? The Fed role in society is to manage inflation and employment.   One of the ways the Fed accomplishes its manda...
Read more