- It is better to look good than feel good.
- Billy Crytal as Fernando Lamas on TV.
Well, the sketch from SNL got a twist by Bill Clinton as he campaigned for the presidency. He said, "It's the economy, stupid!" Years later, he refined the statement to affect your emotion. In helping his fellow Democrat, Obama seek reelection under a difficult economy, he told him to use positive economic messages in the media. It worked. Today, Biden is trying the same technique under a difficult economy. Trump says the economy would be better under him. Whomever wins will employ the same principle, "Spend!" Neither has a vision. They do bandaids. Biden did well with his chip bill and the cleanup with the bridge in Baltimore. Trump enacted the first tariffs, but they were only tokens to fulfill his campaign promise. Meanwhile, we notice some aspects that will not leave us not feeling well if they cause an unpleasant surprise. The most alarming and dangerous took place last week.
End of Petro-dollars
Saudi Arabia is ending the petrodollar agreement with the US. This means the most inportant commodity, oil will no longer be priced in US dollars. Saudi Arabia joined the BRICS who are seeking to stop the dollar from being the world's reserve currency. Saudi Arabia is supplying the first nail for the dollars coffin. However, they are also keeping ties by joining a pact to formulate peace in the Middle East.
Enter: Strategic Alliance Agreement. This partners with the US and Isreal under a nuclear pact. One aspect of the deal is to allow Palestine to be recognized as a state. Meanwhile,
We mentioned above how Biden is putting out messages that things are getting better and they are not as bad as perceived. One way to use data to support those statements is to mention the unemployment rate and job growth. What we are seeing is possible corruption and a no doubt manipulation of the labor data. This is shades of Bill Clinton. The recent reports by the BLS all seem to project a huge creation of jobs only to be revised downward under the radar. In June of 2023 (one year ago) the report stated 209,000 new jobs. Turns out there were only 105,000 new jobs. That number is under our population growth. We need 150,000 jobs to stay even with population. The unemplyment rate shoud have ticked higher, but it did not. In fact, the data reported by the BLS has been revised downward 10 of the last 12 issues. The message to "feel good" does not hold because everyone goes to the grocery store and knows that a dozen eggs cost 50% more. Meanwhile,
We hear Chairman Powell of the Fed give us another "transitory" quote. Remember he said in January 2022, "Inflation is just transitory." Now, he says, "The banking system is in a good place." I guess Powell does not read the news like we have been mentioning in commercial real estate. We have another example. Blackstone, who publically says this is a great time to buy real estate, has quietly sold a large New York office building to KKR. Get this, they had to offer financing along with a low price to push the deal through. The banks would not touch the deal nor the buyer with high interest rates.
Recessions and Fraud
If you do a quick check on recessions, one thing always appears, a fraud scheme is exposed. Well, there is a Texas bank, USAA that is being suspect in the news. There were 4,119 complaints against the bank just last year. The bank also suffered a "data" breach. More news will be forthcoming.
Sell Short
This is not a recommendation to sell short, Tesla, but the owner did. Musk took 10% of the companies value for himself. I bet he feels good? However, those who have stock in the CAC do not. The index dropped to the same level as July 2023. With the Olympics coming, along with Bastille Day and a snap election, the smiles will be in doubt. Hope things turn for the better.
Finally, Some Relief
There is some feel good news with the summer heat. Try going to your local park. The trees give off clean oxygen and shade to rest. Some new ideas are also emerging. Parks are adding misters that spray the mist of cool water. New designs are constructing breezeways that are 10 degrees cooler. The wonderful ideas that keep coming from Singapore. They add cold tubing in their parks. Under a pavilion a line of tubes filled with cold water are added. They attract the heat from people to the pipes and somehow, the area gets cooler. Great stuff as the aspect to have all park roofs use reflective paneling and throw in some solar to cut the cost of street lighting. Peace.
