Mike Lipper’s Monday Morning Musings
Penalty for Using the Wrong Indicators
Editors: Frank Harrison 1997-2018, Hylton Phillips-Page 2018
Lessons from History
Louis XIV of France reigned from 1643 to 1715. Examine the “Sun
King” and the dramatic changes wrought on France one hundred years after his
death:
- He built the Palace of Versailles and commanded all nobles to live there. Being away from their ancestral homes and lands weakened their political strength and direct control of their lands.
- He built a very expensive Palace with monuments to himself.
- He moved the government of the country to the suburbs of Paris, which led to great difficulty in collecting taxes from Paris to pay for his frequent and expensive wars.
- The separation of the tax base from its expensive ruler was an important contributor to the French Revolution and ultimately Napoleon, who also conducted very expensive wars.
Hopefully; the US won’t follow a similar pattern.
Which May Be the Wrong Indicators?
Evidently, based on government numbers produced by
understaffed personnel, few people in Washington DC believe the US economy is
healthy and growing. (We have been cutting governmental research staff for several
generations.) Economic expansion is only seen in “AI”, which is in part driven
by government funding of wars and medical related expenditures. These
expenditures are in part caused by faulty schooling. (We have deserted
education in terms of health and morality for a long time)
The bulk of the remainder of the economy is not growing. An
indigent population of workers is merely replacing those leaving jobs. Many stores
and class “B” office buildings have vacancies or are completely empty.
The present government believes bombs alone solve problems
with countries unresponsive to our desires. Historically this has not worked,
except for nuclear bombs which create other problems.
Financial markets are increasingly responding to these
issues. Last week the following data was put forth:
- US retail sales grew at only 0.8% compared to an estimated 1.3%.
- Sixty-seven percent of stocks traded on the NASDAQ market sold at lower prices last week, with only 18 of 1393 stocks rising in price on the older New York Stock Exchange (NYSE).
- The American Association of Individual Investors (AAII) sample survey shows 41.6% anticipating a higher market in six months vs. 38.7% anticipating a lower market. Both numbers are about 1% lower than the prior week.
- According to Barron’s, 12 European stock markets rose vs only 3 in Asia.
At least some people see a less rosy picture of the US
market than those in Washington.
How do you see it?
Did you miss my blog last week? Click here to read
Mike
Lipper's Blog: Headlines Are for Those Who Don’t Use Their Heads - Weekly Blog
# 962
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Lipper's Blog: Are Changes Indicative? - Weekly Blog # 961
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Lipper's Blog: For Better Performance: Pick the Right Data - Weekly Blog # 960
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