Sabbatical
We are back. Rink Rats, after a year away from writing has
returned.
A sabbatical if you like: What is a sabbatical? A sabbatical
is an extended period away from work. During this time, employees are still
employed and may still be paid. The employee can use this time as they like,
whether for rest, learning new skills, or writing.
Well, I did not write, or was I paid, but I needed a
break. Call it writer’s block, the need
to recharge the batteries, tired of all the BS in the world, and time to think
about some new twists to Rink Rats.
It has been a year of good and bad (July 2022 to present).
Good health, good friends, good golf, and of course the rewards of teaching
wonderful students ranging from high school to graduate degree students. The
bad: Bad leadership, bad weather, bad baseball, and divisions we have in
society in so many areas.
We will try and tackle a few of these good and bad as we get
back into our blog. I plan of three blogs a month plus some special editions.
We also plan on once a quarter podcast and some other surprises.
We appreciate you staying with us, let’s get at it!
MARKET WEEK - To see what an economic
soft landing looks like, search no further than business hiring.
Parts of the U.S. economy are cooling, just as the Federal
Reserve would like to see to combat inflation. Yet the key to a measured,
inflation-busting slowdown that does not sink the economy lies in whether
companies hold on to workers or lay them off. The answer, so far, is clear:
They are making a priority of keeping workers. July's jobs report on Friday
will offer a fresh look at whether employers are continuing to resist
large-scale staffing cuts.
Everyday investors are thriving in a world awash
in yield.
Interest rates are hovering at their highest level in more than
two decades. For individual investors, that has been an unexpected blessing.
Although it is more expensive for consumers to borrow money now, they also have
more options to put their cash to work. American households are earning an
extra $121 billion from income on investments annually versus a year ago,
according to Commerce Department data through June. In the coming days,
investors will be parsing earnings reports from the likes of Apple, Amazon and
Starbucks for insights into where consumers are spending their money as
inflation eases and interest rates rise.
The U.S. economy continues its glide path to the
elusive "soft landing," even in the face of 11 interest rate hikes
and counting.
That is in large part because we spent the 15 years before the
rate hikes steadily deleveraging and ensuring that debtors could not easily
fall victim to a credit crunch.
Why it matters: Rate hikes in many other countries, especially
the U.K., hurt most of the population rapidly, thanks to their high
homeownership rate and how short-term their mortgages are.
The U.S. has positioned itself to withstand rate shocks much
more easily.
Household and corporate debt is mostly fixed-rate rather than
floating-rate, meaning that debt payments do not immediately rise when rates go
up.
There is also less debt, overall, than there has been
historically.
The bottom line: The good news is that the U.S. economy has
shown that it can remain strong in the face of an ultra-aggressive rate-hiking
cycle by the Fed.
The bad news is that rates might have to remain high for some
time before the Fed feels comfortable bringing them back down to a more neutral
level.
But we believe two major areas of the economy will
have a recession in the next six months: (1). Television and film production,
and (2). Higher education. Stay tuned to future blogs for analysis.
HEAT - How hot does it have to be for
a month to be declared the hottest month on record when it is not even over
yet?
Approximately 62.51 degrees Fahrenheit, which was the global
average temperature for July through the 23rd day of the month. That makes it
the hottest month ever (barring a sudden ice age), according to the EU’s
Copernicus Climate Change Service and the World Meteorological Organization.
Warning of the “existential threat of climate change,” the
president announced policies yesterday aimed at protecting workers at high risk
of heat-related illness or death on the job.
President Biden asked the Department of Labor to issue a heat
hazard alert, which would mandate heat-related protections under federal law.
Last month, Texas Governor Greg Abbott signed a law to eliminate local rules
mandating water breaks for construction workers, saying it creates too much red
tape for business.
The President also called for increased inspections on farms
and construction sites.
Other industries are also adjusting to the record heat. In the
fragile airline industry, which is already juggling huge demand and worker
shortages, the heat is disrupting operations even further:
Warm air is less dense and requires planes to have longer
runways and lighter weight to lift off, which can cause delays.
Workers on the tarmac need more frequent breaks from slinging
Away suitcases.
It is difficult to cool down a plane once it has been
disconnected from cooling units at the gate. Left idling, an aircraft’s cabin
temperature can reach a dangerous level—such was the case with a Delta flight
last week in Las Vegas. The airline is under investigation for leaving
passengers on the tarmac in a sweltering plane without A/C for hours.
It is not going to get better soon. Forty percent of the US
population was under a heat advisory yesterday as dangerous temps move East and
roast the heavily populated I-95 corridor (hello from sweaty Brew HQ). Phoenix,
AZ, can sympathize: Wednesday marked the 27th day in a row that temps reached
110 degrees.
BIRTHDAYS THIS WEEK –
Birthday wishes and thoughts this week to Kate Beckinsale (50); Ken Burns (70);
Reggie Dunlop, “Give 'em the old-time hockey!”; Issam Ghazzawi…the best teacher
at the University of La Verne; Corlan Harrison…a truly giving person; Mick
Jagger (80); Lisa Kudrow (60); Norman Lear (101); Sandro Suffredini…the master
of video games
TOP FIVE – Rink Rat Summer Movies
1). Oppenheimer
2). Mission Impossible – Dead Reckoning
3). Living (Netflix)
4). You Hurt My Feelings
5). Asteroid City
STAT OF THE WEEK - Former President The
Thing’s PAC has spent $40.2 million on legal costs to defend himself and his
associates in the first half of this year, The Washington Post reports.
That is more than Save America — the PAC — raised in the
second quarter of 2023 and brings the group's total spending on The Thing's
post-presidential legal woes to around $56 million.
The former president is facing multiple criminal
investigations at the state and federal levels, and he has been indicted in
Florida and Manhattan.
Costs are adding up as Save America, which mostly raises money
through small-dollar donations from The Thing supporters around the country,
takes on the legal bills of almost anyone in the former president's orbit who
has been pulled into the investigations.
HISTORY 101 - In the United States, Teapot
Dome, Watergate, Iran-contra and Whitewater never put a president in the dock.
The only sitting president to see the inside of a police station as a defendant
was Ulysses S. Grant, who was stopped for speeding down the streets of
Washington in his horse-drawn carriage. He paid $20 and went on his way.
While no president has ever been indicted before, an early
vice president, Aaron Burr, was put on trial for treason after leaving office
for plotting to carve off Western territories into a new country, although he
was acquitted. Nearly two centuries later, another vice president, Spiro T.
Agnew, resigned amid a plea deal in a corruption case.
The Thing would not be barred from running for his old office
by an indictment or even a conviction. In 1920, Eugene V. Debs, the Socialist
leader, mounted his fifth bid for the White House from prison, where he was
serving time for his opposition to World War I. He received 919,799 votes, or
3.4 percent of those cast. Of course, unlike The Thing, he was not a
major-party candidate and had no prospects of winning.
At least a couple other presidents worried about being
indicted after office. Richard M. Nixon was pardoned by his successor, Gerald
R. Ford, a month after resigning, sparing him any prosecution in the Watergate
scandal. Bill Clinton struck a deal with Whitewater prosecutors on his last
full day in office in which he admitted providing false testimony under oath
about his affair with Monica S. Lewinsky, gave up his law license for five
years and paid a $25,000 fine in exchange for not facing charges as a private
citizen.
BIDENOMICS - If Larry David were a
macroeconomist, he’d probably tell you that the economy is doing pretty,
pretty, pretty good. The real economists at Morgan Stanley have upgraded their
prediction for this year’s US GDP growth by almost fourfold (to 1.9%),
crediting the boost to “Bidenomics.”
Biden’s critics and supporters alike have embraced the term
for the president’s economic philosophy. And now that POTUS has made it central
to his reelection campaign, you are going to keep hearing it.
What does it mean? The backbone of Bidenomics is industrial
policy, aka directing loads of government spending toward key industries like
clean energy and semiconductor production. The goal is to make America a
high-tech manufacturing hub that is less reliant on global supply chains while
creating solid middle-class jobs.
It’s intended as a rejoinder to Reaganomics, the philosophy
that reducing business regulations and cutting taxes for the rich juices
spending, making wealth eventually trickle down through the economy.
But in Bidenomics, it is federal spending that drives the
action.
The Infrastructure Investment and Jobs Act made $550 billion
available for road repairs, broadband expansion, and electrical grid upgrades.
Chipmakers now have more reason to chip make in the US thanks
to $52.7 billion in direct subsidies in the CHIPS and Science Act.
And companies involved in solar, wind, and clean hydrogen
technologies can receive tax breaks and funding from the $500 billion Inflation
Reduction Act.
The administration also doled out cash for social welfare,
like temporarily expanding a tax rebate for families with children in 2021.
How is it going so far?
The White House has quickly branded recent strong economic
data as a Bidenomics win. Experts were surprised by faster-than-expected 2.4%
annualized GDP growth last quarter, partially due to government spending.
Yearly inflation cooled to 3% last month after peaking at 9.1% a year prior,
and the labor market remains strong.
Just how much credit Biden’s industrial push deserves for all
that is up for debate. But there are some concrete industry investments
stemming from the new laws:
Lured by federal subsidies, chipmakers plan to invest $210
billion in US factories and employ 44,000 people, according to the
Semiconductor Industry Association.
And many foreign cleantech companies are reportedly looking to
invest in the US, where incentives for their industry abound. Swiss solar
battery-maker Meyer Burger indefinitely postponed plans to expand in Germany
and wants to build a factory in Colorado Springs, CO, where it says it will hire
350 people.
Cheerful economic updates do not automatically turn workers
into Biden supporters though—only 36% of Americans approve of the president’s
handling of the economy, per recent polling.
Many people are still spooked by months of predictions that a
recession is near and feel like inflation has eaten into wage gains.
Looking ahead...it’s probably too soon to judge Bidenomics:
Major government programs take time to work and can have unexpected
complications and side effects—so its full impact may not be felt until well
after the pundit chatter recedes.
Growth in key US inflation measure continues to
slow.
The personal consumption expenditures price index—the Federal
Reserve's preferred inflation gauge—rose 0.2% month-over-month in June, up from
0.1% monthly growth in May. On a yearly basis, the index rose 3% in June, down
from 3.8% growth in May and 4.3% in April. The index measures the costs
consumers pay across a wide swath of items.
To see what an economic soft landing looks like, search no
further than business hiring.
Parts of the U.S. economy are cooling, just as the Federal
Reserve would like to see to combat inflation. Yet the key to a measured,
inflation-busting slowdown that does not sink the economy lies in whether
companies hold on to workers or lay them off. The answer, so far, is clear:
They are making a priority of keeping workers. July's jobs report on Friday
will offer a fresh look at whether employers are continuing to resist
large-scale staffing cuts.
SCIENCE 101 - The month of August will be
bookended by two supermoons — and the first will illuminate our night skies at
the start of this week.
This month’s first full moon, nicknamed the Sturgeon Moon,
will reach peak illumination at 2:32 p.m. ET on Tuesday, August 1, and will be
best viewed later that evening as it rises in the southeastern skies after
sunset, according to The Old Farmer’s Almanac.
This full moon is the second in a unique string of four
supermoons in a row this summer. It will be followed by a supermoon blue moon —
the second full moon to occur within one calendar month — on August 30.
A full moon is called a supermoon when it reaches peak
fullness at the same time it reaches “perigree” — the moment when the moon is
at its closest point to Earth in its roughly 28-day orbit cycle. This can cause
the moon to appear larger and brighter than usual, especially when the moon is
near the horizon as it rises.
According to The Old Farmer’s Almanac, which publishes names
for each full moon based on a variety of cultural sources, the August full moon
is called the Sturgeon Moon because it coincides with the time of year
historically associated with the season for catching sturgeon, a massive Great
Lakes native fish with prehistoric origins. Moon names traditionally applied to
the moon’s entire 28-day cycle, not just full moon itself.
OUT AND ABOUT – This past month a group
of St. Lawrence hockey “old-timers” came together in Canton, New York for a
reunion. A fantastic weekend was hosted by hockey coach Brent Brekke and
associate athletic director Randy LaBrake. Golf, campus visits, Hoot Owl, and
great stories highlighted the weekend. The best, touring the “old barn”
Appleton Arena. What a great job by St. Lawrence in renovating the famous
arena. The names of Yosh, Cat, Red Jet, Murph, Newfie, Lunar, Road Map, Hoot
Owl, Hollywood, Breeder, Brousser, “O”, Bugsy, and Caper, will live on forever
in this hockey haven.
THE SWAMI’S WEEK PICK –
MLB Game of the Week –
Saturday 8/5, 1:05 PM (EDT), YES: Houston Astros (59-47) vs. New York Yankees
(55-50). Both teams are battling for a wild card spot, Yanks are feeling the
heat being 4.5 games behind the Astros. Also, Astros have the Yankees number. Houston
wins 5 – 3 in the Bronx.
Season to Date (0 - 0)
Next Blog: A Recession in Higher
Education
Until August 7, 2023, Adios.
Claremont, California
July 31, 2023
#XIV-1-452
2,637 words, four-minute read
RINK RATS POLL – Ocean or lake?
____ Ocean
____ Lake
CARTOON OF THE WEEK – “Fireworks
Season”
QUOTE OF THE WEEK – “The
era of global warming has ended; the era of global boiling has arrived.” – Antonio Guterres, United Nations
Secretary-General
Rink Rats is a blog of weekly observations, predictions,
and commentary. We welcome your comments and questions. Also participate in our
monthly poll. Rink Rats is now viewed in Europe, Canada, South America, and the
United States.
Posted at Rink Rats The Blog: First Published –
May 3, 2010
Our Fourteenth Year.
www.rhasserinkrats.blogspot.com
