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06.2.2023 by David M. Smith

Debt Ceiling Bill Moves Forward & Checking In With Dr. Copper

The Debt Deal – All That Fuss for This? It looks like the debt ceiling budget deal will be approved. But was it worth the high-stakes brinkmanship? The deal outlines modest spending cuts for discretionary spending and IRS funding plus some work requirements for welfare programs. There’s nothing in it to stabilize the real deficit causing issues in the large mandatory programs of Social Security, Medicare, and Medicaid. And the cost for this modest bill was that the sovereignty of the U.S. debt was jeopardized, the 14th amendment almost came into play, the minting of a $1T coin was considered and bond markets were going wonky with Federal debt due about the time of default. It’s not necessarily a bad bill, but I doubt many will agree the cost and nervousness were worth it. Can we hope for a better process and result in two years? Axios Greg Valliere

Job Openings Are Up: Job openings climbed in April and layoffs slowed in a sign of strong labor demand. After three months when job openings declined, they accelerated again. There are 1.79 job openings per unemployed worker, well above normal. The Federal Reserve is monitoring the strength of the labor market as it tries to determine monetary policy and this will be one of the factors in its June meeting. WSJ

Checking In With Dr. Copper: Periodically I will check the price trend of copper. Since the raw material is used in many industries such as construction, electrical equipment, and transportation, it is said to have a Ph.D. in economics in predicting the trend of the global economy. And the most recent data suggests that the economy is slowing but still going at a healthy pace as the chart below shows. St. Louis FRED

Source: International Monetary Fund, Global price of Copper [PCOPPUSDM], retrieved from FRED, Federal Reserve Bank of St. Louis;, May 31, 2023.

Financial Planning/Investment Strategy Corner:              

Managing a Financial Windfall: Now and then we have a client that reaps an unexpected financial windfall. It mostly comes in the form of stock options vesting all at once because a company was bought or from an inheritance. The first thing we recommend clients do is to take a deep breath! After that, we need to account for any taxes, whether in the form of higher income from stock options vesting or even estate taxes. With stock options vesting all at once, it may be a good time to look at charitable donations for those inclined to do so – you could potentially fund charitable giving for many decades with a donor-advised fund while reducing your tax hit. After taxes, it’s time to assess your financial plan. Some previous goals may get immediately funded, such as paying for college or paying off a mortgage. But others may take more thought, such as moving up a retirement date or buying a second home. No matter how your plan changes, it’s important to work with your financial advisor to lay out your options and take your time to reassess your goals. RSWA Blog – Large Inheritance Financial Planning: 9 Critical Mistakes to Avoid   Schwab – How to Manage a Windfall

Quick Hits:

  • It’s tick season – here’s when and how to do a proper body check: Lifehacker
  • I never knew what an interesting role Nashua, NH played in integrating baseball: AP News
  • Henry Kissinger gives his opinion on world events as he turns 100: WSJ
  • Looking for some interesting summer recipes? How about skillet meatballs with peaches, basil & lime? Chilled beet & yogurt soup? Grilled pork chops with a soy glaze? We’ve got you covered: 17 Summer Food Recipes - NYT Bon Appétit
  • It’s peak hiking season – check out the best hiking apps for your adventures:

Summer Travel Tips: Travel last summer was a nightmare for many as flights were canceled or overbooked. This year is looking better but you still want to be prepared. Here are some resources to help your summer trip go easier. AFAR – How to Avoid Flight Delays and Cancellations-And What to Do if It Happens Travel + Leisure – TSA PreCheck vs. Clear: Which Should You Choose?

Adaptogens. What Are They and How Can They Help You? I kept hearing about adaptogens in advertisements and just had to learn more. Adaptogens are ingredients in plants and mushrooms that may help your body respond to stress, anxiety, and fatigue. They have been used for centuries in Eastern medicine and are now found in many drinks or taken as supplements. For example, ginseng can help relieve mental and physical fatigue and improve your energy during stressful activities. Some have been shown to even help with sleep. Just be sure to check with your doctor if you plan on adding adaptogens to your diet. The Botanical Institute – Complete Guide to Adaptogens  VeryWellHealth

Quote: “It’s like if a guy walked into a restaurant with a ticking bomb demanding to blow everyone up if he didn’t get a free peppermint!” Economics commentator Noah Smith’s analogy of the high-stakes debt ceiling crisis and resulting modest legislation.

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