The Iranian military strike on Saudi Arabia’s oil production capacity is ominous. Oil prices should stabilize soon, but the probability of military conflict in the Middle East, directly involving the U.S. and its strategic allies (e.g., Saudi Arabia and Israel), is escalating dramatically. Iran apparently believes that military provocations are its best strategy to force the U.S. and its allies to negotiate the removal of economic sanctions and to achieve de facto acceptance of its nuclear weapons.
Back in the U.S., as we anticipated, the Fed continued its balancing act by lowering short term rates this week by 0.25%, managing to alienate both the “doves,” like President Trump, who wants negative interest rates, and the “hawks“ who argue that a supposedly data driven Fed should not cut rates at all. After all, inflation is showing signs of ticking up and employment is strong.
Want another take on the 2020 election beyond talking heads, debates, tweets, emotional dinner conversations and opinion polls? There are websites that allow wagering on elections, letting us know what people, who are willing to put their money where their mouth is (to use the old cliché), are thinking.
We also share notes on the U.S. consumer and negative interest rates, which are being experienced in other parts of the world. Prefer something lighter? We touch on climate change (that is ominous too-sorry!) the power of reading, insights into what makes men happiest (spoiler alert-it’s not food) and country music (of all things). We hope you enjoy.
- Trump’s Greatest Crisis? Greg Valliere, the astute Washington political insider, posits that the current Iranian and Saudi Arabian conflict presents President Trump with his biggest crisis to date. I have trouble seeing this conflict ending well. Even with China, we share a common interest in avoiding an economic slowdown. Where are the strategic commonalities with Iran? President Trump has no good options. He is understandably averse to using military force, but risks being perceived as weak in the absence of credible responses to brazen attacks on an important ally. Might he “greenlight” an ally to launch a major preemptive strike on Iran? (AGF Investments)
- Betting on the U.S. Presidential Election: Check out two wagering websites, if you are curious where the “money” is. Long story short, the bettors currently favor Democrats generically to win the presidency by somewhat narrow odds, and Elizabeth Warren, to gain the Democratic nomination. We trust that you will understand that this is neither an endorsement of betting nor of any candidate by the way. (electionbettingodds.com) (predictwise.com)
- Keeping the U.S. Shopper Calm: The U.S. consumer is keeping the economy growing. Manufacturing is slowing but that only accounts for roughly 10% of jobs now. We are a service economy. Keeping the U.S. consumer positive is key to continued economic growth. (CNN)
- Trump Wants Negative Interest Rates: Negative interest rates sound like one of those inherently contradictory descriptions like airline cuisine. We aren’t close to negative interest rates in the U.S., which would be bad for fixed income investors. But in Europe you may be paying the bank to hold your money. (New York Times)
- Climate Change Threatens Maine Islands: If it hasn’t already arrived, the day is rapidly approaching when climate change will have tangible and negative impacts on us. Some beautiful and iconic Maine islands see it coming. (Portland Press Herald) Another information source that allows you to enter your county to see if it is experiencing more dangerous warming trends. (Washington Post)
- Read to Live Longer: As a voracious reader, seeing a credible study showing that readers live longer was encouraging. But is it correlation or causation? Might serious reading reduce the mortality risk of dementia or Alzheimer’s? Or could it be some sort of correlation (e.g. readers are drinking more coffee and tea while they read, and this beverage consumption is adding to their longevity)? (Inc.com)
- Strongest Predictor of Men’s Happiness: Quoting this 2018 study, which I just came across, “Being satisfied at work is the #1 indicator of men's well-being.” I don’t know that this is surprising, but we are venturing into generalities here. For the sake of argument, assume it’s valid, what are the retirement implications for those men or women who are more work dependent for their emotional well-being? Are we doing enough to prepare emotionally? (prnewswire.com)
- Country Music Anyone? In full disclosure, I may enjoy country music more than your average New Englander, having grown up in Kentucky. In truth, I love some of it and hate the rest. Regardless of your personal reaction to country music, you may enjoy the epic Ken Burns PBS documentary on how country music became such an important music genre in parts of our country. (CNN) For extra points, listen to a few song tracks from The Highwomen, the new hurricane force super group of four women, who are rocking (so to speak) the country music world. (New York Times)
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