A Wedding, A Funeral and A New Year’s Realization…
Grab the champagne and poppers, it’s almost time to ring in the New Year! But before we get to the celebrating, I’d like to share something I’ve been reflecting on recently.
Over the past few months I’ve made an alarming realization. One that could change the way you think about the U.S. government, society, your retirement and investing in 2016…
This is a doozy…. and it started with a wedding…
Back on November 6, I got married. In true cheapskate fashion trying to save money on cakes, flowers and whatnot, I had a lot of errands to run the morning of the big day.
I took off at 8 a.m. or so – rush hour – and got down to business. I had to pick up dozens of flowers, go to two different locations for the cakes and pick up some accoutrements for the centerpieces… Heh, I also had to pick up a wedding ring, can’t tie the knot without that!
All in all I did a good bit of running around town. With several stops back at home to drop off the perishables.
More to the point in a second.
But first, let’s flash forward a few weeks for a funeral…
This week we had to send our 18 year old family cat to “kitty heaven.” The poor lil guy had more ailments than he could handle and after six months of medicine, IVs and tender love and care, he just couldn’t make it.
If you’ve ever had a family pet you know the drill. And if you’ve ever had a family pet that you know was pretty special, it sucks even more. (Heh, that cat had about 10 times the smarts as our 135lb Rottweiler. Ugh.)
Anyway, my wife was pretty broken up. And I wasn’t going to let her mourn on her own.
If it’s going to be a pity party, it’s going to be a pity party of two! So I stayed home from work and made sure we kept busy. We ran errands, took the dog on a hike, got lunch and hit up the grocery store.
So now you’re caught up. One wedding, one funeral… and now for the big problem…
Here’s the point…
Both days I took off work on a weekday. And both days I was quite literally shocked at the amount of traffic and people out and about. What the heck was going on, I thought.
You see, for the most part I don’t have days off to run errands. I run them on nights and weekends. So frankly, I’ve never noticed this strange, over-populated phenomenon. Maybe you have?
And no, I’m not hinting at overpopulation or jumping on the recent wave of climate change chatter.
Point is, there are A LOT of people that simply aren’t at work.
And I’m not talking about one single demographic either. It wasn’t just housewives, school kids or retirees meandering around. This was the middle of the day from 9 a.m.-3 p.m. in the city and suburbia – it was a broad swath of people… a lot of them.
It’s a strange realization – and I think it hints at a huge problem set to hit U.S. shores.
Lots of Americans simply aren’t working. And if you connect the dots a little more, data shows that there are more people in the U.S. collecting money from the government than not.
You don’t need an advanced degree in economics to understand that when you’re getting entitlements from the government you’re either retired or have strong disincentive to work.
And don’t get me wrong. Both of my parents are happily retired. They paid their dues. Worked for many decades. Paid taxes and saved money. So I’m NOT saying all of those busy bodies running around on weekdays are deadbeats collecting government checks.
Nonetheless it’s an alarming realization. It all ties in to the discussion about the U.S. economy going forward…
“Our labor market participation is the lowest it’s been since Jimmy Carter” Dr. Bill Cassidy told Janet Yellen yesterday during a Q&A with Congress’ Joint Economic Committee.
Cassidy, a senator from Louisiana, brings up a good point. Amidst a lower U.S. unemployment rate, the “labor participation” is still on a downward trend, at its lowest point in several decades. That’s not a good sign for an economy – it’s similar to what started Japan’s “lost decade.”
Yellen didn’t disagree, either. In fact, she admitted that with an aging population, labor participation is going to continue to remain under pressure. That’s a frightening admission. Then, as a Fed Chairman will do, she brought the discussion back to more positive sounding unemployment numbers.
We’ve got a pretty disconcerting set-up in the financial markets. Regardless of the nitpicking about the interest rate hike, it’s becoming clear that there’s a lot of room underneath today’s stock prices.
The way I see it, there are giant cracks forming in the U.S. economy. Frankly, if we wouldn’t have been blessed with America’s second oil boom, we’d be way worse off today. Heck, if the U.S. didn’t find a bonanza of oil and gas in its backyard over the past 5-10 years, we’d be nothing more than Europe! And look at what’s happening over there.
Add it all up and here we are with a shaky economy, lots of government spending and potentially an end to easy money.
Meanwhile, the S&P is down almost 3% year to date. In 2016 we may not be this “lucky.”
That’s all I’ve got for today. I just wanted to make sure that if you’ve been looking around and noticing some alarming realizations here in the U.S., you aren’t alone. It’s only a matter of time before these ominous warning signs come home to roost.
Keep your boots muddy,