A Big Dirty Cloud

The Story

I have been on vacation for the past few weeks and have been occasionally checking things on the iPhone. I didn’t see much happening.  Same old thing, I read the Washington Swamp was being drained, that may be on one level, but it looks to me like it evaporated into a huge black cloud that is waiting to rain down on all of us.

Economic Numbers

1. The consumer continues to keep discretionary spending in check as they watch the cloud growing.
2. Earnings of large Corporations look good as they continue to increase their grip on the economy, to the detriment of the share to the  little guys.
3. So the defining growth number is not total economic growth, ie GDP, it is the allocation of earnings to the big guys.
4. Just noted this afternoon that the Atlanta Fed initial forecast model estimates 3rd quarter GDP at 4.0% based on inventory buildup for the much anticipated Washington Growth Story.  We will see how that works out with consumer confidence declining.  No doubt this GDP estimate reflects the anticipated implementation of the infrastructure and tax plans of a Washington that is basically out of commission.
5. The jobs report should show the same phenomenon, a buildup for the administrations forecast surge in the economy. A conundrum of sorts is building between the supplier side of the economy which is confident in the Trump agenda, and the consumer side which is less confident.

Tracking Portfolios

Nothing new to report, sideways pattern continues.

Vacation Read

Read most of “The Anatomy of Inequality” by Per Molander.  Great book, probably the best piece that I have read on inequality.  I have not finished it yet, but the quick takeaway is that inequality  is a natural thing that periodically has to be adjusted because of the compounding effect of assets held by the top tier.