The Watchdog on Wallstreet Weekly Recap for 10/31/2022

10/31/2022 Economic Grow Means Pie Growth

Let’s start this week by discussing “The Deadly ‘De-Growth’ Craze” by Andy Kessler in the Wall Street Journal, in which he explains the importance of growth.

According to the degrowth theory, the economic “pizza pie” must stay stagnant, and everybody gets their fair share of the pie. My argument, as well as Kessler’s, is that degrowth for the United States would entail no growth, which would indicate no innovation-related investment. 

We say it again and again: “If you’re not growing, you’re dying.” Economic Growth means the pie grows, and this lifts everyone’s boats.

11/1/2022 63% of Americans want inflation relief checks

I saw a recent poll that says approximately two-thirds, or 63%, of American voters are in favor of the federal government sending out inflation relief checks. They believe that the government should be taking care of them, yet you’ve got 1.9 job openings for every one person looking for work. There is no doubt that inflation is hitting a lot of people and that some individuals are being affected more severely than others, but at least there is a means to fight back against it. I am a big believer in personal responsibility, and you falling into this camp is not that responsible. 

Take advantage of our Complimentary Financial Consultation, during which you will have the opportunity to discuss your current financial situation with one of our certified financial planners and obtain a better understanding of your financial situation. Let us help you get ready for the inevitable, with or without the government’s inflation relief checks.

11/2/2022 To raise or not to raise…that is the question

This money minute is a pre-fed announcement about another rate hike by 0.75 points. “To raise or not to raise“… that is the question. But it doesn’t matter, does it? 

Democrats say that we are at war with the war in Ukraine. However, there is a bigger war at hand—the war on fossil fuels, which largely caused some of these price increases. You’ve got major companies pointing out in their earnings reports that the cost of energy is affecting their bottom line. They’re coming out complaining about the thermostat in the same way that I complain about the thermostat when my children start playing with it.

The Fed is not “Bob the Builder”; they can’t fix it. What we need is for the government to get out of the way and show fiscal restraint.

11/3/2022 Conventional Wisdom is poisonous

For anyone who is new to the Money Minutes, our podcast, or our radio program, one of the things we strive to teach is that conventional wisdom is poisonous and that critical thinking is necessary when interpreting changes and trends. 

We have been led to believe, or have been taught, that a tight labor market is impossible, and that rising wages are bad because they contribute to inflation. To put it another way, the idea that job-seeking individuals may obtain employment is bad. Or that it is bad that people are making more money? There is no logic or reason for this at all. Avoiding wage rises or a loose labor market won’t solve inflation when energy costs are the issue.

11/4/2022 Good Firing vs. Bad Firing

We have talked a little bit about the firing that’s taking place at many of these tech companies. Why do they have to fire? Well, guess what? They’re looking around to see who’s been good and who’s been bad, and who’s been productive and who hasn’t been. 

I keep thinking of Ari Gold going around with his paintball gun and firing people. There’s good firing and there’s bad firing. Bad firing is when you have to fire people you don’t want to fire but you’ve got to get rid of them because business conditions have deteriorated. Good firing is when business conditions deteriorate, but not to the point where they have to fire these people. Instead, they are firing them so that they can become like a lean, mean fighting machine, which is what smart companies do during slowdowns.

In any case, you should make it a priority to ensure that you are well-prepared. At Markowski Investments, we highly recommend you create a  holistic financial plan with us that is sustainable so that you can face the challenges and setbacks that life throws your way such as losing one’s job.