‘All’s Fair In Love and War’- John Lyly

As the parent of a young, energetic, eight year old girl, an easy way to occupy her time is to let her use a portable electronic device.  It is a lazy solution to the problem of her short attention span.  It is not hard to imagine many other parents use this strategy to handle a similar issue with their kids.  As a society, the transition to digital devices also may play a part in reducing the concentration period of the general population.  With access to information so easily available, quickly, and about anything we want, the ability to show perseverence or patience on a task which requires diligence has been minimized.  It has implications on every of our lives which matter, economically, socially, and culturally. For example, in the business and investment world, asset prices like stocks and bonds react immediately to headlines about comments from Fed officials, earnings reports, or news about a product recall.  Currently, as the country digests the stench from the presidential election, we see a news media focused on generating as sensational of a headline as it can to generate the widest audience possible, clearly always good for ratings and future advertising.  Of course, there are repurcussions from these tactics, but more on that a little later.  Our digital age will only continue to progress in way leading to all kinds of fabulous benefits, and even though attention spans probably will slowly erode, trying to find a balance between the two remains elusive.

In the financial markets this week, the September retail sales number came in at a strong 2.7%, up .6% versus the prior year.  Janet Yellen made a speech about trying to transition the economy into a ‘high pressure’ outcome with greater consumption, lower unemployment, increased investment and confidence, but temporarily higher inflation.  Fellow Federal Reserve Bank of New York chief William Dudley commented about having interest rates rise gently, while earnings reports from large money center banks like J.P. Morgan Chase, Citigroup, and Wells came in relatively strong (4-6 billion).  Citi and Chase benefited from stronger fixed income and currency trading.  The Wells Fargo CEO stepped down mid week, as there was no way a CEO could survive a 200 million dollar fine, with plenty more a coming in the form of further investigations.  I suspect it is the tip of the iceberg, shock of shocks.

One of the deficiencies of the structure of the Presidential debates is the power given to moderators who ask non substantive questions.  For example, not one question has been asked in the first two debates about the role of technology on society and why it has not resulted in more jobs for our overall population.  If you want more proof, maybe read this article from the Wall Street Journal on the lack of jobs in the technology world.  Another example is the lack of a rigorous discussion about tax policy.  The interjection of Warren Buffet into the issue introduces an incomplete and one sided perspective, and based on this article, probably hypocritical as well.  Mr. Buffett has since engaged in the swap of further assets for operating companies, all tax free. The use of stock swaps for corporations to gain access to control of assets in a tax free manner is legal in the tax code.  Shareholders benefit from these strategies, but the question about the government’s treatment of capital gains, carried interest at private equity and venture capital firms, and preferred stock rates versus common stock are all examples of substantive areas of the tax code which have been ignored by moderators whose motives are anything but pure.

When I was but a lad in grade school, I can remember foolish classmates setting off stinkbombs as a way to make the environment less attractive for learnings.  You may have experienced similar such irritation when you were in school.  In order to clear the aroma, it just took time for the noxious fumes to dissipate.  In the same manner, our country will need the passage of months and years before it heals from the tone, tenor, and disappointment of this presidential election.  The words and actions of Donald Trump have been a disgrace to all Republicans and they demonstrate how poor a Presidential candidate he is.  The lack of due diligence and vetting by the Republican Party and no cooperation from Mr. Trump highlight the lack of professionalism from both groups.  The excuses of Mr. Trump about a rigged election hold zero weight because much of the damage done was because of his own past rhetoric, inability to persuade non committed voters in an attractive way, and  offer subsantive solutions to the country’s problems.  A good leader anticipates the problems which need to be solved before they are incurred, which Mr. Trump clearly did not due with respect to media bias.  It is not a secret all media companies have preferred favorites in elections- Fox the Republican party, every other company goes Democratic.  What is different in this cycle is you have journalists and the current government aiding the Democratic party in the effort to win the election.  In combination with all the scandals Mrs. Clinton is involved in, her words regarding changing policy positions, aides attitudes toward religious groups, and the revelations of potentially having a complete open border policy, and the ultimate result becomes nauseating. Meanwhile, our current President is focused on finding ways to go to Mars.  Lovely.  On that note, the next debate is Wednesday and let’s hope it is more substantive and statesmanlike than the previous affairs.  I suspect it will be more of the same as all is fair in love and war.  

  Thanks for reading the blog this week and if you have any questions or comments, please email me at information@y-hc.com.

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