Former Representative, Tom Davis, a moderate Republican who served seven terms in Congress from northern Virginia, was commenting on the failure of candidates to participate in debates and Town Hall Meetings, and he is quoted as saying, “People don’t feel that duty anymore” adding “When they say I went home and talked to my constituents, they are talking to their base.” Nothing could describe the actions of Representative Stefanik any more clearly as she does not represent a significant portion of her constituency, but also doesn’t want to hear from them.
On the inflation front, Britain hit 10.1% driven largely hirer by food prices. The issue of inflation was also recently addressed in articles in the Times and Wall Street Journal where they indicated that one of the hidden inflationary factors is housing prices, both to purchase a home or to rent. There has also been recent commentary about gasoline prices dropping precipitously because refineries have finally come back online. The causes of inflation are complex, and many have both up and down sides to them. Obviously, if you are a homeowner, and the price and value of your home went up, that is a good thing. If you are a buyer, that is a problem, but both homeowner and buyer suffer from the consequences of inflation. Is this a political problem, or a market problem?
The strong US dollar is creating substantial issues for the rest of the world, as the sharp rise in the dollar is increasing the likelihood of a global recession sometime next year. The dollar is up 18% this year, and last month hit a 20 year high according to the benchmark ICE US Dollar Index. The dollar’s _strength is being driven by the Federal Reserve raising interest rates, which to the rest of the world becomes a reason to invest in the US dollar, and thus, strengthening it.
And the most exciting news of the week was that CBP published Modernized Customs Broker Regulations. These are dense government documents, but what they have attempted to accomplish is to bring the custom’s brokerage business, which is vitally important to importing and exporting in the United States, into the modern era and conform it to actual practices and technology. This is an unusual move by CBP to be so progressive, but it is definitely welcomed for by of us who deal with the border on a regular basis.
One of the typical area’s investors go to hide during the market tremor we have been experiencing is to buy utility stocks because they are known for their sizable dividend, which offers investors a regular income stream and stability under most circumstances. This has been an unusual market, and the reaction of utility stocks fits into that category. Where will investors go to hide now?
There are some concerning statistics, which if accurate, are quite problematic for the animal kingdom. It is reported that the populations of most major animal groups, including mammals, birds and fish have declined by an average of 69% in the last half century. Obviously, there are a wide variety of reasons for this. Clearly, more research needs to be done surrounding these statistics and a determination made as to what, the causes are, and what the possible solutions are available to reverse this trend.
On the economic front it was recently reported that the CEO of Bank of America has indicated that consumers are in good shape from a debt and spending perspective. So, there is no immediate concern about a significant drop off in consumer spending, which is important as consumer spending represents well over 65% of our GDP. The fact that we continually receive conflicting data about the economy, demonstrates the times we live in.
On the flip side, of course, is the fact that several of the large banks have increased their bad debt reserves with a result that their income for the last quarter was down. You may recall that many of these institutions have done similar increases to their reserves only to later determine that the increases were too large and to take those reserves back into income, thus, balancing off, at least to some extent, the lower earnings recorded when the reserves were taken. This is, again, one of those confusing signs, because if consumers were in such good shape, why would banks be increasing their reserves?
Continuing with our discussions on the economy. Amazon recently reported that their holiday sales event which they sponsored several weeks ago saw lower sales, which they are interpreting as a sign of consumer retrenchment. This, again, is not consistent with many of the other indicators, but again, is something which we need to watch because of the significant impact consumer spending has on our GDP.
Early democratic voters in Georgia are being hassled under a New Georgia Law that allows any citizen to challenge a voter’s right to vote based upon no facts at all. Most challenges have been tossed, but it is still a hassle to experience. I trust Democrats are giving in kind to Republican’s if not I’d encourage them to get on it.
The governor’s race in NY tightens. The Governor has made several unforced errors and as the NYT editorialized, it would be a disaster if Zeldin won; then again he won’t have much room to maneuver given the D’s control of the Assembly and Senate.
China comes out of its Party congress with solid support for Xi Zinping.
Great Britain may get Boris back as he looks sane compared to Ms. Truss. A pretty low bar.
Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford, Owens, Piller, Murnane, Kelleher and Trombley in Plattsburgh, NY and a Strategic Advisor at Dentons to Washington, DC.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.