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Affluent Investor | April 28, 2017

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The 4th Quarter: More “Bad Weather”

A common excuse on Wall Street made by company management when their earnings disappoint is the weather.  You hear it time after time offered up on conference calls to explain why the number came in a few pennies below the consensus estimate.  The truth is there is always some abnormal occurrence in the world that can be used to deflect criticism of poor performance.  Good companies don’t make these excuses.  They tell the truth, take their lumps, and lay out their vision for the future.  In the end, these companies have more credibility with the Street.

I chuckled to myself when I heard the White House explain away the contraction of the U.S. economy last quarter as due to the effects of Hurricane Sandy.

The truth is, the U.S. economy shrank last quarter.  That is not a good thing.  One more down quarter like that and we will officially be in a recession.  Yes there were cuts in defense.  But there are larger cuts to come here as well as in other domestic programs.  The sequester is right around the corner and the talk in D.C. is that it’s going to happen.  We also raised taxes at the turn of the new year and we haven’t seen the effects of this yet.

Europe is still mired in a debt crisis and a recession of their own. China growth is slowing as their primary markets are soft. These facts will put further pressure on our economy.

I have never in my lifetime seen an administration that refuses to take responsibility for its own actions and policies. It’s pathological, clinical. The basic fact here is that out of control government interference in the economy will dampen economic growth. Think about it.  Why would you hire anyone if you are a CEO or owner of a small business? You have no idea what your health care costs are going to be. You have no idea what your energy costs are going to be. You have no idea what your taxes are going to be. Government uncertainty and interference are strangling the economy.

They even found a way to blame today’s data on the GOP. We are four years into the Obama Administration! I believe that quote today was, “This was the best contraction we have ever seen.” Sounds like, “I was for it before I voted against it.”  Or,“Depends what the meaning of is, is.”

My goodness, who are these people?

Rick Santelli is right.  Wednesday, he said we are now just like Europe. We have slow growth, highgovernment spending and debt, and high unemployment.

Our openly political Federal Reserve is trying as hard as it can pushing on a string to lower unemployment.  But, no one is dealing with nor will they acknowledge the real issue – government induced uncertainty.

The MSM crowed today about how much of a shock this slowdown was. They have been trying as hard as they can to push the narrative that the economy is recovering.

What are they going to say next quarter?

 

Article originally published on The Brenner Brief.

Born in Georgia and raised in Savannah, Todd spent his early summers in Carp Lake, Michigan listening to the vivid stories of his grandparents recalling their youth in the northern wilderness. Ever since his earliest days, he loved story telling.

Todd left Savannah in 1982 to attend the U.S. Air Force Academy in Colorado Springs, CO where he studied aeronautical engineering. Upon graduation in 1986, he immediately left the Academy for flight school. His initial assignment was flying Combat Search and Rescue helicopters at Elmendorf Air Force Base in Anchorage, Alaska. In the UHAE (Unique Harsh Arctic Environment-pronounced “Yoo Hay” by Alaskans) he flew local rescue missions and was also deployed throughout Asia. During this time he was credited with saving many lives and even more assists. In addition to flying exciting missions, Todd also managed to graduate from the University of Alaska Anchorage with an M.S. in Engineering Management. In 1990 he volunteered for Special Operations and went back to flight school. In 1991 he was assigned to the 20th Special Operations Squadron at Hurlburt Field, FL, flying MH-53J Pave Low helicopters. Immediately he was deployed to Kuwait. Over the next three years he was active in classified missions in support of counterterrorism under the control of the National Command Authority and deployed throughout the world. His customers included SEAL Team Six and Delta Force. He left the Air Force as a Captain in 1994. During this hectic period in his life he found time to write his first novel, The Ultimate Solution which was never published. He did publish an article in the Armed Force’s Journal in 1994 on Special Operations Aviation.

1994 found Todd joining an investment bank and earning a chance to expand his knowledge of his other passion, Finance. During this second career he became highly knowledgeable in Emerging Markets Fixed Income and traveled a great deal internationally with a focus on the Caribbean. He has conducted business in over forty different countries. He became acutely aware of the consequences of economic decisions and their effect on national and economic security.

However, Todd.’s love of storytelling was uncontrollable. He left the financial business in 2011 to write. Currency was published in December of that year. Once he began typing, he never stopped.

Todd lives on a three-hundred year old farm in Connecticut deeded by King George of England with his children.

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