Experiencing the downfall of a seasoned politician can be oddly gratifying. There’s a certain satisfaction in witnessing their spectacular failures. This past Tuesday offered just such a moment, enriching our perspective on the political arena. Without a doubt, the world benefits from these events.
Interpret it however you wish. Donald Trump’s victory over Hillary Clinton signals a significant departure from the established political norms in Washington. Regardless of your feelings about Trump, this is indeed a cause for celebration.
While countless political analysts dissect the election results, we prefer to focus on a topic we touched on previously. If you remember, we discussed the potential beginning of a shift in the long-term credit market cycle. Since reaching a low point in July, the yield on the 10-Year Treasury note has been on the rise. Whether this trend will persist remains uncertain. Continue reading
“There are more things in heaven and Earth, Horatio, than are dreamt of in your philosophy.” – William Shakespeare, Hamlet
A Ticking Time Bomb
The American public eagerly anticipates Election Day. Will their preferred candidate take the White House on January 21, 2017, or will we see one facing legal consequences instead?
Only time will reveal the answers to these pressing questions. Here at Economic Prism, we observe the political landscape with detached curiosity. Neither major candidate inspires our confidence for high office, yet we are still keen to see the election results unfold.
What truly commands our attention, however, isn’t the outcome of the election but rather the economic challenges looming over both the U.S. and global economies.
Specifically, we’re referring to interest rates, which have recently been climbing significantly. Continue reading
The prevailing narrative in mainstream media suggests that the economy is steadily improving. Reports of gradual growth have started to circulate, promising clearer skies ahead.
Nevertheless, we harbor some skepticism. From our perspective, business activity isn’t thriving. Company earnings are stagnating, and profits remain meager. Moreover, layoffs are being executed with a blunt force, as evidenced by Google’s recent staff cuts.
If the economy were genuinely improving, we would expect to see heightened demand for raw materials and construction equipment. That, however, does not seem to be the case currently.
Earlier this week, Caterpillar’s CEO Doug Oberhelman remarked that, “Economic weakness throughout much of the world persists and, as a result, most of our [Caterpillar’s] end markets remain challenged. In North America, the market is saturated with used construction equipment, and rail customers have substantial inventories of unused equipment.” Continue reading
While growth and profits may seem rosy, they often overshadow deeper problems. These successes conceal inefficiencies within businesses and the draining nature of corporate bureaucracy. They also mask unproductive employees.
Most critically, growth and profits hide the damaging effects of oversized management teams. When times are prosperous, the value they add is murky. However, when adversity strikes, it becomes painfully obvious just how little they contribute.
As profits dwindle, the senior executives, preoccupied with overly complicated project requirements and reports, find themselves lost. They suddenly appear vulnerable, struggling to grasp the essence of their business. The question arises: what have they been doing all this time?
Where does the money originate from? How is it utilized? Over time, unchecked growth leads to a diminishing understanding of these essential questions.
Sadly, by the time clarity is required, it’s often too late. While management focused on rigid risk protocols and convoluted approval processes, the crucial insights were lost. Continue reading
