Notable
- CPI comes in at 8.2%.
- Rumor has it that the UK government will be making changes to its economic policy with major revisions to the plan that was announced a few weeks back.
- Russia arrests alleged saboteurs of the TurkStream pipeline.
- An anti-woke ETF has been launched.
Hamlet: (not)
The CPI came in at 8.2% which, as you all know since you definitely read my article yesterday, is 0.1% above the expected 8.1%. Since it was higher than estimated, the market should be sad. After all, bad news = good news these days because it means the Fed will stop increasing interest rates. In fact, the market did start to crater at first, but the market reversed itself with a huge, optimistic leap into positive territory, and all major indexes ended up more than 2% in the green (the DOW was almost 3%). It’s hard to tell for sure why, but part of the reason might be because…
Did someone just blink? The UK government is rumored to be discussing scrapping aspects of its financial plan that was previously announced…and then partly retracted after the markets went FUBAR (FUn Beyond All Reasonable expectations). Salvation came from the BOE, but the BOE said it would stop being the nation’s savior on Friday, which put the ball into the Truss (UK Prime Minister for you laypeople) court to become the new savior. WWTD? (What will Truss do?)
We’ll have to wait a day to see what happens, but if I had to guess, some part of the UK ruling system (Truss…BOE…George Soros…) is about to cave, and tomorrow will see “good” news of some kind of government support that will unleash another green tidal wave because it would be political suicide to allow pensions to fail. Then after people digest all the data and sober up during the weekend, there will be a crash on Monday as the hangover sets in.
That’s all just a guess. This constitutes no investment advice! Don’t short the market tomorrow and blame me when you can’t afford a Pepsi in Turkey on Monday. And if you shorted the market today, hahaha. I mean, uh, my condolences.
Russia claims to have arrested saboteurs from sabotaging the TurkStream Pipeline because they were saboteurs. According to Russia, the sabotagery was meant to damage through sabotation the only remaining pipeline (outside of Ukraine) that carries natural gas from Russia to Europe. I don’t need to tell you that sabatadisaster like that could have been pretty bad. Like, Nord Stream levels of bad.
The question is whether there really was a sabotagation attempt and, if so, by who?
Beyond that, we can note that Russia sent missiles against Ukraine for a second time yesterday. That’s indicative that the escalation of the war hasn’t eased, which means we could be one step closer to nuclear war. I think I can confidently say that if nuclear war occurs, you should short the market. I think I can also say that if nuclear war occurs, there may no longer be a market to short. Maybe Putin and Zelensky can play a nice game of chess?
An ETF launched this week under the symbol “YALL.” It’s called the God Bless America ETF. It’s billed as being anti-woke and will exclude companies that have emphasized “politically left and/or liberal political activism and social agendas at the expense of maximizing shareholder returns.” You might consider it a response to the ESG movement. What’s that? ESG stands for Environmental, Social, and Governance. Duh! Without getting into exactly what the E, S, and G mean, the idea is that beyond just the numbers, an investor should take into account aspects of a company which relate to those three categories when choosing whether or not to invest. The expectation would be that companies with bad ESG will be bad for the bottom line.
I’ll paint a VERY broad brush and say that ESG considerations often come on the left side of the political spectrum, which is why I suggest that YALL is, at least in some respects, almost the opposite of ESG. You may disagree with this and are welcome to flame me in the comments, which I will of course completely ignore because that would mean you’re clearly not worthy.
I’m not claiming to be a proponent of either ESG or YALL. What I’m asking is what place do political — or any other — considerations hold when deciding how you should invest? (In this regard, ESG and YALL are the same because they want you to consider other considerations.)
How far beyond the numbers and business fundamentals should we go in our decision-making? Do morals come into this? Do we really think they’ll make a difference in the success of a company? If so, will that difference be positive or negative? If it’s a negative effect, would you still buy the company? What is YOUR philosophy behind investing? If a company uses child slavery to build its products, should you not invest in it? What if it didn’t know it was using child slavery and then stopped doing it when it found out? Or what if it was using child slavery and the children said it was okay because they were making a ton of money and getting new iPhones?
Deep questions require deep thought and only you can decide how deep your convictions are. My answer? Ask Jackie Robinson. Cuz it’s included in everything.