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There’s Always A First Time


Is it a race against time? Or is it trying to set aside today so as to focus entirely on a specific kind of tomorrow? It’s easy to do the latter especially when today is what it is; you can’t change what’s already gone on. You can, however, think that today won’t impede or even impact a much better tomorrow yet to be determined, especially when the heavy hand of government is anticipated to intervene after sunset.

On the one side, more fiscal “stimulus” is purported just over today’s horizon landing squarely at the forefront of our future. The government will spend gobs, trillions, no doubt, to fix whatever’s broken, however much it may be broken.

And it is in the scale of such “stimulus” all worries are supposed to melt away.

That hasn’t happened yet, anywhere, but there’s always a first time.

So, this sort of feeling for tomorrow beckons at the expense of today because who the hell would want it? Sure, the ISM Manufacturing Index spiked early in the week, but not so much that it indicates anything beyond what’s already been indicated for months now.

The US economy continues to rebound from the trough. Better than re-recession, no question, but it simply isn’t good enough. To avoid the “L”, as in lack of recovery, it must do a lot more and do so quickly. The ISM’s 60 was actually a reminder that it hasn’t, as is this:

There’s Always A First Time


According to ADP reporting today, private American employers cut 123k jobs on net during December. Yes, a negative. The prospects for one on Payroll Friday are substantial, too.

This particular minus sign is neither surprising nor, at this moment, too significant. What it indicates is simply that today remains too far outside the region of recovery. The economy is rebounding, even with one month of potentially net layoffs, but the chances of it improving enough to reach the ultimate goal have clearly slimmed down even further.

It’s almost certain that renewed COVID restrictions (more overreactions) are the primary factor. But that’s not really the issue; the difference between a small positive, like over the preceding five months, and a small negative isn’t meaningful in this context. Rather, it’s how there haven’t been anything other than small, too small, for that long of a time.

In other words, like the ISM, these ADP estimates keep pointing in the same “L” direction.

The Democrats taking the Senate, with the next VP acting as the potential tie-breaker making this so, that may likely raise the prospects for more fiscal activity. But more fiscal activity, as we’ve seen time and again, hasn’t yet been the game changer it is always promoted to be; the letter-changer.

It never flips the “L” to “V.” It simply can’t.

It is being assumed, by some, that eventually the government will paper and cash out today’s problems such that they won’t stop tomorrow. There’s always a first time.

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Jeffrey P. Snider
Jeffrey P. Snider is the head of Global Investment Research of Alhambra Investment Partners (AIP). Jeffrey was 12 years at Atlantic Capital Management where he anticipated the financial crisis with critical research. His company is a global investment adviser, hence potential Swiss clients should not hesitate to contact AIP
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