Yup, May is definitely shaping up to be full of spirit – whether it’s spirit as in a spirited set of circumstances for us all to do business or spirits as in the ghosts of economies past that may come to haunt us. Heck, maybe it’s the spirits we might need to quaff to get thru the month! Regardless, the combination of supply chain issues, tariffs, and a 4.2% unemployment rate in March vs. 4% in January will keep us all on our toes.
Yes, I know these are just statistics friends but what other yardstick do we have? I can’t read tea leaves or commune with Punxsutawney Phil so I have to look at things like SOFR, Treasuries, the BLS and their report, the “Beige Book” and other sources. And, like you, I compare and contrast It’s a bit like watching the Red and Blue news channels and coming to your own informed conclusions.
We also have to be mindful of trends and since I’m in the business of lending money, that is where the vast majority of my info and opinions come from – banks, borrowers; lessors and lessees; developers and off-takers; and, investors and investees. What is the big trend? While these are more stats from folks like Reuters and the Treasury, it’s been wild YTD with over $33B being pulled out of US Equity Funds and in foreign private outflows of nearly $75B in January. Yup, less money to beg, buy, borrow or steal. So what happens, either or both money becoming subject to stricter lending and investment criteria and interest rates rising. We are experiencing the former as we write this: Tighter lending policies, much more comprehensive due diligence on investment and shorter terms for lending and investment in general. And as for the latter, the 10 year treasury has been on a see saw with a YTD low of 4.01% and a high of 4.79%.
I reckon it’s hard to be Lao Tzu in these circumstances:
Life is a series of natural and spontaneous changes. Don’t resist them – that only creates sorrow. Let reality be reality. Let things flow naturally forward in whatever way they like.
But bring an umbrella!