Question of the Day|
Will your children be better off or worse off than you?
· Worse off because of Washington DC
· Worse off because of capitalism
· Better off once Washington changes
· Better off because we are dealing with the ills of capitalism
The self-fulfilling prophecy is, in the beginning, a false definition of the situation evoking a new behavior which makes the original false conception come true- Robert K. Merton
Merton's self-fulfilling prophecies are as prevalent today, as they were when he coined the phrase in 1948, and expressed that we live in a nation where dark clouds of despair are becoming darker, where prophets of doom understand the more they scream, the greater the likelihood there dire warnings will come true. For me, the greater risk is the former. We live in a nation with slumped shoulders that cannot produce an economy that maximizes potential and create widespread prosperity.
The NBC/WSJ survey underscored things we thought were going on, and were shocked and amplified by the notion there is a leadership and confidence crisis. The country is not in a recession. There are forces moving it in the wrong direction from excessive money printing to ideological-driven policies that have gut our work ethic, and have removed rungs from the ladder of success. Nonetheless, when there are overarching feelings of hopelessness our destiny will curve in that direction.
|71%||Country moving in wrong direction|
|71%||Somewhat to very dissatisfied with economy|
|49%||Believe the country is currently in a recession|
There is a silver lining. I do not think Americans are ready to ditch our economic system, despite non-stop badmouthing from the White House to the mass media. People see Washington D.C. as the issue, not income inequality, low minimum wage, or other "ills" of capitalism, which is great news; we can always throw the bums out.
|71%||Elected officials in Washington hurting economy|
|23%||Longstanding problems hurting economy|
Of course, disliking elected officials and knowing they are selling us down the river is a lot different from tossing them out, which is something we fail to do when it comes to our very own elected officials. Nevertheless, I am more encouraged with the idea that only a fraction of people surveyed sees longstanding problems holding back the economy.
White Flag for White House
For all the populist rhetoric that comes out of the White House each day, it is remarkable how much falls on deaf ears. President Obama's overall approval numbers has crashed since his first month in office.
|President Obama's Approval Swoon Song||Feb 2009||July 2014|
"The American people don't want me to sit around twiddling my thumbs, getting nothing done."
If President Obama was bothered by the NBC/WSJ poll, he did not show it last night during his press conference. When asked about being an imperial president, and just how far he is willing to go to get the job done without Congress, his reply:
"What I am consistently going to do, is wherever I have the legal authorities to make progress on behalf of middle class Americans and folks working to get in the middle class … I'm going to seize those opportunities and that's what I think the American people expect me to do."
It is beyond tone deaf to ignore elected officials, and those American voters who put them into office if they are not willing to play ball. In many ways, we could be watching a coup d'état in Washington D.C., with the President declaring himself the peoples' leader.
Without a doubt, such thinking is not going to make the public feel any better, but I guess the good news is they cannot feel any worse.
The most damning part of all of this is the fact that now 76% of American parents think their children will be worse off financially than they were. It has been something of a rite of passage that each generation does better than the previous one.
Sell-off or Head fake?
This specious validity of the self-fulfilling prophecy perpetuates a reign of error. For the prophet will cite the actual course of events as proof that he was right from the very beginning - Robert K. Merton
At some point, the market will get hit, but there is a huge difference between pullbacks, corrections, and crashes. Lots of people have gotten into the crash prediction business, which affects the behavior of investor's. Still, yesterday was an odd session, even odder than Monday, if the Dow was off 300 points, it would have been understandable.
Today should be another interesting day of trading. We received some good news from the Bureau of Labor statistics regarding jobless claims. Initial jobless claims came in lower than expected for the week ending August 8th at 289,000 compared to consensus at 308,000. Continuing claims which lag by one week came in at 2.518 million for the week ended July 26th, lower than the upwardly revised 2.542 million observed in the prior week and consensus at 2.525.
Earnings results by major companies were mixed this morning; a lot of companies missed on earnings. Below are some of the major players in the market.