View From The Road

Spoiler alert this is not a FB post.?Nothing to buy. Don't need a job. So maybe LinkedIn is misplaced too? It's clearly too long for Twitter. Sorry for the intrusion. Read on, it's your time.

?One Man's Perspective and Opinions - The view from the ground is different than what is offered by the pundits on your favorite business channel.

?Recently my wife and I checked off a bunch of personal?goals now that we are retired. We took off on a?killer road trip across the country 12/1/22 for two months?to see places either one or both of us hadn’t yet experienced. Hard to believe my wife had?never been to D.C. having?grown?up in NYC!?We also spent time Individually with our three boys scattered across the country?and again?collectively in Phoenix for Christmas.

Nine scheduled stops.?We surpassed all our goals while logging over 7,000 miles north to south and east to west and back again. We skirted bad weather including a tornado less than a mile from our hotel in New Orleans, forcing us to retreat to the lobby bar!?Out of an abundance of caution we remained at said bar until the tornado reached Mississippi.

?Passing through over twenty states across main trucking thoroughfares (95, 10, 40 & 70) I had a handful of?nagging?observations I couldn’t reconcile.?

?1.?Every city and region we passed had major public works infrastructure projects in full swing. Active road and bridge improvements in every city and in between. Large private?commercial projects constructing?apartments, expanding?hotel chains?and smaller?office buildings were evident in many regions. It can't all be government subsidized spending via the Infrastructure and Jobs Act, can it?

?2. I can’t tell you how many RV distribution sites we passed all with acres of inventory. How do they fund?inventory at that scale?given the long sales cycles? Is RVing that cool? Me thinks there may some funny financial business at play. I plead ignorance.

?3. The clear leader in billboard advertisements is?personal injury lawyers, their twenty-foot selfies emblazoned up high, guaranteeing great settlement?sums regardless of fault without apparent concern about the likely increase in premium cost to the pool of insured. Some even specialize in truck accidents! Is there no shame?

?4. Restaurants were packed,?even the pricy ones. Online reservations mandated?a non-refundable $50 deposit to hold the reservation. When did that become a thing? The rare half empty restaurants couldn’t seat us due to labor shortages.?Service job anyone? Anyone?

?5. Trucks, trucks, and more trucks. Just east of Flagstaff AZ on route 40 due to?icy road conditions?an 18-wheeler jack- knifed?across the west bound lanes.?I witnessed no less than a fifteen-mile backup. Two lanes?of 18-wheeler?trucks nose to tail. I knew?trucking is the life blood of goods consumption. However, this image clarified that point.?Seeing a single event cause a massive impact to the supply chain crystalized for me how large and?fragile the process is with Just in Time inventory management.?Good luck with the AI routing algorithms.?Almost every truck had a sign ‘immediately?hiring CDL drivers, we?train’.?

?Are?these leading or trailing economic indicators? Did they describe a portion of our growing polarization? Where is all the funding/money coming from if we are truly heading into a recession? Or is liquidity still abundant in spite of FOMC measures to restrict it (i.e., are the Feds measurements behind the curve?).

?It seems to me, amateur economist, that the twenty-year low employment participation rate will continue to impede on productivity levels for years. I mean if I am better off suing folks to generate wealth than working and producing something where’s the incentive? Why has?frivolous litigation?become morally acceptable??Sorry, I digress.

?My Takeaways ?

• Technology enhancements will continue to aid productivity. That said, infrastructure projects?will take a long time to complete without more?skilled laborers.?
• If demand for services and goods outstrip delivery, jobs will be available to those so motivated.?
• We as a people are so consumption driven it will take a repeated?kick in the teeth to our wallets to slow down. I think Jay Powell is a believer.
• Rates will rise until there is an about face on money supply. (M2)?
• Credit card debt?is escalating which on a personal financial level is worse than inflation (20% interest?vs 6% price increase). The worse scenario is paying for more expensive stuff on credit. I think credit debt will overtake consumers forcing a retrenchment in mid-2023.
• I don’t believe most working and retired people can tolerate?higher baseline inflation. I’ve been wrong before RAP and Hip Hop are still around. Just kidding. (Sorry I’m a R&B, Funk, Jazz and R&R guy)
• The 60/40 portfolio isn't dead.?Fixed income products will be weighted more heavily in portfolios, especially for retired persons. Treasury bill, note and shorter duration bond ladders may be back in vogue?

?Most importantly what do you think? It's ok I'm retired, I got time to listen! If you made it to the end thanks for reading. If you didn't, can someone tell them reading is fundamental. That's a generational joke. Peace.