The big question for the week is whether the FOMC will choose to raise interest rates. Observations are mixed, with some commentators suggesting they will, and others suggesting otherwise. We have long believed, and maintain this position, that they won’t raise rates during the current administration.
In business news, Pfizer and Allergan announced a merger a few weeks ago, in a deal which, if completed, would create one of the largest pharma companies in the world. The merger may or may not work long term, but it is certainly garnering its share of press. Post-merger, the company could claim Irish domicile, reducing its overall corporate tax burden. This business strategy is irritating to those who believe all citizens, private or corporate, have as their first duty, the sharing of revenue with the taxing authorities.
We are pleased to pay taxes we owe, as those taxes play a part in maintaining a most excellent quality of life. We do firmly believe however, that prudent planning dictates that we be aware of all personal and business costs, of which taxes are one. And further, that as we make our decisions, we do what we can, while still moving toward our goals, to participate in involuntary sharing, otherwise known as taxes, as little as possible.
We would suggest that if the governors of our great country, federal and state, wish to maintain good corporate citizens, they realize they are competing on a worldwide stage. Tightening the reins through regulation and legislation will simply squeeze the best corporate citizens from our country’s hands.
In economic news, some bullet points…recent job growth has been strong, averaging more than 200,000 new jobs each month. Official unemployment is trending down, at or toward 5%, inflation is low, below the Fed target of 2%, and auto sales are at record levels, exceeding 18 million units annually. Oil and gas prices continue to drop, and in Atlanta, residential and commercial construction seems to be everywhere, and home prices are firm and rising.
On the flipside, wage growth is weak. When employers hire, they expect their new employees to add value sooner rather than later, placing the onus for preparation on the employee. Those who are prepared and continue to prepare are doing well. Others are struggling. International challenges remain, with the drop in oil prices, and economic questions in countries ranging from Greece to China to Japan, and across Europe.
No one seems to want to get in the face of terrorists, for reasons we can only guess at. Terrorists speak the language of force, so they likely understand the language. A key communication skill is being able to speak to people in language they understand, so perhaps we should speak to the terrorists with force. It makes me wonder if the wall would have fallen during Reagan’s tenure, or England would have been demolished under Churchill’s watch, or Rome overrun by barbarians while Maximus Decimus Meridius was general, or the known world would have been Hellenized while Alexander The Great was wielding a sword, if any of these leaders had taken the approach our current crop of world leaders are taking with these barbarians.
At the individual level, we are called to love, to care, to serve, to teach, to set an example, and to seek the best for others and ourselves. Governing or sovereign entities have a different mandate, which is to promote good and suppress evil. While I wish no ill on anyone, I encourage those who make decisions at the highest levels of government to stand strong in suppressing evil.
Writing about the courage to stare down evil reminds me that last Monday was the 74th anniversary of the bombing of Pearl Harbor. It is, as President Roosevelt said, a “day that shall live in infamy”.
Before dawn on December 7th, 1941, an attack wave of 180 aircraft was launched into the darkness, and headed south. Shortly thereafter, a second attack wave of similar size was launched. Within a short time, five of eight battleships at Pearl Harbor were sunk or sinking, and America was brought into WWII.
We salute those who are have given, or are prepared to give, their lives, so we can live with the freedoms we enjoy.
“And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.” – Declaration of Independence
Randy Brunson is the founding shareholder of Centurion Advisory Group. Mr. Brunson
has invested most of his thirty five year career in the area of financial services.