Morning Brief – Full Employment

Full Employment

 

The textbook definition of full employment has an unemployment rate of 4.5%, so for Fed Chair Jerome Powell with US unemployment rate at a 50 year low of 3.5%, he will inevitably both say and signal things that will spoil the party spirit when he gets to his feet at 1500hrs London time today at the Jackson Hole conference. That is when the Fed Chair will have to point out a few hard facts about the US economy to his audience: US inflation is not tamed and wage growth is above 6%. Moreover global inflation is still rising and threatens to undo the good work already accomplished in the USA. How different it all is to last years’ s speech when Jerome Powell was concerned that too much medicine would choke off the nascent post pandemic recovery. EUR/USD 0.9950.

 

Student Loans

 

In the latest iteration of helicopter money, President Joe Biden is floating the idea of forgiving USD 10,000 of loans for those who earn less than USD 125,000. That will take approximately 15 million aging US students out of the program. In the UK the amount outstanding at March 2022 was GBP 182 billion and that is predicted to rise to GBP 460 billion in the next 20 years. Some might (justifiably) ask the question as to whether the UK can afford to let that student debt mountain continue to grow. GBP/USD 1.1800.

 

Middle Aged Men in Lycra (MAMIL)

 

The love in with Peloton shares is looking to be over with no meaningful progress on recovering from the post pandemic hangover when bike exercisers returned to the great outdoors. The company made a lacklustre announcement yesterday when they released their results and slipped in the fact that their subscribers were aging further (really)which sent their shares down by 20%. Just a reminder those Peloton shares stood at $116 a year ago versus $10.80 last night.

 

Silly Season

 

It must be the last weekend in August when the news broke of an 18 foot Burmese python which had slithered through a first floor bedroom in Chandlers Ford, Hampshire, UK and surprised a couple in bed early yesterday morning. Two facts support the silly season slant: firstly the couple “recognised the snake” and secondly they repelled it with the aid of just a broom. GBP perky on all this silliness with GBP/EUR 1.1860.

 

Love to Love You Baby

 

Who can forget this disco hit that Donna Summer groaned and sighed her way through that was released this day in the still talked about torrid summer of 1976? Storming to Number 2 in the USA despite Donna subsequently admitting that she was unsure of the lyrics which necessitated the sighs and groans and quite a bit of improvisation. It has to be said that there really wasn’t a whole lot for Donna to learn:

 

I love to love you, baby
I love to love you, baby
I love to love you, baby
I love to love you, baby
I love to love you, baby
I love to love you, baby

 

When you’re laying so close to me
There’s no place I’d rather you be than with me, me, uh

 

I love to love you, baby
I love to love you, baby
I love to love you, baby

 

Do it to me again and again
You put me in such an awful spin, in a spin, in, uh

 

Oh, love to love you, baby
Oh, love to love you, baby
Oh, love to love you, baby
Ah, love to love you, baby
I love to love you, baby
I love to love you, baby

 

Lay your head down real close to me
Soothe my mind and set me free, set me free, uh

 

I love to love you, baby
I love to love you, baby

 

Alright, alright
Alright
Oh
Whoa

 

Have a Great Weekend!

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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