A few Monday AM thoughts on something that comes up all the time over cocktails:  People have bigger dreams than they have budgets.

Since this is (nominally) an economics website, I sometimes feel compelled to hold up the mirror to society and ask the genuinely brave to have a look.

Simple questions only:

1.  Have you actually read a book in the last month about making money?  You’d be surprised how stupid people are:  They expect to have money with no effort.   The world is a constantly changing place and everyone else is out to get YOUR money, so seems obvious to me that if you want more money in your life, you would study the subject a bit… Simply on the basis that “the more you study, the more you’ll make…”  Most people say “No…”  They don’t study a whit.  Which is why most people end up on Monday’s like this with a sense of dread and having to get back on the treadmill to eat… Sucks.

2. Have you tried your hand at economic forecasting?  Obviously, if you can spot the “hot new trend” and you can figure out who is making it, then tossing a few dollars on that bet is a simple way to make money.  But, have you either tried to forecast the economy this fall OR have you spotted a trend you could cash in on?  Again, most people say no.

3.  Do you regularly look at your personal financial condition (without BS’ing yourself) and come up with a plan to make a certain amount of money in a given period of time?  99 percent (or more) of the population has no financial plan or goals at all.

4. Do you buy one lottery ticket per drawing?  Obviously, your odds of losing are 100% if you don’t buy a ticket.  But, ONE ticket will get you in the game.  And THAT ticket isn’t too expensive plus it will spur you to learn about statistics of lotteries – and it makes statistics fun.  The odds suck…so put a threshold ($50 million?) and only bet one chance on the big ones.  The odds change between 1 ticket and 100 isn’t worth the price.

5.  When you listen to news, are you listening as a voyeur or as a rich person?  A voyeur will listen to the political crap, the Kardashian-like “people” stories and whatever tugs your social media strings.  But the Rich person has no time for that.  They realize that with enough money, they can pretty buy whatever kind of world they want to surround themselves with.  “Get off my island” kind of thing.

These are really simple questions.  But worth asking when it’s time to head out for work.

Which is why we tend to gloss over what’s “trending” and focus on ideas and concepts that can make us money….

Clouds of War

Donald Trump is hitting the tweets hard with warnings to Iran:

To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!”

What set of “Tweets from the Chief” was the idiotic lingo from Iran over the weekend in which Iran threatens the “mother of all wars.

I believe the Iranians are (to translate into street-talk) just “talking shit.”

Still, we have picked up some terrorist chatter around the web of something in September…so we shall see what the next outburst is (from either side).

Let’s see if defense stocks pop, though, shall we?

CFNAI

Take the Chicago Fed National Activity Index just out as a good starting point, too.  Here’s the data — what does it tell you?

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rebounded to +0.43 in June from –0.45 in May. Two of the four broad categories of indicators that make up the index increased from May, and three of the four categories made positive contributions to the index in June.
The index’s three-month moving average, CFNAI-MA3, edged up to +0.16 in June from +0.10 in May.

Housing data will dominate tomorrow and Wednesday and then Thursday it will be Durable Goods – a bad number here could spook the markets.  GDP on Friday to round out your money-dancing card.

Fed Data

Again, if you’re going to be rich, it helps to know which way the Federal Reserve is stacking the deck.  If the Fed is increasing the money in circulation, some of it will find its way into new jobs, expanding the economy and eventually inflation.

But, when the Fed rolls the other way, the money gets tighter and things begin to slow.

Over at the Fed website we see the rate of increase (3-months annualized) was running minus 8-10ths of a percent through the end of May.  Through the most recent window (ending July 9) the rate of increase in M1 was 1.3% annualized.

If the economy is growing at 2.4 percent, this is NO WHERE NEAR ENOUGH.  It means several things:  1) the non-partisan (sorry for the joke) Fed wants the market to come down.  And, 2) they want rates to keep going up.

Pressuring the Fed? BoJ easing talk sends bond yields up.  Either the US Fed will be wrong for raising rates too far, too fast (our pick) or Japan is wrong to consider lowering.  (We don’t think so).  And exchange rate jitters persist globally: China says it won’t devalue currency to bolster exports.

What this means is the Fed seems to be applying the kind of economic pressure that will let (a good deal) of the air out of the Trump Bump before the November elections.

Fox, though, got in a lick for Trump-onomics with Tax cuts only help the wealthy, right? American paychecks show otherwise.

Now We Do Headlines

Going along with the notion that the non-partisan but democrat-leaning Fed is getting the economy ready for a pre-election slide, we see how JPMorgan Chase CEO opens up on the trade war, infrastructure ’emergency’ and Trump.

Although at the same time, some energy prices should come down based in part on Energy giants opening natural gas spigots, fueling profit rise.

Murder Cycle Research

Is this anywhere near our 135-140 day “murder cycle?”

2 dead, 12 wounded in Toronto shooter spree.

Only 90 days from the April 23 van attack that killed 10 and wounded 15.  So, is Canada on its own “cycle?”

Weathering Highs

103F at the ranch here in East Texas today:  But not everywhere: Heavy rain along the East Coast and no Heat Relief for the Southwest, Southern Plains.

We are not alone – it’s also summer in Asia where Record high in Japan as heat wave grips the region.

Moron the ‘morrow…  Dow and S&P futures flat, the NASDAQ down, so we look for the non-techs to follow ’em down…