The Long Term Investor

HEY.....remember when Bitcoin was going to be hedge against inflation and stock market moves?

Bitcoin drops 5% to again trade below $30,000 as sell-off resumes

https://www.cnbc.com/2022/06/07/bit...ain-trade-below-30000-as-selloff-resumes.html

(BOLD is my opinion OR what I consider important content)

"Bitcoin fell below $30,000 again Tuesday as the cryptocurrency’s recent sell-off resumed.

The largest cryptocurrency by market cap slumped 4.8% to $29,827.50, according to Coin Metrics. Bitcoin had gained more than 4% to trade above $31,000 in the previous session. Ether dropped 4% to $1,784.43 on Tuesday.

The moves followed a report that the Securities and Exchange Commission is investigating the possibility that the BNB token, a cryptocurrency issued by Binance, could be categorized as a security. BNB led the market-wide sell-off. It’s currently down 6%.

Bitcoin has lost more than half of its value from an all-time high of $68,982 reached in November. The digital token had suffered eight straight weeks of losses and dropped below $30,000 last month after the Terra collapse.

Cryptocurrencies have been moving in lockstep with equities, which have had a rough year amid fears of rising rates, surging inflation and the risk of a slower economy or outright recession. The S&P 500 has fallen more than 13% in 2022, while the tech-heavy Nasdaq Composite has been hit harder, down 23% this year.

“BTC’s increased correlation with equity, stagnated transactions growth ... and the emergence of ETH as a store of value rival could weaken BTC’s dominance,” Bernstein analyst Gautam Chhugani, said in a recent note.

Still, some on Wall Street see a rebound in bitcoin on the horizon. JPMorgan’s Nikolaos Panigirtzoglou said last month that he sees about 30% upside for the cryptocurrency after the recent washout.

Bitcoin faces another hurdle this week with the closely watched consumer price index reading, which is due out Friday. If the reading for May is cooler than April’s numbers, as expected, some could interpret it as a sign that inflation has peaked.

Some Fed members have said rate hikes could continue past this summer, Yuya Hasegawa, a crypto market analyst at Japanese bitcoin exchange Bitbank, noted. If the CPI rebounds in May, the market will start to price in that scenario and could cause a shock for risk assets, he said.

“How much a 50bp rate hike by the Fed in May could suppress prices is still uncertain,” said Hasegawa. “So it will be difficult to open new positions until Friday’s CPI announcement. In other words, bitcoin could continue to fluctuate sideways until then, but the market should brace for impact.”"

MY COMMENT

Surprise, surprise.......no one really has a clue what or why Bitcoin does anything. At this point it is acting like an EXTREMELY speculative, volatile.......stock.

 

SO......the good news is we may be in an extended buying period.....for younger people with time to compound the cheap shares they pick up over the next months to years.

GREAT NEWS......for anyone that is doing a 401K or other account that has any sort of averaging of purchases over a number of years.

For the rest of us.....the good times will return......they always do. It is just a question of when.....and.....having the patience to wait for it.

 

Of course we will make it through this. I have sat through a lot worse than this over the past 45+ years. Patience and NO FEAR is the key. As I have said.....my investment money is totally disconnected from my living money.....so that makes it easy for me to do nothing and avoid fear or panic.

This little time period......no matter how long it turns out to be.....will be a TINY little blip on a long term chart of the SP500.

I expect to have some money in my budget to invest around December. I would like to get a good price at that time. BUT....I am an all in all at once investor.....so when the money is available it will be invested regardless of what is going on. The research supports this type of strategy over market timing.

 

Well......whoop-de-do....I made some money today. I was green. I got beat by the SP500 by 0.43%......but I dont care. Gains are gains and are money in the bank.

It is nice to rack up gains any time we can. I like to add to my short term cushion any time I can since we are no doubt going to see some down days going forward. I am hanging in there at about (-19.80%) year to date. I actually consider this "acceptable" considering the past six months.

SO......we are TWO FOR TWO this week to the green. LETS MAKE IT THREE TOMORROW.

 

LOL......I love it......with the economy threatening to enter a recession..........what do we do? WELL.....we change the definition of a recession.

Fed GDP tracker shows the economy could be on the brink of a recession

https://www.cnbc.com/2022/06/07/fed...omy-could-be-on-the-brink-of-a-recession.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• The Atlanta Federal Reserve’s GDPNow tracker is now pointing to an annualized gain of just 0.9% for the second quarter, down from an estimated 1.3% increase less than a week ago.
• With first-quarter growth down 1.5%, a second consecutive quarter of negative growth meets a rule-of-thumb definition for recession.
• The National Bureau of Economic Research, the official arbiter, says a recession can include two straight negative GDP prints, but that’s not necessarily the case.

A widely followed Federal Reserve gauge is indicating that the U.S. economy could be headed for a second consecutive quarter of negative growth, meeting a rule-of-thumb definition for a recession.

In an update posted Tuesday, the Atlanta Fed’s GDPNow tracker is now pointing to an annualized gain of just 0.9% for the second quarter.

Following a 1.5% drop in the first three months of the year, the indicator is showing the economy doesn’t have much further to go before it slides into what many consider a recession.

GDPNow follows economic data in real time and uses it to project the way the economy is heading. Tuesday’s data, combined with other recent releases, resulted in the model downgrading what had been an estimate of 1.3% growth as of June 1 to the new outlook for a 0.9% gain.

Personal consumption expenditures, a measure of consumer spending that is responsible for nearly 70% of gross domestic product, saw a cut to a 3.7% gain from a previous 4.4% estimate. Also, real gross private domestic investment now is expected to shave 8.5% off growth, from the previous 8.3%.

At the same time, an improvement to the trade outlook resulted in a mild boost to the estimate.

The U.S. trade deficit with its global partners fell to $87.1 billion in April — still a large number by historical standards but down more than $20 billion from March’s record. On net, trade is expected to subtract 0.13 percentage point from GDP in the second quarter, from a previous estimate of -0.25 percentage point, according to the Atlanta Fed.

Talk of recession has accelerated this year amid surging inflation that has put a damper on corporate profit outlooks. Many on Wall Street are still expecting the combination of resilience in consumer spending and job growth to the keep the U.S. out of recession.

“Right now, it looks like any talk of a recession is a 2023 story. It’s not this year,” said Joseph Brusuelas, chief economist at consulting firm RSM. “We would need to see future shocks to the business cycle. My sense is the economy is going to slow, but only really back to its long-term trend growth rate of 1.8%.”

To be sure, while the notion of two consecutive negative GDP quarters is often considered a recession, that’s not necessarily true.

The National Bureau of Economic Research, the official arbiter of recessions, says that rule of thumb often holds true but not always. For instance, the recession of 2020 saw just one quarter of negative growth.

Instead, the NBER defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”

“Most of the recessions identified by our procedures do consist of two or more consecutive quarters of declining real GDP, but not all of them,” the NBER says on its site. “There are several reasons. First, we do not identify economic activity solely with real GDP, but consider a range of indicators. Second, we consider the depth of the decline in economic activity.”

However, there has never been a period with consecutive negative-growth quarters that did not entail a recession, according to data going back to 1947.

One major source of inflation fears is the Federal Reserve, which is on a rate-hiking cycle in an effort to quell runaway inflation. Chair Jerome Powell said last month he sees “a good chance to have a soft or softish landing,” even with policy tightening.

“It’s not going to be easy. And it may well depend, of course, on events that are not under our control. But our job is to use our tools to try to achieve that outcome, and that’s what we’re going to do,” Powell said.

Earlier Tuesday, Treasury Secretary Janet Yellen told a Senate panel that “bringing inflation down should be our No. 1 priority” and noted that attempts to bring down the cost of living are coming “from a position of strength” in the economy."

MY COMMENT

You have to love these semi-government bureaucrats. EVERY recession since 1947 has been two quarters of negative growth. BUT now......well......that is not necessarily a recession.

AND.......it is not like anyone cares if some government board says it is a recession or not. Regardless of what they say.....everyone......will use the two quarter definition.

When we enter an "official" recession it is important for stock investors to keep one thing in mind. it is IRRELEVANT. I dont know any long term investor that invests according to economic data and definitions. The media is going to have a field day when we get two quarters of negative growth. It is going to be recession, recession, recession......all day long in the media.

The main thing for long term investors........this is short term CHAFF. It is simply a distraction from what is important for investors........keeping money working in good quality companies, funds, and indexes.......in order to capture the long term compounding that produces real wealth.

 

You were up late last night roadtonowhere.

I like the open today. It reminds me of the past couple of days. I think the way the markets are performing today....there is a "chance"........that we will be able to end the day either mixed or green. Keep in mind that......"chance".....does not mean "probably".

The key issue today is the yield on the Ten Year Treasury being above 3% and going up. Just short term commentary.......not an issue for long term ivnestors.

 

When I find anything relevant to long term investing I post it. MOST of the material out there in today's world in the investing and financial press is totally short term or trading oriented. I like this little article.

A Guide to Protecting Your Investments in a Stock Market Crash
This is what you should do in a bear market

https://investorplace.com/2022/06/a...et-crash/?utm_source=rcm&utm_medium=editorial

(BOLD is my opinion OR what I consider important content)



"Stock market crashes should be treated as a natural part of the ongoing market cycle.

• A measured "buy when there's blood on the streets" approach can help you to capitalize on opportunities during crashes.
• Investors should prepare for the worst by making a wish list of rock-solid businesses they'd like to invest in at reduced prices.

Stock market crashes are many investors’ worst nightmare — or they’re a dream come true if you have the right approach. Investors can view a crash as a chance to go bargain hunting, and they should take steps ahead of time to prepare for this eventuality.

When I give you the years 1929, 1987, 2008 and 2020, what’s the first thing that pops into your mind? Seasoned investors should immediately think of the collapses that happened in the stock market during those years.

Sudden stock market drawdowns of 20%, 30%, 50% or more can be scary if you’re not prepared. Knowing what to expect, and how to capitalize on the opportunities involved, can help investors make the most of a very challenging situation.

With all of that in mind, let’s explore the three steps you need to take to protect your investments when the market crashes

1. Stay Calm, but Be Aware of Macro Conditions

Stocks fall for many different reasons, but there’s a common theme: a negative surprise. In 2008, it was the collapse of the richly valued housing market. 2020, unfortunately, was the year when the Covid-19 pandemic came to the U.S.

Some folks might posit that a stock market crash is bound to happen every 10 years or so. However, crashes don’t happen because they’re “due.” There’s typically going to be a negative shock or “black swan event” to cause panic in the stock market.

You might have heard that high U.S. inflation will be the next shock event to cause a crash in the financial markets. This might or might not be true. Stocks have already fallen from their peak prices, and could enter into a full-blown crash this year. So, it’s a good idea to consider how you’d respond.

2. Look for Opportunities

History shows that buying when most investors are complacent, and selling when investors are panicking, is a recipe for disaster. Famous investors like Warren Buffett instead choose to flip the script, and buy during times of panic instead of selling.

As the old saying goes, buy when there’s “blood on the streets.” Think about the companies you’ve wanted to invest in, but the share prices were too high. During a stock market crash, those prices often go down to much more attractive levels.

Hence, the best strategy is to view stock market crashes as opportunities rather than as problems. Focus your attention on stocks with comparatively low valuation metrics, such as price-to-earnings ratio and price-to-sales ratio. When these metrics are unusually low for any given company, you can thank the market for handing you a rare bargain.

3. Extend Your Time Frame

What if you already owned stocks and the market collapses? Rather than panic-sell your stocks, you can choose to extend your investment time frame. This means holding on to your stocks if they represent great companies, and let the passage of time heal the wounds.

And time does tend to heal wounds, at least when it comes to great companies. This is why the stock market eventually recovered after the 1929, 1987, 2008 and 2020 crashes. Solid companies will prove their resiliency, given enough time.

Whether you believe that stocks are going to crash or not, it’s wise to prepare ahead of time. You can do this by making a list of great companies that you’d like to invest in. Then, list the share prices at which you’d like to buy their stocks if a crash happens.

And if you get caught holding stocks while a full-on stock market crash happens, you don’t have to panic. The idea is to be invested in solid companies and to have a long enough time frame. If you follow those guidelines, you’ll probably be all right in the end.

When Will the Stock Market Recover?

There’s no crystal ball to let you know exactly how long it will take the stock market to recover, unfortunately. Really, though, the timing doesn’t matter so much if you’ve followed the three steps listed above.

Just know that all previous stock market crashes were temporary, even if they were scary at the time. Many traders needlessly dumped their stock holdings near the bottom of the cycle. Meanwhile, Warren Buffett and other patient investors picked up stocks at bargain-bin prices.

For what it’s worth, it’s practically assured that the stock market will recover at some point. In the meantime, feel free to build your wish list — and, when your favorite companies’ stocks get down to an irresistible price point, make a move and turn that crash into cash."

MY COMMENT

Can it really be this simple? Actually.....yes. Follow the advice above and you will be just fine. This is what long term investors do. This is what it means to be......."long term". this is also what it means to be an....."investor".

 

I also like this little article. It presents some accurate economic data based n actual historical fact.

Why Price Controls Don’t Work
They neither dampen demand nor swell supply—and have a history of hampering the latter.

https://www.fisherinvestments.com/en-us/marketminder/why-price-controls-dont-work

(BOLD is my opinion OR what I consider important content)

"Editors’ note: MarketMinder is nonpartisan, neither for nor against any party, politician or policy. Though inflation has become a politically charged topic, our analysis focuses only on its—and surrounding developments’—potential impact on the economy and markets."

"If rising prices are hurting so many, why not just outlaw them? It sounds so simple. But, in practice, history has proven such price controls to be highly problematic in practice. Prolonged price pressures have raised calls for government action and led to some actual legislation—e.g., windfall profits taxes in Europe. In the US, there are efforts to go further, with prospective price control bills in Congress barring “gouging.” While passage doesn’t seem likely, we wouldn’t rule it out. We are watching their progress because, if adopted broadly, we think they could pose headwinds for the economy and markets.

Why are price controls such a bad idea? They distort price signals, which are core to markets’ functioning effectively and, not unrelatedly, economic growth. Prices balance supply and demand, coordinating production and consumption. They are signals, full stop. On the demand side, when they are high and rising, they encourage more people to cut back, substitute and economize. At the same time, high and rising prices imply greater potential profit, signaling producers to boost supply—which eventually helps keep prices in check.

But if prices can’t fluctuate freely, they don’t tell producers when they need to crank up output. Nor do they incentivize people to adjust consumption in order to help limited supply stretch further in the short term. As a result, you don’t get the changes in behavior that help stabilize prices. Heck, price controls can even cause severe shortages if prices are set near or below producers’ costs, which discourages production by destroying the profit motive—ultimately driving prices far higher still.

Price controls aren’t hard permanent ceilings. Sometimes the caps reset periodically, causing prices to jump in blocky stair-steps, much as the UK is enduring with household energy prices under its retail price cap right now. Or, they lift, and shortages quickly drive prices much higher—potentially higher than they would otherwise have been. This happens regularly in Emerging Markets nations that have historically been frequent users of fuel price caps. Even if a cap is set above current market prices, they can quickly shift from ceiling to target, as producers worry they won’t be able to raise prices later, if need be.

We understand and empathize: High and rising prices aren’t fun. They can be excruciating. But they are crucial to incentivize more supply—and temper demand temporarily until then. Market processes aren’t always quick or painless, hence the frustration and clamor for relief by other means. Without dynamic price signals to consumers and producers, though, history shows greater pain awaits.

You don’t have to look very far back to see how. The Nixon administration’s price controls were disastrous. Introduced in August 1971 along with scrapping dollar convertibility to gold, President Richard Nixon ordered a 90-day freeze on wages, prices and rents. Next came October 1971’s dual Economic Stabilization agencies—the Pay Board and the Price Commission overseen by the Cost of Living Council—which administered wage and price controls thereafter, permitting increases by diktat. Price controls seemed to succeed at first. CPI inflation was running at 4.4% y/y in August 1971 and fell to 2.9% a year later. But by January 1973, price controls started phasing out, first with “voluntary controls” and later “voluntary compliance” in August 1973. Catch-up inflation ensued.

In April 1974, when price controls formally dissolved, CPI was at 10.1% y/y and the economy was 5 months into a recession. Gas lines, tied to 1973 – 1974’s Arab oil embargo and these controls, were one result. Empty grocery store shelves were another, and the two became the face of America’s malaise. Without profit, ranchers stopped bringing their cattle to market. Farmers drowned their chickens—perverse and sad, but it is what occurs when governments interfere with price signals. We think it is clear Nixon’s heavy-handed interventions—and the uncertainty surrounding them—helped cause the 1970s’ high inflation. They didn’t control it. Moreover, they helped contribute to the deep mid-1970s recession as a result.

So, price controls are generally something to watch out for. If enacted broadly, they would be a negative. But even short of that, just their increasing likelihood would probably add to headline fears already weighing on sentiment. That could roil markets short term, especially since price controls risk interfering with the forces that are already working to tame inflation, which stems predominantly from supply disruptions. Take oil, cars, homes and semiconductors—in all cases, unit production is ramping up, hitting or approaching record highs. As Economics 101 teaches, there are two ways to tame inflation: either curb demand or build supply. Only the latter spurs growth. But price controls do neither. Relieving supply bottlenecks takes time and may not provide immediate respite, but it gets the job done eventually.

Positively, the risk Congress implements price controls appears remote, as there aren’t the votes for it. The Democratic Party’s current edge in the House is among its smallest majorities in history, and they are fractured on the issue. The Senate is evenly divided, and we are only about five months from midterm elections that, if history is an indication, are likely to flip control of one or both chambers, dividing nominal party control of government. If that happens, price control legislation stands little to no chance.

Actually, those midterms may somewhat explain the push to act on prices: It is an effort to show politicians are “doing something” about inflation, a stance perhaps aimed at turning out the base at midterms. A windfall profits tax may stand more of a chance, yet that isn’t very likely, either, considering politically centrist red-state Democratic Senators and Representatives are against the idea and facing fraught battles to keep their seats. So even if there is movement on this front generating headlines, it isn’t likely to sail through Congress anytime soon. In the unlikely event anything passes, it would probably have to be greatly watered down for approval."

MY COMMENT

YES......there is no way to short circuit what we simply have to go through and put up with. There is no magic bullet. Much of what we are facing right now is due to government policy and the disruptions of closing the economy. The worst thing we could do is take more action to try to manipulate the economy. More PHONY ACTIONS to solve the current issues will simply make things WORSE.

 

I like that post Emmett. Over the years I have thought many times about taking all the content in this thread......or others I have done on other sites......and doing a book. BUT.....I am just too lazy to do it.

As you are seeing in that book you are reading.....the concepts are very simple. They have also been around for decades and decades. the principles of long term investing have always worked and they continue to work today.

What also never changes.....is the ability of humans to mess it up. The human brain is a dangerous thing.

I appreciate you being here Emmett. You are a very good contributor and investor.

 

I have been investing for a very long time.....basically all my life.......over 50 years. Having gone through so many different events over the years......makes it difficult to appreciate what it is like for younger investors who might be experiencing their first market drop of bear market. So....for any first timers......here is a nice little article.

Dear Gen Z: Here's how to survive your first bear market

https://www.cnn.com/2022/06/06/investing/recession-new-investors-advice/index.html

(BOLD is my opinion OR what I consider important content)

"New York (CNN Business) The pandemic brought a wave of new investors into the stock market. And now those newbies are facing their first major market downturn.

Some Millennials and Gen Z-ers found themselves jobless and bored during peak Covid, yet flush with sudden access to cash through stimulus programs and increased federal unemployment payments. And the pandemic-fueled market dip provided an easy entry point to investing.

The casino was open and everyone was winning big. These new investors had less wiggle room when it came to losing cash, but hey, they had never lived through a market crash or recession.

Then came the geopolitical chaos, supply shortages, higher inflation and high interest rates that have roiled markets. The S&P 500 has come down about 13% from its last high on January 3 and briefly hit bear territory, down 20% intraday, last month.

For newbie investors, things are changing fast.

Buying first, asking questions later

About 15% of all current US stock market investors say they first began investing in 2020, according to a Schwab survey — and the majority who opened their first non-retirement investment account that year were under the age of 45 and had lower incomes than other investors, a FINRA study found. In all, about 20 million people have started investing in the past two years.

Flushed with liquidity, "they bought first and asked questions later with meme stocks, SPACs, NFTs. There was a lot of what I call indiscriminate buying," said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management.

Berkshire Hathaway's Charlie Munger described the stock market during that period as "almost a mania of speculation," adding that that "we've got people who know nothing about stocks, being advised by stockbrokers who know even less."

Now, "the casino is closed," Peter Mallouk, president and CEO of Creative Planning, a wealth management firm, told CNN's Paul R. La Monica. The mood has shifted within digital communities like Reddit's WallStreetBets, where young investors gathered during the good times to post memes about stocks only going up. "Turns out investing is kinda difficult when the free money faucet is turned off," wrote one user, with another adding: "I blew up my savings and portfolio. I don't even have money to lose more money on the stock market so I'll be out."

But seasoned pros say that's not the way to go. Here's what they suggest.

Don't panic, learn lessons and keep going

Investors may be panicking, Grohowski said, but they shouldn't pull out of the markets altogether.
"Frankly, I hope lessons being learned are 'buy first ask questions later' is never a good strategy — and that fundamentals and valuation does matter," he said. "This will turn out to be a better entry point than exit point for longer-term-oriented investors."

Certainly "it's a test" for investors who lose big, Grohowski acknowledged, but he thinks there will be "a better market ahead."

Other longtime investors have also preached the need for perspective.

"In every bear market, it feels like the end of the world is near while it's happening," Ben Carlson, manager at Ritholtz Wealth Management, wrote in a recent note. "In every bear market, we get some technical analyst who makes a 1987 or 1929 analogy using an overlay chart that makes it look like we're gonna get the mother of all crashes yet again."

But "every other bear market in history is an epic buying opportunity until the next one," he added.

How to survive the downturn

Indeed, "when markets become more volatile and weakness takes over from strength, we always remind investors that panic is not an investing strategy," said Liz Ann Sonders, chief investment strategist at Charles Schwab.
She recommends active investors select stocks by focusing on factors such as cash-rich and low-debt balance sheets, positive earnings revisions and low volatility.

Sharp rallies are par for the course during bear markets, Sonders noted, but investors should be prepared for an extended downturn. "Aggressive Fed policy, the turning of the liquidity tide and slower economic growth will likely keep pressure on stocks," she added.

Given all of those concerns, "don't panic" might sound like difficult advice to follow. One way to avoid it is ensuring you have enough resources outside of the market to weather a crisis, said Mark Riepe, managing director of the Schwab Center for Financial Research. If you can hang in without depending on that money in the market, you don't have to pull out at the bottom and risk missing the inevitable rebound. (Remember, past bear markets have tended to be shorter than bull markets).

The Schwab Center for Financial Research compared the returns of different portfolios during the average bear market and found that investors who remained 100% in stocks as the market touched its low and then rebounded performed better than investors who sold some stock during the downturn.

So, although economic uncertainty abounds, investors should remember that volatility is necessary for better long-term returns on equities, wrote David Kelly, chief global strategist of JPMorgan Asset Management in a recent note. Kelly also advised investors to keep in mind that a diverse portfolio reduces risk, valuations are a good indicator of long-term gaining potential, and to invest with logic not emotion.

"Very often the best time to get invested is when people feel most scared and confused," wrote Kelly. "In a world of '?'s, investing principles deserve an '!'.""

MY COMMENT

The usual.....but perfect......advice as to how to invest....especially during a bear or down market. The emphasis for any real investor in any sort of market should be on.........LONG TERM.

 

I will note......just for the historical record......that at the moment I am moderately in the green for the day.

 

Well two out of three is not bad......for positive days this week.

I ended moderately in the red today. BUT.....I will take my beat on the SP500 by 0.47% as a victory.

Got to grasp any victory I can these days.

 

You know me and work from home. As a former business owner I am NOT a fan of remote work. In the end I believe that the one that will really suffer will be the......employee. Here is a little article on the topic......it is an opinion piece so I am not posting this as news.......simply opinion that I happen to agree with. Others are free to post any view they wish on this topic.

America needs to go back to work — in person

https://nypost.com/2022/06/07/america-needs-to-go-back-to-work-in-person/

(BOLD is my opinion OR what I consider important content)

"America needs to go back to work.

Elon Musk ordered Tesla employees back to the office full time last week. Tesla will “create and actually manufacture the most exciting and meaningful products of any company on Earth,” Musk said. “This will not happen by phoning it in.”

Bravo to Musk for rebuffing the fairy tale that employees working from home are just as productive. It’s true for some jobs but not for most. The nation is moving recklessly fast to make remote and hybrid working permanent without anticipating the harm to the world’s largest economy.

The advantages of remote work are obvious: no laborious commutes, especially with budget-busting gas prices, and more lifestyle freedom. But it also threatens to depress economic output, lower America’s standard of living, doom our cities and deprive young people of on-the-job training.

It’s a myth to think employees — especially entry-level workers — can acquire new skills sitting in their pajamas at their home computer instead of interacting with more seasoned workers on the job.

Remote work penalizes strivers who want promotions and need their job performance to be on full display. Employees working remotely are half as likely to be promoted, according to Harvard economists Edward Glaeser and David Cutler.

Not to mention the adverse impact on cities. Alarmingly, the Partnership for New York found 78% of city companies expect to make hybrid work — some days in the office and some at home — permanent after the pandemic. Business leaders should take a page from Tesla’s CEO and resist that trend.

Commercial real-estate values here plummeted in 2022, resulting in less tax revenue to pay for city services like cops and firefighters.

Cities can’t bounce back from the pandemic until office workers return, spending money in restaurants, retailers, shoe-shine stands and after-hours bars. New York office workers used to spend $15,000 a year on average at businesses near their place of work. Now many of those businesses are shuttered.

Workers demanding freedom from the office often sound self-centered and uninformed. More than 1,000 Apple employees signed an open letter declaring that “office-bound work is a technology from the last century,” and “commuting to the office, without an actual need to be there, is a huge waste of time.”

Sorry. Working together in an office fosters innovation, say Glaeser and Cutler. Working remotely discourages collaboration and information-sharing, a study of Microsoft employees found.

Despite the negative impact on productivity, many employers are caving. Blame the tight job market. An astounding 54% of employees working from home say they’d look for another job if forced to go into the office, per Gallup. That will change when the economy slows.

But longer term, the push to make work remote is one manifestation of the political attack on America’s strong work ethic.

Rep. Mark Takano (D-Calif.) has introduced a bill, endorsed by the Congressional Progressive Caucus, to reduce the work week to 32 hours. Americans shouldn’t have to return to “the old normal” after the pandemic, he said.

Joe O’Connor, head of the nonprofit Four Day Work Week Global, argues that there’s “no correlation between working more hours and better productivity.” That’s laughable.

Europeans work fewer hours than Americans. No surprise, their GDP per capita is lower, too. They’re producing fewer goods and services and have to settle for a lower material standard of living than Americans enjoy, including smaller homes and fewer appliances.

Zealots bashing America’s work culture and calling for an end to workplaces and 40-hour weeks aren’t telling you that these changes will likely require you to lower your standard of living. Societies that produce less have less.

Kudos to Musk and to Mayor Eric Adams, who’s insisting municipal workers get back to the office. More leaders need to do the same. The stakes are high, for young people with ambition to succeed, for companies that want to grow, for cities and for a nation whose work ethic has produced unrivaled prosperity."

MY COMMENT

I like some of the research data above.

I will also add that this trend of people wanting to work from home is going to destroy a HUGE number of jobs here in the USA. If I was a business.....why would I want to contribute to a 401K, pay for benefits, pay Social Security, pay for medical, etc, etc, etc.......when I can have employees working from home. HOME....being in a foreign country.....India for example. I could probably hire two or three workers in India for less than the cost of one person working from home here in the USA. So even if they are not as productive individually......I can make up for that with quantity and cost savings.

A worker that is not in the office is meaningless to me as a business.....they are nameless and faceless. There is no connection between me, the business, and them as a person. It is the ultimate BEAN COUNTER dream.

Be very careful what you wish for........the work from home campaign.....in the end is going to screw a HUGE percentage of people in this country out of their jobs. it will sever one of the few links that still remains between companies and employees. It will make workers interchangeable cogs that can simply be contracted for anywhere in the world at a much lower price to the company.

 

Here is the little story relevant to the story of the day.....gas prices.

Gas prices: 'Demand destruction' has already started, says strategist

https://finance.yahoo.com/news/gas-...lready-started-says-strategist-195433877.html

(BOLD is my opinion OR what I consider important content)

"Gasoline prices at all-time highs may be starting to put a dent on demand at the pump. Yahoo Finance spoke to several strategists to get their take on when consumers start buying less gas amid rising energy costs.

"One could argue that demand destruction for gasoline has already started," Peter McNally, global sector lead for industrials, materials, and energy at Third Bridge, told Yahoo Finance.

"Since the start of March, U.S. gasoline consumption is 6% lower than the corresponding period in 2019," pre-pandemic.

Gasoline prices are just pennies away from hitting $5/gallon nationwide. Roughly 15 states already have oil prices at that level, or higher.

The US Energy Information Administration (EIA) has been tracking a slight dip in gasoline demand when compared to 2021.

"According to the EIA, gasoline demand over the last 4 weeks is about 2.0% less than this time last year. As prices continue to rise, I expect that the demand will continue to fall off compared to 2021," Andy Lipow of Lipow Oil Associates told Yahoo Finance.

The higher prices at the pump corollate with higher costs for crude oil. The problem is exacerbated by limited refineries in the U.S.

West Texas Intermediate (CL=F) crude futures were trading above $122 per barrel on Wednesday. Brent (BZ=F) was trading above $123 per barrel.

"If we broach $125/b on crude oil, and stay there for a while, consumers will change their behavior," Stewart Glickman, Deputy Research Director and Energy Equity Analyst at CFRA Research.

High energy prices are also impacting the cost of virtually every good, including food. More money spent on gas and food is leaving the average consumers with less money for more discretionary items.

"When transportation costs go into nosebleed territory, it drives up the cost of bringing goods to market too, which induces companies to pass those cost hikes along to consumers," he said. "My guess is that destruction would be concurrent – both for necessities (like filling your tank) and for those more discretionary items," added Glickman.

The big concern is higher energy prices contributing to an economic slowdown as demand destruction kicks in.

"If past practice is any guide, elevated oil prices often induce a recession. So if high prices persist, I see no reason why it would be different this time," he said.

The difference in 2022 is the impact of the Russia-Ukraine war. Sanctions imposed by the West on Moscow briefly sent Brent crude prices above $130 per barrel back in March.

"If Kiev and Moscow could achieve a ceasefire, then benchmark prices should retreat quickly. That’s the biggest wildcard today," added Glickman.

One strategist sees a dent in demand if the price of oil stays between the $120-$130 range.

"Indications to us are that demand destruction really begins closer to $120-$130 a barrel," Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.

"For odds of recession to pull forward into 2022 would take significantly higher oil prices or an impingement on global energy supplies as the economy reopens," he added.

JPMorgan analysts recently predicted the national average of gasoline could hit $6 per gallon — and go even higher by August."

MY COMMENT

This is good news if it is happening. It will speed us toward the needed recession.

One issue that is going to be critical for a long time is the extremely dangerous fact that we are quickly losing refinery capacity in this country. We are now down to less than 125 working refineries in this country. if you want to know what that means......look up how many we had 5 or 10 years ago.

NO ONE is ever going to build another refinery. You would have to be insane to even try to do so with all the regulations and environmental road blocks. If the number of refineries continues to drop.....we will reach a point where we will start to experience rolling gas shortages.......every year. Not a pretty picture.