Hiring, Firing, Openings, Orders, Wages, Buybuy Baby, Mad Rabbit, Bad Bankers, a Chevrolet Christmas and Fountains & Drains
Look at that Stock Market!
It’s sliding in for a good finish for the year, with a mix of news, giving you more conversation starters at the holiday office party or mixer.
Oh, and gold hit an all-time high on December 1 at $2,089/ounce.
While many economists thought this was all good news, I just don’t think it was what the Fed was looking for. The Fed is looking for the economy to cool; that’s the whole point of raising interest rates; it causes some companies to go bankrupt, raises unemployment, and cools hiring.
And yes, the Fed knows that and that’s the price to pay to bring down inflation.
So, let’s get to it.
199,000 people were hired, up from 150,000 last month and beating expectations of 190,000. However, some caveats:
Striking auto and Hollywood workers returning to the job are in these numbers
Education, healthcare and government comprised 150,000 of that number; other industries were flat, or lost jobs.
Retail was down 38,000 jobs, for example.
Services and professionals were also down.
Unemployment went down to 3.7%. That’s not cooling off.
More people joined the job market; the worker participation rate was up to 62.8%, meaning more people thought they could find a job.
Factory orders were down 3.6%. That is cooling off.
Job openings dropped to 8.7 million from 9.4 million. Yes, that’s cooling, and 6.3 million are looking for jobs.
New jobless claims came in at 220,000, right where folks thought it would be making it not hot or cold; it’s a Goldilocks number.
Wages were up 0.4% for the month and 4% year over year. This is great news for workers, but the Fed really doesn’t like that because growing wages fuels inflation, so that’s not cooling.
Consumer credit kept growing, albeit at a reduced rate, but growing nevertheless.
And U.S. productivity was up 5.2% year over year. That is great news in general. It means folks are being more productive, either by showing up or with the aid of technology or both.
Or picking up the slack of someone who was laid off.
Everyone will be waiting to see what the Fed says this week at their holiday party, er, December meeting on the 12th.
They won’t lower rates, but they will think about it next year.
Santa may leave a soft landing under the Fed’s Christmas tree after all.
Buybuy Baby… is back!
You may recall that Bed Bath & Beyond owned Buybuy Baby, a store for – wait for it – babies. Well, their mothers. And dads, too. Parents. Birthing parents. Legal caregivers. Whatever. It’s so confusing!
BB&B went BK and sold off their assets, one of which was Buybuy Baby.
A group of investors that owns baby store Dream On Me purchased Buybuy Baby and has since reopened 11 stores at the same locations.
They plan on opening another 100 stores.
This is the natural progression of some businesses. In this case, the former owners of Bed Bath & Beyond bought the company using debt. As interest rates increased, the payments on billions of dollars of debt were unsustainable, and they could no longer stay in business.
It all ended with a bankruptcy liquidation. Overstock.com bought the name and some of the assets, and Dream On Me purchased the Buybuy Baby assets.
It’s amazing what the interest costs of $3+ billion of debt will do to profitability.
And now, with a clean sheet, Buybuy Baby should do quite well, thank you.
Can you identify a new market?
Oliver Zak and Selom Agbitor did.
When you purchase art, regardless of the medium, sometimes the challenge is to keep it vivid, withstand aging, and maintain its original vibrancy.
Oliver and Selom felt that the products out there did not do the art they purchased justice, with various chemicals and formulas that did not perform as promised.
So, they created a new formula with different ingredients that they feel get the job done.
All this in 2019.
Earlier this year, Walmart announced that their product would be offered online and be in their 2000 stores.
In less than four years. That’s impressive.
Protection for art in Walmart?
Yep. The product is called Mad Rabbit.
The art it protects? Tattoos.
Now that’s a niche. And that’s the power of the first-mover advantage. They’ve got the lead; they just need to maintain it.
Speaking of a Niche Market
I’ve always said that it was the Great Recession, where bankers made attorneys look good.
Now, to prove my point, here are the following statistics:
9% of Millennials and Gen Z-ers said they have a great deal of confidence in banks.
47% said they have some confidence.
28% said they have very little confidence in banks.
So does it mean anything anymore when someone says you can take that to the bank?
I’m betting they have more confidence in a chatbot. Ouch.
And they are learning about personal finance from their friends over lunch.
What can we, as bankers, do better? FinTechs are already moving into “our territory”, and I’m sure Chase is all over that, but I’d like to hear your comments. I’ll tell you in a couple of weeks why I’m asking.
Is there a poll for attorneys?
A Chevrolet Christmas
The holiday season strikes again.
Google “A Holiday to Remember – Chevrolet video,” click on play and get the tissues out.
Or click here.
It’s an incredible short film of 5 minutes with no agenda other than:
The connection between a grandchild and their grandparents is special.
Memories made decades ago never leave us; they just may hide for a while.
Family is the glue that keeps us all together.
And that’s what Christmas is all about.
Or perhaps, as teenager Audrey Griswold says, “Would it be indecent to ask the grandparents to stay at a hotel?”
Thought for the Week
A college coach approached one of his players for a short conversation. He wanted to tell this player the secret of life. He said:
“Everybody you meet in this world is either a fountain or a drain”. “I need fountains”, the coach growled, “I don’t need freaking drains. Man, I want to tell you, you’re freaking draining me.”
That left a deep impression on that player and changed his life.
He determined that in a world of gutters, he would be a geyser.
So, are you a fountain or a drain? This is a great time of year to change habits and adjust your hydrostatic pressure, or at least make your grate a little smaller.
Two weeks until Christmas.
