Market Review 'Bloomberg Surveillance' Full Version April 27th, 2021

Keeping up on the finance, economics and investment news. 

 

Morgan Stanley Indicates Roaring 1920's-Opportunities Rise for Pro-Social Investing

The economy is poised to grow and investors project that some of this growth could have long-term sustainability. Morgan Stanley believes we could have another roaring 20's with the right investment environment (1920's and 2020's 👷). Investors rely on complex tools to understand, manage, and predict the environment for maximum shareholder returns. Those tools help investors plug in certain company criteria and come to a more manageable short list of firms to include in their portfolios. Powering up the American economy through active and purpose driven investment can go a long way in future international competitiveness. 

Data is important for investors to best determine which companies are most likely to take advantage of market changes. Some of these algorithms can be quite complex and it would take a serious mathematician to sort of break it all down into something mentally manageable.  Despite its PhD complexity no system as of yet is 100% accurate (100% can never actually exist outside perfect form mathematical reality)! 

Its interesting that people have an impressions of investors as cold hearted, vest wearing, gold watch swinging, tall hat bearing princes/princesses of modern industry. Wealth doesn't change a person's soul and it doesn't change the dreams they had when they made their first serious investment (It might take a minute to get back there🤔? If your unaccustomed to self-reflection start slow and build your abilities over time🙊). As the hair greys and the bravado of youth wanes, prosocial interests come to the forefront. The motive to be part of something bigger than themselves tugs increasingly harder making its needs known (See Investing for Money or Morals?). Tasting the fruits of one's investment is great, but making money for a pro-social cause is of the sweetest nectar the investment world can offer; aftertaste is good too! 🧉.

Keep a look out for opportunity!

The free hand can whip up a tasty batch of solutions but without a hot oven nothing will rise (See Isolation vs. Globalization). The government can invest taxpayer money but it is the market that makes the biggest difference in the longevity of such strategies. Planted seeds of investment and innovation don't just vanish (See Innovation Diffusion and Evolutionary Economics). One draws investment through information and focused resources while the other sustains and pushes global market penetration. (See theory play Michigan Economic Solutions. )

When the right environment is created the business community can solve some pretty dicey problems. For example, if an investor toss and turns over police and protestor violence, (a heightened dispute in our American family👪) he/she may come to a practical solution that investing in advanced non-lethal weaponry lines could significantly reduce fatalities (A solution that might be helpful to police, national guard and international peace keepers. Maybe we can get Hawks and Doves to build a nest together?🤷 🕊.). I suspect officers and communities would feel a sigh of relief when a split second action/reaction isn't the final irreversible judgement. Redirecting the investment community and our politicians to the same shared vision (based on our central American values) would likely be a transformative experience for everyone involved. (See Stimulus and Ethical Econ and Pack Investing)

All civilizations
 need resources

How we as a nation attract international investment is influenced highly by socio-political stability of the country (central focus of political parties), safety and policing, corruption, infrastructure (i.e. digital networks for knowledge sharing and ports to export products), available skilled labor, technologies, education quality, patents, etc... Solving problems through our pragmatic American values and shared sense of purpose can be the vanguard to spearhead post Covid economic renaissance (See American Values & Treaties and Global Supply Chain).

We may have planted seeds in previous generations but it is up to this  new crop to break ground and reach for the sky while the sun still shines on their destiny (Inactivity increases the length of its shadow)⏳. That won't happen if the soil is dry, cracked, toxic and untilled (See Global Supply Chain Dev.) Investors have the power to change their environment through coordinated multi-industry efforts that seek the most profit and at the same time the most good for the most amount of people. Prosocial investing can transform dying American industries into new thriving market champions♘♞. Its rational economic agents that make the choices that allows our entrepreneurial gladiators (See Global Knowledge) to compete in the global arena. ( See Perpetual Sustainable Invest)

Escanaba Town Hall April 22nd 2021-Seeking Developers and Marina Tourism Enhancements

Watching Escanaba's April 22nds, 2021 Townhall meeting. Its really a great idea to record these meetings and put them on line for different demographic interests. Governance awareness helps citizens (and others) understand the activities of town and how those activities relate to the lives of local residence. Discussion on attracting more developers and looking at the waterfront. As with other townhall meetings there are lots of small details and budgeting issues that have to be settled. Personally, I think attracting businesses/investments, alternative housing (some downtown would be great), as well as encouraging condos and apartments in city can open up the area to wider interests.  A coordinated marketing campaign can help draw developers and entrepreneurs. Great points on underutilized harbor/marina and how that might attract investment into the area. A great marina, nice park, condos, groomed beach, fun downtown and it might be a winning combination. (See Redeveloping Esky Downtown and Neuroscience Marketing Delta County and Public Information Esky Invest Capital)

A Few Photos of Louisville Kentucky River and Paddle and Barge

Photography is an artform that almost anyone can engage in. Our cell phones can take pictures almost anywhere we are which makes them great for hiking and other on-the-go activities. I have a Canon but its clunky and big so the cell phone is usually on me at all times.   I have seen a few cell phones that can take great shots but haven't yet seen an affordable one that can take professional pixel quality photos. You can walk a few blocks from downtown to the waterfront. I think the first picture turned out well. 

These barges are pushed around by tug boats. 

Detroit Economic Club-Hot Seat: What I Learned Leading a Great American Company

Learning from leaders who have been there and done that is important for students. It can be hard to keep up with changes when your busy but spending some time thinking about some of the business changes and opening opportunities is helpful. You can learn more about the Detroit Economic Club HERE. Some great advice. Knowing what to do is easier than to know when to do it! Invest early and lose money and invest late and be too far behind the curve to capitalize on emerging technologies such as electric vehicles. 

Exploring the Idea Of Lower HQ Taxes and Its Potential Impact on Supplier Networks (Calibrated Tax Structure)

Ideas are only ideas unless we find a practical way of taking these ideas and evaluating them for beneficial application. Its not my place to say at this moment which tax system is likely to work the best as different policies are discussed and debated among lawmakers. Some will advocate for high taxes and some will advocate for low. Each one has their own supporters that come from a long line of economic theorists. There are also other alternatives strategies we sometimes miss because of social aspects of arguments and adherence. We may also consider maintaining lower headquarter (HQ) and normal/moderate taxes on suppliers as a mechanism to attract back to North America manufacturing interest.

There is a difference between exploring ideas for future research and trying to definitively make conclusions without an actual investigation. The one thing that is not helpful for researchers is to make a conclusion before understanding the actual questions or looking at the pieces of information that lead to an affirmation of the connection between question and conclusion. We see this all the time when doctoral students are interested in a topic and then seek out only those answers that justify the conclusion (researcher bias). 

Thus, taxes have become a big issue in our country and its been debated for some time (See cognitive teams). While I cannot say this to be a fact, I can say that in my experience the ALL THIS and ALL THAT answers are rarely correct because they are exclusive and seem to ignore the vast majority of exceptions that are a natural part of life (This is why unexplored option C sometimes works). Thus, one can only say in my experience I believe there is a possibility that having lower headquarter taxes and moderate supplier taxes might lead to attracting intellectual capital and suppliers back to the U.S. 

To help ensure that I'm not biasing the questions it is helpful to keep a couple mental anchors in mind. 1.) Being indifferent to the results helps maintain a level of objectivity. Coming to a wrong conclusion and proposing that as truth could damage and hurt a lot of people and waste others resources (In formal research this would be the long-tail consequences of skewed research).  2.) There is no "proof" that something IS, but only that it is a logical possibility (a little more qualitative) and additional research will determine the probabilities (a little more quantitative) likeliness of outcome (predicting the environment). 

There are four fundamental questions (different researchers might see the questions differently) we want to ask when trying to determine if one can create the basis of a chain of logic. I put them into a typical research format although this is more of a essay explanation (Disclaimer: In very formal research I might have lots of literature supporting each of the points in the logical chain and look to existing research to fill the gaps. Probability of something would require a creation of logic and the determination of probabilities through observation, manipulation of variables, and supported instruments. That would take a long long time!😾 So think of this as a "thought" experiment or a type of investigation of pure reason.): 

R1: Does attracting corporate headquarters improve on economic investment?

R1-1 Large manufacturers and non-manufacturing firms are more likely to invest in R&D activities. The large manufacturers have a stake in the research to develop new products. Small non-manufacturing firms are also investing in R&D. Small firms in design & engineering, technology, and small manufacturers might be interested R&D pooled investment opportunities. See Firms R&D. Digital Era Infrastructure Draw

R2: Does lowering (maintaining low) headquarters tax attract business to the U.S.? 

R2-1 HQ can be attracted and retained through 1. better clustered communications and knowledge exchange, 2.) focused capital, resources, talent spill over, and shared services, and 3.) lower costs and higher legal and regulatory environment (Baaij, et. al 2015). See Attract MNC Innovate  Tax Environ and 15% Global Tax Floor

R3: Will supply chains be inclined to follow parent company headquarters?

(One might consider a couple of sub questions for each such as R2-1, "Under what circumstance will suppliers follow headquarters?", "Are there employee size differences?" "Which industries are most attracted?", "What is the expected return rate to companies/governments from infrastructure improvements?", etc... R2-2 to100)

R4: Are businesses willing to pay (direct and indirect) for national infrastructure?

Because I would like to devote a little time to each of the questions mulling the possibilities I think it would be best to give each its own article to minimize confusion. None of them will be in great depth but just a connection point. Each question would have to be supported through additional significant research (That isn't the goal today!😢).  "Connecting" them through some basic research studies might show at least a possibility of a relationship for future exploration. At some point one might move beyond this essay discussion down the chain of logic to extrapolate a larger conclusion. 

This is part of a larger research that explores the possibility of using academic, labor, and creative capital within global-export oriented clustered environments to create rapid industry expansion and economic growth/prosperity potential. You can see the unfinished Theory of Transactional Clusters and Perpetual Sustainable Development. They look like they are different but one is the pathway to understanding the practical utility of the other.

April 17th Unemployment Rate Improves to 547K Claims

Unemployment is one marker that lets us understand whether employers are hiring and there is a level of  motivation to return back to work (i.e. those that are counted and actively looking for jobs). When the unemployment rate drops there will be some increased pressure on wages and thus companies will look for ways to save money (We are not yet there in these numbers). When production costs are high is when we experience outsourcing to China and other "emerging" economies. We may consider adjusting our processes to consider the possibility of our neighbors to the south (i.e. MX) to fill some of that low cost transition gap. 

As a general supply and demand mechanic, when unemployment rates are high then wages would not feel upward pressure because of oversupply. Even when unemployment rates go down to historical levels it doesn't influence wages 1-1 because companies are relieving wage pressure by moving overseas where cheaper labor rates and low cost manufacturing strategies don't require adaptation. Companies borrowed technology instead of going through the painstaking process of creating it.).  

When companies outsource overseas it forces the American worker to compete against cheap wages and borrowed American/international technology that didn't need the capital investment for innovation (In other words, American companies should be careful of corporate espionage and better to create innovation partners with those who can use that technology for fast adaptation in their industries thereby outpacing the value of low cost outsourcing and copying strategies. There are some additional long term benefits to those organizations sharing invention prospects as it helps create economic synergy and long term values for companies and governments).

When labor supply shrinks from an improving economy wages will generally rise (assuming we stop the outsourcing leakage). As unemployment claims decrease and pressure is put on labor supply companies will adjust by hiring from overseas, training, or implementing technology to offset costs. While technology is often seen as something negative to labor it doesn't have to be if technology and a booming economy raises productivity value of skilled labor through wearable tech. enhancements (....versus pure automation independent of human intervention and/or low option opportunities. There are also some benefits to using enhanced human labor because the randomness of mistakes and variability in highly skilled empowered labor can create additional innovation sources that isn't possible when innovation is controlled by the top through pure automation). 

I'm not an economist by trade..just more of a generalist so its just a few ideas to ponder. 👃👂

-Jobless claims 547,000 vs. 603,000 estimate
-8.32% Possible Q1 2021 GDP
-You may want to look at comparisons from the BLS between March 2020 to March 2021 HERE.
-If you click the Char tab you can pull a comparison for each state. For example, in Michigan we had a 3.7 to 5.% which is a 1.4% increase since March of last year.
-You can read the Department of Labor press release HERE.

I kind of thought of an idea to sponsor some orphanages overseas to help Mexico deal with a humanitarian crisis. Thinking along the lines of adjusting our foreign policy monies to help the most vulnerable through improved support, education, and opportunities at U.S./International companies that consider relocating parts of their operations through U.S. leadership. A peace dove of sorts that could create greater will and economic coordination between U.S., CAN and MX. 

NASA's Perseverance Rover MOXIE Makes Oxygen on Mars

We are in the beginning of digital transformation into the Information Age where micro robots and advanced manufacturing lead to new types of technology that will soon become part of our daily lives (i.e. toasters and television). What was seen only in science fiction comic books a few decades ago is now reality. Creating oxygen on planets (solid oxide electrolysis) not only opens these planets to experimental stations that host human inhabitants but also additional research into biomechatronic that can lead to mining new substances off of interplanetary stations (new rare metals that lead to emergent technologies). Managing rapid innovation will require adjustments in economic policies that lead to enhanced development of new technologies (i.e. development of entrepreneurial clusters) to reach those goals. The normal process of information transference and innovation (adaptation) across geographically dispersed regions within multiple industries may not function well when we need to bump multiple associated industries into uncharted territory quickly (space, military, advanced manufacturing, distribution, mining/metals, etc..). Because of the huge unknown potentials there may be first in market advantages to nations/companies that can get up there and create new discoveries. 🤷Working on a transactional cluster theory of industry innovation which will hopefully help better understanding how to infuse R&D and entrepreneurial/intellectual capital into a specific locations to create faster paced developmental/innovative system that leads to advanced prototype/small batch production products HERE that can be considered for larger scale production national/internationally. Its not finished so don't judge too harshly because there is some gap filling and rewrites needed 😬

Policing Laws Need to Change

I'm reading an article that discusses the rare conviction of officers when something like murder has been committed. You can read about Njeri Rutledge's article entitled The entire country needed a guilty verdict in Chauvin case. But laws still need to change. The article has some great points and prompts our national leadership to think long and hard about what immunity from criminal behavior means in law enforcement (not to mention how this might turn out a few years, or a decade, later if a couple more recorded and publicized issues occur). 

Let me say I am 100% for law enforcement and 100% for reform. I know their value to society and the community. Most departments focus on what is right and love to help others. Reform is about raising that value of the profession by increasing trust and integrity of the institution so that it better ensures its effectiveness and capacity to recruit from a wider base of talent. 

Laws are subjective by nature and how they are applied often determines their forthrightness to the people that live by them. Enforcing the law with those who enforce it, is highly important for integrity and validity. To fix this problem might require some changes in policing and prosecution practices. More regulations are unlikely to improve the situation until we install ethics in all behaviors and cultural artifacts (psychological and physical) of the field (A couple of recommendations in Oaths and Ethics).

I've met so many awesome officers that are willing to do the right thing. They are forced to make split second decisions over dangerous situations on a regular basis (mistakes will happen). The vast majority would only shoot in the worst situations where they feel themselves or someone else is under threat. Trigger happy sadists should not be on this force; or any other force where lethal capacity exists. 

I'm not talking about those who make natural mistakes in the course of their dangerous jobs. For them training and new non lethal weapons might be useful (We might want to develop a line for use domestically and/or internationally in peace keeping missions. I wonder if clustering businesses to tackle this issue might be helpful? 🤔). Who I'm talking about are those who never had the right personality for policing in the first place and are well known to lack integrity or good judgement.

This is something I've experienced in real life and in real time action. The involved officer wasn't making a mistake, they knew what they were doing, and were reinforcing their fundamental beliefs/identity within their social network. That social network also has a history of bullying others and contains within it the propensity for hate based behaviors and coordinated intimidation. It just took the right self-consumed personality to light and then throw the match.

That officer is already forgiven because I understand the difficulty of their background (Broken home, low self-esteem displayed as arrogance, the need to feel better than others, always putting others down, aggressive personalities when alcohol removes inhibitions, etc... all the signs of a pained soul. ). While mental health help for officers is important, we also must consider laws that ensure intentional violators of sound moral judgement are removed from the force to protect the public. We just have to decide what the essential purpose of policing is and move to adjust our policies to create a healthier organism in closer alignment with shared American values. There is no good reason why we don't remove bad officers and remove barriers for good officers (from an HR perspective). 

Changes by wiser minds that understand the bigger picture likely coming. You can read about Attorney General Merrick Garland launching investigation policing practices....HERE

The solutions are simple but changing the egos is hard! There should be no politics in this at all. 😢 There are no more blind eyes. 

Presidential Remarks on Verdict in George Floyd Case

Presidential discussion on the recent conviction and hopes for a more insightful and prosperous future for all Americans. The conviction helps us understand that there are times when justice can peek through the hazy fog of doubt. Divisive issues don't need to destroy us, but they can push us to change for the better. What we learn from this situation will say volumes about who we are as a people.