2023 Was a Pretty Good Year for the Global Economy, but… 

Despite widespread global inflation, geopolitical problems, and the economic after-effects of COVID and the lockdowns, the global economy in 2023 did a bit better than most economists expected.

However, in 2024, many of these same economists are saying that the US (and most of the rest of the world) will experience a global economy that is less sanguine.

In its semiannual “Global Economic Report,” the World Bank predicted that the growth of the world’s economy would slow to 2.4%.

That’s not good, because despite the improvement experienced in 2023, a 2.4% growth would still be the third consecutive year of economic deceleration. The report cited “continued higher interest rates, anemic global trade, reduced global investing, and rising geopolitical tensions” as the reasons.

If that turns out to be true, this first quarter of 2024 is the time for business leaders and individual investors to make changes. (I will write more about this in future issues.)

The Problem with Minimum Wage Laws 

Do minimum wage laws work? Are they helpful in improving the lives of our least-skilled workers? The evidence from a hundred studies over the last 20 years is clear. They do not.

And why would that be?

As I’ve mentioned before, by the time a minimum wage is agreed upon, the market demand for minimum-skilled workers is usually as high as the proposed wage or greater.

As I write this, 22 states are lifting pay floors, but many fast-food cooks and housekeepers are already earning more than minimum wage. And that’s because of free-market competition. The COVID shutdown and the move towards working remotely, have made it increasingly difficult for business owners to attract low-wage workers.

As noted in the WSJ:

“Robust raises in recent years have rendered pay floors largely irrelevant, even in states that aggressively lifted them.”

For example: “To start 2024, Washington State will raise the nation’s highest minimum to $16.28 an hour, from $15.74 in 2023. Washington ties its minimum wage to the consumer-price index, a measure of inflation. Hawaii has the largest planned increase, with its minimum wage rising $2, to $14 an hour, in 2024. That is part of a law that will increase the lowest hourly wages in the Aloha State to $18 by 2028. California, New York, and Illinois are also among the states raising the pay floor.

“Most low-wage workers are making well above those minimums. Through September, the lowest 10% of workers by income in each state earned hourly wages that were on average nearly 50% higher than their state’s minimum wages in 2023, according to a WSJ analysis that compared state minimum wages to income estimates from MIT Sloan School of Management professor Nathan Wilmers.

“That is the largest gap between actual pay and minimum pay in a decade.”

Read more here.

Chart of the Week 

This week, Sean MacIntyre talks about the expectation of some economists that we are quickly nearing a worldwide stock market crash. He’s not so sure. And he has another graph with solid analysis and thoughtful explanations to support his thinking. 

Some new stock market forecasts claim that the S&P 500 could dive as much as -86% in 2024.

The reason given for such a crash is usually overvaluation: Index prices have drifted away from what company profits can reasonably support.

But I question this assumption.

Let’s compare the price of the S&P 500 against the most predictive valuation metric – the Shiller CAPE Ratio.

We’ll compare current prices to both the CAPE’s long-term average and its 10-year average.

As I write, the S&P 500 is trading around 4300.

If it fell until its CAPE valuation returned to long-term averages, the S&P 500 would have to drop to about 2900. That’s a -32% drop from current levels. Cataclysmic, especially for retirees.

But what if the S&P 500 fell to its 10-year average CAPE?

The S&P 500 would drop to about 4030 – a -6% drop.

Not nearly as scary.

Many doom-and-gloomers balk at the market’s nosebleed-high valuations. But there are many reasons why this should be the norm.

Since the early 1990s, more Americans own stocks than ever before.

And one of the most popular investment strategies is simply to buy and hold the S&P 500.

It stands to reason that if tens of millions of people keep throwing money at one thing, the value of that thing will go up.

Also, retirement accounts and 401(k)s do not offer many alternatives besides stocks and mutual funds that own stocks. Workers have their money shunted automatically into stocks every month, regardless of valuation.

Finally, since the late 1980s, algorithms have accounted for up to 75% of all stock trading volume. Robots routinely scoop up stocks during downturns and drive prices back up. (They cause crashes sometimes, too.)

Simply put: The fundamental calculus of the market has changed. Investor behavior has changed. The world has changed.

So if there’s a cataclysmic crash coming in stocks… it won’t be because the market is “overvalued.”

– Sean MacIntyre

By the way, Sean is working on a free video that teaches stock valuation on his YouTube channel. Click here and subscribe to be notified when it goes live.

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Election Watch

Trump Must Be Reading This Blog

Donald Trump must be reading my blog, because he’s just predicted that Biden won’t be running against him in the 2024 election.

In a recent interview with Breitbart News, Trump said, “All you have to do is look at his credentials. When you compare him today to 15 or 20 years ago, he’s a different kind of a guy. The guy can’t talk. The guy can’t put two sentences together.”

If you have watched clips of Biden speaking, you know this is true.

In recent weeks, many poll watchers and pundits have been voicing their doubts about Biden. If you google “predictions that Biden won’t run in 2024” (or something similar), you’ll find dozens of them.

Here are three:

From The Economic Times: A senior JPMorgan Chase strategist has predicted that Joe Biden will bow out of the 2024 election. He has given reasons for this. He has also made other predictions. Click here. 

From Reuters: Biden is “not sure” he’d be running if Trump was not in the race. Click here.

From The Hill: Cornel West says he’s not sure Biden will make it to the election. Click here. 

 

The End of Western Culture 

Holiday Roadkill: Pro-Hamas Americans Shut Down Airports 

As reported in the Dec. 31 installment of “The Week That Perished” in Taki’s Magazine:

“On Dec. 27, pro-Hamas protesters in the US rolled out a nationwide airport blockade in which noble leftists fighting for the right of Muslims to rape and murder Jews linked arms and prevented entry to LAX, JFK, and O’Hare, keeping travelers from their flights….

“This capped a year in which ‘climate activists’ in the UK and Europe… made a cottage industry out of blockading highways, ‘slow-walking’ traffic on busy streets, defacing buildings, and vandalizing museums.”

The Associated Press responded to this by running a piece that argued that protests involving violence and the use of force are the most important facets of a well-functioning democracy.

Read more headline news from “The Week That Perished” here.

Are Americans Becoming Emotionally Dependent on Their Celebrities? 

In response to a recently published NYT piece by Anna Marks on Taylor Swift that suggested she was, or should be, bisexual, Freddie deBoer wrote:

“The NYT piece operates by conceding that Swift is known to have exclusively dated men and has never made a single statement suggesting that she’s anything other than heterosexual, then goes on to insist that she’s queer, whatever the fuck that term means in 2024. Marks does this in part by sketching some unconvincing readings of Swift’s lyrics and by laying out conspiracy theories that remind me of QAnon. But more, Marks simply insists that LGBTQ people need this, that the palpable longing for Swift to be gay… can somehow will Swift’s homosexuality into being.”

Continue reading here.

 

Health Watch 

DeSantis Gets Ahead of the Biden Administration on Prescription Medicine Pricing 

The so-called Inflation Reduction Act gave the US government the right to negotiate certain drugs for Medicare Part D participants down to a maximum of about $3,300 a year. The Democratic leadership was counting on this as an important talking point in the 2024 election.

Ron DeSantis has taken the wind out of those sails by securing permission from the FDA to import all sorts of prescription drugs from Canada at even cheaper prices. This could make a big difference in how much Floridians will be spending on medicine in 2024.

DeSantis’s strategy should be very popular among voters, but it’s not a done deal.

The current deal with the FDA will be in force only for two years. If DeSantis wants the cost savings to become permanent, Florida must “demonstrate the programs would result in significant cost savings to consumers without adding risk of exposure to unsafe or ineffective drugs,” FDA Commissioner Robert Califf said.

DeSantis said the state would begin the program by importing drugs to help people cared for by state agencies – e.g., the Dept. of Corrections and the Agency for Persons with Disabilities. The drugs would treat chronic health conditions such as asthma, diabetes, HIV/AIDS, and mental illness.

Dr. Joseph Ladapo, Florida’s Surgeon General, Has Called for a Halt of the mRNA COVID-19 Vaccines

The reason? He says that the shots Pfizer and Moderna said were “safe” are contaminated with plasmid DNA.

And plasmid DNA is not something you want floating around in your body.

Citing a paper published by the FDA in 2007, Dr. Ladapo presented the following concerns with respect to regulatory limits for DNA in vaccines:

* DNA integration could theoretically impact a human’s oncogenes – the genes that can transform a healthy cell into a cancerous cell.

* DNA integration may result in chromosomal instability.

* The FDA’s paper discusses biodistribution of DNA vaccines and how such integration could affect unintended parts of the body, including blood, heart, brain, liver, kidney, bone marrow, ovaries/testes, lungs, etc.

This wasn’t news for those of us that have been following the issue. Scientists and medical professionals have been talking about it for years.

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Quick Bites: Hot Stuff… Dumb Stuff… and an “Impossible” Challenge Smashed 

McDonald’s Under Attack!

You may have seen video clips of McDonald’s customers being harassed by pro-Palestinian protestors. It’s disturbing because… well, what could be more American than eating at McDonald’s?

Have no fear. Google is coming to the rescue of all McDonald’s customers. Google is working with the company to deploy generative AI to ensure that “large orders of fries are delivered hot.”

Meanwhile, here’s a tip from the New York Post to ensure that your fries are scalding-hot every time. Just specify “no salt,” which means they must make a batch especially for you.

An Unfounded and Oddball Allegation About Elon Musk 

I was about to write a short piece to express my astonishment at a piece I read this weekend from the WSJ about Elon Musk. But I saw that Alex Berenson had summed it up succinctly. Click here.

Boy Wonder Smashes 34-Year-Old Game Challenge

Millions of people all over the world play Tetris. As with many computer games, players try to advance their positions using natural intelligence and acquired skills. Since the launch of the standard NES Tetris game in 1989, no player has made it to the “kill screen” – a barrier that was astonishingly broken through on Dec. 31 by a 13-year-old phenom! Click here.

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How much do you know about the Vikings?

I scored only 12 out of 20 on this quiz, but I found the ones I didn’t know fascinating. The Vikings contributed more to British and American civilization that most people realize, including some of our best words.

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“I Am 17 and I Don’t Know Where to Go with My Life”

I frequently get requests from my readers asking for advice, and I do my best to answer their questions and get them pointed in the right direction. Sometimes, much to my surprise, the requests come from young people who have read my books. For example, this one from JC, who wrote after reading Ready, Fire, Aim:

“I am 17 and I don’t know where to go with my life. I was thinking about going into sales because I want to learn a skill. Since you are an expert, I wanted to know what your insight would be. Any help would be appreciated.”

This is what I told him… 

The best thing you have going for you, JC, is that you are only 17 and you’ve already proven your ambition by taking the initiative to write to me. In my opinion, ambition + proactivity = 50% of success. So, you already have half of what you need to achieve your business and financial goals.

The other half is a combination of knowledge and skill.

By knowledge, I mean discovering the key elements that undergird all entrepreneurial businesses, which is exactly what Ready, Fire, Aim was written to explain.

And by skill, I mean the three essential skills of entrepreneurial success:

* Knowing how to sell products and services, generally and in the specific industry you work in
* Knowing how to safely and intelligently grow any entrepreneurial business
* Knowing how to create and manage healthy and sustainable profits

Smart You!

There is no bigger advantage to achieving significant goals than starting young. Not only do you have unlimited energy and perhaps the sharpest mind you will ever have, you also have decades of time. You have the time to learn the fundamental skills that will make you competent and comfortable in every situation and against every challenge you will face in the future. You have the time to decide, at any point, that the path you are on is not right. And you have the time to start over.

Lucky You! 

There are many ways to become wealthy and successful. So if you begin your journey without a particular profession or business in mind, as seems to be the case with you, don’t fret about it. You have a BIG advantage over someone that wants to be, for example, a successful doctor or software technician or CEO in a particular industry. Because you haven’t locked yourself into a niche, you are free to choose a path that – depending on the skill sets you have now – will be the fastest and easiest to get you where you want to go.

What Should You Do First? 

I’ve never been comfortable with the idea that goals – any goals – should be undertaken one step at a time. The moment I decided that I wanted to be financially successful, I could see that there were a half-dozen things I needed to do, and I needed to start doing all of them immediately.

Suggestion #1. At this point, you are not sure what profession or business you want to become a part of. And, as I said, that is to your advantage. Because what you must start doing immediately is learn the fundamentals of how all businesses work. Not just by reading Ready, Fire, Aim, but by treating it as a reference that you refer to daily.

Suggestion #2. Take a sales job. Any sales job. Every successful entrepreneur I know spent at least a year or two in his/her youth selling products and services directly – either by phone or door-to-door, in a retail office or on a car lot. There is nothing that will teach you how to sell anything better and faster than simply doing it. No book or manual can come close. And don’t be afraid to move around a bit from one type of sales job to another. To truly master the skill of selling, you have to have experience with soft selling (as you would be doing in a retail store) and hard selling (on the phone or door-to-door).

Suggestion #3. Once you become comfortable with your selling chops, make the move to become head of sales, either in the company you are working for or another one. Running a sales department requires essential skills that you won’t get by being one of the salespeople. Heading a sales team will teach you how to manage, monitor and, most of all, motivate salespeople. And that is an enormously important skill that you must learn if you want to get to the top of whatever industry you eventually land in.

These three suggestions will get you started. There will be other skills you will need to develop as you move closer to your ultimate goals. But for now, since you are just starting out, this will be more than enough to focus on.

Oh, and One Other Thing… 

While you are working full-time at various jobs to develop your selling and sales management skills, don’t neglect your general education. If you choose not to go to college, you should nevertheless spend several hours a day taking online courses that will provide you with the knowledge and intellectual sophistication you will need in order to wisely spend the wealth you will eventually acquire.

 

Worth Considering

The Continuing Mystery of Ray Epps, Sr. 

On Jan. 5, the man pictured above was videotaped energetically encouraging Trump supporters to storm the Capitol. The next day, in the midst of the chaos outside the Capitol building, he was videotaped asking law enforcement officers how he could help them.

This got Tucker Carlson and some other conservative commentators wondering: Who was this guy? And what the heck was he doing? Was he bipolar? Or could he be working for the Feds, provoking the crowd to enter the Capitol?

For months, they asked: Who is that mystery man? And why wasn’t he among the 1,000+ Jan. 6 protestors that were suspected of criminal activity, identified, and arrested? For months, there were no answers. And then, finally, he was named: Ray Epps, Sr., a 60-something ex-Marine who, when questioned before the now-defunct House Select Committee, said that he wasn’t a federal agent and wasn’t working for the CIA, the National Security Agency, or the Metropolitan Police Dept.

What he couldn’t explain was his strange behavior.

Since then, more than 700 Jan. 6 protesters have been charged with various crimes, with more than half of them convicted. Most of those that had done nothing more than be photographed at the scene received sentences of several months. But the sentences of some who were involved in the planning and execution of the protest were severe.

Stewart Rhodes, a Yale graduate and military veteran who was convicted of planning the protest, received 18 years in prison for “seditious conspiracy.” Peter Schwartz, who was accused of throwing a chair at a group of policemen and then pepper-spraying them, got a 14-year sentence. And Thomas Webster, a retired New York City police officer, got 10 years for tackling a DC officer and grabbing his gas mask.

The most-publicized protestor, of course, was Jacob Chansley, who wasn’t accused of assaulting law enforcement or destroying property. He was sentenced to 41 months in jail for, apparently, simply being inside the Capitol Building, shirtless and wearing a headdress.

So, what do I think about the whole Ray Epps thing?

It might be the biggest political farce of the last 10 years, and we have had plenty of those. In terms of facts and common sense, his testimony and the government’s stated position on him and his story have the intellectual solidity of gender fluidity theory.

I still have questions.

Why, after the contradictory videos of him went viral, weren’t the FBI, the CIA , and the Metropolitan police, who had thousands and thousands of images of all the protestors that day, able to identify him?

And then why, when he was identified, did it take so long for the police to charge him?

And then why, after he was arrested, did the Justice Department make a special plea to the court for how they felt he should be treated?

Could it be that they were afraid that if he got a much stiffer sentence, five or 10 years, for example, he might start talking?

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Chart of the Week 

One of the numbskull ideas that have always been part of political discussions is that the ups and downs of the economy and/or the financial markets are responses to the legislative or executive actions promoted by whoever is in the Oval Office at the moment. It doesn’t take a lot of thinking to realize that economic events and changes do not happen that way. There is this thing called gestation that lies between the passage of a law or the declaration of an executive order and the economic and financial effects that result from it. Those gestation periods can be weeks, but are much more often months or years.

It’s an election year. So, this week, Sean takes a look at how stocks perform during such years… 

According to research by LPL Financial, “the S&P 500 has generated an average gain of 7% during presidential election years dating back to the 1952 election.”

That’s below the market’s long-term averages – but not catastrophically so.

But the data gets more interesting when broken down further.

In years when we have a “lame duck” president – one who has served two terms already – the average return for the S&P 500 is an abysmal -0.4%.

But in years when a president is seeking reelection, like 2024, the average return of the market is 12.2%.

Why? Typically, the incumbent party tries to “prime the pump” before the election.

Whether it’s Republican tax cuts or Democrat handouts, this works by pushing more money into the US economy, encouraging growth.

You may ask: “Won’t this add to America’s insane deficits and debt levels? Won’t this make the US more susceptible to another inflation spike?”

Well, yes. But those are all problems for whoever is in office in 2025.

– Sean MacIntyre

Click here for Sean’s prediction for what will happen with inflation in the coming years.

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Two Takes on Dems’ Efforts to Keep Trump Off the Ballots

Republican Senator Eric Schmitt calls the Colorado Supreme Court ruling to remove Trump from the state primary ballot “one of the most dangerous court rulings in US history.” He says that Democrats “completely lost their minds” when they realized that Trump’s lead against Biden was growing even after he was hit with all those criminal and civil charges. Click here.

Meanwhile, Bill Barr, who became an anti-Trump hero when he testified against him before the House committee investigating the Jan. 6 attack on the Capital, has said that though he is “firmly against Trump’s candidacy,” he also believes that “efforts to knock him off the ballot are legally untenable, politically counterproductive, and, most ominously, destructive to our political order. The Supreme Court needs to act swiftly to strike down these foolish decisions.” Read his argument here.

What do I think?

Trying to stop a candidate from running for office through criminal and civil charges is a common political strategy one sees in Banana Republics and totalitarian states.

Talk about a “threat to democracy”! Democracy is not about woke values. It’s about a political system in which the citizens, and only the citizens, have the right to choose their leaders.

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Can the US Fight Three Major Wars Simultaneously? 

Read Time: 8 minutes 

Michael Snyder believes that 2024 will be a “year of war.”

In the Jan. 1 issue of his blog, he says, “In recent years our military has been gutted, eviscerated, and transformed into a politically correct joke. We couldn’t even defeat the Taliban, and now we are faced with the possibility of fighting three major wars simultaneously [Russia, the Middle East, and China].

“We are in so much trouble, but most Americans seem to believe that we are still the same global military powerhouse that we were when the first Top Gun movie was originally released.”

Read more here.

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Painting in Paradise

They call themselves plein air (i.e., outdoor) painters, a term that came into prominence during the early decades of the 20th century. It referred to the Impressionist painters who worked outdoors in order to capture the light and color that was a key element in their philosophy.

About a year ago, we got a request from the group to have their members come to Paradise Palms every week or two and spend a few hours painting any of hundreds of possible scenes the 20 acres of gardens provide. We agreed, and they’ve been doing it ever since.

On Friday, Jan. 6, the Cornell Museum in Delray Beach opened a two-month exhibition of the paintings and drawings they have produced during their visits to Paradise Palms. Click here for a story about the exhibit from the current issue of Outdoor Painter.

And click here to watch a video of their work.

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