How Short Term Thinking Won

If you ever feel like the world has become incredibly focused on short term results… that’s probably not your imagination… People are living paycheck to paycheck, Companies are being managed earnings report to earnings report, financial markets are waiting for the next interest rate movement, political decisions are being made for the next election cycle, entire industries have been created just to be sold to the next biggest investor and all of this is being held together by loans that are being written to last just long enough to be bundled up into fixed income assets… This month people were losing their minds because for the first time since it was introduced, the Bureau of Labor Statistics did NOT publish its monthly jobs report because the household survey data could not be collected during the government shutdown. Now this may be a sign of bigger issues under the surface, but the most immediate problem right NOW is that the Fed can’t set interest rates without completely up to date information. These decisions SHOULD be made based on long term strategic plans, not noisy (and lets be honest, questionably) month to month data… but a few things have been changed which for a lot of markets means that bad news is good news. A lot of people are actually hoping for MORE unemployment, because job losses force the Fed to lower interest rates, and lower interest rates means cheaper borrowing, and cheaper borrowing means debt fueled speculation can go on a little bit longer… Now if you think this is all a little bit dumb that’s because it is… but at the center of all of these issues there is the question of… Is our entire economy just surviving quarter to quarter?