Compounding is small consistent efforts over time that lead to exponential results
-Brian Luebben
I believe this is the best definition of compounding. It is the little things we do consistently that makes all the difference. The question we have to ask ourselves is "What are the small consistent efforts that I can take that will lead me to where I want to be."
Welcome back to the Rambling Mind Newsletter. This is your Market Update.
Markets
You know those weeks where you just want to end as soon as it begins. That was the Stock Market this week. The market had its worst week since March because Jerome Powell reminded investors he ain't on their side (more below).
This newsletter is 1,036 words a 5-min read
Tale of the Tape
Economy
Imma need Papa Powell and his Fed buddies to stop talking. Cause every time he speaks to the public, the market has sell offs.
🔍Details: The Federal Reserve held its bimonthly Federal Open Market Committee (FOMC). As expected Jerome Powell announced there would be no interest rate increases for this month, keeping rates at 5.25%. However; the way he said it made the market very sad
The S&P immediately dropped 1%
The NASDAQ dropped by 1.5%
He reminded investors that his goal is 2% inflation and the last time he checked 3% is larger than 2%.
💬In His Words: "We're prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we're confident that inflation is moving down sustainably."
Takeaway: Jerome and the Fed have remained very clear that the goal is to get inflation in line with historical norms. With the economy remaining resilient this long, the Fed have a lot of leverage to have a firm stance on interest rates without causing a recession.
My Takeaway: This is like those moments when your Mom uses your full name and you realize, "Oh DAYUM! She is serious."
Investors realized the Fed is serious about keeping rates high for much longer to force inflation down. And they do not care about what happens in the stock market. The sell off indicates investors are finally hearing the words that Jerome has been saying since the beginning of this year.
Stats of the Week
The cash bail aka bail bonds industry made about $15 billion in profit last year. According to Prison Policy Initiative, there are 427,000 people sitting in jails waiting trails. 80% of those people have not been convicted of any crime. It is largely known that this system preys mainly on minority communities.
Illinois became the first state in the US to abolish cash bail. It is replacing bail bonds with a judge hearing that will determine if a person requires pretrial detention if they are found to be a flight risk or threat to the public.
🔢By The Numbers: According to PBS, between 1970-2015 there has been a fivefold increase in the number of people jailed before trails.
60% of defendants were detailed prior to trial because they couldn't afford paid
Black men received 35% higher bails than white men
Latino men receive 19% higher bails than white men
💬In Their Words: As Illinois Public Defender Sharone Mitchell Jr. said, "The vast majority of people in the system are poor, and they’re Black and brown, and they have no power. It is an incredibly unfair system. You go to a bond hearing, it sounds like a slave auction. People are talking very fast. They’re putting price tags on people’s freedom.”
Takeaway: About TIME! I have said it before and I will say it again, Being Poor in America is a SIN! Fines like these should be based on each individual's financial ability to meet the fine. This should not be a for profit business where someone can take advantage of people in dire circumstances. Hopefully this will spread to other states.
The number of full-time, part-time, and seasonal workers, Amazon will be hiring this holiday season to staff its fulfillment centers and transportation roles. Amazon expects massive holiday spending from shoppers this year.
This is an increase of 67% increase in hiring it did the last two holiday seasons. It is also in contrast to every other retailer, who have said they will hire much fewer workers.
In complete opposite direction, the number of work days missed in August due to strikes and lockouts. This was the highest monthly total since August of 2000. The combination of the Hollywood writers and actors and Teamsters (UPS' Labor Union) strikes. This month is going to be much higher with the Hollywood strike still going on and now the Auto workers also striking.
People got too much MONEY! Bob Ross' painting, "A Walk in the Woods" was recently sold for almost $10 Million.
Who is Bob Ross? He is the PBS Painting Guy you have seen memes and gifs of all over the internet. For all 90s kids, who grew up in the US (so not I), you will remember him mainly for his hair. His show, The Joy of Painting, went on for 11 seasons and had over 1,000 paintings. It is expected that each painting could fetch similar prices.
Looking Ahead
Not much going on this week. At least nothing that interests me.
A few companies will report earnings including Costco and Nike but ehhh not interested.
The Case-Shiller National Home Price Index and FHFA’s House Price Index will be released for July. But who cares about what happened almost 3 months ago. We wanna know what is happening right now.
The Personal Consumption Expenditure (PCE) which is ANOTHER inflation index used by the Federal Reserve. According to Investopedia, the Fed prefers the PCE because:
The PCE better reflects changes to consumer spending, such as selecting substitute goods due to price changes
It covers a broader range of spending
Past information can be adjusted to support recent information
It is expected that the PCE increased in August by 0.5% from July, driven primarily by oil prices.
Sports I Love
Man U Actually Won A Game
Yeah I was shocked too. But it wasn't for lack of trying to lose the game.
Sit Down Be Humble
Oregon decided to humble Coach Prime and Colorado.
Extras
A New High Speed rail line opened on Friday, it will connect Miami to Orlando. It is the first city to city train line in over 40 years. The total trip will take about 3.5 hours and cost between $158-$298. The hope is puts the tracks in place for other long distance lines to be built in the US.
Something we all knew way back when has become official. All NFTs are worth NOTHING!! According to crypto platform, dappGambl, 95% of the almost 74,000 NFT tokens are worth 0 ether.
*I am a tiny shareholder in this company.