Economics? . . . Anyone? Anyone?
In the past I have written of the ongoing requirement for all of us on the investment team to read a steady diet of periodicals, research reports and the daily newspapers. Reading is fundamental to the job.
One of the subject areas that demands regular attention is the field of economics. Alas, in my diet of daily reading, economics is the green vegetable prepared with no butter. While we are fortunate at Nexus to receive economics commentary that is thorough, timely and well-organized, economics is, by its nature, dry and less exciting than much of what else we need to read. It’s for good reason that economics is known as the dismal science.
Thankfully, every now and then, an economist will step “outside the box” and write a piece that is entertaining and fun to read. One of the best is Doug Porter, the Chief Economist at BMO Financial. Over the years he has channelled Yogi Berra with respect to China: “The future ain’t what it used to be”, as well as Ernest Hemingway with a piece entitled: “For Whom the Yield Falls”, which was introduced in clipped, spare sentences.
Most recently, Porter wrote a piece entitled “Ferris Yellen’s Day Off”, picking up on the 30th anniversary of one of my favourite movies, Ferris Bueller’s Day Off. In this latest work, Porter channelled Ben Stein, the monotonous high school economics teacher speaking about economic tariffs. For those who love the movie like I do, and who still must pay attention to the “dismal science”, it was a breath of fresh air at the end of a long week. Here’s the introduction from Doug Porter’s most recent piece;
“In honour of the 30th anniversary of its release this week, here is a potential update from the iconic Economics class scene from Ferris Bueller… and how Ben Stein might sound today:
The Minutes of the April 2016 FOMC meeting, in an effort to convince Wall Street that it was seriously considering… Anyone? Anyone?… raising interest rates, noted that… Anyone? Anyone? The unemployment rate? The labor market? Which, anyone? Was healthier or weaker?… Was healthier, in a chance that wages could rise for the average worker. Did it lift inflation? Anyone? Anyone know the effects on inflation? It did not raise inflation yet, and the United States sank deeper into the New Normal. Today we have an added debate on Britain. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Brexit Vote. Anyone know what this does? It says that at this point on June 23rd, barely a week after the Fed next meets, you could get exactly the same amount of volatility in markets as seen in January. This is very controversial. Does anyone know what this means for the timing of the next rate hike? Anyone? June or July? July or June? Anyone? Anyone?”
For those who don’t “get” the cultural reference or for those who want to see the scene again you can enjoy it by clicking on the video clip above (if you haven’t already).
Source: BMO Capital Markets Economics Focus, May 20, 2016.