CPI, Jobs (again), consumer sentiment, the richest women, tariffs (yawn) and Tibor Hollo
The Economics of Summer
No, I won’t discuss the cost of vacations and the ‘best value for your money’ trips.
It’s closer to the stockbroker's creed of “Sell in May and go away.”
It seems the economic news has ebbed a bit, but I think that’s because a bigger sucker of energy is the election year.
And boy, that will suck your energy. But I digress…
The headline news this week was two-fold, but very much related:
The consumer price index came in lower than expected: 3.3% vs. 3.4% expected and last month's number.
It’s all about managing expectations.
The way folks were celebrating, you would have thought it came in at 2%. I think by the end of the week, the enthusiasm had tempered a bit.
Also, the Fed had their June meeting, before they go away, and they said something pretty significant.
They are thinking only one rate decrease this year. That said…
Initial jobless claims keep going up: 242,000 last month, up from 229,000.
Consumer sentiment dropped to 65.6, down from 69.1, a 7-month low. Folks aren’t feeling too hot about economic things.
Must be time for a vacation. Let’s get out of town!
America’s Richest Self-Made Women
This is from Forbes Magazine.
There are 31 self-made billionaires.
Up from 24 a year ago.
New members of the Ladies Billionaires Club include:
Katy Perry – no explanation necessary.
Merrilee Kick, creator of ready-to-drink BuzzBallz cocktails with flavors like Tequila ‘Rita and Lotta Colada.
Sounds more like an Austin Powers movie to me.
Top honors go to:
#1 – Diane Hendricks, owner of ABC Supply, the nation's largest wholesale distributor of roofing supplies. $20.9 Billion net worth.
#2 – Judy Love & Family. They opened their first filling station in Watonga, Oklahoma; her sons now run the $24 billion Love’s Travel Stops, with 640 locations. $11.6 Billion net worth.
Honorable Mentions:
#5 – Elizabeth Uihlein. Ever heard of U-Line? That’s her gig. She sells $8 billion of packing and shipping supplies annually. $6.7 Billion net worth.
#13 – Peggy Cherng. Does the name Panda Express ring a bell? It should. She has a PhD in electrical engineering but launched Panda in 1983. 2,300 stores later… 5.4 Billion net worth.
She and her husband just contributed $100 million to the City of Hope for cancer research.
I’m guessing these ladies did not wait for opportunity to knock; they probably went door-to-door.
Tariffs
There has been quite a bit of talk on tariffs lately, so I thought I would explain what they are and what compels them to be levied. Or you can jump to the next section…
A tariff is a tax o…… zzzzzzzzzzzzzzz. OK, jump to the next section.
Well, that’s about as far as you get before your eyes start closing. But let’s see if we can do this.
Earlier last month, Washington announced more tariffs on imports from China.
From a conversation at a mixer viewpoint, a tariff is simply an import tax or fee on a product being imported into the United States. It makes the product more expensive.
It makes it easier for US companies to compete domestically if the cost of their raw material is less than that of the imported material.
As an example, a ton of Chinese aluminum is roughly $2300. The cost in the US is $2600. Everything being the same, manufacturers in the US will buy Chinese aluminum because it is cheaper.
But not if you put a 15% tariff on that. That makes it $2645/ton, allowing the US manufacturers to compete better.
Of course, this invites conversation on how this ultimately hurts the consumer since the price does not drop for the person buying the final product. The counterargument is that you are saving jobs.
All of that said, tariffs were recently applied to Chinese solar cells at 50%, steel and aluminum products 25% and computer chips at 50% by 2025. Also impacted were medical products and critical minerals.
As it turns out, this does not make China happy, which begs the question, does anything make China happy?
Who was Tibor Hollo?
He was born in 1927 in Budapest; his family moved to Paris in 1933. When the Germans came in 1940, the family ended up in Auschwitz.
His quote “Travelling to Auschwitz in those small boxcars made me appreciate little things like fresh air.”
I just wasn’t aware that fresh air was kind of a little thing; more on that in a few lines.
When he was liberated by US troops, he was 17 years old, 6 feet tall and weighed 90 pounds.
Naturally, he came to the United States and he had $18 in his pocket when he stepped on Ellis Island.
He got into construction and found a job as an estimator. He saw that few contractors were interested in the ‘dirty’ jobs, like building or repairing docks in New York, so he created his own firm and started winning contracts.
On a trip to Miami, he saw an opportunity (probably before it knocked) and decided to move there in 1956 and focus on property development.
Even though he tried to keep his debt to 40% of his development costs, he lost millions in the 80s and 90s real estate slump.
In a 2018 speech to students, one asked what not to do. His reply: “Don’t borrow too much money.”
He later funded educational programs focused on the Holocaust.
He died last month at the age of 96.
What made these people “The Greatest Generation”? From reading obituary after obituary, World War II was the commonality with many of these individuals. Whether they were in the middle of it in a concentration camp or the Battle of the Bulge, or on the perimeter of the war effort, there wasn’t ever going to be anything else that would be harder to do than what these people did from 1940 to 1945. Doing dirty work on a pier was a cakewalk compared to wishing for fresh air in a rail boxcar. If you failed, big deal. But for the most part, they did not fail.
They were phenomenal successes. That’s why I like profiling them so much.
It’s June 17, and we’re making the turn into the middle of summer and past the halfway point of the year. As a business owner, office worker, or sales professional, you had specific objectives for the year. Are you on track? It’s a good time to measure results. Otherwise that Pina Colada isn’t going to taste as good over the summer.
