Thoughts from the Frontline

“Political leaders still think things can be done through force, but that cannot solve terrorism. Backwardness is the breeding ground of terror, and that is what we have to fight.” – Mikhail Gorbachev “... Europe exemplifies a situation unfavorable to a common currency. It is composed of separate nations, speaking different languages, with different customs, and having citizens feeling far greater loyalty and attachment to their own country than to a common market or to the idea of Europe.” – Professor Milton Friedman, The Times, 19 November 1997 “There is no example in history of a lasting monetary union that was not linked to one State.” – Otmar Issing, chief economist of the German Bundesbank in 1991

An already-confusing employment environment grew even more complicated this past week. Many readers responded to my “Crime in the Jobs Report” letter with their own stories. Some confirmed what I wrote, while others disputed it. Some of the stories I read from readers who are stuck far from where they want to be in this job market were very moving. I think everyone agrees the labor outlook is uncertain. I sense a lot of nervousness, even from those who have secure jobs that pay well. In today’s letter, I’m going to respond to some of the observations and data that came in this week on employment.

“When more and more people are thrown out of work, unemployment results.” – Calvin Coolidge, US president, 1923-29, in his role as Mr. Obvious “Unemployment is of vital importance, particularly to the unemployed.” – Edward Heath, UK prime minister, 1970-74

“Inflation is as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man.” – Ronald Reagan “To me, a wise and humane policy is occasionally to let inflation rise even when inflation is running above target.” – Janet Yellen

“Retirement is like a long vacation in Las Vegas. The goal is to enjoy it to the fullest, but not so fully that you run out of money.” – Jonathan Clements “In retirement, only money and symptoms are consequential.” – Mason Cooley

As I mentioned in last week’s letter, I traveled to San Francisco last Monday with my friend Patrick Cox, who writes our Transformational Technology Alert newsletter. We had dinner with Dr. Mike West of Biotime and then spent the next morning at the Buck Institute for Research on Aging. Pat and I decided we would jointly report on what we learned. He has already written his part, which was published last week. I am going to reproduce portions of that letter, which highlight the conversation with Brian Kennedy and his team at the Buck Institute, and then add my own thoughts about our conversation with Mike West the previous night.

“The first wealth is health.” – Ralph Waldo Emerson “Man needs difficulties. They are necessary for health.” – Carl Jung Decisions, decisions. Many Americans will have to make a big one in the next 60 days or so. How you decide will affect both your health and your wallet. Hospital management and doctors are seeing significant differences in the trends of patient care and are moving to adapt. Some of the changes they implement are going to create significant economic impacts on households and local communities.

“Growth is never by mere chance; it is the result of forces working together.” – J.C. Penney “Strength and growth come only through continuous effort and struggle.” – Napoleon Hill “We’re lost, but we’re making good time.” – Yogi Berra, 1925-2015, RIP (For a most moving and memory-laden tribute to Yogi, see The Lefsetz Letter.)

I love waterfalls. I’ve seen some of the world’s best, and they always have an impact. The big ones leave me awestruck at nature’s power. It was about 20 years ago that I did a boat trip on the upper Zambezi, ending at Victoria Falls. Such a placid river, full of game and hippopotamuses (and the occasional croc); and then you begin to hear the roar of the falls from miles away. Unbelievably majestic. From there the Zambezi River turns into a whitewater rafting dream, offering numerous class 5 thrills. Of course, you wouldn’t want to run them without a serious professional at the helm. When you’re looking at an 8-foot-high wall of water in front of you that you are going to have to go up (because it’s in the way); well, let’s just say it’s a rush.

“The European Project has very little economic and political capital left to defend it if anything goes wrong now. As Mr Juncker says, the bell tolls.” – Ambrose Evans-Pritchard Perhaps I should issue a storm warning for this letter. Maybe it’s because I had major gum surgery on my entire lower jaw this week and am in a bit of discomfort, but as I read the news coming through my inbox, it’s not helping my mood. This week’s letter will focus on the immigration crisis in Europe – after I muse on what I think is the very disturbing aftermath of this week’s Federal Reserve meeting.

“The world’s biggest problems are the world’s biggest business opportunities.” – Peter Diamandis One pill makes you larger And one pill makes you small And the ones that mother gives you Don't do anything at all Go ask Alice When she's ten feet tall When logic and proportion Have fallen sloppy dead And the White Knight is talking backwards And the Red Queen's off with her head Remember what the dormouse said Feed your head Feed your head – “White Rabbit,” Jefferson Airplane, 1967 (The link is to Gracie Slick at Woodstock, 1969)

“He who knows when he can fight and when he cannot, will be victorious.” – Sun Tzu A couple of weeks ago I was complaining about 47,000 China reports clogging my e-mail. The number now feels like it is well into six figures (perhaps a slight exaggeration). Maybe my memory is going, but there wasn’t nearly as much China talk on the way up. Funny how that works.