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Socialist Senator Bernie Sanders introduced legislation last week which would standardize a 32-hour workweek for the same pay as the current 40-hour one.  The bill was, of course, supported by Gavin Newsom’s self-proclaimed diversity hire and non-Californian appointee to Diane Feinstein’s Senate seat, Laphonza Butler.

"Today, American workers are over 400 percent more productive than they were in the 1940s. And yet, millions of Americans are working longer hours for lower wages than they were decades ago. That has got to change," Sanders said in his press release. 

But wait:

On the same day that Sanders introduced his legislation, US Industrial Production in January was revised from a 0.1% decline to a 0.5% decline, which is the 10th monthly revision lower in the last 11 months (and 14th of the last 17). Industrial Production rose 0.1% month over month in February (from that revised lower print), leaving the year over year change in industrial production at -0.23%.  Want to guess how we could lower it more?

Also from Sanders’ press release:  “In 2022, employees in the United States, and I hope people hear this, logged 204 more hours a year than employees in Japan, and they’re hardworking people in Japan. 279 more hours than workers in the United Kingdom, and 470 more hours than workers in Germany.”

He’s not wrong, and it shows in the gross domestic product (GDP) per capita in those countries.   Germany’s is $48,718.  The United Kingdom’s is $46,125, and Japan’s is $34,017.3.  The USA’s is $76,330.

And even with all that GDP, there’s this:

Maybe we wouldn’t have all this inflation if the government would quit printing money in its effort to monetize its debt.


The problem that the Senators from Vermont and California appear to be missing is that our economy is having no problem turning 40-hour work weeks into zero hours.  32?  Don’t worry, Senators, the market can more than take care of this for you.

According to Bloomberg, middle managers-- defined as non-executives who oversee employees-- make up almost a third of terminations, up from 20% in 2018. In January, United Parcel Service (UPS) said it would save more than $1 billion by slashing 12,000 manager jobs. Citigroup aims to eliminate 20,000 roles over the next several years, shrinking to eight management layers from 13.

And more might be coming; according to Morgan Stanley, mentions of “operational efficiency” in the US hit the highest on record this earnings season.



While running for a special election Senate seat in 1974, Sanders drew unemployment benefits. He would go on to lose several other elections up until 1981, at which point he became the mayor of Burlington, Vermont.  So, at the age of 39, he finally got a steady paycheck for the first time.

As for Senator Butler, she has a Bachelor’s degree from Jackson State University, which ranks #395-435 out of 439 national universities by US News and boasts an average SAT score between 940-980.  She already ran out on California once after Jerry Brown appointed her to the University of California Board of Regents for a 12-year term; she served for just three years before bolting to go run a PAC.

Sanders and Butler have no idea how wealth is actually produced because they haven’t ever produced anything beneficial for anyone.  What’s obvious to fair minded people is not to Sanders or Butler-- the more the government intervenes in the market, the more expensive everything becomes.  Thank goodness neither one has ever proposed a bill that actually got passed.



As readers of our Insights are well aware, we have been in the higher-for-longer camp on interest rates for some time.  At this point, Fed swaps are pricing in less than a 50% chance of a rate cut in June, and Goldman Sachs just revised down its expectations for rate cuts to three 25-basis point cuts this year, down from its prior projection of four rate cuts, which is down from its projection as recently as February for five. Across The Street, three interest rate cuts in 2024 is about half of what was expected at the beginning of the year. 

We reasoned that one of the causes of sticky inflation would be fuel prices.  Gas prices at the pump just hit five-month highs, and Brent crude rose to just over $87 a barrel on Tuesday.

We also figured that a raging stock market would fuel additional inflation and irrational behavior among consumers.  Well, what do you know?--  retail brokerage Robinhood announced last week that its assets under custody rose to $118.7 billion in February, marking a whopping 59% year-over-year increase, and the company reported an 86% annual increase in its crypto trading volume along with a 41% annual rise in equity trading volume.  Meanwhile, credit card and auto loan defaults continue to rise, and 401k hardship withdrawals are at all-time highs.

And then, on Wednesday, the Fed came very close to implying only two 25bp cuts this year, not three; reduced the number of cuts expected further out; their economic projections raised the level of GDP growth, didn’t expect any increase in unemployment, and saw core PCE inflation over target until 2026-- all while failing to address the loosening of financial conditions that’s apparent to, well… everybody. 

Readers of Insights might recall when we wrote plainly that the minute the Fed admitted it would tolerate a rate of inflation higher than its 2% target,  “That’s when everything goes limit up.”  The Dow is up about 1,000 points in the two days since the release of the FOMC minutes.



Goldman Sachs’ sentiment indicator recently hit 2.0, which is wildly stretched and indicates that market optimism is perhaps a little excessive:

Just as we suggested on March 4th for Bitcoin, we now expect a countertrend move for the stock market to begin in the next couple of weeks.  Nothing huge, what we currently see as just a little whoop-de-do, your garden variety stock market volatility.  Does that mean to sell all your stocks?  Of course not, especially if you’re still working to fund 30 years of retirement in this sort of ongoing inflationary environment. 

We currently recommend:

·         Large-cap financials, mega-cap tech, big-box retailers and energy stocks

·         Private credit

·         Adherence to your personal financial plan

Click here to invest with Chad.

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Just Keep Swimming

Prices for everything are too high, butwhere do you think stock prices will be ten years from now, higher or lower?


Divebombing into stagflation nation.


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