Sure, a bit later this morning, the FED will release the minutes from their last meeting.  And I could comment on the evolving Covid crisis in China, it’s impact on their economic output, and how this may generate an economic ‘contagion’ that adversely impacts the global economy.   Or I could even focus on the sliding financial fortunes of Credit Suisse — who just warned of a $1.6 billion loss in Q4 — and what impacts this might have on global banking.  

Or I could talk about the exceptionally strong ‘Durable Goods’ orders number, just released this morning, increasing $2.8 billion — up 1.0%— according to the U.S. Census Bureau.   If the US is in a recession, someone forgot to tell manufacturers and consumers.   Or I could pile-on and talk about the Crypto-crash — after saying “I told you so!” of course — but do we really need another story about that?    And who want’s to hear I told you so, anyway.   🙂

This blog will be long-gone by the time the FED drops the minutes … flying thru hyperspace … because they need me in the kitchen.   What?    You can’t enjoy Thanksgiving without first reading the FED minutes?   OK … here you go … you’ll find ’em here (right click, open a new tab): 

https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

Welcome to this week’s Steak House Index update.

If you are new to my blog, or you need a refresher on the SHI10, or its objective and methodology, I suggest you open and read the original BLOG: https://www.steakhouseindex.com/move-over-big-mac-index-here-comes-the-steak-house-index/

Why You Should Care:   The US economy and US dollar are the bedrock of the world’s economy.  

But is the US economy expanding or contracting?

Expanding.    At the end of Q3, 2022, in ‘current-dollar’ terms, US annual economic output rose to $25.66 trillion.   So far this year, America’s current-dollar GDP has increased at an annualized rate exceeding 7.1%.   The world’s annual GDP rose to about $95 trillion at the end of 2021.   America’s GDP remains around 25% of all global GDP.  Collectively, the US, the euro zone, and China still generate about 70% of the global economic output.  These are the 3 big, global players.

The objective of this blog is singular.

It attempts to predict the direction of our GDP ahead of official economic releases. Historically, ‘personal consumption expenditures,’ or PCE, has been the largest component of US GDP growth — typically about 2/3 of all GDP growth.  In fact, the majority of all GDP increases (or declines) usually results from (increases or decreases in) consumer spending.  Consumer spending is clearly a critical financial metric.  In all likelihood, the most important financial metric. The Steak House Index focuses right here … on the “consumer spending” metric.  I intend the SHI10 is to be predictive, anticipating where the economy is going – not where it’s been.

Taking action:  Keep up with this weekly BLOG update.  Not only will we cover the SHI and SHI10, but we’ll explore “fun” items of economic importance.   Hopefully you find the discussion fun, too.

If the SHI10 index moves appreciably -– either showing massive improvement or significant declines –- indicating growing economic strength or a potential recession, we’ll discuss possible actions at that time.

The Blog:

I personally took the photo above adorning today’s blog.   That, my friends, is the Ottauquechee River in Vermont.  In person, the vista is stunning.  

And I suspect it looks very much like it did 402 years and 2 days ago, when on November 21, 1620, the Mayflower Compact documented the governing rules of the brand new ‘Plymouth Colony’ as the Mayflower anchored in Provincetown Harbor safely within ‘the hook’ at the northern tip of Cape Cod. 

402 years and 2 days ago.   Imagine that.   Imagine the overwhelming feelings of awe and fear, simultaneously, as they stepped off the boat, first touching land in the harbor, setting in motion all the subsequent events that allowed American to become.   Historic records suggest there were 101 passengers on that ship.   Today the United States counts nearly 332 million.  

Ironically, the first documented Thanksgiving, however, took place the year before — in 1619 — further south in what is today Virginia.  But America’s current traditions are more firmly rooted in those of the Pilgrims who brought their historic tradition of “Days of Thanksgiving” with them to the shores of Cape Cod.  Historic records suggest a celebration of good harvest took place in Plymouth, Massachusetts in 1621.  

Food has always been, and I suspect will always be, the essential element for human survival.  Perhaps this is why “harvest celebrations” are quite commonplace around the world at various times of year.   And perhaps this is why we all love the steak house index soooooooo much!

Maybe not.   Regardless, as you enjoy your Thanksgiving this year, permit me to suggest you give thanks not only for the bountiful harvest in front of you, but also for the amazing achievements of our forefathers — and ‘foremothers’ — who against all odds, journeyed in a rickety, cramped boat across the oceans to a land they barely knew, willing to endure unfathomable hardships in their search of freedom and opportunity.   Yes, yes, I know the story isn’t that simple … explorers in the “New World” brought much more than hopes and dreams with them, as we learn in painstaking detail in Jared Diamond’s book, “Guns, Germs and Steel.”   

But for the moment, on this day before Thanksgiving, lets view tomorrow’s idyllic event thru those proverbial rose-colored glasses and focus only on the positive attributes of food, family, and the celebration of those things that brings us together as the American family that we are.  Whatever disagreements we have with each other — and there are plenty — tomorrow let’s have no beef between us — only turkey.   Oh … and gravy.  Gotta have gravy.   And stuffing …. this is exciting! 

All right … gotta go.  They’re calling for me in the kitchen.   🙂

<:> Terry Liebman