Fast Facts

Old is Made New- For more than 500 years, Swiss Guards have protected the Pope at the Vatican wearing metal helmets which scorched their skin in the hot Roman sun — but those days are over for the 120 members of the Holy See’s private army. The old metal helmet has been replaced by a 21st century high-tech, 3D-printed version, made of UV-resistant PVC, a common type of plastic. The first wave of 95 helmets out of a total shipment of 150 has arrived at the Swiss Guard headquarters in the Vatican on Tuesday, where cadets prepared to wear them for the first time. They often have to stand still for several hours during papal events and Swiss Guard Nicolas Albert says the new helmet’s hidden air vents are a major improvement. “There is more space between your head and the top of the helmet which lets the air flow through,” he said.

Special Delivery- Freezing conditions couldn’t stop a Michigan pharmacist from making her rounds during last week’s polar vortex. Andrea Cusack typically uses her car to deliver lifesaving medicines to the residents of Lake Odessa. But when snow and ice blocked roads and driveways, Cusack had to get creative. “Blood pressure, diabetes meds, you do not want to stop those,” she said. Cusack recruited her 15-year-old son to drive the family’s snowmobile, climbed on the back, and sped off to make her special deliveries. “I’ll do what I have to do to take care of customers,” she says.

Puppy Love- Khemjira Klongsanun was seven miles into a marathon in western Thailand when she spotted a trembling puppy sitting alone on the roadside. With no houses nearby, she decided the pup must have been abandoned or lost, and so she scooped him up and got running. She carried the animal for the next 19 miles and, after crossing the finish line, posted a message on social media asking for the dog’s owner to come forward. No one did, so Klongsanun adopted the pup and named him Chombueng, after the marathon. Carrying Chombueng was exhausting, she said, “but I did it anyway just because he is adorable.”

Weekly Focus – Think About It

“Taking in the good, whenever and wherever we find it, gives us new eyes for seeing and living.” –Krista Tippett, American journalist

The Markets

Central banks take a turn.

At its first policy meeting of 2019, the U.S. Federal Reserve changed direction. After four rate increases in 2018, Chair Jerome Powell announced interest rates were on hold. Last week, banks in the United Kingdom, Australia, and India followed suit by either reducing rates or cautioning rate reductions were likely, reported Sam Fleming and Jamie Smyth of Financial Times.

The dovish tone of central banks owes much to slowing global growth. January’s International Monetary Fund World Economic Outlook lowered global growth estimates for 2019 and 2020. Changing expectations were fueled both by factors that slowed momentum in the second half of 2018 and by issues that pose a potential risk to continued economic growth. These included:

The negative effects of higher tariffs
New auto emission standards in Germany
A slowdown in domestic demand in Italy
Economic contraction in Turkey
High levels of public and private debt
Escalating trade tensions
A no-deal British exit from the European Union
A severe slowdown in China

These issues have had limited effect on the U.S. economy; however, global risks are affecting the performance of some U.S. companies. Financial Times explained:

“The U.S. domestic economy has continued to put in a robust performance, with the number of new jobs in January coming in well ahead of Wall Street expectations and wage growth running comfortably above inflation. But corporate giants in the S&P 500 index, which generate over a third of their earnings overseas, are sounding the alarm about faltering overseas demand in markets including China, where the government has been battling against a slowdown. Smaller U.S. firms are feeling the global chill as well.”

Randall Forsyth at Barron’s reported major U.S. benchmarks finished last week higher, while the yield on 10-year U.S. Treasuries hit a 13-month low. Outside the United States, some global stock markets moved lower.

AT THE INTERSECTION OF ECONOMICS AND VALENTINE’S DAY…Author and illustrator Liz Fosslien has thought a lot about economics and Valentine’s Day. In ‘14 Ways an Economist Says I Love You,’ she offers this advice:

“Give your loved one a nerdy Valentine and they’ll be yours forever! Why? Because if you give them diamonds/cufflinks this year, anything you get them next year will fall short. Give them [a nerdy Valentine] and anything they receive next year will be a step up. It’s called expectation management and is the key to a long and happy relationship.”

Fosslien suggests a variety of approaches to saying, ‘I love you,’ in economic terms. (Each is accompanied by an illustrative chart or graph at Fosslien.com/heart.) If you’re looking for a way to express the magnitude or enduring nature of your feelings, you could try:

I don’t think your great, / I think you’re fantastic, / For what you’re supplying, / My demand’s inelastic.
The monopoly you have on my heart is all natural.
Our risk of default is zero.
The S&P was in the red, / But I wasn’t blue, / Because I shorted the market, / And went long on you.
The marginal returns of spending time with you will never diminish.
Irrational, asymmetric, / Love is so foolish. / But I could not care less, / If you’re the stock then I’m bullish.

If the dismal science of economics doesn’t deliver the level of romance your relationship requires, you can always go for the cufflinks or the diamonds.

Best regards,

John Klevens, CFP

Sources: The Week Magazine, CNN.com
Portions of this newsletter has been prepared by Peak Advisor