Headline Writers Will Call It A Recession And That's What It Will Be -- July 23, 2022

Flashback: On the way to looking up something I ran across this with a google search: link here. Back on July 10, 2012. Wow, a lot has happened in the past ten years. 

Flashback: companies relocating from California to Texas. That supports my note from the other day with regard to the grid:

• In Texas, it's a DEMAND problem, not a SUPPLY problem. 
• In New York and New England, it's a SUPPLY problem, not a DEMAND problem.

This doesn't even account for all the new companies, including the most energy-intense of all: crypto-mining.  

And, of course, just the opposite in the New York and New England area: folks and companies moving out -- mostly to Florida -- and supply still unable to meet demand. 

It's not that Texas is not increasing supply, it simply cannot keep up. That growth began in 2019, and then the lockdowns prevented a lot of grid infrastructure to be built in 2020 compounding problems, and, of course, they misspent / mis-directed a lot of their money / efforts by installing non-dispatchable, not-dependable renewable energy to make people feel good instead of installing what really would have made sense.

By the way, candidate-for-governor Beto says Texas needs to solve the grid problem by adding more non-dispatchable, not-dependable renewable energy.Of course that will work: adding any form of energy will help, but it won't be the most cost-effective or efficient, and, or course, it will have no effect on global emissions. China is adding a new coal plant every day (on average) and now Europe is even returning to coal. 

Others agree. Link here.

Investing: link here. Sent by a reader, thank you. I've seen the same sentiment from other analysts, including a very nice graph (which I did not post / link) that suggests one should expect it will take at least six years, as many as ten, for the market to recover. That's fine. We'll talk about this later but for me it simply means different "priorities" in investing. 

Even if it seems he's seldom right any more, I still agree with Jim Cramer when he says there's always a bull market somewhere. 

Recession: there's going to be a lot of talk this next week when the 2Q GDP comes in with a negative number, the second consecutive quarter to have a negative GDP. To a reader I wrote, not-ready-for-prime-time:

I can't wait to see how the Biden camp spins this. 

Clearly we will have a negative GDP reading for the second quarter and regardless of all the spin and definitions of what a recession is, the press will clearly call two quarters of negative growth consistent with recession. 

Apparently the Biden camp is already tweeting that two quarters of negative growth does not necessarily define a recession, which is accurate. 

There have been "books" written on the definition of a recession and some folks argue that employment numbers like the numbers we see now are not consistent with a recession. 

It will only be months to years from now when "wiki" will record when / if this recession began and when it ended (assuming "wiki" says this is a recession). 

But headline writers don't have time -- or the space -- for such nuance, and most articles on this subject will fall into the TLDR ("too long, didn't read") category. 

Headline writers will call it a recession and that's what it will be.

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The Book Page

This past week I started reading:

On Playing the Flute: The Classic of Baroque Music Instruction, Johann Joachim Quantz, translated from the German, first published in English, 1966, if I read it correctly, and first published in 1752, Berlin. 

Word for the day: quaver. 

Two years ago our local school district closed down for a short period of time, and then finished the year with a hybrid system, some linked into their classes by streaming on their iPads, others attending school in person. 

Wow, that was a tough year. Sophia stayed home for the entire year. Her mother and sisters mentored her in the morning and I took over in the afternoon. It was an incredibly tough year, but I found it so incredibly rewarding. 

Wow, Sophia clearly gapped up on her knowledge of her iPad and all the streaming apps. It was simply amazing all she learned and all she could do. In the big scheme of things, there are times I wish it was still that way: remote learning. 

I connected with her teachers and she had several: home room, math, reading, physical education, music and art. I knew all of them and Sophia and I interacted with all those teachers every day. Imagine: a first grader with different teachers for all those subjects.

My three favorite: reading, music, and art.

For music they used an app called: QuaverMusic.  

I never thought of looking up "quaver." I assumed it was a made-up word. And, then out of the blue, ran across "quaver" in the On Playing The Flute, written in 1752, translated and copyrighted in 1966.

From wiki:

Johann Joachim Quantz, German, 1697 – 1773, was a German composer, flutist and flute maker of the late Baroque period. Much of his professional career was spent in the court of Frederick the Great. 

Quantz composed hundreds of flute sonatas and concertos, and wrote On Playing the Flute, an influential treatise on flute performance. His works were known and appreciated by Bach, Haydn and Mozart. 

In fact, he tutored the Prussian king's son to be play flute.  

By the way, 1697 - 1773, encompassed the Seven Years' War (1756 - 1763), also known as the French and Indian War in the colonies, which provided a lot of experience for the "Brits" and the "Scots" when they took on King George III a few years later. 

I continue to cull my library, mostly by giving books away. This will be a very, very hard book to give away. If I do, it will go to Sophia's music teacher.