My daughter came home from college to visit with us for a few days. After a long hot summer in East Tennessee, temperatures have finally started to feel like Autumn here. We took advantage of her visit by trekking to Dollywood for their Great Pumpkin Luminights event.
The next morning as we loaded my daughter's car for her 2 1/2 hour drive to Nashville, she explained that her portable tire inflator was broken. Back story - a few years ago, I found a great deal (aka cheap!) on some easy to use, portable tire inflators on Amazon and I bought them for everyone in my family. When they opened them on Christmas morning, I got plenty of puzzled looks. Since then, my family members have learned to appreciate the convenience and utility of the devices.
The big drop in temperatures caused a tire on my daughter's car to deflate.
She noticed it and tried to hook up her inflator to fix it. Her dad was proud for a couple of reasons:
- She took the initiative to fix the problem
- She used the tool that I provided to her
- When that didn't work she asked for help
Fathers are problem solvers and when we see our kids learn to solve their own problems, it's satisfying. It is even more so when they rely on tools (physical, spiritual, emotional, intellectual) that you equipped them with. Since mom had the same unit in her car, I gave that one to her so she could inflate the tire and hit the road. As she drove away, I was reassured from this incident that my daughter was becoming very responsible.
Seasonal changes can insert unexpected events into our life. Some things, like a low tire you can prepare for. Others, like an unseasonal snowstorm, you may only be able to react to.
The global economy is heading into the holiday period where things are normally strong. Unfortunately, there are signs of "unseasonal" weakness that investors should prepare for. The Federal Reserve is conducting open market operations in the bank funding repo market to inject liquidity into the banking system. This was unexpected when the need arose at the end of summer. The problem is worse now and the Fed was forced to ramp up their intervention.
This is a serious problem percolating in the banking system at a time of year when we normally don't worry about such things. Despite their assurances that this action isn't QE, the market is behaving like it is.
It may be a bit early, but maybe stock investors should get their winter tire chains ready now. If you're within 6 years of retirement, think about paring back your risk exposure until we see signs that consumers aren't spooked.