Newsletters - Past Issues

The 2024 December jobs report came out last Friday and it showed an increase of 256,000 jobs following a 212,000 gain in November. Analysts expected 165,000 created jobs for December so saints be praised, the country seems robust!

Not so fast said Wall Street and the Dow subsequently shed  a whopping 696 points on the day sending traders into the local bars at closing to gulp down a couple of double martinis to ease the pain of it all. So good economic news causes the market to crater?

How can that be you say?

Let me explain.

I miss the olden days. Back when sanity ruled Mr. Market, good economic news meant positive market movement. That was before the governmental money guys tried to harness the winds of supply and demand that drove the market in the direction it wanted to go.

Which is to say let it freely meander to and fro in response to a healthy and vibrant U.S. economy that was the envy of markets everywhere.

So the question becomes what happened since then where now good news on the economy causes the stock market to bleed red and bad news might cause a market rally?

What happened was the repeated interventions by the Federal Reserve (the FED) nearly every time the markets got a cold. So many times has the FED intervened, messed with, manipulated and basically tried to steer the market with monetary (money) injections, the knee jerk reaction by investors has now become what will the FED do in response to any economic news that comes out.

Bad news might cause the FED to juice the market by lowering interest rates, making credit easier, and bailing out a bank or two. Good economic news might cause the FED to do the opposite and tighten up on the money spigots causing markets to pull back.

Investors now seem more concerned with FED response to a positive or negative economic statistic than the actual health of the economy itself. What an odd investing world we now live in.

In other news, the Los Angeles fires no doubt will mean higher insurance rates for us homeowners.

Just last month, I penned an article discussing the solvency of the California Fair Plan insurance entity and how they might be, self-admittedly, one large fire away from insolvency. Well, the news is out the latest fires in Southern California might be the costliest insurance event in their history. I have seen social media chat suggesting Cal Fair is in shambles. I can say as a Cal Fair agent, they are still up and running and, at least now, seem no worse for wear. I have no way of knowing their current financial picture, but they continue to communicate and operations continue, at least from an agent’s point of view.  In the article, I mentioned Cal Fair may have to instigate assessment charges on policies throughout the state to cover shortfalls. Much like a property tax bill where you get an invoice for a new road or what have you, a fire assessment would send you a bill out of the blue to help cover costs.

In the middle of the crisis, it’s difficult to tell how this will all wash out. But my guess is the Federal and or state governments along with the insurance companies will all have to contribute massive amounts of money to cover the costs of these fires. A bail out by somebody is in the cards.

A bail IN, where you and I will be asked to contribute is also a possibility.

In conclusion, whatever happens, if you thought insurance rates of all kinds were high now, it’s not rocket science to foresee even higher rates are in our future.

For now, let us offer our prayers and support for those victims and their families, our first responders and all those involved in bringing this horrid event to a close.

“Watching the markets so you don’t have to”    

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services.  Email: news@moneymanagementradio.com

Happy New Year  !

Wishing you all the best in the coming year

I have penned a few Money Matters articles on those big box stores and the little mom and pop local stores we all like to support and how they coexist with each other.

The first article centered on the idea the big box stores like Costco, Walmart, Home Depot and Lowes were killing the small local stores in neighborhoods around the country.  The reasons were lower overhead cost per purchase, better selection, ease of access (the one stop shopping experience), of course, price.

The subsequent article a few years later turned the tide on the big box store with the subject being that they themselves were now dealing with their own threat of existence because of the online retailer Amazon.

Some big box stores were slow to react while others like Walmart, Target, and others took a quick lesson from Amazon and started their own online services.

The big box stores also had an advantage. Buyers could actually view the item at the store. When shopping online, this was not possible.

Amazon countered that concern by implementing a no-questions asked, super easy return policy.

When CoVid arrived and the governments of the world decided to implement shutdowns of just about everything, this further exasperated the plight of the in-person shopping experience and put even more pressure on local establishments. As the shopping environment has progressed along, the mom and pop stores, those that survived that is, did have a leg to stand on, albeit a wobbly one.

We found out that people care about their local stores and many didn’t mind paying a few pennies extra for the local experience. Many mom and pops met their shoppers half way with price concessions making sure the “few extra pennies” didn’t turn into “many extra dollars” as people still have to watch their budgets. The severe inflationary pressures of the last few years obviously hasn’t help local stores to keep the doors open but they are a stubborn bunch as well as some of their local supporters luckily are a compassionate bunch.

That being as it may, some local vendors resist dropping prices and rely on the local shopping experience as something no online retailer or big box store can compete with.

For some store owners however, how to compete with the large corporate outlets still eludes them.

I once shopped at a small store in my local township Nevada City that was tucked away in a quaint hallway like shopping area in an historic old building that had only a few small stores in it.

The area also contained a Persian Rug outlet, a gourmet chocolatier as well as a few other specialty shops. The historic building environment and the tucked away shops offered a somewhat magical experience so I frequented a small gift boutique during birthdays, Valentine’s Day, and Christmas. The store was very small, had a very limited selection and the prices were high, but I liked the owner, wanted to support the shop and was always warmly welcomed.

After shopping there three or four times a year for more than a decade, I bought my wife a blouse there one day and when her birthday arrived, the wife tried it on. Me, being a clueless husband when it came to sizing, had of course bought the wrong size. I should have known better than to try and buy clothes for the opposite sex but I felt brave that day so what the heck.

In any case, the blouse didn’t fit so I went back to my little boutique and asked if the owner had a larger size. The owner said no and when I asked for a refund, she said the store policy was on a credit. Yea, I know this is the policy of many a store but seeing as I went out of my way more times than I would care to shop there and support her, she still refused to refund my money and stuck to the credit offer. Seeing nothing else, I gently reminded her that I would of course be back but would prefer the refund, she stuck to her guns. I thanked her and left the store and never returned.

In conclusion, our local shops are a great place to engage with our neighbors, make a pleasant day of shopping and walking the town and supporting our small town purveyors. But there is a give and take that should always be considered by the small shop owner. Don’t act like a big box or mega store with stringent policies that can’t be bent because you’re too focused on the almighty buck. We shop there because we’re neighbors, so treat us as such.

“Watching the markets so you don’t have to”    

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(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)    

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services.  Email: news@moneymanagementradio.com

Call me (530) 559 1214