Alchanati Campbell & Associates
Ambition. What the “dreamers that can’t sleep” have. It’s a talent, a skill, an urge inside of you that never rests. Ambition keeps you up at night and it wakes you up in the morning before the sun rises. It’s for those who’d rather be impressive without acclaim than having acclaim without being impressive. They don’t need public opinion to validate who they are or what they have done. Only the fame-driven, lazy, confused, and ill-exposed go after acclaim without being impressive. It’s fake and meaningless. Ambition could also be your downfall. You’re so driven to be better than everyone else that competition becomes your life. The thought of others working and producing drives you to work and produce even harder. You become unfriendly and everything turns into a race. You look at others as competition instead of thriving individuals that are a part of your society. So how do you be ambitious without losing a sense of humanity? Don’t be afraid to follow your gut, hold onto true core values, act on your dreams and live to better yourself every single day.
The Market. Amazon plans to make all of their shipments carbon-free, with 50% of shipments achieving this by 2030. More airlines have cameras installed on their seat backs. Many Americans are managing their finances based on their monthly subscriptions and lease payments, not thinking of the total they’ll pay in the long run. Car debt has reached $1.2 trillion. The US trade deficit widened more than expected in December to $59.8 billion. 63% of the US’s $598 billion deficit is from trading with China (a total deficit with China of $375 billion). The Fed is nearing the end of its balance sheet reduction process. Employers added 20,000 jobs during the month, bringing the unemployment rate to 3.8%.
The end of the road for automobiles? “Your time is not free, right? Your time is worth more than $20 an hour. So, in my case, why not spend $15,000 to $20,000 a year on Uber and Lyft to get all of that time saved?” The dilemma is traffic and wasted time, and the solution is not owning a car and using ride-hailing apps. Auto sales are declining, 26% of US 16-year-olds earned a driver’s license in 2017, the average price of a new car in the US hit a record $37,777. Ultimately, you will start seeing a trend of people not having cars and using ride-hailing and mobility apps instead.
The relationship between financial statements. The three most well-known statements are the income statement, balance sheet, and cash flow statement. The income statement states the revenue and costs and determines the bottom-line net income. The net income is used on the top line of the cash flow statement and in retained earnings on the balance sheet. The cash flow statement uses the cash from operations, investing and financing to determine the net change in cash during the period, and the balance sheet balances liabilities and equity to assets. The net change in cash from the cash flow statement is added to the top line of the balance sheet where it is a current asset listed under the description of cash, cash equivalents, and marketable securities. Change in current assets and current liabilities on the balance sheet is represented as the changes in working capital on the cash flow statement.
What is Brexit? Brexit, in its purest essence, is the United Kingdom’s exit from the European Union. The European Union is an economic union which is comprised of a set of counties that share 4 things in common.
•No barriers to imports/exports amongst member countries
•Uniform trade agreements with non-member countries
•No barriers to labor and capital amongst member countries
•Uniform economic policies, and common institutions
The European Union will be considered a monetary union post Brexit, as all member countries will also be sharing a set currency, the euro. The big issue currently with Brexit is setting up new trade agreements which they have never had to deal with before. They must also set up restrictions on labor and capital, which once flowed freely amongst EU countries. The last issue lies into setting up an entirely different economic system, with differing policies then they once held. Luckily for the UK, they never left the sterling, so they won’t have to deal with setting up a new monetary system. All in all, their big issue lies into getting this all set up before the UK officially leaves the EU on March 29th.
The next recession. A recession is defined as two consecutive quarters of negative GDP growth. Currently, unemployment is at its lowest level in decades, employers have added jobs for eight years running, and the economy this year is on track to grow at its fastest pace since 2005. But, weakness in some major sectors (auto manufacturing, agriculture, construction, and retail), stock market declines, global economic slowing, and the fear of a worsening trade war with other countries show that a recession may be on its way. Right now, the country is in the part of the business cycle known as expansion and this expansion is currently the second-longest on record and will be the longest if it continues into summer. The effects of a recession can devastate an economy as people lose their jobs, pay is cut, and production slows. According to the Federal Reserve, 2 in 5 Americans don’t have enough money in their savings to cover a $400 emergency expense. This means that millions of American families would be unable to support themselves through even a mild recession. When a recession strikes, the economy slows down and contracts. In order to encourage borrowing and spending, the Federal Reserve lowers interest rates. When the economic outlook of a country looks poor, people begin to lose confidence in their currency. In the United States, Americans may prefer the stability of gold over the US dollar which would drive the price of gold up and may destabilize the dollar. Since production has slowed, companies lay off workers which leads to less circulating money which in turn leads to consumers spending less money and as a result companies produce less. This cycle leads companies to post low revenues, which in turn lowers the value of the stock market. The US economy is the largest economy in the world and is the largest importer in the world. When the US economy slows and imports fewer goods then the economies of other countries begin to slow. Globalization has made the economies of the world increasingly intertwined, which means as the US economy suffers, so does the rest of the world. In preparation for a recession, it is recommended to have at least 6 months of income saved up and you may also want to move some investments around since stock prices tend to decline in a recession while less risky investments like bonds offer higher relative rates.
The Alchanati Campbell and Associates Team
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