In the 1979 movie Being There, which is based on Jerzy Kosinski’s book of the same name, Peter Sellers stars as a simple-minded gardener named Chance. Following the death of his employer and guardian, Chance is kicked out of the Washington, DC, townhouse he has called home for his entire life and forced to aimlessly wander the streets. He can neither read nor write. His only education and contact with the outside world have been through television. He is eventually befriended by a wealthy industrialist and political insider who thinks Chance is a highly educated businessman merely down on his luck. Chance the gardener (now mistakenly known as Chauncey Gardiner) becomes an instant sensation on the Georgetown cocktail circuit. His remarks are simplistic and literal, and mostly refer to gardening. Yet everyone over-interprets his simple sayings, imbuing them with deep allegorical meaning.
“The U.S. economy isn’t likely to slip into recession anytime soon, and there is no reason for the Federal Reserve to cut interest rates,” former Fed Chair Janet Yellen said. Speaking to an investor conference in Fort Worth, Texas on Thursday, Yellen said that while Fed officials had marked down their economic growth forecasts to a median of 2.1 percent for 2019, “that’s not a recession. A slowdown is something that was long expected.”
January was National Slavery and Human Trafficking Prevention Month. It’s probably fair to say most people had no idea about, much less observed, a month dedicated to eradicating one of the world’s most shocking crimes. But if January came and went without much extra attention paid to this issue, February certainly brought it into sharp relief: The uncovering of a human trafficking ring in Florida—a police sting that resulted in charges filed against a number of prominent individuals—was hard to ignore.
Also hard to ignore are the wider statistics. According to a 2017 report from the International Labor Organization and the Walk Free Foundation, an estimated 40 million people worldwide are victims of modern slavery, 25 million of whom are being exploited for labor purposes, largely in the construction, manufacturing, agriculture, and fishing industries. The more statistics you read, the more you despair. Is there anything we as investors can do to help? The answer is yes. But first let’s clarify what we mean by human trafficking.
Economic recessions, while widely dreaded, are about as commonplace as hairline recessions (also widely dreaded). However, unlike receding hairlines, receding economies eventually return to growth. Loosely defined as a significant decrease in economic activity that lasts for more than six months, recessions are simply a normal part of the business cycle.
Recently, SEI Private Trust Company published a Research Commentary entitled, “What is a Recession,” which we thought would be of interest.
Commentary in brief:
- A recession is loosely defined as a significant decrease in economic activity that lasts for more than six months.
- Recessions occur during the contraction phase of the business cycle and are usually caused by higher-than-necessary inflation.
- Bear markets (or declines of 20% or more in a broad stock market index such as the S&P 500 Index) typically accompany recessions.