Market Minute March 11, 2013

Market Minute – Beer Day

March 1st, aptly referred to as Beer Day in chillier parts of the world, has come and gone. This particular Beer Day was promoted to be one for the ages; I’m talking about a drunken disaster, the proverbial liquid ale for what ails you. You see, this Beer Day, known in our nation’s capital as Sequestration, was the moment when our federal government was congressionally mandated to cut annual expenditures. In this particular case, $85 billion dollars worth of reductions are set to occur during the next twelve months.

$85 billion dollars is an awfully large sum of money, and whenever it moves to and fro, ripples are sure to be felt. Let me break that number down a bit for clarification purposes. During the course of the next year federal outlays will be reduced $232,876,712 per day or $9,703,196 per hour, that’s $161,719 per minute, or $2,695.33 per second. According to the BLS, the average American earns around $42,733 per year; therefore, it would require a headcount reduction of around 1,989,095 governmental employees to arrive at that number. Now that I’ve painted the picture for you, I seriously doubt that this will be the path taken by our elected officials to fulfill this mandate. You are probably wondering why I am sharing such a gloomy drunk-a-log and asking yourself if there’s a happy ending to all this mumbo-jumbo? The answer is yes! Now it’s time to put away the beer and pop open the champagne.

The Market Minute is a financial blog whose sole purpose is to glean, measure, evaluate and reflect on the actions of Mr. Market. Mr. Market doesn’t appear to be shaken at all by Beer Day; in fact, he’s acting like the sequester is good news. Does this mean that our government is finally taking the necessary steps to get its White House in order? Mr. Market says yes, and that means making money. The Dow Jones Industrial Average closed at record highs on Friday and has “Marched” forward every day this month (pun intended).

Minute’s up.