Within every medium sized and large financial institutions is a department which tries to understand both the local and national economy. If things are expected to go well, the banks can lend more money or make credit easier, if the outlook is bad, banks will lend only to those who are guaranteed to pay it back or seemingly have a very low propensity not to pay it back. This means many will not get credit. The economists go through the government and industry data and make a report, sometimes the report is good, sometimes no so good.

In an article by Niket Nishant and Saeed Azhar of Reuters, Jan Hatzius, the Chief economist at Goldman Sachs, wrote a report about tariffs which President Trump did not like. The report said US consumers had absorbed 22% of the total costs through June and that figure could rise to 67% if tariffs continue on the same trajectory.

Consumers have likely noticed some higher prices, but as the percentage goes higher, everyone will notice higher prices because the company which imports the tariff good is not going to absorb the total costs for an extended period of time. It is why you have heard CFOs say tariffs have cost us $200 million or an extra cost that hurt margins.

President Trump jumped onto Truth Social and criticized Goldman Sachs CEO David Solomon and disagreed that tariffs have hurt the economy.

All the above shows that President Trump does not like bad news, in his mind everything is going great. The reality is some parts of the economy are doing well, some parts are not doing so well and the tariffs which are paid by the consumer take time to go through the supply system, but they will show up in higher prices.

Linking to dividend paying stocks, the best management want to hear about and the problems and how the company is solving the problems. If the person only wants to hear about success, all numbers have to be jigged to show some success, when the reality is the expectations analysts have of the company are not being met or the Aesop Fable – the Emperor has no clothes. At some point, there will be a management change because the solutions offered are terrible and anything could be better. If you invest in a company and despite all the negative aspects, the management only sees what could be, it would be good to find alternatives.

There are more questions than answers, till the next time – to raising questions.