Many Happy Returns

We had an election this week. And some of the most interesting returns are the least reported.

Everyone knows that Tuesday was a good day for the Democratic party. But a little-reported item on many ballots may give us a good idea of where the economy is headed.

Local governments in 41 states asked voters to approve $66 billion in new bond issues. And over three quarters of the requests were approved. That tells me that consumers may not be as hard up as they seem.

Back in 1990 voters rejected over half the bond issues put before them. As the economy was headed into a recession consumers figured that if they can’t get their money out of the bank, and if their jobs are shaky, then telling the town to borrow to build a school wasn’t prudent. But this time they said, in effect, go ahead and build it.

I’ve always been an advocate of watching what consumers do rather than what they say. What they did on Tuesday gives me hope that things aren’t as bad as many others say.

Douglas R. Tengdin, CFA
Chief Investment Officer
Hit reply if you have any questions—I read them all!

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