A Little Help From The Supremes

3rd Quarter 2023

Market Watch
by Joe A. Hollingsworth, Jr.

As we all know, regardless of what political persuasion you are, it’s undeniable that the Supreme Court has been making some key decisions with more to come in the next 20 days. It’s unclear when they are going to release it, and this could be old information by the time you read this, but the student loan forgiveness plan by the Biden Administration was born by questionable legal experts who suspiciously designed the timing for students in a shameful reach for votes. I believe the Supremes are going to come to the rescue by overruling this poorly thought-out policy.

Every retailer is moaning the blues of student loan payments being resumed by the 30 to 40 million debtors after a pandemic freeze. Clearly, they’re worried about how that will affect future sales. Removing somewhere between $8-10 billion from retailer sales per month is significant to retailers. While retail sales may be affected some, a far more important fact exists.

With an average loan requiring a payment of $360 per month, repayments are due to resume in September/October. What’s the likely outcome? I believe it will greatly motivate the 3-4 million people, who currently find work to be a great inconvenience to their lifestyle. As they face new, higher expenses, they should feel compelled to return to work or seek additional hours at their current jobs. The ramifications are tremendous, instead of damaging retail sales as the “chicken little” retailers seem to believe, I believe this stark realization of the need to rejoin the workforce will become more and more evident with each passing month. So how does that affect us? 1) Finally, we can start rebuilding a much-damaged work ethic. 2) A sense of work accomplishment might begin to replace the feeling of aimlessness that arises from being idle with no sense of purpose. And most importantly, 3) we can supply additional workers that would replenish our greatly depleted supply lines, many manufacturers can begin produce to demand, or service levels begin to improve at restaurants, etc., etc.

With supply chains operating effectively, competitiveness will once again occur in the marketplace replacing the current scarcity. That enables us to better control inflation. This could be the saving grace for avoiding a recession. Like I’ve been saying in the last few articles, if you can afford to take on the risk of Industrial real estate vacancies, now is an excellent time to build.

“Joe Hollingsworth participated as one of our first equity investors. In addition, Joe Hollingsworth has served as a board member and leading advisor for strategic planning and direction.” — Scott Kelley, President and CEO, Service Center Metals