The Daily Feather — Cure-Alls to Coca-Cola
Every age has its panacea, its cure-alls that “treat” the anxieties and preoccupations of the cultural moment over the centuries. Chinese alchemists of the T’ang dynasty were obsessed with the elixir of life, believed to cure all disease and confer immortality. Big oops, four emperors died after taking a dose, presumably due to lethal ingredients like cinnabar and mercury. To combat plague, European pseudoscientists turned to theriac. Famous since the days of Marcus Aurelius, theriac was a compound of up to 80 ingredients, including fermented viper flesh, ground coral, saffron, and opium, mashed into sticky syrup. In mid-1800s America, medicine show charlatans hawked their miracle drugs at traveling fairs, between vaudeville acts and burlesque shows. Pre-dating food and drug regulations, these patent medicines were anything from high-proof alcohol to colored water. Promising to cure everything from acute ailments to general malaise, patent medicines were touted as safeguards against the strain of modern life. “We are a great army of nervous invalids,” proclaimed Dr. John Pemberton, American pharmacist and Confederate States Army veteran. To diagnose the entire United States with a nervous affliction, he prescribed cocaine-infused wine, to “stimulate our lethargy and console our grief.” Thus, Coca-Cola was born.
Lower interest rates have a similarly soothing calming effect on unnerved investors, with the disclaimer – so long as recession risks are kept at arm’s length. In the credit-driven-growth universe businesses populate, lower rates have the potential to induce euphoria, especially after the Federal Reserve’s tightening campaign to get inflation to cry ‘Uncle!’ has gone too far.
The Empire State Manufacturing Survey was a case in point. There’s no denying the positivity in September’s headline, which vaulted 16.2 points to a stout 11.5, marking the first expansionary reading in 10 months (yellow line). Even better, current General Business Conditions bested the consensus’ penciled in -4.0 by 15.5 points, the largest beat in 15 months. And finally, the coincidence, Shipments index advanced 17.6 points to 17.9, also a 15-month high. Since the survey’s 2001 inception, monthly changes in this last gauge have a .82 correlation to the headline number.