Friday, February 29, 2008

Leap Year

The year 2008 has an “intercalary” day - otherwise known to the rest of us as an “extra” day. What good is an extra day? What good is one more day to see record stock market losses? For some it is just another day to pay breathtaking prices as the gas pump to worry about whether they have received their last paycheck.

Could anything good come out of having an extra day on the calendar? Previous Leap Days have produced some positives.

1796 - Jay’s Treaty was signed by George Washington, setting an understanding between Great Britain and the new United States about commerce and navigation. An earlier treaty, the Treaty of Paris of 1783, had been violated so many times, a new effort was deemed necessary. Sort of like the situation we have with the North American Trade Agreement we have today.

1904 - Theodore Roosevelt appointed a committee to study the feasibility of the Panama Canal. These days it seems we could use an economic jump start of “Panama Canal” magnitude. A breakthrough in biofuel technology maybe?

1960 - Hugh Hefner opened the First Playboy Club in Chicago and unintentionally opened one more door to the liberation of women, the economic benefits of which the country is receiving.

1972 - Hank Aaron became the first baseball player to sign a $200,000 a year contract, beginning the outrageous inflation of sports salaries that probably motivated many to take illegal drugs.

There is no stock pick in this history lesson. However, it is valuable for investors to keep perspective on the political elements that impact economic outcomes.

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