Consumers Feeling the Burn

“Europe and America are united by telegraphy. Glory to God in the highest; on earth, peace and good will toward men”

Queen Victoria sent the above telegram to President James Buchanan on August 16, 1858, as the first communique over the newly laid submarine transatlantic cable.

President Buchanan replied:

“It is a triumph more glorious, because far more useful to mankind, than was ever won by conqueror on the field of battle.”

The cable was shaking and correspondence took hours, but a major step forward in connecting the people of the planet was accomplished, and while the leaders of the two great nations of the world grabbed the headlines, it was all made possible by the private sector. In this case, it was the visions of Cyrus West Field, who raised the money and made it happen.

Last week Facebook and Microsoft announced a joint venture to lay 4,000 miles of underwater internet cable between Virginia Beach and Bilbao. Interestingly, Mr. Field’s cable was installed by four ships that began crossing the Atlantic on July 29 and finished by August 16. The high tech project is going to take more than a year, but something tells me it’s slightly more complicated.

The hot news in communication has been drones, which I suppose are still the future of wireless, but I guess there’s nothing like the steadiness of cable buried miles under the ocean’s surface. I like that the private sector is leading the charge on this.

Burning a Hole

Looks like all that money was burning a hole in our pockets as consumer spending soared at its fastest pace in almost seven years. Coming into April consumer savings rate was at a four-year high, and while that may have been too much to resist, a lot of the increase is a reflection of more expensive gasoline prices.

St. Louis Federal Reserve President James Bullard said Monday that global markets appear “well prepared” for a summer interest rate hike. I had been a non-believer, but for sure, the market is prepared for such a hike (probably in July it must be accompanied by a clear message of one-and-done until after the November elections).