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The Wheels Are Starting to Fall Off the Economy


Bloomberg published an article with the title “Stubborn Inflation Poses Risk to Recently Upgraded US Forecasts for Economic Growth
 
  •         Disinflation, rate cuts formed premise for strength this year
  •         Consumer spending has lost momentum amid recent bump in prices
Excess Savings Gone:
  But spending managed to continue as a sizeable share of the population took advantage of buy now pay later (BNPL) offers, building up phantom debt that is not incorporated into personal credit reports:
  As described in Bloomberg:

BNPL is a black box largely because of a longstanding blame game among BNPL providers and the three major credit bureaus: TransUnion, Experian PLC and Equifax Inc. The BNPL companies don’t provide data on their installment loans that are split into four payments, which were used by online shoppers to spend an estimated $19.2 billion in the first quarter, according to Adobe Analytics, up 12.3% compared with the same period last year.

Fortune magazine also wrote on this buy now pay later end run around personal credit reports:
  Finally, as reported by Zerohedge:

disappointing consumer report from the University of Michigan raises concerns about stagflation as Bidenomics implodes. Credit card debt growth from the Federal Reserve earlier this week showed heavily indebted consumers have hit a brick wall as pandemic savings deplete.

On Tuesday, Goldman's top consumer trader, Scott Feiler, wrote in a note to clients, "Our desk is getting bearish on consumer and our soft landing basket. We think it's the most vulnerable area of cyclicality, and cyclicals/defensives are priced very optimistically, and we are starting to see a defensive rotation"


At this point we can expect the recession to take root prior to the election, where such a development would substantially favor President Trump; however, the least painful path would be if the economy hung on just long enough for the new administration to bring in reform on a tide of excitement and relief and avoid the deeper recession altogether.

Either way, we all desperately await the 2024 election and the end of rule by these marxist degenerates.
 
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