But where’s the promised utopia for middleclass Americans? Democrat politicians and their policies are supposed to build the economy from the bottom up and middle out.
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This is a 3-month chart for the QQQ (a popular etf used as a stand-in for tech stocks).
That’s technical pattern called the “Nose Dive pattern” but I prefer the previous name “Crash-and-burn pattern.”
This is a Mar 2024 chart of Russell 2000 companies with negative earnings.
(Notice it is close to an all-time high)
If you are not invested you need not care much about the top chart.
The bottom one? Well, it’s what happens when a bunch of whack jobs think corporations are evil and declare war on them.
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Even if the markets go up, overall wealth is being destroyed at a rapid rate, inflation can at time drive up stocks with inflated dollars, but you still might not be actually gaining wealth. When you have massive amounts of people buying groceries and other essentials on credit cards and pulling out their retirement funds to pay the rent and utilities, THAT is NOT prosperity. This IS where we are at:
One popular way (popular among economists AND the Twittersphere) is the Sahm rule.
It declare the start of a recession is when unemployment rises by a certain amount relative to where it has been in the past 12 months. It triggered last week.
Notably its (lefty)inventor Dr. Claudia Sahm took to the Twittersphere and announced it does not count this time because the unemployment, and thus the recession, is only among those born in America.
Employment among people born here = recession (already.)
Employment among all people here = recession (already.)
Employment among immigrants? . . . Well, it’s really really high so the other two don’t matter.
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I can tell things are slowing down, and the GDP might still be up, but that doesn’t really tell the whole story at this inflationary time. GDP will be up some just from high prices, but people are paying more and getting less.
The spending may be the same or higher in dollars, but when everyone is getting much less for those same dollars, and many are becoming impoverished, it’s NOT economic prosperity, it’s the opposite.
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I believe we need a mild recession.
There is still a lot of crap, born back during the free money era, that needs to be flushed.
EX
Zume Pizza.
1.) A California couple, skilled in writing code to program robots,
knew nothing about pizza, nothing about trucks, and nothing about running a business. So what did they do? They opened pizza truck business, combining three things they know NOTHING about and initially receiving a $412 million venture capital loan, they earned zero profit (and almost no revenue) then went public becoming a publicly-traded company valued at $2.3b.
2.) Only later did they find out that in California, pizza has to be sold in recycled plastic boxes, not cardboard. Of course everyone who knows the California pizza business knows these, but these were a couple of robot programmers so . . .
3.) They suddenly found out how expensive the boxes are and well . . . if anything is expensive you can make money selling them, right? Instead of buying a few thousand boxes, like everyone else) they bought a pizza- box manufacturing company. (Of course they knew NOTHING about manufacturing either but money is free so , why not?)
4.) In June 2023 the company shut down. but there are still many many more like them. They provide nothing for the economy, they are zombie companies. They are nothing more than misallocated resources making it more difficult for viable businesses to succeed and innovate.
It is time to flush. Interfering with the natural free-market flushing process is not part of the Fed’s mandate.
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A growing number of Americans are in a recession:
indebtedness of American households has surged in the last few years amid a challenging economic environment for consumers that has contributed to delinquency rates rising to their highest levels in more than a decade.
A quarterly report published this month by the Federal Reserve Bank of New York on household credit and debt found that between the first quarter of 2021 and the second quarter of 2024, credit card debt surged 48.1% while household debt – which includes mortgages and auto loans – rose by 21.6%.
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The DOW is up like 10K since biden took office. Something like 30%
Many Americans are feeling like it’s a recession for them:
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Tying the Market’s moves to any particular individual person (other than Jerome Powell) is a fool’s game as those moves are largely the result of just a few hundred companies (sometimes just a dozen or less) who are able to succeed in good times and bad times.
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Tell it to the OP.
august 1st tbefore heh 2k point drop the dow closed at 40318. it closed today at 40563…
y/y inflation is under 3%
retail sales up 1%,much better than expected
initial unemployment claims down.
I guess the answer to the OP is a resounding NO
Very interesting story and great point. Thank you for that. I mean it
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Thank you.
There are a lot of hari-brained zombie companies out there & and the only things they do are
- misallocate resources
- compete with legit companies, preventing them from succeeding, profiting and innovating.
But it does not always happen that way. Often it is more mundane.
EX:
1.) As the circa 2008 recession ended, gas prices had dropped from $3.60/gallon to $1.80/gallon, and the Fed funds dropped from ~5% to nearly 0% where it would stay for 6 years.
2.) My part of Long Island then served by 2 major supermarkets, 2 minor supermarkets and a Sam’s Club could legitimately support another supermarket. Why not? Enterprises that don;t make sense on borrowed 5% money sometimes do make sense on borrowed 0% money.
3.) But one did not open. FOUR did, plus the local Walmarts began carrying fresh meat fresh produce etc. (Total roughly six.) Companies do not collude, not that way at least, so when six companies saw it made sense to open a supermarket in my neighborhood ALL SIX of them did. (Each of them hiring ~100 people)
Now imagine the Fed trying to keep rates so low, or Congress trying to adopt so many spending programs, that all six ventures can survive and continue to employ people. In the short term it’s quixotic, at best, and, repeated over the long term, it is a recipe for economic disaster!
That’s kinda where the economy is now.
Here comes Harris’ solution to Americans being crushed by high prices.
Federal corporate price controls aka communism
Welcome to Maduro’s Venezuela 
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Their voters will still deny it, and at this point they’d actually cheer for the construction of gulags. Every single policy idea she’s ever floated has been nothing other than an egregious, Soviet-style government takeover.
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The OP mentioned other things as well. Here’s some things to consider:
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