Claiming inflation and recession weren’t real didn’t work.
Blaming them on a pandemic only the media, the very comorbid and the most drama-addicted Karens really care about anymore is just absurd.
Blaming it on Putin? That reeks of desperation.
So we’re down to Plan D: gaslighting consumers and society.
Well, blaming it on the “malaise” worked for Carter, didn’t it?
It’s possible that the US will enter a technical recession due to the base effects of the wild gyrations during Covid-19 but I strongly doubt the US is about to experience a significant decline in economic activity.
^ Can you even explain what it is you just wrote? Base effects as opposed what other effects? Wild gyrations of what? And why would they have taken place during your oh-so-beloved Kung flu dictatorship? And why would you “doubt the US is about to experience a significant decline in economic activity”? As compared to what?
There’s a strong possibility we’ll hit recession this quarter given that the economy contracted last. High inflation tends to reduce discretionary spending, Em, and that tends to hurt the economy. Or have you not noticed that the big box retailers like Target and Walmart have both declared that their inventories are 20-30% over full?
And yes, this is principally caused by Democratic policies this time, Em. When you intentionally raise the price of energy, you hit every sector of the economy with a huge tax and slam the purchasing power of the lower and middle classes immensely. You can argue that Demonrats didn’t mean to raise them this high this fast, but you can’t argue that it hasn’t been their design to do just this. They meant to boil us frogs more slowly, and Putin just turned on another burner and made it worse, eh?
As for this article, it’s Fortune, so the analysis is flawed as usual. Yes, the psychology of the economy matter far more than used to be commonly believed, but it’s still driven by fundamentals. Fundamentally, the basic driver of the economy has been made more expensive, folks have noticed, and it’s hurting them to the point that they’re worried. Too bad Biden and company aren’t willing to adapt their extremist beliefs to reality.
I remember the Ford-era “Whip Inflation Now” campaign, and TV commercials telling folks that we all needed to be a little less “piggy”. I also remember 20+% mortgage rates in the Carter-era (and feeling great when I got a 12% first-time home-buyers rate in ’84). I also remember an editorial cartoon just after Reagan took office, showing RR on his first day in the Oval Office with a huge monster labeled “Inflation” sitting in his in-box.
Would be good to see a track record of the predictions ofthe same SiTD economists for last 5-10 years. Just 1 year ahead.
The irony is that this inflation has been widely forecasted for at least the past two years, yet the politicians not only did not put in place measures to avoid it but actually did the opposite to deepen the impending crisis. They (both parties) strong armed the Fed to ease money supply, kept borrowing and printing money, slapped import tariffs on imports from China and Europe. The US is no longer led by elite professionals but by second rate politicians who would do anything to please their financial supporters and voter base.
@ jdm — Would a recession cause a housing market crash?
Probably not, Em ^. Effectively, yes it would, but home prices tend to be really, really sticky due to the fact that mortgages are involved and most folks literally can’t sell at a loss. But a recession will stop the rise in home prices, and with inflation running at the rate it is, that’s an effective crash.
Just as an FYI, that’s what happened when NW and I went through the LBJ/Nixon/Carter inflation. I remember folks being totally unable to see their houses and having to rent them out rather than sell them when they were transferred for work. It was a mess in the real estate market for quite a while.
“see their houses” should be “sell their houses.” I really hate my work keyboard.
Night;
Yup! We bought our first house in 82 in a new semi custom tract development. The builder bought down the points to 14.5%. Fortunately, we made our payments on time for three years and because so many people were bailing on their mortgages, our lending company reached out to us and did a no cost re-fi down to 9%. That was a nice monthly raise.
^ Re: housing
Not in the US. Why? There is a net undersupply of new homes. I think the puff comes out of aspirational second home in functional real estate — $4M Miami Condos; there is pain in SF >$9M level. DFW keeps on trucking (a little slow down there reported late week in Highland Park) — but Greater Dallas will just keep on trucking.
The Fed has promised to take inflation “seriously”. The only way to do so is to slow the economy. Unless they can limit the slowdown to one quarter, by definition they are promising a recession.
A recession doesn’t mean the end of the world. Just two quarters with declining GDP.
But this is the psychology of markets. Fear, panic, irrational selling like its the end and we’ll never see a bull market again. Of course we will.
“Emery” wrote: The irony is that this inflation has been widely forecasted for at least the past two years
But not by you, and not by Biden’s secretary of the tresaury, and not by Biden, and not by Nobel Prize winning economist Paul Krugman (aka “America’s worst economist’).
The gormlessness of the Biden administration has even surprised many conservatives (but not me). When Biden says that inflation is not his fault, American’s hear Biden say “nothing I can do about it.” Ditto the baby formula shortage, high gas prices, etc. When Biden’s “Disinformation Governance Board” initiative exploded in his face, Biden blamed its creation on . . . Trump. Biden never fires anyone because he doesn’t think any mistakes or revealed incompetence are worth anyone’s job.
We all know that the country is in deep doo-doo. Biden doesn’t.
“Vote for me, I can’t fix anything” is not a winning campaign slogan.
^ Stock markets did predict this coming recession way before any economists did.
We’re already in a recession. It’s hidden by distortions in the formula for calculating GDP where government spending is included. Throw enough money out of the helicopter, you mask the decline in every other sector of the economy.
Look: if gas and diesel went to $100 per gallon, it would be obvious on a national scale that consumers had no choice but to cut spending elsewhere in the family budget. Since it’s only $5 per gallon, the same effect is taking place but it’s not as obvious on a national scale (although it’s certainly obvious to lower income families who mostly tend to be women, children, and persons of color – the ones being hurt the most by Lesko Brandon’s policies). The reason Target has a rising inventory is because consumers are using the economic principle of ‘substitution’ and shopping at The Dollar Store or Goodwill instead.
Second quarter numbers are going to be bad, third quarter numbers will be even worse but will be hidden until after the election. Lying about it is Democrats’ only hope.
One of Pedo Joe’s most trusted economic advisors, said on Friday that due to inflation in food and fuel prices, Americans will pay $5,255 more in expenses this year. Pretty much wipes out any gains in wages that were the norm while Trump was in office. The IRS reported earlier this year that on average, every citizen got a tax break and household income was up about $4,000 on average, across all demographics. Then came Pedo Joe’s corrupt and economically illiterate cabal. With extremely rare exceptions, none of the career swamp dwellers, including Joe and Kamal, have never signed both sides of a check.
Stock markets did predict this coming recession way before any economists did.
And how do they do that?
Trucking is a leading indicator of economic activity.
Volume on the spot market starting taking a dive over a month ago and it’s not getting better.
Rates have taken a dive too despite #FJB fuel costs. There have been a rash of trucking company closures and buyouts recently as well which happens during recessions.
I have a friend who says: ‘watch the Fed blink first — they will tolerate high inflation because the alternative is a lot worse. Smart money buying the dip.’
Politicians won’t tolerate high inflation. Rock, meet hard place….
Even Summers and Ratner were predicting this as Biden was promoting his “Recovery” and “BBB” plans, although they hoped a recession wouldn’t be necessary to fix this, Summers at least thought this outcome probable.
It’s been known to anyone with three working brain cells for quite some time, as well as anyone who lived through the 70s and 80s. In other words, Biden, Yellen, Krugman, MMT theorists, and progressives were all surprised, but almost nobody else. It takes a huge amount of education to be as stupid as they were.
I question whether the Fed can solve this.
The classic thumbnail definition of price inflation is ‘too many dollars chasing too few goods.’ It can occur when there is a shortage of goods (plywood after a hurricane) or when there are too many dollars (2% mortgages).
The Fed can raise interest rates which will force home prices down (buyers have only so much money to pay for housing – the more that goes to interest, the less that goes to principal). That will also raise non-housing prices (more expensive for manufacturer to borrow money, higher cost passed along to consumer), which is counterproductive. Not likely before November.
What if the source of the dollars isn’t easy credit, what if the source is helicopter dumps? If that’s the case, raising interest rates won’t withdraw money from the economy, raising taxes is the way to do that. Anybody foresee Democrats raising taxes before November?
Another possible solution – start World War III and bomb every other industrialized nation to ruins, leaving American industry the sole survivor. Hey, it worked last time. Don’t think there are no people in Lesko Brandon’s administration considering it.
This inflationary cycle is not like the prior ones. I’m not seeing an easy solution for a soft landing. Maybe someone smarter than me can explain how to do it?
Washington Compost is also blaming ALL of the increase in gas prices on Putin. Good luck with that lefties.
Actually, JD, it is more similar to the 60s and 70s than you think. LBJ started helicoptering money in to pay for Vietnam and the Great Society programs. That continued to the point that Nixon had to drop the Gold Standard. As Em’s friend says, lesser politicians like Nixon and Carter lacked the courage to fix the problem and continued the pain. It took until Reagan found the courage to address things that the dismal conditions prevailed. The pain of the following recession and the politics it created removed all hope of returning to sounder money, though.
nerd, current situation is way NOT like the others. Supply disruption continues to stymie economy. Facilites (around the world, including Asia) are not running at optimum rates (ie lower productivity) because they cannot get enough raw materials. This means thumbnail definition on steroids – prices will not be coming down even if consumers start pumping up their savings. And there is no fix in sight, November or not.
Also, JD, WWIII is not a solution either, other than in history books – US no longer has raw materials to supply the world with widgets.
I think that I mentioned this last week, but two of my trucking company customers, have announced that they are closing down operations. According to them, there are probably another 50 on the bubble.
boss, why can’t your trucking company customers raise prices to cover their costs?
So the troll has “technical recession”, but the economy will continue to grow.
1. 1st quarter growth was negative, that means it shrank, the opposite of grew.
2. “Technically” a recession is two quarters of negative growth. Hence if we are in a “technical” recession the economy will not be growing.
Wish we had a smart troll.
Joe Doakes on June 13, 2022 at 11:11 am said:
. . .
The Fed can raise interest rates which will force home prices down (buyers have only so much money to pay for housing – the more that goes to interest, the less that goes to principal). That will also raise non-housing prices (more expensive for manufacturer to borrow money, higher cost passed along to consumer), which is counterproductive. Not likely before November.
What if the source of the dollars isn’t easy credit, what if the source is helicopter dumps? If that’s the case, raising interest rates won’t withdraw money from the economy, raising taxes is the way to do that. Anybody foresee Democrats raising taxes before November?
. . .
Welcome to the world of Modern Monetary Theory.
The idea behind MMT is that you take the management of the US economy away from the unelected fed governors and give it to politicians. Need a boom? Lower taxes. Inflation getting too hot? Raise taxes.
jdm.
Apparently, they did. Both firms also had trouble hiring drivers, along with the unpredictable fuel costs and additional onerous rules by the ICC, all had a part. I’m usually dealing with the service people, so not sure what drives their management.
Boss and jdm – just wait until the DEF fluid is completely scarce and the trucks can’t run.
https://marketrealist.com/p/def-shortage/
NW, just piss in the container – DEF is a dilute urea solution, nothing more than that. Or just poor water into the tank. I doubt there is a urea concentration sensor on-board, but I do not know for sure.
Even the “Putin Price Hike” is Biden’s fault.
No chaotic, disastrous Afghan withdrawal, no war in Ukraine.
Hey now, MP, Lesko Brandon only authorized a ‘minor incursion.’ He never intended for Putin’s armies to disrupt oil and gas supplies coming up from Texas, or across from North Dakota, or down from Canada.
Damn that Putin!
“Stocks plunged across the board Monday, with the S&P 500 closing in a bear market, after investors digested and fretted over Friday’s hotter-than-expected inflation report. The S&P fell plummeted 3.9%, down more than 20% from its January peak, while the tech-focused Nasdaq dropped 4.7% and the Dow Jones fell 3%. With consumer prices climbing at their fastest rate since 1981, many Wall Street analysts believe the Federal Reserve will hike interest rates more aggressively to rein in rocketing inflation — potentially triggering a recession as a result.”
A bear market is defined as when major U.S. stock indices drop by 20% or more from their peak. The NASDAQ and Russell 2000 meet that standard right now and the DJIA and S&P 500 are teetering on the toilet rim.
But hey, no mean tweets!
The ceiling is caving in on the degenerates, and their J6 circus gambit was a flop.
What to do?
That question scares tf out of me. These reprobates have thrown everything at us, including the kitchen sink…what fresh horror is Schumer & Pelosi crafting as I write this?
Say there Tom — how’s your retirement crypto doing? Crypto is a Ponzi, who knew??? Next they’ll be saying NFT’s are worthless!
Tom wrote: “The ceiling is caving in on the degenerates, and their J6 circus gambit was a flop.”
I can see that I have been too narrow in my focus looking at sedition and insurrection; a very large fraud was also going on. Takes a wide angle lens to take in the full scope.
I’ve listened to a few chats between Summers and podcasters. The “secret sauce” that Summers used to determine that inflation was going to be a persistent problem was the magic of looking at publicly available data about how much goods & services could be produced versus how much money the gov’t pumped into the economy to, supposedly, make for lost economic production during covid.
It is Milton Friedman stuff.
Joe Biden, April, 2020: “Milton Friedman isn’t running the show anymore!”
Fuck you, Joe Biden.
What happened was when the pandemic appeared, the elites decided to lock down because “Milton Friedman isn’t running the show anymore!” They could make up for lost economic activity by printing money!
Idiots. Ain’t fit to manage their own checking accounts.
It is kind of fun watching Biden drive himself off of a cliff.
Last month there were stories about how Biden knew his polls were cratering & taking all the Dems down with him, so he decided that the proper response was for him (Biden) to make more media appearances.
No, no, no, Biden’s handlers advised him. This is not 1990. Let the pro’s do there job with social media, etc.
But Biden, despite all evidence, really believes that the American people think that he is just a regular guy who happens to be president, and, gosh darn it, the more that the American people see of him, the more that they will like him!
Imagine what Obama, an actual skilled politician, thought when Biden piled up this BS in front of him. Obama, first term senator from Illinois, first black man elected president of the US — when Obama was still in his 40s.
Biden, senator from Delaware for 36 years, failed 2x candidate for the Dem presidential nomination, now telling Obama that he had a special relationship to the real America.
Okay.
So this month we have seen a few more interactions between Biden and the media,
It’s embarrassing, Biden slurs his words, he often fails to make a correct sentence, backtracks, and then gets lost and utters nonsense. Biden is clearly suffering serious cognitive decline, Biden’s plan to ramp up his poll numbers is backfiring.
Here is what Biden has to do to avoid electoral disaster in the mid terms.
DO SOMETHING! FIX SOMETHING! DO SOMETHING TO CONVINCE VOTERS THAT YOU KNOW THAT THINGS ARE REALLY BAD AND YOU HAVE A PLAN TO FIX IT!
The thing is that everybody and their grandmother was happy for the free money and the free lunch and 20% house appreciation per year, stocks doubling and tripling and quadrupling and Tesla going to the stratosphere together with crypto going into the millions and zillions. It was crazy to say it mildly.
Now the fun inflation is over and the bad inflation is here.
Powell and Fed have left themselves no out. They claimed they are data dependent. They have to raise 75 bps. The action today, especially in the last hour when the WSJ story broke, seems to suggest that 75 bps is being considered, most likely will happen
If Powell comes out with 50bps and gives a lecture how they will definitely, definitely do 75 if inflation stays at a high level, this Fed will lose even more credibility.
Some people may say they don’t have much credibility to start with but I am not that uncharitable.
rAT unironically squeaked: “Some people may say they don’t have much credibility to start with but I am not that uncharitable.”
LMAO! Who knew lack of self-awareness could be so entertaining? Everyday is a new level of low IQ buffoonery with the rAT!
White House says Biden has sparked ‘historic economic BOOM’ as Dow plunges into bear market amid record inflation, high gas prices and recession fears: Claims Americans ‘are well positioned to face these challenges’ thanks to the President
When you repeat a lie, ahem talking points, some idiots infected with a libturd disease will repeat it ad nauseum.
Ukraine is toast
“After experiencing numerous setbacks during the early stages of the war that began in late February, Russia has made advances in eastern portions of Ukraine as it concentrates more of its efforts into winning in the Donbas region. According to the BBC, Putin’s military is also making gains in southern Ukraine as it tries to create a land corridor between Crimea, which was annexed by Russia in 2014, and areas held by Kremlin-backed separatists. One of those areas is Luhansk, which the BBC reports is now 90 percent controlled by Russia.
This is an artillery war now,” Vadym Skibitsky, deputy head of Ukraine’s military intelligence, told The Guardian on Friday. He added that Ukraine’s troops “are losing in terms of artillery” as its military has “one artillery piece to 10 to 15 Russian artillery pieces.”
Speaking of artillery…about all that hardware Pedo Joe’s handlers have sent to Ukraine;
“High-precision long-range sea-based Kalibr missiles near the village of Chortkiv, Ternopil region, destroyed a large warehouse of anti-tank missile systems delivered to the Kyiv regime from the U.S. and European countries, man-portable anti-aircraft missile systems, and artillery shells for weapons systems,” Russian Defense Ministry spokesman Lt. Gen. Igor Konashenkov said on Sunday.
Russian forces targeted buildings in the Ternopil region with four Kalibr cruise missiles fired from a ship in the Black Sea, according to Ukrainian officials. Four five-story buildings were destroyed and 22 people were injured in the airstrike, according to the governor of Ternopil.”
Well, that’s one way to keep them out of the hands of the Taliban.
At this point, sending Ukraine more weapons is just inflicting more pain on the people to benefit Raytheon et. al. Ukraine is running out of an irreplaceable military resource: Cannon fodder.
Another issue with rising interest rates — the national debt is about to become a lot costlier to service.
Nice to see Dullee quoting Pravda again….
Regarding a possible recession, it’s worth noting that when I took my dad to the ER this Monday for a broken ankle, the tech noted that the slightly long crutches they gave him were the only thing available due to an aluminium shortage. The supply chain issues we’re getting now are not going to be fixed by the Federal Reserve, but rather by Biden undoing what he and Pelosi have done., Otherwise, it’s going to be a long, dismal ride.