- This topic has 15 replies, 3 voices, and was last updated 1 week, 5 days ago by
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https://x.com/RealEJAntoni/status/1856745193246003242
Real wages fell under Biden-Harris and never really recovered.
Inflation still closer to 3% than 2%. Debt exploding, especially in the last few months. We passed $1T in interest payments per year on the debt. For reference, the US collected $2.43T in personal income tax in FY 2024, and another $530B in corporate income taxes.
The good news is that a Republican Congress is more likely to slow the pace of spending increases (it is too much to expect spending cuts). They started in 2022, which is a big reason why inflation actually started coming down, because we now know the Inflation Reduction Act did not reduce inflation.
That being said, deep cuts are needed, and the economy will suffer. Think back to what Reagan inherited in 1980, and what 1981-82 were like. It will be much worse this time.
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https://x.com/RealEJAntoni/status/1856778628417126841h
ttps://x.com/KobeissiLetter/status/1856814001784521106
Deficit for FY24 came in at $1.8T.
At 34% of GDP, cuts to government spending will necessarily be painful.
https://tradingeconomics.com/united-states/government-spending-to-gdp
Incredible that government spending as a percent of GDP remained over 43 for FY21.
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https://x.com/RealEJAntoni/status/1857068509261357530 and now revisions to inflation related numbers. Going to be a bumpy economic ride.
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https://x.com/porterstansb/status/1857057210498453855
Yes. But also the expected result of government deficit spending / money printing. So Trump will be inheriting a double whammy of inflation caused by lower interest rates (an error in traditional Fed governance theory) and increased spending. In addition, I don’t trust the BLS / official government statistics, so the jobs numbers and consumer debt numbers may not be accurate. My guess is that we may be in for a Paul Voelker like interest rate shock to bring prices under control.
Keep in mind that Biden drained and did not refill the Strategic Petroleum Reserve, so an oil shock can be mitigated by more US production, but the US could be vulnerable to a short term shock in energy prices as well.
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https://x.com/bravosresearch/status/1857110313729986980
Mortgage rates are going up even after the Fed cuts. Why? Because people aren’t buying bonds. There’s significant default risk, and the Asian economies are looking for more stable assets (and moving away from the dollar as the world’s reserve currency). Discounted bonds mean increased interest rates. If you have X, the thread also discussed the lower labor participation rate, something I have posted about before.
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https://x.com/FinanceLancelot/status/1857232594334519595
Super nerdy, but pulling liquidity will create bank runs.
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The good news is that labor force participation rates in the 25-54 age group are going up, nearing all-time highs. As the Boomers retire, the overall participation rate is going down.
The double-edged sword of reshoring manufacturing is going to have three effects:
- It will boost GDP as we make more of what we need in America.
- It will cause inflation and rates to increase. It’s expensive to bring back all that manufacturing.
- We will have need for bodies to do all that work. It’s unlikely that 70 year olds will return to the factories. Part of the answer is immigration. As much as the country might want to deport millions of people, it is highly unlikely that America will be able to expel more than Obama and Trump did at their peak. And Biden/Harris let in so many illegal aliens that the sheer number will overwhelm DHS’s resources. I doubt they will deport workers in agriculture, construction or hospitality.
There are 1.19 million “final removal” standing orders of deportation. If DHS deports those along with criminals, I think most Americans would be satisfied.
Audaces fortuna iuvat
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https://x.com/bravosresearch/status/1857085090595000759
It’s 1982 all over again?
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https://x.com/CGasparino/status/1859617665922330990
I was wondering what was happening with money market funds (usual holders of short term securities).
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Interesting statement by the incoming AG nominee Pam Bondi. “The Department of Justice, the prosecutors will be prosecuted, the bad ones…The investigators will be investigated.”
That sort of statement is a career decision. Attorneys generally circle the wagons to defend their own, particularly those in their chosen fields. She will get next to no cooperation from the target community. They don’t generally wish to weed out the bad actors, as might happen in other businesses.
It’s bad enough and difficult enough to pursue this strategy. It is 10x harder when you decide to publicize it. For better or worse, Ms. Bondi’s life is going to get very interesting.
New attorney general pick’s past vow: prosecute the ‘bad’ prosecutors who indicted Trump
The accuracy of Trump’s/Bondi’s position with respect to DoJ and FBI lawyers is almost immaterial. They’re despised at the outset.
Audaces fortuna iuvat
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But…if there is validity in Trump’s antipathy towards the Deep State (not just the part that’s trying to put him behind bars)…then Trump faces an enormously high hurdle, a conundrum that he is almost unilaterally trying to solve.
Republicans push back against Democrats’ claims that Trump intelligence pick Gabbard is compromised
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https://x.com/RealEJAntoni/status/1861924021282988518
https://x.com/KobeissiLetter/status/1861858357440651714
And inflation seems to be following the Carter – Reagan transition model.
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Recession Since 2022: US Economic Income and Output Have Fallen Overall for Four Years
“Cumulative inflation since 2019 has been understated by nearly half. This has resulted in cumulative growth being overstated by roughly 15%. This is a large amount for just 5 years – peak-to-trough drop in real GDP during the 2008 crisis was 4%.”
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Interesting article. During the campaign, lefties insisted the economy was doing fine, often pointing to the stock market as proof. At least half the voters called BS.
Anyone who was purchasing groceries over the last 5 years knew the economy was a mess without input from partisans or Phds.
My own index is the BDBI. (Beeg Dawg Breakfast Index.) My benchmark – 3 egg Denver omelette, potatoes, coffee and toast is roughly double since 2019.
I haven’t trusted reported labor numbers for years, going back to Obama claims how many jobs were created coming out the 2008 recession. Two examples – Obama probably claimed x number of teachers jobs created in a Wisconsin school district. Problem was there were more “jobs” created than teachers. Another was in the construction industry. 3 part time jobs were counted as 3 jobs created, even if all 3 were filled by the same worker at different times.
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Right. Would you rather believe Biden/Harris or your own lying eyes?
Mrs. Mick and I shop regularly. Prices are astronomical. Salaries haven’t budged much. It’s the logical outcome of printing an inordinate amount of money during COVID, which we stockpiled when we couldn’t spend it anyway.
Presto. Ridiculous inflation. And every time I see the official “9% inflation peak” statistic, I just lauuuugh and laaaaaaaaaugh. Because that’s a fiction. I have the same experience that Beeg Dawg has.
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