You’ll know the tree by the fruit it bears

26 Feb You’ll know the tree by the fruit it bears

Image made be me using Canva

Last summer, I warned you that we were not in a K shaped recovery but rather a K shaped economy.

Wait a minute… I thought ppl’r’ doin’ great…?

published on August 17, 2022

https://www.buzzsprout.com/1125110/11144066
– “Saturday Broadcast 12,” published on August 20, 2022

https://www.buzzsprout.com/1125110/11163035
– “Bonus Episode: ‘The Public Always Forgets,'” published on August 22, 2022

https://www.buzzsprout.com/1125110/11231979
– “Bonus Episode: Is this a Pump-and-Dump Economy?” published on September 5, 2022

Why am I bringing this up? Because you are only just now getting an MSM report discussing the possibility of a K shaped economy taking root. Only just now! This is but one reason why I always say that, IMO, if you wait to be “officially” told something and/or you wait for some talking head in the MSM to finally reveal whatever the overlords allow them to reveal, you are waiting too late. Period. Full stop. Too late.

“Gregory Daco, chief economist at EY Parthenon, told Fortune that he expects to see a ‘K-shaped consumer spending pattern’ this year where working class families slow their spending as the rising cost of living takes its toll, while wealthy families continue to splurge, ‘albeit with more discretion.’

He predicts that consumer spending will rise just 1% this year—after a 2.8% increase in 2022 and a 9.1% jump in 2021—arguing that hiring will slow ‘meaningfully’ and economic uncertainty will increase, making households pull back.

‘We’re still in an environment where high inflation and high interest rates are a constraint on many families. And if you look at household balance sheets, they’re in worse shape than they were even six months ago,’ he said. . . .

Eric Freedman, chief investment officer at U.S. Bank Asset Management, told Fortune that he also believes U.S. consumers are splitting into two distinct groups, but he noted that, overall, consumers’ finances remain in good shape.

‘I think that it is certainly possible that we could get that K-shaped type of spending phenomenon,’ he said. ‘But the evidence right now does not suggest the consumer is in a really difficult spot. We would anticipate that worsening and weakening as the year goes on, but I think it’s gonna have to be a later this year story, as opposed to a right here and now story.'” –https://finance.yahoo.com/news/america-economy-splitting-consumers-two-103000667.html  published February 25, 2023.

Better late than never, I guess.

I don’t mind being a contrarian because if I believe I’m telling you the truth as I see it, it’s worth it. I’ll be vindicated on my RTO predictions as well, although I wish that weren’t the case. Believe me, I wish we weren’t in a K shaped economy either, but here we are. You’ll know the tree by the fruit it bears. If someone is out here smoking hopium and trying to share it with you, be careful with that.

I warned you last year that I saw not a K shaped recovery but a K shaped economy and we’re only just now seeing an MSM source reporting on the same thing. Are you staying ahead of the curve? I hope so.

“Consumer spending makes up roughly 70% of U.S. gross domestic product, so if it does slow dramatically, it will have big implications for the economy and investors. But while many billionaire investors and business leaders believe this means a recession is all but guaranteed, EY Parthenon’s Daco isn’t so sure.

He argues that the outlook for the U.S. economy is ‘uncertain’ and while it could be headed for a ‘mild recession,’ he doesn’t see ‘broad-based layoffs’ as likely. And U.S Bank Asset Management’s Freedman doesn’t foresee an outright recession either.

‘Our economics team is calling for a slowdown, but not a recession,’ he said. ‘We think that it’s going to probably be a longer slowdown, if you will, but not necessarily a deep slowdown.'” -Yahoo Finance, Ibid.

😒

*slips on Unfrozen Caveman Lawyer hat*

I’m not an economist and have never claimed to be. I would say that I have basic common sense and some financial knowledge and, um, I don’t freakin’ believe these fluffy predictions that, IMO, are designed to keep John & Jane Q. Public pacified.

+ Where is the uncertainty? The only reason to say that is to hedge your bets. It’s like when someone gives you risky advice and then says, “But, I mean, like, I dunno. Do whatever you think.” I think we can all see that the economic car has left the highway and is stuck in a ditch.

+ Broad-based layoffs not likely? Is this an analysis of the job market on Mars or what? Broad-based layoffs are ALREADY underway! To me, this is like the folks who told you mass layoffs would hit Big Tech / Silicon Valley but no one else. However they first told you that no mass layoffs were coming at all and then had to walk it back when Big Tech started hemorrhaging. So . . . trust those types of analyses at your own risk.

+ Could be headed for a “mild recession” but then at the same time, “a slowdown, but not a recession” ?  Wut? So much waffling around. Again, this is like, “But, I mean, like, I dunno. Do whatever you think.” A longer slowdown but not a deep slowdown. A slowdown but not a recession. A recession but a mild one. A mild recession but it lasts a long time. 😐 Six is half a dozen but also a number higher than five but less than seven. 3 + 3 equals 6 but then also so does 4+ 2. LOL. So much side-stepping and obfuscating language. Except from me, cuz I’ll tell ya what I really think!

“David Rosenberg doesn’t buy the latest cheerful economic narrative on Wall Street. The veteran strategist and founder of Rosenberg Research argues a recession is inevitable as the Federal Reserve’s rapid interest rate hikes work to slow the economy.

Recent robust labor market and consumer spending data have led some economists to believe in a ‘no landing’ scenario—in which interest rate hikes don’t spark a recession, economic growth continues, and inflation remains stubborn. But Rosenberg says the Fed will continue to raise rates until inflation ‘melts,’ no matter the consequences.

‘The ‘no landing’ narrative is the biggest hoax Wall Street economists have peddled since ‘global decoupling’ in 2008. Follow the leading indicators, not the Pied Pipers,’ he tweeted Thursday.” –https://www.yahoo.com/now/top-wall-street-strategist-david-171410651.html

Yep. You’ll know the tree by the fruit it bears. Who’s telling you the truth? Who keeps you ahead of the curve? Who’d rather tell you uncomfortable truths than fluffy lies? You gotta ask yourself these questions.

“The 2007-08 financial crisis affected many countries simultaneously and led to a global economic crisis unseen since the Great Depression. It was triggered by a proliferation of financial products linked to risky mortgage loans. The crisis seriously called into question financial globalisation, which to a certain extent amplified risks linked to banking activities and financial markets and brought about financial imbalances among leading economic powers.” –https://www.oecd-ilibrary.org/economics/economic-globalisation/the-2008-financial-crisis-a-crisis-of-globalisation_9789264111905-9-en

“Up until now, I have been discussing whether movements in economic activity have or have not decoupled from each other. But whether or not business cycles have diverged, it is clear that the sharp increase in many commodity prices has given rise to highly coincident increases in inflation rates around the world. In industrialized economies, such as the United States, rising inflation has chiefly reflected the surge in energy prices, whereas in developing countries, for which food takes up more of household budgets, rising food costs have been a more important culprit. The reasons for the trajectory and persistence of increases in prices of food and energy this year, as global growth has moderated, are not entirely clear. The upward trend in prices of food and energy over the past several years, however, importantly reflects the pressures posed by rapidly growing demand in developing economies against relatively inelastic global supplies of commodities.” –https://www.federalreserve.gov/newsevents/speech/kohn20080626a.htm  written by Vice Chairman Donald L. Kohn, published on June 26, 2008 – emphasis mine

Wow. Sounds like it could have been written today, except it was the summer of 2008.

Wake up, folks. The time for hot air, hopium, and BS is long gone.