The US Economy

[Mori Chu]

Most economists think that some inflation is actually fine / good. Pushing the economy into a recession just to stop inflation (austerity measures) isn't usually a good idea. We can nitpick what exactly Biden has spent US dollars on, but I don't think he has spiraled our economy into disastrous inflation.

[Nodack]

The Fed likes 2%

[In2ition]

It started the excelleration towards it, along with the unending amount of money printing that happened rapidly.

[Mori Chu]

Didn't know where to post this. I think this is a really good thing for Biden and the FTC to do. Working in tech, I see engineers get locked behind these non-compete agreements all the time. They suck.

[In2ition]

For those who do not understand what just happened:

First, Q1 2024 GDP growth slowed to just 1.6% which is less than HALF of the 3.4% Q4 2023 number.

This reading is roughly 50% BELOW Goldman Sach's expectations.

But it gets even worse.

At the same time, the US Core PCE Price Index soared from 2.0% to a staggering 3.7%.

This crushed estimates of 3.4% and further suggests that inflation is on the rise.

We have a weakening economy with rising inflation.

The worst possible outcome for the Fed.

[In2ition]

Sources: Bureau of Economic Analysis, Reuters Federal Reserve

[AmareIsGod]

Dammit!

[In2ition]

Don't worry, Biden is going to raise the Capitol Gains tax.

[Nodack]

Congratulations!

For those who do not understand what just happened:

First, Q1 2024 GDP growth slowed to just 1.6% which is less than HALF of the 3.4% Q4 2023 number.

This reading is roughly 50% BELOW Goldman Sach's expectations.

But it gets even worse.

At the same time, the US Core PCE Price Index soared from 2.0% to a staggering 3.7%.

This crushed estimates of 3.4% and further suggests that inflation is on the rise.

We have a weakening economy with rising inflation.

The worst possible outcome for the Fed.

[In2ition]

Congratulations!

For those who do not understand what just happened:

First, Q1 2024 GDP growth slowed to just 1.6% which is less than HALF of the 3.4% Q4 2023 number.

This reading is roughly 50% BELOW Goldman Sach's expectations.

But it gets even worse.

At the same time, the US Core PCE Price Index soared from 2.0% to a staggering 3.7%.

This crushed estimates of 3.4% and further suggests that inflation is on the rise.

We have a weakening economy with rising inflation.

The worst possible outcome for the Fed.

For what?

[Nodack]

For getting some new ammo to shoot.

[In2ition]

There is something seriously wrong with you. Get help.

[Nodack]

Back at you.

[Cap]

GDP growth has generally been stronger under Biden than Trump, but we should vote Trump because Biden had one bad quarter.

[In2ition]

You mean one bad quarter this year.

[In2ition]

I know I'm going to get some snarky comment by Mori about Wall Street Silver posting, but whatever...

[In2ition]

7% of U.S. Banks at risk of failure, warns major Consulting firm
Elmaz Sabovic
BANKING
May 2, 2024
https://finbold.com/7-of-u-s-banks-at-r ... ting-firm/

As expected in the financial world, Federal Reserve Chairman Jerome Powell announced no interest rate hikes or cuts. However, March’s Consumer Price Index (CPI) rose by 3.5%, surpassing expectations and accelerating inflation.

The sudden surge in inflation is exerting pressure on banking institutions, leading to visible strains such as the significant losses reported by New York Community Bank (NYSE: NYCB) and Softbank Group (OTCMKTS: SFTBY), which may necessitate intervention.

Responding to these alarming developments, consulting firm Klaros Group undertook a comprehensive analysis of 4,000 US banks to evaluate their vulnerability to failure.

[Kryptonic]

I'm more skeptical of banks but not because of the CPI... Which is funny it's acting like it's so bad, however the stock market has responded with STRONG work the last few days. Marches CPI didn't raise 3.5% either... it's 3.5% for the last 12 months. CPI rose .4%.

Straight from the horses mouth.

https://www.bls.gov/cpi/

[Nodack]

I have tried to figure out US economics and only have a slight grasp on things. There is supply and demand. The more demand, the higher the price. The less the demand, the lower the price goes. As I understand it.

Covid hits. The world shuts down everything everywhere. Supplies of anything almost stop. People horde toilet paper, water and baby formula. For a year the world was shut down.

We get through Covid and things open up again. Demand for everything is off the roof. The infrastructure for all that has been shut down during Covid and now has to reinvent itself. Some people got used to just staying at home and working from there and aren’t interested in going back to the office.

Demand is high, supply is low. What did we say about that? Higher prices. How does the Fed handle inflation? They raise interest rates. It always seems to work eventually because as far as I can remember, every Fed has raised interest rates to curb inflation. Inflation was 9% and they got it down to 3-4% after a series of interest rate hikes. The target is 2% I believe so, we are close.

I saw where Biden was complaing that retailers, like grocery chains have kept their prices artificially high and gouging Americans. I read where people can’t afford Happy Meals anymore and that is a bridge too far. I just saw this article that I hope is true because it states that Americans have reached to point where they are cutting back on everything and only getting the necessities now. That has retailers freaking out. Lower demand? What does that mean again? Lower prices?

Retailers jacked up prices and squeezed consumers. They might have just blinked
https://www.cnn.com/2024/05/05/business ... index.html
“A lot of retailers have said that discretionary spending is slowing. People are buying essentials, they’re also trading down in prices and then calling it a day,” Stambor said. “If you want to convince consumers to spend you have to give them a reason to do so. Lower prices are a clear opportunity to drive people into the store or online.”

This seems to indicate to me supply has caught up to demand and the price gouging has gone as far as it can. People are starting to cut back. Retailers are starting to cut prices to lure customers. It seems to me like this is a good milestone in our recovery.

[In2ition]

Corporations are getting used to getting a higher rate of return, and are hesitant to give it back. They will make temporary concessions with a hope to get the rate of return they became accustomed to later. Regardless of party rule, we are screwed by being ruled by corporate interests.