Credit Flow Investor

CLEARLY WAGES ARE NOT DRIVING THE ECONOMY!

It’s S&P and wealth effect. Wealth effects are coming off for housing as of this year.

BUT Inflation is dropping…

Gov’t data starting to catch up…Sep equivalent rent is now reflecting falling rents and house prices….

Also we know Oct rents have fallen further.

They rank sentiment and ISM manufacturing new orders high even though sentiment tells me nothing

and manufacturing is now 10% OF ECONOMY.

It is not 1955 anymore when new orders for car parts mattered.

AND THEY WEIGHT S&P AT ONLY 10% ! The 6 months ending August was -2.5%.

This all explains why they have been so off with their forecasts for the last 4 years!

AND economy and especially jobs now slowing despite SPY rising 78% in 3 years!

Idiocracy NOT conspiracy! For me I would love conspiracy, idiocracy is the worst of all worlds.

BUT conspiracy sells and idiocracy doesn’t.

We live in the age of Central Bankers and idiots. They hoped everything would work out for example 2024 and 2025.

AN ominous conclusion is the only conclusion. Because JP is now realizing that SPY rising at such a clip IS NOT SUSTAINABLE. If SPY slows down, economy will be in huge trouble. I think in August the idiot central bankers have slowly woken up to this fact. Hence, the talk of everything being OK while at the same time they know it’s worsening.

They are stuck between a massive stock bubble and a failing economy.

Unfortunately for them, there is now no way out. They have to pause rates in Dec. No drop in Jan.

Getting close to negative…since August DOWN

AND YoY shows point of no return…

To scale it to match, I multiplied real pce by 7.

It’s not a surprise +12% S&P Q3 leads to big GDP Q3 to be reported late December.

Atlanta Fed Q3 GDP estimate is strong 3%+…

Many believe this…

Overdone by perma-bears….empl-popn now 59.7…peak was 60.4 in 2023.

Jobs lost…2.4 M though quite a lot as normally it rises every year!

Christmas hiring down -22% over last year…

77% bad customer rage survey….32% in 1976!

Down -1.1% for last 4 weeks (based on 5d average weekly price).

Below 2% growth…less next year.

Bubbles eventually pop as debt efficiency dies and money velocity falls.

More and more debt is required to keep growing asset prices.

When asset prices stall, growth dies rapidly. Nov. S&P growth YoY in 2024 +32%, 2025 +14%.

So 43% of 14% means 2026 growth … 2%-5%. GLD would be +20% slowing down.

MONEY VELOCITY BOOMED IN 2022…2025 has falling efficiency.