…easy. Or so the song goes (lyrics are from the opera Porgy and Bess).
It’s easy for some, I guess. Like those set to benefit from the markets poised to make new all time highs (S&P 500 anyway, at the time of writing).
(Update, on 6/27 the S&P 500 “squeaked” to a new record high – hurray!?).
And what is the great news triggering the markets to shoot into the stratosphere?
No WWIII, for one (f or the time being at least). And oil appears to not be surging into the stratosphere. But it’s not as if the dust has really settled. But many “investors” with ADHD (helped by Hopium) have concluded the bombing, for now, is done with and there is a cease fire between Israel and Iran. So time to move on!
And speculation is increasing the Fed will cut rates sometime… soon. Oh joyous news that will be (even if the short term rates will do little to help much of anyone, at least in the short term; keep in mind mortgages, for one, are based on long-term interest rates, out of the Fed’s scope).
But maybe there is no real reason other than the conviction that stocks are so close to all-time highs so it’s time to pile in. Generating wealth… for top income tiers… who are really the main beneficiaries of these manic surges.
But really, how about a reality check?
- Starting off, Q1 GDP has just been revised again. Down a bit. Hmm, not exactly great news. At -0.5% that means the economy was indeed contracting.
- Continuing unemployment claims have been steadily rising. They are now at 1.937 million, the highest since November 2021.
- Housing price drops are being reported in certain housing regions, such as the South. Could be good news, but then we get the headline: US New-Home Sales Drop by Most Since 2022 on Poor Affordability.
- Oh, as to inflation: “core” PCE, the figure closely watched by The Fed, ticked up. Maybe not much, but it appears the best you can say is that it is sticky, not disappearing as some had hoped/predicted.
More broadly:
- We hear from both consumers (informally, on social media) as well as from corporate CEOs (Starbucks, McDonald’s, many other fast food franchises) that for growing numbers fast food has simply become too expensive. Remember when fast food wasn’t just about convenience but cost?
- And at least some franchises have started to issue concern. Like Starbucks, with five consecutive quarters of declining sales.
- Consumer debt (principally credit card) remains at record levels.
- There is an uptick in delinquencies in this debt.
- And more consumers are resorting to Buy Now, Pay Later (BNPL) plans. They are being used not just for discretionary items such as concerts (ex. Coachella, where it was found about 60% of tickets bought were on BNPL plans), but also for groceries. That is, for everyday expenses. Note that there is an uptick in such loans becoming delinquent or in default.
- More debt: about one in three student loan borrowers risk default. That is about 5.8 million borrowers who were 90 days or more past due on loan payment, as of April 2025.
- Speaking of college grads, the difficulty of many new grads with degrees like Computer Science in landing a job is getting attention. In some situations it appears that AI is at least partly to blame. Last I heard 1/3rd of software written at IBM is being done by AI.
- Consumer confidence, as tracked by the Conference Board, “unexpectedly” declined in June.
- The list could go on and on. With horrible data for the housing market, for example (with low sales figures and rock bottom affordability). But I will end with this: corporate bankruptcies, where 188 companies filed for bankruptcy in the first quarter of 2025. This figure is the highest seen for this period since the Great Recession, and is a “significant increase” over the 139 filings for Q1 2024.
Yep, a “solid” economy! (adjective used by The Oracle and MSM).
The job market is not close to being “strong” as you will see being stated in MSM (just today, saw an article in The Guardian attempting to answer why college grads are having a difficult time, while the job market is “strong”). Inflation is still around, and paychecks are not keeping up for significant segment of the working population (remember, wages by themselves do not directly transfer to paychecks – hours worked is usually and conveniently left out). And there are signs the economy is not firing on all cylinders.
One word for this: stagflation. The keyword for the Summer of Our Discontent.
By the way, on top of the preceding that “big beautiful (stupid) bill” will end up gutting the safety net (for ex Medicare and SNAP). Some Americans, the most vulnerable, are set to lose big.
Behind the platitude of “the living is easy” there is growing frustration and dismay. But the stock market, as hyped by the machinery of The Mirage, is fantastic. And there you have the current state of America in a nutshell, with winners drowning in “wealth” and a lot of Americans getting screwed.
…..
Some related thoughts:
Much of the preceding would suggest something “big” is in the works. As in some sort of unpleasant financial event. And yet, the can continues to get kicked. More debt! Including even larger deficits that will result from that “big beautiful (stupid) bill.”
Gershwin’s Porgy and Bess is an example of American Genius. It’s not that there aren’t interesting artists and acts in the current scene, but we seem to be bereft of real genius. Instead, for example in many mainstream movies, we get stale rehashings of stories that are being sequel’d to death. (It’s as if a lot of these stories are written by AI; come to think of it, there is talk of incursion of AI into Hollywood… with jobs, including for writers, on the chopping block)
Lastly, a recent blog post from the Federal Reserve, Real GDP Growth by State is quite enlightening, and sobering. 39 of the 50 states saw contracting economies in the first quarter of 2025. Texas and California saw slight contraction, but because of the size of their economies that contraction is very significant.