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Good Things Gone Bad
For the longest time, the case for a "soft landing" in the US revolved around the notion that household balance sheets were generally strong and that "excess" savings (a legacy of the pandemic) would serve as a buffer against a severe contraction in consumer spending.
I've explored virtually every side of that debate in these "hallowed" pages at one time or another. Part of me harbors serious doubts about the notion that the same Americans who, famously, can't cover an expensive emergency witho
This has all been making me dizzy. Marco or Harnett, soft or hard, and toss in the gamma rallies and 200 point 5 minute red candles, I can say my confidence is damaged.
Taxes would be an obvious solution… and, contrary to rate hikes, they can be targeted. But, alas, everyone hates taxes so much, woe to the politician who try to raise them…
Don’t forget the surge in consumer credit. So far in 2022, we have seen four of the five largest monthly increases. Furthermore, that doesn’t include BNPL. This factoid may just be anecdotal, but i don’t think I have purchased anything online this year without being offered a payment plan. And now even my credit cards (Amex and Chase) are both offering “plan it” options. I remain of the view that even the aggregate data will soon show the consumer hitting a brick wall. I also think unemployment will jump but that is less clear.
CL – Great point.
Yes, in fact, I believe PayPal gives you the option to pay in installments for a Heisenberg Report custom t-shirt in the shop. So, no need to buy it all at once! We’ll ship you the collar first, then the sleeves, and so on, until you have the entire shirt by next summer.
Hopefully, this type of payment structure/delivery of goods doesn’t start applying to mortgages. Otherwise, me and the family will have to make some tough decisions as to which parts of our house we’ll want to cram into until the bank ships the rest of it over the next 30 years.