There’s an unsettling trend emerging that is leaving many Americans feeling discontented.
Despite working a full 40-hour week, the average employee finds his financial situation increasingly untenable. Cash outflows frequently eclipse cash inflows, leading to an overwhelming number of debits compared to credits. How is this possible?
The unemployment rate is currently reported to be 3.5 percent, which is near an all-time low.
With virtually everyone employed and earning wages, one would expect consumers to be thriving, paying down debts and maintaining healthy savings for future needs.
However, the reality is starkly different. Households are increasingly finding it challenging to make ends meet, with expenditures consistently outpacing income. Their financial situations are under severe strain.
Take, for instance, the rate of severe delinquency on auto loans, which has reached its highest level in 17 years. For clarity, severely delinquent loans are those overdue by more than 60 days, while defaults are loans that are over 90 days late. Continue reading
For over four decades, Duane Peters has epitomized the role of “The Master of Disaster,” putting forth tireless effort day in and day out.
This profession has not come without challenges, including numerous injuries like broken bones and dental mishaps. Nevertheless, he has excelled in this demanding field.
His induction into the skateboarding hall of fame in 2015 marked a pinnacle in what has been a tumultuous journey, highlighted by one of the most memorable acceptance speeches to date.
Unfortunately, the last few years have posed significant challenges for Peters, who defied expectations by living well into his 60s.
Like many others, he is striving to navigate life in the landscape of America in 2023.
This week, the yield on the 10-Year Treasury note surpassed 4.3 percent—marking a 15-year peak. Should this upward trend continue along with tightening credit markets, the implications could be far-reaching.
Where to begin? Continue reading
Decades of extreme governmental intervention have resulted in distorted price signals, pushing Americans into irresponsible habits regarding spending, saving, and investing. The fallout from these errors is largely irreversible.
Low-interest rates driven by the expansion of the Federal Reserve’s balance sheet led many to believe they could borrow sums far beyond their genuine capacity.
Currently, the yield on the 10-Year Treasury Note hovers around 4.11 percent. Aside from a brief window last fall, this yield has not exceeded 4 percent since mid-2008, indicating that borrowing costs have reached their highest levels in over 15 years.
The immediate ramifications are clear and should not have come as a surprise.
As borrowing costs rise, the burden of debt servicing simultaneously increases. This is a straightforward reality: Borrowers—including individuals, businesses, and governments—must now allocate a larger portion of their resources to debt repayment compared to a year ago.
For some, this isn’t particularly challenging; they avoided the temptation of the Federal Reserve’s artificially cheap credit. Continue reading
The behaviors of the U.S. economy and financial markets can often seem perplexing. Obvious outcomes frequently do not unfold, while unlikely scenarios may emerge as dominant trends.
For instance, gross domestic product (GDP) growth may occur amidst troubling economic indicators, or a protracted bear market rally could be mistaken for the advent of a new bull market.
Moreover, extreme market interventions by central planners can lead to especially confusing distortions and misleading signals, causing prices to detach from logical expectations for extended periods.
Will Fed Chair Jay Powell manage to guide the economy toward a soft landing?
This is the optimistic view of Marriott CFO Leeny Oberg, who recently stated during the company’s earnings call that it now appears probable the U.S. economy could experience such an outcome.
“Recent trends indicate strong employment figures and heightened expectations for GDP growth,” she noted. “Additionally, inflation appears to be stabilizing, leading many to believe that a soft landing is indeed achievable without a significant downturn.” Continue reading
In conclusion, the current economic landscape presents a paradox. While employment figures appear robust, many households are wrestling with increasing financial strain. Understanding this dichotomy is crucial for addressing the broader financial inequalities affecting millions of Americans today.
