CELENTE: Stocks See Gains, Average Americans Still Struggle
There's a widening gap between Bigs and We the People of Slavandia
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While the Dow posted its longest winning streak since December, the plantation workers of Slavelandia—people that used to be called middle and lower class—are on a losing streak.
Week after week, the data shows the disconnect between Wall Street and Main Street. In this edition of The Trends Journal, we note the latest Gallup Poll that shows how inflation is eating away at the hearts, minds, souls, and pocketbooks of Americans.
Yesterday, the New York Federal Reserve released a survey of apartment renters that shows only 13.4 percent of them believed they would earn enough money to buy a house.
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Yes, as the Dow posted its longest winning streak of the year, the wish to buy a home survey hit a record low. And making a bad situation worse, apartment renters expect rents to increase by 9.7 percent over the next year… as their earnings can’t even keep up with inflation.
Over in Canada, the Bloomberg Nanos Canadian Confidence Index reports that “Canadians are feeling gloomy about their personal finances—and Generation Z is the gloomiest of all,” and the index hit a new low since they started the survey 16 years ago.
And, as we have noted, businesses, especially the fast food/junk food industry are feeling the consumers’ pain with sales of McDonald’s, Starbucks, KFC, Taco Bell and others on an earnings slump. Some of this is also a result of their pro-Israeli stance, which has hurt sales in some foreign markets. But the downside picture is much broader.
“Tyson Shares Fall as Beef Business Struggles” is a headline story in today’s Wall Street Journal. They go on to note that Tyson, America’s largest U.S. meat supplier, said its beef business was softening and that “The company, a bellwether for the U.S. meat industry, forecast a bigger operating loss for its beef business this fiscal year—between $100 million and $400 million.”
Why? Mostly because people can’t afford beef and are eating chicken. And droughts and shrinking herds have made the situation worse.
The bottom line, however, is that consumers are stretched thin and the economy is headed for Dragflation: Declining economic growth and rising inflation.
Office Building Bust
Again, this is only one of the major segments of economic despair on the near horizon. Two of our Top Trends, OFFICE BUILDING BUST and BANKS GO BUST have been ignored and when they are reported by the media, they are downplayed or played as a game, such as this headline in today’s WSJ: The Office-Market Meltdown Comes for Trump’s Prized Wall Street Building. The Manhattan office tower has lost tenants and has a big mortgage bill coming due next year.
They note that “Trump’s office tower at 40 Wall Street is getting swept up by the worst storm to hit the office market since the global financial crisis,” and like thousands of other U.S. office buildings, 40 Wall is now under duress because of weakening office demand.”
Yes, a megatrend that we had forecast back in May of 2020 when politicians launched the COVID War and people were told to work from home. After being in their home day-after-day, week-after-week, month-after-month and year-after-year, commuters realized how they were wasting their lives and money away by commuting back and forth to work… and would not do it anymore.
Leaving the City
Then there were those who escaped the big cities and moved to the suburbs and ex-burbs and worked remotely because they were afraid COVID would kill them.
On the business side, firms with hundreds of employees realized they did not need all their people working in small cubicles that they never saw and would save a lot of money by cutting office space.
WSJ notes that Trump’s office “vacancy rate has risen to 21%, compared with about 5% in 2015. Drugstore chain Duane Reade, one of 40 Wall’s largest tenants, recently vacated its office and retail space in the building, leaving 23,000 square feet empty on the ground floor.”
Yes, as we had forecast, the fewer commuters, the more businesses that depended on commuters would be going out of business. But again, this goes unreported in the mainstream business media because they are in the business of artificially inflating terrible economic news, so the equity markets keep rising.
This year, nearly a trillion dollars of outstanding property loans will mature according to the Mortgage Bankers Association. This is a 41 percent increase from their earlier estimate, since the holders of the loans, knowing they could not be paid off, extended the loans in 2023.
They call this extending of loans the extend-and-pretend strategy. The holders of the loans are pretending that interest rates will go down and they will be able to bail out the bad loans. But that has not happened. And even when interest rates do drop, they will be much higher than when these offices were built or bought.
TREND FORECAST: The economies in much of the developed world are on the cusp of Dragflation: Declining economic growth and rising inflation. When the BANKS GO BUST, the equity markets will crash and so will the global economy.