S3 E3: Crossing the Macro-Event Horizon

Among several macro-themes I pushed during last January's 2024 Outlook, I note three that are intertwined with the US Consumer:

One) US Consumer cocoon would “harden” amid deflation in “real” Retail Sales.

Two) Consumers would RELY on Credit Cards to “make ends meet,” thus Delinquencies would soar under intensifying financial pressure, thanks to dangerously LOW savings and ZERO “real” wage growth.

Three) A consumer credit crunch would evolve.

BAM, we entered the final phase, so to speak, as the Fed's Consumer Credit data this week revealed a RARE monthly decline in Revolving Credit, which was inevitable, and an “event” I’ve been “anticipating” ALL YEAR!

Throw in some “hawkish” commentary drawn from the FOMC December Meeting Minutes, a stunning mis-read of the ISM Service Sector Survey results, horrific Retail Sales data, and a less-than-met-the-eye Employment Report…not to mention the second largest monthly Import total EVER and resultant BLOW OUT Trade Deficit, at a time when Tariff threats escalate...

...and my “call” for 2025 becomes crystal clear >>> the US has “crossed over” the “Macro-Event Horizon Line” and we are now captive to the inescapable gravitational pull of a Debt Black Hole. This means STAGFLATION and ultimately, more money printing/QE. AKA "monetary debasement in the purchasing power of paper currencies, wealth and income.

In that vein, the bull market in US equity indexes stands directly "in harm's way", as I stated in my most recent podcast (S3 - Ep2). Indeed, this past Friday the market CRACKED.

I discuss ALL of this, in today's podcast.

Chapters

• 0:01 Crossing the Debt Black Hole
• 10:32 Analyzing Economic Indicators and Trends
• 25:01 Impact of Trade Deficit on Economy
• 32:00 Navigating Investment Opportunities in Changing Markets