Morgan Stanley Credits ‘Bidenomics’ for Economic Surge
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Public perception is not always based on facts, that's not the same as a real world event. For example, there is a public perception that Republicans are good for the economy and on deficits - that hasn't been true for decades now and yet the myth perpetuates.
The current real world economy is shit,that is a fact.
This is a good point. Bonds were destroyed in 2022 and if not for the Silicon Valley Bank collapse they would have been destroyed again in 2023. At the end of October 2023 the 10 year treasuries were yielding 5% due to all the treasury auctions by Yellen.
The markets are up only because of enterprise spending on AI products. Take away the AI companies from the S&P 500 and 2023 had negative earnings as did 2024 Q1. The market minus the Magnificent 7 has negative earnings and it is up on hopium. That explains all this IRA spending by Biden. Without it the economy would be in a lot worse shape.
I think the real explanation for the negativity for the economy and indirectly Biden is the aggregate inflation since March 2020. I think the Biden theme of inflation falling just makes him look foolish. Blaming voters for their lack of understanding inflation will not help Biden.
I live in the SF bay area and even people here who make a lot of money are always complaining about grocery shopping or eating out and ludicrously expensive it has gotten. Yesterday my friend who works at JP Morgan as a mortgage banker told me he had lunch with 2 friends and 3 burgers, 3 fries and a salad cost $200 before tips. That was probably $80 in 2019.
Completely agree and it does explain the "cover-up" with inflation that even a low-inflation economy by the Biden/Harris administration still feels like a high-inflation economy.
I put a lot of emphasis on the above words "still feels like" for a reason.
I recently met a French business owner who does business in the SF area...he's been doing business in SF since 2007.
He talked a lot about the huge growing gap there between the rich and the upper class...many in the upper class can not afford to live in the SF area or are forced to live as if they're poor to get by.
As he continued talking, these problems in SF had started long before the Obama administration and maybe during the Bush administration. Then I begin to remember my old man's complaints about SF back in the late 1990s during the Savings & Loans crisis...
He would call me up on the telephone and complain about the cost of salad as if he was in cultural shock at what he saw about the wealth and poverty in the SF area. I don't remember the cost of salad he was talking about but I do remember him saying he could have bought 15 bowls of that SF salad at the same cost of one bowl of salad at a restaurant near the Chicago CME.
Fast forward to today, this is a crisis that's been swept under the rug for a very long time and the little guy are not position correctly to be able to adapt to inflation...it kills their investments.
Anyways, he and other French business owners and French immigrants believe Biden or Trump can never fix that "feeling" of a high-inflation economy. Both had an opportunity and it didn't work.
wrbtrader
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That’s wild. I live in New Jersey and eat at restaurants on the shore pretty regularly. We can still get a really good burger, fries and a beer for ~$25 before tip here. And you can’t beat the scenery.
Anyway, the cure for high prices is going to always be high prices. As long as there are enough people willing and able to pay $200 for 3 burgers then that will be where the price stays.
The American economy itself is in very strong shape. Consumers are spending, employment is high, wages are up, and inflation is near optimal. There are no signs of consumers or companies cutting back and that is the real signal that cuts through the noise. The last time I checked 2023 ended pretty strong with S&P EPSs beating in about ~70% of companies, with revenues exceeding estimates in ~65% of companies. There is no reason not to be bullish on America right now.
if you think it's too expensive - don't buy it.
I think the same way. Unfortunately, a lot of people keep saying they're struggling but then continue going out to restaurants, buying cars & trucks, and paying outrageous prices for entertainment...
Mostly at the expense of consumer debt... which continues to grow because people are unable to control their spending.
wrbtrader