Rolling US Economy Into The Shitbin Thread

Gift link ^^. Article is about increasing credit card defaults, especially among young people.

It’s still so wild to me that “most people struggling” is a fucking epistemological break that well-off liberals just don’t believe these days. We truly live in a sick age.

The article provides the reassurance we need in these unsettled times:

Wall Street has so far brushed off concerns about rising credit debt levels and payment struggles, forecasting earnings growth to accelerate from 5.6% in the first quarter to 17.1% by the fourth quarter.

But it also ends with a warning from an expert who understands how we should view these rising credit card delinquencies:

“If our forecast of a benign moderation in the labor market is correct, we think consumer spending will remain resilient,” wrote Michael Gapen, Bank of America Global Research analyst. “However, elevated credit card delinquencies among lower-income consumers could increase the sensitivity of these consumers to an adverse labor market shock.”

Truly spoken from the heart, Mr. Gapen.

The most minor of minor shitbinnery (relating to food prices, specifically) but I buy boxes of Clif Bars to have at work and noticed a couple weeks ago that they weren't being restocked and had a 'DISCONTINUED' label on the shelf underneath and I'm like, what's that about, and I found out what that was about when the shelves began to be restocked with the same size boxes for the same price except now there are five bars per package instead of six and each of the bars are noticeably smaller than before, and well

https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fgns8tc2oof3d1.png

You love to see it (Mondelez says so).

Ugh.

https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fgns8tc2oof3d1.png

The FBI raided the offices of mega-landlord Cortland Management over algorithmic price-fixing that keeps apartments empty and raises rents across the country. I don't like Matt Stoller, but he's got a good write-up about it.

More grist for the mill:

Washington Post reports that “Average hourly wage growth accelerated sharply in May, to $34.91, up 4.1 percent from the previous year. Wages have consistently beaten inflation for nearly a year, boosting American workers’ standard of living after years of wages falling behind inflation.”

Gift link: https://wapo.st/3x6r36s

here we go?

rate cut when?

i think ppl/the markets are making way too big a deal out of this, similar to the yield curve inversion a couple years ago. the sahm rule (3 month moving average of unemployment increases by 0.5ppt from recent low over 12 months) is fine to look at, but imo it depends a lot on what the "recent low" is. and in this case it's 3.5%, which is insanely low, basically a historical aberration. the current unemployment rate of 4.3% is also very low; before 2017 the last time we had such low unemployment was in 2001.

nothing like a global pandemic to throw off expectations based on historically reliable indicators.

another thing is like, we've all kind of lost sight of this given that the last two recessions were so extreme, but historically and internationally many recessions have been mild and short. negative growth of like 0.2% for two or three quarters, unemployment goes up to 5-5.5%, inflation gets back under 2%, followed by a decent recovery--that sort of thing happens all the time. it's still bad, fed should cut at next meeting, etc. but it's a far cry from into the shitbin

Japan’s Nikkei down 12.5% in a single day today…

How ugly was that Japan close you ask?

TOPIX: -12% - worst day since 1987
TOPIX Banks: -17% - biggest one-day loss on record
Nikkei: -12% - worst session since 1987

Fun times.

— 𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 𝐌𝐚𝐫𝐤𝐞𝐭 𝐇𝐲𝐩𝐞 (@EffMktHype) August 5, 2024

So, uh….

AI bubble popping

i'm moving all my assets into artificial blood. i hear it could be BIG!

how can one bad u.s. jobs report send the world into a tailspin?

Well, also stuff like this:

https://nymag.com/intelligencer/article/wall-streets-usd2-trillion-ai-reckoning.html

Which leads to stuff like this:

https://www.cnbc.com/2024/08/05/nvidia-super-micro-computer-lead-ai-trade-carnage-with-both-stocks-down-more-than-12percent.html

tech stocks are not the cause here, but they are vulnerable to a contagion.

The market sell-off, explained pic.twitter.com/wf4v9IuYH5

— Trung Phan (@TrungTPhan) August 5, 2024

times like these i invest heavily in popcorn

intel is not an AI stock but the CEO is tweeting scripture, which is not historically bullish.

you have to have a CPU in all those AI machines. it might not do all that much, but it's there!

Warren Buffett disclosing that Berkshire sold half of its Apple shares over the past quarter hasn't helped.

the government is a sucker! that's my conclusion after reading this story:

https://www.wsj.com/health/healthcare/medicare-extra-payments-home-visits-diagnosis-057dca8b?mod=hp_lead_pos7

Millions of times each year, insurers send nurses into the homes of Medicare recipients to look them over, run tests and ask dozens of questions.

The nurses aren’t there to treat anyone. They are gathering new diagnoses that entitle private Medicare Advantage insurers to collect extra money from the federal government.

A Wall Street Journal investigation of insurer home visits found the companies pushed nurses to run screening tests and add unusual diagnoses, turning the roughly hourlong stops in patients’ homes into an extra $1,818 per visit, on average, from 2019 to 2021. Those payments added up to about $15 billion during that period, according to a Journal analysis of Medicare data.

Nurse practitioner Shelley Manke, who used to work for the HouseCalls unit of UnitedHealth Group, was part of that small army making home visits. She made a half-dozen or so visits a day, she said in a recent interview.

Part of her routine, she said, was to warm up the big toes of her patients and use a portable testing device to measure how well blood was flowing to their extremities. The insurers were checking for cases of peripheral artery disease, a narrowing of blood vessels. Each new case entitled them to collect an extra $2,500 or so a year at that time.

But Manke didn’t trust the device. She had tried it on herself and had gotten an array of results. When she and other nurses raised concerns with managers, she said, they were told the company believed that data supported the tests and that they needed to keep using the device.

“It made me cringe,” said Manke, who stopped working for HouseCalls in 2022. “I didn’t think the diagnosis should come from us, period, because I didn’t feel we had an adequate test.”

Other nurses interviewed by the Journal said many of the diagnoses that home-visit companies encouraged them to make wouldn’t otherwise have occurred to them, and in many cases were unwarranted.

lol dmac

a lot of tech layoffs are sort of performative - for instance, 'laying off' positions that aren't even filled - but the Intel layoff looks genuine

it’s mostly just vibes. i don’t think this has much/anything to do with ai; hasn’t fallen much and it’s market cap is still up like a trillion dollars over the year. nikkei is crashing because boj is jacking rates to stop its currency from falling further. it’s most likely just panic over weakening us economy but every leading recession indicator except unemployment is pointing in the opposite direction

*nvidia hasn’t fallen much

I think it’s exciting for bears to finally have some fun after ages of watching the bulls walk around confidently while wearing no diapers whatsoever

Like caek alluded to I there’s some strong encouragement of “contagion” even if this really is just about the nikkei correcting - tech bears especially have every reason to laugh it up and hope for things to go all to shit

Nikkei is going to open up 10% going by futures.