Here Comes the Re-Recession?

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In a very short span of time, barely 24 hours, my news feed became populated with stories about how maybe the Biden economy — Bidenomics, as the White House quit calling it out of embarrassment months ago — might not be so great, after all.


Well, what took them so long?

Let me show you a few choice headlines.

Yahoo Finance: US economy grew at a slower pace than initially thought in Q1. "The update to the first quarter growth metric 'primarily reflected a downward revision to consumer spending,' per the BEA. Personal consumption in the first quarter grew at 2%, down from a prior reading of 2.5%."

Hey, another downward revision — who'd'a thunk it? But the serious point is that American consumers first depleted their COVID lockdown savings, then maxed out their credit cards, and are now finally starting to pull back on spending. Consumer spending drives 70% of the economy... which brings us to a related story.

NAR: Pending Home Sales Slumped 7.7% in April. "The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – decreased to 72.3 in April. Year over year, pending transactions were down 7.4%. An index of 100 is equal to the level of contract activity in 2001."

People buying homes generate all kinds of positive downstream effects as they fill those homes with new furniture and appliances. Plus, real estate agent's livelihoods depend on sales commissions. When home sales dry up, so do the downstream benefits. 


CNN: Why the Dow has fallen 1,000 points in the last three days. "New economic data on Thursday showed that US gross domestic product in the first quarter was revised lower (1.3% from 1.6%) and that personal consumption is slowing. That’s a sign that economic expansion is cooling."

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But how robust is that economic expansion, truly? Despite the low unemployment rate and big population growth fueled by massive illegal immigration, there are still fewer full-time jobs than there were before the COVID lockdowns. If you subtract Biden's massive deficit spending — inflationary funny money printed up to goose growth — we've been in a recession for almost his entire administration.

I don't care how "robust" anybody tries to tell me the economy is when I read headlines like this one from KABC: Nearly 80% of Americans now see fast food as a 'luxury,' survey says.

Finally, the economy's magic growth hormone — artificial intelligence — might not be so magic after all: This Record Stock Market Is Riding on Questionable AI Assumptions. "I fear the market is paying too little heed to the risks," the Wall Street Journal's James Mackintosh concluded in today's must-read report. "AI may be a big deal, but it’s unlikely to pan out the way people seem to think."


AI stocks, particularly Nvidia, have led Wall Street's big-but-narrow run-up. As tapped-out consumers finally start reining in their spending, earnings at retailers could get hammered. Already, some like Target, have already announced price cuts to try and win back customers. Wall Street is starting to notice.

If the economy truly does take a serious stumble in the next few months, I'll call it "the re-recession" since nobody in the mainstream media has been willing to tell the whole truth about the Biden economy.


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