Article: Recession on the Horizon? 
Is it Baked Into the Cake?

Peer Reviewed Politics™: Not sure if anyone is paying attention, but after the Pandemic, the unemployment rate has been falling since April 01, 2020, whereas the Trump administration had put into effect policies that controlled and brought down the unemployment rate after the pandemic.  It drove down unemployment rate from its highs of 14.8% during the height of the pandemic to 6.2% in February 01, 2021, after Former President Trump had left office.

This was the fastest unemployment recovery of any president in the history of the United States.  A lot of policies (removal of regulations) the were left unchanged for a while by the Biden Administration during the first half of Biden’s Administration’s term.  Even with the high inflation, which was caused by the Biden Administration from the frivolous spending, the unemployment rate still continued to drop, but not as fast as it did under former president.  Biden Administration and congress policies ended up adding more to the debt with the uncontrolled spending.  Congress and the president started to spend more and more money in 2021 and has continued into 2024 on everything from Covid, the war in Ukraine, and more whereas this spending had slowed down the pandemic recovery and the drop in unemployment.

In the first 6 month of the Biden Administration, the unemployment rate dropped only 1.1% as compared to the Trump Administration unemployment rate drop of 8.0% from April 01, 2020 to October 01, 2020.  Even after a lot of spending after the pandemic to get the economy back on track, the unemployment rate from October 01, 2020 to February 01, 2021 continued to drop from 6.8% to 6.2% when democrat spending was starting to get out control in the House and Senate.

Since Biden took over the Presidency on January 20, 2021, the unemployment rate has continued to drop, but spending became a lot worst, which basically caused the worst inflation our country has seen in more than 40 years, since the Carter Administration.  Inflation has recently has slowed down some, but inflation continues to adds up to be a 20.4% increase, since the beginning of 2021 when President Biden took office.  When compared to Former President Trump total inflation of 7.7%, which was during a pandemic. Biden administration inflation was more than 12.7% than Trump’s inflation for 4 years. Biden term is still not finished, either.

Even with all the spending and inflation, the unemployment rate had continued to very slowly to drop from January 20, 2021 (6.2%) until April 01, 2023 (3.4%), but now all the spending and inflation has finally caught up with the good economic planning by the Trump Administration policies and the low unemployment rate.  This is because consumers now have much less money in their bank accounts due to inflation, according to bea.gov.

The most recent personal saving rate data for May of 2024, the overall U.S. consumers personal saving rate was at 3.9% versus 19.3% when former President Trump left office.  Personal savings since the year 2000 had been hovering around 5.0%, whereas before 1999, the savings was closer to 10%.  Now that inflation has taken its toll on consumers and businesses, we are now starting to see increases in the unemployment rate and business laying off people and closing up stores.  On April 01, 2024, the unemployment rate was 3.4%, now the unemployment rate is at 4.1% in June 01, 2024.  This is due to people spending much less money and businesses making less profits.

In recent news, Walgreens is closing a huge number of stores and laying off people.  The retail giant hasn't divulged any exact figures, but it advised on Thursday, June 27, 2024 that it plans to shut down "significant" amount of stores, which are under-performing across the nation.  It's part of an ongoing optimization strategy Walgreens is planning on taking.  Walmart has already closed six stores, so far this year.  These closed locations were in California, Maryland, Ohio, and San Diego.  Best Buy plans to close 10 to 15 stores by 2025 and this decision adds to the closure of 24 stores in 2023 and 2024.  Dollar Tree, which owns Family Dollar, is closing stores in the first half of 2024 too, with an additional 370 set to close upon their lease expiration.  According to the Family Dollar, mismanagement, poor store conditions, and competition from other discount retailers, besides inflation has impacted Family Dollar’s customer base and profits.  Rite Aid is closing many locations due to financial difficulties exacerbated by the COVID-19 pandemic and fierce competition.  The Gap and Banana Republic stores are reducing their real estate footprint and are enhancing its online presence.  The Gap and Banana Republic are also struggling with declining sales.  Macy’s is planning on shut down approximately 150 under-performing U.S. stores through 2026, including 50 locations in 2024.  Neiman Marcus is closing some of its Last Call outlet stores following bankruptcy restructuring.  Victoria’s Secret has closed a bunch of stores and plans to close a total of 50 stores in 2024.  Victoria’s Secret is struggling with a lack of sales in this tough consumer spending atmosphere. Party City has closed over 30 stores across the United States in 2024 due to lack luster sales.  The Body Shop, a British cosmetic chain shut down its operation in the U.S. and has closed its website too, due to very significant decline in sales.

According to seekingalpha.com, in recent weeks, the spread between 10-year and 3-month constant maturity U.S. Treasuries has been rising, which points to the likelihood the downward trend in the recession probability's trajectory may soon reverse.  Recession Probability Track shows the recession probability hovering between 67% and 77%, while the Federal Funds Rate has been held at an average of 5.33%.

Peter Berezin, a chief global strategist at BCA Research said, "The consensus soft-landing narrative is wrong.  The US will fall into a recession in late 2024 or early 2025.  Growth in the rest of the world will also slow sharply."  Peter Berezin stated that Rising unemployment could ultimately lead to consumers reducing their spending to build up their "precautionary savings," and that will happen as consumers ability to borrow money narrows due to rising delinquency rates.

Peer Reviewed Politics analysis of consumer spending and inflation seems to be spot on with BCA Research and other analysis.  What we don't agree on with what analysis are claiming, "if interest rates don’t come down, this will result in the downturn in the economy." We believe if the Fed reduces the interest rates to try and stop the down turn in the economy, you will see inflation once again rise during the down turn.

We believe the problem is baked into the cake, because of what the Biden Administration did when they came into office and then implemented their bad economic policy, cutting energy production, and spending like there is no tomorrow.  Sorry to say, its going to take more than cutting the interest rate to fix this mess that the Biden Administration caused.

• Attribution: Peer Reviewed Politics™ | Media Attribution: Article - Peer Reviewed Politics™, Data Attribution - seekingalpha.com and Peter Berezin, a chief global strategist at BCA Research, BEA.gov | Author(s): @TeaPartier_Al  - Twitter | Date: October 03, 2022 | Duration: 00:00:00 | Photo/Video Credit: Graphs: Recession Probability-Political Calculations, BEA.gov

Video: SEC Chair Gary Gensler: Use Caution with Celebrity Endorsements of Investment Products

Transcript:

SEC Chair Gary Gensler: “Celebrities and influencers often are endorsing a variety of products and services across television ads, social media or print, on everything from clothing, diet plans to perfumes.  It catches our attention. We always wondered, did they use the product?  Did they like the product?  How much were they paid to endorse it?  In any case, what does this have to do with the Securities and Exchange Commission?  Sometimes celebrities endorse investment opportunities like crypto tokens or special purpose acquisition companies.  Celebrity endorsements, though, don’t mean that an investment product is right for you, or even, frankly, that it’s legitimate.  Even if a celebrity endorsement is genuine, each investment has its own risks and opportunities that may not fit your investment needs.  Furthermore, a celebrity or influencer’s incentives aren’t necessarily aligned with yours.  We might enjoy watching a celebrity playing on a basketball court, starring in a reality TV show or a movie, or performing to a large crowd at a stadium show.  We shouldn’t confuse those skills though, with the very different skills needed to offer appropriate investment advice.  So before investing, please do your research.  Consider the investment’s potential risks and benefits in light of your own financial goals.  Search a company’s finances, organization, and business prospects through the Securities and Exchange Commission’s database called EDGAR.  And when it comes to crypto, remember, many of these are highly speculative assets.  You may be wondering if it’s right for you or even if it might be a scam.  If you have questions about investing, check out our resources at Investor.gov.”

• Attribution: Peer Reviewed Politics™ | Media Attribution: Air.TV | Author(s): SEC Chair Gary Gensler - Internet video - Twitter | Date: October 03, 2022 | Duration: 00:02:05 | Photo/Video Credit: Twitter

Video: CNBC’s Kernen to W.H.’s Bernstein on Reckless Spending & Inflation: ‘No Way You Could Sell This to Me with a Straight Face’

Transcript:

KERNEN: “Joining us now White House Economist Jared Bernstein.  He’s a member of the President’s Council of Economic Advisers and a friend and longtime guest here on ‘Squawk Box.’  And I — I look forward to having you on, Jared, because we could be — I think of us like at a bar saddling up to a bar and just — because we can talk that way about things.”

BERNSTEIN: “That’s a nice — that’s a very nice image.”

KERNEN: “It is.  And I kind of — you know, some of your colleagues come on, and I don’t really get anywhere.  But — but with you, I think you’re in on it.  I think you know what’s going on so that I can be really —“

BERNSTEIN: “Where are you going with this?”

KERNEN: “I’m going to tell you where — I’m going to tell you where I’m going with this.  Here we go.  It’s been a brutal couple of weeks for the market, obviously.”

BERNSTEIN: “Yeah.”

KERNEN: “Awful inflation numbers.  Now the likelihood of a hard landing, maybe even a global recession, according to some...

• Attribution: Peer Reviewed Politics™ | Media Attribution: Air.TV | Author(s): Joe Kernen, Jared Bernstein - Interview - Squawk Box | Date: September 26, 2022 | Duration: 00:02:28 | Photo/Video Credit: CNBC

Video: Dow Nears Closing in a Bear Market as Investors Fear Fed-Caused Recession: ‘Even Some Optimists Are Throwing in the Towel’

Narrative:

CNN financial reporter Matt Egan delivered some dire reporting on the U.S. economy Friday as the Dow Jones was “flirting with closing in a bear market” for the first time since March 2020.

CNN Newsroom anchor Ana Cabrera introduced the report by noting President Joe Biden just spoke highlighting “some of his economic wins, making some more promises should his party stay in control.”

Peer Reviewed Politics™ Commentary: We officially ended up in bear market territory today. The Dow Jones fell 486 points or about 1.6%, to 29,590 on Friday, September 23, 2022. The market has fell to 18-month low.  The Fed has raised interest rates four times in a row now, which is the biggest interest rate hike since 1998, but inflation continues on without any break.  There is some good news, the average bear market lasts for about 289 days, but then again we have an election coming real soon, which could change things.

Stakes are High! If Republicans, fail to take 2/3 rds of the Senate and the House of Representatives, you won't see much getting done, as Democrats will continue their fight and will continue to push their losing economic and green deal plans on America.  Whats likely to happen? Legislation will fail on both sides, there will be a stalemate, and nothing will get done for another two years while the American people will suffer.

• Attribution: Peer Reviewed Politics™ | Media Attribution:  | Author(s): Ana Cabrera, Matt Egan - -  | Date: September 23, 2022 | Duration: 00:02:08 | Photo/Video Credit: Mediaite / CNN