from Rachel Cruze
The High Cost of Cheap Money
by Brian Maher
Daily Reckoning
The stars were once again in their courses yesterday… oil was poured upon troubled waters… the dip was bought.
All was peace.
Following Monday’s sharp unpleasantness, the stock market went trampolining back.
Yet gravity reasserted itself today.
The Dow Jones Industrial Average fell 234 points earthward.
With it came the S&P 500 and Nasdaq Composite.
Kamala On Inflation – Ignoring the Elephant in the Room
by Martin Armstrong
Armstrong Economics
Kamala has a plan to conquer inflation – increase government spending and raise taxes! She has been avoiding the topic in recent speeches, but her past comments can give us some insight.
Before the government passed the Inflation Reduction Act, the largest government spending package in our nation’s history, Harris praised the Build Back Better agenda for working to lower costs for the average American. The Inflation Reduction Act was originally the Build Back Better Act and the Democrats were seeking $2.2 trillion in funding. “And, Build Back Better is not going to cost anything — we’re paying for it. So when we can get Build Back Better passed, and we are optimistic that we will, the American people will see costs actually reduced around some of the most essential services that they need to take care of their basic responsibilities, including issues like child care and elder care, and also preschool,” Harris said.
Used Car & Truck Prices Suddenly Bounce, Inventories Tighten: End of Historic Plunge That Pushed CPI Inflation Down?
by Wolf Richter
Wolf Street
That would be a bummer for CPI Inflation over the coming months.
This may be it, the end of the historic plunge of used-vehicle prices that has unwound 60% of the even more historic price spike during the pandemic. The price plunge, which kicked off at the end of 2021, has been a substantial force in bringing CPI inflation off its highs, and it would be a bummer if that flipped now.
Prices of used cars, SUVs, pickup trucks, and vans that were sold at auctions across the US jumped by 2.8% in July from June, seasonally adjusted, the biggest jump since the surge in early 2023, according to today’s Used Vehicle Value Index by Manheim, the largest auto auction house in the US which runs about 8 million vehicles a year through its auction lanes. The index is adjusted for changes in mix and mileage (red in the chart).
Disney Shares Plummet as Theme Parks Hit Hard by Inflation
by David Ng
Breitbart.com
The Walt Disney Company has warned that its theme parks are facing trouble as record inflation has made a trip to the Magic Kingdom unaffordable for millions of middle and working class Americans. The news sent Disney shares crashing more than 3 percent during the day on Wednesday.
During its quarterly earnings call, Disney specifically cited inflation when it said that its “Experiences” division — which includes theme parks, cruise ships, and other live entertainment offerings — will see a decline in income in the next few quarters.
Disney’s chief financial officer Hugh Johnston said lower-income consumers are being hit hard in the current economy and as a result, are no longer visiting Disney parks like they used to. For the most recent quarter, Disney reported its Experiences operating income fell 6 percent.
Americans Prepared for Lasting Inflation
by Martin Armstrong
Armstrong Economics
Americans are preparing for a prolonged inflationary period, based on new data from the New York Fed. The New York Federal Reserve’s Survey of Consumer Expectations found that Americans are still pessimistic about inflation waning, with no one now believing it is transitory. The median expectation is that inflation will remain at the 3% level in 2025.
The public does not anticipate inflation tapering off in a meaningful way in the years to come. The Federal Reserve is still honing in on that 2% target but the people have lost confidence in its ability to do so. Most Americans see inflation sitting at 2.9% in three years from now, up from the 2.4% estimate in January 2024. Even in five year’s time, the average consumer believes inflation will be above target at 2.6%.
The central bank believes they can meet that 2% target. Policymakers believe inflation will fall to 2.1% by 2025 before finally reaching 2% in 2026. Amid the sell off this week, Chicago Fed President Goolsbee came out and said that the central bank will simply “fix it” if the economy continues to deteriorate.
Kamalaflation: Disney Hiking Streaming Prices as Much as 25 Percent
by David Ng
Breitbart.com
Thanks to the Kamala Harris economy, households will see their Disney streaming entertainment bills soar by as much as 25 percent in the weeks ahead.
The Walt Disney Company announced Tuesday that it is yet again hiking monthly subscription prices across its streaming entertainment services, including Disney+, Hulu, and ESPN+. Effective October 17, the cost of a Disney+ subscription with commercial interruptions will rise $2 to $9.99, which represents an increase of 25 percent.
The same goes for a Hulu plan with commercials.
An ad-free Disney+ subscription will cost you 14 percent more than it used to, with the price going up $2 to $15.99 a month. Hulu without ads will go up $1 to $18.99 a month.
The already expensive Hulu with Live TV will get even more expensive, rising by $6 a month to $82.99.
The Stock Market Rallied, but the Economy Isn’t Out of the Woods Yet
by Helaine Olen
MSNBC
Though Wall Street indexes made something of a comeback Tuesday, recent days have been brutal for investors. The Dow fell more than 1,000 points Monday, following a smaller but still steep drop Friday. After hitting a record high on July 10, the tech-heavy Nasdaq has dropped 13% in less than a month.
This extended drop is prompting increasing calls for the Federal Reserve to cut interest rates. And its critics have a point. The United States economy, seemingly so robust, is increasingly acting as if it’s on the precipice of an economic downturn. But the Fed, still busy fighting a battle against inflation it won well over a year ago, appears to be the last to know.
Yum Brands Faces Sales Dip as Inflation Hits Dining Habits
by Finimize Newsroom
Finimize
What’s going on here?
Yum Brands saw a notable dip in Q2 same-store sales as inflation pushed lower-income Americans to cut back on dining out – a trend hitting KFC hard but benefiting Taco Bell.
What does this mean?
Persistent inflation has made home-cooked meals more attractive, hitting Yum’s KFC division in the US with a 5% drop in same-store sales for Q2, following a 7% decline the previous quarter. Still, Taco Bell offered a bright spot, seeing a 5% rise in same-store sales, surpassing the expected 3.6% increase due to popular new items like Cantina Chicken and Taco Tuesday events. While Yum Brands narrowed its overall quarterly same-store sales decline to 1% from 3% the previous quarter, it was larger than the anticipated 0.2% drop.
Donald Trump Says That a Great Depression is Coming. He is Right.
by Michael Snyder
The Economic Collapse Blog
Do you believe Donald Trump? He is entirely convinced that if we stay on the path that we are currently on we are heading into a “great depression”, and many believe that he is right on target. Unemployment is rising, manufacturing activity is contracting, bankruptcies are soaring, home sales have fallen to depressingly low levels, the cost of living crisis never seems to end, poverty is soaring and homelessness is at the highest level ever recorded. Since Barack Obama first entered the White House, our politicians in Washington have been propping up the economy by adding 25 trillion dollars to the national debt. Now our national debt has crossed the 35 trillion dollar mark, and our politicians continue to spend money at a pace that is absolutely absurd. But despite this tremendous influx of borrowed cash, the wheels are starting to come off the U.S. economy anyway.
This week, everyone is talking about a “recession” because of what has been happening in the financial markets.
Dem Rep. Smith On Stock Market: Fed Should Cut Rates, ‘Inflation is Down Pretty Close to Zero’
by Ian Hanchett
Breitbart.com
On Monday’s broadcast of “CNN News Central,” Rep. Adam Smith (D-WA) responded to the tumble in the stock market by stating that the Federal Reserve needs to cut interest rates and “inflation is down pretty close to zero. And now, you have opposite pressures on the market and I think the Fed should respond and I think they will respond.”
Co-host John Berman asked, “Congressman, just one quick question about what we’re seeing in the markets right now, how do you feel when you look at these numbers drop this morning on what are now global fears about the U.S. economy?”
Smith answered, “Well, I think it’s time to bring interest rates down. I think your analysis of your guests there is spot on. We’ve seen an economy that has been remarkably strong coming out of COVID. They’ve been predicting recessions for several years, they haven’t happened now.