New York City Government Faces Armageddon as Property Owners Revolt

Steven Van Metre
30 Mar 202418:26

Summary

TLDRIn this episode, host Steve Van Meter delves into the alarming surge in delinquent property taxes in New York City, framing it as a microcosm of broader economic issues in the US. He discusses how the optimism of consumers contrasts with the reality of a potential economic downturn, exacerbated by tightening bank lending standards and declining commercial real estate values. Steve predicts these challenges will lead to decreased tax revenues nationwide, impacting municipal budgets and potentially triggering a recession. Moreover, he critiques the Federal Reserve's response to these issues, suggesting that current policies may not be sufficient to prevent the impending economic difficulties.

Takeaways

  • ๐Ÿ˜ฑ New York City faces a financial crisis as property owners increasingly default on taxes, reflecting broader economic troubles in the US.
  • ๐Ÿ“ˆ Delinquencies in property taxes are surging, expected to jump over 30% to $880 million, indicating a significant drop in municipal revenue.
  • ๐Ÿ›  The commercial real estate market downturn is a major factor, with Manhattan office vacancy rates hitting a record 22.2%.
  • ๐Ÿ”ฅ A 2019 law limiting landlords' ability to raise rents has added financial stress, worsening the situation for property owners.
  • ๐Ÿ’ณ The expiration of tax lien sale programs in March 2022 removed incentives for delinquent property owners to pay their taxes, exacerbating revenue losses for the city.
  • ๐Ÿ’ธ Banks are tightening lending standards, which reduces the amount of money circulating in the economy, leading to higher delinquency rates.
  • ๐Ÿ”ด The Federal Reserve's cautious stance on cutting rates reflects a complex balancing act amid fluctuating economic indicators.
  • ๐Ÿ“ฒ Steve promotes a 30-day free trial for a financial advisory service, claiming it offers superior returns compared to competitors.
  • ๐Ÿ’ฐ Consumer confidence is on the rise, buoyed by cooling inflation and strong labor market signals from the Fed, despite underlying economic vulnerabilities.
  • ๐Ÿšซ Manufacturing activity in the Kansas City Fed's district declined further in March, contradicting the optimism from consumer sentiment and highlighting potential recession risks.

Q & A

  • What is the main issue facing New York City's government according to the transcript?

    -New York City's government is facing a significant problem with delinquent property taxes, which are expected to soar, leading to potential financial distress as property owners are increasingly unwilling or unable to pay their taxes.

  • How does the transcript suggest the property tax issue in New York City is indicative of broader economic problems?

    -The script suggests that the rising delinquencies in property taxes in New York City reflect larger, systemic economic issues, such as declining commercial real estate prices and broader financial strain affecting municipalities across the United States.

  • What impact does the decline in commercial real estate prices have on local government revenues?

    -The decline in commercial real estate prices leads to lower property valuations, which in turn results in reduced property tax revenues for local governments. This financial strain affects their ability to fund services and operations.

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  • What does the transcript imply about the relationship between consumer optimism and economic reality?

    -The transcript suggests a disconnect between consumer optimism, which is increasing, and the economic reality of rising delinquencies and financial strains. This optimism may be misplaced if the underlying economic conditions do not improve.

  • How does the tightening of lending standards by banks relate to the broader economy?

    -Tightening lending standards by banks can lead to reduced credit availability, which may slow down economic activity. This can contribute to an increase in delinquencies and a potential slowdown in the broader economy.

  • What does the script indicate about the Federal Reserve's response to the economic situation?

    -The script indicates skepticism about the Federal Reserve's timing and effectiveness in responding to economic challenges, suggesting that the Fed might be too late in taking actions such as cutting interest rates to address the economic downturn.

  • How are employment and manufacturing activity related according to the transcript?

    -The transcript mentions that despite moderate expansion in employment levels, manufacturing activity has declined. This contradiction suggests that while some jobs are being created or maintained, overall industrial production and demand may be weakening.

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  • What potential future scenario is predicted in the transcript concerning the US economy?

    -The transcript predicts a possible rapid downturn in the US economy, with increasing unemployment claims and a potential recession, highlighting the urgency for preparedness and responsive measures.

  • What is the role of consumer sentiment in the economic outlook presented in the transcript?

    -Consumer sentiment is depicted as a key indicator that might not accurately reflect the underlying economic conditions. While currently high, it may be vulnerable to rapid changes if the economic situation worsens.

Outlines

00:00

๐Ÿ™๏ธ New York's Property Tax Rebellion: A Symptom of Wider Economic Troubles

The video script opens with a focus on a burgeoning issue in New York City, where property owners are increasingly delinquent on their taxes, seeing a significant uptick to $880 million in overdue taxes. This situation is not unique to New York but indicative of broader economic issues within the United States. The segment explains that the decline in commercial real estate prices has yet to fully impact municipal revenues but is expected to do so, leading to financial strain across various municipalities. Additionally, the video critiques the optimism in the economy, suggesting that this confidence may be misplaced as evidenced by tightening lending standards and increasing delinquencies, which could signal a forthcoming economic downturn. The host, Steve Van Meter, hints at systemic issues within the banking system and the Federal Reserve's (Fed) policies, suggesting that these may exacerbate the problem.

05:01

๐Ÿ’ธ Investment Strategies Amid Economic Uncertainty

In this section, Steve Van Meter discusses how, despite economic uncertainties, his platform offers valuable investment insights, boasting successful trades and profits for its subscribers. He introduces two services, CDA Timer Pro and Momentum Timer Pro, which leverage market positions and technical signals to guide investment decisions. The script emphasizes the simplicity and effectiveness of their approach, contrasting it with the often complicated and less successful strategies found elsewhere. The segment also touches on the broader economic narrative, suggesting that while the Federal Reserve and certain market indicators predict continued growth and stability, underlying issues, such as property tax delinquencies and a shaky commercial real estate market, hint at a less rosy reality.

10:02

๐Ÿ“‰ The Fed's Missteps and the Economy's Fragile State

The third paragraph delves deeper into the Federal Reserve's policy decisions and their impact on the economy. It critiques the Fed's understanding and handling of monetary policy, especially concerning credit creation and its influence on inflation and economic stability. The narrative suggests a disconnect between the Fed's actions and the actual needs of the economy, pointing out the potential for a significant downturn if current trends continue. It also highlights the contradiction between optimistic consumer sentiment, driven by perceived control over inflation and a strong labor market, and the reality of tightening financial conditions that threaten job security and economic growth. The segment warns of the impending consequences of these policies, particularly for the labor market and overall economic health.

15:03

๐Ÿ”ฎ Economic Indicators and the Impending Recession

The final segment paints a grim picture of the economic future, pointing out the inconsistency between consumer optimism and the actual state of manufacturing and employment. It references a report from the Kansas City Federal Reserve indicating a decline in manufacturing activity, contradicting the optimistic outlook presented by the Federal Reserve and consumer sentiment indexes. The script suggests that the labor market may soon reflect the economic downturn, affecting unemployment rates and further straining the economy. Steve Van Meter concludes by reiterating the serious implications of the current economic trends, forecasting a rapid onset of recession that could catch many by surprise, underlining the urgency and gravity of the situation.

Mindmap

Keywords

๐Ÿ’กProperty Taxes

Property taxes are levies imposed by local governments on real estate based on the property's value. In the video, the rise in delinquent property taxes in New York City is highlighted as a significant issue, with a forecasted jump of more than 30% to $880 million at the end of the fiscal year. This surge in delinquencies is used to illustrate broader economic challenges within the US, suggesting that the decline in commercial real estate prices and a corresponding drop in tax revenue could be symptomatic of deeper financial strains affecting municipalities across the country.

๐Ÿ’กDelinquencies

Delinquencies refer to overdue debts or financial obligations that are not paid on time. The video emphasizes a worrying trend of increasing delinquencies, particularly in property taxes, as an indicator of broader economic distress. This increase in delinquencies is tied to the overall health of the US economy, with the suggestion that it reflects underlying issues such as reduced consumer spending power and challenges in the real estate market.

๐Ÿ’กCommercial Real Estate

Commercial real estate involves properties used for business purposes. The video discusses the significant impact of declining commercial real estate prices on tax revenues for municipalities. The downturn in this sector is depicted as a looming crisis, particularly for major metropolitan areas like New York City, where the high vacancy rates in office spaces exemplify the struggles facing the commercial real estate market.

๐Ÿ’กFederal Reserve (Fed)

The Federal Reserve, or the Fed, is the central bank of the United States, responsible for monetary policy. In the video, the Fed's role in the economy is scrutinized, particularly in terms of its response to the financial issues at hand. The script suggests skepticism about the Fed's ability to effectively manage the current economic downturn, highlighting concerns over its timing and decision-making regarding interest rates and the broader implications for money creation and inflation.

๐Ÿ’กConsumer Sentiment

Consumer sentiment refers to the overall health of the economy as perceived by consumers, often measured through surveys. The video mentions an increase in consumer optimism, despite economic challenges, citing the University of Michigan's consumer sentiment index. This optimism is presented with caution, as it may not accurately reflect underlying economic vulnerabilities and the potential for a future downturn.

๐Ÿ’กInflation

Inflation is the rate at which the general level of prices for goods and services is rising, eroding purchasing power. The video discusses the relationship between inflation, consumer spending, and wage growth, suggesting that while inflation may be slowing, this deceleration might not lead to improved economic conditions if it coincides with reduced employment and wage stagnation.

๐Ÿ’กCredit Tightening

Credit tightening refers to the reduced availability of loans or stricter lending standards imposed by banks. The video highlights how credit tightening can lead to a contraction in the economy, as businesses and consumers face greater difficulties in securing loans. This contraction is linked to increased delinquencies and economic challenges, suggesting that tighter credit conditions can exacerbate financial difficulties.

๐Ÿ’กLabor Market

The labor market encompasses the supply of and demand for labor, where employees work for wages. The video raises concerns about the strength of the labor market, challenging the notion that it remains robust amid economic turbulence. It suggests that tightening financial conditions and a slowdown in money creation could lead to job losses and higher unemployment rates, contrary to more optimistic assessments.

๐Ÿ’กManufacturing Activity

Manufacturing activity refers to the production of goods in an economy. The video cites a decline in manufacturing activity as reported by the Federal Reserve Bank of Kansas City, presenting it as evidence of a broader economic slowdown. This decline is positioned within a narrative of growing economic concerns, suggesting that a reduction in manufacturing could signal deeper issues within the economy.

๐Ÿ’กMonetary Policy

Monetary policy involves the management of a country's money supply and interest rates by its central bank, in this case, the Federal Reserve. The video critically examines the Fed's monetary policy decisions, particularly its handling of interest rates in response to economic indicators such as inflation and unemployment. The discussion implies that missteps in monetary policy could have significant repercussions for economic stability and growth.

Highlights

New York City Government faces Armageddon as property owners revolt, signaling deeper US economic issues.

Delinquent property taxes in NYC soar, with no incentive for owners to pay, impacting city revenue.

Commercial real estate prices decline, yet to impact municipal tax revenues nationwide.

New York's unique laws contribute to its early experience of the broader economic issue.

Manhattan office vacancy rates hit record high, adding stress to the real estate market.

Rise in unpaid property taxes linked to struggling office market and changes in rent regulation.

Federal Reserve's role in the economic downturn highlighted amidst tightening bank lending standards.

Steve Van Meter criticizes the Fed's late response to economic signs, risking further recession.

Highlighting a debt-based economy's vulnerability when new loans don't offset paid-off loans.

Increase in consumer optimism contrasted with rising economic indicators of distress.

Critique of optimism in the labor market amidst a tightening credit environment.

Connection between bank lending practices and the broader economic health.

Predictions of deflationary trends based on historical financial crises and current economic indicators.

Contradiction between consumer sentiment and actual economic conditions, warning of an impending labor market shift.

Kansas City Fed reports decline in manufacturing activity, contradicting optimistic economic narratives.

Steve Van Meter emphasizes rapid Federal Reserve action as critical to averting deeper recession.

Transcripts

play00:00

this is frightening I'm your host Steve

play00:03

Van Meter and thanks for joining me

play00:04

today and our lead stay New York City

play00:07

Government faces Armageddon as Property

play00:10

Owners Revolt but I want you to

play00:12

understand this isn't an isolated issue

play00:14

with New York City this is a sign and a

play00:16

symptom of much broader and deeper

play00:19

problems with the US economy but yet at

play00:22

this time we're seeing consumers

play00:24

starting to be more optimistic than ever

play00:26

but are there hopes about to be dashed

play00:28

well we'll make the case why they are

play00:30

now it's over to Bloomberg where we

play00:31

picked today's story up with a headline

play00:33

of New York City's government delinquent

play00:36

property taxes sore without an incentive

play00:39

to pay now part of this is indeed unique

play00:42

to New York City which I'll show you but

play00:44

as far as the broad US economy we're

play00:47

starting to see not just a small but a

play00:50

large uptick in delinquencies and this

play00:52

is suggesting that perhaps what's going

play00:55

on here in the US is not as good as many

play00:58

of the political leades want us to

play00:59

believe the economy here is sliding down

play01:02

in a big way as overdue property taxes

play01:04

are forecast to reach the highest level

play01:06

ever jumping by more than 30% to 880

play01:10

million at the end of the fiscal year in

play01:12

June from three years ago that means New

play01:15

York could be bringing less tax revenue

play01:17

since close to half of it comes from

play01:19

property tax collections now this is

play01:22

something we've been warning about

play01:23

that's going to happen to counties and

play01:26

municipalities all over the country

play01:28

mainly because the big decline in

play01:30

commercial real estate prices hasn't

play01:32

impacted them yet in fact we haven't

play01:35

even seen it really hit the books but

play01:37

wait till their tax revenue goes down

play01:39

problem with New York City they're going

play01:40

to be one of the first areas to actually

play01:43

experience what's going on here mainly

play01:45

due to their own laws it's people

play01:47

realizing that there quote no

play01:48

consequences for not paying your

play01:50

property taxes that just can't be

play01:53

allowed to continue and there's

play01:55

partially that is true and just to be

play01:57

sure the rise in unpaid property taxes

play01:59

comes as New York's office Market

play02:01

continues to struggle and this is a

play02:03

problem that's again going to hit every

play02:06

major Metropolis every County every city

play02:09

every government all over the United

play02:11

States when these building values

play02:13

finally get appraise down that means

play02:15

they cannot charge them as much in

play02:17

property tax the issue governments just

play02:19

can't cut their expenses fast enough to

play02:22

deal with a lack of Revenue the overall

play02:24

vacancy rate for Manhattan office Bas

play02:26

stood at whopping 22.2% in November the

play02:29

highest ever on record in fact rent

play02:32

regulated Apartments as we found with a

play02:34

recent New York Bank are also facing

play02:37

stress after a 2019 law sharply reduced

play02:40

landlord's ability to raise rents and

play02:42

since tax Lan sale programs and unpaid

play02:45

property taxes get this expired in March

play02:47

of 2022 and wasn't reauthorized by the

play02:50

city council officials say delinquent

play02:52

owners have absolutely no incentive to

play02:54

pay their debts and under that plan the

play02:56

city was authorized to sell leans on

play02:58

single family homes and condo after 3

play03:00

years of non payment and leans on other

play03:02

property types could be sold after one

play03:05

year to bring in some form of Revenue of

play03:07

course not as much as they wanted at

play03:09

least some now they can't bring in any

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and the issue here isn't just with New

play03:14

York City as I want you to understand

play03:15

this is a broader based issue of

play03:18

problems in the economy that all comes

play03:20

back to the FED but is the Fed going to

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do anything well not at least till it's

play03:25

too late and here we can see the net

play03:27

percentage of domestic Banks tightening

play03:28

standards for commercial industrial

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loans to firms of all sizes and this is

play03:32

critical because in a debt-based economy

play03:34

we have to understand that money is

play03:36

created when Banks lend so when they

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issue a new commercial loan money is put

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into the economy now the challenge is

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when you see a net destruction of money

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that occurs when commercial industrial

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lending contracts when there's none of

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new loans being generated to offset all

play03:52

the principal value of loans that are

play03:53

being paid off that's what we're seeing

play03:55

now and what happens is the delinquency

play03:58

rate that shown in red starts to tick up

play04:01

so here you can see that the banks are

play04:02

tiing lending standards anytime the blue

play04:05

line is above the black line that means

play04:06

less money is being created and sure

play04:09

enough with a lag the delinquency rate

play04:11

goes up in red now this data from the

play04:13

government is on a quarterly basis on

play04:15

delinquencies so we haven't seen this

play04:17

num Red Line go up but you can better

play04:19

believe it's going to go up soon but yet

play04:22

as I said don't ask fed to do anything

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here as pal rerat the FED doesn't need

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to be in a hurry to cut rates that is

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it will be in a big way but something

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play06:15

they forc me to go to seven the fact

play06:17

that the US economy is growing at such a

play06:19

solid Pace the fact that the labor

play06:20

market is still very very strong again

play06:23

this is a fed's case here but you look

play06:25

at New York City and what do you find

play06:27

out people aren't paying the property

play06:29

tax and why don't people pay it is it is

play06:31

it really as simple as they sayy you

play06:33

know what they can't take my property

play06:34

away they can't put a lean on it no it's

play06:36

because people don't have the money that

play06:38

is the underlying issue here that's why

play06:40

we see delinquency rates go up this

play06:43

gives us a strong chance just to be a

play06:45

little more confident about inflation

play06:47

coming down before we take the important

play06:49

step of cutting rates now the reason B

play06:51

is saying this part of the reason

play06:53

consumers are optimistic and at least

play06:55

building in their optimism as I'll show

play06:57

you in a bit is that pal believe they

play07:00

went to a restrictive level of rates and

play07:02

then they just pulled back a little bit

play07:04

which they had planned to if the economy

play07:06

will continue to Roar and take off

play07:08

consumers are starting to buy into it

play07:10

that's dangerous we got some new

play07:12

evidence to say well that's not how it's

play07:14

going to play out but let's take a look

play07:16

at this you look at the yield curve we

play07:18

talk about the FED making bad moves what

play07:21

they did is they forced short-term rates

play07:23

above what the market says they should

play07:25

be priced at now that causes an

play07:27

inversion so what we're looking at is

play07:29

the fact

play08:29

and signs of persistent price pressures

play08:32

because they really are afraid that

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inflation is going to come back in a big

play08:36

way just like it did in the 1970s now

play08:38

what's critical here is pal does not

play08:41

understand how the monetary and

play08:43

financial systems work in fact neither

play08:45

him or his cohorts on the fomc board

play08:48

because if they knew this was about

play08:50

money creation and they're constricting

play08:52

the creation of credit they know that

play08:54

the longer this goes on well the worse

play08:57

it gets we can go back now look at the

play09:00

net percentage of domestic Banks

play09:02

tightening standards for commercial

play09:03

industrial loans to firms of all sizes

play09:05

this against the Consumer Price Index in

play09:08

red shown on a year-over-year rate of

play09:09

change and you can see that Banks can

play09:11

tighten standards for a while because

play09:12

there's a lag of how long it takes for

play09:15

the money that's in the system to get

play09:16

filtered through it and what happens at

play09:18

some point inflation comes crashing down

play09:20

in fact look here during the global

play09:22

financial crisis what happened Banks

play09:24

were tightening standards inflation went

play09:26

up then all of a sudden well turned into

play09:28

deflation and look now the FED says look

play09:30

we believe inflation's sticky we don't

play09:32

think it's going to go down that much

play09:33

and what's going to happen is history is

play09:35

going to be a guide here we're likely to

play09:37

see inflation just fall off an outright

play09:40

cliff and that means the FED Chief said

play09:42

Friday he doesn't see the possibility of

play09:44

a recession as elevated at this time

play09:47

still he reiterated that an unexpected

play09:49

weakening in the labor market well that

play09:51

could change everything and warning a

play09:53

warrant a policy response from fed

play09:55

officials well that's not just a small

play09:58

thing it's a real thing because many

play10:00

people believe the FED follows inflation

play10:02

we make the case that's not true there's

play10:04

virtually no relationship between the

play10:06

federal fund rate and inflation at all I

play10:09

mean there is one but it's so far

play10:11

stretched out there and no one really

play10:12

would believe it that how about this

play10:15

look at what we see as far as continued

play10:17

claims go these do have an impact and

play10:20

the FED believes the labor of Market

play10:22

strong they believe that nothing can

play10:23

crack this again you come back to the

play10:25

creation of money in the banking system

play10:28

and this is the same issue that New York

play10:30

City's facing that's only going to get

play10:32

worse because if there isn't enough

play10:34

money created by the system because

play10:36

banks are constricting credit what that

play10:38

means is that Financial conditions start

play10:41

to tighten there's not enough money to

play10:42

support the labor market and some people

play10:44

lose their jobs then what happens they

play10:47

get an unemployment they find out there

play10:48

aren't more jobs and they stay there the

play10:50

longer they're unemployment the less

play10:52

money they spend on the discretionary

play10:54

side of the economy the more people that

play10:56

eventually lose their jobs because of

play10:58

the lack of money in the economy which

play10:59

is why when Banks tighten standards what

play11:01

happens well continued unemployment

play11:03

claims go up pal says this is about it

play11:05

we're plateauing out the market think so

play11:07

too hang tight that's going to change in

play11:10

a big way but meanwhile consumers are

play11:12

excited because this inflation is

play11:14

helping them not just the customers but

play11:17

the companies as well everyone believes

play11:19

this is going to lead to a huge Boom at

play11:21

Equity prices it means the economy is

play11:24

strong and means a Fed for the first

play11:25

time in history nailed a soft Landing or

play11:28

even a no Landing depending on how you

play11:29

want to call it the reality is they've

play11:31

all got it completely wrong as you're

play11:34

about to see because dist inflation is

play11:36

the word of the quarter in retail that's

play11:38

a good thing for the consumer and all

play11:40

that means is the price you pay just

play11:42

isn't going up as much and that means

play11:44

that retailers believe that you can

play11:47

continue to afford to make those higher

play11:49

payments on those increased Goods of

play11:51

services and as Target CEO went on to

play11:54

say that they rolled out an inore

play11:56

discount brand aimed at budget conscious

play11:58

shoppers just to help them out the

play12:01

reality is people are paying more just

play12:03

not as much and the reason this is

play12:06

something that government gets really

play12:08

behind is when we look at the Consumer

play12:10

Price Index here again in Blue on a

play12:12

year-over-year rate of change against

play12:14

average hourly earnings of production

play12:16

and non-supervisory employees here's the

play12:18

case the government's making look

play12:19

inflation's coming down and your average

play12:21

hourly earnings yes they're slowing down

play12:23

but well they're they're making more

play12:25

than the rate of inflation so this is a

play12:28

good sign this means in fact inflation

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could come roaring back that's the big

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fear you go back to the 70s and what

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happened you saw average hourly earnings

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increase that actually eventually led to

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the big surge of inflation it happened

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again in the mid 70s and then going into

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the 80s look now it's going down not up

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that means of course the notion that

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inflation here is going to resurge is

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highly

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unlikely but what the government can see

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is that ours worked are slowing down and

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that means total comp compens ation now

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we're going to look at average hourly

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earnings multiply by average weekly

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hours production of nonsupervisory

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employees this again in red look at that

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broad deceleration in fact you now when

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you take a look at what happened in the

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70s you see that deceleration led to

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inflation coming down deceleration

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inflation came down deceleration

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inflation came down and what it tells us

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is that inflation is likely to come down

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even more because without the credit by

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the banking system what happens is

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there's just not enough demand of the

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economy more people get unemployment

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they stay on unemployment they spend

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less money ours work continues to get

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trimmed but here's the problem us

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consumers well they think fed nailed it

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as us consumer sentiment jumps to the

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highest level since July of 20121 as

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University of Michigan final March index

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is now up to

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79.4 and that means it jumped from 76.5

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earlier this month suggesting consumers

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are indeed more confident reaching the

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highest say mid 2021 and that matters

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cuz throughout history what we know is

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that if consumers are actually seeing

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inflation cool off and they haven't

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started losing their jobs well their

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optimism that the FED nailed it goes up

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problem is as you about to see isn't

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going to last the 2.9% gain from the

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preliminary ring was the biggest intram

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month increase since August 2022 again

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as consumers get excited here but here's

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what I want you to look at we have

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inflation we have total compensation in

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blue and red resp respectively the same

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chart as before but now let's look at

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University of Michigan's consumer

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sentiment this in green and we can note

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the periods where inflation's coming

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down even though wage growth and total

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compensation is slowing what happens

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consumers start to get optimistic

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because they feel like there's a chance

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they're going to get ahead of inflation

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the problem here is and we can see this

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happen throughout history and now is one

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of the biggest increases in sentiment

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against the decline inflation and total

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compensation the problem something's

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about to change and that my friends is a

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labor market and as you're about to see

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in a big way not only did inflation

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expectations fall sharply as again

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consumers buy into the fact that fed has

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got this so did inflation uncertainty as

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such consumers are now broadly in

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agreement that inflation will continue

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to slow both over the short term and

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long term but what they also believe is

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in the labor market they're listening to

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the fed the fed's telling them look the

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labor market is strong and robust

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nothing here is going to change at all

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the issue as we know it is because we

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can go back and now overlay the

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University of Michigan consumer

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sentiment survey will show that in blue

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this time against continued unemployment

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claims and we can note that right now

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consum are just really optimistic

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because cons uh continued claims just

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aren't surging but we can note that when

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they do and that happens as I showed you

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because lending standards are tight and

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they're staying that way what happens if

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eventually this consumer confidence

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turns around in a big way you can see

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the real link here is the fact that

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consumers are more confident when they

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have a job than when they're not but as

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I mentioned in the beginning of the show

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are there underlying signs of the US

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economy is head into recession well we

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got those from the Kansas City fed this

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week as a 10 District manufacturing

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activity declined further in March but

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that doesn't make sense because

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consumers are more optimistic Target

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says you should be happy about this

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inflation and the FED says well the

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labor market super strong and here we

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see the Federal Reserve Bank of Kansas

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City released a March manufacturing

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survey today according to them well the

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survey revealed that manufacturing

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activity declined further in March and

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get this expectations for future

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activity remain steady of course future

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activity should be going off the charts

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at this rate but notably it's not and

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Regional Factory activity fell further

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March and expectations for future

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activity were again steady but here's

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some of the key things employment levels

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expanded modly mod which doesn't make a

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lot of sense I'll make the case for that

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even as production and new orders

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contracted and over half of firms have

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given midyear wage increases recently

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but fewer plan this year so they hiring

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admits a fact that there is a Slowdown

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here because everyone's buying into the

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narrative but when we look at the

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details you can tell you the labor

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market is going to come Unwound look at

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this volume new orders contraction

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backlog of orders in contraction and

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what did we say happens when you work

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through the backlogs and there aren't

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that many new orders the work week goes

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down so here you can see average

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employee work week that is in

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contraction as well that means they're

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hiring people on the hopes the economy

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turns around but at the rate things are

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going if we continue to see a workr of

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these backlogs and a decline of new

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orders it's only a matter of time we

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could just be months away before we

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start to see a big uptick in of course

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initial an employment claims a continued

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increase and continued unemployment

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claims in the FED not just waiting till

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midye to come one or two times they're

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going to be cut rapidly as the US

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economy spirals into recession again we

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see this in New York City with

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delinquency rates going up we see that

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going around the rest of the country

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it's going to get worse and what's going

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to happen as it always does it's going

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to happen fast and with that I'm Steve

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Van Meer thanks for watching thanks for

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being fans bye

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now

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Economic CrisisProperty TaxesUS EconomyNew York CityConsumer OptimismReal EstateFederal ReserveInflationLabor MarketRecession Risk