Concerning: The similarities to 2008 keep piling up!

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Various economic concerns, including a significant contraction in credit impulse, slowing savings, and negative credit impulse when adjusted for deposits. This suggests a reduction in the flow of new credit into the economy, potentially impacting economic growth and liquidity. Additionally, both real and nominal M1 growth have contracted more than during the Global Financial Crisis (GFC), indicating reduced liquidity in the financial system. These factors point to depressed domestic demand, which could result in lower inflationary pressures and potentially lead to a “hard landing” scenario, with adverse consequences for private credit and private equity markets.

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Stock Market Outlook Looks Like 2008, Warns JPMorgan’s Quant Expert

JPMorgan strategist, Marko Kolanovic, warns of looming downturns as the S&P 500 nears his 4,200 target, drawing parallels to the 2008 crisis. He cites challenges like overvalued markets, tech stock gains concentration, and tighter financial conditions, including rising interest rates. With increasing delinquencies in credit and loans, Kolanovic urges caution, noting that current market chatter mirrors pre-2007 crisis.

Surprising Collapse in Personal Consumption in Latest GDP Revision

The U.S. economic outlook darkens as the Bureau of Economic Analysis (BEA) releases revised Q2 GDP data. Personal consumption, a pivotal component of GDP, was a significant letdown. Initially expected at 1.7%, it came in at just 0.8%, a dramatic drop from Q1’s 3.8%. This marked the worst consumer performance since the COVID-ridden Q2 of 2020. Despite headline GDP figures meeting expectations, the underlying data indicates severe consumer weakness. Factors like the resumption of student loan payments, potential federal government shutdowns, and reduced auto production only magnify concerns for impending economic decline.

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Inflation Hits Workers’ Wages as 60% of Americans Are Still Living Paycheck to Paycheck

Amid persistent high inflation and interest rates, 60% of U.S. adults live paycheck to paycheck. With the consumer price index up 3.7% from last year, stagnant wages strain households. The Federal Reserve’s 11 rate hikes haven’t stemmed inflation, severely impacting lower-income individuals. Essential costs continue to rise, and 70% of Americans report financial stress, with less than half having an emergency fund.

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