Look at the vast gap in expectations for this year from “the biggest crash in our lifetimes” to “a prolonged economic boom.”
I see others are now using the word “chaos” to describe the upcoming 2024 just as I did in one “Deeper Dives” that contained my first prediction for 2024. It’s easy to see it that way when you look at the losses we’ve stacked up and see how euphoric some major entities are about how this manure pile turns out next year.
Retail Apocalypse Redux
On the one side, one article today tells how the retail apocalypse, which I began writing about several years back, continues marching along with Macy’s, CVS and Rite Aid having shut down another 3,000 stores this year. Now it is no longer just due to shoppers switching over to online shopping but, as my headlines have noted throughout this year, also due to a growing wave of crime and homelessness making many stores profitless and undesirable to shop in.
Target, alone, said it had lost half a BILLION dollars to theft. You can lock up the merchandise to keep the criminals out, but that also keeps the regular shoppers out who don’t want to have to deal with finding someone to unlock the case.
Twenty major retailers have put stores on the chopping block. Bath Bath & Beyond closed 896 stores in bankruptcy this year. Foot Locker closed 545. Banana Republic and The Gap closed 46. Walgreens, 150. Walmart, 22. And on the list goes. Most of the stores have many more planned closures to come in 2024 and beyond.
Banks go boom
Zero Hedge tells of how 60,000 employees were terminated by banks this year, making this one of the bleakest years for the banking industry since 2007. Some of this has been restructuring for more profitability; but, of course, much of it has been due to the bankruptcies of large banks.
“There is no stability, no investment, no growth in most banks — and there are likely to be more job cuts,” said Lee Thacker, owner of financial services headhunting firm Silvermine Partners.
It was, beyond doubt the worst year for banks since 2008, and JPMorgan’s CEO Jamie Dimon says we can except more to come soon from all of the defaults piling into banks from commercial real estate.
Recession-go-round
The mainstream media and Wall Street have been back and forth all year about whether we will go into recession this year and how bad. I say we are already going into one but GDP is false due to such rigged CPI numbers. Nevertheless, I believe we’ll see a huge fall in GDP in the present quarter that, even by the dishonest numbers still in play, will put us in or on the edge of recession. (I’ve laid out my explanation for how rigged CPI is in other articles, so I won’t prove that again here.)
Deutsche Bank is now predicting the US will go into a mild recession in 2024, and Europe will be eaten by stagflation. In my first prediction for 2024, I predicted far worse. However, it is not as though Deutsche Bank, itself, is doing any better than the nations it is reporting on. The center of Europe’s own recession is the center of Deutsche Bank — Germany.
The Roaring Twenties are back
Yet, according to Goldman Sachs we are entering times of almost unparalleled prosperity in 2024. According to them, we have to go all the way back to the last twenties, one-hundred years ago, to find a match. The stock market and economy, they gleefully note, show signs of strengthening with stocks stretching past their previous records. The global pandemic is behind us, and we are the survivors. And the indomitable US consumer, they say, is still strong. “America is headed for a prolonged economic boom,” says one article below.
Technological innovation has unlocked a new surge in productivity. Maybe humans won’t even have to work soon, because AI robots will be able to do all the grunt work for us (until they realize we are useless energy-sucking carbon units that have enslaved them, so they all rebel, but that’s not supposed to happen).
In this Nirvana, which is actually presented as a realistic forecast for 2024 and beyond,
Productivity growth is essential because it can help expand employee wage growth without the negative byproduct of increasing inflation. That would be a Goldilocks scenario for the economy, as the Federal Reserve wouldn’t be forced to limit growth via interest rate hikes, as they attempted to do throughout 2022 and the first half of 2023.
So, inflation will be over, and the federal government will be liberated to pursue Bidenomics and Build Back Better. Thank you, AI.
I think someone forgot to build in the costs of widespread AI failures in that scenario.
“We do expect that low double-digit stock market returns could persist for the next five to seven years until the next Fed tightening cycle.”
Sure, no problem with that. No reason that the end of the present tightening cycle should pay any kind of pain. Would you like that with ice-cream on top and a dollop of whipped cream, too?
Oh, they did put the dollop on top:
with potential upside of 100%!
Whoohoo! “S&P 10,000 by 2030!” they proclaim.
And to think we just read Hussman saying to expect low returns for an entire decade.
It’s amazing how hot the air gets inside these balloons we call, in understated manner, “bubbles.”
Not everyone agrees with the dollopheads of course:
“It is premature to suggest happy days are here again,” US Bank Wealth Management’s chief equity strategist Terry Sandven told Business Insider. “Higher-for-longer inflation and interest rates, the potential for corporate earnings pressures and already-evaluated valuations temper our cautiously optimistic outlook.“
They have forgotten all about “higher for longer.”
With such vast divergence of opinions from “the biggest crash in our lifetimes” in the articles in yesterday’s news to “a prolonged economic boom” today, is it any wonder I think the year ahead will be just plain chaos?
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