Economic Warning: With GDP and GDI divergence, a record-low 10% of companies strong, and 96% of Americans concerned, signs indicate trouble ahead.

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When Gross Domestic Income (GDI) and Gross Domestic Product (GDP) part ways, it’s a red flag. Contrary to popular belief, Fed rate drops often precede stock plunges, signaling economic slowdown. A staggering 96% of Americans worry about the economy, per Intuit Credit Karma.

Unprecedentedly, less than 10% of companies boast strong Altman Z-scores, reflecting a concerning financial landscape. November’s Commercial Chapter 11 bankruptcies spiked 141% YoY to 842, per Epiq Bankruptcy. The 30-day z-score on the $spx indicates a bearish trend.

Amidst optimistic pivots, reality hits: a 100bp or even 200bp cut in the FED funds rate won’t deter the impending default cycle. Massive rate slashes are necessary, as history reveals Fed cuts during recessions, not falling inflation. Earnings dip in recessions, cautioning against hasty wishes.

Gasoline hitting a two-year low signifies economic downturn, warns Societe Generale. The inevitable U.S. downturn looms, emphasizing the urgency for careful economic navigation.


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