Tough Choices Are Coming for Many Americans

Editor's note: Longtime Empire Financial Daily readers will likely remember our friend and colleague Joel Litman, the chief investment strategist over at our corporate affiliate Altimetry... Joel is a forensic accountant and CPA who has lectured at Harvard, Wharton, and the world's top CFA societies. He has developed a methodology for analyzing companies' financial statements, […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] Editor's note: Longtime Empire Financial Daily readers will likely remember our friend and colleague Joel Litman, the chief investment strategist over at our corporate affiliate Altimetry... Joel is a forensic accountant and CPA who has lectured at Harvard, Wharton, and the world's top CFA societies. He has developed a methodology for analyzing companies' financial statements, making dozens of adjustments to uncover their true earnings and financial health. Here at Empire, we're overall bullish on the economy and stock market... but that doesn't mean we aren't paying attention what smart folks on the other side of the argument are saying. As such, we're sharing this warning from Joel on something that could lead to volatility ahead... --------------------------------------------------------------- Tough Choices Are Coming for Many Americans By Joel Litman --------------------------------------------------------------- [This rare market event has happened only FOUR times in 123 years]( Just FOUR times in the last 123 years, a massive surge has sent this one market sector soaring. According to one Wall Street legend, we could be headed for a FIFTH and FINAL mega-rally... with a chance at 10x returns. [Click here for details](. --------------------------------------------------------------- It might be time to revisit your budget... For most of the pandemic, the U.S. government found ways to keep money in consumers' pockets. If you kept up with the headlines back then, you can probably recite the list by heart. Stimulus packages kept spending strong, companies happy, employment high, and interest rates low. It was the opposite of what would happen in a recession. And while it propped up the economy for years, we're now seeing a key sign that the 'easy money' era is over... Starting October 1, student-loan payments will resume for almost 27 million borrowers. The average borrower owes about $400 per month. So many consumers will have to make some tough budgeting choices. These folks haven't had to worry about student loans for the past three years, which means this will be a big adjustment. Analysts believe more households could fall behind on credit-card and other loan payments as a result. The macroeconomic environment is getting worse across the board. --------------------------------------------------------------- Recommended Link: [Concerning America's Currency Reset...]( It isn't happening in a vacuum... Every country of economic importance – i.e. places like the United Kingdom... Mexico... Canada... Japan... and France – are developing their own FedCoin, which could impact over $1.25 quadrillion in global assets. Is your portfolio positioned, accordingly? Because whenever currencies undergo a "reset," profits tend to be stratospheric. To prepare for FedCoin's deep impact on society, [click here](. --------------------------------------------------------------- Today, we'll dive into why this change is adding stress to the already troubled U.S. consumer... and why the effects could be far-reaching. Consumer balance sheets were looking great... And the same was true for corporate credit. Starting in March 2020, when the government paused student-loan payments, delinquency rates started falling for almost every form of consumer credit. Many rates trended toward record lows. For instance, credit-card delinquency rates fell from nearly 10% in mid-2020 to as low as 7.5% in September 2022. Auto-loan delinquencies fell from more than 5% to less than 4%. Student-loan delinquency rates fell the most. They had been above 11% for most of the 2010s. By late 2022, they had dropped below 2%. Take a look... Unfortunately, that trend couldn't last forever... Times are getting tougher for borrowers, including those with student loans. Again, before the pandemic, more than 11% of student-loan borrowers were already more than 90 days late on their payments. Economists and Bank of America (BAC) expect that pattern to pick right back up when the pause ends. That will almost immediately add $167 billion in delinquent balances back to the U.S. economy. The kicker is, rising delinquency rates will put pressure on everything else... When student-loan payments were paused, it drove delinquency rates down. So it makes sense that as those payments pick up, so will delinquency rates. This is going to put pressure on the entire economy. It will send other types of loan delinquencies higher... And it will hurt retail businesses. As folks spend more on debt repayments, they'll have less money for discretionary spending. Keep an eye on all kinds of consumer delinquency rates in the coming months. As they start rising, credit issues will worsen. We may even see the retail landscape deteriorate. These are all signs that we're not out of the woods yet. Regards, Joel Litman Editor's note: Joel sees a potential crisis looming that will affect a tidal wave of money on Wall Street: $50 trillion – including hundreds of stocks, even household names you recognize and possibly even own. And worst of all, he says Wall Street knows this crisis is coming... they just haven't told you yet. That's why Joel is holding an urgent online briefing tonight at 8 p.m. Eastern time to share the full story so you don't get blindsided by what he says is coming. It's completely free to attend, but you must reserve a spot in advance. [You can do so here](. --------------------------------------------------------------- If someone forwarded you this e-mail and you would like to be added to the Empire Financial Daily e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2023 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 1125 N. Charles Street, Baltimore, Maryland 21201 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](