Postcards: These Numbers Don't Add Up, Do They?

Look at the state of the American consumer and other troubling statistics, and it doesn't make sense that markets are at this level, huh? Well, let's discuss the reasons for this...                                                                                                                                                                                                                                                                                                                                                                                                                 Forwarded this email? [Subscribe here]() for more [Postcards: These Numbers Don't Add Up, Do They?]( Look at the state of the American consumer and other troubling statistics, and it doesn't make sense that markets are at this level, huh? Well, let's discuss the reasons for this... [Garrett {NAME}]( Dec 18   [READ IN APP](   Market Update: The Nasdaq is now within shouting distance of 15,000, and we could see the S&P 500 hit 4,800 in the next few days if this frantic buying continues. Oil and gas prices were pushed higher as the Hamas-Israel conflict spilled into the Red Sea and led to a temporary shutdown in the Suez Canal. If ships need to reroute around South Africa, it could add 30% more transit time than moving through the Red Sea. Dear Fellow Expat: If I had the time this week, I’d tour my favorite seven meals in Maryland. The list goes in no particular order: - The Ming Chicken at Joey Chui’s in Lutherville - A dozen Blue Crabs at Ocean Pride in Towson - The Lamb Stew at An Poitin Stil in Timonium - The pit beef sandwich at Pioneer Pit Beef in Milford Mill - The lunch sushi special at Minato Sushi Bar in Mt. Vernon - Spaghetti Bolognaise at Sammy’s Trattoria II in Hunt Valley - A corned beef sandwich at Attman’s Deli in Downtown Baltimore. If I pulled this off in three days, I might qualify for a wheelchair on my Southwest Airlines (LUV) flight home on Wednesday.   Then, I could find the sudden strength to deplane without a wheelchair once I arrived, [like the miracle I witnessed every time]( I returned to [The Florida Republic](. I’ll have to settle for one or two of these locations, as I’m here in Baltimore for my first week with Marketwise (and it’s my brother’s birthday). It’s exciting that we’re getting closer and closer to building the Florida Republic out for the contrarian, tactical, and Floridian approach to markets. That said, if I don’t go to these restaurants, there’s a good chance that one or two of them won’t be around the next time I travel north. This year, more than 20 established restaurants closed in the Greater Baltimore area due to declining foot traffic, higher food prices, and worker retirement, among other factors. This isn’t the only city facing these pressures in the post-COVID era. Trends like these are why so many people are confused about why the markets are sitting near all-time highs while the economic pain remains evident across America. Take a look at these numbers… Then, I’ll explain how this makes sense… and what you can do about it. [Upgrade to paid]( Americans Are Facing Serious Financial Weakness. For Example: - About Two in Five (40.1%) Americans live paycheck to paycheck. ([Forbes]( - The Biden Administration reported that 40% - or 8.8 million of 22 million – student loan borrowers missed their payments in October. ([CNN]( - Roughly 39% of Americans have skipped meals to make housing payments. ([MSN]( - About 37% of Americans plan to spend months paying off Holiday shopping spending. ([Achieve]( - U.S. credit card debt just hit a record $1.3 trillion. ([Yahoo]( - Car payment defaults are at a 29-year high ([NYPost]( - A record number of Americans are working second jobs ([MSN]( - The New York Manufacturing Index is screaming problems lie ahead, with ratings back at a four-month low ([Marketwatch]( - Job openings, the yield curve spread, small business optimism, existing home sales, vehicle sales, temp employment, and hires are all in contraction territory ([EconPi]( - Homes are unaffordable for the average American in 99% of the country. ([CBS]( But the Government Keeps Spending Money (Where?). Just Like… - The Biden Administration has asked Congress for $105 billion for Ukraine, Israel, the border - The Treasury Department is auctioning off $100 billion in 3-, 10-, and 30-year bonds today and tomorrow on top of another $200 billion in short-term loans. (Only 40 nations have a GDP above $300 billion… and we are borrowing more money in two days than the economic output of 173 nations on their own) - Economic Advisor Lael Brainard says that Biden won’t wait to provide free money for 500,000 Americans to buy a new home (in the middle of a supply shortage). ([MSN](. Yes, more free money when home prices are at all-time highs. - The government spent over $1 trillion on Infrastructure and billions on charging EVs. Yet we’ve only deployed one charging station in two years. - Interest on debt has topped $1 trillion, and the U.S. now spends more money than it does on the military. All While the Government Gets Bigger and More Unsustainable. See: - In 1993, there were 69,688 pages in the U.S. Federal Register (pages of laws). By 2020, there were 87,351. - The National Association of Manufacturers released its Federal Regulations study. It determined that the “total cost of complying with federal regulations in 2022 is an estimated $3.079 trillion (in 2023 dollars), an amount equal to 12% of U.S. GDP and larger than the manufacturing sector's entire economic output.” - The government just ran the largest deficit ever for November at $314.01 billion, according to [the Monthly Treasury Statement](. - By 2032, the Federal Debt will be roughly $50 trillion, while unfunded social security and Medicare liabilities could be north of $150 trillion. (Combine the two for America’s real debt.) And Despite All of This, Markets Don’t Care… - The Dow, S&P 500, and Nasdaq 100 ETFs hit new total return highs for the first time since November 2021. (Charlie Biello) - Markets are the most overbought since November 2020 (Syz Group). - About 50% of all stocks in the S&P 500 are in overbought levels. The last time that happened was after the 1991 recession. (Charlie Biello) - Meanwhile, roughly 45% of all equities are likely locked up in passive investment vehicles (run by Wall Street funds), which distort price discovery and amplify volatility. (Temple University) All Because Central Banks Keep Pumping Money - [Michael Howell at Capital Wars]( that his Fed Liquidity figure increased by US$534 billion or 16.6% since the British gilts crisis in October 2022. - China just pumped another $204 billion into its lending facility last week, marking the 13th straight month they’d pumped more money into the system. ([MSN]( So, What’s Are Lessons? - The markets are not the economy… and the economy is not the market… - Americans are getting shafted by their government and the Federal Reserve. - Americans aren’t getting much of the benefit of this market run. The median value of stocks Americans own is just $15,000, and only 58% of Americans have exposure to the equity markets. - Americans are ignorant of how this happened and what they can do about this. I’m still wrapping up my piece on the six big factors that helped accelerate the crisis that we’re enduring today. I’ll aim to be done tomorrow - but fair warning - this will be a much longer read. So How Does This End? It only ends one of two ways. Either the Fed keeps doing their easing and money pumping while pricing out an entire generation of Americans from the housing market and financial freedom… or there will be a massive (and possibly necessary) asset crash. Those are the two options. And you need to be prepared for both scenarios. You only have [ONE CHANCE LEFT]( access the free report: The Portfolio Reset… [as this opportunity goes dark at midnight](. So, [click the link]( and see for yourself why this is the best research team out there and why I joined his team. Now, if you need me, I must eat a Lamb Stew. Stay positive, Garrett {NAME} Secretary of Defense You're currently a free subscriber to [Postcards from the Florida Republic](. For the full experience, [upgrade your subscription.]( [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2023 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()