Let's talk about Trump’s economy and your debt...
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What is the overall focus of the episode on Trump’s economy and personal debt?
Well, howdy there, internet people it's Bell again. So today we're going to talk about Trump's economy and your debt. We haven't done a deep dive into the underlying health of the economy lately. And one of you had a conversation over Thanksgiving. That led to a message. And it's probably time to check on things so nobody's caught unaware. Here's the message. Belle, I have a Thanksgiving dinner question that isn't about debate.
How does the host explain a “bifurcated” or K‑shaped economy?
My brother, who describes himself as a non MAGA Republican, was talking about the shape of the economy. He said it wasn't great. He kept talking about a bifurcated economy. And said that while the stock markets were doing well, the underlying economics aren't good. Of course that made me think of you. I'm wondering if a bifurcated economy means a K-shaped economy, or any of the other terms you've used. And what everybody's individual debt has to do with it. He lost me at that point.
What do rising auto‑loan, credit‑card, and mortgage delinquencies reveal about economic health?
Okay. So depending on usage, bifurcated economy could mean a K shaped economy. It means the economy is splitting where some sections do well while others do poorly. We know this as the rich get richer and the poor get poorer. But in this context, what he meant was probably closer to when we talk about the stock market being untethered from reality. What he's probably looking at is the stock market performing like we're in a raging economy, while ignoring various bright red warning signs coming from what he's calling debt. But he's probably talking about delinquency. As an example, subprime auto loan delinquency rates are ridiculously high.
Why are consumer confidence and stock‑market valuations signs of a stressed economy?
These are loans that are more than sixty days past due. By ridiculously high, I mean the highest in more than thirty years. That's a bad sign. Perhaps more telling is US credit card delinquencies of more than ninety days. Reports show that being more than twelve percent in the third quarter of twenty twenty five. We haven't seen numbers like that since the Great Recession. Office commercial mortgage backed securities delinquency rate is high. About the only canary in the coal mine that hasn't fallen is mortgage delinquency and that looks shaky.
What is the host’s final takeaway about the difference between the stock market and the real economy?
This with a backdrop of consumer confidence being on par with the pandemic, and the expectations index being lower than the pandemic. Should be a clear sign the economy is stressed. When the economy is stressed, stock valuations that lead to a buffet indicator of two hundred twenty four point one percent are probably untethered. So the short version here, too late. Is that your brother is using different math, different indicators, and different terminology, but is coming to the same conclusion. The top line numbers people use as shorthand for the state of the economy is are based on speculation and are masking the true state of things. This is everybody's periodic reminder that the stock market is not the economy.
Anyway. It's just a thought y'all have a good day.
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Chapters
5 chapters
1
What is the overall focus of the episode on Trump’s economy and personal debt?
0:01–0:34
2
How does the host explain a “bifurcated” or K‑shaped economy?
0:34–1:12
3
What do rising auto‑loan, credit‑card, and mortgage delinquencies reveal about economic health?
1:12–2:05
4
Why are consumer confidence and stock‑market valuations signs of a stressed economy?
2:05–2:49
5
What is the host’s final takeaway about the difference between the stock market and the real economy?
2:49–3:47
Speakers
1 identifiedMore from Belle of the Ranch
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