We are smashing through all the records and trading at 30x earnings on AVERAGE (many stocks are higher) and the analysts just keep raising their predictions because - if we're higher now - we are certain to be higher later, right? I don't want to be Chicken Little here - I learned that lesson in 1999 and again in 2007 - no one likes a party pooper - especially one that is right...
Retail Sales this morning came in at 0.1% vs up 0.4% expected by our leading Economorons with core Retail Sales DOWN 0.1% vs 0.3% expected. Not only that, April Retail Sales have been revised from flat to -0.2% - so we can't rely on the data anyway so why worry about it is the proper conclusion? Of course, the weak Retail Sales matches up with the declining CPI and PPI driven, not by lower prices but by Consumers who simply can't even afford the basics anymore. Consumer Borrowing and Consumer Sentiment were also in decline last week - this is NOT a one-off report!
Minus is BAD. Last time we had a minus it was during Covid when we literally barred the doors and WOULD NOT LET PEOPLE SHOP or travel or even get a coffee on the way to work - THAT is how hard we had clamp down on Consumers to get a negative number on retail sales. This is that bad so - RECORD HIGHS, right???
John Stewart's guest on The Daily Show yesterday was Reverend Dr. William J. Barber, who is the Co-Chair of the Poor People's Campaign, which aims to tackle issues like poverty, systemic racism, mass incarceration and militarism (in other words - Republicans) and he's organizing a march on Washington later this month. I know this may be painful for Conservative Members but try listening to what the man has to say:
THIS is what is happening to our economy, the bottom 165M people are collapsing! And, as John Stewart pointed out earlier - that's exactly what the GOP has been saying anyway:
You can't have a "soft landing" if half of your support disintegrates and that is exactly what is happening to the bottom 60% of this country and, no matter how much you hate them and blame them for their unfortunate economic situation - a lot of those stocks you own depend on those people for a substantial portion of their revenues. Yes, it's true, it actually does matter if we let all those poor people die...Reverend Dr. William J. Barber's message about the struggles of the poor and working class in America ties into a broader historical pattern. Throughout history, when societies have neglected and exploited their most vulnerable members, it has often led to instability, unrest, and even collapse.
One of the most famous examples is the fall of the Western Roman Empire in the 5th century AD. While there were many factors that contributed to Rome's decline, historians point to growing inequality and the impoverishment of the lower classes as a key cause. As small farmers were driven off their lands and into destitution, the empire lost a vital source of tax revenue and military manpower[1]. This weakened Rome's ability to defend its borders and maintain order.
Similarly, the French Revolution in the late 18th century was sparked in large part by the immense inequality and poverty of the lower classes under the Ancien Régime. Faced with food shortages, crushing taxes, and a complete lack of political representation, the French peasantry and urban poor rose up to overthrow the monarchy[2]. The resulting instability led to years of chaos and conflict.
In more recent history, the Russian Revolutions of 1917 were driven by similar class tensions. Tsarist Russia was one of the most unequal societies in Europe, with a tiny elite controlling most of the country's wealth while the vast majority lived in poverty[3]. This fueled mounting discontent that ultimately exploded in revolution.
Even the United States has not been immune to these dynamics. In the late 19th century, the Gilded Age saw levels of inequality and poverty not dissimilar to what we see today. This was a major factor behind the rise of Populist and Progressive movements that sought to restrain the power of big business and improve conditions for workers and farmers[4].
While these specific historical situations differed from today in many ways, they illustrate a general principle: societies that allow inequality and poverty to grow unchecked do so at their own peril. When a critical mass of the population feels it has no stake in the existing order, and that the system is rigged against them, it creates a volatile and potentially explosive situation.
Leaders ignore these warning signs at their own risk. As Rev. Barber argues, attending to the needs of the poor and working class is not just a moral imperative - it is essential to the health and stability of the nation as a whole. Societies that fail to do so often pay a steep price.
Citations:
[1] https://phys.org/news/2020-10-history-societies-collapse-leaders-undermine.html
[2] https://www.elidourado.com/p/collapse
[3] https://www.npr.org/sections/13.7/2014/08/19/341573332/lessons-from-the-last-time-civilization-collapsed
[4] https://eand.co/civilizations-collapse-through-neglect-and-ours-is-on-the-brink-f63f99f9c671?gi=b26e25c88706
[5] https://risk.princeton.edu/img/Historical_Collapse_Resources/Tainter_The_Collapse_of_Complex_Societies_ch_1_2_5_6.pdf
Well, the AI has warned you - revolution is coming!