“…The candles flicker…
September 24th, 2019

and dim.”  Back in the 1950’s, one of the most popular crooners, Nat King Cole, sang a song called “The Party’s Over.”  The second verse begins “The candles flicker and dim.”  The economy’s party is definitely nowhere near over.  Unemployment is at near-record lows, homeowners’ wealth has escalated dramatically since the 2008 recession (remember that?), Apple’s market value passed one trillion dollars, Jeff Bezos bought the White House, and interest rates keep going down.  The strong economy probably has a way to run yet before it starts running out of breath.  Christmas spending is projected to be up around 5% this year which is great for the economy.  But back at the party, somebody just cracked the door and a slight zephyr is sneaking in and the candles are flickering just a little.

Another line is “… now you must wake up, all dreams must end….”  They’re not going to end abruptly and they aren’t likely to be nightmares.  But eventually you have to wake up and realize that the party can’t go on forever.  Credit card debt continues to increase.  Good times mean lots of buying, lots of buying often leads to lots of credit card usage.  Total credit card debt is estimated to be higher now (approximately $1.04 trillion) than the 2008 peak.  It will eventually start being paid down to some extent taking money out of the economy that would otherwise be spent (of course it has already been spent and now the bills are being paid but at a time when the economy is slowing).  The attack on the Saudi oil production facilities is probably going to raise gasoline prices if for no other reason than continuing uncertainty over the vulnerability of their oil infrastructure.  Trucking industry shipments have been declining in 2019, an important leading indicator of where the economy is headed.  And then overhanging a large portion of the economy is the trade war with China, affecting multiple industries.

Just a tiny zephyr ….

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