JP Morgan CEO Jamie Dimon: An Economic "Hurricane" Is Coming, and You'd Better "Brace Yourself"
But Don't Worry, Biden Understands Your Pain. He Has "Lived Experience" Or Something.

Gird your loins.

Jamie Dimon warned investors to prepare for an economic "hurricane" as the economy struggles against an unprecedented combination of challenges, including tightening monetary policy and Russia's invasion of Ukraine.

"That hurricane is right out there down the road coming our way," the JPMorgan Chase & Co. chief executive officer said at a conference sponsored by AllianceBernstein Holdings Wednesday. "We don't know if it's a minor one or Superstorm Sandy. You better brace yourself."

Dimon said at JPMorgan's investor day in May that there were "storm clouds" looming over the US economy, but he said he's since updated that forecast given the challenges faced by the Federal Reserve as it attempts to rein in inflation. "Right now it's kind of sunny, things are doing fine, everyone thinks the Fed can handle it," Dimon said.

Ruling Class putzes think that. No one else does.

...

JPMorgan economists last month lowered their growth outlook for the second half of 2022 to a 2.4% rate from 3%, for the first half of 2023 to 1.5% from 2.1% and for the second half of 2023 to 1% from 1.4%.

Along with everyone else, he cites consumer spending as a bright spot.

And as I keep saying: Yes, but how long will consumers keep spending in the face of historic inflation and fears about the economy?

For example: Gallup finds that consumer confidence is crumbling, and is at its lowest state since the 2008-09 crash.

And note that means consumer confidence was higher when the world economy was literally locked down by governments due to a pandemic.

Gallup's Economic Confidence Index is a summary measure of Americans' perceptions of current economic conditions and their outlook for the economy. It has a theoretical range of +100 (if all respondents say the economy is excellent or good and that it is getting better) to -100 (if all say it is poor and getting worse).

The latest results are based on a May 2-22 Gallup poll, conducted at a time of record-high gas prices, elevated inflation, government reports of declining economic growth in the first quarter, and a slumping stock market. Low unemployment is a rare bright spot, but employers are still struggling to find workers to fill needed jobs, which is contributing to ongoing supply chain problems.

...

Confidence was clearly lower than now in February 2009, when the index registered -64 in that month's Gallup survey.

Currently, 14% of U.S. adults rate economic conditions as either "excellent" or "good," while 46% say they are "poor," with another 39% rating them as "only fair." The Confidence Index takes into account the net of excellent and good versus poor responses, which is -32 this month. In April, 20% of Americans rated the economy positively and 42% said it was poor, a net of -22.

Meanwhile, 20% of Americans say the economy is getting better and 77% say it is getting worse, essentially the same as in April and March.

Gallup notes they only sampled consumer confidence infrequently between 2009 and 2017 so it's "possible" there was a period of very low confidence they missed, but, if you look at the generally moderate to decent level of confidence until the lockdown, that doesn't seem likely. No, Joe's got the new record since the crash.

And there's another huge blow to consumer spending coming: the housing market is about to crash.

The housing market just went into correction territory. Now, a correction was needed, I think. The housing market was overheated.

But the pricking of another bubble is the last thing Biden's Miracle Economy needed.

What are homeowners going to do once the correction lops off a solid chunk of their accumulated wealth stored in the value of their home>

Probably not continue spending a lot of money.

Moody's Analytics chief economist Mark Zandi is ready to call it. He tells Fortune that we've officially moved from a housing boom into a "housing correction."

The real estate data rolling in for April and May shows that the U.S. housing market is softening. New home sales fell 19% to their lowest level since April 2020. Redfin reports 19% of home listings cut their price over the past month. Inventory is rising fast, while mortgage applications and existing home sales are also falling.

This drop-off isn't a result of seasonality, or a soft month or two. Zandi says it's a trajectory flip: Demand is pulling back--fast--in the face of mortgage rates that have spiked dramatically.

"The housing market has peaked...everything points to a rolling over of the housing market," Zandi says. "In terms of home sales, they're falling sharply. Housing demand is coming down fast. Home price growth [will] go flat here pretty quickly; we will see [home] price declines in a significant number of markets."

Unlike a stock market correction, which means a greater than 10% drop in equities, Zandi says a "housing correction" means the end of the housing boom and the beginning of a period where home prices will fall in some regional markets. Over the coming 12 months, he expects year-over-year home price growth to be 0%. If that comes to fruition, it'd mark the worst 12-month stretch since 2012. It would also be whiplash for real estate agents and brokers who've watched home prices soar 19.8% over the past year.

This is all by design. The Federal Reserve has a dual mandate from Congress: Keep both unemployment and inflation low. Of course, with the jobless rate at 3.6% and the latest CPI reading at 8.3%, it's obvious which mandate the Fed has shifted its attention to: inflation. In the Fed's mind, if it can end the housing boom, it can slow down overall price growth. That's why the Fed hit the housing market with an economic shock of higher mortgage rates.

The Fed won't be appeased with simply slowing home sales, Zandi says. It will also want home construction to slow. Elevated home construction, which this year hit its highest level since 2006, has put upward pressure on everything from lumber to steel to kitchen tables. If the housing market heats back up before inflation has been tamed, Zandi says, the Fed would simply push mortgage rates even higher. Already, over the past five months the average 30-year fixed mortgage rate has spiked from 3.11% to 5.1%.

To be clear, Zandi doesn't see a 2008-style housing bust or foreclosure crisis.... This time around, Zandi says, we also don't have widespread subprime mortgages. Also, if nationwide home prices do begin to plummet, he says, the Fed could always ease up on mortgage rates.

That said, Zandi says some regional housing markets have become historically "overvalued" and could see home prices decline 5% to 10% over the coming year. If a recession does come, Zandi says price drops in those markets could grow to between 10% to 20%.

Yeah, well, we'll have to see about the "soft landing" in housing prices the Gang Who Couldn't Shoot Straight is trying to engineer.

Of course, all of this delicate surgery, basically cutting off blood supply to parts of the economic body just long enough to calm a fever, but not so long to cause parts of the body to die, is all required because President Magnum P.I. wanted to play Liberal Superman and spend up a huge amount of money to be more popular than Baracky. All of this delicate surgery, which could cause catastrophic long-term debilitation, is necessitated by what these Ruling Class Marxist Incompetents did in their first six months -- with the frenzied cheerleading of the media, the academy, and the whole of the professional managerial class.

And of course the TrueConservative NeverTrumpers, too.

They're all implicated. They're all responsible. They're all culpable.

America is back, baby.

The adults are back in charge.

Biden now says: There is no hope of inflation subsiding.

Don't worry, though, everyone: Biden understands how his disastrous policies are making people feel.

He has "lived experience."

But Don't Worry, Biden Understands Your Pain. He Has "Lived Experience" Or Something.&bodytext=Gird your loins. Jamie Dimon warned investors to prepare for an economic "hurricane" as the economy struggles against an unprecedented combination of challenges, including tightening monetary policy and Russia's invasion of Ukraine. "That hurricane is right out there down the...&topic=world_news"> posted by Ace at 12:01 PM

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