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The Weakening Consumer
Delinquency rates across loan types are increasing as: 1.) debt loads and interest rates / interest expense grow and, 2.) consumers lose their jobs. Further weakening: We believe the consumer will weaken further as: 1.) the Fed tightens monetary policy, 2.) prices for goods and services remain elevated and, 3.) companies continue to lay off … Continue reading The Weakening Consumer
Rates Going Higher. Equities Going Lower.
Coinbase up 12% because the company is cutting staff? They can't cut quick enough as crypto trading falls off. ChatGPT at 145x revenue? There are plenty of Technology companies that continue to trade at 20x revenue. Despite the pronounced pullback in Tech valuations over the course of 2022, there is further room for valuations to … Continue reading Rates Going Higher. Equities Going Lower.
We Predicted Elon Musk’s Behavior
Given the recent Elon Musk drama I point you to our Musk-related articles which include our CEORater CEO Personality Analytics work. In short, Musk is a volatile personality. The Tesla / Twitter drama was all too predictable. CEOs Matter: Elon Musk. GM’s Mary Barra vs. Tesla’s Elon Musk – A CEO Personality Comparison Elon Musk … Continue reading We Predicted Elon Musk’s Behavior
No Soft Landing Ahead
The soft-landing narrative that has started to make a comeback in recent weeks does not make sense. The damage is done. The economic slowing will continue. The global economy is a slow-motion car crash in the making with the U.S., Western Europe and China all suffering the consequences of radical fiscal spending policy combined with … Continue reading No Soft Landing Ahead
Not So Fast. This Won’t Be Quick & Painless.
The 2008 downturn and the current downcycle have similarities as far as investor sentiment is concerned. We believe that investor sentiment will sour early next year as Q4 2022 earnings reports come in. 2023 earnings estimates and stock prices will move lower off of the Q4 EPS reports. Early cycle disbelief. I recall that in … Continue reading Not So Fast. This Won’t Be Quick & Painless.
CEOs Matter: Elon Musk.
I wonder what the Tesla/Elon Musk bulls are thinking now that TSLA shares are significantly off and Musk is distracted by Twitter? Musk is an erratic, volatile personality and getting distracted easily is what such personalities do. We warned you that Musk was not the world's greatest corporate chief (articles below), and certainly not the … Continue reading CEOs Matter: Elon Musk.
Wholesale Used-Vehicle Prices Decline Further
The Manheim/Cox Automotive team released its used vehicle price index through the first 15 days of October. Used vehicle values continued to decline as one would expect. We expect further declines this year and next as we wrote back in early October. Used vehicle valuations and sales are typically a leading indicator as it relates … Continue reading Wholesale Used-Vehicle Prices Decline Further
Is Ford Long For This World?
Ugly design language, cheap build quality (hope you like plastic and dated display technology, see our example at the end of this note), combined with a less than enviable financial position make one wonder if Ford (ticker: F), is long for this world. The same is true for other Auto OEMs that carry large debt … Continue reading Is Ford Long For This World?
The Ticking Consumer Time Bomb
Consumer spending is poised to take a nose dive. Outstanding consumer credit has expanded to approximately $911 Billion at a time when credit card interest rates are approaching 17% and likely to go higher (see chart below, click the caption link to expand the chart). As the Federal Reserve lifts interest rates and pushes the … Continue reading The Ticking Consumer Time Bomb
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