1/12
In the interview below, I expressed concerns about wage growth. I might be too low!
I detail my thinking in this 🧵
2/12
April wages rose 0.2% (less than expected) to a y/y growth of 3.6% (blue). Normally, this is good news, indicating wage inflation is under control.
However, gasoline is soaring, narrowing the gap (bottom line) to CPI (orange). https://t.co/g6TAgAwf2z
3/12
The Cleveland Fed's Inflation Nowcast shows y/y CPI rising to 3.9% by May (red box), well above the current wage growth.
Real wages (after inflation), bottom panel above, should turn negative, meaning inflation rises more than wages, further dividing the K-shaped economy. https://t.co/NleGTkuWaD
4/12
What does negative real wages mean?
The top panel is the University of Michigan Consumer Sentiment Index. The red part of the line shows when real wages are negative (bottom panel, same as the chart above).
When real wages go negative, consumer sentiment gets crushed. https://t.co/jmJm1qSObH
5/12
Note that consumer sentiment is already at a 74-year low. https://t.co/joJYIn3MkZ
6/12
Trump's overall approval rating (black) and his approval ratings on various issues (colored lines). This is an average of all political polls compiled by RealClearPolitics.
Notice the green line, Trump's approval rating on inflation (aka "affordability") is imploding. https://t.co/CMj9r4UV8Z
7/12
Prices have the public so upset that consumer sentiment, as measured by the University of Michigan, is approaching nearly a one-century low.
Why now? Since the end of COVID, the cumulative increase in prices (blue) is outpacing their paycheck (orange). https://t.co/oeuJnAG55s
8/12
53% likely have no assets (no stocks and rent), so they are not benefiting from the rise in asset prices (booming stocks and soaring home prices).
They have to make ends meet with their paycheck alone, and they cannot.
https://t.co/0Mpew7mVIa
9/12
By the way, the opposite was true from 2009 to 2020, paychecks (orange) outpaced CPI/prices (blue). So those without assets could at least "hold serve." https://t.co/bes4qZv7UG
10/12
What does this mean for markets? Nothing and everything.
Nothing. None of this will impact the rally in assets.
Everything. Ds are leading the generic ballot by almost 6% (bottom panel).
Public unhappiness with prices (aka "affordability") is driving this. https://t.co/NOWCHnyzTQ
11/12
And if you listen to the Ds, they have an answer to high prices: they are going to take your stock/crypto profits away from you via taxes.
Take them seriously.
https://t.co/tU836YMIVR
12/12
For the Rs to have a chance, they need this chart to collapse before the midterm elections.
But you don't need to be a Chartered Market Technician to see that this chart is doing the opposite of collapsing ... it continues to go vertical. https://t.co/jegb4D9ZB6
Someone can certainly *make* a billion dollars. That’s not the same thing as earning.
Growing fast and disrupting markets also often means chasing and wielding market power, political influence, and scale.
Take Airbnb. They heavily lobby politicians against passing housing laws to protect working class residents because it’s bad for their business model.
Airbnb could not exist at its current scale and size without the housing market destabilizations, displacements, and exploits that are supercharging the evictions of working people everywhere from Puerto Rico to Jackson Hole.
Now young people are planning for a future where they will never be able to afford to own a home while others have 20 and live off renting it out to them at extortionate rates with zero protections. Yes, a tiny amount of people can make billions of dollars doing that. And millions of everyday Americans are bearing the cost.
Alert: Only 47% of Americans can cover a $1,000 emergency expense right now, according to Bankrate's 2026 survey. If you are in the other 53%, your first financial move is not investing, it is building a cash cushion that keeps you out of debt when life happens.