stevenkesslar

Further evidence of a robust economy:
U.S. economy was hotter than previously thought, new GDP data shows
STOCKS.APPLE.COM Fresh data released Wednesday shows U.S. economic growth in the third quarter was even better than... No recession in sight

U.S. gas prices are falling and could hit the cheapest Thanksgiving day price since 2020
WWW.CNBC.COM Gas prices have fallen for nine weeks now on a seasonal weakening of demand and a drop in crude oil prices. Gas prices are falling. We're having our lowest Thanksgiving gas prices since 2020. All good news for inflation since gas prices are built into other costs including transportation, air fare, etc. In Colorado, you can find gas below $3.00 a gallon. Definitely helping me save money. 

Agreed.
I'll respond first with a personal comment, about one of those people I know.  Probably 50 % of the writing I do is emails to one of my nephews, who I have always had a weird intellectual relationship with.  He is cursed to have scored in the top 1 % on the ACT test for scientific reasoning.  The bad news for me is we are both cursed with being interested in really boring shit.  And he is smarter than me, to boot. His Mom nailed it when I just spent a week in Chicago with them.  She said, "I didn't understand half of what you guys were talking about.  But it was cute."  This is why most of the boring shit we say is in boring emails to each other.  It gets boring.
So the emails this week started with Dumb Money.  Which is a very good new movie that is kind of like The Big Short, about the GameStop short squeeze.  Most of the emails that movie generated have been about politics.  And how Millennials (my nephew is one) and Gen Z tend to view the world.  What the movie does a very good job of portraying is this TikTok meme that jumps out in the trailer above:  that a few older rich White male fat cats (Seth Rogen???!!!) have it all.  And the rest of us are fucked. Totally fucked!
To the degree that is true (spoiler alert:  young STEM degree workers in Silicon Valley, who may live in the most Asian American House district in America, are not totally fucked) it is most true because, like my nephew, there are a lot of Millennials and Gen Z who would like to own homes.  But can't.  At least based on my family and people I know, I don't think the basic problem is income.  The basic problem is that in places like Portland, Oregon people with working class incomes (me, in the 90s) used to be able to buy affordable homes.  And now they can't. 
That is slightly less of a problem in Texas.  Which is why lots of young people move there.  I have another nephew who lives there, who recently did buy a home.  Although Austin ain't cheap.  All of this is because - wait for it - a huge number of people have a shitload of money to buy homes with.  If we were all poor and broke, this would not be happening.  (See Depression, The Great.)
So, again, I agree with you.  This site is mostly older and more affluent people who hire escorts.  Dumb Money, which was written in part by a Millennial woman who is a former WSJ financial reporter, does a better job of channeling the "we're fucked!" vibe.  With more than enough annoying TikToks and rap songs and needle drops to prove it.
That said, I'll close with a few paragraphs trashing the "we're fucked!" premise.  I know nothing about Hollywood.  But Sony, a global conglomerate, probably figured you can't make a successful film about investment people who are all assholes.  And boring ones to boot.  So they infused the movie with moralism.  Just like The Big Short kinda sorta tried to make Brad Pitt and Christian Bale not be complete assholes.  At the end of Dumb Money there is a line that claims that Keith Gill, the father of the GameStop short squeeze, started a "movement" that is growing.  Presumably of young people taking on the rich fat cats at hedge funds who short companies like GameStop.  
I think it's almost all total bullshit.  Like a lot of "sky is falling" headlines today.  Probably in part designed to sell movies and newspapers with populist themes and hysterical claims.  Keith Gill himself said this:
My opinion is he is no Warren Buffet.  GameStop was losing like $7 a share in 2020 and 2021, when this happened.  So if there was a "movement", it was definitely not young people being Young Warren Buffets, and starting a movement for true value investing.  Arguably, it was a social media movement.  More TikTok than Wall Street Journal in nature.  But if that's true, what it mostly said is that Millennials and Gen Z want in.  Meaning they want in on capitalism.  And Robin Hood was one of their tools to do it. 
They also want in on homes.  One of the reasons home values probably won't crash is I have way too many nieces and nephews who want to own a home.  Or, in some cases, a second home.  The sky is not falling.  The American Dream is alive and well.

You are correct. The average person spends 3 years in Assisted Living (which Medicaid does not cover) until going into a nursing home (which Medicaid DOES cover).  As I age my plan is to give my money away to family until I am left with $400k to cover Assisted Living.  Medicaid will kick in when I'm transitioning to a nursing home.  An irrevocable trust is also something to look at since a nursing home cannot touch those assets.  You just need a very trustworthy person to control the trust

Here it is a year and a half later. My sister-in-law is now 86 and stays in her suite now full time except when she wanders at night, sometimes going into someone else’s room. She is living in a fog but is still relatively healthy and gets excellent care. My brother goes to see her most days.
He is 81 but not in great shape. Conceivably he could die before she does. I don’t think my nephew will go to see her in that case except occasionally. He has two teenagers in school, a working wife and lots of work on his hands bringing  in the bread..
Getting old with Alzeimers is one of the worst ways to go, not just for the victim but their family as well.

I've looked at the eligibility criteria and to actually benefit from the policy you have to be in really bad shape in terms of not being able to perform the activities of daily living. We're talking not being able to make a bowel movement independently. Most old folks are not and will not be in that situation, and thankfully so. 
My view is that it's best to self-insure by investing. In addition to standard retirement money, have a separate bucket set aside for elder care. You likely won't need the money until your 70s or 80s so it should be 100% stocks and no bonds.

One "problem" is that you are often required to use a "preferred provider" with the insurance company. My mother suffered a debilitating stroke in 2016; she was rendered, as by the Victorians, a "helpless invalid". Fortunately, we had the financial wherewithal to keep her at home for the remaining six years of her life.  Although I was  "on duty" 24/7, the staffing cost, two shifts of home health aides, and, in addition, physical, speech and occupational therapist, and  a registered nurse, was staggering. The home health services covered by Medicare and her BCBS Plan F Medicare Advantage plan were rudimentary.

In America, long term skilled nursing works for two classes: the Uber-rich and the indigent.
Government does not pay for it unless you’re in the latter. You have to have nothing, zero, zilch, no house, no property, no retirement no savings. Don’t worry - you don’t have to actually take responsibility for unloading things when it all gets to that point. They’ll just take it once you’ve paid the last bill you can.
Good thing we can be spared the worst sort of life and rely on the autonomy of choice with assisted suicide.  
Wait. What?

The thing that is also interesting, and somewhat inexplicable, is that when it comes to inflation the US is doing so much better than  (name a country on the planet Earth.)  Right now escaping the misery of inflation is increasingly a good reason to live in America.
Current inflation rate:
United Kingdom  8. 7 %
Australia  7 %
Germany  6.4 %
Euro Area  5.5 %
Mexico 5.1 %
India  4.8 %
France 4.5 %
Canada  3.4 %
Russia  3.2 %
United States  3 %
This does suggest that the causes of the post-COVID global inflation spike are ............. well ............ global.  Last year when inflation was peaking the US was in the middle of that list of major nations.  Pretty much everybody was sharing the misery.  Now the US appears to be recovering from the spike quicker than most of the rest of the planet.
The good news on inflation probably helps explain why the looming US recession has been MIA for about a year now.  Europe is on the brink of recession.  And high energy prices seem like a logical thing to blame that on.  While US gas prices are still relatively high, they are down from a national peak of almost $5 last Summer to $3.57 now.  That's one thing that could be fueling an apparent soft landing. 
This is all good news.  The stock market sure seems to think so. 
We may be climbing a wall of worry.  But we still have to climb out of an inverted yield curve, which almost always ends in a recession.  (In 1966 it didn't, so there is hope.)
 

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Here's the positive thing about what you are doing, Auggie.

It's always good for someone to see the downside of everything.  You're good at it, Auggie.  Mike Wilson at Morgan Stanley is better.  He probably predicted about 1,010 of the 3,830 recessions predicted in the last year. 
Wall Street’s biggest bear Mike Wilson is now predicting an end-of-year stock rally is ‘more likely than not’
The only scary thing to me is that the guy who has been wrong the most for the longest is now saying it is blue skies ahead.  Hope he is right for once!
But let's put voodoo prognostications aside and channel our inner Warren Buffets.  It's all about long term value. It's all about gradual wealth accumulation.
I'll say this two different ways.  One down to earth, and one snobby.
My Dad, a conservative who ran his own small business as an architect,  instilled in me the value of investing, and owning a home.  When my Mom and him died, both almost 100, about half their net worth was in their home.  That is true for most working class and middle class Americans who own homes.  It is why owning a home is, was, and will be part of the American Dream.  And a huge stabilizer in the US and global economy.
Now here's the elitist part.  You're not a very good conservative, Auggie.  If you want to talk the CEO of GE Capital into starting multi-billion dollar home lending programs for working class and minority home buyers, it helps to have that whole conservative schtick down.  You know.  About climbing the ladder through hard work.  Investing.  Buying a home.  Building wealth gradually.  A few other things that help are having a boss known as the mother of the anti-redlining movement, and having the Chair of the Senate Banking Committee on your side.  It also helps when the CEO, Greg Barmore, is a capitalist who believes in capitalism.  And the ability of his company to help middle class and working class America build wealth gradually.   All of this was my reality.  And it is why in the 1990's we had this sweet spot where working class and minority net worth went up gradually and significantly.  Thanks in large part to people being able to buy homes.
You are right about asset bubbles, which is a whole story in itself.  But, basically, the subprime lenders spent roughly 2003 to 2006 figuring out how to royally fuck up lending concepts that had worked well for about 15 years, by being greedy and stupid.  Don't blame working class families for that.  Blame AIG, Countrywide, and Bear Stearns.  I've always been curious how Washington Mutual and GE Capital morphed from the sane lenders I knew in the 80's and 90's to the subprime lenders of 2005.  But I think it was mostly about greed and ego.  That's what former WSJ reporter Bethany McLean argued in All The Devils Are Here, the Bible of the subprime/Wall Street greed debacle.
I have a friend in SF who is kind of the poster child for what you describe.  A bit over a decade ago he bought a condo in SF at exactly the right place at exactly the right time.  The value of his condo went up like a rocket ship.  Then, in 2020, thanks mostly to COVID and people wanting to move to the burbs or Sacramento, his condo was exactly the wrong place at the wrong time.  Was it a bubble?  Maybe, maybe not.  This much is true, though.  Even after a huge drop in value, like six figures, the condo is worth way more than he bought it for.  Had he kept renting, which he did for the first decade I knew him, he would be far, far, far worse off financially today.  Especially in SF, where rent is insane.  I was a renter in SF for a decade, while I escorted and bought homes in places where they were mostly affordable.  So you're not wrong about asset bubbles.  But I'm not wrong about homeownership. 
The big regret of my life is that the subprime lenders were allowed to fuck up the American Dream for a while.  We could talk about who ran the Banking Committees and regulatory agencies from 2003 to 2006, which is precisely when that happened.  But that would sound too partisan.  Thankfully, even the subprime lenders and derivatives traders failed to fuck up homeownership permanently.  So we are back in business.  People do have money.  Home equity is not cash in pocket.  Which is actually a good thing.  That is what my conservative Dad taught me.  Don't treat your home like a piggy bank.
Are we in a home asset bubble now?  Maybe, maybe not.  You're (supposedly) a conservative capitalist.  So surely you understand supply and demand.  Am I wrong to think that the demand for homes is strong, and we have a lack of supply?  And that, even if mortgage rates went down to 4 %, that would only drive demand higher without fixing the supply problem?  That is partly because, thank God, the majority of Americans - not just a few old rich people - own their homes.  And they mostly own them with low fixed rate mortgages.  Which is a huge bedrock of financial stability.
So even if some of the value in homes is a "bubble" it is a small percentage of the value.  Especially for anyone who has owned their home for years or decades.  My best guess is we may replay the 1990's, and not the Great Recession.  Meaning from 1990 to 2000 the average price of a home in LA went up a little bit, in dollar terms.  But it went down something like 20 %, adjusted for inflation.  I think demand is too strong and supply is too weak to drive the kind of foreclosure crisis we had in 2008, which tanked home values.  Most important, nobody allowed the subprime lenders back in the market.  Very few Americans have mortgages that were designed to explode.

That article you posted above about how most Americans have "less savings" is also a great example of how to write a "the sky is falling" headline.  I've worked with a lot of reporters in my life.  Including one who won a Pulitzer based in part on data that a college professor and I helped him put together on bank redlining.  I know a bit about how it's done.
The article notes correctly that net worth is at a "record high" based on the Fed report I cited above.  It states that the driver - homes and stocks - tend to be forms of wealth that are "more prevalent among wealthier households."  I'm okay with that definition.  But, by that standard, 2 in 3 Americans own homes.  So 2 in 3 Americans are "wealthier households"  whose net worth is at a "record high".  Explain to me again why the sky is falling? 🤔
I'm betting on Glenn Neely being right, and the stock market reaching all time highs.  Maybe some of his schtick is voodoo.  But it also makes sense to me based on the chart above.  It's true that we have just seen a huge run up in consumer debt,  And that consumers have "less savings".  It is also true that this is because for a while people were encouraged to stay home.  And getting on a plane was a pain in the ass.  So they were forced to save, and got government checks to boot.  For some strange reason, savings went up and consumer debt went to record lows.  So now what we have is people spending money and going into debt at the same rate they were before the pandemic, when the economy and stock market were growing. 
Explain to me again how this tells me the sky is falling?  Because it seems like the economy is growing - 5 % GDP growth last quarter.  And even the bears like Wilson are now bulls.
 
 

@stevenkesslar I don't disagree with you.  Just wanted to point out that a lot of people don't own homes and don't own stocks, so they are going to feel different about this inflation cycle than the typical client on this site who already has a nest egg.  Being a millennial and in the middle to younger end of the working age, my view is skewed towards the average working person.
The age group that benefited the most wealth growth in the last 10 years were people over 60.  And because of the aging Baby Boomers, there are more and more people over 60 compared to the number of people working.  So the data will continue to show average people getting wealthier, but what it's really saying is the average person is getting older.
Ask a 30 year old who is trying to move out of his parents house how they are doing, and it will be a different story.
 

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Here's the positive thing about what you are doing, Auggie.

It's always good for someone to see the downside of everything.  You're good at it, Auggie.  Mike Wilson at Morgan Stanley is better.  He probably predicted about 1,010 of the 3,830 recessions predicted in the last year. 
Wall Street’s biggest bear Mike Wilson is now predicting an end-of-year stock rally is ‘more likely than not’
The only scary thing to me is that the guy who has been wrong the most for the longest is now saying it is blue skies ahead.  Hope he is right for once!
But let's put voodoo prognostications aside and channel our inner Warren Buffets.  It's all about long term value. It's all about gradual wealth accumulation.
I'll say this two different ways.  One down to earth, and one snobby.
My Dad, a conservative who ran his own small business as an architect,  instilled in me the value of investing, and owning a home.  When my Mom and him died, both almost 100, about half their net worth was in their home.  That is true for most working class and middle class Americans who own homes.  It is why owning a home is, was, and will be part of the American Dream.  And a huge stabilizer in the US and global economy.
Now here's the elitist part.  You're not a very good conservative, Auggie.  If you want to talk the CEO of GE Capital into starting multi-billion dollar home lending programs for working class and minority home buyers, it helps to have that whole conservative schtick down.  You know.  About climbing the ladder through hard work.  Investing.  Buying a home.  Building wealth gradually.  A few other things that help are having a boss known as the mother of the anti-redlining movement, and having the Chair of the Senate Banking Committee on your side.  It also helps when the CEO, Greg Barmore, is a capitalist who believes in capitalism.  And the ability of his company to help middle class and working class America build wealth gradually.   All of this was my reality.  And it is why in the 1990's we had this sweet spot where working class and minority net worth went up gradually and significantly.  Thanks in large part to people being able to buy homes.
You are right about asset bubbles, which is a whole story in itself.  But, basically, the subprime lenders spent roughly 2003 to 2006 figuring out how to royally fuck up lending concepts that had worked well for about 15 years, by being greedy and stupid.  Don't blame working class families for that.  Blame AIG, Countrywide, and Bear Stearns.  I've always been curious how Washington Mutual and GE Capital morphed from the sane lenders I knew in the 80's and 90's to the subprime lenders of 2005.  But I think it was mostly about greed and ego.  That's what former WSJ reporter Bethany McLean argued in All The Devils Are Here, the Bible of the subprime/Wall Street greed debacle.
I have a friend in SF who is kind of the poster child for what you describe.  A bit over a decade ago he bought a condo in SF at exactly the right place at exactly the right time.  The value of his condo went up like a rocket ship.  Then, in 2020, thanks mostly to COVID and people wanting to move to the burbs or Sacramento, his condo was exactly the wrong place at the wrong time.  Was it a bubble?  Maybe, maybe not.  This much is true, though.  Even after a huge drop in value, like six figures, the condo is worth way more than he bought it for.  Had he kept renting, which he did for the first decade I knew him, he would be far, far, far worse off financially today.  Especially in SF, where rent is insane.  I was a renter in SF for a decade, while I escorted and bought homes in places where they were mostly affordable.  So you're not wrong about asset bubbles.  But I'm not wrong about homeownership. 
The big regret of my life is that the subprime lenders were allowed to fuck up the American Dream for a while.  We could talk about who ran the Banking Committees and regulatory agencies from 2003 to 2006, which is precisely when that happened.  But that would sound too partisan.  Thankfully, even the subprime lenders and derivatives traders failed to fuck up homeownership permanently.  So we are back in business.  People do have money.  Home equity is not cash in pocket.  Which is actually a good thing.  That is what my conservative Dad taught me.  Don't treat your home like a piggy bank.
Are we in a home asset bubble now?  Maybe, maybe not.  You're (supposedly) a conservative capitalist.  So surely you understand supply and demand.  Am I wrong to think that the demand for homes is strong, and we have a lack of supply?  And that, even if mortgage rates went down to 4 %, that would only drive demand higher without fixing the supply problem?  That is partly because, thank God, the majority of Americans - not just a few old rich people - own their homes.  And they mostly own them with low fixed rate mortgages.  Which is a huge bedrock of financial stability.
So even if some of the value in homes is a "bubble" it is a small percentage of the value.  Especially for anyone who has owned their home for years or decades.  My best guess is we may replay the 1990's, and not the Great Recession.  Meaning from 1990 to 2000 the average price of a home in LA went up a little bit, in dollar terms.  But it went down something like 20 %, adjusted for inflation.  I think demand is too strong and supply is too weak to drive the kind of foreclosure crisis we had in 2008, which tanked home values.  Most important, nobody allowed the subprime lenders back in the market.  Very few Americans have mortgages that were designed to explode.

That article you posted above about how most Americans have "less savings" is also a great example of how to write a "the sky is falling" headline.  I've worked with a lot of reporters in my life.  Including one who won a Pulitzer based in part on data that a college professor and I helped him put together on bank redlining.  I know a bit about how it's done.
The article notes correctly that net worth is at a "record high" based on the Fed report I cited above.  It states that the driver - homes and stocks - tend to be forms of wealth that are "more prevalent among wealthier households."  I'm okay with that definition.  But, by that standard, 2 in 3 Americans own homes.  So 2 in 3 Americans are "wealthier households"  whose net worth is at a "record high".  Explain to me again why the sky is falling? 🤔
I'm betting on Glenn Neely being right, and the stock market reaching all time highs.  Maybe some of his schtick is voodoo.  But it also makes sense to me based on the chart above.  It's true that we have just seen a huge run up in consumer debt,  And that consumers have "less savings".  It is also true that this is because for a while people were encouraged to stay home.  And getting on a plane was a pain in the ass.  So they were forced to save, and got government checks to boot.  For some strange reason, savings went up and consumer debt went to record lows.  So now what we have is people spending money and going into debt at the same rate they were before the pandemic, when the economy and stock market were growing. 
Explain to me again how this tells me the sky is falling?  Because it seems like the economy is growing - 5 % GDP growth last quarter.  And even the bears like Wilson are now bulls.
 
 

I know this is three in a row for me.  But I thought I'd post this as a rebuttal to myself.  I assume people who say we're in a recession and they are worse off financially are not just making it up.
So this is an extremely data geeky post.  And part of the point is that when talking about the "average" American, there really is no average.  The big conclusion the data tells me, as I already said earlier, is that if you own a home and stocks you are probably a lot better off.   Even if prices have gone up.  If you don't own a home and stocks, and especially if you live in a city where rents have soared, you are probably  worse off. 
@Vegas_Millennial, you just said this:
2 in 3 Americans own homes.  More people own homes since COVID started.  Anyone with basic math skills would put that together and realize that if home values have gone up a lot, the average American's net worth has gone up a lot.

So that chart suggests there is a "there" there.  The article I got it from, which is a right-of-center rant, says that inflation-adjusted wages have dropped 3.7 % since 2020.  What I like about City Journal is that even though they have their own ideology, which I usually disagree with, they do not have their own facts.  So something clearly happened in 2021 and 2022.  And inflation clearly had something to do with it.
That said, once you get beyond that, it's very hard to talk about the "average" American.  As that article notes, part of the reason average wages peaked in 2020 is lots of low-income workers with shitty wages lost their jobs.  So for that part of the pandemic, you can argue @pubic_assistance had a good point above.  Low end workers got screwed.  As in, they got FIRED.  When low wage workers lose their job, the average wage goes up.  Is it good news that lots of people lost their jobs in 2020 during a pandemic that killed over 1 million Americans?  You can decide that for yourself.
As City Journal also notes, in addition to inflation taking its toll on wages, the other thing that happened in 2021 and 2022 is low wage workers were being hired back in droves.  That drove average wages down, of course.  And that in itself is complicated.  Because we also know that people who made the shittiest wages also got the biggest wage increases, because of demand for their labor.  But the math is still pretty basic.  If your wage goes from $8 to $10, that's a big increase.  But if you use $10 in an average with people who make $50, it still pulls the average down.  Is it bad news that lots of low wage workers went back to work, with higher wages, in 2021 and 2022?  Would it have been better if the government had just sent them checks, and run up the deficit?  You can decide that for yourself.
But to the point @Vegas_Millennial just made about wealth inequality, let me repeat what the data says.  Income inequality actually narrowed a little bit, thanks to the fact that wages at the low end went up the most.  I understand that is NOT the same as wealth inequality.  If it were up to me, we'd go back to the 1990's and design sound programs that help working class families buy homes.  Which is how most middle class and working class people build wealth.  But that's a different post.
The other thing I said above that I will repeat is that the people who moved jobs during the pandemic tended to get the best wage increases.  The reason the pandemic helped a lot of workers who makes the lowest wages, and actually reduced income inequality a little bit, is that the jobs they went back to tended to pay more.  That statistic is a very well documented fact. Workers at the bottom, not the top, had the biggest percentage wage increases.  Is that bad?
One more fact, which is also a repeat.  Just about 2 in 3 Americans own their homes.  Many, probably most, of them locked in low fixed interest rates in 30 year mortgages.  So I agree with City Journal that it particularly sucks for the minority of Americans who want to buy homes right now, and can't.  Both because home prices are too high, and mortgage rates are too high.  But tell my Republican niece who lives in a nice home in Kentucky, and who just bought a second vacation home for cash,  that her homes are worth "too much".  And that's why my nephew who lives in a Chicago suburb can't afford to buy a home, even though he and his wife work hard.  Anyone want to try a conversation like that at Thanksgiving dinner?  I won't be talking about it.  
How many of you who own homes think your home is worth "too much"?  Don't all raise your hands at once.  😉
And since I'm being particularly data geeky, no one should feel sorry for my data geek nephew.  We exchange extremely verbose and chart-laden emails constantly.  So I'll say this in a Geek-O-Rama paragraph.  The guy we're both following closely now is Glenn Neely. His claim to fame as a sort of voodoo stock prognosticator with his own proprietary system is that when smart rich guys like Stanley Druckenmiller said in 1987 that we were headed into a depression, Neely said we are headed into the biggest bull market ever.  He was right.  In 2000 he predicted we're headed into a long secular bear market.  He was right.  In early 2008, when the S & P had already started to fall apart, his voodoo wave theory told him there were two versions of a crash imminent. Fast crash meant 1500 to about 650 soon.  Slow crash meant it would take longer, and not go quite as low.  His "fast crash" prediction was pretty much exactly on target.  So maybe it's voodoo.  But like Allan Lichtman, who has predicted every POTUS race in advance since 1984, he is a guy who use relatively objective pattern recognition techniques.  And he ends up being right about the big things.  Neely has been wrong about many of the details.  But the big picture movements, he tends to be right.
Why is this relevant?  Neely predicted in mid-June 2023 that the 2022 bear market/correction was over, and we were headed into a one year bull market that would take the indexes to new highs.  That looked right on the money for months.  And then it looked kind of dicey a few weeks ago.  Thanks in part to Hamas, Neely says.  So last week he came out and said the next phase of the bull market is on, and we're headed to new highs.
Is this voodoo?  Is it science?  Decide for yourself.  But the guy's been right about most of the big things in the stock market for decades.  If he is right again, it means average American net worth - already at an all time high - is about to go higher.  Boo hoo!  Doesn't it just suck???!!!  Ain't life awful!
Again, there is no average, I think.  On a personal level, my intelligence is below average, and my nephew's is above average, perhaps.  I did sell a lot of stock last Fall, when I should have been buying.  Why?  Because I had a conservative reaction to all these Wall Street guys like Mike Wilson (they are almost all men) screaming "Recession!  Recession!  Recession!"  I have beat the S & P by a lot since 2020.  But I would have beat it more had I ignored the fat cat whiners and pessimists.  Sensing a bottom, my nephew instead loaded up on SOXL- a leveraged tech index fund -  last Fall, starting at about $7 a share, which went to $28 by this Summer.  It tanked to $14 last month, lower than either of us thought it would go.  It's now recovered to $23.  If Neely is right, my nephew is going to have a massive capital gain and increase in net worth.  Happily, all this took over a year, meaning long term capital gains tax rates.  If he were really a genius, he would have sold it at $28 and bought it back at $14 and paid short term gains taxes.  But that is exactly what real geniuses like Warren Buffet advise us NOT to do.
So somebody tell my nephew (or niece) how much things suck.  And how people can't afford to buy homes.  He's sitting on a big down payment, at least.  And probably being able to buy a house for cash, if he wants.  Boo hoo!  Life sucks!  The market sucks!  Capitalism sucks!  😉
 

I emphatically agree with you.  My Dad, a Reagan Republican, was a deficit hawk.  I'm a liberal Democrat, and a deficit hawk.  
There is a word for this.  It's not ideology.  Or politics.  It is compromise.  And doing things that create a sound investment environment.
We did it in the 1990's, when we ended up with a surplus.  We can do it again.  Carville commented on this, saying at the time that if he is reincarnated he wants to come back as the bond market.  I respect the bond market, too.  Because they like fiscal sanity. A huge deficit is not good for the bond market, or interest rates.
If I am reincarnated, I want to come back as the 1990's.  People could compromise and get important shit done then.

Damn straight Auggie.  It's all over the news!
Net worth surged 37% in pandemic era for the typical family, Fed finds — the most on record
I feel miserable.  America sucks.  Inflation sucks.  My life is a nightmare.
My house is worth 42 % more than on March 2020, when COVID started, according to Zillow.  I hate this inflation.  How the fuck am I supposed to survive?
And it's even worse.  The S & P 500 is up about 40 % or so since COVID started.  They are fucking killing us with this economy.  And if that wasn't bad enough, my stock portfolio is up 60 % since 2020.  I hate everything I see.  It is all going downhill.  I really can not tolerate this abject misery.
There are a few very small things that I find comfort in.  According to my ice cream inflation calculator, the Haagen Daaz that cost $3 in 2020 has only gone up to $4 today.  So, despite the torment of what has happened to my home and my stocks, which has left me in a deep depression, I am able to scrape together just enough pennies to buy some Dulce De Leche.  At least I have some small reason to live.
Other than that, this economy sucks and everybody knows that their life is miserable.  It is all over the news!
There you have it.  Assholes.  "Households have a lot of money."  And they say it with smiles on their faces, even.  I'm sure these idiots have college degrees.  But they have no human empathy for our misfortune.
Note:  That video is a few years old.  I could not find a recent one from a credible business network like CNBC about this recent 2023 net worth report.  But all the numbers - net worth, home values, the S & P 500 - are even higher than the good news story above.  Since that video, economists have forecasted 3,830 recessions.  Since that video, the actual number of recessions has been zero.

I know this is three in a row for me.  But I thought I'd post this as a rebuttal to myself.  I assume people who say we're in a recession and they are worse off financially are not just making it up.
So this is an extremely data geeky post.  And part of the point is that when talking about the "average" American, there really is no average.  The big conclusion the data tells me, as I already said earlier, is that if you own a home and stocks you are probably a lot better off.   Even if prices have gone up.  If you don't own a home and stocks, and especially if you live in a city where rents have soared, you are probably  worse off. 
@Vegas_Millennial, you just said this:
2 in 3 Americans own homes.  More people own homes since COVID started.  Anyone with basic math skills would put that together and realize that if home values have gone up a lot, the average American's net worth has gone up a lot.

So that chart suggests there is a "there" there.  The article I got it from, which is a right-of-center rant, says that inflation-adjusted wages have dropped 3.7 % since 2020.  What I like about City Journal is that even though they have their own ideology, which I usually disagree with, they do not have their own facts.  So something clearly happened in 2021 and 2022.  And inflation clearly had something to do with it.
That said, once you get beyond that, it's very hard to talk about the "average" American.  As that article notes, part of the reason average wages peaked in 2020 is lots of low-income workers with shitty wages lost their jobs.  So for that part of the pandemic, you can argue @pubic_assistance had a good point above.  Low end workers got screwed.  As in, they got FIRED.  When low wage workers lose their job, the average wage goes up.  Is it good news that lots of people lost their jobs in 2020 during a pandemic that killed over 1 million Americans?  You can decide that for yourself.
As City Journal also notes, in addition to inflation taking its toll on wages, the other thing that happened in 2021 and 2022 is low wage workers were being hired back in droves.  That drove average wages down, of course.  And that in itself is complicated.  Because we also know that people who made the shittiest wages also got the biggest wage increases, because of demand for their labor.  But the math is still pretty basic.  If your wage goes from $8 to $10, that's a big increase.  But if you use $10 in an average with people who make $50, it still pulls the average down.  Is it bad news that lots of low wage workers went back to work, with higher wages, in 2021 and 2022?  Would it have been better if the government had just sent them checks, and run up the deficit?  You can decide that for yourself.
But to the point @Vegas_Millennial just made about wealth inequality, let me repeat what the data says.  Income inequality actually narrowed a little bit, thanks to the fact that wages at the low end went up the most.  I understand that is NOT the same as wealth inequality.  If it were up to me, we'd go back to the 1990's and design sound programs that help working class families buy homes.  Which is how most middle class and working class people build wealth.  But that's a different post.
The other thing I said above that I will repeat is that the people who moved jobs during the pandemic tended to get the best wage increases.  The reason the pandemic helped a lot of workers who makes the lowest wages, and actually reduced income inequality a little bit, is that the jobs they went back to tended to pay more.  That statistic is a very well documented fact. Workers at the bottom, not the top, had the biggest percentage wage increases.  Is that bad?
One more fact, which is also a repeat.  Just about 2 in 3 Americans own their homes.  Many, probably most, of them locked in low fixed interest rates in 30 year mortgages.  So I agree with City Journal that it particularly sucks for the minority of Americans who want to buy homes right now, and can't.  Both because home prices are too high, and mortgage rates are too high.  But tell my Republican niece who lives in a nice home in Kentucky, and who just bought a second vacation home for cash,  that her homes are worth "too much".  And that's why my nephew who lives in a Chicago suburb can't afford to buy a home, even though he and his wife work hard.  Anyone want to try a conversation like that at Thanksgiving dinner?  I won't be talking about it.  
How many of you who own homes think your home is worth "too much"?  Don't all raise your hands at once.  😉
And since I'm being particularly data geeky, no one should feel sorry for my data geek nephew.  We exchange extremely verbose and chart-laden emails constantly.  So I'll say this in a Geek-O-Rama paragraph.  The guy we're both following closely now is Glenn Neely. His claim to fame as a sort of voodoo stock prognosticator with his own proprietary system is that when smart rich guys like Stanley Druckenmiller said in 1987 that we were headed into a depression, Neely said we are headed into the biggest bull market ever.  He was right.  In 2000 he predicted we're headed into a long secular bear market.  He was right.  In early 2008, when the S & P had already started to fall apart, his voodoo wave theory told him there were two versions of a crash imminent. Fast crash meant 1500 to about 650 soon.  Slow crash meant it would take longer, and not go quite as low.  His "fast crash" prediction was pretty much exactly on target.  So maybe it's voodoo.  But like Allan Lichtman, who has predicted every POTUS race in advance since 1984, he is a guy who use relatively objective pattern recognition techniques.  And he ends up being right about the big things.  Neely has been wrong about many of the details.  But the big picture movements, he tends to be right.
Why is this relevant?  Neely predicted in mid-June 2023 that the 2022 bear market/correction was over, and we were headed into a one year bull market that would take the indexes to new highs.  That looked right on the money for months.  And then it looked kind of dicey a few weeks ago.  Thanks in part to Hamas, Neely says.  So last week he came out and said the next phase of the bull market is on, and we're headed to new highs.
Is this voodoo?  Is it science?  Decide for yourself.  But the guy's been right about most of the big things in the stock market for decades.  If he is right again, it means average American net worth - already at an all time high - is about to go higher.  Boo hoo!  Doesn't it just suck???!!!  Ain't life awful!
Again, there is no average, I think.  On a personal level, my intelligence is below average, and my nephew's is above average, perhaps.  I did sell a lot of stock last Fall, when I should have been buying.  Why?  Because I had a conservative reaction to all these Wall Street guys like Mike Wilson (they are almost all men) screaming "Recession!  Recession!  Recession!"  I have beat the S & P by a lot since 2020.  But I would have beat it more had I ignored the fat cat whiners and pessimists.  Sensing a bottom, my nephew instead loaded up on SOXL- a leveraged tech index fund -  last Fall, starting at about $7 a share, which went to $28 by this Summer.  It tanked to $14 last month, lower than either of us thought it would go.  It's now recovered to $23.  If Neely is right, my nephew is going to have a massive capital gain and increase in net worth.  Happily, all this took over a year, meaning long term capital gains tax rates.  If he were really a genius, he would have sold it at $28 and bought it back at $14 and paid short term gains taxes.  But that is exactly what real geniuses like Warren Buffet advise us NOT to do.
So somebody tell my nephew (or niece) how much things suck.  And how people can't afford to buy homes.  He's sitting on a big down payment, at least.  And probably being able to buy a house for cash, if he wants.  Boo hoo!  Life sucks!  The market sucks!  Capitalism sucks!  😉
 

I emphatically agree with you.  My Dad, a Reagan Republican, was a deficit hawk.  I'm a liberal Democrat, and a deficit hawk.  
There is a word for this.  It's not ideology.  Or politics.  It is compromise.  And doing things that create a sound investment environment.
We did it in the 1990's, when we ended up with a surplus.  We can do it again.  Carville commented on this, saying at the time that if he is reincarnated he wants to come back as the bond market.  I respect the bond market, too.  Because they like fiscal sanity. A huge deficit is not good for the bond market, or interest rates.
If I am reincarnated, I want to come back as the 1990's.  People could compromise and get important shit done then.

I emphatically agree with you.  My Dad, a Reagan Republican, was a deficit hawk.  I'm a liberal Democrat, and a deficit hawk.  
There is a word for this.  It's not ideology.  Or politics.  It is compromise.  And doing things that create a sound investment environment.
We did it in the 1990's, when we ended up with a surplus.  We can do it again.  Carville commented on this, saying at the time that if he is reincarnated he wants to come back as the bond market.  I respect the bond market, too.  Because they like fiscal sanity. A huge deficit is not good for the bond market, or interest rates.
If I am reincarnated, I want to come back as the 1990's.  People could compromise and get important shit done then.

Damn straight Auggie.  It's all over the news!
Net worth surged 37% in pandemic era for the typical family, Fed finds — the most on record
I feel miserable.  America sucks.  Inflation sucks.  My life is a nightmare.
My house is worth 42 % more than on March 2020, when COVID started, according to Zillow.  I hate this inflation.  How the fuck am I supposed to survive?
And it's even worse.  The S & P 500 is up about 40 % or so since COVID started.  They are fucking killing us with this economy.  And if that wasn't bad enough, my stock portfolio is up 60 % since 2020.  I hate everything I see.  It is all going downhill.  I really can not tolerate this abject misery.
There are a few very small things that I find comfort in.  According to my ice cream inflation calculator, the Haagen Daaz that cost $3 in 2020 has only gone up to $4 today.  So, despite the torment of what has happened to my home and my stocks, which has left me in a deep depression, I am able to scrape together just enough pennies to buy some Dulce De Leche.  At least I have some small reason to live.
Other than that, this economy sucks and everybody knows that their life is miserable.  It is all over the news!
There you have it.  Assholes.  "Households have a lot of money."  And they say it with smiles on their faces, even.  I'm sure these idiots have college degrees.  But they have no human empathy for our misfortune.
Note:  That video is a few years old.  I could not find a recent one from a credible business network like CNBC about this recent 2023 net worth report.  But all the numbers - net worth, home values, the S & P 500 - are even higher than the good news story above.  Since that video, economists have forecasted 3,830 recessions.  Since that video, the actual number of recessions has been zero.

I emphatically agree with you.  My Dad, a Reagan Republican, was a deficit hawk.  I'm a liberal Democrat, and a deficit hawk.  
There is a word for this.  It's not ideology.  Or politics.  It is compromise.  And doing things that create a sound investment environment.
We did it in the 1990's, when we ended up with a surplus.  We can do it again.  Carville commented on this, saying at the time that if he is reincarnated he wants to come back as the bond market.  I respect the bond market, too.  Because they like fiscal sanity. A huge deficit is not good for the bond market, or interest rates.
If I am reincarnated, I want to come back as the 1990's.  People could compromise and get important shit done then.

Damn straight Auggie.  It's all over the news!
Net worth surged 37% in pandemic era for the typical family, Fed finds — the most on record
I feel miserable.  America sucks.  Inflation sucks.  My life is a nightmare.
My house is worth 42 % more than on March 2020, when COVID started, according to Zillow.  I hate this inflation.  How the fuck am I supposed to survive?
And it's even worse.  The S & P 500 is up about 40 % or so since COVID started.  They are fucking killing us with this economy.  And if that wasn't bad enough, my stock portfolio is up 60 % since 2020.  I hate everything I see.  It is all going downhill.  I really can not tolerate this abject misery.
There are a few very small things that I find comfort in.  According to my ice cream inflation calculator, the Haagen Daaz that cost $3 in 2020 has only gone up to $4 today.  So, despite the torment of what has happened to my home and my stocks, which has left me in a deep depression, I am able to scrape together just enough pennies to buy some Dulce De Leche.  At least I have some small reason to live.
Other than that, this economy sucks and everybody knows that their life is miserable.  It is all over the news!
There you have it.  Assholes.  "Households have a lot of money."  And they say it with smiles on their faces, even.  I'm sure these idiots have college degrees.  But they have no human empathy for our misfortune.
Note:  That video is a few years old.  I could not find a recent one from a credible business network like CNBC about this recent 2023 net worth report.  But all the numbers - net worth, home values, the S & P 500 - are even higher than the good news story above.  Since that video, economists have forecasted 3,830 recessions.  Since that video, the actual number of recessions has been zero.

The good news is that in 2023, wages are outpacing inflation.

The black line is inflation and the blue line is wages.  Here's the website if you want to see the details.
It really is a bit of a mystery why almost half of Americans think we are in a recession.  Did I mention the Nasdaq went up 2 % today, because the market thinks things are better than the Fed, apparently?
There are people who deserve to bitch and moan.  If you are someone who hires escorts, you are almost certainly not one of them.  Average net worth went up 37 % during COVID.  If you own a) a home or b) stocks, you are like the majority of Americans.  And your net worth probably went up a lot.  Granted, inflation-adjusted gas prices in the US are only a little LOWER than they were in 2008.  Making it seem impossible that the US can survive, let alone prosper.  And, yet, we seem to be prospering.  And I get that you can't use big increases in home equity to fill your tank with gas.  But you are still better off.
The people who are not better off, or maybe a little worse off, are people who don't own homes and stocks, don't have STEM jobs, live in big cities with high rent, and did not change jobs recently.  They are a minority of Americans, who actually do tend to be minorities as well.  
The other thing we know is that thanks to things like all the COVID relief, consumer debt levels actually went to about as low as they get.  So when the media goes off about how consumer debt is soaring, they basically mean it is coming off lows and going back to the normal place it has been, on average, for like half a century.  Much like inflation is coming off highs and going back to normal. 
In fact, if the past is a guide, there are three times consumer debt levels hit a low of about 5 %:  during the early 90's recession, during the Great Recession, and during COVID.  All three times involved things being tight.  All three times, tight times were followed by years of expansion.  So if we follow the past trend, it's as likely as not that we'll have more consumer-debt fueled expansion, not less.  
The combined effect of it all of this is that most people are better off economically since COVID started, as an objective fact. Even if they don't feel that way when they buy bread or fill their gas tank.  If the economy is growing at a 5 % annual rate, average net worth is up 37 %, and even people who don't own assets are now making more in wage gains than inflation, that is all good news for consumers. 
Could that possibly be why the stock market is flirting with all time highs, not lows?
 

Do you have any data to back that up?
As a general comment, what I've been reading consistently for the last few years is more like the opposite.  Wages are going up the most, percentage-wise, at the bottom.
A quick Google check immediately produced articles that confirm this.  Although I think we both may have a good argument to make, and it simply depends on the specific circumstances.
Lower-income earners’ wages have grown faster than others
Here's a second article that was at the top of the list Google gave me that says the same thing, mostly for the same reasons.  
One consistent fact I've read again and again is that the people who changed jobs during the pandemic got much better wage increases than people who did not.  That may be the case most of the time, anyway.  Since one big reason people change jobs is to make more money.  But it was certainly true during the pandemic.  Without data, I might guess that white collar workers might be the ones who could take the most advantage of this.  But, during the pandemic, apparently not.  And I think both articles suggests why.  When all those lower wage employers needed to hire people back, they had a hard time finding workers. And they had to pay them more.
None of this really says whether any group of people got wage increases that matched or exceeded inflation.  Especially last year, when inflation was spiking.  But my impression from many articles, including these two, is that people who changed jobs probably had much better luck beating inflation with wage increases.  And many of them were lower income workers.
That said, the basic picture I have is that if you have assets, you won during COVID.  If you don't have assets, you lost.  The key statistic is that from 2019 to 2022 average net worth went up 37 % after inflation. That is huge.  Net worth is not cash in your pocket to buy gas with, of course.  But anyone I know who owns homes or stocks, or both, are better off since before COVID.  The people who don't own homes or stocks are the ones who got the joy of inflation without getting the pain of your home value going way up, or the value of your stock portfolio soaring.   🤔 

The good news is that in 2023, wages are outpacing inflation.

The black line is inflation and the blue line is wages.  Here's the website if you want to see the details.
It really is a bit of a mystery why almost half of Americans think we are in a recession.  Did I mention the Nasdaq went up 2 % today, because the market thinks things are better than the Fed, apparently?
There are people who deserve to bitch and moan.  If you are someone who hires escorts, you are almost certainly not one of them.  Average net worth went up 37 % during COVID.  If you own a) a home or b) stocks, you are like the majority of Americans.  And your net worth probably went up a lot.  Granted, inflation-adjusted gas prices in the US are only a little LOWER than they were in 2008.  Making it seem impossible that the US can survive, let alone prosper.  And, yet, we seem to be prospering.  And I get that you can't use big increases in home equity to fill your tank with gas.  But you are still better off.
The people who are not better off, or maybe a little worse off, are people who don't own homes and stocks, don't have STEM jobs, live in big cities with high rent, and did not change jobs recently.  They are a minority of Americans, who actually do tend to be minorities as well.  
The other thing we know is that thanks to things like all the COVID relief, consumer debt levels actually went to about as low as they get.  So when the media goes off about how consumer debt is soaring, they basically mean it is coming off lows and going back to the normal place it has been, on average, for like half a century.  Much like inflation is coming off highs and going back to normal. 
In fact, if the past is a guide, there are three times consumer debt levels hit a low of about 5 %:  during the early 90's recession, during the Great Recession, and during COVID.  All three times involved things being tight.  All three times, tight times were followed by years of expansion.  So if we follow the past trend, it's as likely as not that we'll have more consumer-debt fueled expansion, not less.  
The combined effect of it all of this is that most people are better off economically since COVID started, as an objective fact. Even if they don't feel that way when they buy bread or fill their gas tank.  If the economy is growing at a 5 % annual rate, average net worth is up 37 %, and even people who don't own assets are now making more in wage gains than inflation, that is all good news for consumers. 
Could that possibly be why the stock market is flirting with all time highs, not lows?
 

Do you have any data to back that up?
As a general comment, what I've been reading consistently for the last few years is more like the opposite.  Wages are going up the most, percentage-wise, at the bottom.
A quick Google check immediately produced articles that confirm this.  Although I think we both may have a good argument to make, and it simply depends on the specific circumstances.
Lower-income earners’ wages have grown faster than others
Here's a second article that was at the top of the list Google gave me that says the same thing, mostly for the same reasons.  
One consistent fact I've read again and again is that the people who changed jobs during the pandemic got much better wage increases than people who did not.  That may be the case most of the time, anyway.  Since one big reason people change jobs is to make more money.  But it was certainly true during the pandemic.  Without data, I might guess that white collar workers might be the ones who could take the most advantage of this.  But, during the pandemic, apparently not.  And I think both articles suggests why.  When all those lower wage employers needed to hire people back, they had a hard time finding workers. And they had to pay them more.
None of this really says whether any group of people got wage increases that matched or exceeded inflation.  Especially last year, when inflation was spiking.  But my impression from many articles, including these two, is that people who changed jobs probably had much better luck beating inflation with wage increases.  And many of them were lower income workers.
That said, the basic picture I have is that if you have assets, you won during COVID.  If you don't have assets, you lost.  The key statistic is that from 2019 to 2022 average net worth went up 37 % after inflation. That is huge.  Net worth is not cash in your pocket to buy gas with, of course.  But anyone I know who owns homes or stocks, or both, are better off since before COVID.  The people who don't own homes or stocks are the ones who got the joy of inflation without getting the pain of your home value going way up, or the value of your stock portfolio soaring.   🤔