Page 6 - Wealth Effect News Today

Were right now in a contraction. the first quarter contracted 1.6% and this morning youve got the atlanta federal reserve expecting a contraction in the second quarter of 1.9%. goldman sachs is expecting growth but taken the growth level down. in a nutshell, the economy is in a contraction. were not growing. however, the jobs market so far has not been impacted too negatively from the sticker shock of inflation. it has impacted the corporate earnings sector and impacted the stock market. there i...

Underappreciated? >> that strength is fantastic, and its resilient, but we shouldnt expect it to last forever. theres something called the wealth effect. weve seen s&p drop 15%, housing prices starting to slow down in terms of their double-digit impressive expansion annually, and the consumer has negative real wages which means that inflation is outpacing the increase in his or her wages. so the combination, i think, of the negative wealth effect, knell regular -- negative real wages, consumer c...

Tax increase. lets bring in larry glazer. you see the damage going on to the markets. the fed wants it. i guess the white house accepts that we have to bring in the so-called wealth effect. its really crushing the housing market. thats what im concerned about. more americans have homeownership than own stocks. if they tinker with this thing, how bad could it get? listen, you want to cool housing prices. what if we derail them? >> a year ago the fed talked about inflation. inflation is much worse...

You look at the markets today obviously a real concern about inflation. >> its just a citizenned repricing of just absolute soaring energy crisis which not just at the gas pump but thousands of products that use petroleum higher interest rates. when i say higher they have gone vertical. now you add in something that i think has been a big part of the economy over the last couple of years. the wealth effect, which is now in reverse where the many are looking at the 401(k)s and seeing much less in...

Be going up in some shape. and then you have the inflation that was already before ukraine and now real inflation in many industries is much higher. so you have less money, youre spend ing more on your loans. youre spending more on the weekly shopping list. youre spending more in every aspect of your life, and your wages may be going up marginally because we care getting some improvement on that that. youre going to feel poorer because of the wealth effect. youre going to feel poorer. this morni...

Wonderland element to this. we used to talk about this all of the time. that was the big issue. and we look around and say were in the middle of a pandemic how is it possible that stocks are this high. so everything is relative. you see the prices come down but maybe the truth is you should look at where prices were pre-pandemic. >> and certainly the price of the stocks not necessarily commensurate to the health of the economy and that is a lesson that donald trump never wants anyone to learn be...

Down, the more it may act as a deinflationary metric where the fed says, well, we were going to raise interest rates even more, maybe we dont have to as much. so there is this push/pull situation going on back and forth. >> obviously, the money that people have made off of the markets, just the billions and billions of dollars -- >> its the wealth effect. >> the wealth effect and so many of them are spending that money finding it difficult to spend all the money theyre making in the market. you ...

Netflix's announcement earlier this week that it had lost 200,000 subscribers should sound a warning on the real ...

For. >> bret: liskly if you a high jobs number and low inflation number how do we as a country avoid recession? >> >> prices if they can come down organically, now, we have seen 2.5% decline in gasoline use. and by the way, thats what the federal reserve is trying to do. now, what theyre try position do is to punish the stock market enough and i think the number for jay powell is to knock it down 20%. so that we lose some of that so-called wealth effect. and when we lose that wealth affect we st...

Theres the wealth effect incluesing the housing boom. the fed has to walk a delicate bouncing act, dont they? >> absolutely. we talked about record prices for homes. id say that sales are moderating. theres not the right supply out there. you know, theres a lot of jobs around. we talked about 11 million jobs opening. you dont quit in a bad economy. thats the good part for consumers out there. >> martha: heres the good news. back then, the number 1 song was "ebony and ivory." maybe well get good ...