Today’s show opens with a better than expected GDP for the third quarter of 2022. I’ll admit, I did not expect to see growth of any kind, given the inflation rate and the policies of this White House. However, though the 2.6% positive was a nice feather in the cap for the Fed, does it really mean we are on firm economic footing? Not according to most financial analysts and from the warnings coming from Big Tech.
First, let’s turn to why the GDP grew. Three areas helped give President Joe Biden a positive talking point: there was a shrinking trade deficit, consumer spending was still high and government spending. Another way to look at that is, with inflation as high as it is, people have no choice but to spend more while getting less. However, this cannot go on much longer as more and more Americans are turning to credit cards to survive. Add to this the notion that government flooding the market with spending just as their fiscal year came to a close, giving a artificial boost to the overall GDP number. And though a slimmer trade deficit was another factor, most economists know it’s a blip and not a reliable indicator.
According to Stifel Chief Economist Lindsey Piegza, too many other indicators in the 3Q report show a continued downward trend. Nancy Davis the CIO with Quadratic Capital Management also thinks that since the Fed is still planning to raise interest rates to still deal with inflation, it’s not a good sign for early 2023. Finally, Joseph Lavorgna with SMBC Nikko Securities America believes the inverted yield curve shows it’s almost impossible to avoid the downward trend.
We are almost one month into the fourth quarter and an NBC Today news story is bleak for home heating over the winter. Home heating oil is expected to be up 27% over last year and natural gas is expected to be 28% higher. With consumers already reaching for credit cards and depleting savings, this does not bode well for the start of the new year.
And, as I mentioned, Big Tech is really worried. Google reported a steep decline in profits; social media companies such as Meta said their advertising sales – the heart of its business – have rapidly cooled off; and Microsoft predicts a slowdown through at least the end of the year.
Now, let’s talk voting for a moment. I thought it was interesting when the acting Secretary of State for Pennsylvania told voters earlier this week to expect delays in counting the midterm vote. Leigh Chapman made a point of saying it’s not for any “nefarious reasons.” However, just today we learn that same Democrat official has mailed out over 255,000 ballots to voters who did not request them. Ballot harvesting seems to be already underway in Pennsylvania. And, to add to the outrage, a Democrat whistleblower in Florida has turned over enough evidence to initiate a criminal investigation into ballot harvesting via ballot brokers in the Orlando, Florida area. The way Cynthia Harris describes it, this has been happening for quite some time.
Finally, to give us a moment of levity, it’s time for another edition of Deep Thoughts with Kamala Harris. As we know, our Vice President has a special way with words and we like to give her a chance to let her have the spotlight for a moment. Just in case you missed it.
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