My Investing Muse

  Over the last few years, we have seen a climb in inflation and recent house prices have hit record highs. Is housing getting unaffordable in the US? Is the income sufficient to cope? For this article, let us focus on household income and home price growth. Household income This is the extract from a recent  article  dated 21 June 2023 from The Hill: The typical U.S. family earns about $71,000 per year, according to the Census. Yet, the average American believes a family needs at least $85,000 in annual household income to get by, according to a recent Gallup poll. According to this article, the typical US family is short of USD$14,000 per year. Is this why the total credit card debts in the USA have hit USD$988 billion? Here is another  news  extract from The Hill dated 27 June 2023: One-third of Americans with credit card debt say no one else knows how much they owe, according to a new report. The nation’s credit card balance hovers around $1 trillion, and in...

Is the macro so bad?   What is the macro (economics)? According to Investopedia: Macroeconomics is the branch of economics that deals with the structure, performance, behavior, and decision-making of the whole, or aggregate, economy. The two main areas of macroeconomic research are long-term economic growth and shorter-term business cycles. Gross Domestic Product (GDP) For a start, 2 successive quarters of GDP decline in the US is a good start on why the macro is bad.   US GDP (2018 - 2022) Source: https://www.bea.gov/news/2022/gross-domestic-product-second-quarter-2022-advance-estimate According to the US, this alone does not imply recessions.  However, we are expecting earning compressions in the coming earnings reports. With the recent PMI coming out from China, the demand for production is slowing down.  China is one of the big producers and this should imply a drop in global demand too. Inverted Yield Curve An inverted yield curve shows that long-ter...