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Originally Posted by bagekko
Didn't they say the other day that Europe is officially in a recession?
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Yes, Germany plus 7 others in the EU. Ireland shrank by 4.6% in Q1. And they revised the Q4 '22 number to -0.1% from 0%. No bueno for its largest trading partners - US, UK, China, in order - either.
Quote:
Originally Posted by bagekko
From my experience Europeans overall do not have the spending habits like us, so officially we won't be in a recession as long as we keep spending. Though it may hit the fan when all the dummies who haven't been saving and have to restart their student loan payments in two months, huge disaster if they are variable interest rates as we're close to 0% when paused and now prolly 7%, gonna be a lot of 20-30 somethings moving back into parents basement if they already don't live there.
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I've already been reading about the bifurcation, by generation, of spending. Gens X, Z, and even to a degree millenials are all pulling back as they run out of funds for $8 mocha frappes and $15 designer cocktails. They are still spending, of course, because they have jobs and access to credit, but they're definitely feeling the pinch. Boomers, on the other hand, continue to party like it's 1999, apparently. Between staring death in the face during Covid and the fact that many of them used the 0% interest-rate market to create substantial nest eggs, they appear to be willing to splurge still.
The slow-motion trainwreck that is the US economy lumbers on, propelled by trillions in "Inflation Reduction Act" dollars, while pieces of the engine fly off in all directions. Will the resumption of student loan payments - which generally have pre-Covid fixed interest rates, BTW - be the cow that throws it off the tracks, or will that too get flung off into the weeds like the energy price spike of '22 or the more recent banking tumult? I don't think that'll do it, though it may be the catalyst that creates the unemployment we need to finally derail this thing and get inflation back down below 5%.
We're definitely not out of the woods yet, IMHO. And, more importantly, in the minds of the Fed Govs, it seems after today's presser. Keep some powder dry, pop some corn, and grab a seat. Cuz, who doesn't love a trainwreck?! C'mon, you know you do! Admit it!
WaPo Article -
There’s a widening spending gap between retirees and younger adults