“Under pressure, you don't rise to the occasion, you sink to the level of your training.”
-Navy Seals
There is a prevailing belief in the culture that when can always just meet the demands of an occasion. We believe we have the ability as they say in sports, to just “turn it on” when we need to but otherwise we can generally coast. But this is so far from the truth. As the quote says, we are not the one of behaviors. We are the things we do every single day. The habits we practice day in and day out. Will there be one-off special situations? Maybe. But generally, we are who we have built habits to become. For example, a person who does not wake up early regularly is not about to suddenly be a morning person because of an interview. It will require some extreme changes before the interview.
Never assume that you will rise to a high-pressure situation. Assume, you will be who you have shown yourself to be. YOU ARE YOUR HABITS!
So the question is What Habits Are You Building?
Welcome back to the Rambling Mind Newsletter. This is your Market Update.
Markets
For the first second time in 2023, we hit a new all-time high this year. Despite all the negative headlines. The Market does what the market does. Go UP!
This newsletter is 1,317 words a 6 min read
Tale of the Tape
Economy
Credit Card debt and delinquencies (not paying anything on your debt) are slowly increasing as the Fed continues raising rates, especially for young adults (18-29).
🔢By The Numbers: Total household debt sits at $17 Trillion an all-time RECORD. This is 20% higher than at the start of the pandemic
Mortgage Debt makes up a large part of the total debt at $12 Trillion
Credit Card is at an all-time high of almost $1 Trillion
Auto Loans are $1.56 Trillion
Student Loans are $1.6 Trillion
The rest is made up of HELOCs and a Variety of Personal Loans
💳🚫No Payment: People had a revenge spend moment and said I will deal with it later. Well seems later is becoming NEVER
Delinquencies increased from 5.1%, a year ago, to 8.9% for 18-29 year old
For 30-39, it was 6.27%
For 40 and up, it stayed below 5%
😕How: According to data from the New York Federal Reserve, young borrowers saw the fastest increase in credit card and auto loan balances. Now that debt is beginning to come due but with inflation wreaking havoc on all our finances. It is hitting the youngins a bit harder.
💬What They Are Saying: "The tightening of lending standards will hit this particular cohort the hardest," said Claire Li, senior analyst at Moody's.
Takeaway: Things are not going to get any easier. Student Loans pause will be ending in June. That will mean more pain for young folks, who have the bulk of student loans.
My Takeaway/Advice: Do not stick your head in the sand! We have 1.5 months to get a plan in motion for when Student Loans get added back into the mix. No one is coming to save you. You have to take control.
Random Prediction: I believe at the pace student loans continue to grow. I believe in my lifetime it will be comparable to mortgage debt.
🛍We Still Shopping
I said it before and I will say it again. The American Superpower is our ability to shop shop shop. I would think there would have been a continued slowdown in consumer spending as inflation continued to raise prices and interest rates continued to make life more expensive. But I was wrong.
After a few months of declines in retail spending, consumers were back at it. As the weather has warmed up so has our willingness to swipe that card.
🔢By The Numbers: According to the Census Bureau, Retail sales for the month of April increased by 0.4%. In March, retail sales were down 0.7%. The numbers show spending is now all about getting together with people. Think restaurants, bars, entertainment, etc.
Food and Drink sales increased by 0.6%
Health and Personal Care increased by 0.9%
Things we are no longer buying:
Furniture and décor sales dropped 0.7%
Books, Music, and Sporting Goods declined by 3.3%
Target and Home Depot reported terrible earnings for Q1 to add more color to the shift of consumer spending.
💬In Their Words: However, the increase in sales was not due to more products being sold but rather due to price increases
“Retail sales posted a modest rebound in April, but the gain mostly reflected higher prices and a sustained turnaround is unlikely with consumer fundamentals turning less supportive,” said Lydia Boussour, senior economist at EY-Parthenon.
Basically, we are willing to pay more for less
Takeaway: Can't Stop Won't Stop Spending. As long as we have access to debt in the US, we will always spend now and worry about it later. It is only after things get really bad that we look up to ask questions.
My Takeaway: Be Proactive. Create a plan for your money. Determine what you choose to spend money on and then ignore the rest.
Stats of the Week
Percentage of Millennials who say they want to move to the suburbs.
Takeaway: Everything is a cycle. Back in the early 2010s, people believed millennials wanted to live in cities forever and that we would never buy a house. Well, people could not be any more wrong. It just took millennials a bit longer to be able to get in a position to afford these things with Earth-shattering student loans on their heads. Plus commuting was also a problem but flexible work is becoming a staple. It has opened the world back up for millennials
But: 78% of people believe now is a terrible time to buy a house according to a survey from Gallup. It is the highest percentage since Gallup began asking the question in 1978.
My Takeaway: As I and most millennials will tell you, we all want the exact same things our parents gave us growing up. Good school districts and close-by grocery stores, a local movie theater, and decent middle-tier restaurants that will not break the bank.
I bought my house in the city and I can attest, it is totally wasted on me. I would rather live in the burbs and occasionally come into the city. So count me in that number, I will def be moving to the burbs in the future. Time to give the cities to Gen Z. But good public transportation would be nice, especially in the city of Atlanta 😔.
The amount spend on sports betting in the US in 2022. That is more money than was spent on coffee, ride-sharing, and streaming combined. This is without the three largest states (California, Florida, and Texas) legalizing betting.
DraftKings and FanDuel control about 70% of the market. No wonder we see all their commercials all the time. But you would think these companies were profitable, they are not.
The exact number of reasons to hate Wells Fargo. Wells Fargo agreed to settle a lawsuit that accused Wells Fargo of defrauding investors. This was due to the millions of fake accounts created using real people's information. They also charged real people for insurance they did not buy and for loans, they did not make.
Looking Ahead
Nothing of interest to note.
I will be traveling and celebrating my sister’s wedding. So it is unlikely I write anything or if I do write it will be very short.
Sports I Love
Empire Strikes Back
The World Hoped Real would be the chosen one to bring balance to football. But it was not to be.
Man City displayed why they are the Empire (the best team in the world). They smashed Real Madrid in the Champions League semis on Tuesday. It was not a close match AT ALL.
Safe!
Man U may have done just enough to survive and play Champions League football next season.