WWD : Brunello Cucinelli Shares Soar on Back of Strong Nine-month Results

Brunello Cucinelli Shares Soar on Back of Strong Nine-month Results
The year 2022 is expected to be a record one for the company.

MILAN — Brunello Cucinelli shares climbed all day on Thursday, closing up 10.15 percent at 57.50 euros on the Milan Stock Exchange, following the release of strong nine-month figures the evening before and forecasting a record 2022. Shares over the past year have gained 17.68 percent and 13.3 percent in the past six months.

The Italian luxury company reported a 27.7 percent increase in revenues to 642 million euros in the nine months ended Sept. 30, compared with the same period last year.

On top of that, relying on its strong manufacturing pipeline, Cucinelli expects a 25 percent increase in revenues for the year and a 10 percent gain in the top line for 2023 based on the order intake for the men’s and women’s spring 2023 collections.

The company is poised to double sales ahead of its 10-year plan revealed in 2019 and introduced a new five-year plan beginning in 2023, considering 2022 a “non-linear year.”

Equity analysts Flavio Cereda and Kathryn Parker at Jefferies in their report stated that, “We continue to believe that [Brunello Cucinelli] is entitled to high multiples versus most peers,” and that revenues beat their expectations. The performance “validates our view that its unique brand profile at the top end is likely to be a safe haven” and rated Cucinelli shares as a “buy.” “Current trends look like a doubling of sales in six years versus the original stated assumption of 10.”

Cereda and Parker expressed their belief that Cucinelli’s “very resilient customer profile, category and geographical expansion opportunities will allow” the company to secure growth “but above all retain its unique characteristics that continue to distinguish it from all other players.” Jefferies estimated 2024 revenues to reach near 1.1 billion euros “and see no reason why 1.5 billion euros should not be comfortably achieved within five years.”

The namesake Cucinelli entrepreneur said he expects 2022 to be a record year and one of “total rebalancing, and along with the strong advancement in revenue after the pandemic period, we expect margins to completely rebalance, returning to ‘normal’ levels pre-pandemic.”

Growth in all markets and in the company’s retail and wholesale channels, as well as increases in both the women’s and men’s divisions, now representing almost a 50/50 balance, contributed to the strong nine-month performance.

WWD : L’Oréal’s Growth Streak Continues

L’Oréal’s Growth Streak Continues
Despite continuing to outperform the global beauty market in the three months ended Sept. 30, there were signs of weakening for the L’Oréal Luxe activity.

PARIS — L’Oréal continued its acceleration, registering third-quarter sales 20 percent above pre-pandemic levels and outperforming analyst expectations for the three months ended Sept. 30, despite a slowdown in growth for its Luxe division and ongoing difficulties in China.

The world’s largest beauty group on Thursday reported total sales of 9.58 billion euros for the three months ended Sept. 30, which represented a 19.7 percent year-on-year gain in reported terms and an increase of 9.1 percent on a like-for-like basis.

“In a context of unprecedented volatility, marked by the public health restrictions in China and inflation in the Western world, L’Oréal achieved a very solid quarter, continuing at a steady pace of growth compared to 2019,” said Nicolas Hieronimus, L’Oréal chief executive officer, in a statement released after the closure of the Paris Bourse.

“L’Oréal continues to shine,” wrote Bernstein analyst Bruno Monteyne in a research note. “What is remarkable is that L’Oréal still delivers double-digit organic growth, even when China doesn’t grow, confirming the success of its diversification across regions, across divisions and across price points.”

In a global beauty market that was up 6 percent in value in the first nine months of the year, L’Oréal’s sales gained 12 percent, Hieronimus told analysts during a conference call. The group benefited from its efforts to rebalance its geographic footprint and from exchange-rate effects, it said. It registered double-digit growth in all regions except North Asia and saw balanced gains across its divisions, all of which outperformed the beauty market overall, L’Oréal reported.

Nevertheless, the L’Oréal Luxe division, which includes brands such as Kiehl’s, Yves Saint Laurent and Biotherm, underperformed expectations. Its sales came in at 3.61 billion euros, an increase of 15.8 percent in reported terms and 4.6 percent on an organic basis, L’Oréal stated, numbers that Jefferies analyst Molly Wylenzek described as “well below expectations” — and below the results of its category peers, including LVMH Moët Hennessy Louis Vuitton.

The division was penalized by the Chinese lockdowns, weaker than anticipated performance in the U.S., with the exception of fragrance, and sourcing difficulties, notably for scent bottles.

For perfumes, Hieronimus said during the call, L’Oréal’s growth continues to outpace the market, with sales up 28 percent year-to-date compared with a market up 16 percent. “We would have had an even better performance in [the third quarter] had we had all the glass bottles we needed,” he commented. Looking forward, Hieronimus said, the division will focus on “allocating our capacities to the best performing brands.” Addressing issues for the Luxe activity in the U.S., Hieronimus admitted, “We could have done more from the innovation side….It’s in our hands, we just have to do it.”

One major bright spot for L’Oréal’s portfolio in the third quarter was its mass-market Consumer Products division, where reported sales were up 19.1 percent, or 10 percent on an organic basis, to reach 3.55 billion euros. Driven by its premiumization strategy as well as by price increases, the division’s performance was particularly strong in emerging markets, L’Oréal said, including “spectacular gains” in India and Mexico, as well as “solid growth” in the U.S. and Europe.

The Active Cosmetics division saw third-quarter sales leap 38.8 percent year-on-year in reported terms to 1.32 billion euros, a rise of 26 percent on an organic basis. Professional Products revenues, at 1.09 billion euros, gained 15.7 percent in reported terms and 4.3 percent like-for-like.

“All in all, the beauty market has grown in [the third quarter] at the same pace as it has done in the first half of the year, despite all the perturbations…the continuous difficulties in China with lockdowns that…we had not anticipated, all the more as they were simultaneously happening in Hainan and mainland China, [and] inflation in Europe,” Hieronimus said.

For the Chinese domestic market, said group chief financial officer Christophe Babule, L’Oréal’s sellout in the third quarter was up 6.7 percent compared with an overall market that was down 4.7 percent, numbers that were roughly stable compared with the first half, and with all divisions except Consumer Products reporting gains.

With the all-important Singles’ Day campaigns fast approaching and China’s leading influencers now back online, “I hope that Double 11 will be a good vintage in a market that right now remains pretty chilly because of the lockdowns,” Hieronimus said.

For the third quarter, at 2.41 billion euros, L’Oréal’s sales in North Asia grew 11.3 percent in reported terms, but only 0.3 percent like-for-like.

In Europe, the group’s sales were up 12.1 percent in reported terms or 10.5 percent like-for-like, to 2.88 billion euros. With the exception of the U.K., the beauty firm is seeing no signs yet of consumers trading down. “As far as the slowdown in consumption or trading down…we don’t see any major changes with a few exceptions….In the U.K. where inflation is the highest…we see a little bit of trading down, people spacing their visits to the hairdresser, buying a bit less premium skin care,” Hieronimus said.

North American sales for the three-month period gained 27.7 percent in reported terms and 9.3 percent like-for-like to hit 2.82 billion euros. While the company had feared a slowdown Stateside early in the quarter, he added, consumers who had traveled abroad over the summer had returned strongly after the break. “When they came back to the U.S. in August and September, it was back to school, back to stylists and back to derms, so that was very positive.”

In the emerging markets of the South Asia-Pacific, Middle East, North Africa and sub-Saharan Africa [or SAPMENA-SSA] zone, revenues gained 41.5 percent, or 30 percent like-for-like, to 787.7 million euros, while in Latin America, high inflation helped drive sales up 36.5 percent in reported terms — or 16.2 percent like-for-like — to 675.6 million.

While inflation accounted for a large part of sales gains in the third quarter as price increases were implemented at all of the divisions, volume sales were also positive for all but the L’Oréal Luxe division, said Babule. By region, volumes were up everywhere except North Asia, he said. “Besides the price increase, we see that in most of our business, whether by region or by division, we are in positive territory in terms of volume.” In the U.S., Hieronimus said, “consumers are kind of getting used to this inflation situation and they are considering spending money on beauty favorably.”

In the first nine months of 2022, the group’s sales grew 20.5 percent on a reported basis and 12 percent like-for-like, to reach 27.94 billion euros.

WSJ : Grindr Public Listing Can’t Keep It Casual

Grindr Public Listing Can’t Keep It Casual
Gay-dating platform will probably get slow fade from investors in this market

Investors will soon be able to hook up with the world’s most-popular gay-dating platform. A merger with the special-purpose acquisition company Tiga Acquisition, announced in May, values Grindr at $2.1 billion and is expected to close by the end of the year. As with any SPAC merger, historical details on the business are slim. In online dating, though, a snapshot often says all you need to know.

Grindr’s popularity relative to its total market size is impressive. A study commissioned by Grindr estimates the size of the LGBTQ+ population as of 2021 was just about 7% of the global tally. Meanwhile, Grindr had amassed 601,000 paying users as of last year, according to its registration filing, about 40% of the number of paying users of Bumble, the No. 2 dating app after Tinder.

Granted, Grindr is no spring chicken, having been founded when the iPhone was in its infancy. Attitudes toward a Pinterest-like grid of mostly shirtless men, organized by satellite location data, might have been less enlightened at the time. The world has evolved, even as Grindr hasn’t changed much—for better or worse. The company says it still has no proprietary matching algorithm, and there is no Tinder-like swiping. The app is still a very “visual experience,” as creator Joel Simkhai described it to the New York Times in 2014. It is used to find instant community—romantic or otherwise—wherever users go.

LGBTQ+ daters have the potential to be a valuable bunch. Pew Research Center data shows dating-app use varies significantly by sexual orientation. While just 28% of straight adults had tried a dating app or site as of a 2019 survey of U.S. adults, 55% of lesbian, gay or bisexual adults had tried one. Perhaps because of its first-mover advantage, Grindr says it has an 85% brand awareness among gay, bisexual, transgender and queer people, and is the best-known gay-dating app among the general population.

It hasn’t paid much for this. Grindr’s registration statement shows sales and marketing expenses amounted to less than 1% of its overall revenue last year. Match Group and Bumble spent nearly 19% and 28% of their revenue, respectively, on selling and marketing expenses over the same period.

Chalk some of that difference up to size. While on pace potentially to expand its top line faster than its competitors this year, Grindr’s run rate as of June 30 implies the company will put up about $180 million in revenue this year. Wall Street is forecasting that Match Group will generate about $3.2 billion. Most dating-app companies have several brands under their umbrellas. Match, for example, has more than a dozen, but Grindr has remained something of a lone wolf in the dating space.

Which raises the question: If Grindr’s brand was so valuable, wouldn’t a bigger company have bought it by now?

The concern could be a matter of the company’s past missteps, including periods of third-party data sharing of sensitive information such as users’ HIV status and the selling of other user information including location—problems the company says it has long since remedied. Or it could be the more delicate nature of Grindr’s mission. Lingering stigma on being “out” on a dating app persists to varying degrees by location and culture, which could crimp expansion potential. It is worth noting that predominantly straight dating apps such as Match’s Tinder enjoy many LGBTQ+ users.

Perhaps the biggest unknown is how quickly Grindr can increase monetization. Well over a decade into its existence, Grindr had nearly 11 million monthly active users as of last year across 190 countries, but its paid penetration was still under 6%. By contrast, Bumble had about 9% paid penetration as of September 2020 in less than half the time.

Grindr will tell you it has only recently started pushing its monetization efforts with the introduction of a few a la carte paid features this year. But the app’s simplicity could be working against it financially. While you have to pay to message suitors on Tinder before matching, Grindr is a bit like a digital bar, where users can approach and message whomever they see at no cost. While you can pay to see more (and avoid ads), freemium users can see 100 local singles on Grindr. That seems plenty to work with, given that Grindr’s users already spend an average of over an hour a day on the app.

The public market might not welcome Grindr with open arms. Stock-market investors since 2015 have lost an average of 37% of their investment on SPACs a year after the merger through the end of September, The Wall Street Journal reported this month. Meanwhile, Match and Bumble have shed an average of 68% of their market values over the past year as tech stocks have taken a beating and economic pressures have called into question near-term growth of nonessential spending.

Grindr’s latest valuation implies it is worth 17% of the dating giant Match, despite having fewer than 4% of Match’s paid users as of the end of last year.

That mismatch could break some hearts on Wall Street.

WSJ : ESPN, Formula One Reach New Broadcast Agreement

ESPN, Formula One Reach New Broadcast Agreement
The deal will keep F1 on the ESPN networks and ABC through 2025

ESPN and Formula One announced a new broadcast deal Saturday that will keep the global motor-sports series on the network through 2025.

The agreement will keep the current commercial-free format for live races on ESPN, ESPN2 and ABC, which are all owned by Walt Disney Co. DIS 3.50% ESPN has broadcast F1 in the U.S. since 2018.

At least 16 races will air on ABC and ESPN each season, the network said in announcing the renewal. ESPN Deportes will continue as the Spanish-language home of F1 in the U.S.

Race weekends will continue to include live telecasts of practice sessions and qualifying, as well as prerace and postrace coverage. The new agreement includes an increased focus on qualifying, with more sessions airing on ESPN or ESPN2.

ESPN said its F1 2021 season set a record for the most-viewed ever on U.S. television, with an average of 949,000 viewers per race. Live F1 telecasts have averaged 1.2 million viewers in 2022, the network said.

F1 has exploded in popularity in the U.S. since the 2019 Netflix documentary series, “Drive to Survive,” first aired.

The terms of the new deal, announced ahead of Sunday’s U.S. Grand Prix in Austin, Texas, weren’t disclosed.

The May telecast of the inaugural Miami Grand Prix had an average viewership of 2.6 million, the largest U.S. audience on record for a live F1 race, ESPN said.

FT : Red Bull co-founder and F1 team owner Dietrich Mateschitz dies at 78

Red Bull co-founder and F1 team owner Dietrich Mateschitz dies at 78
Austrian billionaire turned the energy drink into a global sports empire

Dietrich Mateschitz, co-founder of the Red Bull energy drink company and owner of the brand’s Formula One racing team, has died at the age of 78.

The Austrian entrepreneur turned the caffeinated canned drink into one of the world’s best-known brands, with its “Red Bull gives you wings” slogan and marketing campaigns that revolved around extreme sports.

Mateschitz had a net worth of roughly $20bn, according to Forbes. He and Thai businessman Chaleo Yoovidhya founded Red Bull in 1984, sold their first energy drinks in Austria three years later, and expanded into the US in 1997. Yoovidhya died in 2012.

More than 9.8bn cans of Red Bull were sold globally last year, up by around 24 per cent on the prior year, according to the company’s website. Group revenues increased by a similar percentage to €7.8bn. It employed over 13,600 people at the end of last year.

The inspiration for the energy drink came to Mateschitz during his travels in Thailand as a marketing director for a toothpaste maker now owned by Procter & Gamble.

The Red Bull billionaire also built up a vast sports empire that ranged from Formula 1 racing teams to football clubs. The Red Bull network of football clubs includes Austria-based Red Bull Salzburg, Germany-based RB Leipzig, and the New York Red Bulls.

Mateschitz got into the Formula 1 car racing series in the 1990s, bought the Jaguar racing team in 2004 and entered the following season under the Red Bull name. With Sebastian Vettel at the wheel, Red Bull Racing won both F1 championships — for drivers and constructors — four years running from 2010-13.

However, Red Bull Racing struggled to match Mercedes and British racing driver Lewis Hamilton, a combination that dominated the championships from 2014.

Last year, Red Bull driver Max Verstappen claimed the driver’s title from Hamilton in controversial circumstances at the season finale in Abu Dhabi. The Dutchman has already defended that title and Red Bull is set to seize the constructor’s championship from Mercedes as soon as Sunday’s US Grand Prix in Austin.

Mateschitz’s death emerged on Saturday during the F1 race weekend.

“It’s very, very sad. What a great man,” said Red Bull team principal Christian Horner on Sky Sports. “What he achieved and what he’s done for so many people around the world across different sports is second to none.”

Fellow Austrian Toto Wolff, the team principal at Mercedes, described Mateschitz as one of the world’s greatest entrepreneurs.

“He created a market that didn’t exist with energy drinks out of Salzburg and made one of the best brands in the world. There’s no one like him.”

FT : Second-hand Rolexes: watch out for stupid prices and superfakes

Second-hand Rolexes: watch out for stupid prices and superfakes
Watchmakers want a slice of the pre-owned market but they may be late to the game

Find yourself with some spare cash? Fancy a luxury timepiece? If you’re new to the market, prepare to be shocked. First, because there are few new watches to be had. Second, because second-hand watches, even when recently made, sell at a premium to the retail price — often at multiples of that figure.

For experienced collectors, this is old news. The UK retail price of a new Rolex Submariner “Hulk” with its deep green face and bezel was “just” £7,550 in 2020 before it was discontinued that year according to the website Swiss Watch Trader.

Data on another site, Chrono24, show that the average second-hand price broke above the retail price in December 2017 and went on rising, peaking at £27,744 this April.


The websites of UK retailers such as Mappin & Webb do not mention prices. They do acknowledge demand for Rolex watches at times outstrips production capacity. Collectors advise tyros to buy their way into the good graces of jewellers who may add their names to waiting lists of up to five years.

Watchmakers are getting in on the act. A new report on the Swiss watch industry from Deloitte predicts that the “pre-owned” market will be worth SFr35bn (£31bn) by 2030 and make up more than half of what it calls the “primary” market.

In a survey of 5,579 consumers in 11 countries, Deloitte found that most buyers of used watches today are in their 30s and 40s. Some makers already offer their own models second-hand. Ironically, they may struggle to compete with the impressively resourced third-party websites offering multiple models and brands.

Haywood Milton of Miltons, which has four UK stores specialising in second-hand Rolexes, describes the market of the past two years as “ridiculous, stupid”. The belief had taken hold that a Rolex could only ever go up in price. Well-paid professionals have pandemic-era savings to spend. While prices have fallen in recent months, Milton says, they have stabilised at a high level.

There is also a dark side to the market, he adds. Thousands of youngsters have become dealers overnight on platforms such as Instagram, where know-your-customer and anti-money-laundering rules have little weight. There is also the recent phenomenon of “superfakes”. The insides of these knock-offs look much like the real thing. Buyer, beware.

FT : A Recession Is Coming. Big Banks Can Handle It.

A Recession Is Coming. Big Banks Can Handle It.

Bank earnings have been tough to digest. Nearly all of the big banks topped third-quarter forecasts, and their stocks popped a bit. Yet the sector hasn’t caught on, trailing the market since earnings season began.

The disconnect reflects the fact that investors are looking ahead to 2023—and don’t like what they see. The economy may be headed into a recession within nine months, predicts JPMorgan Chase (ticker: JPM) CEO Jamie Dimon. If a recession settles in, it would put banks back on their heels after a strong recovery in core banking and capital markets from the pandemic-era lows.

Among major banks, JPMorgan, Bank of America (BAC), and Wells Fargo (WFC) do look well equipped to navigate through the tough climate. But all will have to overcome skepticism that the sector can outperform in a difficult economic stretch ahead.

For now, profits at the big banks appear to hitting Wall Street’s targets. Results weren’t as strong at Morgan Stanley (MS) and Goldman Sachs Group (GS), due to their exposure to investment banking and other capital markets areas.

The next few months could be tougher for the sector. The housing market is ailing, depressing loan volumes. Interest income from lending activities isn’t likely to grow as much. Deal-making has slowed, pushing investment banking revenues to the lowest levels in a decade. Provisions for loan losses are rising.

Some analysts are souring on the banks. Wells Fargo’s head of equity strategy, Christopher Harvey, cut his rating on the sector to Neutral this past week, writing that he’s “no longer bullish.” While the fundamentals look fine, he said, “banks will struggle to outperform as economic growth slows, credit normalizes, inflation abates, and sentiment weakens.” Stresses in credit markets may pressure profit margins. And chances are dimming for the Federal Reserve to “pivot” toward a more accommodative stance on interest rates, at least until late in 2023, putting the economy in a slow-growth mode or recession.

Investors shouldn’t brush away these issues. Rising interest rates have increased banks’ net interest income, including the margins they make on loans. But that tailwind is likely to wind down, as the Fed is expected to ease off rate hikes in early 2023.

At the same time, banks face pressure to increase yields on deposits, potentially ramping up their costs and putting another squeeze on margins. Despite a big jump in rates this year, banks are still paying meager interest—averaging 1.09% on savings accounts. Rival money-market funds yield almost 3%. Bank deposits are considered to be “sticky,” since it’s such a hassle to switch banks, but deposits could come unglued if yields don’t rise.

“We haven’t gotten to the point where it has created a liquidity crunch,” says Chris McGratty, head of U.S. bank research at Keefe, Bruyette & Woods. “But certain banks are impacted by this dynamic more than others.”

Consumer lending could also weaken, particularly in housing. Far fewer homeowners and buyers are taking out loans or refinancing as 30-year mortgage rates rise to nearly 7%, more than double their 2021 average of 3%. Mortgage applications recently hit a 25-year low, and banks are seeing sharp drops in loan volume for purchases and refinancing.

If the economy enters a recession, these pressures will increase. That said, the big banks are heading into a downturn in far better shape than before the financial crisis; capital buffers are now robust, and lending standards have tightened.

JPMorgan, for one, epitomizes the strength. The bank raised its forecast for net income interest through year end and said it plans to resume stock buybacks in 2023. Despite Dimon’s recession warnings, JPMorgan said it’s on track to lift its capital ratio buffer to 13% in early 2023, up from 12.5% in the fourth quarter. The bank’s confidence in hitting that target “should reignite the market’s trust in their ability to manage their balance sheet while generating solid revenue growth,” wrote UBS analyst Erika Najarian in a note this past week.

Bank of America has been raking in deposits, including 418,000 new consumer checking accounts in the third quarter. Its Merrill Lynch wealth management business is adding assets, pushing total client inflows for the bank to a net gain of $100 billion this year.

Bank of America isn’t as exposed to volatile capital markets as rivals like Goldman Sachs. BofA’s lending standards are relatively conservative, reflected in its percentage of nonperforming loans at just 0.39%.

Wells Fargo analyst Mike Mayo reiterated an Overweight rating on the stock, seeing it hit $55, up from recent prices around $34. BofA is a “leader in tech among banks,” he wrote, which should help it reach a target of capturing a quarter of U.S. bank deposits. “Overall, BofA is a Goliath at a time when Goliath is winning,” he said.

Wells Fargo is a turnaround in the making, following a series of scandals and management shuffles. The bank reported a 36% rise in net interest income in the quarter, from a year ago, hitting $12.1 billion and topping Wall Street estimates for $11.6 billion.

Wells Fargo has scaled back on issuing mortgages, historically a large part of its business. The bank is improving its operations, according to Edward Jones analyst Kyle Sanders, who sees Wells Fargo becoming a “more productive and profitable firm,” according to a recent note.

Granted, if the economy cracks next year, bank stocks will suffer. Sticking with the giants might be the best way to handle the shakier ground.

(ZH) The Middle Class Is Dying! 50% Of All American Workers Made Less Than $3,13

The Middle Class Is Dying! 50% Of All American Workers Made Less Than $3,133 A Month Last Year

Inflation is systematically destroying our standard of living, and the middle class is shrinking a little bit more with each passing day. The Social Security Administration just released wage statistics for 2021, and the numbers that they have given us are quite stunning.
As you will see below, half of all American workers made less than $3,133 a month last year. Once upon a time, you could live a very comfortable middle class lifestyle on $3,133 a month. But thanks to inflation, such a wage now puts you just barely above the poverty level. The decisions that our leaders have been making are absolutely eviscerating the middle class, and that should deeply trouble all of us.

You can find the new Social Security Administration wage report right here. The following are some statistics that I pulled out of the report…
  • More than 30 percent of all American workers made less than $20,000 last year.
  • More than 41 percent of all American workers made less than $30,000 last year.
  • More than 52 percent of all American workers made less than $40,000 last year.
  • More than 62 percent of all American workers made less than $50,000 last year.
These numbers tell us that most Americans are just barely scraping by, but our leaders want us to buy into the illusion that most people are “doing well” these days.
Of course that isn’t even close to the truth.
According to the Social Security Administration, the median wage for 2021 was just $37,586.03…
By definition, 50 percent of wage earners had net compensation less than or equal to the median wage, which is estimated to be $37,586.03 for 2021.
If we were still living in 1980, that would be fine.
But we aren’t in 1980 anymore.
In 2022, the poverty level for a household of five in the United States is $31,040.
That means that a worker in the United States making the median wage would be earning just enough to lift a family of five above the poverty line.
If you divide $37,586.03 by 12, that gives you a median monthly wage of $3,132.17.
For purposes of this article, I will round up and call it $3,133.
Half of all American workers make more than that per month, and half of all American workers make less than that per month.
And it is important to remember that this figure is before taxes are taken out.
Ouch.
Meanwhile, the cost of living continues to spiral out of control. Recently, the average rent on a single family home in the United States reached $2,495 a month…
Rent prices for single family homes swelled during the first half of 2022, hitting a national average of $2,495 a month — a 13.4% increase compared to the same period in 2021, according to a new report from national real estate brokerage HouseCanary.
If you are only earning $3,133 a month and you have to spend $2,495 a month for rent, that leaves you next to nothing for everything else.
For example, all of us have to eat.
But these days a single shopping cart full of food will easily run you more than 300 dollars.
And that is if you are trying to be really frugal.
Gasoline has also become extremely expensive.
All the way back in 1960, a gallon of gas cost just 31 cents.
Today, gas is approaching 7 dollars a gallon in some parts of California.
I could go on and on with more examples of the rapidly rising cost of living. Heating bills are expected to soar this winter, health insurance has gotten absurdly expensive, and new vehicles cost so much that most Americans can no longer afford them.
If things are this bad already, what will conditions be like for the middle class as the economy deteriorates in 2023 and beyond?
The worst housing crash since 2008 has now started, the financial markets are on pace for their worst year since 1969, and big companies all over America are starting to lay off people in large numbers.
Alarmingly, some of the biggest layoffs are actually being conducted by the big tech companies. In fact, we just learned that Microsoft will be laying off approximately 1,000 workers…
Microsoft will lay off about 1,000 employees, the company confirmed Tuesday.
Although it is not confirmed if the layoffs are isolated in gaming divisions, employees who work for Xbox and other Microsoft-owned studios said they were being laid off, the Washington Post reported. Axios first reported the layoffs Monday evening.
At this point, almost everyone can see that a recession is coming.
Even Jeff Bezos, who is usually extraordinarily optimistic, is warning people to “batten down the hatches”…
Amazon founder Jeff Bezos warned America’s to ‘batten down the hatches’ as he shared a tweet warning of a likely impending recession.
Bezos – who is the world’s second-richest man – tweeted a video of Goldman Sachs CEO David Solomon saying there was a ‘good chance’ of a downturn.
The Amazon founder – who has a $137 billion fortune – signaled his agreement by captioning the tweet: ‘Yep, the probabilities in this economy tell you to batten down the hatches.’
When Jeff Bezos starts sounding like The Economic Collapse Blog, you know that the hour is late.
These days, our impending economic downturn has even become a very hot topic among Hollywood celebrities…
Even non-billionaire-but-still-rich person Gwyneth Paltrow is losing sleep over it.
“The economy sucks,” she told the Hollywood Reporter this week. “I’m just worried about next year and how bad the recession’s gonna be.”
Other celebrities are weighing in, too. Last month, rapper Cardi B ranted about inflation and interest rates. “How are people surviving? I want to know.”
If the middle class is steadily eroding during relatively stable times, what is going to happen once the economy really begins to unravel?
There is so much anger all over the United States right now, and the vast majority of the population is simply not prepared for what is ahead.
I have been writing about the demise of the middle class for more than a decade, and the condition of the middle class has never been worse than it is right now.
At one time America had the largest and most prosperous middle class in the history of the world, and that was a wonderful thing.
But now very dark times for the middle class are here, and there doesn’t appear to be much hope on the horizon.