August 12, 2025 • 14 mins
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Despite politicians touting progress, the latest inflation numbers and economic indicators tell a more sobering story. From rising delinquencies and corporate bankruptcies to stubborn tariffs and high prices on everyday necessities, this breakdown examines the cracks in America’s economy—and why the “less bad” narrative isn’t the same as good news.
Apple Podcasts: https://podcasts.apple.com/us/podcast/watchdog-on-wall-street-with-chris-markowski/id570687608
Spotify: https://open.spotify.com/show/2PtgPvJvqc2gkpGIkNMR5i
WATCH and SUBSCRIBE on:
https://www.youtube.com/@WatchdogOnWallstreet/featured
Despite politicians touting progress, the latest inflation numbers and economic indicators tell a more sobering story. From rising delinquencies and corporate bankruptcies to stubborn tariffs and high prices on everyday necessities, this breakdown examines the cracks in America’s economy—and why the “less bad” narrative isn’t the same as good news.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.
Speaker 2 (00:16):
Inflation, Nation, Economic Reality and Less Bad Anyway. I want
to talk about arguments and debate because it's funny you
get into. You watch a lot of the television programs
out there, and basically, basically they set it up so
various different people have to take a position and they
(00:39):
have to stick with that position. Well I don't have to,
but they do. I guess it makes for good TV.
When entering into a quote end quote debate or argument
with someone, the goal shouldn't be to win the debate,
unless you're doing a debate club where you're told what
position you're supposed to have. It's to basically come to
(01:03):
some sort of truth, to some sort of understanding. And
we don't have that. We really don't. The inflation numbers
came out today two point seven percent. Now the Fed
wants it down at two percent. Core inflation up three
point one percent. Okay. A lot of people spike in
(01:27):
the football saying I see, Oh my god, you said
the sky was going to fall, the world's gonna end,
inflation was gonna destroy us. Yeah, if we had stuck
with those Liberation Day tariffs that were in place, that
would most certainly be the case. I like to remind
(01:48):
everybody our largest trading partner in the world. He got China,
one of our largest trading partners. Again, they put and
put on another ninety day. Basically look back. You know,
they're gonna see what's gonna happen in ninety days. They're
still trying to work something out. Inflation is here, Tariffs
(02:09):
are forcing prices up. Anybody again who pays any bills
in their home knows this. You can yell and scream
all you want about it. If Trump administration coming out
today going after Golm and Sacks, going after JPOW, will
get into that in regards to interest rates. But the reality, okay,
(02:32):
the reality is, you know, excluding food and energy, you've
got three point one percent to the upside, and I
think that quite frankly, it's substantially understating the actual rise
and prices. Again, I don't trust government numbers. I didn't
trust the government numbers when they were telling us that
inflation was transitory not too long ago. Inflation is here,
(02:58):
prices are going up, tariff is attacks. The question is,
right now, what about monetary policy. Some are arguing that
Fed shouldn't do a damn thing, well, based upon the
Fed's metric in rules. No, they really shouldn't be lowering
(03:21):
rates based upon what this number states at this point
in time. However, the Federal Reserve has what we call
a dual mandate, and the underlying economy has major cracks,
major cracks right now. If you take a look at
(03:42):
some of the various different you want to call them,
interest rate handicappers, basically what they are. They're expecting three
interest rate cuts seventy five basis points this year. Okay, again,
how that will affect the overall economy? Again, I might again,
(04:06):
you've seen mortgage rates come down a little bit automatically,
and that's based upon the ten year Treasury. It's not
based upon the Fed doing anything. But do we foresee
see interest rates getting down to where they were you know,
in COVID post COVID. No, And if that's the case,
(04:27):
we're in real, real trouble. I want to go through
because we want to talk about economic reality. Okay, here
I'm looking at various different balances. Okay, the percentage of
balances on various different loan types here in this country.
That and again it's a shame, it's a shame that.
(04:47):
Again again they don't talk about this on the business
networks and break things down. Percent of balance balances that
are ninety days delinquent by loan type. And again I'm
looking at a chart right here. You're going back right now.
(05:10):
This is the highest level we've seen. It's the highest
level we have seen on credit cards, going all the
way back to two thousand and eight, two thousand and nine,
percentage of credit card rates that are ninety days delinquent.
Student loans were back up to where we were back
(05:33):
during the beginning of COVID before they put the forbearance on,
so basically went way down when they said, okay, we're
just gonna you know, there wasn't anybody defaulting because you
didn't have to pay it back, and it has spiked
a great deal. Auto loans, we haven't seen ninety this
number since two thousand and ten. Revolving you know, mortgage
(05:59):
delink one sees again kind of flatline to some degree,
but those are the numbers when it comes to loans. Again,
I'm giving you underlying economic reality here, we'll talk about
we'll talk about prices and deflation a little bit. Here,
(06:22):
we'll talk a little bit some more economic numbers here. Oh,
seventy one large US companies went bankrupt in July. That
is the highest monthly total sense the pandemic. This follows
sixty six and sixty four filings in June and May, respectively.
Year to date, there have been four forty six large bankruptcies,
(06:44):
the most in fifteen years. And again you take a
look at the companies that are leading the surge industrials,
consumer discretionary, healthcare, consumer staple, information technology, and I can
(07:05):
keep going through some of the numbers. Share of young
adults living with a parent. Yesterday we talked about unemployment
rates with college graduates. There is there's, without a doubt,
there's some serious weakness in the economy. President of the
United States put out a tweet today said Jerome too late.
Powell must now lower the rate. Steve Mannoushian, he spelt
(07:31):
his name in an odd way. It was his Treasury
secretary for you, recall, really gave me a beauty when
he pushed this loser. The damage he has done by
always being too late is incalculable. Fortunately, the economy is
so good that we've blown through Powell and the complacent board.
What that means, I don't know. I don't know exactly
(07:54):
what that means. It's unintelligible. I am, though, considering allowing
a major loss suit against Powell to proceed because of
the horrible and grossly incompetent job he's done in managing
the construction of the FED buildings, three billion dollars for
a job that should have been a fifty million dollar
fix up. Not good. If the economy is so good,
(08:17):
why are the employment numbers as they are? Why are
these things happening in the underlying economy? Why are delinquency
rates so high? There's weakness there. And again the President
of the United States, and I get this, this is politics.
(08:38):
He doesn't want He doesn't want to get caught with
the recession on his hands. He doesn't want it, doesn't
want a recession on his hand. I don't want to
deal with that. And if you know, he feels that again,
if we can lower interest rates, we might be able
to stave off this economic weakness. Again, he's got the
(09:05):
bully pulpit. He's got the bully pulpit. He can get
out there and you know, bang his tweets out and
say how wonderful, like I said, everything awesome, How everything
is so awesome out there. But the the American people
and the poll numbers, it doesn't reflect that. Talking about
I mentioned the word deflation. We've talked about this before
(09:27):
and again it's conventional wisdom is poisonous. The idea out
there that deflation is this horrific thing and it's going
to it's awful, and the economy is going to be
in a depression if that's the case. Wrong. Wrong. Deflation
in everyday necessity bare necessity items we like to call them,
(09:50):
is not a bad thing. Why because people are not
going to avoid spending on these items because they have
to to live that. It's the difference. And I'll explain
it to you this way. If there's deflation, and let's
say items that you'd buy at home depot or a
(10:13):
furniture store, and you know you've you've got this, uh,
you know you've been looking to upgrade your lawnmower, look
at a grade your lawnmower. But you keep seeing prices
coming down on lawnmowers, you will hold off that that
individual might hold off on upgrading the lawnmower thinking that
ge whiz, that lawnmower is going to be cheaper next month.
(10:37):
That yeah, without a doubt, that can push back economic activity.
But when it comes to things that you have to buy,
comes to things that you have to buy, that you
have to purchase just to live here in this country,
that quite frankly, it's not bad if they deflate to
some degree. Again, this is still over the past five
(10:58):
years we've done going over some of these numbers before,
family health insurance up twenty four percent, food at home
up twenty four percent, shelter up twenty seven percent, use
cars up thirty two percent, right on down the list. Okay,
who's going to complain if these prices come down? You
(11:21):
know they said auto insurance up sixty percent over the
past five years. You have to have auto insurance, right,
you have to buy it. You mean to tell me
that it's going to hurt people if these types of
items are deflationary. No, it's actually a very good thing.
We're actually a little bit over eleven percent over the
(11:43):
trend line over the two percent trend line over the
past five years overall. When it comes to inflation, a
deflationary type of do you want to call it spiral
if you will. When it comes to the you know,
items that are necessities would be great for the overall economy,
and quite frankly, that is something that I really wish
(12:05):
the president would focus on doing everything and anything we can.
He gives little exemptions here and there when it comes
to various different items. Okay, do whatever you can. When
it comes to food stuff coming in here to the
United States to get these prices down, they remain steady,
(12:26):
steady over the past month. But again you're still getting whacked.
People are still getting whacked upside the head. They need
to come down. Okay, just staying flat is not going
to put a smile on anyone's face because everyone knew
what they were paying just a few short years ago.
(12:46):
So again, this is the economic reality. Okay, the President's
going to come out again. He's the president, and politicians
are going to always come out to out how wonderful
everything is. Everything's awesome. We know better, we know what
the underlying fundamentals are in the economy, and we'd like
to see them improve. Will the FED rate cuts help
(13:06):
with that? Maybe, But then again, you know, this is
the risk type of a situation. Fed's concerned about whether
or not it's going to reignite inflation. I don't think
that seventy five basis points quite frankly, is going to
do that. Do I think that tariffs are going to
(13:27):
continue to again filter their way through the economy. Companies
are going to figure it out. They're going to start
passing these costs on because they said they're going to,
and people are going to get hit again. Focus on
the bare necessities, get those prices down. Yeah, we got
to get the economy moving and growing again. We got
(13:47):
to get people back to work. All of these things
can be done as more and more uncertainty gets pulled away.
The tariff debacle from Liberation Day has been just that.
It's been a debacle, and you still have many many
businesses out there that are still in weight in see
(14:08):
mode the governing by regular tweets on truth social again,
at some point in time, some point in time, it
has to stop. Watchdog on Wall Street dot Com
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.
Speaker 2 (00:16):
Inflation, Nation, Economic Reality and Less Bad Anyway. I want
to talk about arguments and debate because it's funny you
get into. You watch a lot of the television programs
out there, and basically, basically they set it up so
various different people have to take a position and they
(00:39):
have to stick with that position. Well I don't have to,
but they do. I guess it makes for good TV.
When entering into a quote end quote debate or argument
with someone, the goal shouldn't be to win the debate,
unless you're doing a debate club where you're told what
position you're supposed to have. It's to basically come to
(01:03):
some sort of truth, to some sort of understanding. And
we don't have that. We really don't. The inflation numbers
came out today two point seven percent. Now the Fed
wants it down at two percent. Core inflation up three
point one percent. Okay. A lot of people spike in
(01:27):
the football saying I see, Oh my god, you said
the sky was going to fall, the world's gonna end,
inflation was gonna destroy us. Yeah, if we had stuck
with those Liberation Day tariffs that were in place, that
would most certainly be the case. I like to remind
(01:48):
everybody our largest trading partner in the world. He got China,
one of our largest trading partners. Again, they put and
put on another ninety day. Basically look back. You know,
they're gonna see what's gonna happen in ninety days. They're
still trying to work something out. Inflation is here, Tariffs
(02:09):
are forcing prices up. Anybody again who pays any bills
in their home knows this. You can yell and scream
all you want about it. If Trump administration coming out
today going after Golm and Sacks, going after JPOW, will
get into that in regards to interest rates. But the reality, okay,
(02:32):
the reality is, you know, excluding food and energy, you've
got three point one percent to the upside, and I
think that quite frankly, it's substantially understating the actual rise
and prices. Again, I don't trust government numbers. I didn't
trust the government numbers when they were telling us that
inflation was transitory not too long ago. Inflation is here,
(02:58):
prices are going up, tariff is attacks. The question is,
right now, what about monetary policy. Some are arguing that
Fed shouldn't do a damn thing, well, based upon the
Fed's metric in rules. No, they really shouldn't be lowering
(03:21):
rates based upon what this number states at this point
in time. However, the Federal Reserve has what we call
a dual mandate, and the underlying economy has major cracks,
major cracks right now. If you take a look at
(03:42):
some of the various different you want to call them,
interest rate handicappers, basically what they are. They're expecting three
interest rate cuts seventy five basis points this year. Okay, again,
how that will affect the overall economy? Again, I might again,
(04:06):
you've seen mortgage rates come down a little bit automatically,
and that's based upon the ten year Treasury. It's not
based upon the Fed doing anything. But do we foresee
see interest rates getting down to where they were you know,
in COVID post COVID. No, And if that's the case,
(04:27):
we're in real, real trouble. I want to go through
because we want to talk about economic reality. Okay, here
I'm looking at various different balances. Okay, the percentage of
balances on various different loan types here in this country.
That and again it's a shame, it's a shame that.
(04:47):
Again again they don't talk about this on the business
networks and break things down. Percent of balance balances that
are ninety days delinquent by loan type. And again I'm
looking at a chart right here. You're going back right now.
(05:10):
This is the highest level we've seen. It's the highest
level we have seen on credit cards, going all the
way back to two thousand and eight, two thousand and nine,
percentage of credit card rates that are ninety days delinquent.
Student loans were back up to where we were back
(05:33):
during the beginning of COVID before they put the forbearance on,
so basically went way down when they said, okay, we're
just gonna you know, there wasn't anybody defaulting because you
didn't have to pay it back, and it has spiked
a great deal. Auto loans, we haven't seen ninety this
number since two thousand and ten. Revolving you know, mortgage
(05:59):
delink one sees again kind of flatline to some degree,
but those are the numbers when it comes to loans. Again,
I'm giving you underlying economic reality here, we'll talk about
we'll talk about prices and deflation a little bit. Here,
(06:22):
we'll talk a little bit some more economic numbers here. Oh,
seventy one large US companies went bankrupt in July. That
is the highest monthly total sense the pandemic. This follows
sixty six and sixty four filings in June and May, respectively.
Year to date, there have been four forty six large bankruptcies,
(06:44):
the most in fifteen years. And again you take a
look at the companies that are leading the surge industrials,
consumer discretionary, healthcare, consumer staple, information technology, and I can
(07:05):
keep going through some of the numbers. Share of young
adults living with a parent. Yesterday we talked about unemployment
rates with college graduates. There is there's, without a doubt,
there's some serious weakness in the economy. President of the
United States put out a tweet today said Jerome too late.
Powell must now lower the rate. Steve Mannoushian, he spelt
(07:31):
his name in an odd way. It was his Treasury
secretary for you, recall, really gave me a beauty when
he pushed this loser. The damage he has done by
always being too late is incalculable. Fortunately, the economy is
so good that we've blown through Powell and the complacent board.
What that means, I don't know. I don't know exactly
(07:54):
what that means. It's unintelligible. I am, though, considering allowing
a major loss suit against Powell to proceed because of
the horrible and grossly incompetent job he's done in managing
the construction of the FED buildings, three billion dollars for
a job that should have been a fifty million dollar
fix up. Not good. If the economy is so good,
(08:17):
why are the employment numbers as they are? Why are
these things happening in the underlying economy? Why are delinquency
rates so high? There's weakness there. And again the President
of the United States, and I get this, this is politics.
(08:38):
He doesn't want He doesn't want to get caught with
the recession on his hands. He doesn't want it, doesn't
want a recession on his hand. I don't want to
deal with that. And if you know, he feels that again,
if we can lower interest rates, we might be able
to stave off this economic weakness. Again, he's got the
(09:05):
bully pulpit. He's got the bully pulpit. He can get
out there and you know, bang his tweets out and
say how wonderful, like I said, everything awesome, How everything
is so awesome out there. But the the American people
and the poll numbers, it doesn't reflect that. Talking about
I mentioned the word deflation. We've talked about this before
(09:27):
and again it's conventional wisdom is poisonous. The idea out
there that deflation is this horrific thing and it's going
to it's awful, and the economy is going to be
in a depression if that's the case. Wrong. Wrong. Deflation
in everyday necessity bare necessity items we like to call them,
(09:50):
is not a bad thing. Why because people are not
going to avoid spending on these items because they have
to to live that. It's the difference. And I'll explain
it to you this way. If there's deflation, and let's
say items that you'd buy at home depot or a
(10:13):
furniture store, and you know you've you've got this, uh,
you know you've been looking to upgrade your lawnmower, look
at a grade your lawnmower. But you keep seeing prices
coming down on lawnmowers, you will hold off that that
individual might hold off on upgrading the lawnmower thinking that
ge whiz, that lawnmower is going to be cheaper next month.
(10:37):
That yeah, without a doubt, that can push back economic activity.
But when it comes to things that you have to buy,
comes to things that you have to buy, that you
have to purchase just to live here in this country,
that quite frankly, it's not bad if they deflate to
some degree. Again, this is still over the past five
(10:58):
years we've done going over some of these numbers before,
family health insurance up twenty four percent, food at home
up twenty four percent, shelter up twenty seven percent, use
cars up thirty two percent, right on down the list. Okay,
who's going to complain if these prices come down? You
(11:21):
know they said auto insurance up sixty percent over the
past five years. You have to have auto insurance, right,
you have to buy it. You mean to tell me
that it's going to hurt people if these types of
items are deflationary. No, it's actually a very good thing.
We're actually a little bit over eleven percent over the
(11:43):
trend line over the two percent trend line over the
past five years overall. When it comes to inflation, a
deflationary type of do you want to call it spiral
if you will. When it comes to the you know,
items that are necessities would be great for the overall economy,
and quite frankly, that is something that I really wish
(12:05):
the president would focus on doing everything and anything we can.
He gives little exemptions here and there when it comes
to various different items. Okay, do whatever you can. When
it comes to food stuff coming in here to the
United States to get these prices down, they remain steady,
(12:26):
steady over the past month. But again you're still getting whacked.
People are still getting whacked upside the head. They need
to come down. Okay, just staying flat is not going
to put a smile on anyone's face because everyone knew
what they were paying just a few short years ago.
(12:46):
So again, this is the economic reality. Okay, the President's
going to come out again. He's the president, and politicians
are going to always come out to out how wonderful
everything is. Everything's awesome. We know better, we know what
the underlying fundamentals are in the economy, and we'd like
to see them improve. Will the FED rate cuts help
(13:06):
with that? Maybe, But then again, you know, this is
the risk type of a situation. Fed's concerned about whether
or not it's going to reignite inflation. I don't think
that seventy five basis points quite frankly, is going to
do that. Do I think that tariffs are going to
(13:27):
continue to again filter their way through the economy. Companies
are going to figure it out. They're going to start
passing these costs on because they said they're going to,
and people are going to get hit again. Focus on
the bare necessities, get those prices down. Yeah, we got
to get the economy moving and growing again. We got
(13:47):
to get people back to work. All of these things
can be done as more and more uncertainty gets pulled away.
The tariff debacle from Liberation Day has been just that.
It's been a debacle, and you still have many many
businesses out there that are still in weight in see
(14:08):
mode the governing by regular tweets on truth social again,
at some point in time, some point in time, it
has to stop. Watchdog on Wall Street dot Com
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