Editor’s Note: Did you see what Jack and Lance revealed yesterday?? I’m not gonna spoil it… Check it out here
Hey y’all,
I’ve been studying German in my free time on Babbel.
We work with a bunch of folks from Germany, I’ve always wanted to be truly bilingual, my family’s heritage is very German, I love the country, and I studied German for years in middle and high school, so I’ve always wanted to really pursue it and see if I could master the language.
And yesterday, I learned an interesting new German word: “Schwindlig.”
Schwindlig is the German word for “dizzy.”
And I think it’s an incredibly accurate word for the economy right now.
It is dizzying to try and figure out “the truth” about the economy these days.
On the one hand, the markets are ripping higher. Retail stock buying is at record levels. The Fear and Greed Index is firmly in “Greed,” racing towards “Extreme Greed.”
And yet…
The economy just doesn’t seem “healthy,” does it?
Next Thursday, we’ll get the official GDP print on the heels of April’s negative “unofficial” number. The last time we had a confirmed negative quarter in GDP, it kicked off the bear markets of 2022.
But beyond those more “meta” realities, it seems like folks on a day-to-day level are struggling.
Money doesn’t go as far as it used to. Houses are impossible to buy. People can’t afford to take vacations. Travel is dwindling.
And then there’s the big news of the day on X, the news that Klarna posted a massive loss last quarter because the pay-as-you-go platform’s users aren’t paying back their debts.
As is ever the case on X, the memesters are out in full force to poke fun at this news. But one series of memes has really caught my attention: those, like the one posted below, drawing analogies to The Big Short.
Now, I laughed out loud when I first read that tweet.
But then I got concerned. Because the truth is, it’s a little TOO on the nose.
For those who might not remember, The Big Short is the story of how Michael Burry and a group of renegade investors saw the 2008 housing crisis coming, and set themselves up to make a massive profit as the economy collapsed.
Obviously, the memes are an allusion to the similarities between 2008 and today — the unstable economy, the everyday investors making bad decisions with their credit and their finances because they can’t afford not to.
In other words, using Klarna to fund a Chipotle order in installments might be different in scale but is identical in effect to using a subprime mortgage to finance a house you couldn’t afford in, say, 2006.
If you can’t afford the house, don’t buy the house.
If you can’t afford the burrito, don’t buy the burrito.
The problem is, everyday folks are struggling to make ends meet. So as much as the stock market might be ripping right now, there’s plenty of reason for concern in the near future.
And let’s not forget: when the 2008 Financial Crisis happened, it was the banks who got massive bailouts from the government. Not the everyday folks whose lives were destroyed.
Which is why everyday folks need to protect themselves.
First, from transparently bad decisions like using Klarna or other pay-as-you-go platforms to fund purchases that you can’t afford and that aren’t critical. Those are the “easy” decisions.
But for folks who can afford to…
It’s NEVER been more important to get serious about using the stock market for some extra cash.
Learn how to invest, and, more importantly, learn how to trade in ANY market condition.
Yesterday, I talked about the value of being a “utility trader.”
Today, the message is pretty much the same: keep honing those skills, because you’re gonna need them sooner than later.
As I’m fond of saying, no one cares more about your money than you.
No one is coming to save anybody, unless that person already has billions of dollars and massive corporate safety nets.
So roll up your sleeves and get to work on saving yourself! We’re here to help.
To your prosperity,
Stephen Ground
Editor-in-Chief, ProsperityPub
