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Hmm, I wonder why.

With recession in his forecast, Rosenberg steers investors into bonds and rate-sensitive stocks including utilities, consumer staples and REITs.

The Supreme Court recently prevented Republicans from hijacking state and county election boards in its 6-3 ruling against North Carolina Republicans in Moore v. Harper. If the state GOP had been successful, they would’ve been able to run federal-level elections in North Carolina and across the country without any pathway for citizens to challenge unfair election laws. But voting rights are still…

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Customers use an ATM at a Bank of America.

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• US personal savings have collapsed by $5.5 trillion since April 2020, spelling trouble for the economy. 
• Historically high inflation has been the key reason for the decline in American consumers’ cash reserves. 
• With the return of student loan bills, savings and spending levels could worsen. 

The US economy has held up remarkably well this year, defying recession predictions, thanks in part to Americans’ pandemic-era savings that have cushioned consumer spending.

But that support is now running low.

Americans’ personal savings have collapsed by an eye-watering $5.5 trillion since April 2020 thanks to soaring inflation, according to Barchart.com – and that could spell trouble for the economy. 

Such reserves have now fallen to levels lower than before COVID-19, the financial data provider said in a tweet. 

US household savings surged during the pandemic, spurred by government stimulus checks and a drop in in-person spending. That cash pile has boosted consumer spending ever since the COVID restrictions were relaxed, supporting the economy even as the Federal Reserve raised interest rates steeply since last spring. 

But historically high inflation in the US since mid-2021 has eaten into the savings, as prices of everything from energy to food surged. Inflation hit a 40-year high of 9.1% in mid-2022, but has since slowed to 3% as of last month – thanks to the Federal Reserve’s aggressive rate hikes. 

The US central bank has increased benchmark borrowing costs by 500 basis points since early 2022 in a bid to bring inflation down to its 2% target. 

Billionaire investor Bill Gross recently weighed in on falling consumer savings levels, warning that Americans could run out of their pandemic savings later this year, paving the way for a recession.

Also adding pressure on the US economy is the return of student loan bills, which could cut both consumer saving and spending levels.

A new report by Oxford Economics forecasts US consumer spending could fall by more than $100 billion a year as student loan payments kick in, lifting the odds of an economic downturn.

“I was completely, if not catastrophically wrong,” the author of the famous “Anonymous” op-ed tells Salon

A decade ago, Spain was often cited as a rare European country without far-right MPs. But polls for Sunday’s election suggest the Franco-nostalgist Vox party is about to enter national government, after years building its influence over mainstream conservatives.

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Alberto Núñez Feijóo, leader of the Partido Popular, center, at a campaign rally at Plaza Colon in Madrid, Spain, on July 20, 2023. (Manaure Quintero / Bloomberg via Getty Images)

“The time for patriots has arrived,” Italian premier Giorgia Meloni told supporters of the nationalist Vox party ahead of the general election in Spain this Sunday. In a speech delivered remotely from Rome to a packed rally in Valencia, the leader of the post-fascist Fratelli d’Italia party framed Sunday’s vote as one that could “change the direction of European politics,” fundamentally altering the balance of power on the continent.

“In Italy, as in Finland, Sweden, Poland, and the Czech Republic, we have shown that patriots can govern,” she claimed, referring to other parties in her continent-wide European Conservatives and Reformists (ECR) alliance that have won high office in recent times. Now, she said, “it is crucial that on July 23 a conservative patriotic alternative is established [in Spain].”

Final polling before Sunday’s vote suggests a government along such lines is indeed the most likely outcome. The combined vote share of the conservative Partido Popular (PP) and Vox is predicted to reach between 46 and 48 percent — a historic high for the Spanish right, putting the two parties on the brink of an absolute majority. El País’s final poll has them three seats short, with PP leading the center-left Socialists (PSOE) 32.9 percent to 28.7 percent (or 135 seats to 110) and Vox tying the left-wing Sumar party at around 13.5 percent (or between 36 and 38 seats each). Given such an outcome, the right-wing bloc would probably be able to count on the support of a small number of regional MPs from Coalición Canaria and Teruel Existe to secure a thin majority.

Italian far-right leader Giorgia Meloni framed Sunday’s vote in Spain as one that could ‘change the direction of European politics,’ fundamentally altering the balance of power on the continent.

The PP and Vox have spent the campaign demonizing the center-left prime minister Pedro Sánchez and attacking the democratic legitimacy of his left-leaning coalition — and their combined efforts look set to translate into heightened mobilization of right-wing voters. With its slogan “Sanchismo or Spain,” the PP’s campaign has, in large part, dovetailed with that of Vox in its portrayal of the PSOE–Unidas Podemos government as a threat to the country’s constitutional order, accusing Sánchez of being in bed with supposed Basque terrorists and Catalan independence activists.

Alberto Núñez Feijóo, the PP’s candidate for prime minister, even leaned into a prominent online conspiracy theory that Sánchez was going to interfere with postal voting to fix the election. During a speech last week, he asked mail workers “to deliver all the ballots despite your bosses.”

In this polarized atmosphere, the Left has struggled to respond. Sánchez has sought to sound the anti-fascist alarm and position the PSOE as the tactical vote for all progressives fearful of what is to come. But, according to political analyst Iago Moreno, this strategy has ensnared Sánchez’s campaign in “a reactive logic,” under which the PSOE has been unable to go beyond “simply responding to the provocations of the Right, whether around the removal of pride flags [from public buildings] or Vox’s denial of gender violence.”

A further major unknown is the level of mobilization on the radical left and whether deputy prime minister Yolanda Díaz can put months of damaging infighting behind her and lead a late comeback — particularly in a series of marginal constituencies where her new Sumar platform can potentially steal seats from the Right.

The Partido Popular and Vox have spent the campaign demonizing center-left prime minister Pedro Sánchez and attacking the democratic legitimacy of his left-leaning coalition.

Yet barring such a late surprise, apologists for Francisco Franco’s regime will likely be sitting in the next Spanish cabinet. Feijóo has explicitly made clear that he is willing to govern with Vox. In such a context, Spain seems poised to undergo an authoritarian drift at home while potentially becoming pivotal to plans to construct an alternative governing axis in the European Union (EU), uniting the mainstream conservative European People’s Party (EPP) and Meloni’s EU-wide far right. The consequences of Sunday’s results could be very far-reaching, indeed.

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Spain’s Reactionary Wave

There are some caveats to this picture. Vox looks positioned to be kingmaker and yield significant institutional power, yet this also comes at a moment when the party seems to have hit something of an electoral ceiling at 14 percent of the vote. “The extreme right has imposed its agenda on the public arena, but the resulting toxic atmosphere seems to have benefitted the PP more, with Vox having lost ground in the polls over the last year,” Marga Ferré, copresident of the left-wing think tank transform! europe, told Jacobin. She sees the boundary between the two parties as “ever more vague and permeable, not least because the true leader of the far right in Spain, the person who has done most to impose its narrative, is [the PP’s Trumpian Madrid governor] Isabel Díaz Ayuso.”

This vague boundary, however, also reflects the fact that unlike most other far-right parties in Europe, which have emerged at a distance from mainstream conservatism, Vox was founded as a splinter from the PP — its leader, Santiago Abascal, was a regional MP for the PP in the Basque Country until he split from the party in 2013. According to Ferré, “extreme-right elements have always operated within the PP, particularly through its strong ties to ultraconservative Catholic sects like Opus Dei and Los Kikos,” though their influence was diluted within the PP’s broader conservative project for middle-class Spain.

These sects are heavily represented in state institutions like the judiciary and military, as well as in the governing party of the Right, a situation that Ferré views as “a structural hangover from Spanish fascism — one ensuring that right-wing politics in Spain has a very traditionalist character.”

When Vox split from the PP in 2013, it drew its leading cadre from this social milieu, heavily recruiting high officials from the coercive institutions of the state while also seeking alliances with extremist Catholic associations like HazteOir and Foro Español de la Familia. Yet the party’s initial electoral breakthrough did not come until five years later, in the December 2018 Andalusian regional election. That surge was facilitated by a reactionary turn already underway within the mainstream Spanish right, as the PP and the now defunct Ciudadanos party pursued a punitive and aggressively nationalist response to the failed push for Catalan independence.

Barring late surprises, apologists for Francisco Franco’s regime will likely be sitting in the next Spanish cabinet.

In turn, during the last four years, Vox has forced a further radicalization of right-wing discourse, infecting the public domain with anti-globalist conspiracy theories, climate denialism, and rabid anti-feminism. According to Moreno, the party has operated as “the Right’s ideological cavalry, breaking through the previously hegemonic consensus in Spanish society around issues such as feminist and LGBTQ+ rights . . . and [thus] giving the PP the necessary cover to take a harder line on such issues.”

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“Let Them Eat Insects!”

Vox’s chief ideologue and the architect of its current election campaign is MEP Jorge Buxadé. A state’s attorney with links to Opus Dei, he twice stood as an election candidate for the fascist Falange in his early twenties, before joining the PP a few years later in 2004. As the figurehead of Vox’s more extremist “national-Catholic” wing, Buxadé defends a form of radically essentialist and paranoid Spanish nationalism obsessed with “internal enemies and external threats” alike while also pushing for a sweeping recentralization of the state.

These were the central themes of Falangism and the twentieth-century Spanish far right. But, according to left-wing MEP Miguel Urbán, Buxadé has brought them up to date by “importing discursive elements from the American alt-right and other contemporary authoritarian populist movements” — as is evident in his formulation of Vox’s clear anti-globalist discourse. If separatism is the major enemy within, which wants to undermine “the undissolvable unity of the nation,” Vox has increasingly branded the UN development goals (or Agenda 2030) as the enemy without: an “ecofeminist” new world order imposed by cosmopolitan elites “in New York” and embraced by an anti-Spanish government at home.

Vox juxtaposes these specters with its own defense of Spanish traditions. “Agenda 2030 means the criminalization of rural life,” Abascal recently claimed. “The powerful, who eat T-bone steaks, want to introduce synthetic meat and the consumption of insects. . . .  No, let them eat insects! Let them eat synthetic meat!”

Similarly, Vox’s stand for a new centralized state is interwoven with an anticorruption discourse and the fight against clientelism — it identifies bureaucratic waste with a parasitic political class in regional government, accused of draining the public finances. Moreno sees this discursive process of recasting targets as “privileged subjects” as key to the party’s brand of right-wing populism, which frames “the LGBT lobby,” “salon ecologists,” and the “trade-union caste” as corrupt elites trying to impose their values and agenda on the Spanish people. Moreno’s research has identified sixty-three such signifiers, and the sheer range of these targets gives Vox an edge over the PP in the two parties’ hyperbolic attacks on the PSOE–Unidas Podemos coalition.

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In Office but on the Defensive

Even if Vox has hit a certain electoral ceiling, its capacity to keep the most reactionary elements in Spanish society agitated around such issues has combined well with the PP’s successful absorption of the vast bulk of the liberal-rightist Ciudadanos party’s voters. Together, they have mobilized the broadest possible electorate for the right-wing bloc, ranging from neofascists to centrists.

Their projected combined vote share is expected to be between 2 and 4 percent higher than the PP’s was when it won its two absolute majorities in the Spanish parliament in 2000 and 2011, each time with around 44.5 percent support. However, the fact that this vote will be divided between two parties means that they are not guaranteed an absolute majority of seats.

In contrast to such hyper-mobilization on the Right, the Left has dealt with mass disengagement, suffering high levels of abstention in May’s disastrous local and regional elections. If the PSOE–Unidas Podemos coalition has gone further than most European governments in protecting its citizens from the cost-of-living crisis, Spain’s low-wage economic model has meant that the initial inflationary spike resulting from the Ukraine war — as well as continued high food prices and the Eurozone’s punishing interest rate hikes — have still hit living standards for millions of workers.

“The current social mood is defined by anger,” Ferré explained. “Many people feel worse off and in this atmosphere the Left has not been able to counter the Right’s apocalyptic discourse.”

Last summer and fall, the coalition parties gained some traction in the polls as they introduced a raft of progressive anti-inflationary measures. These included a partial price cap in the electricity market, limits on rent increases, an emergency wealth tax, and slashing transport fares (including making commuter and medium-distance trains free for at least eighteen months). As Spain began to register among the lowest inflation rates in the EU, first Díaz and then, at times, Sánchez promised a new politics of social protectionism.

For all its rhetorical attacks on globalist elites, ‘Vox is completely neoliberal and is indistinguishable from the PP in its acceptance of Spain’s subordinate role as a low-wage economy at the periphery of the European Union,’ noted Marga Ferré.

Yet with PSOE resistant to more substantive redistributive measures, the coalition never followed through on this discourse or deployed it effectively against the Right — not least because Díaz’s energies during the last six months have been consumed by internal warfare on the radical left. Her last-minute agreement with the Podemos leadership to run together under her new Sumar platform was itself divisive (given her insistence on the exclusion of Podemos’s equality minister Irene Montero from the list).

However, a solid campaign focused on the Left’s programmatic appeal should see it come close to its 2019 result of 13 percent (or 36 seats). Indeed, the election could be decided by a handful of marginal constituencies where Sumar is battling the PP or Vox for the final seat, and a late surge from Sumar could be enough to rob the right-wing parties of a working majority.

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In High Office

But if the numbers do materialize for the Right, the various PP-Vox coalitions formed over the last eighteen months at the local and regional levels provide a glimpse of how Vox would approach participation in a national government. In negotiating its entry as a junior partner in these administrations, Vox has prioritized control of the security services and portfolios from which it can wage ideological warfare (i.e., culture, education, and agriculture). At the same time, it has allowed the PP to fill the major economic posts, as both parties agree on a neoliberal agenda of tax breaks, deregulation, and spending cuts.

“Normally when you have competition between two right-wing parties, one takes up a more protectionist line, defending national rentier capital against transnational economic forces, as is the case with Marine Le Pen in France,” Ferré noted. “Such economic populism also works to attract a certain working-class vote beyond the Right’s existing base.” Yet for all its rhetorical attacks on globalist elites, “Vox is completely neoliberal and is indistinguishable from the PP in its acceptance of Spain’s subordinate role as a low-wage economy at the periphery of the European Union,” she added.

This is hardly surprising given Vox’s origins. But alongside such economic orthodoxy, its program promises a disturbing new form of democratic regression. It lays out plans to roll back recently won rights, recentralize the Spanish state, outlaw pro-independence parties, reinforce the military’s presence in Catalonia and the Basque Country, and institute a naval blockade against small boats carrying irregular migrants to Spain. Among the “destructive laws” its program commits to repealing are Spain’s 2004 gender-violence law, its recent trans rights and euthanasia laws, its historical memory legislation, and its climate change law. Vox also wants to restrict abortion rights and regional autonomy in areas like education.

How much of this is realizable within a PP-dominated coalition remains to be seen. Vox will need to win major concessions on fronts that are symbolically important to its base. Moreover, the PP has already dealt severe blows to democratic standards by means of the Spanish courts. Throughout Sánchez’s time in office, the PP has blocked the renewal of the official body that appoints the country’s top judges (known as the General Council of the Judiciary), thus maintaining an artificial right-wing majority on it. Feijóo has now pledged an overhaul of the selection process, which would rig it in the name of depoliticization and allow the country’s broadly right-wing judiciary to appoint its own hierarchy.

A right-wing government after Sunday’s vote would further embolden the country’s powerful judges in their witch hunts against the Left and independence movements.

Operating as one of the most effective sources of opposition to the current progressive coalition, reactionary elements within the judiciary and security forces have orchestrated lawfare campaigns against numerous ministers. A right-wing government after Sunday’s vote would further embolden the country’s powerful judges in their witch hunts against the Left and independence movements.

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A Reactionary International

According to Urbán, a PP-Vox coalition in Spain could also represent a prologue to “a definitive realignment in the EU away from the traditional grand coalition between center-left social-democrats and center-right EPP and toward the construction of a new reactionary bloc uniting the center-right with pro-NATO far-right forces grouped in Meloni’s ECR.”

“This was unthinkable a few years ago, but after next year’s European parliament elections, there is every chance we could see an Italian-style coalition, of the type first assembled under Berlusconi, emerge at an EU level,” he told Jacobin. “In particular, the war in Ukraine has not only created much more favorable conditions for the growth of the far right across the continent but also accelerated its legitimization as a governing partner.”

The potential for such an alternative majority in the European parliament was glimpsed in the recent knife-edge vote on the EU’s nature-restoration law, which saw conservatives, the far right, and parts of the liberal Renew grouping come together in opposition to the bill — and only failed to vote down the environmental legislation when a number of EPP deputies broke ranks at the last minute. Yet the attempt was further proof that the head of the EPP in the European Parliament, Manfred Weber, is preparing the ground for such a pact ahead of contesting Ursula von der Leyen’s reelection as president of the European Commission next year.

But beyond that, the Progressive International’s David Adler sees a PP-Vox coalition as likely to cement Madrid’s role as “a central node in a broader global network of antidemocratic forces,” with Vox having converted the Spanish capital into a key meeting ground for the European far right and its counterparts in the Americas. “Spain serves today both as a destination for far-right politicians in the so-called [Vox sponsored, anti-communist] ‘Madrid Charter’ and a port of departure for them to intervene in democracies across the world,” he said.

Reactionaries on both sides of the Atlantic will be watching keenly as results come on Sunday night.

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Spencer Platt/Getty Images

• Inflation could rebound in the second-half of the year, according to Wells Fargo’s Darrell Cronk.
• The wealth and investment management CIO noted corporate earnings are weak, which could upend the rally in stocks.
• Already, the market has seen the largest decline in earnings growth since the 2008 recession, Cronk said.

Stocks could get hit by a rebound in inflation and anemic corporate earnings through the second half of this year, according to Wells Fargo Wealth and Investment Management CIO Darryl Cronk.

In an interview with CNBC on Monday, Cronk pointed to the strong performance of stocks over the last week as investors cheered lower-than-expected inflation. Prices in the economy rose just 3% year-per-year in June – significantly lower than the last summer, when prices rose at their fastest pace in over 40 years.

Investors have interpreted the most recent inflation figures as a sign the Federal Reserve will soon pull back on its aggressive monetary policy, which would likely be a boon for stocks. But markets aren’t pricing in the probability that inflation could rise again through the second-half of the year, Cronk said, pointing to various price pressures lingering in the economy.

“It’s entirely likely you can see inflation rise in the back-half from this nice 3% Goldilocks print,” Cronk said. “The Fed can’t really control oil prices, can’t control the hot housing market, and doesn’t really control wages, and three of which are going to feed into the baseline numbers next year.” 

And despite the S&P 500’s blistering rally in 2023, firms are still battling corporate earnings pressures, which will act as another headwind. The market just notched the third-straight quarter of negative earnings growth, posting a peak-to-trough decline of 11%-12%. That’s the largest decline seen since the 2008 recession, Cronk said.

Profit margins have also fallen for six straight quarters, while real revenues adjusted for inflation have fallen for the second straight quarter, he added.

Those trends are consistent with what’s been observed in past recessions – a sign that more downside lies ahead for investors trying to chase the rally in stocks.

“Q3, Q4 are probably going to be more challenging quarters than Q1, Q2 were, and they were both negative earnings growth as well,” Cronk said.

Still, sentiment remains bullish among investors, who poured $12 trillion into the stock market over the last week, Bank of America said in a recent note. Meanwhile, the S&P 500 ticked higher to trade at 4,514 on Monday, up 18% since the start of the year.

Trump aims to expand presidential power over “every part of the federal government” with any independence

The bipartisan group of prominent Democrats and Republicans formed recently to fight the outside group No Labels’ efforts to prop up a third-party presidential ticket has taken a big step in showing it’s ready to go to war: It created a new super PAC to raise money to stop No Labels.

The super PAC, called Citizens to Save Our Republic, also announced new polling results on Monday, the same day Senator Joe Manchin is in New Hampshire for an event with former Utah Governor Jon Huntsman. The event is part of No Labels’ rollout of a set of moderate policy positions on hot-button topics like abortion.

Citizens to Save Our Republic’s polling of 5,700 registered voters nationwide showed that in a three-way race among Joe Biden, Donald Trump, and a No Labels ticket, Trump would win with 40 percent of the vote while Biden got 39 percent of the vote, with the No Labels candidate getting about 21 percent of the vote.

No Labels has maintained that its work to prop up a “Unity Ticket” is not meant to scuttle Biden’s chances of winning a second term, but polling—except that done by No Labels—has consistently shown that such a ticket would effectively only boost Trump.

Citizens to Save Our Republic is led by former House Democratic Leader Dick Gephardt. It also announced that it has recruited some big names to its cause, like former Defense secretaries Chuck Hagel and Bill Cohen and former senator and presidential candidate Bill Bradley. The letter in which the polling results was released was signed by more than a dozen Democrats and Republicans including Stuart Stevens, Joe Trippi, Matt Bennett, Sam Brown, Howard Gutman, and Bill Kristol, among others.

The super PAC’s formation is yet another sign of just how serious the prospect of a No Labels ticket is to the outcome of the 2024 election. Other groups, like the center-left Third Way and or the progressive MoveOn.org, have been eyeing No Labels’ move to set up a third party ticket. Thus far No Labels has not landed a candidate, but Manchin’s decision to headline a No Labels event in New Hampshire is a clear sign that he’s toying with the idea of running for president on the No Labels ticket rather than running for reelection in West Virginia, where he trailed GOP Governor Jim Justice by more than 20 points in a late May poll.