Consumers are maybe not-so-fine

A half-baked theory on back-burner finds some (slim) legs

Publishing note: Random Walk is going to experiment with a different publishing cadence over the next few weeks (more details forthcoming). I will endeavor to trade some frequency for depth, at least some of the time.

• a speculative theory of the illusory Trump Trade

• an interesting thing happened on the way to household unemployment benefits . . . the long tail of White Collar Stagnation?

• a 5 alarm fire in the delinquency data (that shows up in no other delinquency data)

• BNPL tells its own story

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Sohn Investment Conference

Random Walk will once again be at the NY Sohn Investment Conference, May 14. It’s great. You should come, and if you do, make sure to say “hi.”

Also, get 20% off with the code RandomWalk20

Recaps from last year (one and two).

It’s worth it, and it’s for a good cause. Plus, 20% off with the code RandomWalk20. 

See you there!

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Stress in consumer credit?

There’s an undeveloped thought I’ve been thinking, and while the thought is still undeveloped, I did stumble across something that brings it to the fore.

Consider this a thought-in-progress, but here’s the setup:

The flipside of the Random Walkian view that “things have been slowing for a year+ and tariffs ain’t got nothing to do with it” is that the year-end exuberance, aka the “Trump Trade” was a head fake.

In other words, after edging uncomfortably close to breakage in September, everything took a big turn for the better in Q4. Consumers spent handsomely, hiring looked perky-ish, and stocks soared. Compared to that, 2025 has been disappointing, and if you think that was real, then you get big mad at tariffs. But if you struggle to find any sound fundamental reason as to why Q4 was so splendiferous, then some unfortunate mean-reversion was to be expected.

OK, so the Great Tariff Uncertainty Crisis is mostly fake (for now), and was entirely fake, at least until recently. Great. That said, Q4-of-dreams did happen, and if there was no fundamental reason for it, then how exactly did we pull it off (and is there another shoe to drop)?

Now, Random Walk is generally impressed with the Almighty Consumer’s ability to spend within its means, so I don’t worry too much about consumers doing stupid things, but maybe they did? “Just something to watch for” I told myself, and that was kind of it.

But then came this little nugget on one particular cohort’s rise into “uhh, maybe we can we take a mulligan, on the holiday shopping bonanza?,” and so let the undeveloped thinking games begin.