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If some of these nearly three dozen “Facts About America” don’t shake you up, you’re unshakeable (and in today’s world, that’s NOT a good thing)

You don’t want to be unshakeable, not today. Not when the world seems to be coming apart at the seams. You need to be shakeable so you can react and help change things.

Today's unbelievable America...

Today America is changing at a pace that is more rapid than we have ever seen before. But is that a good thing or a bad thing?

If any of us were suddenly transported 100 years into the future, we would be completely and utterly shocked by how things had changed.  Think about how the four Americans shown above might react if they suddenly returned today to the country they helped to lead in its earlier days.

The following are 35 mind-blowing facts about America that previous generations of Americans never would have believed could happen.

#1 Approximately one-fourth of the entire global prison population is in the United States.

#2 By the time an American child reaches the age of 18, that child will have seen approximately 40,000 murders on television.

#3 The average U.S. adult “logs 6 hours, 43 minutes of total screen time daily”.

#4 Approximately 96 percent of all Americans use the Internet.

#5 According to the American Road and Transportation Builders Association, nearly 56,000 bridges in the United States are currently “structurally deficient”.  What makes that number even more chilling is the fact that vehicles cross those bridges a total of 185 million times a day.

#6 In more than half of all U.S. states, the highest paid public employee in the state is a football coach.

#7 The Pentagon has more square footage of office space than any other office building in the entire world.

#8 The state of Alaska is 429 times larger than the state of Rhode Island.  But Rhode Island has a significantly larger population than Alaska does.

#9 Alaska has a longer coastline than all of the other 49 U.S. states put together.

#10 The city of Juneau, Alaska is about 3,000 square miles in size. It is actually larger than the entire state of Delaware.

#11 The average age of America’s dams is now 52 years.

#12 The average supermarket in the United States wastes about 3,000 pounds of food each year.

#13 There are more than 75 million dogs in the United States, and that number is constantly growing.

#14 Montana has three times as many cows as it does people.

#15 The grizzly bear is the official state animal of California. But no grizzly bears have been seen in the state since 1922.

#16 The only place in the United States where coffee is grown commercially is in Hawaii.

#17 More than 2 million Americans work for Wal-Mart.

#18 Half of all American workers make less than $30,533 a year.

#19 According to one recent survey, 37 percent of all Americans eat fast food every 24 hours.

#20 One study found that one-third of all American teenagers haven’t read a single book in the past year.

#21 Almost one-third of all Millennials are still living with their parents.

#22 The suicide rate in the United States has risen by 33 percent since 1999.

#23 Women have earned at least 57 percent of all bachelor’s degrees in the United States for 18 years in a row.

#24 If the U.S. health care system was a country, it would have the fifth largest GDP on the entire planet.

#25 America does not have a single airport that is considered to be in the top 25 in the world.

#26 Today, a million Americans are living in their RVS, and that number is rising with each passing year.

#27 More than 100 churches in the United States are dying every single week.

#28 The original name of the city of Atlanta was “Terminus“.

#29 There are three towns in the United States that have the name “Santa Claus“.

#30 There is actually a town in Michigan called “Hell“, and during the recent polar vortex it actually froze over.

#31 Almost one-third of all land in the United States is owned by the federal government.

#32 More than 27 million acres of U.S. farmland is owned by foreigners.

#33 Congestion on our highways costs Americans approximately 101 billion dollars a year in wasted fuel and time.

#34 According to Bloomberg, it is being projected “that by 2025, shortfalls in infrastructure investment will subtract as much as $3.9 trillion from U.S. gross domestic product.”

#35 In 1980, the U.S. national debt had just surpassed the one trillion dollar mark.  In 2019, we have now passed the 22 trillion dollar mark with no end in sight.

Holding an important position does not make you a leader.  We have way too many “leaders” who are simply filling seats.  Our country is literally coming apart at the seams, and all they think about is protecting their careers, their egos, and their political positions.

America desperately needs change, but unfortunately we have very few change agents, leaders who are willing to work for positive change.  As a result, we are still gathering steam as we head toward our date with destiny.

 

[From an article by Michael Snyder, writing for The Economic Collapse Blog]

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

 

 

 

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“US housing market could be headed for its worst slowdown in years,” say the experts

US housing trends...

Is the United States heading for another absolutely devastating housing crash?

It has been 10 years since the last one, and many of the same signs that immediately preceded the last one are starting to appear once again.

Back in 2007 home prices were absolutely soaring, and it seemed like the party would never end.  But interest rates went up, home sales slowed down substantially, and eventually prices began to crash.  Millions upon millions of Americans were suddenly “underwater” in their homes just as a crippling recession hit the economy, and we plunged into a foreclosure crisis unlike anything that we had ever seen before.

Well, now the cycle is happening again.  Home prices surged to unprecedented heights in 2017, and this was especially true in the hottest markets on the east and west coasts.  Now interest rates are going up and home sales are starting to slow down substantially.  We appear to be closing in on the next crash and another horrible foreclosure crisis, and many experts are beginning to sound the alarm.

For example, the following very alarming numbers come from a recent Bloomberg article entitled “The U.S. Housing Market Looks Headed for Its Worst Slowdown in Years”

Existing-home sales dropped in June for a third straight month. Purchases of new homes are at their slowest pace in eight months. Inventory, which plunged for years, has begun to grow again as buyers move to the sidelines, sapping the fuel for surging home values. Prices for existing homes climbed 6.4 percent in May, the smallest year-over-year gain since early 2017, and have gained the least over three months since 2012, according to the Federal Housing Finance Agency.

Those are definitely troubling figures, but perhaps even more disturbing is the fact that mortgage applications are way down right now

Mortgage applications to purchase both new and existing homes have been falling steadily, and mortgage rates are rising again. Single-family home construction also fell and was lower than June 2017.

Of course economic numbers always go up and down, and just because we have had a few bad months does not necessarily mean that disaster is looming.  But when you step back to see the “big picture” in the housing market, it really does start to feel like early 2008 all over again.

In fact, Nobel Prize-winning author Robert Shiller says in a recent interview, “This could be the very beginning of a turning point.”  Shiller, a Nobel Prize-winning economist, is famed for warning of the dot-com and housing bubbles.

Just like last time, the slowdown is being felt the most in the markets that were once the hottest.  In southern California, home sales just fell to the lowest level in four years

Southern California home sales hit the brakes in June, falling to the lowest reading for the month in four years. Sales of both new and existing houses and condominiums dropped 11.8 percent year over year, as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.

Meanwhile, red flags are popping up on the east coast as well.  New York foreclosure actions have skyrocketed to an 11 year high, and many analysts expect them to go much higher.  As the Federal Reserve has raised interest rates, it was only a matter of time before the housing market really cooled off.  And if the Federal Reserve keeps raising rates, we are going to see home prices collapse, another massive foreclosure crisis, and enormous stress on our largest financial institutions.

This is one of the reasons why we must abolish the Federal Reserve.  By allowing a panel of central planners to determine our interest rates, it is inevitable that artificial “booms” and “busts” are created.  There are always “booms” and “busts” in a free market economy as well, but they are not as severe.

In recent months, central banks all over the world have been tightening, and other global real estate markets are really starting to feel the pain.  For example, home prices are really cooling off in Canada, and it appears that they are on the precipice of a full-blown market crash.

When a new recession didn’t hit in 2015 or 2016, a lot of Americans assumed that the threat had passed.  But just because a threat is delayed does not mean it has been diminished.  In fact, the coming recession is probably going to be substantially worse than it would have been in 2015 or 2016 because of the central bank manipulation that delayed it until now.

The signs are all around us.  An indicator that tracks the vehicle buying plans of Americans just plunged to the lowest level in five years, and even USA Today is running articles with titles such as “Are you ready for the next recession? How to prepare now for a potential downturn”.

Yes, we just got good GDP data for the second quarter, but virtually everyone agrees that the number for the third quarter will be significantly lower.  And it would be foolish to ignore all of the harbingers that are emerging on an almost daily basis now.  Just recently, I explained that the U.S. economy has fallen into recession every single time that the yield curve has inverted since World War II, and now it is about to happen again.  We live at a time when there is great turmoil at home and abroad, and the elements for a “perfect storm” are definitely coming together.

 

From an article written for The Economic Collapse Blog by Michael Snyder

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

 

 

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Follow-up to our last post: Economic collapse of South America is now well under way

BIG economic problems in South AmericaThe 7th largest economy on the entire planet is completely imploding.  I have written previously about the economic depression that is plaguing Brazil, but since my last article it has gotten much, much worse.  During 2015, Brazil’s economy shrank by 3.8 percent, but for the most recent quarter the decline was 5.89 percent on a year over year basis.  Unemployment is rising rapidly, the inflation rate is up over 10 percent, and Brazilian currency has lost 24 percent of its value compared to the U.S. dollar over the past 12 months.

At this point, Brazil is already experiencing its longest economic downturn since the Great Depression of the 1930s, and things are getting worse for ordinary Brazilians every single day.  The following comes from CNN

But with Brazil plunging into its worst recession in over two decades — hopes for a brighter future are fading. The Brazilian economy shrank 3.8% in 2015, according to government data published Thursday. That’s the biggest annual drop since 1990 and the country is in its longest recession since the 1930s.

I have never seen anything like this,” said Alves, 24, as he stood on his balcony overlooking Rocinha, a massive lower middle class neighborhood or favela in Rio de Janeiro where he grew up. “My parents would tell me about hard times, but today it is really tough. Prices are going up every day.”

So how did this happen?

Well, there are a couple of factors that are really hurting South American economies.

First, during the “boom years” governments and businesses in South America absolutely gorged on debt.  Unfortunately, many of those loans were denominated in U.S. dollars, and now that the U.S. dollar has appreciated greatly against local South American currencies, it is taking far more of those local currencies to service and pay back those debts.

Second, collapsing prices for oil and other commodities have been absolutely brutal for South American economies.  They rely very heavily on exporting commodities to the rest of the world, and so at the same time their debt problems are exploding they are getting a lot less money for the oil and industrial commodities that they are trying to sell to North America, Asia and Europe.

I want you to pay close attention to the following chart and analysis from Zero Hedge.  As you can see, the economic problems in Brazil appear to be greatly accelerating…

“The Brazilian economic downturn took a real turn for the worse in February,” according to Markit’s Composite PMI, which collapsed to record lows at 39.0. Despite a slightly less bad than expected GDP print this morning (still down a record 5.89% YoY), hope was quickly extinguished as PMIs showed economic activity continuing to contract at a record pace, job losses accelerating, and manufacturing’s collapse accelerating. As Market sums up, “With the global economy also showing signs of slowing, which will impact on external demand, it looks as if the downturn is set to continue to run its course in the coming months.”

GDP was a disaster (but better than expected)

Brazil GDP - Zero Hedge

And of course Brazil is not the only South American economy that is a basket case right now.  In fact, things in Venezuela are far worse.  In 2015, the Venezuelan economy shrunk by 10 percent, and the official rate of inflation was a staggering 181 percent.

Could you imagine living in an economy with a 181 percent inflation rate?

As prices have escalated out of control, citizens have attempted to hoard basic supplies in advance, and this has resulted in food shortages that are absolutely frightening

Cardboard signs on the door warning of “No bread” have become increasingly common at Venezuelan bakeries.

Venezuela gets 96 percent of its foreign currency from oil exports, and as crude prices have plunged, so have the country’s imports — among them wheat.

The leftist government of President Nicolas Maduro has tightly controlled access to hard currency, and this has affected imports ranging from medicine to toilet paper. Now it is seriously affecting imports of wheat, which Venezuela does not grow.

Add to this the soaring inflation rate — 181 percent in 2015, the world’s highest — and you see why customers are mainly interested in buying basic food items such as bread.

Here in the United States, there are still people who doubt that an economic crisis is happening.

But in Venezuela and Brazil there is no debate.

Unfortunately, what is happening in Venezuela and Brazil is also slowly starting to happen to most of the rest of the planet as well.  It is just that they are a little farther down the road.  Economic and financial bubbles are bursting all over the world, and I like how author Vikram Mansharamani described this phenomenon during a recent interview with CNBC

Deflationary tides are lapping the shores of countries across the world and financial bubbles are set to burst everywhere, Vikram Mansharamani, a lecturer at Yale University, told CNBC on Thursday.

I think it all started with the China investment bubble that has burst and that brought with it commodities and that pushed deflation around the world and those ripples are landing on the shore of countries literally everywhere,” the high-profile author and academic said at the Global Financial Markets Forum in Abu Dhabi.

And of course the evidence of what Mansharamani was talking about is all around us.

Just this week we found out that Chinese state industries plan to lay off five to six million workers, U.S. factory orders have now fallen for 15 months in a row, and the corporate default rate in the United States has now risen above where it was at when Lehman Brothers collapsed.

There are some people that would like to point to the fact that stocks have bounced back a bit over the past couple of weeks as evidence that the crisis is over.

If they want to believe that, they are suffering from severe delusion.

Unfortunately, the truth is that the hard economic numbers coming in from all over the world tell us very clearly that global economic activity is slowing down significantly.

 

[by Michael Snyder, writing for The Economic Collapse Blog]

 

NORM ‘n’ AL Note:  See our last post for further points of reference.

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

 

 

 

 

 

 

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Economic numbers now screaming it’s panic button time…

Panic button time in US and around the globeWe haven’t seen numbers like these since the last global recession.  I recently wrote about how global trade is imploding all over the planet, and the same thing is true when it comes to manufacturing.

We just learned that manufacturing in China has now been contracting for seven months in a row, and as you will see below, U.S. manufacturing is facing “its toughest period since the global financial crisis”.  Yes, global stocks have bounced back a bit after experiencing dramatic declines during January and the first part of February, and this is something that investors are very happy about.  But that does not mean that the crisis is over.  All bear markets have their ups and downs, and this one will not be any different.  Meanwhile, the cold, hard economic numbers that keep coming in are absolutely screaming that a new global recession is here.

Just consider what is happening in China.  Manufacturing activity continues to implode, and factories are shedding jobs at the fastest pace since the last financial crisis

Chinese manufacturing suffered a seventh straight month of contraction in February.

China’s official Purchasing Managers’ Index (PMI) stood at 49.0 in February, down from the previous month’s reading of 49.4 and below the 50-point mark that separates growth from contraction on a monthly basis.

A private survey also showed China’s factories shed jobs at the fastest rate in seven years in February, raising doubts about the government’s ability to reduce industry overcapacity this year without triggering a sharp jump in unemployment.

For years, the expansion of the Chinese economy has helped fuel global economic growth.  But now things have shifted dramatically.

At this point, things are already so bad that the Chinese government is admitting that millions of workers are going to lose their jobs at state-controlled industries in China…

China’s premier told visiting U.S. Treasury Secretary Jacob Lew on Monday his government is pressing ahead with painful reforms to shrink bloated coal and steel industries that are a drag on its slowing economy and ruled out devaluing its currency as a short-cut to boosting exports.

Premier Li Keqiang’s comments to Lew on Monday were in line with a joint declaration by financial officials from the Group of 20 biggest rich and developing economies who met over the weekend in Shanghai. They pledged to avoid devaluations to boost sagging trade and urged governments to speed up reforms to boost slowing global growth.

Across all state-controlled industries, as many as six million workers could be out of a job, with almost two million in the coal industry alone.

But it isn’t just China.  Right now manufacturing activity is slowing down literally all over the planet, and this is exactly what we would expect to see if a new global recession had begun.  The following chart and analysis come from Zero Hedge

As the below table shows, 28 regions have reported so far. Seven saw improvements in their manufacturing sectors in February, twenty recorded a weakening, and India was unchanged. This means that over 70% of the world saw manufacturing sentiment deteriorate in February compared to January.

February Manufacturing Numbers - Zero Hedge

In terms of actual expansion, there were 21 countries in positive territory and 7 in negative. In particular, Greece moved from neutral to contraction territory, while Taiwan dropped below breakeven from expansion.

Unfortunately, most Americans don’t really pay much attention to what is going on in the rest of the world.  For most of us, what really matters is what is happening inside the good ole USA.

And of course the news is not good.  There were more signs of trouble for U.S. manufacturing in the February numbers, and this continues a trend that stretches back well into last year.  The following is what Chris Williamson, the chief economist at Markit, had to say about these numbers

“The February data add to signs of distress in the US manufacturing economy. Production and order book growth continues to worsen, led by falling exports. Jobs are being added at a slower pace and output prices are dropping at a rate not seen since mid-2012.

“The deterioration in the manufacturing sector’s performance since mid-2014 has broadly tracked the dollar’s rise, which makes US goods more expensive in overseas markets and leads US consumers to favour cheaper imported goods.

“With other headwinds including the downturn in the oil sector, heightened uncertainty due to financial market volatility, global growth worries and growing concerns about the presidential election, it’s no surprise that the manufacturing sector is facing its toughest period since the global financial crisis.

Over the past couple of decades, the U.S. economy has lost tens of thousands of manufacturing facilities.  We desperately need a manufacturing renaissance – not another manufacturing decline.

As good paying manufacturing jobs have been shipped overseas, they have been replaced by low paying service jobs.  As a result, the middle class is shrinking and the ranks of the poor are exploding.

It is hard to believe, but today more than 45 million Americans are on food stamps, and a significant percentage of those individuals actually have jobs.  They are called “the working poor”, and it is becoming a major crisis in this nation.

And no matter what Obama may say, unemployment remains a major problem in the United States as well.  At this point, unemployment rates in 36 states are higher than they were just before the last recession hit in 2008.

Of course a lot of people are going to look at this article and point to the stock market gains of the past couple of weeks as evidence that “things are getting better”.  It is this kind of clueless approach that is keeping the American people from coming together on solutions to our problems.

The truth is that the United States has been experiencing economic decline for decades.  Our economic infrastructure has been gutted, the middle class is steadily deteriorating, and we have amassed the biggest pile of debt in the history of the world.

Anyone who believes that things are “just fine” (OOOObama is one of them, at least according to what he keeps telling us) is in a massive state of denial.  Consuming far more wealth than we produce is not a formula for a sustainable economy.

 

[by Michael Snyder, writing for The Economic Collapse Blog]

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

 

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White House vs. Economic Reality: Obama still “living the dream”

The statements quoted below are taken directly from the WhiteHouse.gov website:

“The Obama Administration is committed to saving you money. We are hunting down misspent tax dollars through the Campaign to Cut Waste.”

Note to Mr. O:  Why not start your “hunt for misspent tax dollars” with the tens of millions of tax dollars you have spent on two terms of lavish vacations? Or, why not just reimburse the government and give the money back to US taxpayers…y’know, those people who were still working hard while you were racking up your huge vacation bills?

“Getting back to pre-recession status is not enough; we’ve got to fully restore America’s middle class.” Also, America’s small businesses are essential to strengthening our national economy and good ol’ Mr. O “is committed to helping them grow and prosper.”

Note to Mr. O:  Restoring America’s middle class and the country’s small businesses sounds great; unfortunately, it’s going to be next to impossible to do that if you keep adding trillions of dollars to the public debt at the same time you come up with idiot ideas like your $10 per barrel tax on oil. American consumers (and millions of small businesses) are finally getting a little relief at the gas pump, and you want to artificially increase the price of fuel again? Brilliant. If you really want to help the American economy, why not start work on the Keystone XL oil pipeline? Lots of construction jobs, ending with a way to get US oil to refineries quickly and cheaply and safely.

 

The Obama administration is obviously not even close to living in the same reality that the vast majority of Americans is living in.  Here’s what our present reality REALLY looks like:

 

As bad as the month of January was for the global economy, the truth is that the rest of 2016 promises to be much worse.  Layoffs are increasing at a pace that we haven’t seen since the last recession, major retailers are shutting down hundreds of locations, corporate profit margins are plunging, global trade is slowing down dramatically, and several major European banks are in the process of completely imploding.  I am about to share some numbers with you that are truly eye-popping.  Each one by itself would be reason for concern, but when you put all of the pieces together it creates a picture that is hard to deny.  The global economy is in crisis, and this is going to have very serious implications for the financial markets moving forward.  U.S. stocks just had their worst January in seven years, and if I am right much worse is still yet to come this year.  The following are 22 signs that the global economic turmoil that we have seen so far in 2016 is just the beginning…

1. The number of job cuts in the United States skyrocketed 218 percent during the month of January according to Challenger, Gray & Christmas.

2. The Baltic Dry Index just hit yet another brand new all-time record low.  As I write this article, it is sitting at 303.

3. U.S. factory orders have now dropped for 14 months in a row.

4. In the U.S., the Restaurant Performance Index just fell to the lowest level that we have seen since 2008.

5. In January, orders for class 8 trucks (the big trucks that you see shipping stuff around the country on our highways) declined a whopping 48 percent from a year ago.

6. Rail traffic is also slowing down substantially.  In Colorado, there are hundreds of train engines that are just sitting on the tracks with nothing to do.

7. Corporate profit margins peaked during the third quarter of 2014 and have been declining steadily since then.  This usually happens when we are heading into a recession.

8. A series of extremely disappointing corporate quarterly reports is sending stock after stock plummeting.  Here is a summary from Zero Hedge of a few examples that we have just witnessed…

  • SHARES OF LIONS GATE ENTERTAINMENT FALL 5 PCT IN EXTENDED TRADE AFTER QUARTERLY RESULTS – RTRS
  • TABLEAU SOFTWARE SHARES TUMBLE 40 PCT IN AFTER HOURS TRADING – RTRS
  • YRC WORLDWIDE SHARES DOWN 16.4 PCT AFTER THE BALL FOLLOWING RESULTS – RTRS
  • SPLUNK INC SHARES DOWN 7.6 PCT IN AFTER HOURS TRADING – RTRS
  • LINKEDIN SHARES EXTEND DECLINE, DOWN 24 PCT AFTER RESULTS, GUIDANCE – RTRS
  • HANESBRANDS SHARES FURTHER ADD TO LOSSES IN EXTENDED TRADE, LAST DOWN 14.9 PCT – RTRS
  • OUTERWALL SHARES FALL 11 PCT IN EXTENDED TRADING AFTER QUARTERLY RESULTS – RTRS
  • GENWORTH SHARES DOWN 16.5 PCT AFTER THE BELL FOLLOWING RESULTS, RESTRUCTURING PLAN

9. Junk bonds continue to crash on Wall Street.  On Monday, JNK was down to 32.60 and HYG was down to 77.99.

10. On Thursday, a major British news source publicly named five large European banks that are considered to be in very serious danger…

Deutsche Bank, Credit Suisse, Santander, Barclays and RBS are among the stocks that are falling sharply sending shockwaves through the financial world, according to former hedge fund manager and ex Goldman Sachs employee Raoul Pal.

11. Deutsche Bank is the biggest bank in Germany and it has more exposure to derivatives than any other bank in the world.  Unfortunately, Deutsche Bank credit default swaps are now telling us that there is deep turmoil at the bank and that a complete implosion may be imminent.

12. Last week, we learned that Deutsche Bank had lost a staggering 6.8 billion euros in 2015.  If you will recall, I warned about massive problems at Deutsche Bank all the way back in September.  The most important bank in Germany is exceedingly troubled, and it could end up being for the EU what Lehman Brothers was for the United States.

13. Credit Suisse just announced that it will be eliminating 4,000 jobs.

14. Royal Dutch Shell has announced that it is going to be eliminating 10,000 jobs.

15. Caterpillar has announced that it will be closing 5 plants and getting rid of 670 workers.

16. Yahoo has announced that it is going to be getting rid of 15 percent of its total workforce.

17. Johnson & Johnson has announced that it is slashing its workforce by 3,000 jobs.

18. Sprint just laid off 8 percent of its workforce and GoPro is letting go 7 percent of its workers.

19. All over America, retail stores are shutting down at a staggering pace.  The following list comes from one of my previous articles

-Wal-Mart is closing 269 stores, including 154 inside the United States.

-K-Mart is closing down more than two dozen stores over the next several months.

-J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.

-Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.

-The Gap is in the process of closing 175 stores in North America.

-Aeropostale is in the process of closing 84 stores all across America.

-Finish Line has announced that 150 stores will be shutting down over the next few years.

-Sears has shut down about 600 stores over the past year or so, but sales at the stores that remain open continue to fall precipitously.

20. According to the New York Times, the Chinese economy is facing a mountain of bad loans that “could exceed $5 trillion“.

21. Japan has implemented a negative interest rate program in a desperate attempt to try to get banks to make more loans.

22. The global economy desperately needs the price of oil to go back up, but Morgan Stanley says that we will not see $80 oil again until 2018.

It is not difficult to see where the numbers are trending.  And when you look at the global economic numbers, they tell us that 2016 is going to be a year that is going to get progressively worse as it goes along.  Many of the exact same things that we saw happen in 2008 are happening again right now, and you would have to be blind not to see them.

The greater problem is that the majority of Americans are not prepared for what is coming, and do not have the means to get prepared.

 

[by Michael Snyder, writing for The Economic Collapse Blog]

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

 

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Federal Reserve makes another huge mistake…

US economic bubble

As stocks continue to crash, you can blame the Federal Reserve, because the Fed is more responsible for creating the current financial bubble we’re living in than anyone else.

When the Federal Reserve pushed interest rates all the way to the floor and injected lots of hot money into the financial markets during their quantitative easing programs, this pushed stock prices to wildly artificial levels.  The only way it would have been possible to keep stock prices at those wildly artificial levels would have been to keep interest rates ultra-low and to keep recklessly creating lots of new money.  But now the Federal Reserve has ended quantitative easing and has embarked on a program of very slowly raising interest rates.  This is going to have very severe consequences for the markets, but Janet Yellen doesn’t seem to care.

There is a reason why the financial world hangs on every single word issued by the Fed: The massively inflated stock prices we see today were a creation of the Fed and are completely dependent on the Fed for their continued existence.

Right now, stock prices are still 30 to 40 percent above what the economic fundamentals say they should be based on historical averages.  And if we are now plunging into a very deep recession as I contend, stock prices should probably fall by a total of more than 50 percent from where they are now.

The only way stock prices could have ever gotten this disconnected from economic reality is with the help of the Federal Reserve.  And since the U.S. dollar is the primary reserve currency of the entire planet, the actions of the Fed over the past few years have created stock market bubbles all over the globe.

But the only way to keep the party going is to keep the hot money flowing.  Unfortunately for investors, Janet Yellen and her friends at the Fed have chosen to go the other direction.  Not only has quantitative easing ended, but the Fed has also decided to slowly raise interest rates.  The Fed left rates unchanged on Wednesday, but we were told that we are probably still on schedule for another rate hike in March.

So how did the markets respond to the Fed?

Well, after attempting to go green for much of the day, the Dow started plunging very rapidly and ended up down 222 points.

The markets understand the reality of what they are now facing.  They know stock prices are artificially high and that if the Fed keeps tightening that it is inevitable that they will fall back to earth.

In a true free market system, stock prices would be far, far lower than they are right now.  Everyone knows this – including Jim Cramer.  Just check out what he told CNBC viewers earlier today…

Jim Cramer was tempted to resurface his “they know nothing” rant after hearing the Fed speak on Wednesday. He was hoping that a few boxes on his market bottom checklist might be checked off, but it seems that the bear market has not yet run its course.

The Fed’s wishy-washy statement on interest rates today left stocks sinking back into oblivion after a nice rally yesterday,” the “Mad Money” host said.

Without artificial help from the Fed, stocks will most definitely continue to sink into oblivion.

That is because these current stock prices are not based on anything real.

And so as this new financial crisis continues to unfold, the magnitude of the crash is going to be much worse than it otherwise would have been.

It has often been said that the higher you go the farther you have to fall.  Because the Federal Reserve has pumped up stock prices to ridiculously high levels, that just means that the pain on the way down is going to be that much worse.

It is also important to remember that stocks tend to fall much more rapidly than they rise.  And when we see a giant crash in the financial markets, that creates a tremendous amount of fear and panic.  The last time there was great fear and panic for an extended period of time was during the crisis of 2008 and 2009, and this created a tremendous credit crunch.

During a credit crunch, financial institutions because very hesitant to lend to one another or to anyone else.  And since our economy is extremely dependent on the flow of credit, economic activity slows down dramatically.

As this current financial crisis escalates, you are going to notice certain things begin to happen.  If you own a business or you work at a business, you may start to notice that fewer people are coming in, and those people that do come in are going have less money to spend.

As economic activity slows, employers will be forced to lay off workers, and many businesses will shut down completely.  And since 63 percent of all Americans are living paycheck to paycheck, many will suddenly find themselves unable to meet their monthly expenses.  Foreclosures will skyrocket, and large numbers of people will go from living a comfortable middle class lifestyle to being essentially out on the street very, very rapidly.

At this point, many experts believe that the economic outlook for the coming months is quite grim.  For example, just consider what Marc Faber is saying

It won’t come as a surprise to market watchers that “Dr. Doom” Marc Faber isn’t getting any more cheerful.

But the noted bear at least found a sense of humor on Wednesday into which he could channel his bleakness.

The publisher of the “Gloom, Boom & Doom Report” told attendees at the annual “Inside ETFs” conference that the medium-term economic outlook has become “so depressing” that he may as well fill a newly installed pool with beer instead of water.

If the Federal Reserve had left interest rates at more reasonable levels and had never done any quantitative easing, we would have been forced to address our fundamental economic problems more honestly and stock prices would be far, far lower today.

But now that the Fed has created this giant artificial financial bubble, the coming crash is going to be much worse than it otherwise would have been.  And the tremendous amount of panic that this crash will cause will paralyze much of the economy and will ultimately lead to a far deeper economic downturn than we witnessed last time around.

Once the Fed started wildly injecting money into the system, they had no other choice but to keep on doing it.

 

[by Michael Snyder, writing for The Economic Collapse Blog]

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

 

 

 

 

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Alarm bells going off as 11 critical indicators scream that the global economic crisis is getting deeper

Economic activity is slowing down all over the planet, and a whole host of signs are indicating that we are essentially exactly where we were just prior to the great stock market crash of 2008.  Yesterday, I explained that the economies of Japan, Brazil, Canada and Russia are all in recession.  Today, I am mainly going to focus on the United States.  We are seeing so many things happen right now that we have not seen since 2008 and 2009.  In so many ways, it is almost as if we are watching an eerie replay of what happened the last time around, and yet most of the “experts” still appear to be oblivious to what is going on.  If you were to make up a checklist of all of the things that you would expect to see just before a major stock market crash, virtually all of them are happening right now.  The following are 11 critical indicators that are absolutely screaming that the global economic crisis is getting deeper…

Alarms are flashing all over the globe...

#1 On Tuesday, the price of oil closed below 40 dollars a barrel.  Back in 2008, the price of oil crashed below 40 dollars a barrel just before the stock market collapsed, and now it has happened again.

#2 The price of copper has plunged all the way down to $2.04.  The last time it was this low was just before the stock market crash of 2008.

#3 The Business Roundtable’s forecast for business investment in 2016 has dropped to the lowest level that we have seen since the last recession.

#4 Corporate debt defaults have risen to the highest level that we have seen since the last recession.  This is a huge problem because corporate debt in the U.S. has approximately doubled since just before the last financial crisis.

#5 The Bloomberg U.S. economic surprise index is more negative right now than it was at any point during the last recession.

#6 Credit card data that was just released shows that holiday sales have gone negative for the first time since the last recession.

#7 As I mentioned yesterday, U.S. manufacturing is contracting at the fastest pace that we have seen since the last recession.

#8 The velocity of money in the United States has dropped to the lowest level ever recorded.  Not even during the depths of the last recession was it ever this low.

#9 In 2008, commodity prices crashed just before the stock market did, and late last month the Bloomberg Commodity Index hit a 16 year low.

#10 In the past, stocks have tended to crash about 12-18 months after a peak in corporate profit margins.  At this point, we are 15 months after the most recent peak.

#11 If you look back at 2008, you will see that junk bonds crashed horribly.  Why this is important is because junk bonds started crashing before stocks did, and right now they have dropped to the lowest point that they have been since the last financial crisis.

If just one or two of these indicators were flashing red, that would be bad enough.

The fact that all of them seem to be saying the exact same thing tells us that big trouble is ahead.

And I am not the only one saying this.  Just today, a Reuters article discussed the fact that Citigroup analysts are projecting that there is a 65 percent chance that the U.S. economy will plunge into recession in 2016…

The outlook for the global economy next year is darkening, with a U.S. recession and China becoming the first major emerging market to slash interest rates to zero both potential scenarios, according to Citi.

As the U.S. economy enters its seventh year of expansion following the 2008-09 crisis, the probability of recession will reach 65 percent, Citi’s rates strategists wrote in their 2016 outlook published late on Tuesday. A rapid flattening of the bond yield curve towards inversion would be an key warning sign.

Personally, I am convinced that we are already in a recession.  There is a lag in the official numbers, so often we don’t know that we are officially in one until it is well underway.  For example, we now know that a recession started in early 2008, but in the summer of 2008 Ben Bernanke and our top politicians were still insisting that there was not going to be a recession.  They were denying what was actually happening right in front of their eyes, and the same thing is happening now.

And of course if the government was actually using honest numbers, we would all be talking about the recession that never seems to end.  According to John Williams of shadowstats.com, honest numbers would show that the U.S. economy has continually been in recession since 2005.

But just like in 2008, the “experts” at the Federal Reserve are assuring all of us that everything is going to be just fine.  In fact, Janet Yellen is convinced that things are so rosy that she seems quite confident that the Fed will raise interest rates in December

Federal Reserve Chair Janet Yellen signaled Wednesday that the Fed is all but certain to raise interest rates this month for the first time in nearly a decade, saying that gains in the economy and labor market have met the central bank’s goals.

Her comments at the Economic Club of Washington amount to the strongest indication the Fed has provided so far that it will take action at a December 15-16 meeting.

This is the exact same kind of mistake that the Federal Reserve made back in the late 1930s.  They thought that the U.S. economy was finally recovering, and so interest rates were raised.  That turned out to be a tragic mistake.

But this time around, any mistake that the Fed makes will have global consequences.  The rising U.S. dollar is already crippling emerging markets all around the globe, and an interest rate hike will just push the U.S. dollar even higher.  For much more on this, please see my previous article entitled “The U.S. Dollar Has Already Caused A Global Recession And Now The Fed Is Going To Make It Worse“.

Many people are waiting for “the big crash”, but the truth is that almost everything has crashed already.

Oil has crashed.

Commodities have crashed.

Gold and silver have crashed.

Junk bonds have crashed.

Chinese stocks have crashed.

Dozens of other stock markets around the world have already crashed.

But the “big event” that many are waiting for is the crash of U.S. stocks.  And just like in 2008, it is inevitable that a U.S. stock crash will follow all of the other crashes that I just mentioned.

The exact same patterns that we experienced back then are playing out once again right in front of our eyes.

 

[by Michael Snyder, writing for THE ECONOMIC COLLAPSE BLOG]

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

 

 

 

 

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