Tag Archives: recession

Recession plus boomer downsizing will bring plunging home prices

Harry Dent, a newsletter publisher who uses demographic trends to forecast market movements, believes that even before Covid-19 blindsided the global economy, the US housing market was toast. From one of his recent interviews:

Baby Boomers are now dying at unprecedented rates and will continue to do so into 2040. That takes the net demand for real estate negative, so homes are never going to appreciate even in the next boom. A lot of boomers are realizing they didn’t save for retirement because they’re living in good times and didn’t think they needed to, and now they’re saying wait a minute, I don’t need my McMansion now that my kids are gone. I can sell that and instantly fund my retirement plan and then rent my retirement home.

For the first time in all of modern history the next generation has fewer peak buyers for everything than the baby boomers, and in many countries it’s significantly less. Real estate will never be the same.

Millennials don’t buy as many houses or as large houses. They’ll be sharing McMansions they’ll be so cheap. Split them into duplexes because they’ll be selling for only a little more than an average home.

I don’t think real estate will ever again get to these prices.

In Japan real estate crashed by 60% and has never bounced back because their population is older than most others and there are more baby boomers dying than millennials entering the housing market.

[The US] population is barely going to grow in coming decades. When I subtract the peak buyers age 42 from the dying age 78, net demand for real estate goes down for the next two or three decades. So there’s no way real estate’s going to go up as it has in the past. It’ll be lucky to go up at the inflation rate after this crash.

Dent’s thesis makes intuitive sense: If you’re 70 years old (as the oldest Boomers are), having more house than you need is a burden rather than a status symbol. And if your savings are inadequate (as is true for most Boomers) converting an expensive possession like a house with its taxes and upkeep into spendable cash makes financial sense.

Now add a pandemic-driven recession – possibly a deep one – and what might have otherwise been a leisurely process (“Let’s look into selling and maybe start the clean-up with a target of listing in 2021”) becomes varying shades of urgent, depending on what’s happening with a given retiree’s stock portfolio.

So the supply of homes for sale might spike rather than drift higher, sending prices lower, and possibly a lot lower.

 

[From an article by John Rubino, written for DOLLAR COLLAPSE.com]

 

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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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23 percent of Americans in their prime working years are unemployed, which is 3.5 million MORE than before the recent recession

When you look at only Americans that are from age 25 to age 54, 23.2 percent of them are unemployed right now. The following analysis and chart come from the Weekly Standard

Here’s a chart showing those in that age group currently employed (95.6 million) and those who aren’t (28.9 million):

Americans In Their Prime Working Years Not Working

“There are 124.5 million Americans in their prime working years (ages 25–54). Nearly one-quarter of this group—28.9 million people, or 23.2 percent of the total—is not currently employed. They either became so discouraged in trying to find a job that they left the labor force entirely, or they are in the labor force but unemployed. This group of non-employed individuals is more than 3.5 million larger than before the recession began in 2007,” writes the Republican side of the Senate Budget Committee.

Clearly, we have never recovered from the impact of the last recession.

But let’s try to put these numbers in context.

Below, I would like to share two charts with you. They show what has happened to the inactivity rates for men and for women in their prime working years in the United States in recent years.

In order to be considered “inactive”, you can’t have a job and you can’t be looking for a job. So this subset of people is smaller than the group that we were talking about above. The 23.2 percent of Americans in their prime working years that are unemployed right now includes those that are looking for a job and those that are not looking for a job.

These next two charts do not include anyone that has a job or that is currently looking for a job. These charts only cover “inactive” people in their prime working years that are not considered to be in the labor force.

As you can see in this first chart, the inactivity rate for men in their prime working years exploded higher during the last recession and then continued to go up even after the recession supposedly ended. At this point, it is hovering near all-time record highs. Does this look like an “economic recovery” to you?…

Inactivity Rate Men

For women, we see a similar thing. In this next chart, you can see that the inactivity rate for women in their prime working years rose during the last recession and then just kept on rising. At this point, it is also hovering near all-time record highs…

Inactivity Rate Women

What are we to make of all this?

For both men and women in their prime working years, the inactivity rate is even higher than it was during the last recession and is hovering near the all-time record.

All of these people neither have a job nor are they looking for one.

So what in the world is going on here?

Are they independently wealthy?

Have these people found rich spouses to marry so they don’t have to work?

No, the truth is that the middle class in America is steadily eroding and poverty is absolutely exploding. Credit card debt has soared to a new record high, and 48 percent of all U.S. adults under the age of 30 believe that “the American Dream is dead”.

The issue isn’t that people don’t want to work.

The issue is that people cannot find enough work.

And even if you have a job, that does not mean that you are on easy street. According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.

Tens of millions of Americans are now among the ranks of “the working poor”. So many families are watching their expenses soar while their paychecks go down or stagnate. If you are in this situation right now, then you probably know how exceedingly stressful it can be.

Just look at what is happening to the cost of health insurance. The following comes from Fox News

Health insurance premiums have increased faster than wages and inflation in recent years, rising an average of 28 percent from 2009 to 2014 despite the enactment of Obamacare, according to a report from Freedom Partners.

And I am not exactly sure where they got those numbers. Personally, I know that my health insurance rates have gone up far faster than that.

Two years ago, my health insurance company wanted to double the health insurance premiums for my family even though we never get sick. So I switched to another insurance company that offered a policy that was only about 30 percent higher than my last one. But then when it came time to renew, that insurance company wanted to raise my rate by another 50 percent.

Thanks to Obamacare, American families are being absolutely crippled by the cost of health care. And of course we are seeing the rising cost of living so many other places as well. Our paychecks are being squeezed harder and harder, and this is absolutely killing the middle class. In fact, the middle class in America is now a minority for the first time ever.

And now for the real bad news – this is about as good as things are ever going to get in this country. As you can see from what I have shared above, we never really had any sort of meaningful “economic recovery”, and now we have entered the early phases of the next major downturn.

So where do we go from here? Unfortunately, our debt-fueled prosperity has provided us with a massively inflated standard of living that is not even close to sustainable. As this bubble bursts, the economic pain is going to be absolutely unprecedented.

 

[from TheMostImportantNews.com]

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
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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
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Average daily discretionary spending by Americans not increasing…

Gallup just released the results of a poll asking Americans how much money they spent in a day on discretionary items, excluding major home purchases and regular bills. Respondents are asked how much they spent “yesterday,” or the day before they were contacted by the pollster.

The results of this poll show a lot of seasonal variation in daily spending, with upticks during the summer months and before Christmas, and lower spending in the winter and fall. This means the most useful comparisons to make to the current poll are with responses from June in previous years.

Gallup noted that, while self-reported spending is up from the years following the financial crisis and the Great Recession, June 2015’s average daily spending of $90 is essentially unchanged from June 2013 and 2014:

Discretionary spending in US

NORM ‘n’ AL Note:  You will see above that spending was substantially lower in the 2009 to 2012 period, when it slowly began to increase as people felt more confident about the US economy’s recovery. But if the economy IS recovering, why has discretionary spending remained level during the past three years? This is the question the Gallup poll is asking…along with many other Americans.

 

As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
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The Fed’s cheap-money giveaway is killing America…ticking time bomb warning of a recession dead ahead…

“Rarely have so many large economies been so ill-equipped to manage a recession” and “the next bust will be unlike any other”

 

Next recession is on the horizon, but no one is prepared...

Yes, the clock’s ticking louder, louder, warns the Economist, “only a matter of time before the next recession strikes.” Unfortunately, the “rich world is not ready.” America’s not prepared. You are not ready.

Get it? America’s 95 million investors are at huge risk. Remember the $10 trillion losses in the crash and recession of 2007-2009? The $8 trillion lost after the dot-com technology crash and recession of 2000-2003? This is the third big recession of the century. Yes, America will lose trillions again.

Especially with dead-ahead predictions like Mark Cook’s 4,000-point Dow correction. And Jeremy Grantham’s warning of a 50% crash around election time, with negative stock returns through the first term of the next president, beyond 2020. Starting soon.

Why is America so vulnerable when the next recession hits? Simple: The Fed’s cheap-money giveaway is killing America. When the downturn / correction / crash hits, it will compare to the 2008 crash. The Economist warns: “the world will be in a rotten position to do much about it. Rarely have so many large economies been so ill-equipped to manage a recession,” whatever the trigger.

With today’s near-zero interest rates, our Fed and central banks worldwide have little “wiggle room” to add more monetary stimulus. And even if Congress decided to act on the much needed, highly effective “growth boosting investment in infrastructure,” today’s zero interest makes it impossible “to launch a big fiscal stimulus.”

No wonder Grantham says the “next bust will be unlike any other.” The Fed and central banks worldwide have taken on all this leverage that was out there and put it on their balance sheets,” giving trillions to the top 1%, the world’s 1,826 billionaires, accelerating the inequality gap and fueling a new people’s revolution.

Investors unprepared for 50% stock market losses dead ahead

Meanwhile, distractions are everywhere: It’s not just happy talk about a roaring bull market in tech, a modest recovery, GDP growth topping 2%. Rather it’s the relentless buzz on America’s 24/7 media choking the American mind with trivia.

One: The bizarre presidential primaries featuring the carnival barker of the Trump Casinos gambling against the Koch Bros, the owner of the Vegas Sands and 15 other contestants in their wild-card game of “Political Jeopardy” being played for control of the GOP brand (but no regard for the will of the American people).

Two: Another soap opera is the historic morality war with Pope Francis and billions of revolutionaries pitted against the 19th century Grand Climate Science Denying Fossil Fuel Conspiracy of Big Oil and the GOP. And both these soaps are almost as much fun as “Jurassic World,” Nascar racing and the network daytime soaps combined.

Then of course there’s all the Clash of the Titans between two political dynasties, the heir apparent of the Bush crown versus the Clintons for the right to take over as titular head of a tenuous global anarchy of 1,826 billionaires, 67 of whom own half the assets of the entire world, the one percent whom politicians bow to more than the other 99% of America’s citizens.

Yes, with 95 million average investors risking it all in the volatile Wall Street casino, it’s virtually impossible for any normal folks to concentrate on the ticking time bomb that’s warning of a recession dead ahead … when the bubble pops and the bear takes over the economy … because it really is “only a matter of time,” as the Economist keeps warning that the “rich world,” the Fed, Congress, all America really is not ready for a new recession … and neither are you.

America is its own enemy, trapped in new irrational exuberance

What’s even more disturbing than the near certainty of Grantham, Cook and the Economist in the dark predictions is what’s driving them:  America’s self-delusional narcissism, overoptimism and irrational exuberance from the happy-talking bulls, which sets us up for huge losses, as in the recessions of 2000-2003 and 2007-2009, with trillions in lost market cap.

Individually and collectively, whether Washington, Corporate America, Silicon Valley or Main Street, most Americans secretly believe in the American Dream, at least for themselves, perpetual opportunity, perpetual growth, perpetual prosperity. When we surveyed Wall Street years ago we found a 93% bias toward positive thinking, and a tendency to ignore or substantially discount bearish signals, to “accentuate the positive, minimize the negative.”

This behavioral tendency puts individual investors, stock markets, even nations at great risk. Harvard financial historian Niall Ferguson, author of “Colossus: The Rise and Fall of the American Empire,” asked rhetorically in a Los Angeles Times column:

“America, a Fragile Empire: Here today, gone tomorrow … could the United States fall that fast?” Yes. America could fall very, very fast, triggering an economic collapse with losses in trillions, the historic game-changer demanding a political course correction, like the 1908 antitrust laws, the 1932 banking and securities laws … or today’s massive takeover of American government by an anarchistic oligarchy of superrich billionaires.

Next crash, an ‘accelerating sports car … a thief in the night!’

The point, it’s sudden, fast, and you won’t see it coming. Nor will America’s leaders. Unprepared, says the Economist, unable to act in time to avoid the recession dead ahead.

Says Ferguson, “for centuries, historians, political theorists, anthropologists and the public have tended to think about the political process in seasonal, cyclical terms … we discern a rhythm to history. Great powers, like great men, are born, rise, reign and then gradually wane.”

In that scenario, “whether civilizations decline culturally, economically or ecologically, their downfalls are protracted.” We believe “the challenges that face the United States are often represented as slow-burning … threats seem very remote.”

“But what if history is not cyclical and slow-moving but arrhythmic?” What if history is “also capable of accelerating suddenly, like a sports car? What if collapse does not arrive over a number of centuries but comes suddenly, like a thief in the night?”

What if the collapse of our great capitalist world is dead ahead, in the next decade? What if we’re so deep in denial, we are totally unprepared, thanks to today’s zero-interest Fed policy? Yes, you’ve been forewarned: America, and you, are in a loud, rapid countdown to another crash and recession and negative returns till 2020 … tick … tick … tick …

 

[by Paul B. Farrell, writing for MARKETWATCH]

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
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Obama “making his political situation worse by crowing about the success of the economy” …

People vote with their pocketbooks.  That has pretty much always been true, and it will be true in November 2014. With that in mind, the president has begun to try and convince voters that the Obama economy is working for them.

At Milwaukee Laborfest in Wisconsin this past weekend, President Obama spoke about how he and the Democrats believe the American economy has strengthened over the last six years. The president told the crowd that “by almost every measure, the American economy and American workers are better off than when I took office.” That just isn’t true. And a trove of new analysis proves my point.

A definition of being off-message is when a politician says things to people that differs from what they observe for themselves. Happy talk about the economy doesn’t fool anybody; it makes them angry. According to a George Washington University Battleground poll released today, 54 percent of voters disapprove of the job President Obama is doing on the economy. Even more telling, an NBC News/Wall Street Journal poll from August showed that 49 percent of Americans still think we are in a recession. In that same poll, 76 percent said that they do not feel confident “that life for our children’s generation will be better than it has been for us.”

Mr. ObummerThe truth is, in many ways Americans are worse off today than they were before the recession. Sentier Research released a report showing that median household income is down 4.8 percent from December 2007, when the recession began, and down 3.1 percent from the end of the recession in June 2009. The last time I checked, having less money was not an indication that we are better off.

And, as The Post reported recently, some stunning data from the Pew Charitable Trust shows that from 2007 to 2014, not one state has reported employment gains. Bear with me. This means there is not one state where the percentage of people working today is higher than the percentage of people who were working in that state before the recession. Plus, overall, only 76.2 percent of people aged 25 to 54 are working today, compared with 79.9 percent of that age group who were working in 2007.

The labor force participation rate is still incredibly low, at only 62.9 percent. Democrats can crow about how the unemployment rate has now decreased to 6.2 percent, but the primary reason for that drop is not because people have gone into comfortable retirement; it’s because they can’t find a job. So when the president says that “more folks are working,” people are left shaking their heads, wondering if the president doesn’t know, doesn’t care or thinks it is effective to be deceitful.

There are just too many bothersome facts about the lack of growth and jobs in today’s economy. This administration is the most anti-business administration since World War II, and people who want to work notice.

I don’t ever expect the president to stand in front of a crowd and say “woe is me, I’m a failure,” but when he goes out there and pats himself on the back, crowing about the success of the Obama economy, he only makes his political situation worse.

[by Ed Rogers, writing for The Washington Post]
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NORM ‘n’ AL, Minneapolis
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Consumers hoarding cash in wake of ‘Great Recession’…

With wounds from the Great Recession still fresh, chastened Americans are hoarding more cash in their checking accounts than at any time in the last 25 years.

The defensive stance, uncharacteristic of previous periods of low inflation and an improving economy, reflects how debt-burdened Americans have striven to clean up their personal finances since the recession ended five years ago.

The lack of attractive investment alternatives, with savings accounts paying next to nothing and the stock market already at lofty heights, is another factor, financial analysts said.

A recent report released by bank consulting firm Moebs Services Inc. calculated the average balance for U.S. checking accounts at $4,436 at the end of last year — more than double the average of $2,100 over the 25 years of the annual survey.

During good economic times, when unemployment and inflation are low, the average balance in consumer checking accounts is about $1,400, the survey noted.

“When times get difficult, the consumer sits things out and checking balances get larger, normally upward to $3,000 or a bit beyond,” the study said. “Generally there is higher unemployment, lower inflation and falling prices.”

By contrast, free-spending Americans had allowed their checking accounts to drop to an average of just $788 in 2007, the last year before the near-meltdown of the nation’s financial system, according to the study by the Lake Bluff, Ill., firm.

The Moebs report, previously confidential for its clients, is fresh evidence of how the devastating economic downturn worldwide has changed consumer habits, especially on spending and saving.

As people have been cleaning up their financial houses, they have only slowly increased spending, and that has helped to slow the recovery because spending typically represents about two-thirds of economic growth.

The study was based on Federal Reserve reports and proprietary data from 2,800 banks and credit unions, said economist G. Michael Moebs, who heads the firm. Moebs said he released the findings for the first time because he is confident his numbers could be off by no more than 10%.

“If it’s off by 10%, the amount in the accounts is $4,000 instead of $4,400,” Moebs said. “So what? It’s still twice what we’ve seen in the past.”

Moebs said the trend is challenging for financial firms, reducing their income from overdraft fees. He is urging his clients to prepare for a big withdrawal of funds whenever depositors decide the economy is strong enough for them to use the cash to pay down mortgages, take a vacation or buy cars.

UCLA economist Lee Ohanian said the study shows that despite a recent burst in jobs — employers have added more than 200,000 net new jobs in each of the last five months — there remain “some very troublesome issues in the economy.”

Until recently, much of the decline in unemployment was from people dropping out of the job market, he said. “Our employment-to-population ratio is still very low.”

Growth in productivity is running at less than half its usual rate, Ohanian said, and the number of long-term unemployed remains high.

“That weighs on people’s minds,” he said. “They think, ‘If I lose my job will I be out of work for two years?’ It’s scary.”

The result, he said, has been a wave of caution, with Americans paying down old debts, thinking twice about new borrowing and keeping cash on hand as a safeguard.

“A lot of people got badly burned picking up too much debt” in the years leading up to the recession, Ohanian said. “Now they are scared about where to put their money, especially after a huge run-up in the stock market. Savings accounts don’t pay much, and stocks go up and down. You could lose your nest egg.”

Mark Zandi, chief economist at Moody’s Analytics, agreed that crisis-bred caution factored into the trend, but said rising employment is likely to have contributed to the rise in checking balances as well.

“There is more income,” he said. “I think it’s going to take time for consumers to catch up — to increase their spending to match the improvement in jobs.”

Zandi said he suspected that much of the increase in average checking balances reflects more affluent families allowing cash to pile up for now rather than paying down mortgages carrying rates as low as 3.5% or pouring more money into stocks and bonds.

In Yuba City, however, people of mostly modest means — farmers, retirees, long-distance commuters to Sacramento and San Francisco — also are padding their balances, said John Cassidy, chief executive at Sierra Central Credit Union.

“Consumers should be applauded for cleaning up their credit. They’re smarter now, more aware of charges, and the level of overdrafts has dropped dramatically,” Cassidy said.

“During the bubble periods — this started in the late ’80s, really — people didn’t bat an eye at running up hundreds of dollars in overdrafts. They figured, ‘It’s a part of my lifestyle, I’ll just build it into my budget,'” he said. “That has changed.”

[by E. Scott Reckard, writing for The Los Angeles Times]

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
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Megyn Kelly tells America what’s wrong with Obama and his presidency in less than 90 seconds…

If you asked Americans to say what’s wrong with Obama and his presidency, many of us would probably start talking and not stop for at least an hour or more. There has never been a more corrupt president in the history of our nation, nor one who cared less about the country he has sworn to uphold and protect. Mr. O (or Mr. Zero, if that’s how you see the initial) is the least qualified president the US has ever elected, and it shows more and more as his second term plods on.

Megyn Kelly of Fox News doesn’t need an hour to tell us what’s wrong with President Zero.  In perhaps the most masterful rant since Obama took office in January 2009, Kelly completely spells it out in less than a minute and half. Her well-chosen words were:

Megyn Kelly of Fox News and The Kelly File“Is Barack Obama’s presidency imploding? Al Qaeda is resurging, Iraq is disintegrating and now we may look to Iran to help us stop it. Iran, a terrorist regime responsible for the deaths of thousands of Americans. What could possibly go wrong?”

“We have drawn red lines in Syria that we refused to enforce. We stood by as Russia seized part of Ukraine and now we are releasing top Taliban leaders as the Afghanistan war is still going. Not to worry they tell us, Qatar’s going to watch them for a year, we hope.”

“Domestically we have a president who has lost the trust of the American people by repeatedly misleading them. He bypasses Congress, the people’s representatives on matters ranging from Obamacare to immigration law, to the point where one of the most respected liberal law professors in the country has called our president the very danger our constitution was designed to avoid.”

“The American public overwhelming regrets implementation of Obamacare, our veterans are dying waiting to see doctors, the IRS intimidates conservative groups, the southern border is compared to a sieve and the president tries to tell us not to worry. Smiling. Golfing. And at this very moment partying with fashion queen Anna Wintour because the fund raising never stops. Not when four Americans died in Benghazi and not when Baghdad is at the brink.”

In 82 seconds Kelly blasted Obama with enough fire power to sink his ship.

I would have added Obama’s war on Christianity, destruction of the American military, the destruction of marriage, Operation Fast and Furious that led to the deaths of 2 American law enforcement officers and over 300 Mexican civilians, his constant raising of taxes which he promised not to do, and his treasonous acts of aiding and abetting known enemies of the United States.

Had any president in history committed half the crimes that Obama has, they would have been removed from office a long time ago. Had any president in the past committed treason like he has they would have been hauled out and either shot or hung by the neck.

Yet this criminal continues to walk freely through the hallowed halls of the White House. He is free to continue his tyrannical and illegal reign over our nation and he is free to continue to destroy the America that we all knew and loved. I can’t help but ask what is the power behind Obama that allows him to openly defy the Constitution, Congress and federal laws any time it suits him?

Could it be that this is God’s judgment on our nation for turning so far away from Him and His statutes? Are we now experiencing God’s judgment for murdering millions of unborn children and openly embracing the abominable lifestyle of homosexuality? Are we being judged for removing God from almost every aspect of public life? As we have removed Him, is He removing His blessing that once allowed our nation to thrive?

Consider carefully the words of Megyn Kelly and then ask yourself if this is God’s judgment for what we have done to Him. If you’re not sure, read through parts of the Old Testament to see how God repeatedly judged His chosen people, the Jews,  for turning away from Him. Also read how God restored His blessings to His people after they repented of their sins and returned to Him.
The only hope we have of returning our nation to its past glory is for our leaders and our people to repent and once again embrace God, Jesus Christ, and the Bible!

[by Dave Jolly, writing for GODFATHER POLITICS]
[NORM ‘n’ AL Note:  If the USA continues on its present path without God, do not be surprised if we soon find ourselves cast adrift on the turbulent sea of world affairs. Do not be surprised if we see the USA decline even further in world opinion; if we see the US dollar decline in value and purchasing power; if we watch the US economy go through a downward spiral that becomes deeper and longer than the recent recession; and if other countries around the world, particularly China, Russia, and/or India, surge past us in world importance and impact. “The land of the free and the home of the brave” is not going to seem so welcoming and secure if God abandons us to our folly, just as He turned away from the Jews in the book of Judges when “every man did what was right in his own eyes” by refusing to acknowledge our Lord and Creator.]
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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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If economic analysts and cycle theorists are correct, 2015 to 2020 will be an extremely difficult period for the US…

Does the economy move in predictable waves, cycles or patterns?  There are many economists who believe it does, and if their projections are correct, the rest of this decade is going to be pure hell for the United States.

Many mainstream economists want nothing to do with economic cycle theorists, but it should be noted that economic cycle theories have enabled some analysts to correctly predict the timing of recessions, stock market peaks and stock market crashes over the past couple of decades.  Of course none of the theories discussed below is perfect, but it is very interesting to note that all of them seem to indicate that the U.S. economy is about to enter a major downturn.  So will the period of 2015 to 2020 turn out to be so difficult for the United States?  We will just have to wait and see.

Economic cycles...

One of the most prominent economic cycle theories is known as “the Kondratieff wave”.  It was developed by a Russian economist named Nikolai Kondratiev, and as Wikipedia has noted, his economic theories got him into so much trouble with the Russian government that he was eventually executed because of them…

The Soviet economist Nikolai Kondratiev (also written Kondratieff) was the first to bring these observations to international attention in his book The Major Economic Cycles (1925) alongside other works written in the same decade. Two Dutch economists, Jacob van Gelderen and Samuel de Wolff, had previously argued for the existence of 50 to 60 year cycles in 1913. However, the work of de Wolff and van Gelderen has only recently been translated from Dutch to reach a wider audience.

Kondratiev’s ideas were not supported by the Soviet government. Subsequently he was sent to the gulag and was executed in 1938.

In 1939, Joseph Schumpeter suggested naming the cycles “Kondratieff waves” in his honor.

In recent years, there has been a resurgence of interest in the Kondratieff wave.  The following is an excerpt from an article by Christopher Quigley that discussed how this theory works…

Kondratiev’s analysis described how international capitalism had gone through many such “great depressions” and as such were a normal part of the international mercantile credit system. The long term business cycles that he identified through meticulous research are now called “Kondratieff” cycles or “K” waves.

The K wave is a 60 year cycle (+/- a year or so) with internal phases that are sometimes characterized as seasons: spring, summer, autumn and winter:

  • Spring phase: a new factor of production, good economic times, rising inflation
  • Summer: hubristic ‘peak’ war followed by societal doubts and double digit inflation
  • Autumn: the financial fix of inflation leads to a credit boom which creates a false plateau of prosperity that ends in a speculative bubble
  • Winter: excess capacity worked off by massive debt repudiation, commodity deflation & economic depression. A ‘trough’ war breaks psychology of doom.

Increasingly economic academia has come to realize the brilliant insight of Nikolai Kondratiev and accordingly there have been many reports, articles, theses and books written on the subject of this “cyclical” phenomenon. An influential essay, written by Professor W. Thompson of Indiana University, has indicated that K waves have influenced world technological development since the 900’s. His thesis states that “modern” economic development commenced in 930AD in the Sung province of China and he propounds that since this date there have been 18 K waves lasting on average 60 years.

So what does the Kondratieff wave theory suggest is coming next for us?

Well, according to work done by Professor W. Thompson of Indiana University, we are heading into an economic depression that should last until about the year 2020

Based on Professor Thompson’s analysis long K cycles have nearly a thousand years of supporting evidence. If we accept the fact that most winters in K cycles last 20 years (as outlined in the chart above) this would indicate that we are about halfway through the Kondratieff winter that commenced in the year 2000. Thus in all probability we will be moving from a “recession” to a “depression” phase in the cycle about the year 2013 and it should last until approximately 2017-2020.

But of course the Kondratieff wave is far from the only economic cycle theory that indicates that we are heading for an economic depression.

The economic cycle theories of author Harry Dent also predict that we are on the verge of massive economic problems.  He mainly focuses on demographics, and the fact that our population is rapidly getting older is a major issue for him.  The following is an excerpt from a Business Insider article that summarizes the major points that Dent makes in his new book…

  • Young people cause inflation because they “cost everything and produce nothing.” But young people eventually “begin to pay off when they enter the workforce and become productive new workers (supply) and higher-spending consumers (demand).”
  • Unfortunately, the U.S. reached its demographic “peak spending” from 2003-2007 and is headed for the “demographic cliff.” Germany, England, Switzerland are all headed there too. Then China will be the first emerging market to fall off the cliff, albeit in a few decades. The world is getting older.
  • The U.S. stock market will crash. “Our best long-term and intermediate cycles suggest another slowdown and stock crash accelerating between very early 2014 and early 2015, and possibly lasting well into 2015 or even 2016. The worst economic trends due to demographics will hit between 2014 and 2019. The U.S. economy is likely to suffer a minor or major crash by early 2015 and another between late 2017 and late 2019 or early 2020 at the latest.”
  • “The everyday consumer never came out of the last recession.” The rich are the ones feeling great and spending money, as asset prices (not wages) are aided by monetary stimulus.
  • The U.S. and Europe are headed in the same direction as Japan, a country still in a “coma economy precisely because it never let its debt bubble deleverage,” Dent argues. “The only way we will not follow in Japan’s footsteps is if the Federal Reserve stops printing new money.”
  • “The reality is stark, when dyers start to outweigh buyers, the market changes.” It all comes down to an aging population, Dent writes. “Fewer spenders, borrowers, and investors will be around to participate in the next boom.”
  • The U.S. has a crazy amount of debt and “economists and politicians have acted like we can just wave a magic wand of endless monetary injections and bailouts and get over what they see as a short-term crisis.” But the problem, Dent says, is long-term and structural — demographics.
  • Businesses can “dominate the years to come” by focusing on cash and cash flow, being “lean and mean,” deferring major capital expenditures, selling nonstrategic real estate, and firing weak employees now.
  • The big four challenges in the years ahead will be 1) private and public debt 2) health care and retirement entitlements 3) authoritarian governance around the globe and 4) environmental pollution that threatens the global economy.

According to Dent, “You need to prepare for that crisis, which will occur between 2014 and 2023, with the worst likely starting in 2014 and continuing off and on into late 2019.”

So just like the Kondratieff wave, Dent’s work indicates that we are going to experience a major economic crisis by the end of this decade.

Another economic cycle theory that people are paying more attention to these days is the relationship between sun spot cycles and the stock market.  It turns out that market peaks often line up very closely with peaks in sun spot activity.  This is a theory that was first popularized by an English economist named William Stanley Jevons.

Sun spot activity appears to have peaked in early 2014 and is projected to decline for the rest of the decade.  If historical trends hold up, that is a very troubling sign for the stock market.

And of course there are many, many other economic cycle theories that seem to indicate that trouble is ahead for the United States as well.  The following is a summary of some of them from an article by GE Christenson and Taki Tsaklanos

Charles Nenner Research (source)
Stocks should peak in mid-2013 and fall until about 2020. Similarly, bonds should peak in the summer of 2013 and fall thereafter for 20 years. He bases his conclusions entirely on cycle research. He expects the Dow to fall to around 5,000 by 2018 – 2020.

Kress Cycles (Clif Droke) (source)
The major 120 year cycle plus all minor cycles trend down into late 2014. The stock market should decline hard into late 2014.

Elliott Wave (Robert Prechter) (source)
He believes that the stock market has peaked and has entered a generational bear-market. He anticipates a crash low in the market around 2016 – 2017.

Market Energy Waves (source)
He sees a 36 year cycle in stock markets that is peaking in mid-2013 and will cycle down for 2013 – 2016. “… the controlling energy wave is scheduled to flip back to negative on July 19 of this year.” Equity markets should drop 25 – 50%.

Armstrong Economics (source)
His economic confidence model projects a peak in confidence in August 2013, a bottom in September 2014, and another peak in October 2015. The decline into January 2020 should be severe. He expects a world-wide crash and contraction in economies from 2015 – 2020.

Cycles per Charles Hugh Smith (source)
He discusses four long-term cycles that bottom in the 2010 – 2020 period. They are: Credit expansion/contraction cycle, Price inflation/wage cycle, Generational cycle, and Peak oil extraction cycle.

So does history repeat itself?

Well, it should be disconcerting to a lot of people that 2014 is turning out to be eerily similar to 2007.  But we never learned the lessons that we should have learned from the last major economic crisis, and most Americans are way too apathetic to notice that we are making many of the very same mistakes all over again.

And in recent months there have been a whole host of indications that the next major economic downturn is just around the corner.  For example, just this week we learned that manufacturing job openings have declined for four months in a row.  For many more indicators like this, please see my previous article entitled “17 Facts To Show To Anyone That Believes That The U.S. Economy Is Just Fine“.

Let’s hope that all of the economic cycle theories discussed above are wrong this time, but we would be quite foolish to ignore their warnings.  Everything indicates that a great economic storm is rapidly approaching, and we should use this time of relative calm to get prepared while we still can.

[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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The US economy is doing fine and recovering nicely? Then how do you explain these facts?

No, the economy is most definitely not “recovering”.  Despite what you may hear from the politicians and from the mainstream media, the truth is that the U.S. economy is in far worse shape than it was prior to the last recession.

We are still pretty much where we were when the last recession finally ended.  When the financial crisis of 2008 struck, it took us down to a much lower level economically.  Thankfully, things have at least stabilized at this much lower level.  For example, the percentage of working age Americans that are employed has stayed  remarkably flat for the past four years.  We should be grateful that things have not continued to get even worse.  It is almost as if someone has hit the “pause button” on the U.S. economy.  But things are definitely not getting better, and there are a whole host of signs that this bubble of false stability will soon come to an end and that our economic decline will accelerate once again.  The following are 17 facts that prove the U.S. economy is absolutely NOT just fine…

#1  The homeownership rate in the United States has dropped to the lowest level in 19 years.

#2  Consumer spending for durable goods has dropped by 3.23 percent since November.  This is a clear sign that an economic slowdown is ahead.

#3  Major retailers are closing stores at the fastest pace that we have seen since the collapse of Lehman Brothers.

#4  According to the Bureau of Labor Statistics, 20 percent of all families in the United States do not have a single member that is employed.  That means that one out of every five families in the entire country is completely unemployed.

#5  There are 1.3 million fewer jobs in the U.S. economy than when the last recession began in December 2007.  Meanwhile, our population has continued to grow steadily since that time.

#6  According to a new report from the National Employment Law Project, the quality of the jobs that have been “created” since the end of the last recession does not match the quality of the jobs lost during the last recession…

  • Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
  • Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
  • Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth.

#7  After adjusting for inflation, men who work full-time in America today make less money than men who worked full-time in America 40 years ago.

#8  It is hard to believe, but 62 percent of all Americans make $20 or less an hour.

#9  Nine of the top ten occupations in the U.S. pay an average wage of less than $35,000 a year.

#10  The middle class in Canada now makes more money than the middle class in the United States does.

#11  According to one recent study, 40 percent of all Americans could not come up with $2000 right now even if there was a major emergency.

#12  Less than one out of every four Americans has enough money put away to cover six months of expenses if there was a job loss or major emergency.

#13  An astounding 56 percent of all Americans have subprime credit in 2014.

#14  As I stated recently, there are now 49 million Americans dealing with food insecurity.

#15  Ten years ago, the number of women in the U.S. that had jobs outnumbered the number of women in the U.S. on food stamps by more than a 2 to 1 margin.  But now the number of women in the U.S. on food stamps actually exceeds the number of women that have jobs.

#16  69 percent of the federal budget is spent either on entitlements or on welfare programs.

#17  The number of Americans receiving benefits from the federal government each month exceeds the number of full-time workers in the private sector by more than 60 million.

Taken individually, those numbers are quite remarkable. Taken collectively, they are absolutely breathtaking. Yes, things have been improving for the wealthy for the last several years.  The stock market has soared to new record highs and real estate prices in the Hamptons have skyrocketed to unprecedented heights.

But that is not the real economy.  In the real economy, the middle class is being squeezed out of existence.  The quality of our jobs is declining and prices just keep rising.  This reality was reflected quite well in a comment that one of my readers left on one of my recent articles

It is getting worse each passing month. The food bank I help out, has barely squeaked by the last 3 months. Donors are having to pull back, to take care of their own families. Wages down, prices up, simple math tells you we can not hold out much longer. Things are going up so fast, you have to adopt a new way of thinking. Example I just had to put new tires on my truck. Normally I would have tried to get by to next winter. But with the way prices are moving, I decide to get them while I could still afford them. It is the same way with food. I see nothing that will stop the upward trend for quite a while. So if you have a little money, and the space, buy it while you can afford it. And never forget, there will be some people worse off than you. Help them if you can.

And the false stock bubble that the wealthy are enjoying right now will not last much longer.  It is an artificial bubble that has been pumped up by unprecedented money printing by the Federal Reserve, and like all bubbles the Fed creates, it will eventually burst.

None of the long-term trends that are systematically destroying our economy have been addressed, and none of our major economic problems have been fixed.  In fact, as I showed in this recent article, we are actually in far worse shape than we were just prior to the last major financial crisis.

Let us hope that this current bubble of false stability lasts for as long as possible. But let us not be deceived into thinking that it is permanent.

[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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