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11 Signs That The U.S. Economy Is Starting To Slow Down Dramatically

November 14, 2018

11 Signs That The U.S. Economy Is Starting To Slow Down Dramatically

The pace at which things are changing is shocking the experts.  Just a few months ago, many of the experts were still talking about how the U.S. economy was “booming”, but since then a major shift has taken place.  Most of the headlines have been about the huge stock market declines that we have been witnessing, but things have not been going well for the real economy either.  Home sales are way down, auto sales are plummeting, the retail apocalypse is escalating, the middle class continues to shrink and economic optimism is rapidly evaporating.  We haven’t seen anything like this since 2008, and many believe that the economic downturn that is now upon us will ultimately be even worse than what we experienced a decade ago.  The following are 11 signs that the U.S. economy is starting to slow down dramatically…

#1 When economic activity is rising, demand for oil increases, and oil prices tend to go up.  But when economic activity is slowing down, demand for oil diminishes, and oil prices tend to go down.  That is why what is happening to the price of oil right now is so alarming…

US oil prices plummeted 7% to a one-year low of $55.69 a barrel on Tuesday. It was crude’s worst day since September 2015.

The losses in the oil world have been staggering as worries deepen about excess supply. Crude is down 12 straight days, the longest losing streak since futures trading began in March 1983.

#2 One new poll has found that only 13 percent of Americans plan to buy a home in the next year.  That number has fallen for three quarters in a row, and it is now down by almost half over the last twelve months.

#3 As the market dries up, the inventory of unsold homes is absolutely soaringnationwide…

…click on the above link to read the rest of the article…

Will Trump Accept Responsibility When This Shitshow Implodes?

April 16, 2017

WILL TRUMP ACCEPT RESPONSIBILITY WHEN THIS SHITSHOW IMPLODES?

Donald J. Trump has taken credit for making America’s economy great again. He’s been crowing about all the jobs being created, the soaring consumer confidence and record highs in the stock market. It’s all because the Donald has inspired Americans about our glorious future.

But, a funny thing has been happening in the real world. The economy has gone into the shitter and GDP will be lucky to reach 1% in the first quarter of his presidency. The bullshit consumer confidence surveys mean absolutely nothing. Feelings don’t mean shit. What consumers do is what matters.

67% of the US economy is dependent upon Americans spending money they don’t have on shit they don’t need. And they’ve dramatically reduced that spending. If consumers are so confident, why are a record number of major retailers going bankrupt and closing 3,500 stores in 2017? Mom and pop retailers have been shuttering for years.

If the narrative about a dramatically improving housing market was true, why would furniture store sales and building material store sales be falling? They wouldn’t. It seems even the spendthrift millennials have run out of dough, as restaurant sales are in free fall. Restaurant chains have begun closing units now. It has only just begun.

The auto industry ponzi scheme has come to an end, as billions in subprime loans to deadbeats is finally coming home to roost. If you lend money to idiots with no means to repay you, the loans will go bad. Auto sales have begun to fall and will continue to fall for the next couple years, as this house of cards built on the Fed’s easy money collapses.

…click on the above link to read the rest of the article…

Subprime Auto Loans: the Next Shoe to Drop?

March 18, 2016

Subprime Auto Loans: the Next Shoe to Drop?

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Booming auto sales have more to do with low rates and easy financing than they do with the urge to buy a new vehicle.  In the last few years, car buyers have borrowed nearly $1 trillion to finance new and used autos.  Unfortunately, much of that money was lent to borrowers who have less-than-perfect credit and who might not be able to repay the debt. Recently there has been a surge in delinquencies among subprime borrowers whose loans were packaged into bonds and sold to investors. The situation is similar to the trouble that preceded the Crash of 2008 when prices on subprime mortgage-backed securities (MBS) suddenly collapsed sending the global financial system off a cliff.  No one expects that to happen with auto bonds, but story does help to illustrate that the regulatory problems still haven’t been fixed.

In a recent article in the Wall Street Journal, author Serena Ng uses the performance of a bond issue called Skopos Auto Receivables Trust to explain what’s going on. She says:

“The bonds were built out of subprime auto loans and sold in November. Through February, about 12% of the underlying loans were at least 30 days past due, a third of which were more than 60 days delinquent. In another 2.6% of loans, borrowers had filed for bankruptcy or the vehicles had been repossessed.”  (“Subprime Flashback: Early Defaults Are a Warning Sign for Auto Sales“, Wall Street Journal)

Check out those dates again. If a loan, that was issued in November, is 60 days delinquent by February, it means the borrower never even made the first payment on the debt. How can that happen unless the lender is deliberately fudging the underwriting to “slam the sale”?

It can’t, which means that dealers are intentionally lending money to people they know won’t be able to pay them back.

But why would they do that?

…click on the above link to read the rest of the article…

Ignore the Media Bullsh*t–Retail Implosion Proves We Are In Recession

October 15, 2015

Ignore the Media Bullsh*t–Retail Implosion Proves We Are In Recession

Here we go again. The dying legacy media will continue to support the status quo, who provide their dwindling advertising revenue, by papering over the truth with platitudes, lies, and misinformation. I have been detailing the long slow death of retail in America for the last few years. The data and facts are unequivocal. Therefore, the establishment and their media mouthpieces need to suppress the truth.

They spin every terrible report in the most positive way possible. They blame lousy retail results on the weather. They blame them on calendar effects. They blame them on gasoline sales plunging. That one is funny, because we heard for months that retail spending would surge because people had more money in their pockets from the huge decline in gasoline prices.

September retail sales were grudgingly reported by the Census Bureau this morning and they were absolutely dreadful. This followed an atrocious August report. The MSM couldn’t blame it on snow, cold, flooding, drought, or even swarms of locusts. So they just buried the story in their small print headlines. The propaganda media machine had nothing. They continue to spew the drivel about a 5.1% unemployment rate as a reflection of a booming jobs market. If we really have a booming jobs market, we would have a booming retail sector. The stagnant retail market reveals the jobs data to be fraudulent. The 94 million people supposedly not in the job market can’t buy shit with their good looks.

Despite the storyline about consumer austerity being the reason for sluggish spending, the facts prove otherwise. Consumer spending accounted for 68% of GDP in 2008 at the peak. Seven years later it still represents 68% of GDP. The difference is the spending has shifted dramatically towards services since the Wall Street created financial crisis. Spending on services has grown by 31% versus 20% for goods since 2008. Guess what has caused that surge?

…click on the above link to read the rest of the article…

Brazil Faces Unemployment “Crisis”, As Retail Sales Plunge, Rousseff Blasts “Coup-Mongers”

October 15, 2015

Brazil Faces Unemployment “Crisis”, As Retail Sales Plunge, Rousseff Blasts “Coup-Mongers”

Brazilian President Dilma Rousseff got a rare bit of respite on Tuesday when a Supreme Court justice granted an injunction that delays a lower house vote which could have paved the way for impeachment proceedings.

House speaker Eduardo Cunha has remained defiant, vowing to exercise his “constitutional prerogative” to review impeachment requests.

Of course Cunha has his own set of problems. Allegations of corruption tied to the discovery of Swiss bank accounts have led to calls for his resignation and that, in turn, has Rousseff’s “aides fear[ing] the speaker could try to speed up the impeachment process.” As Reuters notes, if Cunha accepts even one of three impeachment petitions he has on his desk, “a parliamentary commission with representatives of all parties would analyze it and put it to a lower house vote.”

It is essentially a race against time to see if the house ethics committee will force his resignation before he can secure the lower house support to force a Senate impeachment trial.

For her part, Rousseff has accused the opposition of “coup-mongering” following last week’s ruling by the TCU that she cooked the fiscal books. 

Meanwhile, as the intractable political stalemate keeps investors on edge regarding whether the government will be stable enough to enact the reforms needed to plug the budget gap, the economy continues to crumble.

We got a look at retail sales for August today and the picture was not pretty. Core retail sales fell by a larger-than-expected 0.9% month on month and July was revised lower to -1.6%. Broad retail sales fell 2.0% auto sales crashed 5.2%. Annually, core fell by 6.9% broad by 9.6% yoy. Here’s Goldman with the takeaway:

The near-term outlook for private consumption and retail sales remains negative owing to the significant deceleration of credit flows from both private and public banks, high levels of household indebtedness, declining job creation and real wage growth, higher interest rates, higher taxes (including via inflation), higher utility and transportation tariffs, heightened economic and political uncertainty and very depressed (record low) consumer confidence.

…click on the above link to read the rest of the article…

Two Outs in the Bottom of the Ninth

September 26, 2015

Two Outs in the Bottom of the Ninth

The housing market peaked in 2005 and proceeded to crash over the next five years, with existing home sales falling 50%, new home sales falling 75%, and national home prices falling 30%. A funny thing happened after the peak. Wall Street banks accelerated the issuance of subprime mortgages to hyper-speed. The executives of these banks knew housing had peaked, but insatiable greed consumed them as they purposely doled out billions in no-doc liar loans as a necessary ingredient in their CDOs of mass destruction.

The millions in upfront fees, along with their lack of conscience in bribing Moody’s and S&P to get AAA ratings on toxic waste, while selling the derivatives to clients and shorting them at the same time, in order to enrich executives with multi-million dollar compensation packages, overrode any thoughts of risk management, consequences, or  the impact on homeowners, investors, or taxpayers. The housing boom began as a natural reaction to the Federal Reserve suppressing interest rates to, at the time, ridiculously low levels from 2001 through 2004 (child’s play compared to the last six years).

Greenspan created the atmosphere for the greatest mal-investment in world history. As he raised rates from 2004 through 2006, the titans of finance on Wall Street should have scaled back their risk taking and prepared for the inevitable bursting of the bubble. Instead, they were blinded by unadulterated greed, as the legitimate home buyer pool dried up, and they purposely peddled “exotic” mortgages to dupes who weren’t capable of making the first payment. This is what happens at the end of Fed induced bubbles. Irrationality, insanity, recklessness, delusion, and willful disregard for reason, common sense, historical data and truth lead to tremendous pain, suffering, and financial losses.

 

…click on the above link to read the rest of the article…

“Bernanke & Greenspan Have Destroyed America” Schiff & Maloney Warn “People Don’t Realize What Is Coming”

June 3, 2015

“Bernanke & Greenspan Have Destroyed America” Schiff & Maloney Warn “People Don’t Realize What Is Coming”

Ali and Frazier, Laurel and Hardy, Mayweather and Pacquiao, Liesman and Santelli, and now Schiff and Maloney. Peter and Mike join clash of the titan-like to discuss their investment strategies and expose the charts the government doesn’t want you to seeas “people like Bernanke are taken seriously still and the people that did predict [the crisis] are dismissed as lunatics half the time.” The wide-reaching conversation covers everything from gold and stocks to The Fed and The Dollar – Bernanke “took the coward’s way out because all he did was exacerbate the problems to postpone the day of reckoning.” The air is coming out of the bubble, they warn, “Bernanke and Greenspan have absolutely destroyed America. People don’t realize what is coming…”

 

Full transcript below:

Mike: I was in Puerto Rico a little while back and Peter Schiff invited me over to his house and we were just amazed at how we are exactly on the same page when it comes to everything economically. And so he just made a trip out to California near my offices and we decided we’d get together and discuss some of this stuff. So on your travels Peter lately you were just at a show you were speaking. Where were you at?

Peter: I was in Las Vegas. It’s great to see you again Mike. I was speaking to a very main stream audience of hedge fund managers at an annual conference there. And what was very interesting is even though the audience was, as I said, very main stream, and I was on a panel with a lot of very high profile, main stream individuals, the only person that really got applause was me.

…click on the above link to read the rest of the article or view the interview…

 

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