Showing posts with label NEWS - Economic. Show all posts
Showing posts with label NEWS - Economic. Show all posts

Thursday, May 1, 2014

17 Facts To Show Anyone That Believes That The U.S. Economy Is Just Fine

17 Facts To Show Anyone That Believes That The U.S. Economy Is Just Fine
No, the economy is most definitely not "recovering".  Despite what you may hear from the politicians and from the mainstream media (shrugging off today's terrible GDP print), the truth is that the U.S. economy is in far worse shape than it was prior to the last recession.  In fact, we are still pretty much where we were at 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 to show to anyone that believes that the U.S. economy is 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 at this point.
#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 wrote about the other day, there are now 49 million Americans that are 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 that much longer.  It is an artificial bubble that has been pumped up by unprecedented money printing by the Federal Reserve, and like all bubbles that 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.
That is what I am hoping for.
But let us not be deceived into thinking that it is permanent.
It will soon burst, and then the real pain will begin.
Article by Michael Snyder of The Economic Collapse blog.

Thursday, April 24, 2014

The REAL Reasons We’re Drifting Towards World War III

The REAL Reasons We’re Drifting Towards World War III

War: The Big Picture

All of the talk of war in the Ukraine and Syria is confusing … so here’s an executive summary:
  • But it’s not a party thing.  The Dems have been on board for many years as well.  For example, Jimmy Carter and Barack Obama’s foreign policy guru said in 1997 that the U.S. had to gain control of Ukraine
  • The U.S. and NATO will carry out false flag after false flag until they can create a “justification” for war which will people believe
  • They will support Al Qaeda terrorists in the Middle East, neo-Nazis in Ukraine and other bad guys to promote their military objectives
  • Even supposedly “open voting” sites like Reddit routinely censor stories which challenge the status quo in any fundamental way.   For example, Reddit’s front page has consistently carried anti-Russian stories on Ukraine
That’s why we’re drifting towards WWIII …

Monday, April 21, 2014

Barclays is the next big bank pulling out of commodities: report

Barclays is the next big bank pulling out of commodities: report

British multinational banking and financial services Barclays is said to be the next big bank planning to sell large parts of its metals, agricultural and energy business in a move that, FT.com reports (subs. required), will be announced on Tuesday.
The decision echoes moves by other major players, such as JPMorgan Chase and Morgan Stanley, which have been recently walking away from their commodities business.
Since the US Federal Reserve determined in 2003 that certain commodity activities were "complementary" to financial activities and therefore permissible to Wall Street bankers, many jumped at the chance, but that tide has now turned.
Morgan Stanley, Goldman Sachs, JPMorgan, Deutsche Bank, UBS and Royal Bank of Scotland are either shrinking their commodities units or plainly moving away from everything to do with them, including mining, processing, transportation, warehousing and trading.
JPMorgan (NYSE:JPM) got $3.5bn last month after selling its physical commodities unit to Geneva-based trading house Mercuria, while Morgan Stanley has cut back on commodities operations and staff.
Barclays, which is one of the top five banks in commodities, got to control roughly 70% of the commodities trading market last year. But in response to pressure to cut costs and improve returns, the UK bank announced Friday a shakeup of its investment bank management team, including a new head of markets and new co-heads of banking.
The British lender also told staff last week it was looking to simplify its operations and that it could axe thousands of jobs, mainly at its investment arm, while conducting a strategic review, which will report next month.
Revenues for the investment banks from the sector surged to $15 billion at the peak of the cycle, but has now fallen back dramatically in line with a retreat in metal and mineral prices.
Braclays is set to present a strategic update on May 8.

Wednesday, April 2, 2014

The how and when of Chinese stimulus

The how and when of Chinese stimulus
The world's second largest economy is slowing down and dragging all resource-based economies down with it.
China's leaders want to move the country from an investment-led economy to one based on consumption.
But the rebalancing is proving difficult and signs of a slowdown are not hard to find.
Consensus forecast for 2014 growth in China is 7.4%, just below the official target rate set by the government (a number widely believed to be massaged so as to produce the required level).
GDP expansion at 7.4% would be the slowest in 24 years.
Something that's causing alarm among resource companies reliant on Chinese demand.
China watchers are now waiting with bated breath for the government to inject cash to rev up the economy again.
Just like the $640 billion (4 trillion yuan) package delivered in 2008-2009 that made China the only major economy to continue growing strongly through the financial crisis.
That's not going to happen says Capital Economics.
The independent research house parsed Premier Li Keqiang's speech delivered to a meeting of provincial leaders last week.
He spoke of "targeted measures", mentioned "last year's successful experience in fighting the economic slowdown" and cautioned on shifting macroeconomic policies" which may be effective in the short term but is not necessarily beneficial for the future":
The key contrast here is not just with the stimulus of 2008/09 but also with the mini-stimulus of 2012. Two years ago, as after the global financial crisis, government support took the form of across-the-board credit loosening. Policymakers took a different, more discriminating, approach in the spring and summer of last year when, as now, many were worrying about a hard landing.
Support came in the form of speeded up project approvals and budgetary spending. Credit growth slowed. This provides a model for what to expect over the months ahead. We are likely to see some new infrastructure projects given the go-ahead, work on ongoing projects accelerated, some restrictions loosened – notably on property purchases – and faster disbursement of some budgeted funds.
In any event, when looking at China in absolute terms the slowdown does not seem so alarming anymore.
Growth in 2014 would indeed be the slowest since 1990 – in the mid-Nineties Chinese growth rates peaked at an eye-watering 30%.
But mainland China is tacking onto its economy some $700 billion this year.
That's equal to the size of its entire economy in 1994.
And as big as the Swiss economy and the equivalent GDP of two South Africas and four New Zealands.


Monday, February 17, 2014

India's 2014/15 Interim Budget Highlights.

India's 2014/15 Interim Budget Highlights.
Finance Minister P. Chidambaram presented the interim budget for the fiscal year 2014/15 on Monday to cover expenditure until the government's term ends in May.
His speech was repeatedly disrupted by protests over the proposed division of Andhra Pradesh.

GROWTH
* GDP expansion in 2013/14 third and fourth quarters will be at least 5.2 percent

FISCAL DEFICIT
* Fiscal deficit projected at 4.1 percent of GDP in 2014/15
* Fiscal deficit seen at 4.6 percent of GDP in 2013/14
* Says need to bring down fiscal deficit to 3 percent of GDP by 2016/17

CURRENT ACCOUNT DEFICIT
* Current account deficit for 2013/14 projected at $45 billion
* Forex reserves to rise by $15 billion by end of 2013/14

BORROWING
* Gross market borrowing seen at 5.97 trillion rupees in 2014/15
* Net market borrowing at 4.07 trillion rupees
* Debt repayment in 2014/15 seen at 1.897 trillion rupees
* Ways and Means advances for 2014/15 estimated at 100 billion rupees

PRIVATISATION
* Target from stake sale in state run firms for 2013/14 revised to 258.41 billion rupees
* Target for 2014/15 at 569.25 billion rupees

SPENDING
* Plan expenditure for 2014/15 seen at 5.55 trillion rupees, the same level as the previous fiscal year
* Non plan spending estimated at about 12.08 trillion rupees in 2014/15

SUBSIDIES
* Total spending on food, fertilisers and fuel at 2.5 trillion rupees in 2014/15
* Food subsidy estimated at 1.15 trillion rupees, fertiliser subsidy at 679.71 billion rupees. Petroleum subsidy seen at 634.27 billion rupees versus revised figure of 854.8 billion rupees for 2013/14.

DEFENCE
* Spending raised to 2.24 trillion rupees in 2014/15, up 10 percent year on year

EXPORTS
* Merchandise exports seen at $326 billion in 2013/14, up 6.3 percent year on year.
* Agriculture exports expected to touch $45 billion in 2013/14, up from $41 billion in 2012/13

TAX PROPOSALS
* No major change in tax rates
* Factory gate tax to be reduced to 10 percent from 12 percent on some capital goods, consumer durables
* Cut excise duty on small cars, two wheelers, commercial vehicles to 8 percent from 12 percent
* Recommends excise duty reductions on larger vehicles
* Restructure of factory gate tax rates for manufacturing of mobile handsets

BANKS RESTRUCTURING
* Govt to provide 112 billion rupees capital infusion in state run banks in 2014/15
* Propose to set up public debt management office to start5 work from 2014/15

FINANCE MINISTER COMMENTS
Resurgence in exports, global economic revival and moderation in inflation point to better outlook for Indian economy in 2014/15.
Our objectives were fiscal consolidation, reviving growth cycle, and enhancing manufacturing, said Chidambaram. Manufacturing needed an immediate boost, he said.
I can confidently assert that the fiscal deficit is declining, the current account deficit is constrained, inflation is moderated; exchange rate is stable, he said.
India's economy now the 11th largest in the world, he said.

Monday, December 16, 2013

GOLDMAN: Here Are 3 Reasons Why The Fed Won't Taper Next Week

GOLDMAN: Here Are 3 Reasons Why The Fed Won't Taper Next Week
A slew of strong better-than-expected economic data has economists increasing the odds that the Federal Reserve will announce the tapering its $85 billion quantitative easing program at the conclusion of its FOMC meeting on Wednesday December 18.
"It's still a close call, but chances are now above 50 percent that the Federal Reserve will modestly reduce its asset purchases later this month," said Potomac Research Group's Greg Valliere who was communicating the analysis of former Fed Vice Chair Don Kohn. "There's a 60-40 chance that the FOMC will decide on Dec. 18 to begin tapering."
However, a December tapering announcement is not the consensus. Most economists don't expect a tapering announcement until January or March.
Goldman Sachs' David Mericle explains three reasons why in a new 9-page note to clients.
  1. Economic Data: "...the data since October is mixed at best. The strongest argument in favor is the improvement in the trend rate of payroll growth to the 200k level. However, we expect that Fed officials will also put considerable weight on inflation, which has fallen further in recent months."
  2. Communication: "...we continue to expect that tapering will be offset by a strengthening of the forward guidance, but we doubt the FOMC is ready to take this step. While some eventual strengthening or clarifying of the forward guidance is now a consensus expectation, the October minutes and recent Fed commentary suggest little agreement on what form this should take."
  3. Expectations: "...while consensus expectations now place greater probability on a December taper, it remains a minority view. We suspect that this makes a move less likely, as Fed officials will be reluctant to deliver a hawkish surprise that could tighten financial conditions and raise doubts about their commitment to the inflation target."
Mericle expects tapering to begin in March, "with January possible as well."
As for the December FOMC meeting: "We expect modest changes to the economic forecasts. In light of recent data, participants will likely mark down their projections of inflation and the unemployment rate and mark up their growth projections slightly," wrote Mericle.
Notable economists forecasting a tapering announcement include Bank of Tokyo-Mitsubishi's Chris Rupkey and Deutsche Bank's Joe LaVorgna.

Friday, July 12, 2013

US economy still needs Fed's stimulus: Bernanke

Fed Chairman Ben S. Bernanke
Chairman Ben Bernanke said on Wednesday that the US economy still needs help from the Federal Reserve's low interest rate policies.

Bernanke told the National Bureau of Economic Research that because unemployment remains high and inflation is below the Fed's target, the policies are still necessary. He also said the economy is being held back by higher taxes and federal spending cuts. 

"If you put all of that together, you can only conclude that highly accommodative monetary policy for the foreseeable future is what is needed for the US economy," Bernanke said.

Stock index futures rose as Bernanke spoke. The Standard & Poor's index futures were up eight points, or 0.5 per cent, at 1,656 as of 5:40 pm Eastern Daylight Time - shortly after Bernanke wrapped up his remarks.

Bernanke's comments were his latest effort to stress that the Fed will continue to stimulate the economy, even after it begins to slow $85-billion-a-month in bond purchases that have kept long-term interest rates down.

The Fed plans to keep its investment holdings constant to avoid causing long-term rates to rise too quickly. It also plans to keep short-term rates at record lows at least until unemployment slides to 6.5 per cent.

And Bernanke has said 6.5 per cent unemployment is a threshold, not a trigger: The Fed might decide to keep its benchmark short-term rate near zero even after unemployment falls that low.

Unemployment is currently 7.6 per cent.

On Wednesday, Bernanke didn't signal any changes in the bond-buying program. But Bernanke defended recent comments he made after the Fed's June meeting.

At his June 19 news conference, Bernanke said the Fed would likely slow its bond purchases later this year and end them around mid-2014 if the economy continued to strengthen. Stocks and bonds plunged in the days after his remarks. Some critics said the Fed bungled its communications strategy.

Bernanke asked his audience to consider what might have happened if the Fed had given no signals on when the bond buying might be curtailed. He said that might have led to an increase in risk-taking on the part of investors "reflecting an expectation for an infinite" program of bond purchases.

"Explaining what we are doing may have avoided a much more difficult situation at another time," he said.

Bernanke also did not provide any clues on his own future. Many expect he will leave when his current term ends in January.