US - Econ. Slowdown - How deep & long ? 05 (Jan 12 - Dec 16)

Re: US - Econ. Slowdown - How deep & long ? 05 (Jan 12 - Mar

Postby winston » Thu Dec 31, 2015 7:21 pm

This Little-Discussed Truth About the Great Boom Shows Why This “Recovery” Is a Sham

By Harry S. Dent Jr.

A Yahoo Finance headline this morning reads: “Unhappy New Year: The U.S. Economy Is Stalling Out.”

We recently learned that existing home sales in November crashed 10.5% from the month before.

Guess when the last time was when we saw these levels? The housing crisis of the mid- to late-2000s!

I also recently shared a chart showing a cataclysmic 82% drop in the ratio of new home sales to the U.S. population. To put it simply, we won’t need more real estate for decades to come, with baby boomers increasingly dying to offset rising millennial home purchases.

I and a few other experts like David Stockman have continued to argue that this re-bound since 2009 has been all smoke and mirrors – artificial stimulus that has only created greater bubbles in financial assets like stocks, and financial engineering to create rising corporate profits.

None of it goes toward real expansion for future jobs, productivity and growth… things like new office space and industrial capacity.

Wall Street analysts and corporate CEOs can argue against this with their “this is not a bubble” logic, but this chart tells the real story.

Below is a chart that shows the office space per worker in square feet. It shows a rise into the height of the financial crisis, after which it’s fallen like a rock!

At first this could seem counterintuitive. Why did the square footage per worker go up into the worst of the recession into mid- to late-2009? That’s because companies were laying off workers going into that recession, meaning there were more workers per already existing square feet.

But the real story comes in the recovery from late 2009 forward.

See larger image

Square footage per worker has declined very sharply from 371 square feet to 270, down a whopping one-third in just over six years as businesses have rehired a large portion of the laid-off workers – which means largely NOT creating new jobs.

You should not look at this chart and assume that less square footage per worker means more workers than in the past and that everything is hunky dory.

What’s more important is that the sharp decrease in square footage implies a lack of demand in commercial real estate. And that’s because commercial real estate is already way over-expanded! We overbuilt it in the great boom of 1983 to 2007, so even these hires have not filled up the available space. Which again means businesses aren’t expanding their office or industrial space!

So while hiring more workers sounds fine out of context… it’s masking much more severe, deeper-set issues in our capacity to build for the future in a way over-indebted and over-expanded economy.

This is the hard truth that no one is looking at: businesses are merely re-employing their past capacity, and not creating new plants and offices for future employment. All the 200,000-plus jobs numbers per month, if they are even fully real, are just catching up with the past. And we shouldn’t be investing in such new work space as we already have all we need for decades ahead.

This is the reality of demographics that clueless economists just don’t get.

Meanwhile, more and more people drop out of the workforce either from giving up on finding a job, or retiring earlier once their kids have left the nest.

And more jobs are part-time or in the low-end service sector – like bartenders and waiters, not the higher-paid manufacturing and professional jobs of the past.

To top it off, fewer and fewer people are entering or staying in the workforce. Hence, the workforce participation rates continue to edge down – after falling sharply for years.

And all of that means… we’re not even near capacity for all this overbuilt real estate.

Folks, this “recovery” isn’t working! How could we expect it to given the over-expansion in the greatest debt bubble in U.S. history from 1983 to 2008?

Inflation hasn’t risen due to excess capacity here and around the world, especially China…

Money velocity continues to drop without lending and productive investment to expand it…

Businesses are struggling with stagnant earnings because we already hit the peak of debt capacity and demographic spending growth in the great boom that finally peaked in late 2007, as I forecast two decades before.

See larger image

Debt was running at 2.54 times GDP for 26 years. It doesn’t take a rocket scientist or nuclear physicist to tell you that pretty much guarantees a massive period of deleveraging and depression – not continued expansion.

So since growth is all but impossible, corporations have resorted to financial engineering to keep the wagon rolling – all courtesy of the Fed, with near-zero short- and long-term interest rates.

They’ve had two options: either increase stock buybacks to leverage their stagnant earnings with rising earnings-per-share on fewer shares, or increase dividends to compete with lower and lower yielding bonds (also courtesy of the Fed). And they’ve been milking both options for all they’re worth!

But financial engineering does not result in real growth.

And speculation does not expand the money supply.

It is only a sign of decreasing money velocity, and a bubble that will only burst – like in 1929, 2000, and now again!

It’s a mirage.

It isn’t real.

And it isn’t sustainable.

Despite such endless financial engineering, sales for the S&P 500 have been declining for the last three quarters. And profits have declined for the first time since the 2009 expansion.

I’d be surprised if both didn’t continue down in the 4th quarter.

This will end badly… which is the only way bubbles end.

My forecast today: the stock market will start to crash by early February, if not sooner, when it finally gets this clear realization.

Source: Economy & Markets
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US - Economic Data & News 08 (Feb 13 - Dec 15)

Postby behappyalways » Sat Jan 30, 2016 7:51 pm

US economic growth slows sharply
http://www.bbc.com/news/business-35441191
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Re: US - Econ. Slowdown - How deep & long ? 05 (Jan 12 - Mar

Postby winston » Fri Feb 19, 2016 9:36 am

The Recession Isn’t a Few Months Away: It’s Likely Already Started

By Harry S. Dent Jr.

So the S&P 500 is out of correction for now and the coast is clear. NOT! This is exactly what we’ve been predicting would happen – after reaching new lows, stocks would have to bounce before they inevitably resume their longer-term trend, which is down.

But stocks haven’t been the only victims of late. Just a couple weeks ago the January nonfarm payroll report came in at 151,000 jobs. So much for the expected 190,000! And of the ones reported, they were mostly low-wage jobs.

Pile that on top of the disappointing Christmas and retail sales in December. Not to mention falling stock earnings and sales growth, the worst December-to-January stock performance to date, and another banking crisis looming in Europe, especially Italy. There’s economic weakness everywhere you look!

All of this is leading me to believe that the next recession – which will lead into an even greater DEPRESSION – is not a few months away. I think it’s already begun.

Think back to the Great Recession in 2008. By the time we figured out it had started, it was months after the fact. It officially started in January 2008, three months after the stock market peaked in early October. And jobs didn’t peak and start to decline until four months later that May. Only then did the stock market see its sharp and deep crash between June and early November.

Well, of course it did! The jobs report is a lagging indicator! It doesn’t tell us anything about where we are now, which is probably why the Fed and markets-on-crack love it. Yet they think it’s the most important report that comes out. Go figure. (By the way, real estate is another lagging indicator, and Lance will have more on that for you tomorrow to tell you where we’ve been, and to give you an idea of where we’re going.)

David Stockman recently pointed out a better indicator for jobs that his colleague Lee Adler tracks.

Unlike the nonfarm payrolls report, where there’s a lot of room to fudge the numbers, this other indicator is in real time and goes right to the source: payroll! Specifically, payroll taxes that the IRS withholds from businesses.

It’s pretty obvious that if the IRS is withholding fewer payroll taxes, then there aren’t as many people on payroll. As it turns out, the trend in monthly data has been clearly downward since 2011. And the last two months are worse. Lee Adler’s daily data shows that jobs flattened in December and declined 5% in January.

Given that this is in real time, sounds like we’re already in a recession!

But let’s take a look at another indicator that shows we’re already there. This one most surprised me: the Restaurant Performance Index. What sector would you expect to benefit more from freed-up spending thanks to lower oil prices? But look where it is today:



See larger image

By falling below the 100-level line, restaurants are officially in a period of contraction. The index fell to a negative reading of 99.7 in December from 101.3 in November. That’s a 1.6% drop in a month! We haven’t seen a drop this steep since late 2007!

It gets really ugly when you start digging into the index. Among the eight indicators that make it up, the December decline occurred in all of them.

For example, 73% of restaurants reported higher same-store sales in July. As of December, only 42% of them do. Ouch.

And whereas only 13% of restaurants were reporting lower same-store sales in April, now it’s 43% – more than the 42% on higher same-store sales I just mentioned. Sure, it’s higher by just a percent, but still, that’s a pivotal shift in momentum!

Digging deeper, 33% of restaurants reported higher customer traffic, but 51% reported a decline. And a quarter of them see worsening economic conditions in the next six months. Only 12% see better.

That likely points to a key tipping point in December. All of which suggests that a recession either started in that month or January.

Of course, most of the economists or analysts in bubble land aren’t seeing this. I can’t say none of them because a few are finally starting to wake up!

After stocks broke below the support level at 1,820 on the S&P 500, we were bound to get another bounce. But a much sharper and larger crash is growing very likely between sometime next month and July – and that won’t be the end of it.

We are not out of the woods yet. And we’re in for a lot of volatility ahead, so don’t expect things to settle down anytime soon.

Source: Economy & Markets
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Re: US - Econ. Slowdown - How deep & long ? 05 (Jan 12 - Mar

Postby winston » Tue Feb 23, 2016 8:15 am

The U.S. States Where Recession Is Already a Reality

by Steve Matthews

Energy-state slumps put economists on alert for wider decline

In West Virginia, everyone needs to `tighten their belts'

Source: Bloomberg

http://www.bloomberg.com/news/articles/ ... 022216_BIZ
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Re: US - Econ. Slowdown - How deep & long ? 05 (Jan 12 - Mar

Postby winston » Thu Feb 25, 2016 10:43 am

Why There Won’t Be a Recession in 2016

By Tracy Ryniec

Source: Zacks Investment Research

http://www.thetradingreport.com/2016/02 ... n-in-2016/
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Re: US - Econ. Slowdown - How deep & long ? 05 (Jan 12 - Mar

Postby winston » Thu Mar 17, 2016 9:59 am

US recession data shows it’s a very short road to capital controls

By Simon Black

Source: Sovereign Man

http://www.thetradingreport.com/2016/03 ... -controls/
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Re: US - Econ. Slowdown - How deep & long ? 05 (Jan 12 - May

Postby winston » Fri Mar 25, 2016 7:42 am

What Killed The Middle Class?

By Charles Hugh Smith

Source: Zero Hedge

http://www.thetradingreport.com/2016/03 ... dle-class/
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Re: US - Econ. Slowdown - How deep & long ? 05 (Jan 12 - May

Postby winston » Thu Apr 07, 2016 9:29 am

19 Facts That Prove Things In America Are Worse Than They Were Six Months Ago

By Michael Snyder

Source: The Economic Collapse Blog

http://www.thetradingreport.com/2016/04 ... onths-ago/
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Re: US - Econ. Slowdown - How deep & long ? 05 (Jan 12 - May

Postby winston » Fri Apr 08, 2016 6:17 am

This overlooked data point may back up Trump's 'very massive recession' call...

by J. Reeves

The U.S. Department of Commerce reports American factory orders dropped year-over-year (Y/Y%) for the 16th month in a row. (Last month also saw the lowest dollar total for factory orders – $454 billion – since the summer of 2011.)

Zero Hedge goes on to note: “In 60 years, the U.S. economy has not suffered a 16-month continuous year-over-year drop in factory orders without being in recession.”

We’ve noted several U.S. states are already in or near recession. Global shipping has slowed to a trickle. And a massive global credit contraction is underway. Any responsible investor should heed Trump’s recession warning… and play “maximum defense” in this environment.


Source: Palm Beach Daily

http://thecrux.com/the-data-no-ones-men ... sion-call/
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Re: US - Econ. Slowdown - How deep & long ? 05 (Jan 12 - May

Postby winston » Mon Apr 18, 2016 7:02 pm

Citi slashes US outlook, risks ‘very evident’

Source: CNBC

http://finance.yahoo.com/news/citi-slas ... 14300.html
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