US - Econ. Slowdown - How deep & long ? 06 (Oct 16 - Jul 22)

[winston]

Record 7 million Americans are 3 months behind on car payments, a red flag for the economy

By HEATHER LONG

The share of auto-loan borrowers who were three months behind on their payments peaked at 5.3% in late 2010. The share is slightly lower now — 4.5% — because the total number of borrowers has risen so much in the past several years.

Source: WASHINGTON POST

https://www.latimes.com/business/la-fi- ... newsletter

[winston]

Rats, Public Defecation And Open Drug Use: Our Major Western Cities Are Becoming Uninhabitable Hellholes

by Michael Snyder

More than half a million Americans are homeless right now, and that number continues to grow.

The number of homeless in LA has been rising about 20 percent a year, public drug use is seemingly everywhere, and there are mountains of trash all over the place.

In San Francisco they actually give out free syringes to drug addicts, and it is being reported that they handed out a total of 5.8 million free syringes in 2018.

Source: End Of The American Dream

http://endoftheamericandream.com/archiv ... -hellholes

[winston]

Three-Quarters of Economists Expect Recession by 2021

By Paul Ausick

U.S. fiscal policy is expected to generate a deficit equal to 4% of gross domestic product (GDP) this year, and some 85% of economists surveyed believe the current taxing and spending policies are likely to increase the deficit, compared to the Congressional Budget Office’s current 10-year baseline forecast.

Buffett noted since 1942 the federal deficit has increased by 40,000%. The result: total U.S. household wealth has reached $108 trillion, according to an estimate from the Federal Reserve. In other words, the federal deficit has little to no impact on growth.

Just 10% of economists included in the NABE survey expect a U.S. recession this year, compared to 40% who expect a recession in 2020 and 25% who think it will come in 2021.

Source: 24/7 Wall Street

https://247wallst.com/economy/2019/02/2 ... Newsletter

[winston]

18 Really Big Numbers That Show That The U.S. Economy Is Starting To Fall Apart Very Rapidly

Source: TTR

http://www.thetradingreport.com/2019/03 ... y-rapidly/

[winston]

Is Recession Near?

by John Mauldin

“The yield curve doesn’t have to completely invert for a recession call. It barely did so the last two times.”

“Recessions historically begin when the unemployment rate climbs 0.4 percentage points above its cycle low, which this time seems to have been 3.7%. So 4.1% unemployment, when it happens, should ring an alarm bell.”

“The recession will probably be mild but there is no correlation between a recession’s severity and how far equity markets decline.”

“This time, the bubble is on corporate balance sheets, as firms borrowed money at historically low rates. Instead of productive use, much of the borrowing went to share buybacks. This did nothing to cover future debt-servicing costs.”

“While many focus on high yield, the leveraged loan market is in a bubble of its own. A key risk for this year is a debt refinancing “tsunami” as trillions in debt has to be rolled over at higher rates.”

Source: Forbes

https://www.forbes.com/sites/johnmauldi ... a14c284b69

[winston]

Food Stamp Enrollment Declines Under Trump, Saving Taxpayers Billions

BY PETR SVAB

Nearly 3.9 million Americans have nixed food stamp benefits since President Donald Trump took office, saving taxpayers more than $8.5 billion.

Some 38.2 million people collected payments in November 2018, according to the last available data, down from about 42.1 million in February 2017—the first full month Trump was in office.

Source: Epoch Times

https://www.theepochtimes.com/food-stam ... -238084345

[winston]

Recession looms large as US feeds worries

by Andrew Wong

Last week, the US Federal Reserve, as the market expected, kept interest rates unchanged.

However, to the surprise of the market, as many as nine of the 17 Federal Open Market Committee members lowered their outlook for the federal funds rate.

In a statement after the meeting, the committee said that there are no expectations of another interest rate rise this year.

However, there is a chance of a rate rise in 2020.

Meanwhile, an announcement is expected over a plan to slow down the shrinkage of the balance sheet, with the end coming in September.

The market was not pleased by the sudden dovishness of Fed officials.

Instead, they were more worried as investors suspected the central bank might have still-unpublished data that indicates a sharp downturn in the economy, which caused a shift from last year's more hawkish monetary policy.

The biggest reaction from the market was in treasuries.

The three-month and 10-year bond yield curve almost appeared upside down after the Fed statement.

The two spreads narrowed to only 5.5 basis points, below 10 basis points for the first time since September 2007, and the one-year and seven-year treasuries saw inverted yield curves.

Of course, that may not necessarily mean the United States and even the global economy are looking at a recession, especially as the Fed, in addition to its plans to suspend its balance sheet shrinkage in September, also said that when its federal agency debts and government-issued mortgage-backed securities expire, it will withdraw the principal again and throw it back into the US treasury bonds.

And the market generally believes that the Fed will buy shorter debt, which seems to stimulate short-term treasury prices to rise sharply, becoming one of the reasons that the yield curve has inverted.

However, the influence of Fed's bond-buying operation does not mean the investment market has no economic worries.

Fed chairman Jerome Powell said the biggest economic worry now is from the impact of China and European's great economic easing.

Of course, with a loose monetary policy, growth in China and Europe have the opportunity to rebound in the next two seasons, but all will depend on the trade agreement between China and the United States.

Therefore, the rapid shift of the Fed's policy is the result of the President Donald Trump's unpredictable policies and behavior, which have had an economic impact.

At the same time the coupon has an upside-down reason for the crisis, which is just an indication of a recession that is actually an expression of the anxiety investors have toward the US and its constant change in relations with other countries.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 0325&sid=2

[winston]

INSEAD academic says US recession is near

The US economy has never managed to sustain a low rate of unemployment without generating imbalances that lead to a recession, according to a new working paper by Antonio Fatas, professor of economics and the Portuguese Council chaired professor of European Studies at INSEAD.

This suggests that a recession is near as the United States is currently at or near what economists consider “full employment.''

Analyzing unemployment rates around the peak of the last five U.S. economic cycles, Fatas finds that unemployment reaches its lowest point around 12 months before the recession and, in most cases, unemployment starts to increase in the months preceding the recession.

In his research paper, “Is full employment sustainable?”, he uses quantile regressions to understand how the low level of unemployment is associated with recessions.

“The pattern of U.S. unemployment and recessions suggests that low levels of unemployment are a strong predictor of sudden increases in unemployment, associated with crises. We do not observe in the data any sustained periods of low unemployment,” Fatas said.

But why is full employment in the U.S. unsustainable? “Recessions follow periods of low unemployment because imbalances are built during those years,” Fatas added.

Underpinning academic literature that analyses the factors leading to a recession are two sets of variables – macroeconomic imbalances like inflation and those associated with financial imbalances, which often arise in a booming economy.

Examining the data further, Fatas found that low unemployment doesn’t necessarily signal a recession, but is a contributor to financial imbalances: credit growth.

Looking at credit growth over the four quarters preceding U.S. recessions, he finds that fast credit growth tends to precede recessions.

“Out of the imbalances we have considered, credit growth seems to have the strongest explanatory power,” said Fatas.

Fatas also found that the phenomenon is not present in other countries.

Australia, for example, has sustained a low unemployment rate for decades. After an Australian recession in the early 1990s, unemployment increased and then started a decline similar to the economic expansions in the U.S..

By 2000, unemployment reached a low level which has remained mostly flat for years. The Australian unemployment rate does not display a V-shape seen for U.S. unemployment but looks more like an open L-shape.

“There are other countries with similar patterns to the U.S., like Greece or Sweden. But others, like Germany or the United Kingdom, have been able to sustain longer periods of low unemployment”, said Fatas.

Source: The Standard

http://www.thestandard.com.hk/breaking- ... 0326&sid=2

[behappyalways]

Buffett on the economy: 'It looks like things have slowed down'
https://www.cnbc.com/2019/03/28/buffett ... -down.html

[winston]

U.S. created 500,000 fewer jobs since 2018 than previously reported, new figures show

by Jeffry Bartash

Source: Market Watch

https://finance.yahoo.com/m/63450b8b-f5 ... fewer.html