FACTS ON OUR ECONOMIC CRISIS

FACTS ON OUR ECONOMIC CRISIS.

Stop the fallacy  of “ignorance is strength”

Hugo Adan, May 29, 2014

1- Small companies: The American retail industry is emitting a wheezing sound as a long slow painful death approaches.

“The absolute collapse in retail industry is the warning siren that this country is about to collide with the realit: Americans have run out of time, money, jobs, and illusions. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.

Once the Wall Street created fraud collapsed and the waves of delusion subsided, retailers have been revealed to be swimming naked. Their relentless expansion, based on exponential growth, cannibalized itself, new store construction ground to a halt, sales and profits have declined, and the inevitable closing of thousands of stores has begun.
The Retail Death Rattle Grows Louder | Zero Hedge

The corporate mainstream media hide facts, here some dreadful headlines:

            Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%

Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%

Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%

JC Penney Thrilled With Loss of Only $358 Million For the Quarter

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%

Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%

Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores

The list is large, open The Retail Death Rattle Grows Louder | Zero Hedge. by Jim Quinn of The Burning Platform blog

 
The continued unrelenting decline in profits of retailers, dependent upon the working class, only benefit the oligarchs that have made much progress over the last four decades. Meanwhile:


2- At the macro-economy level we have this news: Excluding Obamacare, US Economy Contracted By 2% In ...

As the official news that the US economy is just one quarter away from an official recession somehow managers wipe out $100 billion in economic growth from the initial forecast for Q1 GDP - here is some even worse news: if one excludes the artificial stimulus to the US economy generated from the Obamacare Q1 taxpayer-subsidized scramble, which resulted in a record surge in Healthcare services spending of $40 billion in the quarter, Q1 GDP would have contracted not by 1% but by 2%!

Other related news are these:

A- Income inequality achieves escape velocity after the 1%. See chart: open the source above:  The Retail Death Rattle Grows Louder | Zero Hedge

B- Annual consumer expenditures by those over 65 years old drop by 40%. There were 35 million Americans over 65 in 2000, accounting for 12% of the total population.

C- Half of Americans between the ages of 50 and 64 have no retirement savings. The other half has accumulated $52,000 or less. It seems the debt financed consumer product orgy of the last two decades has left most people nearly penniless. More than 50% of workers aged 25 to 44 report they have less than $10,000 of total savings. See table 1: Average & Median Retirement account balances of people ages 50-54 in the US. 

D- This decline in household income may have something to do with the labor participation rate plummeting to the lowest level since 1978. There are 247.4 million working age Americans and only 145.7 million of them employed. You’d have to be a brainless twit to believe the unemployment rate is really 6.3% today. Retail sales would be booming if the unemployment rate was really that low.

E- With a 16.5% increase in working age Americans since 2000 and only a 6.5% increase in employed Americans, along with declining real household income, an inquisitive person might wonder how retail sales were able to grow from $3.3 trillion in 2000 to $5.1 trillion in 2013 – a 55% increase. The 1^st answer is ATM machines and credit cards, that is : the Wall Street induced debt debacle. The 2^nd answer is: manipulation of a dirty couple: the  boom-bust crisis and  austerity policies.  During these times the total credit market debt has RISEN from $53.5 trillion in 2009 to $59 trillion today. Not exactly austere, since the Federal government adds $2.2 billion PER DAY to the national debt, saddling future generations with the bill for our inability to confront reality.

F- Consumer credit reached an all-time high of $3.14 trillion in March, up from $2.52 trillion in 2010. Of course, this increase is solely due to Obamanomics and Bernanke’s $3 trillion gift to his Wall Street owners. The doling out of $645 billion to subprime college “students” and subprime auto “buyers” since 2010 accounts for more than 100% of the increase. The losses on these asinine loans will be epic. Credit card debt has actually fallen as people realize it is their last lifeline. See Chart Student and car loans 96% of total consumer credit component in past 12 months.

More on consumerism?  Check how corrosive this mindset can be to a society in The Religion Of Consumerism | Zero Hedge. They simply cannot see life in any other context and so they become trapped within  a very sick and twisted form of human existence.

Regarding food prices check this  Why Are Food Prices So High? | Zero Hedge   

Anyone who buys their own groceries  knows that the cost of basic foods keeps rising, despite the official claims that inflation is essentially near-zero. There are four factors to explain this issue:  

a- severe weather and droughts than reduce crop yields,  

b- rising demand from the wealthy global middle class,  

c- money printing, which devalues the purchasing power of income, and  

d- the most influential  factor is rising in oil prices, usually manipulated.  

This means that we are the victims of oil business:  when we eat they get fat in their pockets. The global production of foods relies on fertilizers derived from fossil fuel feed-stocks, on transport of the harvest to processing plants and from there, to final customers. http://www.zerohedge.com/news/2014-05-28/why-are-food-prices-so-high .  

Regarding manipulation of oil prices check: The 4-Week Manipulated Move in Oil Prices is Criminal ...,and   Forget Libor-gate, Oil Market Manipulation Is Far Worse ...

3- Info on the profiteers of  crisis?.  You can find it here: The Top 100 Hedge Funds Ranked By Equity Holdings ...

4- The dollar in the currency war? Bonds yield in 10years?, stocks?   

The USD is getting dumped; bond yields are tumbling; VIX is hgher; credit spreads are pushing wider... and stocks are (drum roll please) pleasantly green... http://www.zerohedge.com/news/2014-05-27/spot-odd-one-out Check these Charts: Bloomberg  Spot The Odd One Out | Zero Hedge

For more info on bones yield open: 10Y Yield Drops To 10-Month Lows As Stocks Hit Record ...

If you one to explain why stocks are going up: consider these two facts:

a- Whatever the overpriced stocks may or may not be, one key factor undeniably keeps them bid is the fact that bond yields are too depressed,  see the source mentioned above and  7Y Treasury Yield Drops Below 2% | Zero Hedge.

b- Who buys stock?  Only millionaires in Wall Street, the big CEOs Check: Here Is The Mystery, And Completely Indiscriminate, Buy.  Also check:

Thank You Record Stock Buybacks: Median CEO Comp ...

If you want a big picture on this issue, open Buy Stocks, Buy Bonds, Buy Quality, Buy Trash | Zero Hed

Summing up: The inevitable collapse of our economy is coming. The aging demographics of the U.S. population, dire economic situation of both young and old, and sheer lunacy of the retail expansion since 2000, guarantee a future of ghost malls, decaying weed infested empty parking lots, retailer bankruptcies, real estate developer bankruptcies, massive loan losses for the banking industry, and the loss of millions of retail jobs. Since I always look for a silver lining in a black cloud, I predict a bright future for the signs  like these: SPACE AVAILABLE and GOING OUT OF BUSINESS in the current space  of  neoliberal companies. http://www.zerohedge.com/node/488920

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