THE COLLAPSE OF THE AMERICAN ECONOMY Part-1
Submitted by Tyler Durden on 04/25/2016
http://www.zerohedge.com/news/2016-04-25/birds-eye-view-how-us-economy-falling-apart-4-simple-charts
Here only extracts
Whether you support him or not, my guess is that most
middle-aged Americans are very surprised about Bernie Sanders' popularity. However,
it shouldn’t be a surprise given the economic stress many Americans face. The
four charts below capture the essence of what I’m talking about...
The four charts
below capture the essence of what I’m talking about…
..
A shrinking
middle class and a growing lower class
IMAGE LOCATION at: http://ggc-mauldin-images.s3.amazonaws.com/uploads/editorial/These_4_Charts_Give_a_Bird%E2%80%99s-Eye_View_of_How_the_US_Economy_Is_Falling_Apart1.png
Sadly, roughly 50
million Americans live below the poverty line—the largest number in our
nation’s history—and the poorest 40% of all Americans now spend more than 50%
of their incomes just on food and housing.
..
Consumer
sentiment is plummeting
No wonder that
consumer sentiment has been sinking fast, which is a very troubling sign for
our consumer-driven economy.
Spending
is slowing
That consumer angst translates into a drop
in spending. The Commerce Department reported that retail sales dropped by 0.3%
in March, well below the +0.1% gain Wall Street was expecting.
Wages
are shrinking
I suspect the root
of the issue is wages… or lack thereof. The reality is that inflation-adjusted
wages—despite the recent minimum wage increase in several states—have been
shrinking. A
recent report concluded, “In real terms, the average wage peaked more than 40
years ago.”
Check out these
discouraging numbers:
• 39% of American workers make less than $20,000 a year.
• 52% of American workers make less than $30,000 a year.
• 63% of American workers make less than $40,000 a year.
• 72% of American workers make less than $50,000 a year.
• 39% of American workers make less than $20,000 a year.
• 52% of American workers make less than $30,000 a year.
• 63% of American workers make less than $40,000 a year.
• 72% of American workers make less than $50,000 a year.
Debt
is piling up
And it doesn’t help
that Americans continue to rack up debt.
Example:
Outstanding auto loans have hit more than a trillion dollars. With an average
balance of $12,000 per person, that consumes nearly 8% of the average
borrower’s disposable income!
No wonder that an
estimated 62% of Americans are living paycheck to paycheck.
And all of us—low,
medium, and high income combined—are working longer than ever to pay a growing
tax bill. Tax freedom day (the day when the nation as a whole has earned enough
to pay the state and federal tax bill for the year) arrived on April 24,
according to the nonpartisan Tax Foundation.
That means all the money we made
in the first 114 days of 2016 went to taxes.
Actionable
investment strategies
So… what do you
think all this American angst means for the stock market? Of course, the Wall
Street crowd is more concerned about every syllable that comes out of Janet
Yellen’s mouth than any economic or corporate statistic.
However, the stock
market is butting up against a very serious ceiling of resistance that I
believe will limit—if not wipe out—any gains.
Strategy #1: Load up on dividend-paying stocks with a
generous yield. In this topsy-turvy world of ZIRP (zero interest rate policy)
and NIRP (negative interest rate policy), stocks that pay out decent-size,
sustainable dividends will be among the few that will hold their value.
Strategy #2: Raise cash… lots of it. Of course, cash
pays almost nothing thanks to our hallucinating central bankers, but zero will
be your hero when things turn ugly.
Strategy #3: If you have some capital you can afford to
speculate with, you should consider taking out some portfolio insurance with
inverse ETFs and/or put options.
You probably need
to combine all of the three strategies above because the recent good times won’t
last.
----
----
No hay comentarios:
Publicar un comentario