Tag: Economic Woes

Closing Thought–06Sep19

Lots of talk these days about an approaching recession….the markets yo-yo sessions….up one day down the next 2….just feeds this predictions.

Do you remember the crash of 2008?

The markets bottomed out and billions of wealth was lost….especially the Baby Boomers…their savings was wiped out for the most part.

I bring this up because if and when we have another recession the group that will be destroyed monetarily are Millennials….

Why?

Most are already have massive debt and an recession would wipe out any economic progress they have made……

The trade war is dragging on. The yield curve is inverting. Investors are fleeing to safety. Global growth is slowing. The stock market is dipping. The Millennials are screwed.

Recessions are never good for anyone. A sputtering economy means miserable financial, emotional, and physical-health consequences for everyone from infants to retirees. But the next one—if it happens, when it starts happening—stands to hit this much-maligned generation particularly hard. For adults between the ages of 22 and 38, after all, the last recession never really ended.

Millennials got bodied in the downturn, have struggled in the recovery, and are now left more vulnerable than other, older age cohorts. As they pitch toward middle age, they are failing to make it to the middle class, and are likely to be the first generation in modern economic history to end up worse off than their parents. The next downturn might make sure of it, stalling their careers and sucking away their wages right as the Millennials enter their prime earning years.

https://www.theatlantic.com/ideas/archive/2019/08/millennials-are-screwed-recession/596728/

This group will suffer more problems than the “Boomers” did…..they cannot prepare for this possibility if there is no savings to help lessen any blow from a recession.

Poverty will increase and bankruptcies will increase and financial ruin will be the only option for many.

“Lego Ergo Scribo”

The Economy, Stupid!

The markets have had wild swings for about a year now….but with that the profits roll on for the corporations…..the president’s lack of economic knowledge and the wild lies of something good is just making things worse.

And this past week it has come to a head (as they say)…..it happened in the bond markets……

An economic alarm bell has sounded in the US, sending warnings of a possible recession ahead—and sending the Dow plunging 800 points by the end of the day. Yields on 2-year and 10-year Treasury notes inverted early Wednesday, a market phenomenon that shows investors want more in return for short-term government bonds than for long-term bonds. It’s an indication that investors have lost faith in the soundness of the US economy, the AP reports. What appeared to be a slight thaw in trade relations between the US and China that had sent markets sharply higher Tuesday was quickly forgotten, with the Dow opening down 400 points. By 12:30pm ET it was down nearly 650 points; a half-hour later it had plunged 737 points, or 2.6%, reports CNBC. By end of day it was down 800, the S&P 500 was down 86, and the Nasdaq was down 242, per Marketwatch.

CNBC notes that bank stocks like Bank of America and Citigroup have been the big losers today, down 5% and 5.2% respectively, as “it gets tougher for [them] to make a profit lending money in such an environment.” The yield on the benchmark 10-year Treasury note hit 1.622%, falling below the yield of a 2-year, which was 1.634%. The last inversion of this part of the yield curve was in December 2005, two years before a recession brought on by the financial crisis hit. An inversion like the one taking place Wednesday has preceded the last nine recessions dating back to 1955. When a recession might hit, if it does, is a little hazier. Months or even years have passed after an inversion takes place, and before economists can connect the two. Marketwatch notes Wednesday was the Dow’s worst day this year.

Here comes the “R” word…. a “recession”…..some are running worried….

Then there are the multiple lies about China and tariffs….remember when he said China would pay for the tariffs not the American people?  That was the same lie as Mexico would pay for that damn silly border wall.  Don’t forget the lie about all the billions flowing into the coffers of the nation…that was a lie as well…..

If China was gonna to pay and the pain would all be on someone else then why did Trump decide to postpone tariffs until mid-December?

U.S. President Donald Trump on Tuesday backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on U.S. holiday sales.

https://uk.reuters.com/article/uk-usa-trade-china-tariff/trump-backs-off-china-tariff-plan-with-delays-for-cellphones-laptops-idUKKCN1V31CR

Would “impact US holiday sales”…..that should tell you everything you need to know about these pseudo-economic solutions….even if you are not a genius like our Supreme Leader Trump.

Be Smart!

Learn Stuff!

“Lego Ergo Scribo”

 

Battle Of The Economic Stars

The economy is doing well under Trump….well with the exception of wages and markets and housing, etc etc……but the sector is being the focus of a game being played by both sides…..

GM will close plants and lay off over 1000 workers…..

It’s a bleak day for workers at General Motors: The automaker said Monday it’s cutting about 15% of its salaried workers in the US and Canada and closing five plants. The Wall Street Journal reports that the moves could translate into the loss of about 8,000 jobs. The company plans to close three assembly plants next year—in Hamtramck, Mich.; Lordstown, Ohio; and Oshawa, Ontario—as well as two transmission plants, in Baltimore and Warren, Mich., reports the New York Times.

“We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success,” said GM Chairman and CEO Mary Barra in a statement. One big part of the shift is to put more focus on electric and hybrid vehicles, as well as SUVs and pickups, while sedans get lower priority. US auto sales set records in 2016 but have since slowed, reports the Detroit Free Press, which adds that automakers also were facing pressure over rising tariffs on steel and aluminum

After all his promises on the campaign trail trup fires back at GM…….

President Trump took to Twitter on Tuesday to express his displeasure with GM’s planned 14,000 layoffs and five plant shutterings; National Economic Council director Larry Kudlow did the same thing from the White House. In afternoon tweets, Trump issued a sort of threat, writing, “Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China. The US saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including … for electric cars. General Motors made a big China bet years ago when they built plants there (and in Mexico) – don’t think that bet is going to pay off. I am here to protect America’s Workers!”

The Atlanta Journal-Constitution reports those tweets came “moments” after Kudlow departed the White House Briefing Room, where he had said much the same thing: “We’re going to be looking at certain subsidies regarding electric cars and others.” GM Kudlow characterized the administration’s reaction as “a tremendous amount of disappointment maybe even spilling over into anger,” reports the AP. Kudlow met with Barra Monday, and on Tuesday told reporters, “The president is very cross with her and of course I transmitted that.” He added the sense was that GM “kind of turned” its back on the president in making its move. (There’s a surprise among GM’s six discontinued cars.)

Keep in mind that a 1000 auto jobs lost could cost as much as 10,000 along the supply line…..so auto jobs are not the only ones on the chopping block…..

GM record- Got $514 million from the Trump tax scam – Made $6 billion in profits – Poured $100 million into stock buybacks – Paid its CEO $22 million – Received over $600 million in gov’t contracts.

I am still waiting for all those jobs to come home….as promised in 2016.

Why Americans Feel So Good

Trump came to office on the promise of the American economy will boom…he will ax crappy trade agreements….he will make the free market blossom for ALL Americans.

The stock markets are going well and Trump points to that as proof positive that he is doing what he promised.

It is true that markets are doing well……sadly the same cannot be said for the economy of this country….at best it is mediocre.

Then why are Americans pleased and satisfied with this situation?

A strange thing seems to be happening to the US economy. On surveys, businesspeople and consumers say the future looks bright. But recent economic activity hasn’t appeared very robust.

Andrew Ross Sorkin of the New York Times noted this in a recent article about mergers and acquisitions. A number of surveys have been reporting that chief executive officers are highly optimistic. For example, the website Chief Executive and the Wall Street Journal/Vistage Small Business CEO Survey both report a surge in CEO confidence since the 2016 election, while Business Roundtable’s CEO Economic Outlook Survey finds an average level of confidence.

But as Sorkin reports, M&A activity is at its lowest level since 2013, and has fallen 40 percent in the past two years. Share buybacks have also slowed. Those “hard” numbers indicate that whatever CEOs are saying on paper, they aren’t taking actions that signal confidence in the future of their businesses. Capacity usage, which fell slightly in May, is another indicator of that true business sentiment is far from giddy.

Source: Why Americans Feel So Good about a Mediocre Economy – ASHARQ AL-AWSAT English

It is typical….Americans have always been satisfied with mediocrity.

Who Or What Killed The Middle Class?

The Middle Class has been disappearing for decades but what or who is to blame?

Easy answer….Reagan or better yet Reaganomics…..

It death spiral began with Reagan’s dash to slice taxes on the rich and it has continued ever since……

There’s nothing “normal” about having a middle class. Having a middle class is a choice that a society has to make, and it’s a choice we need to make again in this generation, if we want to stop the destruction of the remnants of the last generation’s middle class.

Despite what you might read in the Wall Street Journal or see on Fox News, capitalism is not an economic system that produces a middle class. In fact, if left to its own devices, capitalism tends towards vast levels of inequality and monopoly. The natural and most stable state of capitalism actually looks a lot like the Victorian England depicted in Charles Dickens’ novels.

At the top there is a very small class of superrich. Below them, there is a slightly larger, but still very small, “middle” class of professionals and mercantilists – doctor, lawyers, shop-owners – who help keep things running for the superrich and supply the working poor with their needs. And at the very bottom there is the great mass of people – typically over 90 percent of the population – who make up the working poor. They have no wealth – in fact they’re typically in debt most of their lives – and can barely survive on what little money they make.

Source: Reaganomics killed America’s middle class – Salon.com

The Dems have taken up the mantle of the Middle Class and so far they have failed miserably……but yet they keep trying the same failed policies that they have come to champion…..and there is NO end in sight…..

The Democrats don’t have a “white working-class problem.” They have a “working-class problem,” which progressives have been reluctant to address honestly or boldly. The fact is that Democrats have lost support with all working-class voters across the electorate, including the Rising American Electorate of minorities, unmarried women, and millennials. This decline contributed mightily to the Democrats’ losses in the states and Congress and to the election of Donald Trump.

Source: The Democrats’ ‘Working-Class Problem’ Is Worse Than We Think | Alternet

There is a slight chance that this situation can be reversed…..but the Dems are playing the same cards as they always play…..and they lose.

Sadly we are seeing the final days of the Middle Class….and few seem to care.

Closing Thought–17Jan17

As we grow closer to the day of days when the country swears in the king of kings, Donald J. Trump…..and this election was much the same as every recent election…..the fear and loathing of immigrants.

One of the big “solutions” for Trump and his gang of cutthroats is DACA….Deferred Acion for Childhood arrivals…..one conserv solution to the immigration problem…

Let’s say they are successful and eliminate DACA….what will the economc cosats be for the states?

Since June 2012, more than 752,000 people who came to the United States as children have benefitted from Deferred Action for Childhood Arrivals, or DACA. This initiative has provided recipients with a temporary reprieve from deportation and renewable work permits. DACA has lessened the barriers for these recipients to reach their full potential—they have been able to secure good jobs, obtain driver’s licenses, and pursue higher education—so that they might better contribute to their communities. A 2016 survey of DACA recipients shows that they work across many different industries ranging from educational and health services to nonprofits. Along with receiving higher wages, DACA recipients are buying cars, homes, and other goods and services to boost local economies.

But this quintessential embodiment of the American dream is under attack. During his campaign, President-elect Donald Trump threatened to end DACA, along with other executive actions. While it remains to be seen what specific actions the president-elect will take, the fate of DACA is still uncertain. But if the president-elect ends DACA, whether in a single action or by allowing work permits to expire over time, the end result will be hundreds of thousands of young people losing their work authorization and effectively being forced out of the labor market.

(Oh there is so much more)

Source: Ending DACA Will Cost States Billions of Dollars – Center for American Progress

States lose revenue and where do you think the shortfall will come from?

Who actually will benefit from the elimination of DACA?

The Magical 401(k)

Remember to plan for your retirement…….

Back during the reign of “King Ronnie” and his big push to privatize everything…the big new plan to help people retire was the advent of the 401(k).

This was a way for business and government to get out of the business of pensions…..but since those days in the 1980’s this idea has proven to be as bad an idea as sneaking arms to the Contras…….

The only people that this horrible idea benefited was stock traders and fund managers…the individual was only a tool to extend wealth and not for the individual……

When 401(k) plans emerged in the ’80s, they were supposed to complement pensions, not replace them. But as the Wall Street Journal reports, only 13% of workers in the private sector today hold pensions thanks to the 401(k) revolution—and original proponents of the tax-deferred savings plans are now saying they may not be the best way for people to shore up for their golden years. “We weren’t social visionaries,” says Herbert Whitehouse, an ex-J&J exec who was also an early 401(k) promoter. Not only are the plans—which let workers sock away pretax money—vulnerable to stock market declines (defined-benefit pensions are guaranteed payouts for life), they’re also subject to costly manager fees. And Forbes notes that longer-lived retirees may need enough funds to last 30 years or more, making it even more critical that retirement cash can be stretched for the long haul.

One economist says at first she’d tell workers they’d be set if they saved just 3% of their salary—but that was based on projected 7% annual investment returns, an overly optimistic calculation. Plus, per an Employee Benefit Research Institute researcher, only 61% of workers who could be saving for retirement are currently doing so. Based on Boston College calculations, 52% of US households are “at risk” of not being able to live comfortably during retirement. Not that 401(k) plans are complete failures: Advocates say if people start using an employer-offered 401(k) early enough, it can lead to substantial savings. Still, fixes are being proposed, such as mandated savings plans run by either employers or the government. “There was a complete overreaction of excitement and wow” in the early days of the 401(k), laments a retirement services exec. (Research has pointed to this “alarming” anti-401(k) fact for a few years.)

As usual none of these “miracle” plans ever fully assists the individual.

Those Damn Crony Capitalists

This election we have had a full array of attacks on the system we live under….even from a person that has gamed the system to benefit himself….there has been so much talked about….especially those damn “crony capitalists”…..but what is this phenom we hear so much about?

Crony capitalism and genuine capitalism, if not opposites, are fundamentally opposed. Unfortunately the broader public, to date, is largely unaware of this.

Crony capitalism is the marriage of the state and private special interests. Some people have called it corporatism, mercantilism, fascism, or even Communism.

We will call it crony capitalism.

By whatever name, it is phony capitalism.

Well said…..and this is where an article I read in The American Conservative comes into the picture…..

The story of crony capitalism—where success in business depends on government favoritism, not competitive products—is often told in anecdotes. Anyone who follows policy debates can rattle off a list: the Solyndra loan-guarantee fiasco; the Utah woman who couldn’t braid hair for a living without undergoing 2,000 hours of formal training, a regulation designed to shield established salons from upstart competition. But while such stories serve as excellent examples of the phenomenon, they can’t reveal its true depth and breadth.

Crony capitalism isn’t just a collection of individual restrictions: it is a cancer that is slowly eating the economy. Signs of it can be found in even the broadest, most fundamental economic data, and the nation’s biggest industries have fallen victim to it. And rooting it out would require a complete rethinking of how businesses and the government interact.

Source: The Crony Economy | The American Conservative

Pay to play comes to mind….the Clinton camp is guilty as sin….Trump ……who knows for sure.

If the liberals are bitching about iot and now a conservative publication is also….then there is a good chance that it is the cancer that some call it.

Nuclear Power Is Losing Money

I try not to be a one trick pony meaning I try not to post on only one subject….I feel my readers would like an extended view of what is happening in the world these days.

For the past couple of elections there has been a solution to our energy problem….nukes.  It has been debated and debated but this time it is not so important because of fracking.

And now it looks like Nuclear Power may have been on its last leg…..

Half of existing nuclear power plants are no longer profitable. The New York Times and others have tried to blame renewable energy for this, but the admittedly astounding price drops of renewables aren’t the primary cause of the industry’s woes — cheap fracked gas is.

The point of blaming renewables, which currently receive significant government subsidies, is apparently to argue that existing nukes deserve some sort of additional subsidy to keep running — beyond the staggering $100+ billion in subsidies the nuclear industry has received over the decades. But a major reason solar and wind energy receive federal subsidies — which are being phased out over the next few years — is because they are emerging technologies whose prices are still rapidly coming down the learning curve, whereas nuclear is an incumbent technology with a negative learning curve.

Source: Nuclear Power Is Losing Money At An Astonishing Rate | ThinkProgress

Should we continue to explore this as an energy source even to the point of a bail-out…..a solution that many do not like……what should we do?

Why is the global economy suffering so much turbulence?

2016 is an election year so candidates will be making hay with the economic woes of the planet…..China is sliding….US is crumbling……Wall Street is a bouncing ball……..wages suck…..inflation is under control (tell that to someone on a fixed income)……gas prices in a race to the bottom……as soon as the luster moves on from the Muslim theme or the immigrant subject or the refugees…..the economy will make a return to the campaign ads and rhetoric…….

But with the markets playing the rhumba on the bowels of traders…..the question is….does anyone know what the Hell is going on?

A tumbling oil price and see-saw financial markets are clear symptoms of economic instability. But what’s the cause?

Well there is a newspaper trying to help in the understanding of economics of the day……

Source: Why is the global economy suffering so much turbulence? | Business | The Guardian

Can you see it now?