“Whatever you think, whatever you believe,
whatever your opinion, whatever you disagree, it pays to consider to be prepared.”
– Thomas Fletcher Grooms
A STUDY IN CONTRADICTIONS
Europe (EU) GDP Report
Value of US Dollar 1900-2013
Debt and borrowing driven by government.
Real Inflation 2014 ↑ 8% first of year (Weiss Research) to ↑ 11% now (Thomson Reuters CRB Index)
First Quarter GDP Decline ↓ 2.9% (Department of Commerce)
Look Who Is Exempt from Obamacare (National Health TAX…Largest Tax Increase in US History)
(1) The President’s and their Families
(2) Congress and their Families
(3) Supreme Court and their Families
(4) 1,200 Corporations and Unions
Economically and financially, the new law will bankrupt an already struggling middle class who has, in many cases, seen a four-fold increase in their monthly premiums.
By all accounts, life for those people is going to change dramatically in coming years because as much as 15% of their income will now be taken from them by force in the form of what the U.S. Supreme Court has classified as a mandated tax.
The death panels may not exist by name, but they most assuredly exist within the bureaucracy managed by the U.S. government, as evidenced by the experiences of actual people currently enrolled in the Obamacare system:
Obamacare is denied at most cancer hospitals according to a recent Associated Press survey. Only four out of 19 of the nation’s best cancer hospitals who replied to the survey said they will accept patient’s insurance from all of the healthcare exchanges within their state, in effect excluding most people who are signing up for coverage under the Affordable Care Act, commonly referred to as Obamacare. In simple terms: If you get cancer you will not get medical care.
Again, in simple terms, An Instantaneous Collapse of Obamacare Services:
First, if you’re “27″ the average premium is $266.20/month or $3,194.40 per year.
While the law may never be repealed and everybody who signed up thinks they still have health insurance, when it matters most there may well not be a doctor on the list who will be willing to help you. Why?
Because the government will outright deny the medical services and simply refuse to pay the doctor to provide it. That is a De Facto death panel. (Stansberry Research)
Cato Institute Study: Welfare Benefits Pay More Than Minimum Wage Job
The Cato Institute released an updated study (original study in 1955) showing that welfare benefits pay more than a minimum wage job in 33 states and the District of Columbia.
Even worse, welfare pays more than $15 per hour in 13 states.
According to the study, welfare benefits have increased faster than minimum wage.
It is now more profitable to sit at home than it is to earn an honest day’s pay.
Hawaii is the biggest offender, where welfare recipients earn $29.13 per hour, or a $60,590 yearly salary, all for doing nothing.
Here is the list of the states where the pre-tax equivalent salary that welfare recipients receive is higher than having a job:
1. Hawaii : $60,590
2. District of Columbia : $50,820
3. Massachusetts : $50,540
4. Connecticut : $44,370
5. New York : $43,700
6. New Jersey : $43,450
7. Rhode Island : $43,330
8. Vermont : $42,350
9. New Hampshire : $39,750
10. Maryland : $38,160
11. California : $37,160
12. Oregon : $34,300
13. Wyoming: $32,620
14. Nevada: $29,820
15. Minnesota: $29,350
16. Delaware: $29,220
17. Washington: $28,840
18. North Dakota: $28,830
19. Pennsylvania: $28,670
20. New Mexico: $27,900
21. Montana: $26,930
22. South Dakota: $26,610
23. Kansas: $26,490
24. Michigan: $26,430
25. Alaska: $26,400
26. Ohio: $26,200
27. North Carolina: $25,760
28. West Virginia: $24,900
29. Alabama: $23,310
30. Indiana: $22,900
31. Missouri: $22,800
32. Oklahoma: $22,480
33. Louisiana: $22,250
34. South Carolina: $21,910
As a point of reference the average Middle Class annual income today is $50,000, down from $54,000 at the beginning of the Great Recession (Depression).
Hawaii, DC, and Massachusetts pay more in welfare than the average working folks earn there. Is it any wonder that they stay home rather than look for a job.
Time to un-do this type of stupidity on the part of Americans? This is crazy.
Salary of retired US Presidents $180,000 FOR LIFE
Salary of House/Senate….$174,000 FOR LIFE
This is stupid Salary of Speaker of the House ….$223,500 FOR LIFE
This is really stupid Salary of Majority and Minority Leader $193,400 FOR LIFE
Average Salary of a teacher .. $40,065
Average Salary of Soldier DEPLOYED IN AFGHANISTAN .. $38,000
Nancy Pelosi will retire as a Congress Person at $174,000 Dollars a year for LIFE; PLUS she has retired as SPEAKER at $223,500 a year; PLUS she will receive an additional $193,400 a year as Minority Leader…That is $803,700 Dollars a year for LIFE including FREE medical which is not available to working Americans. ALL PAID by US TAXPAYERS.
This is just one gross instance of abuse that hundreds of Senators and Congress take as they float in and out every year.
Why should any honest decent American work…
White House Orders Job Creation for Political Votes Go to Illegal Immigrants…Not Americans
Government data show that since 2000 all of the net gain in the number of working-age (16 to 65) people holding a job has gone to immigrants (legal and illegal).
Greater than 100% of jobs went to immigrants because the number of non-immigrants holding a job is negative, and the total must equal 100%.
With 58 million working-age natives not working, the Schumer-Rubio bill (S.744) and similar House measures that would substantially increase the number of foreign workers allowed in the country seem out of touch with the realities of the U.S. labor market.
The trends since 2000 challenge the argument that immigration on balance increases job opportunities for natives. Over 17 million immigrants arrived in the country in the last 14 years, yet native employment has deteriorated significantly.
The total number of working-age (16 to 65) immigrants (legal and illegal) holding a job increased 5.7 million from the first quarter of 2000 to the first quarter of 2014, while declining 127,000 for natives.
In the first quarter of 2000, there were 114.8 million working-age natives holding a job; in the first quarter of 2014 it was 114.7 million.
Because the native-born population grew significantly, but the number working actually fell, there were 17 million more working-age natives not working in the first quarter of 2014 than in 2000.
Immigrants have made gains across the labor market, including lower-skilled jobs such as maintenance, construction, and food service; middle-skilled jobs like office support and health care support; and higher-skilled jobs, including management, computers, and health care practitioners.
Immigration has fallen in recent years. But despite the economy, between 2008 and the start of 2014, 6.5 million new immigrants (legal and illegal) settled in the country and three million got jobs. Over the same time, the number of working-age natives holding a job declined 3.4 million.
If the employment rate of working-age natives in the first quarter of this year were what it was in 2007, 7.9 million more natives would have a job. If the share working were what it was in the first quarter of 2000, 12.5 million more natives would have a job today.
The supply of potential workers is enormous: 8.7 million native college graduates are not working, as are 17 million with some college, and 25.3 million with no more than a high school education.
(The Center for Immigration Studies Report)
New Poor in The Recovery Cannot Afford Food
Survey-wide, 21 percent of families with children responded that they have had problems affording food; 15 percent of families without children reported such problems as well.
But the numbers are worse in the U.S., where 19 percent of people without children report food struggles. For people with children, 23 percent report the same challenges. That number has grown dramatically, up 12 percent from 2007 to 2013.
These survey results end before 2014 when food prices really began powering their way higher.
Conditions will worsen. (Weiss Research)
Social Security should be $48,000 Non-Taxable (now $16,000 taxed) at age 62; $54,000 Non-Taxable (now $26,000 taxed) at age 65, and $60,000 Non-Taxable (now $36,000 taxed) at age 70 under current program. Future years for Social Security moved from 62 to 65, 65 to 70, 70 to 72. Reward those who have made a contribution.
“Thirty-six percent (36%) of American workers age 55 to 64 say they have less than $25,000 in retirement savings.” — Employee Benefit Research Institute
“Fifty-one percent (51%) of households are at risk of not having enough savings to maintain their standard of living after retirement.” — The Center for Retirement Research at Boston College
“Sixty-six percent (66%) of Americans said their top financial concern was not having enough money for retirement.” — Gallup poll
Senior Poverty Continually Growing Last 7 Years in The Recovery
But more shocking is the account of the growing number of people aged 50 to 64, people who normally would be in their peak earning years, forced by economic conditions to move in with their parents!
The LA Times reports that “older people are quietly moving in with their parents at twice the rate of their younger counterparts. “For seven years through 2012, the number of Californians aged 50 to 64 who live in their parents’ homes swelled 67.6 percent to about 194,000.”
And now the Gallup organization finds that almost a quarter of families in the U.S. are struggling to afford food for their families.
That’s a higher percentage than their peers elsewhere in the developed world. (Weiss Research)
Job Lines in The Recovery Growing Larger
The quality of jobs created the past seven years and in May of 217,000 jobs (BLS), however, is a different story. Despite this month’s gains, more than half of the jobs created were below the median wage of $22.95. Stunningly, nearly 30% of the jobs added in May went to the lowest wage bucket. In short; the low wage jobs recovery continues to march right along. (Dent Research)
In May, the BLS (Bureau of Labor Statistics) guesstimated that 205,000 new jobs were created at companies that were not included in the employment survey. The official report showed 6,000 new jobs in construction, but this includes 36,000 construction jobs added through the birth-death adjustment, while Leisure and Hospitality officially added 39,000 positions, but 79,000 were guessed-at. Without the fantasy jobs, construction would have lost 30,000 (6,000 minus 36,000), while Leisure and Hospitality would have lost 40,000 (39,000 minus 79,000). Maybe next month, the BLS could guess that a million new jobs were created, sending the markets to the moon and creating wealth for everyone, except those who need a real, not guessed-at, paycheck. (Dent Research)
Student Graduates Join Job Lines in The Recovery
Some 50% of recent college graduates say they are receiving financial help from their family, while an additional 19% say they need financial help from their spouse. This is despite the fact that half of these graduates have full-time jobs, according to the latest installment of an ongoing study, “Arizona Pathways to Life Success for University Students,” carried out by Joyce Serido, an assistant research professor at the University of Arizona, who has been tracking 2,000 people at colleges nationwide since they were freshmen in 2008.
Highest Paid CEOs in Public Companies Perform Worst of All: Study
Calls for one $1 million dollar Cap on total compensation per year by law for all CEOs in all public traded companies and $500 thousand dollar Cap on total compensation per year by law for all Executives in all public traded companies.
*NOTE: this is not a vote against Capitalism since all Retirement money is required by Law to be funneled into the stock and financial markets. There is no limitations regarding privately held companies.
Wave goodbye to the theory that top pay guarantees top performance. The highest-paid CEOs are the worst performers, according to academic research cited by Forbes.
Michael Cooper, University of Utah David Eccles School of Business, and two professors, one at Purdue University and the other at the University of Cambridge, studied data from 1,500 companies with the biggest market caps. They found that the more CEOs got paid, the worse their companies did. At the very top, the 5 percent of CEOs who were the highest paid turned in the worst company performance — 15 percent worse than the average. Broadening the view a bit, the top 10 percent of highest-paid CEOS turned in company performance’s that were 10 percent worse than the average.
The study finds that among the top-paid CEOs, 19 percent did mergers and those deals resulted in a negative performance of 1.38 percent during the three years.
“The returns are almost three times lower for the high-paying firms than the low-paying firms,” Cooper argues. “This wasteful spending destroys shareholder value.”
The study also reveals that the longer CEOs were in their position, the more pronounced was their firms’ poor performance. Cooper attributes that to the tendency for CEOs to appoint allies to their boards who are more likely to go along with bad decisions.
“For the high-pay CEOs, with high overconfidence and high tenure, the effects are just crazy,” he says. In fact, they return 22 percent worse in shareholder value during three years as compared with their peers.
According to the Economic Policy Institute, average CEO compensation at the largest U.S. companies in 2013 was $15.2 million including stock options exercised, up 21.7 percent since 2010.
The institute found that from 1978 to 2013, inflation-adjusted CEO compensation grew 937 percent, compared with 10.2 percent for the typical American worker. Further, the CEO-to-worker compensation ratio that was 20-to-1 in 1965 hit 295.9-to-1 by 2013. (MoneyNews)
US Minimum $20 Per Hour or $35,000 per Year to Meet Federal Definition of Poverty in The Recovery
Home Prices in The Recovery Still Sinking
Real estate is weakening in the U.S. and this “recovery” is faltering. Young people are not buying homes and the three largest banks have peaked. The housing market will never be the same. (Dent Research)
US Debt Result of FED Money Printing Since Gold Standard Deserted
FED Money Printing Since Gold Standard Deserted
Government Debt by Credit and Tax Payer Liability
GDP Decline Since 1950
Top 12 Tax Havens for US Companies
US Economy Contracts First Quarter of 2014
“Overall, we remain relatively optimistic about the outlook,” said Gregory Daco, a senior U.S. economist at Oxford Economics USA in New York, which now estimates GDP shrank at a 0.6 percent annualized rate in January through March. “We are not too far from the bottom, hopefully, in terms of revisions.”
It now looks like America, the world’s largest economy, contracted in January through March instead of eking out a 0.1 percent gain at an annualized rate as reported by the Commerce Department last week. (MoneyNews.com)
Employment Update First Quarter of 2014
There are 102 million Americans of working age who do not have a job. And, in 20% of all families in the United States, there is not a single person who is employed. So how can the government claim that unemployment has dropped to 6.3%. Well, the way they do it is by lying.
They just lie. And if you believe these guys, you are out of your mind.
Somebody might be able to do the Minecraft game there themselves. But we have heard that April unemployment numbers were fantastic. But if you decipher them, you find out that there were 58.9% of all working age Americans with a job in March. How many in April? 58.9%. Not anything improved. Nothing. It is all just a statistical fudge that they are blowing smoke in your face. And what they are trying to do, by the way, is to defraud you into spending money that you cannot afford to spend, or investing money on the false premise that there is a recovery underway. (Strategic Research)
Top Income payroll tax went from 37.4% to 52.2%
Top Income tax bracket went from 35% to 39.6% income of $400,000 and above
Capital Gains tax went from 15% to 28%
Dividends tax went from 15% to 39.6%
Estate tax went from 0% to 55%
Congress: Taxes were passed only with Democrat votes, no Republicans votes for these taxes
Taxes were all passed under the Affordable Care Act…aka…Obamacare (IRS)
The way to crush the bourgeoisie (working class) is to grind them between the millstones of taxation and inflation. - Vladimir I. Lenin
Teaching: The Lowest Paid Profession in US…Our teachers, students, and education is our most important asset?
Teaching has gone from a pleasurable profession, to a terrible job. Why…because of administrators and school boards, which should have never existed.
Since the creation of the formed in 1979 and level agency in 1981 Department of Education to make Socialist all public schools, the US has dropped from 99% literacy to below 75% literacy.
Teachers are not the problem. Teachers get the blame. Teachers are the excuse for management’s failure and incompetence. Management is the cause of the problem. The problem is management, has always been management, and will always be management.
Depression Cycle Effect on Education Performance
80% High school graduation a record high
20% or one in five did not finish the most basic level of education
70% in 2009 the high point enrolled in college
66% in 2013 enrolled in college supports fewer young people entering college
Given the cost of college, the recent economic downturn caused many families to re-evaluate if pursuing higher education was the right choice.
Unfortunately, this is not translating into more employment.
While recent college graduates work to find jobs in their field, recent high school graduates struggle to find any employment.
Those without high school diplomas are being left behind in record numbers.
1990s over 80% of those with just a high school diploma were participating in the labor force (either employed or looking for work) the year after graduation and roughly 70% had jobs.
2000s participation in the labor force — the year after graduation — had dropped to around 78% while employment had fallen to 60% and participation dropped well below 70%.
The net effect is that unemployment the year after high school — among those with just a high school diploma — was running at 10% in the 1990s, and is currently at 23%.
For those who did not graduate high school, it is worse.
That group had a roughly 65% labor force participation rate the year after high school in the late 1990s, while their employment rate was near 50%.
But the numbers have fallen dramatically since then, and have not staged much of a recovery.
2013 only 43% of this group was either employed or actively seeking employment, with 31% holding down a job — the key is that only 43% are participating in the labor force.
Where are the rest of them…Where are the 26% of graduates not participating in the labor force and where are the 57% of those who did not receive a diploma who are not participating in the labor force?
With one in five young people not achieving a high school diploma, expect a very large social issue to erupt in the years ahead because this group will have little work experience and little ability to establish and grow their own household. (Dent Research)
Economics: Deflation in few sectors with mostly inflation coming and rapid decline in the economy last 60 days causing severe hardships
Lateral Economy: Lateral markets exist because of no growth, no prospects of growth, and no momentum to drive the economy forward for years to come, which make for a lateral economy as the search for yield with increasing risks seek Re-Positioning and Transference from the Old to the New (weighting vs. multipliers).
Economic Cycle: Depression Cycle started in 1971…the 2008-2014 period was a Trough (this is Not and never has been a Recession)
1929 or 2014
2014 40% of Americans that have a job earn less than $20,000 per year
2014 15% or 46.5 million Americans now living in poverty
2014 48 million Americans now on food stamps, the highest number since the program began in 1969
2014 Median household income for Americans have declined 5 years in a row
2014 updates (Weiss Research)
Recovery: No economic recovery, no growth, no solid evidence, never been a recovery since 1963
White House definition of “Recovery” is keeping banks solvent; nothing to the US economy or its people.
Recovery Destroying Middle Class: People 50 to 64 are moving back in with their parents. And now at twice the rate of 18 to 29 year olds moving back in with mom and dad. (Goyette Research)
Recovery Creating Largest Poor Class in History: Making poor poorer unemployment at 38% and rising, the highest in the history of the US. (BLS)
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises
Economic Stimulus: War…The government spending in Afghanistan represents about 87% of the total GDP. (Davidson Research)
Climate Change: A political threat for more TAX and control over people’s lives…claim that must reduce emissions of greenhouse gases at risk of imperiling the planet…real threat more government…Solution in Private Sector with oil for living with reduced carbon emissions, NG (natural gas) to LNG (liquid natural gas) for transportation with no carbon emissions, nuclear plants for energy the cleanest form of energy known with no carbon emissions.
When ranked by their direct contribution to the greenhouse effect, the most considered are:
|Water vapor and clouds
|| H 2O
|| 36 – 72%
|| 9 – 26%
|| CH 4
|| 4 – 9%
|| O 3
|| 3 – 7%
The Smallest source of greenhouse gases and carbon footprints are from Coal (44%), Oil (36%), Natural Gas (20%), and all are being reduced by the Private Sector.
The Greatest source of greenhouse gases and carbon footprints are from Cows with greater emissions and more damaging than CO2 (Carbon Dioxide) from cars.
The oceans contain 3000 GT. The atpmosphere contains 720 billion tons of CO2 and humans contribute only 6 GT of CO2.
The oceans, land and atpmosphere exchange CO2 (Carbon Dioxide) continuously so the additional load by humans is incredibly small. A small shift in the balance between oceans and air would cause a CO2 much more severe rise than anything humans could produce.
Oceans absorb 48% of ALL carbon dioxide.
There is no single greatest source and no threat. (Independent Research UK)
The overall greatest threat of greenhouse gases and carbon footprints is the gasses given off by government.
Message to Global Warming and Greenhouse Gasses Radicals: New Little Ice Age Begins in 2014
Habibullo Abdussamatov, Russian astrophysicist, former head of space research at St. Petersburg’s Pulkovo Astronomical Observatory in Russia spoke a couple of years ago to the Heartland Institute’s Fourth International Conference on Climate Change in Chicago…saying…the average annual sun activity has experienced an accelerated decrease since the 1990s.
Abdussamatov took on advocates of the theory of man-caused warming who want to diminish human use of hydrocarbon fuels. He contended, instead, that a reasonable way to combat coming cooling trends would be “to maintain economic growth in order to adapt to the upcoming new Little Ice Age in the middle of the 21st century”.
Abdussamatov’s research amounts to a sharp rebuke of climate scientists who believe human-generated carbon dioxide is responsible for causing catastrophic global warming, issuing instead a news flash announcing “Sun Heats Earth”.
Abdussamatov published a paper in which he tracked sunspot activity going back to the 19th century to argue that total sun irradiance, or TSI, is the primary factor responsible for causing climate variations on Earth, not carbon dioxide.
Moreover, Abdussamatov’s analysis of sun activity data has led him to conclude that the Earth is entering a prolonged cooling phase, because sunspot activity is currently in a phase regarded as a “minimum”.
“Observations of the sun show that as for the increase in temperature, carbon dioxide is not guilty’,” Abdussamatov wrote, “and as for what lies ahead in the coming decades, it is not catastrophic warming, but a global, and very prolonged temperature drop”.
Abdussamatov’s research is featured on page 140 of a 2009 report issued by the U.S. Senate Committee on Environment and Public Works, documenting more than 700 scientists who disagree that global warming is an anthropogenic, or man-made, phenomenon.
The Earth Is Not Flat…Sun Activity Determines Temperatures and NOT Global Warming and Greenhouse Gasses
Business: Higher stock price due to buying back shares to increase earnings per share, not profit performance.
Expatriates: Americans Leaving United States
A skyrocketing number of Americans are deciding that they want to leave the U.S.A. for good.
Under Obama the country itself is becoming a disgrace and they no longer want to be associated with the US.
Almost 3,000 Americans officially renounced their U.S. citizenship in 2013, according to Treasury Department records, a 221% increase.
It is about to get worse, much worse. (Sovereign Daily Research)
United States Areas of Greatest Upward Mobility
Evidence that the South is still subsidizing the North since the Civil War.
Countries of the World with Greatest Upward Mobility
Executive Pay: Executive pay and bonuses in public (not private) corporations are taken from the working public whose retirement money is directed into the stock market each month, more than profit performance, not put into R&D (research and development) to create new products for higher pay jobs, leaving retirees in their 401K, 403b, IRA, etc…without a livable income and life savings.
1914 – 1918 Income: average wage rose 63 percent…War period
1918 – 2014 Income: average wage rose 0 percent…FED period
1948-2011 Productivity Growth vs. Income Growth
Wages and Salary All Time Low
Profits Up and Real Wages Down
Only Graduate School Keeps Up with Pay
Women Pay: Women are on par in pay with men. Earnings of career female workers overall are equal to the pay of men. Career choices and time away from work to have and rear children are the real reasons for pay discrepancy. As a result, the women who spend less time on careers and loosing out on advancement earn about $0.77 cents for every $1.00 dollar other men and women earn with uninterrupted careers. (Kiplinger)
Age 20 – 29 Jobs Historical Low: The labor force participation rate in 2013 for Americans in their twenties hit the lowest level recorded since 1981, when the Bureau of Labor Statistics (BLS) started releasing employment data on people in the full age bracket of 20 through 29. The labor force participation rate for people ages 20 through 24, which BLS has been tracking since 1948—hit a 42-year low in 2013. (BLS)
Jobs: The jobless rate fell to 6.7% in December, but not because of more work. Instead, it was because less people were counted as being in the labor force. While 74,000 new jobs were created, over 500,000 people left the labor force because of their manager or company work environment.
- We now have the lowest labor force participation rate in 35 years. This is not a great way to lower the rate of unemployment, and it surely is not a sign of confidence. Over the course of 2013, the economy created roughly 183,000 jobs per month, barely changed from the 182,000 jobs created each month during 2012.
- The new 25 hour work week with new hires must find two 25 hour part-time jobs to equate to the past 40 hour work week – this is how the government is claiming a reduced unemployment number
However, from the top of the market in 2006 to December 2013, the number of construction jobs is still down by 2.3 million, which makes all the rah-rah about new home construction seem a bit shallow. We are not anywhere close to adding back the middle class jobs we lost.
The jobs report showed a solid gain in employment with the unemployment rate dropping to 7.0%, this was partly fueled by the return of government workers during the government shut down. (Dent Research)
Major companies and all others were hiring the last few months of 2013 employees on a 28 hour work week preparing for obamacare, a tax called national healthcare.
Now in 2014 these companies need more margin as they are scared of what he might further do using the IRS (Internal Revenue Service) to collect mandatory health care premiums from every citizen; so, now most all new job hires are a 25 hour work week for new employees. At present, less than 58% of working adults (38% unemployment – BLS, Bureau Labor of Statistics, it was 25% unemployment 1929-1939 without social support programs) have full-time employment.
Increasingly, over 91 million adult Americans have no jobs of the 160 million work force or 56% are now unemployed. A staggering 49% of all American citizens are on some form of welfare. (WSI Research)
Young adults, especially under 40 years of age, and anyone becoming a new hire are having to work 2-two 25 hour jobs to earn about the same income that a historical 40 hour work week provided. (WSJ)
At this year’s State of the Union address, the President made a big deal about income inequality…But what the President did not say was how his own policies were responsible for creating a larger gap between the rich and poor. (Davidson Research)
Housing: Still 30% deficient from full recovery of housing prices since 2008, no full recovery, home equity still underwater, there can be no housing recovery until the 2008 price levels are in place.
The U.S. Census Bureau’s metropolitan statistical area (MSA) residential permit report for January 2014 noted a third straight month of declines in permits, perhaps pointing to some underlying weakness in the housing market.
The statistics, released February 19, showed 937,000 privately owned housing units authorized by building permits, measured on a seasonally adjusted annual rate (SAAR). This represented a 5.4% decrease from the revised December rate of 991,000, though is still 1.0% higher than the January 2013 estimate of 915,000.
December’s and January’s frigid temperatures have been blamed for the sharp slowdown in permits, as well as a slowdown in hiring. The weather also chilled manufacturing output last month and has been linked to the unexpected retail sales drop in January.
The U.S. Census’ other statistics of note:
- Single-family (SF) permits measured 602,000 units, a decrease of 1.3% from December 2013 but an increase of 2.4% from January 2013.
- Annual Multifamily (MF) permits (5+) decreased to 309,000 units, a 13.0% drop from December’s annual rate, but were 2.7% higher than the comparable period a year ago.
- U.S. housing starts plunged 16.0% in January to a seasonally adjusted 880,000, down from December’s total of 1,048,000.
- Amid new supply concerns, MF starts stood at 300,000 units, a 12.8% drop from December, but still above the 2013 average of 295,000 units.
- January completions for both SF and MF units increased by 3.0% and 9.5%, respectively. MF completions are averaging 190,000 units per month, on an annual basis.
The top 10 MSAs for MF permitting for the trailing 12 months ending January 2014 were:
The top ten metros for MF permits remain the same as last month, but Miami and Denver have switched positions again. The total MF units permitted in the top ten metros (116,225) is only slightly higher than the total for the next 30 metros (113,768).
Within the current top ten metros:
- MF permitting continues to increase in New York (46%), Houston (23%) and Dallas (17%); has leveled off in Los Angeles (5.2%) and Seattle (0.2%); and has decreased in Austin (-6.4%).
- Atlanta and Miami have experienced a surge in MF permitting, with annual increases of 95% and 173% respectively.
- Overbuilding in Washington, DC continues to be a concern. The MSA reported a 9.3% annual increase in MF permits of 8,715 units. With only 11,000 jobs gained between December 2012 to December 2013, the District metro is garnering less than a third of the jobs gained in 2012, 2011 and 2010 each.
Rent or Buy
The most expensive place to rent is Honolulu with an average monthly rent of $2,862. The least expensive place to rent is Montgomery County Arkansas with an average monthly rent of $699.
The San Francisco Bay Area’s six counties (Alameda, Contra Costa, San Francisco, Santa Clara and San Mateo) all are the nation’s top 10 most expensive places to rent, averaging more than $2,400 a month.
Data also shows that a third of Americans live in regions where average rents are unaffordable for median income earners.
The least expensive place to buy a home is Washington County Mississippi with an average mortgage of $217 a month and a median sales price of $42,000. The most expensive place to buy a home is San Francisco with an average home mortgage of $4,599 and a median sales price of $890,500. (RealtyTrac)
Charity: Government (Forced Charity) has been a dismal failure since 1963, does not work, never has worked, never will work, purpose only to buy votes of the poor and penalize the population; compared to, Private (Volunteer Charity) which does everything better, more efficient, more honest, without an ulterior purpose and benefits the entire population and nation.
Social Security: Social Security, a Formal TRUST Fund established by the Social Security Act of 1935 on August 14, is to provide a monthly income for all American Retirees. When Social Security was created, one of the fundamental promises by Congress and President (FDR) was that benefits would Never Be TAXED. Ronald Reagan (R) and Democrat Congress (D) including still in office Vice-President Joe Biden (D) and Senator John McCain (R), in the Tax Recovery Act of 1984 Taxed Social Security and Retirement Income Dividends of all American Retirees.
The purpose of Social Security and the American people have been betrayed by Presidents and Congresses; and, the TAXATION of Social Security has become a FUTURE TAX on the Poor, Young Adults, and Working Middle Class. Efforts to Repeal the TAX on Social Security has been Defeated year after year. The TAX on Social Security Income was Increased by the Clinton Administration on the Future of the Poor, Young Adults, and Working Middle Class. TAXING Social Security has created a 66%-104% Increase in the TAX Bill for all American Retirees. (DMN)
Ask your Representatives and Incumbents in office before you VOTE about HR 3894 The Senior Citizens Tax Elimination Act to Repeal the Social Security TAX.
Social Security Solution: Federal law making Social Security the only legal and permitted source of government retirement for ALL Americans. This would immediately stop and solve the bankruptcy shortages of state, city and county government retirement programs allowing double or triple dipping on the TAX PAYER. State, City, and County retirement programs would be illegal and cease immediately. Then ALL Americans including Presidents, Congressional members, Congressional staffs, military, and any others would be permitted to only draw Social Security in addition to any ‘Private’ self financed retirement.
Medicare: Medicare was established July 30,1965 as a Supplemental Insurance program for all American Retirees.
National Health Care Welfare: Government (Forced National Health System) does not work in any country of the world effectively, does not work efficiently, mandates an extremely higher cost that a family cannot afford to pay out of their own pock with or without Insurance, decreases money for medical research, gives government decision-making role as to whether you will be permitted to live or die based on political considerations while excluding government officials, does not work fairly to the poor and penalizes the population with an unnecessary TAX; compared to, Private (County Owned Hospitals as prior to 1963 allowing communities to take care of their own) which did everything better as a medical system, more efficient with an extremely lower cost that a family could afford to pay out of their own pock without the need for Insurance, increases money for medical research through private donations and private grants (especially today since individuals and business are more solvent than government), makes illegal government decision-making role as to whether you will be permitted to live or die period, more honest, without the need for Insurance, without an ulterior purpose and benefits the entire population and nation without an unnecessary TAX and added burden on the poor.
Goethe, the German philosopher, said at one point that: “None are more hopelessly enslaved than those who falsely believe they are free”.
The world is witnessing the global collapse of the 20th century’s socialist experiment. (EWR)
Economic Cycles (Prosperity – Recession – Depression – Recovery) and Market Forecasts (1900 – 2054)
Prosperity cycle ↑↑
Defined: 3% Unemployment or less; Positive Balance Sheets to Peak GDP and GNP
1918 (Industrial Expansion) – 1924
1945 (Infrastructure Growth) – 1963 (22 November 1963 Peak and Height of US as World Power)
2023 – 2036 (tfg forecast)
Recession Cycle ↓
Defined: 5% – 9% Unemployment; Declining GDP and GNP
1924 (Currency Bubble) – 1929
1963 (22 November – Welfare & War) – 1971
2036 – 2054 (tfg forecast)
Depression Cycle ↓↓
Defined: 10% Unemployment and greater; Negative GDP and GNP
1900 (Currency Collapse) – 1914
1929 (Engineered Transfer of Wealth) – 1942
1971 (August 15 Left Gold Standard) – 2018 (tfg forecast)
Depression Cycle Economics
Depression Cycle National Debt
Depression Cycle Earnings Per Share in Stock Market (S&P 500)
Depression Cycle Economic Lack of Growth
Depression Cycle Interest Rates
Recovery Cycle ↑
Defined: 10% – 5% Unemployment; Sustaining Rise GDP and GNP
1914 (WW I) – 1918
1942 (WW II) – 1945
2018 – 2023 (tfg forecast)
*(tfg forecast) “Forecast is an opinion predict of the future that is impossible to predict…Caveat Emptor.” – Thomas Fletcher Grooms
Average Earned Income by Capitalist Proving Jobs for 90% of Population
“Only the Wealthy Capitalists can afford to be Socialists.” – Thomas Fletcher Grooms
Reason for Saving and Staying Out of Debt
Roughly 15 cents of every dollar taxed at the Federal level ends up in the pocket of someone living within 50 miles of Washington D.C.
10 of the richest 15 counties in the United States surround our nation’s capital.
Congress 6% Approval Rating (Dent Research)
Obama 9% Approval Rating (Dent Research)
Post Office ↓ $5 billion Loss (2013) Post Office is a Public Service and Security for Private communications; Post Office is Not a Profit Center and was never meant to be.
Trust In 1958, 73% Americans trusted government; in 2014, 19% Americans trust government. (EWR Research)
↑ 9.0% (2013 BLS; CPI False Indicator)
Dwindling Pay with Price Inflation
Putting a drag on the consumer-oriented economy is the fact that Americans earn less today than they have in years. The median annual household income was $51,404 in February, according to a March report by Sentier Research. In June 2009 — it was $54,437. Even in January 2000 — more than 13 years ago — the figure stood at $56,101.
The process of sequestration in Washington, D.C. and the Central Banks around the world is confiscation of bank depositors’ money.
For instance, $5,000 in cash squirreled away in a bank in 1913, when the Federal Reserve was created, is now worth only 4.37 cents.
Put another way, it would take $114,396.56 of today’s money to buy what $5,000 would have bought in 1913.
Want more recent examples? Consider the following …
It now takes $6,210.11 to buy what $5,000 bought just 10 years ago … $29,161.44 to buy what $5,000 bought in 1970 … $47,047.46 to buy what $5,000 bought in 1950.
Even a McDonald’s Big Mac, which cost a mere 57 cents in 1959, now costs about $4.37, an increase of 665%, for an average annual increase of just over 12% per year.
↑ 80% of American citizens are barely staying afloat. (Sovereign Society)
Highlights from The Wall Street Journal on March 19, 1959
Why Big Spending, Extravagance and Waste?
“Inflation is our greatest enemy…a narcotic. It soothes and exhilarates while doing its deadly work.”
“Already inflation has reduced our dollar to half of its purchasing power. It is the killer rampant in our midst, threatening to destroy us as it has other countries whose rulers thought they could have a little bit of controlled spending and inflation; a little cheapening of their money. THEN IT WAS TOO LATE…”
“Some people say we need deficit spending by our government for prosperity and growth. But they forget that the means can destroy the end.”
“No greater tragedy, short of war…” said William McChesney Martin, Jr., Chairman, Federal Reserve System, “…could befall the free world than to have our country surrender to the easy delusion that a little inflation, year after year, is either inevitable or tolerable … for that way lies ultimate economic chaos.”
“Excessive inflation in the long run destroys the will to work and the will to save…” argued Senator J. W. Fulbright, “…which are the foundations of our economic system. Inflation is a deadly enemy of a free capitalistic system.”
“If you do get mounting inflation…” noted President Ike Eisenhower, “…our whole scheme of economy would just go out of the window.”
“Men in government — in Congress — are plain human beings. They want to keep their jobs as we all do. But what has been happening to these men? They have been put on the spot. On the one side, they have been entrusted with the job of protecting your interest, your money.”
“On the other side, they are being forced by every conceivable kind of pressure group to spend, spend, spend … for every special interest and selfish program except the basic protection of your money and your rights as a taxpayer.”
“Yet the bill comes to you either in the form of higher taxes or deficit financing (spending money we do not have) or both.”
“When this happens … it is because you have not taken the trouble to tell them that you have had enough … that your pocketbook will not stand any further whittling away of the dollar.”
“Remember: Lawmakers are human. They want to do what is right. But if you do not tell them what you want, the blame is on you — they will continue to play politics with your money…”
Today, although official measures of inflation may look tame, highly flammable inflationary material lies nearly everywhere on the planet.
We have the lowest interest rates for the longest period in modern history, a known prelude to inflation.
We have the most reckless money printing since Weimar Germany, another powerful inflationary force.
We have serious threats to the world’s largest energy supplies, another potential driver of inflation.
And we see the first signs of possible currency wars — competitive devaluations by countries in a race to the bottom.
↓ – 1.0% Y (2013 Market, shrinking) vs. ↑ 1.0% Y (2013 Commerce Department); ↑ 1.0% Y – Revised ↓ – 1.0% Y (2012)
1948-2012 Nominal GDP
Total Public & Private Debt
↑ 345% to ↑ 400% (total country debt-to-GDP – CBO)
$222 Trillion to ↑ $234.3 Trillion (CBO – Congressional Budget Office)
GDP↓ $14.6 T (Gross Domestic Product : economy produced goods and services)
GDP Rank ↓ US second largest economy in world 2010 (Peterson Institute and University of Pennsylvania)
GDP ↑ 1.0% Reported for 2012 – Revised to ↓ 1.0% (SAAR rate)
Per Capita Sovereign Debt Per Person ↑ $49,703 to ↑ $52,173
Government Open Debt ↑ $16 Trillion
Government Closed Debt ↑ $66 Trillion (Kleiner Perkins) to ↑ $88.800 Trillion
Government Spent Trust Fund for Social Security and Medicare Debt Spent from TRUST Fund ↑ $140.6 Trillion…Social Security and Medicare is NOT Welfare or an Entitlement
Consumer Debt↓ $38 Trillion = $12.8 T Household Debt + $25.2 T Leveraged Debt
Families Broke ↑ 43% (MSN Money)
Americans in Poverty ↑ 46.7 million to ↑ 49.7 million (1 in 6 people in America living in poverty) (Census Bureau)
Consumer National Credit Card Balance ↑ $15,422
Consumer National Average Household Debt ↑ $12.8 T
National Debt ↑ 100% (3 August 2011) to ↑ 104.8% (debt-to-GDP)
National Debt & Budget Accounting Statement ↔ http://www.youtube-nocookie.com/embed/EW5IdwltaAc?rel=0
National Debt ↑ $14.5 T On-Balance Sheet and ↑ $146.1 T Off-Balance Sheet (government) TOTAL ↑ $222.6 T (market and Laurence Kotlikoff, Council of Economic Advisors) (T = trillion or 1,000,000,000,000)
Corporate Tax ↑ 35% (world’s highest corporate taxes)
Socialist Country Officially March 23, 2010 ↓ National Health Care – 23 March 2010 – 10:15a CST – 2,700 page Tax Bill passed at 3:00 AM Vote in Congress
Death of Capitalism by Executive Order ↑ 80.2% Americans favored a free market economic system of capitalism (2009) to ↓ 74.5% (2010) to ↓ 59.0% (2011) to ↓ 30.0% (2012) (Globescan Research)
Days Start Time To Open A Business ↑ 18% 433 days Problems: Dodd-Frank Act, Patient “Protection” and “Affordable” Care Act, decline of US institutions, costs imposed by organized crime, effective political system, K-12 education system, tax code, US ranking 7th behind New Zealand, Australia, Singapore, Canada, Hong Kong, United Kingdom (2013 June 8 Wall Street Journal C1-2).
American Millionaires ↑ 5.9 million, 1.84% population, 4 out of 10 millionaires live in US (BCG – Boston Consulting Group)
Americans on Welfare ↑ 97 million 32.98% population 2009 to ↑ 107 million 33.43% population 2012
Americans Living on $2.00 a Day ↑ 1.5 million people
Poverty Line for American Family ↑ $24,000 per year (Washington)
Americans Living Below Poverty Line ↑ 50% (Washington)
Poor Defined Below Income for American Family ↑ $35,000 per year (Washington)
Earned Paid Savings into National Trust Fund (not an entitlement or welfare)
|Historical Social Security COLAs (Cost-of-Living Adjustments)
Medical Insurance TAX
“Affordable” Care Insurance Act (tax on poor) (hardest on under 40 adults) ($8 billion tax) (WSJ)
7-seven out of every 8-eight jobs created in the U.S. since the passage of the “Affordable Care Act” has been a part-time position with fewer than 30 hours per week. (WSJ)
Wall Street Journal by Syracuse Professor Carl Schramm, “How Obamacare Rips off the ‘Young Healthies,’” the lowest users of health care, the least costly to cover, are 18-26 year olds. “Yet the group faces extraordinarily high Obamacare rates.”
It is just another wealth redistribution scheme:
“A Manhattan Institute analysis of Health and Human Services numbers notes that a 27-year-old male will pay 99% higher premiums under Obamacare than he would under previously prevailing market rates. One reason is that the law now limits insurers to charging the sickest seniors no more than three times the amount they charge their youngest customers. Given that 64-year-olds use on average six times as much health care as 19-year-olds, the Affordable Care Act forces young people to pay considerably more than the cost of their own care.” (Wall Street Journal)
So the young are bequeathed a debt burden they will struggle under their entire lives. (Wall Street Journal)
Americans on Food Stamps ↑ 14.2 to ↑ 48.0 to ↑ 52.0 million people or 1 in 6 or 16% population under Barack Obama; ↑ 14.7 million people under George Bush
1975-2012 Food Stamps Recipients
1965-2010 Entitlement Spending
Welfare Social Benefits as to Disposable Income
American Productivity Employee Make-up ↑ 50% Government – ↓ 38% Services – ↓ 9.75% Small Business – ↓ 2.0% Manufacturing – ↓ 0.50% Agriculture (government 500 employees = Small Business 1984) (history and market 50 employees = Small Business)
American Average Net Worth ↓ $129,582 to $93,150 2009 in 2012 (LA Times)
Productivity ↓ 0.5% (output per hour worked)
Savings ↓ minus 4.5% to ↓ minus 3.9% (personal – historical saving 20% – 50%) (10-20-70 Rule)
Consumer Debt ↑8.6% rate; ↑ 5.6% Y/Y
American Families ↑43.0% Broke (MSN Money)
Median Family Net Worth ↓ 50.0% (2009-2012) and ↓ 40.0% (2005-2008)
Median Household Income ↓ 8.9% (1999-2013)
Consumer Confidence ↓ 94.4 points to ↓ 70.2 to ↓ 69.2 to ↓ 64.9 to ↓ 62.0 to ↓ 60.6 to ↓ 58.6 (90 indicates healthy economy – scale 1-150)
Consumer Sentiment ↓ 75.7 to ↑ 76.4 to ↓ 74.1 to ↓ 72.0 to ↑ 79.2 to ↓ 78.3 to ↑ 83.1 points to ↓ 74.5 to ↓ 72.9 to ↓ 71.3 (Thomson Reuters and the University of Michigan)
Consumer Spending ↑0.8% + ↓ 0.3% + ↑0.3% + ↓ 3.6% rate; ↑ 4.1% to ↓ 1.8% to ↓ 1.5% to ↓ 5.1% Y/Y (contracting)
Economy Spending Make-up ↑ 40% Government – ↔ 15% Industry – ↓ 45% Consumer
Consumer Price Index CPI ↑ 2.3% + ↑ 2.0% to ↓ 2.7% + ↑ 0.6%; ↑ 4.7% to ↓ 1.7% to ↓ 1.4% to ↑ 5.3% Y/Y (government) ↑ 12.2% to ↑ 13.6% to ↑ 14.2% (market)
Small Business Confidence ↓ 0.2 points to ↓ 91.2 (90 indicates healthy economy – scale 1-150)
Income↓1.7% + ↓0.2% + ↓ 8.8% + ↓ 0.3% + ↓ 0.7%; ↑ 3.2% to ↓1.7% to ↓10.5% to ↓10.8% to ↓11.5% Y/Y (government – inflation adjusted wages – declining); ↓ 2.5%; ↓ 26.5% to ↓ 27.2% Y/Y (market – non-farm – dropping); ↓ 11.5% to ↓ 13.5% Y/Y (market – farm – dropping)
Income National Average ↓ $56,080 (2000), ↓ $51,017 (2013), ↓ $50,200 (2014)
Income Poverty Level ↔ $35,000.00 (government definition for family of 4 and establishes poverty income base for Minimum Wage and Social Security Income)
Fair Labor Standards Act (FLSA) and Fair Minimum Wage Act of 2007 federal minimum wage ↑ $5.15 per hour to ↑ $5.85 per hour (July 24, 2007) to ↑ $6.55 per hour (July 24, 2008) to ↑ $7.25 per hour (July 24, 2009)
↑ $17.50 to ↑ $20.00 per hour (what should be if based on 2013 income poverty level defined by Washington)
Many states also have minimum wage laws. Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.
Various minimum wage exceptions apply under specific circumstances to workers with disabilities, full-time students, youth under age 20 in their first 90 consecutive calendar days of employment, tipped employees and student-learners.
Government Poverty Tax ↑ 46.2 million (below government defined poverty threshold) ↔ $2.28 trillion (tax collected for poverty = 63% for government poverty operations + 37% for poverty recipients) = $197,140 (per year for a family of four)
Disposable Income↑ 0.4% + ↓0.7%; ↑ 0.6% to ↓ – 0.1% Y/Y (DPI – disposable personal income) (government)
1956-2056 Spending Wave
Salaries and Income
2000-2014 Employee Compensation as Percent of GDP
U.S. Payroll to Population Employment Rate (P2P)
Wealth↓30.0% – 50.0% (over last 7 years) (deflation – medium family income less than in 1963 – 49 years ago)
Cost of Children
It takes around $250,000 for parents to rear the average child to age 18, and that does not include any future support or college.
Enrollment U.S. college enrollment dropped in 2012 for the first time since 2006.
Education World Rank ↓14th (Students Rank : Program for International Student Assessment)
Education Math & Science World Rank ↓ 23rd (Students Rank : Program for International Student Assessment)
Education Math World Rank ↓ 25th to ↓ 31st (2013)
Education Science World Rank ↓ 20th to 24th (2013)
Education Reading World Rank ↓ 11th to 21st (2013)
These rankings with 65 countries would have been much worse if the results of private schools were not included to pull up the scores.
“Difference, between a Learned person, and an Educated person, is an educated person asks questions.” – Thomas Fletcher Grooms
“A Teacher is the second highest paid person in many countries; but not, in the US as it only is lip service.” – Thomas Fletcher Grooms
“To have Educated students, you require teachers that know something, a great deal, about their subject and learning at a depth beyond titles, administrators, and government.” – Thomas Fletcher Grooms
“If an educational institution were smart, allow teachers to teach, and remove administrators and government from the classroom.” – Thomas Fletcher Grooms
Education SAT Scores ↓ 43% Pass Rate – ↑ 57% Fail Rate – 2012 (WSJ Wall Street Journal)
Education SAT Scores↓ 33 Points Drop in Scores Nationally – 2012 (WSJ Wall Street Journal)
Education ACT Scores↓ 25%Pass Rate – ↑ 75% Fail Rate – 2012 (WSJ Wall Street Journal)
Education SAT and ACT Test Takers ↑ 28% Not Literate (could not speak or write English – WSJ Wall Street Journal)
Education Attend College ↓ 44% High School Graduates – 2012 (WSJ Wall Street Journal)
Education Graduate College ↓ 21% Graduate in Six Years – 2012 (WSJ Wall Street Journal)
Education Literacy ↑ 99% to ↓ 75% (since creation of Department of Education in 1980)
Student Debt and Loans (“Do not borrow money for a degree – work your way through school and graduate debt-free.” – Thomas Fletcher Grooms)
↑ $1 trillion (bubble and still growing rapidly)
↑ $315 billion of all student loans are held by people still in school, or are in some other way deferred, meaning the repayment process has not begun.
↑ $685 billion remaining, $180 billion are in forbearance or default; or, 26% of
the total value of loans outstanding that are currently in the repayment
↑ 600,000 federal student loan borrowers defaulted (New York Times)
↑ 463 percent increase in outstanding federal student loan debt making student loans for college more expensive. In fact, in constant dollars the cost of college tuition has more than doubled.
Education vs. Income ↓ 14.4% (income drop for college students 2001-2012) and ↓ 11.2% (income drop for college graduates 2001-2012)
No.1 Problem Interference. In the 20th century, socialism got a death grip on education and indoctrinated the classroom, which is the main reason millions of adults today cannot read, write, or perform simple arithmetic; or, think, much less think critically in lieu of accepting everything they read, hear, or told. Who suffers, the children and students. – Thomas Fletcher Grooms
No.2 Problem Pay of Teachers. The people who do the work and make the highest contribution should be paid the most. Teachers should be the highest paid persons in any educational system, school, or educational organization; next highest the Principals; lastly then the lowest in pay Superintendents or Presidents, and administrators, which are not necessary if you correct the first three; thus, in colleges and universities the separation is even greater. Who suffers, the children and students. – Thomas Fletcher Grooms
No.3 Problem Waste of Money. Accreditation ensures nothing. Tests ensure nothing. School Boards ensure nothing. Governments ensure nothing. Politicians ensure nothing. Only Teachers ensure learning. Paper work is created to keep Superintendents, Presidents, and administrators busy and employed. Paper and administration placed above teachers in the organizational structure is an insane burden on teachers and disrupts learning in the classroom, when teachers should, who are closes to the needs, be at the top of the educational system, school, or
educational organization chart. Who suffers, the children and students. – Thomas Fletcher Grooms
No.4 Problem School Boards. School Boards contribute nothing, not necessary, and are a political hindrance of ignorance. Schools should not raise children, but educate them, which is the sole job of the teacher. Who suffers, the children and students. – Thomas Fletcher Grooms
No.5 Problem Hunger. Hunger in the belly, which limits learning;
Hunger in the mind to make a better life; Hunger of the poor Teacher for
learned students; So in every public school, feed every student at tax payer
expense breakfast and lunch; teach to the best and brightest while removing
disruptions and problems from the classroom allowing to stay only those that
want to learn; provide teachers with the top pay of all professionals and
provide an abundance of money for learning supplies. Who
suffers, the children and students. – Thomas Fletcher Grooms
“Only the Wealthy Capitalists can afford to be Socialists.” – Thomas Fletcher Grooms
Employed 95% Harvard Graduates
Employed 75% Ivy League Schools and Top Tier Schools
Employed 50% Most Colleges and Universities
Employed 60% Default on Student Loans Nationally
Job Market ↓ 49% Lower Wage Market Jobs (Temps) and ↑ 51% Government Jobs (100% Job Growth)
Jobs ↓ 130 million in 2000 to ↔ 130 million in 2013 (BLS and SGS)
Birth Death Adjustment (where the government guesses at jobs) was actually negative by 15,000, implying that the bureaucrats are correcting some of the past mistakes. Without this adjustment, the report would have shown 220,000 jobs created. Construction was up by 17,000, but was actually corrected lower by 16,000, through the birth/death adjustment. (Dent Research)
Despite the fact that the U.S. spends incomparably more than anyone else on health care, it ranks 51st in the CIA’s table of world life expectancy.
Costa Rica enjoys higher life expectancy than the U.S. for both men and women. Yet, per capita medical outlays in Costa Rica are just $1,197, annually. Even before Obamacare, U.S. health-care costs were $8,233 per capita almost 7 times higher than in Costa Rica, where private health insurance costs $60 to $130 per month.
According to the IRS, it will cost a family of four a minimum of $20,000 a year for health insurance — $1,667 per month — not to mention the additional costs imposed by a minimum of 20 new taxes enacted by Obamacare. (Forbes)
Forbes reports that 74.1% of American adults are medically overweight or obese.
Work Force ↑ 130,000,000 to ↑ 160,000,000 (Bureau of Labor Statistics – BLS)
Unions ↑ 48% (1952) to ↓ 22% (1993) to ↓ 11% (2013)
2000-2014 Employment Is Part-time as U.S. Payrolls 1.5 million Jobs Short
Unemployed Work Force ↑ 55.5% (Bureau of Labor Statistics)
Labor Department reports unemployment rate drops to 7.3 percent due to fewer Americans looking for work. (Challenger, Gray & Christmas)
Employers have announced 347,095 job losses for 2013 (no gain in American jobs), close to the 352,185 that were seen in the first eight months of last year. (Challenger, Gray & Christmas)
Gallup Poll Unemployment Report
Men Highest Unemployed Group
Unemployment Story Unemployment Fell To 7.5%, with 165,000 Jobs Created…which is odd. The labor force grew by 200,000 people, and the economy created 165,000 jobs. That does not add up to a decline in unemployment. (Dent Research)
June 2013, let’s dig a little deeper into the unemployment numbers. The Bureau of Labor Statistics (BLS) guessed that uncounted small businesses created 205,000 new jobs in this latest report. That means the actual count of jobs was -30,000 (175,000 reported less 205,000 guesstimated). We just do not get it. Why does this number not attract more attention? With all the regulatory issues facing small businesses, along with the impending Affordable Care Act requirements, there is no question that the rate of small business creation has fallen off a cliff. The Census Bureau recently confirmed this reality, yet the BLS assumes almost a quarter of a million new jobs in one month from uncounted startups, and everyone goes along with it? (Dent Research)
May 2013, the BLS assumed 193,000 new jobs, which means, in the last two months, they have assumed 398,000 new jobs from small businesses and reported 317,000 new jobs overall. (Dent Research)
Out of Work Males
Unemployment More People Quitting Jobs Story ↑ 7.2 % or 2.25 million More Americans are quit their jobs due to declining income and toxic work environments and toxic managers who make their employees miserable, ↓ 3% or 3.75 million new minimum pay jobs, hiring is falling. (Washington: Associated Press 12 June 2013)
Appears it is not even worth getting up to go to work for the amount of pay any longer – unless you are a government employee.
Why Work ? The Associated Press reports that Dorothy Dugger, a California Bay Area Rapid Transit (BART) employee, earned more than $330,000 last year… despite not working one day for the public agency last year. The AP reports…
Dorothy Dugger, 57, cashed in nearly 80 weeks of unused vacation time, drawing paychecks and full benefits. During that period, she earned nearly two extra months of vacation, received management bonuses and medical insurance, and boosted her pension benefits by more than $1,000 a month for life.
When she left BART’s payroll in December, she began to draw an annual pension of $181,000, according to the newspaper.
Dugger said she was entitled to the money because she earned more than 3,100 hours of unused vacation time during two decades with the light-rail agency.
“It was time I earned my whole career at BART,” she said. “It’s a cost of having the option” to save the vacation until the end of a career, she said.
The value of her unused vacation days soared after she took the top job in 2007 and received a raise of nearly $100,000 a year because the unused time-off was paid at her final, highest pay rate — not her rate when the time was accrued, records show.
Death Premature ↑ Life expectancy declining due to living conditions in economy with the deepest increase occurring in the group of Americans with no college degree. (Strategic Investment Research)
Employed Work Force ↓ 59.5% to ↓ 37.5%
Full-Time Employment ↓ 50.0% of All New Jobs (effect of ObamaCare)
7-seven out of every 8-eight jobs created in the U.S. since the passage of the “Affordable Care Act” has been a part-time position with fewer than 30 hours per week. (WSJ)
Part-Time Employment (Temps) ↑ 150.0% of All New Jobs (effect of ObamaCare)
American Hourly Employees ↓ 58.5% New Jobs 2009 to 2012 Pay $7.69 – %13.83 per Hour (National Employment Law Project)
Jobs Added 2013 ↓ 169K jobs added, the vast majority, some 144K or 85%, consisted of the lowest paying jobs possible. (MarketWatch and Zero Hedge)
Hours Worked ↑ 3.2% to ↓ 42% or 28 Hour Work Week (hours worked – effect of ObamaCare)
Labor force participation rate fell to ↓ 63.2%, the lowest level since 1978. Employment gains for 2013 were lowered by a combined 74,000. (Labor Department)
Number of new jobs created slashed to ↓ 104,000 from 169,000 and government increased employment by 17,000 as average hourly wages rose 5 cents to $24.05, while the average national workweek edged up 0.1 hour to ↑ 34.5 hours. Federal workers and postal workers to get 1% salary increases, even though both
organizations are operating with huge deficits. (Labor Department)
American Exempt Employees ↓ 41.5% New Jobs 2009 to 2012 Pay Less Than $42,000 Annually (National Employment Law Project)
Work Force ↑ 160,000,000
Work Force Employed by Government ↑ 72,000,000 or 40%
Non-Farm Payrolls ↑ 120,000 to ↓ 69,000 (contracting)
Employees Overseas ↑ 1.5% (expanding)
Unemployment Rate Level U-3 ↓ 8.1% to ↑ 8.2% to ↑ 8.3% to ↑ 8.8% to ↑ 14.4% (BLS – Bureau Labor Statistics) (↓ 7.8% government fiction) (government unemployment insurance claims) (U-3 Total unemployed, as a percent of the civilian labor force or official government reported unemployment rate)
Unemployment Rate Level U-6 ↑ 22.8% to ↑ 22.9% to ↑ 41.0% to ↑63.5% (Department of Labor); ↑ 55.5% to ↑55.6% rate to ↑ 78.1% ? (market) (U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force)
Unemployment 16-19 Years ↑ 50.1% (Bureau of Labor Statistics)
Jobless Removed from Unemployment Calculations 16-54 Years ↑ 74% (Bureau of Labor Statistics)
Layoffs of Employees ↑ 10.5% (deflation)
Farms ↑ 7 million (1929) to 2.2 million (2013) (Department of Agriculture)
Mortgage Originations Drop
Household Net Worth
Decline Home Ownership
Home Prices ↓ 0.8% + ↓ 0.1%; ↓ 55.8% to ↓ 55.9% Y/Y (deflation)
Home Prices Since 2008 Collapse ↓ 50.0% to ↓ 40.0% to ↓ 33.3% Full Recovery Since 2008 Does Not Exist
Construction Spending ↓ 1.1% + ↓ 0.9% + ↓ 0.6% rate + ↓ 0.3%; ↑ 5.8% to ↓ 4.9% to ↓ 5.5% to ↓ 5.8% Y/Y (contracting)
Homes in Foreclosure ↑ 3.7 m (held in banking system)
Home Building Permits ↑ 4.5% + ↓ 7.0% + ↑7.9% + ↓ 3.7% + ↑ 6.8% rate + ↓ 1.0%; ↓ 23.7% to ↓ 16.7% to ↑ 24.6% to ↓ 20.9% to ↓ 14.1% to ↓ 15.1% Y/Y (contracting)
Housing Starts ↓ 5.8% + ↓4.8% + ↑ 6.9% + ↓4.8% + ↓1.1% + ↓ 1.0% rate + ↓ 8.5% + ↓ 16.5% (↑ 15.0% + ↑ 12.1% government fiction); ↑ 10.3% to ↓ 5.5% to ↑ 1.4% to ↓ – 3.4% to ↓ – 4.5% to ↓ – 5.5% to ↓ – 14.0% to ↓ – 40.1% Y/Y (contracting)
New Home Sales ↓ 1.6% to ↓ 7.1% to ↑ 5.9% to ↑ 7.6% rate to ↓ 8.4% + ↓ 0.3% + ↓ 2.6% + ↓ 4.3% + ↓ 7.3% rate; ↑ 7.5% to ↑ 13.3% to ↑ 19.8% to ↓ 11.4% to ↓ 11.1% to ↓ 8.5% to ↓ 12.8% to ↓ 20.1% Y/Y
Existing Home Sales ↓ 2.6% + ↓1.5% + ↓ 5.4% + ↓ 1.4% + ↓ 5.4% + ↑ 2.3% + ↑ 7.8% + ↓ 1.7% + ↓ 1.0% + ↓ 4.3% rate; ↑ 5.2% to ↑ 3.7% to ↓1.7% to ↓ 3.1% to ↓ – 2.3% to ↔ 0.0% to ↑ 7.8% to ↓ – 6.1% to ↓ – 7.1% to ↓ – 11.4% Y/Y
Single Family Home Sales ↓ 7.1% + ↓ 8.4% + ↑ 1.5% + ↓ 7.3%; ↓ – 16.1% Y/Y
Driving Home Sales↑ Foreign Buyers with Cash Deals and Hedge Funds (Sovereign Individual)
Not Driving Home Sales ↓Improving Employment + ↓ Rising Wages + ↓ Income in America effectively extinct (Sovereign Individual)
Retail Sales ↑ 0.8% + ↓ 0.1% rate + ↓ 0.2% + ↓ 0.4% rate + ↓ 0.5% + ↓0.5% rate + ↑0.8% + ↑0.9%; ↑ 6.4% to ↓ 6.2% to ↓ 5.8% to ↓ 6.3% to ↓ 6.8% to ↓ 6.0% to ↓ 5.1% Y/Y
1995-2014 Sales Slowing
Consumer Prices ↑ 0.4% + ↑ 0.2% + ↑ 0.6% rate; ↑ 2.9% to ↑ 3.1% to ↑ 3.7% Y/Y
Consumer Credit↑ Danger Sign – ↑ 0.7%; ↑ 5.5% Y/Y
CPI Price Inflation ↑ 6.6% + ↑ 0.6% (Consumer Price Index – government); ↑ 20.7% to ↑ 21.3% (market) (inflation – hidden tax)
Producer Prices↑ 0.4% + ↑ 0.3% + ↑ 1.7% + ↑ 1.1% + ↓ 0.2% rate; ↑ 3.3% to ↑ 3.6% to ↑ 5.3% to ↑ 6.4% to ↓ 6.1% Y/Y
Import Prices↑ 1.3% + ↑ 0.7% rate; ↑ 3.4% to ↑ 4.1% Y/Y
ISM Manufacturing↓ 53.5 to ↓ 49.7 to ↓ 45.9 to ↑ 47.8 to ↑ 49.5 to ↑ 50.7 (below 50 contracting)
ISM Non-Manufacturing PMI ↓ 49.6 to ↓ 45.0 to ↑ 46.4 to ↑ 54.7 to ↑ 56.1 (below 50 contracting)
Industrial Production ↓ 1.2% + ↑ 0.4% + ↓ 1.1% + ↑ 0.6% + ↑ 1.2%; ↑ 4.2% to ↑ 3.1% to ↑ 3.7% to ↑ 4.9% Y/Y
Capacity Utilization↓ 0.1 + ↑ 0.2 + ↑ 0.45+ ↓1.0 points to 78.6% to 78.8% to 79.3% to 77.3%
Power Grid Outages↑ New Nuclear Energy Plants (Worldwide problem)
CPRI ↔ flat ↑ 0.3% + ↓ 0.3% + ↓ 0.2%; ↑ 1.1% to ↓ 1.3% Y/Y (CPRI – Chemical Production Regional Indices)
Light Vehicle Sales↓ 14.4 to ↓ 13.8 to ↑ 14.1 (due to China) million-unit pace – ↓ 0.4% Year
Wholesale Trade ↓ 0.1%; ↑ 6.5% to ↑ 2.7% Y/Y
Factory Orders ↓ 1.5% to ↓ 1.9% to ↓ 0.6% to ↑ 2.8% to ↓ 5.2%; ↑ 3.3% to ↓ 1.4% to ↓ 0.8% to ↑ 2.0% to ↓ 3.2% Y/Y
Durable Goods Orders ↓ 4.2% + ↑ 1.6% + ↓ 0.4% + ↓ 5.0% + ↓ 13.2%; ↑ 1.0% to ↑ 2.6% to ↓ 2.2% to ↓ 7.2% to ↓ 20.4% Y/Y
PMI ↓ 54.8% to ↓ 49.6% to ↓ 48.0% to ↓ 47.1% (Purchasing Manager’s Index) (below 50 contracting)
Business Inventories ↑ 0.7% + 0.3% + 0.1% + 0.8% rate; ↑ 7.6% to ↑ 7.9% to ↑ 8.0% to ↑ 8.8% Y/Y
Trade Deficit ↑ $2.1 billion to ↑ $6.4 billion; ↑ $51.8 billion to ↓ $42.0 billion Y/Y
Patient Protection and Affordable Care Act (PPACA) Initial Cost After 31st December 2012 – Taxes on Dividends 15% to 43.4% and Long-term Capital Gains Tax 15% to 23.8%
United States Computer Speed ↑ USA’s Sequoia (IBM) was the fastest super computer in the world, capable of processing more than 16.32 petaflops or quadrillion (thousand trillion) calculations per second to ↑ Jaguar to ↑ Titan (10x more powerful than Jaguar) is NOW the World’s Fastest Computer with 20,000 Trillion calculations per second (20 petaflops) (20 petaflops is the number 20 followed by 15 zeros) and 700 terabytes of Memory capable of tracking and recording Earth’s population and storing millions of data per second on each person in the world.
IMF (International Monetary Fund) Forecast
↓ Lowered Global Growth estimate by 0.3% to 0.2% for 2014
Derivates Held by U.S. Banks
U.S. Federal Reserve – Created 23 December 1913
Federal Reserve Monetary Base
The following chart shows currency. The green area of the chart shows the total U.S. dollars and coinage in circulation outside Federal Reserve Banks and the U.S. Treasury. The thin grey area shows required reserves.
The red area represents excess reserves held by the Fed. These are balances that depository institutions maintain with the Fed beyond what they are required to hold. The Fed pays banks 0.25 percent interest on reserves, both required and excess. In a high risk, zero-interest rate, no-growth economic environment, the banks do not need to make loans to businesses that actually create jobs, hire people, and grow the economy. Such loans always contain an element of risk. So instead of those trillions being available in the credit markets, the banks leave deposits with the Fed earning interest risk-free, and the recovery is stalled. Said differently, the Fed requires that a certain percentage of such deposits be held on account with it to meet withdrawals.
1982-2013 Dollar Decline
1900-2011 Velocity of Money
Fed Gordian Knot
US Federal Reserve Stimulus↑ It takes $2 trillion in stimulus, $1 trillion in fiscal deficits, and $1 trillion in quantitative easing (QE) or monetary injections to create $300 billion in real GDP growth, or about 2% GDP growth on average.
Fed QE (Quantitative Easing) The Fed’s QE program has hurt millions of Americans by eroding their standard of living.
We are becoming what Europe was, while Europe is becoming what we were.
Change in Central Bank Official Gold Reserves
International Reserve Assets
China and United States
UK National Debt ↑ 48.6% to ↑ 550.2% to ↓ 544.4% (total country debt-to-GDP)
UK GDP ↓ 0.3% + ↓ 0.2% + ↓ 0.7%
Ireland Total Public & Private Debt ↑ 626% (total country debt-to-GDP)
Ireland National Debt ↑ 1001.2% (debt-to-GDP – increasing)
Ireland GDP ↑ 355.8% (debt-to-GDP – contracting – bankrupt)
Ireland Unemployment Rate ↑ 14.7%
EU Europe (17 Nation States in Eurozone) (27 Nation States in European Union)
2014 1 in 10 working households now Live in Poverty
EU National Debt ↑ 412.9% to ↑ 462.7% (total countries debt-to-GDP)
EU GDP ↓ 0.3% + ↓ 0.7% + ↓ 0.2%; ↓ 20.9% (contracting)
EU Bank Combined Assets↓$14.9 T v. US Bank Combined Assets ↓ $13.9 T
EU Consumer Confidence ↓ 94.4 gauge
EU Eurocoin Indicator ↓ – 0.24% to ↓ – 0.33% (Centre for Economic Policy Research)
EU Unemployment Rate ↑ 10.9% to ↑ 11.3% to ↑ 11.6% to ↑ 11.8% to ↑ 12.0%
EU Unemployment ↑ 17,914,000 to ↑ 18,002,000 work force (Eurostat) to ↑ 20.0%
EU Unemployment Youth Under 25 Years ↑ 24.4+%
EU Retail Sales ↓ 1.9%; ↓ 2.6% Y/Y (contracting)
EU PMI↓ 45.9% to ↑ 46.7% to ↑ 48.3% (Purchasing Manager’s Index)
EU Industrial Production ↓ 9.0%
EU ISM Manufacturing↓ 49.3 to ↓ 48.7 points (below 50 contracting)
Germany Total Public & Private Debt ↑ 350% (total country debt-to-GDP)
Germany National Debt ↑ 148.1% (debt-to-GDP – increasing)
Germany GDP ↓ 2.7% + ↓ 1.0%; ↓ 1.0% to ↓ 2.0% Y/Y (contracting)
Germany Consumer Confidence ↓ 103.2 to ↓ 102.3 points
Germany Business Confidence ↓ 95.5 to ↓ 94.2 points
Germany PMI ↓ 49.71% to ↓ 47.4% (Purchasing Manager’s Index)
Germany Industry and Trade Confidence ↓ 111.5 to ↓ 111.2 points
Germany Unemployment ↑ 5.5%
France National Debt ↑ 254.4% (debt-to-GDP – increasing)
France National Debt ↑ $795.0 billion
France GDP ↓ 0.3% + ↓ 1.0%; ↓ 1.3% Y/Y (contracting)
France Unemployment ↑ 10.5% to ↑ 10.9%
France Consumer Spending ↓ 2.9%
France PMI ↓ 44.1% to ↓ 42.7% (Purchasing Manager’s Index)
France Industrial Production ↓ 1.2% (contracting)
Greece Total Public & Private Debt ↑ 200% (total country debt-to-GDP)
Greece National Debt ↑ 292.4% (debt-to-GDP – increasing – bankrupt)
Greece GDP ↓ 5.5% rate (contracting)
Greece Unemployment ↑ 17.3% to ↑ 21.8% to ↑ 25.0% to ↑ 26.0% to ↑ 28.0% to projected ↑ 32.0%
Greece Unemployment Youth Under 25 Years ↑ 50.0+% to ↑ 58.0+% to ↑ 61.4+%
Italy Total Public & Private Debt ↑ 332% (total country debt-to-GDP)
Italy National Debt ↑ 136.6% (debt-to-GDP – increasing – bankrupt)
Italy National Debt ↑ $795.0 billion
Italy GDP ↓ 1.2% + ↓ 0.8% + ↓ 0.7% + ↓ 1.0% + ↓ 2.8%; ↓ 2.5% to ↓ 1.7% to ↓ 2.7% to ↓ 5.5% Y/Y (contracting)
Italy Debt % of GDP ↓ 48.6% (contracting)
Italy Consumer Confidence ↓ 89.5 points
Italy Unemployment ↑ 9.8% to ↑ 10.8% to ↑ 11.0%
Italy Unemployment Youth ↑ 25.0% to ↑ 35.2% to ↑ 37.0% to ↑ 40.0%
Italy Industrial Production ↓ 1.4%
Italy Industrial Sales ↓ 12.0% to ↓ 14.0% Y/Y
Spain Total Public & Private Debt ↑ 400% (total country debt-to-GDP)
Spain National Debt ↑ 200.3% (debt-to-GDP – increasing – bankrupt)
Spain GDP ↓ 1.7% + ↓ 0.4%; ↓ 2.2% Y/Y (contracting)
Spain Budget Deficit ↑ 8.5% (percent of GDP)
Spain Retail Sales ↓ 9.8% (contracting)
Spain Unemployment ↑ 24.8% to ↑ 25.1% to ↑ 26.6%
Spain Unemployment Youth Under 25 Years ↑ 50.0% to ↑ 57.4%
Poland GDP ↓ 3.5% to ↓ 2.4% (contracting)
Poland Retail Sales ↓2.1% to ↓ 1.5%
Portugal Total Public & Private Debt ↑ 406% (total country debt-to-GDP)
Portugal National Debt ↑ 207.3% (debt-to-GDP – increasing – bankrupt)
Portugal Unemployment ↑ 15.0% to ↑ 25.0%
Portugal GDP ↓ 3.4% to ↓ 5.7% to ↓ 50.0% (contracting)
Portugal Unemployment Youth ↑ 36.0%
Portugal Retail Sales ↓ 25.0%
Portugal Tax on Electricity ↑ 6.0% to ↑ 23.0%
Russia Billionaires ↑ Most Billionaires in World (WSJ)
Russia First Trillonaire Reported to be Vladimir Putin (WSJ)
Russia GDP ↑ $1.78 T (2011) (Gross Domestic Product : economy produced goods and services)
Russia GDP ↑ 3.5%
Central Bank of the Russian Federation Gold Reserves
Russia Unemployment ↔ 4.9% to ↑ 5.2%
Russia Income ↑ 10.2%
Russia Military ↑ 667,000 (active-duty)
Brazil GDP ↓ 7.0% to 3.1% (contracting)
Wealth Rankings in Asia
China Beige Book Regional Overview
Region 1: Shanghai, Jiangsu, Zhejiang
Growth slowed – retail & real estate gains weakening sharply – despite stability in manufacturing and pickups in services, transport, and agriculture. Borrowing was stable with rates down at banks and up at non-bank lenders. Hiring slowed, as did margin growth. On-quarter weakness was modest, but the on-year drop was worrisome.
Region 2: Guangdong, Fujian
Despite the national slowdown, Guangdong’s pickup continued, driven by manufacturing and transport. Growth was steady in retail, off in services and property. Wage growth remained high but costs inflation eased, boosting margins. Borrowing ticked up, with bank rates steady and shadow rates up. The export power-house found an encouraging second wind.
Region 3: Beijing, Tianjin, Shandong, Hebei
The capital region saw Q1’s worst results, due to trouble in services and manufacturing. Property and mining were stable, retail slightly better. Margin growth suffered. Borrowing was stable and moved to banks, on the country’s lowest interest rates. Beijing is leading the national economic slowdown.
Region 4: Heilongjiang, Jilin, Liaoning
The Northeast slowed as mining contracted and manufacturing, property, and farming growth eased. Services was stable and retail saw a pick-up. Hiring and wages strengthened, while pricing weakened, pressuring margins. Borrowing ticked up, rates easing. Rebalancing does not look easy in this old industrial region.
Region 5: Hubei, Henan, Chongqing, Sichuan, Anhui, Jiangxi
Growth slowed sharply, slipping in retail, services, property, farming, and mining, with only manufacturing stable. Hiring was steady but input costs grew faster, narrowing margin gains. Borrowing slid again, with lower interest rates in both formal and shadow finance – not an encouraging trend.
Region 6: Shaanxi, Shanxi, Inner Mongolia, Ningxia
Growth took a hit, gains slowing in this crucial mining sector. Manufacturing, real estate and, especially, retail weakened. Services and transport were the bright spots. Hiring and margin growth both eased. Borrowing was flat as rates went up. The North remains dependent on struggling mining.
Region 7: Guizhou, Guangxi, Yunnan, Hainan, Hunan
Again out of sync with the rest of China, the Southwest sped up. Manufacturing, transport, and mining improved, but retail, services, and real estate saw growth slow. Hiring and input costs picked up, but so did pricing and margins. Borrowing ticked up, as shadow lenders’ rates moved back above banks’ rates.
Region 8: Xinjiang, Tibet, Gansu, Qinghai
The West again boasted China’s best overall growth, though manufacturing, retail, and services slowed. Only property picked up, with mining and transport stable. Hiring and input cost growth were steady, but pricing and margin growth eased. Borrowing remained China’s least frequent as rates jumped.
Manufacturing is fine, yet the economy is not
The pace of Chinese economic expansion has painfully slowed. Revenue, sales, profit, and wage growth are all weaker than a year ago. The slowdown is particularly steep in the North [region 6] and Northeast [region 4] and also pronounced in Beijing [region 3] and Central China (region 5).
By sector, stable first-quarter growth in manufacturing confirms our long-standing thesis that it is no longer the economy’s bellwether…
A bounce-back later this year is possible
The worst performer according to CBB figures, both on-quarter and on-year, is real estate and construction. While property companies are getting crushed, the sector is also notoriously unstable for both structural and political reasons. It would be no surprise if real estate were to rally before the end of the year.
More immediate reason for optimism: Growth in new domestic orders was solid (save in the Northeast), and domestic orders and export orders were both stronger in powerhouse Guangdong. The results do not indicate a boom later in 2014, but they do suggest that linear forecasts of continued deterioration are overly simplistic.
Financial segmentation is profound
The ongoing debates about monetary policy assume that anticipated loosening or tightening applies across the spectrum of borrowers. CBB data say otherwise, and in multiple ways. First, while the number of firms reporting that they borrowed stabilized in Q1, it did so at a very low level. Shoving more liquidity at the credit market will have limited effects until participation expands. This includes RRR cuts – though of course these may occur for political reasons.
Second, shadow finance may be revving up for a comeback. CBB numbers show a recovery in the sales of wealth management products (WMPs), likely due to competition from online banking. This is cash leaving the traditional banking sector and, while non-bank lending did not pick up in the first quarter, the groundwork is being laid for it to do so.
Online banking may be encouraging riskier behavior
Online lenders are typically viewed as a force for liberalization, as well as a potentially healthier alternative to unregulated shadow finance. Yet our data show their proliferation would impart significant costs as well…
What appears to be happening is the higher returns available in online banking are forcing banks to move more transactions off-balance sheet, in order to avoid the interest rate cap. While this may accommodate policy goals in the short term, an uptick in off-balance sheet funding portends more shadow bank lending down the line.
Interest rate spread between banks & shadow banks highest in a year
Bank loan rates and bond yields eased slightly this quarter, but the cost of capital increased again for those borrowing from non-bank lenders. While the shifts were not dramatic, the spread between bank and non-bank loan rates nationwide is now the largest since Q1 2013. This highlights the still more challenging road for those firms, principally domestic private entities that are pushed outside formal lending channels.
Growth Is Slowing But Not Collapsing (So Far…)
After reading through the latest report, consulting with friends who are also familiar with the research, and bombarding Leland with a never-ending stream of questions for the last month, John and I still cannot claim to have enough information to make a directional call on the world’s most powerful (and least understood) macro force… but we know more about the inner workings of China’s economy than we did when we wrote to you a couple of months ago.
Great data often has that effect – it’s like shining a light into the shadows (including China’s shadow banks). We can see the nuanced regional contrast in economic activity, the modest (but still insufficient) rebalancing between sectors, and pressure points in the credit markets that suggest last summer’s interbank volatility may return in 2014.
We also see a far more mixed picture of economic activity than a lot of the widely followed headline data suggests. The overall pace of Chinese economic growth is clearly slowing but not collapsing. The credit transmission mechanism is obviously broken, as you can see in the chart below (with government and government-sponsored borrowers in zombie industries consuming the majority of the country’s credit… in turn forcing households to borrow through shadow banks at massive risk premiums); but so far, the credit bubble is not imploding.
(Source: Wei Yao, “China: A whiff of debt deflation.” Societe Generale Research, May 9, 2014)
China’s greatest challenge will lie in deleveraging the economy while also rebalancing toward a consumption-driven growth model for the first time in modern history. That cannot happen as long as households remain repressed by unequal access to credit markets or intentionally suppressed exchange rates, which essentially represent a transfer of household wealth from workers to state-favored firms. But reforming the system will require a greater slowdown than China’s policymakers are letting on. And, Leland warns, Beijing runs the risk of blowing its credibility and instigating capital flight if the divergence between official forecasts and China’s actual economic experience grows too large. (China Beige Book International)
Global Total Public & Private Debt
↑ 212% to ↑ 345% to ↑ 400% to ↑ 435.6% (total country debt-to-GDP – CBO)
China Billionaires ↑ 122 (Forbes)
China Millionaires ↑ 1.3 million (BCG – Boston Consulting Group)
China National Debt ↑ 43.3% (debt-to-GDP – increasing)
China National Debt ↑ $2.78 T (increasing)
China GDP ↑ $14.8 T (Gross Domestic Product : economy produced goods and services)
China GDP ↑ 9.2% (2011) to ↓ 8.1% to ↓ 7.5% (contracting)
China GDP Rank ↑ China first largest economy in world 2010 (Peterson Institute and University of Pennsylvania)
China FOREX Reserves ↑ $3.2 T (currency market)
China Inflation v. Deflation – Answer : Only economy in world in real Inflation growth
China Income Average Pay Increase ↑ 15.0%
China Income ↑ 7.6% (inflation adjusted wages)
China Education World Rank ↑ 1st (Students Rank : Program for International Student Assessment)
China Education Math & Science World Rank ↑ 1st (Shanghai) (Students Rank : Program for International Student Assessment)
China Work Force ↑ 810,000,000
China Unemployment Rate ↓ 3.0%; ↑ 97.0% (employed)
China Consumer Prices ↑3.2% to ↑3.6%
China Retail Sales ↓ 14.7% to ↑ 15.2% to ↓ 13.7% to ↑ 13.4%
China Home Prices ↓ (deflation)
China Housing Vacancy ↑ 24%
China Business Sentiment MNI ↓ 51.92 to ↑ 53.21 points
China Manufacturing ↓ 9.5% (slowing)
China PMI↓ 49.3% to ↓ 48.7% to ↓ 48.2% to ↓ 47.6% (Purchasing Manager’s Index)
China New Export Orders ↓ 47.9 to ↓ 46.8 ↓ 45.9 points
China Exports ↑ 8.9%
China Imports ↑ 6.3%
Energy Information Agency (EIA) China has twice as much proven oil reserves as the US.
China Computer Speed ↑ China’s Tianhe-1A (NUDT) is the third fastest super computer in the world, capable of processing more than 2.57 petaflops or quadrillion (thousand trillion) calculations per second
China Military ↓ 2.2 to ↑ 2.28 m (largest active-duty military in world), 7,400 Tanks, 71 Submarines, 2,004 Aircraft combat-ready, 1 Aircraft Carrier advanced state of the art
India GDP↓10.0% to ↓ 8.4% to ↓ 6.3% to ↓ 5.5% (contracting)
Japan National Debt ↑ 230% to ↑ 620% to ↑ 650% to ↑ 656.8% (debt-to-GDP – contracting)
Per Capita Sovereign Debt Per Person ↑ $129,711
Japan National Savings Rate
Japan GDP ↓ 3.5% (contracting)
Japan Computer Speed ↑ Japan’s K Computer (Fujitsu) is the second fastest super computer in the world, capable of processing more than 8.16 petaflops or quadrillion (thousand trillion) calculations per second
Japan Balance of Trade (BOT)
Japan Exports Flows
South Korea GDP ↓ 6.2% in 2010 to ↓ 3.6% in 2011 to ↓ 3.0% in 2012 (debt-to-GDP – contracting)
South Korea Exports 50% of GDP ↓ 8.8% + ↓ 6.3%
Iraq GDP ↓ (debt-to-GDP – contracting)
Iraq Oil Exports ↑ 2.317 headed to ↑ 3.4 (million barrels per day)
Iran GDP ↓ (debt-to-GDP – contracting)
Iran Oil Exports ↓ 2.2 in 2011 to ↓ 1.25 (million barrels per day)
Global Market Income Redistribution Share
Value of Cross-Border Goods Flows Between Regions
Value of Cross-Border Financials Flows Between Regions
Value of Cross-Border Services Flows Between Regions
Global Poverty Levels
$1.25 per Day 18.4%
$2.00 per Day 41.5%
2014 Index Economic Freedom
Global Total Public & Private Debt
↑ 345% to ↑ 400% to ↑ 435.6% (total country debt-to-GDP – CBO)
Global Debt↑ $184.0 trillion (increasing)
Global GDP ↓ $69.7 trillion (debt-to-GDP – contracting)
Global GDP ↓ 6.9% in 2011 + ↓ 10.0% in 2012 (contracting)
Highest GDPs Per Capita Per Head $99,557 per head Norway, $56,210 per head Denmark, $55,244 per head Sweden, $46,178 per head Finland
For comparison, the U.S.’s GDP per capita per head is at $53,315
Fertility Rate & Life Expectancy
1963 Top Countries Life Expectancy No.1 Japan, No. 2 France, No. 3 United States (OECD – Organization for Economic Development)
2014 Top Countries Life Expectancy No.1 Japan, No. 2 Switzerland, No. 3 Australia, No. 28 United States (OECD)
Global Millionaires ↑ 13.8 million worldwide (BCG – Boston Consulting Group)
Most Billionaires in World ↑ Russia (WSJ)
First Trillonaire Reported to be Vladimir Putin of Russia (WSJ)
Global Top 15 Countries Ranked by Wealth
Global Demand ↓ Economic Output Slowing (Ifo Institute)
CAPE (cyclically adjusted price-earnings) Global Stocks
Global Economic Growth (1980-2011)
Global Consumer Consumption ↓
Global Emerging Markets ↓
Global Trade↓ 5.0% in 2011 to ↓ 3.7% in 2012 (contracting)
Global Banking System Derivatives Debt Bet ↑$1,000.00+ T or $1+ Q (Q = quadrillion or 1,000,000,000,000,000 or thousand trillion) (15 times world GDP)
20 Leading Economies Debt as % of GDP (gross domestic product)
20. United States: 100%
19. Hungary: 110.3%
18. Italy: 136.6%
17. Australia: 139.9%
16. Spain: 169.5%
15. Greece: 178.9%
14. Germany: 183.9%
13. Portugal: 207.3%
12. Austria: 241.3%
11. Finland: 244.8%
10. Norway: 246.9%
9. France: 254.4%
8. Sweden: 262.3%
7. Hong Kong: 265.7%
6. Denmark: 283.2%
5. Belgium: 353.7%
4. Netherlands: 367%
3. Switzerland: 391.3%
2. United Kingdom: 451.4%
1. Ireland: 1,239%
Global CPRI ↔ flat ↓ 0.7% + ↑ 0.4% + ↑ 0.1%; ↑ 1.5% to ↑1.8% to ↑ 2.2% to ↑ 2.3% to ↑ 3.1% Y/Y (CPRI – Chemical Production Regional Indices)
Global Semiconductor Sales ↓ 1.6% + ↓ 0.1%; ↓ 7.8% Y/Y
Global Manufacturing PMI ↓ 51.1 to ↓ 50.3 to ↓ 48.6 to ↓ 48.1 to ↑ 48.9 to ↑ 49.7 (JP Morgan) (below 50 contracting)
GDP Per Capita/PPP and the ‘Trust’ Indicator
1010 GDP Per Capita/PPP
|Central Afr. Rep.
|Congo, Dem. R.
|Congo, Rep. Of
|Pap. New Guinea
|Unit. Arab Em.
Gold (↑ $1,622.70 end 2011) to ↓ $1,609.30 to ↑ $1,622.60 to ↑ $1,687.60 to ↑ $1,740.50 to ↑ $1,772.70 to ↑ $1,778.00 to ↑ $1,780.00 to ↓ $1,724.00 to ↓ $1,675.00 to ↑ $1,714.70 to ↓ $1,705.60 to (↓ $1,660.10 end 2012) to ↓ $1,648.90 to ↑ $1,663.20 to ↓ $1,572.30 to ↑ $1,582.70 to ↓ $1,469.40 to ↓ $1,393.00 to ↓ $1,235.20 to (↓ $1,202.30 end 2013) to ↑ $1,242.50 to ↑ $1,325.50 to ↓ $1,292.30 to ↑ $1,291.40 to ↓ $1,274.00 to ↑ $1,326.10 to ↓ $1,311.00 to ↓ $1,231.50 (per Troy ounce)
Silver (↑ $27.801 end 2011) to ↑ $28.06 to ↑ $31.44 to ↑ $33.69 to ↑ $34.656 to ↓ $34.638 to ↓ $34.57 to ↓ $32.097 to ↓ $30.86 to ↑ $32.37 to ↑ $33.16 to (↓ $30.20 end 2012) to ↓ $29.95 to ↑ $31.35 to ↓ $28.49 to ↓ $27.48 to ↓ $24.28 to ↓ $22.24 to ↓ $19.60 to (↓ $19.37 end 2013) to ↓ $19.16 to ↑ $21.22 to ↓ $20.05 to ↓ $19.33 to ↑ $19.66 to ↑ $21.80 to ↓ $19.94 to ↓ $18.61 (per Troy ounce)
Copper (↓ $336.75 end 2011) to ↑ $340.40 to ↑ $345.70 to ↑ $364.50 to ↑ $383.25 to ↓ $378.90 to ↓ $377.80 to ↓ $363.75 to ↓ $348.15 to ↓ $346.15 to ↑ $366.50 to (↓ $356.70 end 2012) to ↑ $369.35 to ↑ $372.35 to ↓ $350.10 to ↑ $336.40 to ↓ $324.20 to ↑ $329.25 to ↓ $319.75 to (↑ $339.65 end 2013) to ↓ $319.25 to ↓ $318.70 to ↓ $304.35 to ↑ $314.70 to ↓ $302.75 to ↑ $319.55 to ↓ $317.35 to ↓ $310.65 (pound)
Oil Brent Crude (↑ $114.57 end 2011) to ↓ $114.25 to ↑ $116.66 to ↓ $111.42 to ↑ $112.02 to ↓ $110.14 to ↓ $105.60 to ↑ $108.95 to ↓ $107.25 to ↑ ($108.97 end 2012) to ↑ $111.31 to ↑ $116.22 to ↓ $110.40 to ↑ $110.87 to ↓ $103.65 to ↓ $100.39 to ↑ $110.02 to (↑ $110.80 end 2013) to ↓ $106.42 to ↑ $109.10 to ↓ $104.73 to ↓ $102.02 to ↑ $112.46 to ↓ $112.18 to ↓ $105.02 to ↓ $97.11 (Best Oil per barrel Measure of Price: 42 US gallons, 158.9873 liters, 34.9723 Imperial UK gallons)
Oil WTI (West Texas Intermediate) (↑ $91.40 end 2011) to ↑ $93.37 to ↑ $96.47 to ↓ $96.42 to ↑ $99.00 to ↓ $92.89 to ↓ $89.88 to ↑ $90.05 to ↓ $84.86 to ↑ $86.92 to ↓ $86.06 to (↑ $88.66 end 2012) to ↑ $93.09 to ↑ $97.31 to ↓ $90.68 to ↑ $96.62 to ↓ $94.41 to ↓ $91.97 to ↑ $93.33 ( ↑ $98.42 end 2013) to ↓ $97.57 to ↑ $102.55 to ↓ $99.52 to ↑ $109.75 to ↓ $106.91 to ↓ $105.42 to ↓ $97.65 to ↓ $92.27 (Oil per barrel: 42US gallons, 158.9873 liters, 34.9723 Imperial UK gallons)
Natural Gas (↓ $2.877 end 2011) to ↓ $2.782 to ↑ $2.799 to ↓ $2.682 to ↑ $2.943 to ↓ $2.885 to ↑ $3.396 to ↑ $3.617 to ↓ $3.55 to ↑ $3.79 to ↓ $3.49 to (↓ $3.45 end 2012) to ↓ $3.29 to ↑ $3.37 to ↑ $3.46 to ↑ $3.97 to ↑ $4.15 to ↓ $3.98 to ↓ $3.92 to ( ↑ $4.23 end 2013) to ↑ $4.92 to ↓ $4.61 to ↓ $4.35 to ↑ $4.41 to ↑ $4.74 to ↓ $4.44 to ↓ $3.96 to ↓ $3.86 (MMBtu)