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Tuesday, August 18, 2015

American Malls In Meltdown....The Economic Recovery Is Complete Fraud

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The government issued their monthly retail sales this past week and four of the biggest department store chains in the country announced their quarterly results. The year over year retail sales increase of 2.4% is pitifully low in an economy that is supposedly in its sixth year of economic growth with a reported unemployment rate of only 5.3%. If all of these jobs have been created, why aren’t retail sales booming?
The year to date numbers are even worse than the year over year numbers. With consumer spending accounting for 70% of our GDP and real inflation running north of 5%, it’s pretty clear most Americans are experiencing a recession, despite the propaganda data circulated by the government and Fed. The only people not experiencing a recession are corporate executives enriching themselves through stock buybacks, Wall Street bankers using free Fed Bucks while rigging the the markets in their favor, politicians and government bureaucrats reaping their bribes from billionaire oligarchs, and the media toadies who dispense the Deep State approved propaganda to keep the ignorant masses dazed, confused, and endlessly distracted by Cecil the Lion, Bruce/Caitlyn Jenner, Ferguson, and blood coming out of whatever.
You won’t hear CNBC, Bloomberg, the Wall Street Journal or any corporate mainstream media outlet reference the fact retail sales growth is at the exact same levels as when recession hit in 2008 and 2001. Their job is to regurgitate the message of economic recovery and confidence in the future, despite overwhelming evidence to the contrary.
Retail sales are actually far worse than the 2.4% reported number. Excluding the subprime debt fueled auto sales, retail sales only grew by 1.3% in the last year. The automakers are practically giving vehicles away as their lots are stuffed with inventory. The length of auto loans and the average amount of auto loans are now at all-time highs. The percentage of subprime auto loans is surging to record levels, as defaults begin to rise. The percentage of vehicles being leased is also at an all-time high. To call these “auto sales” strains credibility. These people are either perpetually renting their vehicles or just driving them until the repo man shows up.

The relatively strong year over year furniture sales is also driven by the fact that you can finance the purchase at 0% interest for seven years. All is well for the Ally Financial, GE Capital and the myriad of fly by night subprime lenders until the recession arrives, unemployment soars, and defaults skyrocket. Then their bloated debt ridden balance sheets will explode in an avalanche of defaults. That’s when they insist on another taxpayer bailout to “save the financial system”.
The year over year crash in oil prices was supposed to result in a huge spending splurge by the masses, according to the media talking heads. You don’t hear much about that storyline anymore. The talking heads are now worried that oil prices are too low. I guess the tens of thousands of layoffs in the oil industry and the obliteration of the Wall Street financed shale oil fraud storyline is offsetting the $10 per week in gasoline savings for the average driver.

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At least restaurant and bar sales remain strong. It seems Americans have decided to eat, drink and be merry, for tomorrow they die. I do believe there is some truth to that saying in today’s world. I think people are drowning their sorrows by drinking and eating. They’ve drastically reduced buying stuff they don’t need with money they don’t have. Spending their gas savings at a restaurant or bar is still doable.
With real median household income at 1989 levels, real unemployment north of 15%, a massive level of under-employment, young people unable to buy a home – saddled with $1 trillion of student loan debt, middle aged parents struggling to take care of their aging parents and struggling children, and Boomers who never saved for their retirement, the mood of the country is decidedly dark and getting darker by the day. The rise of Trump and Sanders in the polls is an indication of this dissatisfaction with the existing social order.
The part of the retail report flashing red is the sales of General Merchandise stores, and particularly department stores. This category includes the likes of Wal-Mart, Target, Costco, Sears, Macy’s, Kohls, and JC Penney. General merchandise sales fell 0.5% in July, with Department store sales dropping by 0.8%. Sales at these behemoth retailers have barely budged in the last year, with overall sales up a dreadful 0.3%. The dying department stores have seen their sales plummet by 2.7%. The talk of a retail revival is dead on arrival. Wal-Mart and Target muddle on with lackluster results, while JC Penney and Sears continue their Bataan Death March towards the retail graveyard.
The false narrative of economic recovery can be blown to smithereens by the historical data on the Census Bureau website. Their time series data goes back to 1992. GDP has supposedly risen by 22% since 2007. General merchandise sales were $48.4 billion in July 2007. They were $56.1 billion in July 2015. That’s a 15.9% increase in eight years. Even the manipulated and massaged BLS CPI figure has increased 14.5% over this same time frame. That means that REAL retail sales at the nation’s biggest retailers has been virtually flat for the last eight years. Does that happen during an economic recovery?
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The department store data is almost beyond comprehension. July department store sales were the lowest in the history of the data series. Sales of $13.8 billion were 22% below the July 2007 level of $17.6 billion. They were 28% below the peak level of $19.2 billion in 1999. Real department store sales are 36.5% BELOW where they were in 2007, and Wall Street shysters have had buy ratings on these stocks the whole way down. These worthless hucksters remove the buy rating the day before these dinosaur department stores declare bankruptcy. Excluding the debt driven auto sales, real retail sales are flat with 2008 levels.
The data from the Census Bureau has been more than confirmed by the absolutely atrocious financial results reported by Macy’s, Kohls, Sears and J.C. Penney. Retailers do not report results this poor during economic recoveries. The results clearly point to an ongoing recession for the middle and lower classes who do the majority of working and spending in this country. The rich continue to spend their stock market winnings at exclusive boutiques and high end retailers like Nordstrom, but the average American is being sucked into the abyss by rising food prices, rent, home prices, tuition, and the Obamacare driven health insurance and medical costs. With declining real wages, they have less and less disposable income to spend buying cheap Chinese crap at their local mall department stores.
Here is a glimpse into the results of department store dinosaurs headed towards extinction:


  • Overall sales fell 2.6%, while comparable store sales fell by 2.1%, as Macy’s continues to close under-performing stores. News flash: there are many more stores to close.
  • Profits crashed by 25.7% as gross margins declined and expenses rose.
  • Cash flow from operations has declined by a staggering 46% in the first six months of this year.
  • The bozos running this sinking retailer have mind bogglingly burned through $787 million of cash, while adding $452 million in long term debt to buyback their own stock. Executive compensation is stock based, so wasting close to $1.6 billion in the last year as sales and profits fall, is considered prudent management by the CEO.
  • Despite falling sales, the management of this sinking ship have increased inventory by $200 million in the last year. This bodes well for margins in the second half of the year.
  • The long-term future for this retailer gets bleaker by the day as their long-term debt, pension liabilities, and other long term obligations total $10.4 billion, while their declining stockholder’s equity totals $4.8 billion.
  • To show you how far Macy’s has come in the last nine years you just need to compare their results from the 2nd quarter of 2006 to today. They registered sales of $6.0 billion versus $6.1 billion today. On a real, inflation adjusted basis, their sales have fallen by 16% over the nine year period. They had profits of $317 million in 2006, 46% more than the $217 million in the 2nd quarter of 2015. They had $13.6 billion of equity and $8.2 billion of long-term debt.
  • And now for the best part. Despite generating 46% less income than they did 9 years ago, Macy’s stock sits at $63 per share, while it traded at $36 per share in 2006. A company with declining revenue, declining profits and a bleak future should not be sporting a PE ratio of 16. When this recession really takes hold, their 2009 price level of $9 per share will be challenged on its way to Radio Shack land – $0 per share.

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  • Overall sales were up a pathetic 0.6% after last year’s 2nd quarter sales were lower than 2013. Comp store sales were up only 0.1% after being down 1.3% the previous year.
  • Profits fell precipitously by a mere 44% versus the prior year, down by $102 million. Margins fell while expenses rose.
  • In the lemming like behavior of corporate CEOs across the land, this struggling retailer thought it was a brilliant idea to go $330 billion further into debt, while buying back $543 million of stock in the first six months.
  • While sales are essentially flat, the executives of this company ratcheted up their inventory levels by 9% in the last year. Flat sales growth and surging inventory levels leads to plunging margins and profits. I guess that’s why I got a 30% off everything coupon in the mail last week.
  • Cash from operations has crashed by 52% in the first six months. You would think prudent executives would be using a half a billion of cash to buy stock and boost their compensation packages.
  • Another comparison to yesteryear provides some perspective on how well Kohl’s is performing. During the 2nd quarter of 2007 they generated $3.6 billion of sales and $269 million of profits. Their overall sales are up 19% (3% on a real basis) even though they have increased their store base by 38%. Profits in 2015 were 52% lower than 2007.
  • Sales per store is 14% lower today than it was in 2007. And even more worrisome for their long term survival, inventory levels are up 59% compared to the 19% increase in sales.
  • Again, the stock price peaked in 2007 at $76 and earlier this year reached a new all-time high of $79. Despite deteriorating financial conditions, poor management, plunging cash levels, and nothing on the horizon to portend a turnaround, the stock trades at a PE ratio of 13.


  • Sears hasn’t reported their 2nd quarter results yet, but pre-announced that same store sales crashed by 10.6% versus last year. They are truly dead retailer walking, as Eddie Lampert’s real estate maneuvers attempt to hide the coming bankruptcy from unsuspecting investors is nothing but smoke and mirrors perpetuated by Eddie and his Wall Street shyster bankers. Excluding his desperate real estate schemes, they will lose another $300 million.
  • In the last four years, during an economic recovery, Sears has seen their sales crater from $43 billion to $31 billion, and still falling. They have managed to lose $7.4 billion in just over four years and their stock still trades at $25 per share – proving there is a sucker born every minute.
  • They continue to close hundreds of stores and still can’t stop the hemorrhaging. The decade of using financial gimmicks rather than investing in his stores  is coming home to roost for Eddie “the next Warren Buffett” Lampert. Of course, he will arrange matters in a way where he wins, while the stockholders lose when the bankruptcy papers are filed.
  • The balance sheet is a disaster. They have generated a Negative cash flow from operations of $1.4 billion in the last twelve months. They have burned through $556 million of cash. They have $8.4 billion of long-term debt and other liabilities, with equity of NEGATIVE $1.2 billion.
  • Sears may be the worst run business in America, and its chances of going bankrupt are 100%, but the Wall Street hype machine has its stock price at $25 per share, 20% higher than it was in late 2008. For some perspective, Sears’ 2nd quarter 2008 revenues totaled $11.8 billion and they made a $65 million profit. Sales in the 2nd quarter of 2015 will be approximately $6 billion with a loss of at least $300 million. Of course their stock should be higher.
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J.C. Penney

  •  I found it humorous to see the Wall Street hucksters and their mainstream media mouthpieces cheering on the J.C. Penney 2nd quarter results as “better than expected” and proof they have turned the corner. Their overall sales went up by 2.7% and comp store sales went up by 4.1%, as they continue to close stores. For some perspective on this tremendous sales gain to $2.9 billion, their sales in the 2nd quarter of 2009 were $3.9 billion. When your sales are still 26% below where they were six years ago, maybe you shouldn’t be crowing too much.
  • It seems Wall Street and the MSM didn’t really want to focus on the only thing that matters – profits. They lost another $138 million and have racked up $305 million of losses so far this year. They have lost money for 13 consecutive quarters. That is no easy feat. They have managed to lose $3.6 billion in the last four and a half years, while driving their annual sales from $18 billion to $12 billion.
  • Their balance sheet isn’t as horrific as Sears’, but it is nothing to write home about. They have $6.2 billion of long-term debt and other liabilities, supported by a mere $1.6 billion of equity. Back in 2011 they had $5.5 billion of equity to support $4.9 billion of long term liabilities. The deterioration of this once proud retailer is clear to anyone with two eyes and a brain. So that eliminates all CNBC pundits and guests.
  • Wall Street pumped the stock 5% higher on Friday to celebrate their $138 million loss. A company that is on track to lose $500 million has seen its stock price rise 32% this year on hopes and dreams. Wall Street has had buy ratings on this stock from its peak of $82 per share in 2007 on its 90% downward path to its current price. I’m sure they’re right this time.
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The truly disturbing revelation from the Census Bureau data and the terrible financial results being reported by some of the biggest retailers in the world is that it is occurring with unemployment at 5.3%, the economy in the sixth year of a recovery, and a Fed who has pumped $3 trillion into the banking system while still keeping interest rates at 0%. What happens when we roll back into the next official recession, unemployment soars, and consumers really stop spending?
What is revealed when you look under the hood of this economic recovery is that it is a complete and utter fraud. The recovery is nothing but smoke and mirrors, buoyed by subprime auto debt, really subprime student loan debt, corporate stock buybacks, and Fed financed bubbles in stocks, real estate, and bonds. The four retailers listed above are nothing but zombies, kept alive by the Fed’s ZIRP and QE, as they stumble towards their ultimate deaths. The coming recession will be the knife through their skulls, putting them out of their misery.
“Retail chains are a fundamentally implausible economic structure if there’s a viable alternative. You combine the fixed cost of real estate with inventory, and it puts every retailer in a highly leveraged position. Few can survive a decline of 20 to 30 percent in revenues. It just doesn’t make any sense for all this stuff to sit on shelves.”
Marc Andreessen
Credit to Zero Hedge

23 Nations Around The World Where Stock Market Crashes Are Already Happening

Globe Earth World Planet Ominous - Public DomainYou can stop waiting for a global financial crisis to happen.  The truth is that one is happening right now.  All over the world, stock markets are already crashing.  Most of these stock market crashes are occurring in nations that are known as “emerging markets”.  In recent years, developing countries in Asia, South America and Africa loaded up on lots of cheap loans that were denominated in U.S. dollars.  But now that the U.S. dollar has been surging, those borrowers are finding that it takes much more of their own local currencies to service those loans.  At the same time, prices are crashing for many of the commodities that those countries export.  The exact same kind of double whammy caused the Latin American debt crisis of the 1980s and the Asian financial crisis of the 1990s.
As you read this article, almost every single stock market in the world is down significantly from a record high that was set either earlier this year or late in 2014.  But even though stocks have been sliding in the western world, they haven’t completely collapsed just yet.
In much of the developing world, it is a very different story.  Emerging market currencies are crashing hard, recessions are starting, and equity prices are getting absolutely hammered.
Posted below is a list that I put together of 23 nations around the world where stock market crashes are already happening.  To see the stock market chart for each country, just click the link…
2. Brazil
3. Egypt
4. China
7. Turkey
8. Chile
10. Peru
11. Bulgaria
12. Greece
13. Poland
14. Serbia
15. Slovenia
16. Ukraine
17. Ghana
18. Kenya
19. Morocco
20. Nigeria
21. Singapore
22. Taiwan
23. Thailand
Of course this is just the beginning.  The western world is going to feel this kind of pain as well very soon.  I want to share with you an excerpt from an article that just appeared in the Telegraph entitled “Doomsday clock for global market crash strikes one minute to midnight as central banks lose control“.  You see, the Telegraph is not just one of the most important newspapers in the UK – it is truly one of the most important newspapers in the entire world.  When it speaks on financial matters, millions of people listen very carefully.  So for the Telegraph to declare that the countdown to a “global market crash” is “one minute to midnight” is a very, very big deal…
When the banking crisis crippled global markets seven years ago, central bankers stepped in as lenders of last resort. Profligate private-sector loans were moved on to the public-sector balance sheet and vast money-printing gave the global economy room to heal.
Time is now rapidly running out. From China to Brazil, the central banks have lost control and at the same time the global economy is grinding to a halt. It is only a matter of time before stock markets collapse under the weight of their lofty expectations and record valuations.
I encourage you to read the rest of that excellent article right here.  It contains lots of charts and graphs, and it discusses many of the exact same things that I have been hammering on for months.
When one of the newspapers of record for the entire planet starts sounding exactly like The Economic Collapse Blog, then you know that it is late in the game.
Others are sounding the alarm about an imminent global financial crash as well.  For example, just consider what Egon von Greyerz recently told King World News
Eric, I fear that this coming September – October all hell will break loose in the world economy and markets. A lot of factors point to that, both fundamental and technical indicators and this indicates that we could have a number of shocks this autumn.
Sadly, most investors will hold stocks, bonds and property and will see any decline in value as an opportunity. It will be a long time and a very big fall before they realize that the system will not help them this time because the central bankers have run out of ammunition to save the global financial system one more time. Yes, we will see more massive money printing, but it will just make things worse. And at some stage, which could be quite soon, real fear will set in, a fear of a magnitude the world has not experienced before.
Hmm – there is another example of someone talking about September.  It is funny how often that month keeps coming up.
And of course most of the major stock market crashes in U.S. history have been in the fall.  Just go back and take a look at what happened in 1929, 1987, 2001 and 2008.
The “smart money” has been pulling their money out of stocks for quite a while now, and at this point a lot of others have hopped on the bandwagon.  The following comes from CNBC
The flight of investor money from U.S. stocks has turned into a stampede.
In fact, the $78.7 billion leaving domestic equity-focused funds has been worse in 2015 than it was even during the financial crisis years, when the S&P 500 tumbled some 60 percent, according to data released Friday by Morningstar. The total is the highest since 1993.
Domestic equity funds surrendered $20.4 billion in July alone and have seen $158.6 billion in redemptions over the past 12 months. Even a strong flow of money into passively managed exchange-traded funds has been unable to offset the stream to the exit among retail investors, who generally focus more on mutual funds than ETFs.
A global financial crisis has already begun.
So those that were claiming that one would not happen in 2015 are already wrong.
Over the coming months we will find out how bad it will ultimately be.
Sometimes I get criticized for talking about these things.  There are a few people out there that don’t like all of the “doom and gloom” that I discuss on my website.  Apparently it is a bad thing to talk about the things that really matter and we should all just be “keeping up with the Kardashians” instead.
I consider myself just to be another watchman on the wall.  From our spots on the wall, watchmen such as myself all over the nation are sounding the alarm about what we clearly see coming.
If we saw what was coming and we did not warn the people, their blood would be on our hands.  But if we do warn the people, then we have done our duty.
Every day I just do the best that I can with what I have been given.  And there are many others just like me that are doing exactly the same thing.
Those that do not like the warning message are going to feel really stupid when things start falling apart all around them and they finally realize how wrong they truly were.

Credit to Economic Collapse

Print We Are Living in Times Prophets of Old Longed to See

For the first time in nearly 2,000 years, there's an indigenous Israeli Body of Messiah.
For the first time in nearly 2,000 years, there's an indigenous Israeli Body of Messiah. (Reuters)
Join us on our new podcast each weekday for an interesting story, well told, from Charisma News. Listen at charismapodcastnetwork.com.

Biblical historians say Luke is one of the few non-Jewish authors of the Bible, with both the Old and New Testaments almost exclusively written by Jews.
In his Gospel, Luke writes about the life of Yeshua (Jesus), and in the book of Acts, we learn how his disciples fared after His ascension.
When God chooses Jeremiah, He tells him He's watching over His Word to perform it (Jer. 1:12).
It certainly appears His plan is moving right along.
To better understand today's headlines, the biblical prophets are a good place to start. After all, Jeremiah lived in politically turbulent times, especially for the Jews.  
Today, the Jewish people are returning to their biblical homeland. Since the late 1800s, there's been a steady stream of returnees. On May 14, 1948, Israel officially became the modern nation-state of the Jewish people.
Aliyah—immigration to Israel—is increasing again, partly because of rising anti-Semitism, but also because Diaspora Jews are beginning to realize if they're not in Israel, they're in exile. They are returning to the place where a lot of promises to them as a people will be fulfilled. And they're wonderful promises!
For the first time in nearly 2,000 years, there's an indigenous Israeli Body of Messiah.
Estimated at about 15,000 and growing, it's part of this regathering. And its diversity reflects Israeli society as a whole.
Set in a Jewish Context 
While Luke may not have been a Hebrew, his writings mirror the Jewish context of God's plan of salvation for all mankind. Yeshua was born, lived and died a Jew.
You can't separate Israel's Messiah from Israel. Edith Schaffer was right. Christianity is Jewish
Yeshua said, "You worship what you do not know; we know what we worship, for salvation is of the Jews" (John 4:22).
So here's some very good news.
God is raising up an indigenous body in Israel. These young believers have grown up in a tough little country. They've served in the IDF, they're pursuing their education and careers, meeting their mates, getting married and starting families. These young people are PRAYers and DOers. Corporately and individually they're products of prayer. In short, they make our hearts smile.
Those with the gift of evangelism are sharing the Good News with Israelis who for the most part never heard it or heard it in a cultural context they couldn't relate to. The biblical comparison is Joseph's brothers not recognizing him because he looked like an Egyptian. In the end they find out he's their brother. So it will be when the Jewish people come to know their Jewish Messiah.
As latent anti-Semitism raises its ugly head yet again, God is raising up a generation of Israelis equipped to share the Good News with the Jewish people.
Prayer and More Prayer 
Now is the time to undergird the Israeli body in prayer. God is moving in Israel. It's very exciting and at the same time challenging to be here at this point in time.
The prophet Zechariah foretold that God will pour out a spirit of grace and supplication on Israel and simultaneously remove the veil that has prevented His covenant people from seeing the One they're awaiting for thousands of years. 
Jews will see they are not outside God's plan of salvation. In fact, the Bible states in more than one place, "to the Jew first and then the Greek." Israel as a nation will understand and it will bring us to national repentance and salvation. We will be saved as a people, as it is written, "all Israel will be saved."
And the world can hardly stand it. God's enemy, the prince of the power of the air, the one who walks about like a roaring lion seeking whom he may devour, whose only interest is to steal, kill and destroy, is more intent than ever to wipe out the Jewish people.
Iranian Nuclear Deal 
The U.S.-brokered Iranian nuclear deal is a prime example. Sadly, the Obama administration has been a tool in the enemy's hand to stir up anti-Semitism wherever it may be found. His vendetta against Israel and its prime minister is palpable. Many of the world's largest news agencies are simply pawns in the hands of "the prince of the power of the air."
There is nothing Elohei Yisrael, the God of Israel, doesn't know about. He is omniscient, omnipotent and allows what He allows for His purposes.
So while Israel and the Jewish people face increasingly difficult times, God is moving. Along with praying for the peace of Jerusalem, ask God to pour out His spirit on His people (Zech. 12:10):
"And I will pour out on the house of David and over those dwelling in Jerusalem a spirit of favor and supplication so that they look to Me, whom they have pierced through. And they will mourn over him as one mourns for an only child and weep bitterly over him as a firstborn."
End of End Days
It's coming. It's closer and closer. When all the nations of the world come up against Jerusalem, Yeshua Himself will save us.
It's time to dig into the Word of God more than ever. Ask God to open it up to you. Ask for your marching orders. Listen and obey.
These are exciting times, ones the prophets would like to have seen.
He is coming in the clouds! Two millennia ago Yeshua said He was coming quickly. A day is as a thousand years. It won't be long now.
Credit to charismanews.com