Monday, August 1, 2016
Most of us have never witnessed an economic “recovery” this bad. As you will see below, the average rate of economic growth since the last recession has been the lowest for any “recovery” in at least 67 years. And unfortunately, the economy appears to be slowing down even more here in 2016. On Friday, I talked about how the U.S. economy grew at a painfully slow rate of just 1.2 percent in the second quarter after only growing 0.8 percent during the first quarter. And last week we also learned that the homeownership rate in the United States has dropped to the lowest level ever. This is not what a recovery looks like. Instead, it very much appears that a new economic downturn has already begun.
But don’t just take my word for how painful this economic “recovery” has been. The following comes from a Wall Street Journal article that was just posted entitled “Seven Years Later, Recovery Remains the Weakest of the Post-World War II Era“…
Even seven years after the recession ended, the current stretch of economic gains has yielded less growth than much shorter business cycles.In terms of average annual growth, the pace of this expansion has been by far the weakest of any since 1949. (And for which we have quarterly data.) The economy has grown at a 2.1% annual rate since the U.S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Department releasedFriday.The prior expansion, from 2001 through 2007, was the only other business cycle of the past 11 when the economy didn’t grow at least 3% a year, on average.
This entire seven year stretch has come while Barack Obama has been in the White House. After more than seven and a half years, he is solidly on track to be the only president in U.S. history to never have a single year when the U.S. economy grew by at least three percent.
And unlike many presidents, he has had two terms in which to try to accomplish that feat.
One of the industries that had been doing fairly well during this recovery was the auto industry, but now in early 2016 they have found themselves struggling too…
Now, the auto sector, which has propped up GDP growth for years, is slowing down. For the first six months, total car and light truck sales, at a seasonally adjusted annual rate (SAAR) of 17.5 million vehicles, are lagging behind last year by 100,000 units. Over the first half, fleet sales to rent-a-car companies and big fleet buyers were up industry wide. But retail sales fell 2%.
All over the corporate world, earnings are down.
In some cases, they are way down.
It is being projected that this will be the fifth quarter in a row when corporate earnings have declined, and even mainstream analysts are now admitting that it is “evident” that we have entered “a global slowdown”…
“Earnings season in the U.S. confirms the overall macro picture that we have. We have a global slowdown. It’s evident in all of the major economies,” said Peter Garnry, head of equity strategy at Saxo Bank, on a Bloomberg podcast.
Of course I have been saying this exact thing for the past 12 months, but a lot of people have tuned me out because the stock market in the United States has been doing so well.
But the stock market is not an accurate barometer for the real economy. It never has been, and it never will be.
If stocks accurately reflected the health of the U.S. economy, they would have already crashed really hard a long time ago. At this moment, stock prices are completely disconnected from economic reality, and this has many of the most respected names on Wall Street scratching their heads. One of them is Jeffrey Gundlach, the chief executive of DoubleLine Capital. Just check out what he told Reuters on Friday…
Noting the recent run-up in the benchmark Standard & Poor’s 500 index while economic growth remains weak and corporate earnings are stagnant, Gundlach said stock investors have entered a “world of uber complacency.”The S&P 500 on Friday touched an all-time high of 2,177.09, while the government reported that U.S. gross domestic product in the second quarter grew at a meager 1.2 percent rate.“The artist Christopher Wool has a word painting, ‘Sell the house, sell the car, sell the kids.’ That’s exactly how I feel – sell everything. Nothing here looks good,” Gundlach said in a telephone interview. “The stock markets should be down massively but investors seem to have been hypnotized that nothing can go wrong.”
If you follow Gundlach, you probably already know that he has been dead on accurate with regard to the financial markets over the past couple of years.
So when he says that the stock market “should be down massively” and that it is time to “sell everything”, we should all take him very, very seriously.
All throughout history, a huge decline in corporate earnings has almost always resulted in a huge decline in stock prices. As Jesse Felder has noted, “we have never seen a decline in earnings of this magnitude without at least a 20% fall in stock prices” during the last 50 years.
To any rational observer, it is quite obvious that stock prices should have already started collapsing quite some time ago.
And to a large extent this has already happened around the planet, but here in the United States stocks continue to defy the laws of economics.
But at this point it isn’t going to do much good to warn people about this. Those that could see the danger coming have already pulled their money out of stocks, and most of those that want to stick their heads in the sand and pretend that things are somehow going to be different this time are not likely to be persuaded this late in the game.
In the end, we should all be grateful that this absurd financial bubble has lasted for as long as it has, because stability is much more pleasant than instability. The U.S. economy and the U.S. financial system have enjoyed a prolonged period of stability that has defied all the odds, and let us hope that it lasts for at least a little while longer…
Credit to Economic Collapse
For a few minutes at the open, mainstream business media persuaded itself that the EU stress tests had proved that everything was fine in Europe's banking system again. But very quickly, things went south with Italian banks - the center of the storm - reversing gains and then extending losses with Unicredit now down 8% (after being up 4%).
As Citi's Christian Schulz notes, "The 2016 stress test is unlikely to fully restore investors’ trust in the eurozone banking system, in our view."
And it seems he is right...
Monte Paschi is holding gains amid its massively dilutive capital raise, but this is noise across the stock's bid-offer.
Finally, we offer Macro-Man's sarcastic take on the EU stress tests as evidence of why EU banking stocks are sliding...
1) In the latest European bank stress test, Monte dei Paschi ended up with Tier 1 capital of -2.4% in the most stressed scenario
2) Although there was no official pass or fail awards, a negative capital ratio is pretty clearly an epic fail
3) Having sold €8 billion worth of stock since 2014, BMPS proposes to sell another €5 billion before year end...
4) ...providing they can also unload €9.2 billion worth of NPLsturds off of their balance sheet first
5) Since the imposition of negative rates in Europe (illustrated by the arrow), here is what the SX7E index has done
6) So naturally, the stress tests did not measure the impact of more negative rates, only a move higher in rates
7) This is the equivalent of measuring the impact of a dog whistle on a deaf person
8) More European banks failed the Fed's stress test (DB and Santander) than the EBA version (albeit, as noted, there were not official pass/fail grades this time around.)
9) If you can believe it, DB scored half a percent better on the stress test than Barclays
10) If you were wondering, by far the highest score on the EBA stress test was achieved by NRW.Bank in Germany. In a possibly related coincidence, their website looks like it's a school project for a middling web design student, though its career portal does offer applicants the opportunity to "venture into the fascinating world of finance!"
Credit to Zero Hedge
“Envy thou not the man of violence, and choose none of his ways.” Proverbs 3:31 (The Israel Bible™)
Commenting on last week’s horrific execution of a priest by two ISIS-affiliated terrorists in France, Pope Francis said that it is wrong to associate the religion of Islam with violence.
“I think it is not right to identity Islam with violence,” he told reporters, addressing media aboard a plane taking him back to Rome following a five-day trip to Poland. “This is not right and this is not true.”
The comment was made in response to a question about a terror attack which took place in a church in northern France last week. Two Muslim men, armed with knives, burst into the church during mass and slit the priest’s throat. The Islamic State quickly claimed responsibility for the attack.
However, the Pontiff cautioned against associating Islam with violence, reminding the press that
“in nearly all religions there is a always a small fundamentalist group.”
“We have them,” he added, referring to Catholicism. “I don’t like to talk about Islamic violence because every day when I look at the papers I see violence here in Italy – someone killing his girlfriend, someone killing his mother-in-law. These are baptized Catholics.”
He did not differentiate between extremist religious violence and personal vendettas.
“If I speak of Islamic violence, I have to speak of Catholic violence. Not all Muslims are violent,” Pope Francis said.
Instead, he opined, terrorism is born of worshipping money in a capitalist society.
“I know it dangerous to say this but terrorism grows when there is no other option and when money is made a god and it, instead of the person, is put at the center of the world economy,” said the leader of the Catholic church.
“That is the first form of terrorism. That is a basic terrorism against all humanity. Let’s talk about that.”
Poverty and moral emptiness leads to terrorism, he said, rather than religion.
“I ask myself how many young people that we Europeans have left devoid of ideals, who do not have work. Then they turn to drugs and alcohol or enlist in ISIS.”
The pope has been consistently defensive of Islam and Muslims, meeting with top Arab leaders and imams, advocating for the Muslim refugees flooding Europe, and often drawing parallels between Islam and Christianity, as he did on Sunday.
In May, Pope Francis said that Islam and Christianity share the “same idea of conquest” and obliquely blamed Western thinking and interference in the Middle East for the rise of Islamic extremism.
Credit to breakingisraelnews.com
Read more at http://www.breakingisraelnews.com/73089/pope-islam-not-identified-violence/#swS3cAEET1WI4sgp.99
As cases of meningitis, a rare and potentially fatal disease, popped up in cities nationwide over the past several years, public health officials noticed a trend: many of those infected were gay men.
There’s no known medical reason why meningitis, which is transmitted through saliva, would spread more among gay and bisexual men. Yet New York, Chicago and now Southern California have experienced outbreaks disproportionately affecting that population.
“It is perplexing,” said Dr. Rachel Civen, a medical epidemiologist at L.A. County’s Department of Public Health.
Of the 13 cases of meningitis this year in L.A. County — excluding Long Beach, which has its own health department — seven were gay men. There were only 12 meningitis cases in the county in all of 2015, one of which was a gay or bisexual man.
In Long Beach, there have been six meningitis cases this year, half of which were gay men. Last year there were no meningitis cases in the city, according to city officials.
Civen, who has tracked the county’s meningitis cases for a decade, said it was “pretty striking” that half or more of the cases in both jurisdictions were gay men.
Meningitis cases in L.A. and Orange counties are thought to be connected because lab testing showed that many patients were infected with the same strain of meningococcus, known as serotype C.
Federal, state and local public health officials are working together to investigate the current outbreak, which is estimated to have begun in February, with most cases in the past two months. A man in Orange County died after being infected this year, alarming many in the region’s gay community.
“Certainly my patients have shown concern that something is running through the community like wildfire,” said Dr. Jay Gladstein, an internal medicine doctor in downtown L.A. who mostly treats gay and bisexual men. If patients survive the infection, it can still cause permanent brain damage or hearing loss.
The bacteria that causes meningitis is transmitted by swapping saliva, by means such as kissing and sharing drinks. It requires prolonged, close contact and is not as easily spread as the flu, experts say.
Gladstein, who is also an HIV specialist, said he thinks that the cases are likely among men who have multiple sexual partners, engage in anonymous sex and use drugs that make them more susceptible.
“It’s a particular sub-population of gay men,” Gladstein said.
Credit to LA Times
The Eurobarometer poll found that more than half – 51 per cent – of French and Germans were “totally pessimistic” about the EU’s future.
This compared to 46 per cent of Britons, who voted to leave the European Union on June 23, three weeks after the study, which was conducted between May 21 and May 31.
More than half of respondents in Greece (70 per cent), Cyprus (54 per cent) and Hungary (52 per cent) were also totally pessimistic about the future of the EU.
It means that the EU’s so-called “index of optimism” has reached its lowest level since spring 2013 and has fallen 16 percentage points since spring 2015.
Overall the survey, carried out by the European Commission, found that the “proportion of Europeans for whom the EU conjures up a positive image has decreased by three percentage points to 34 per cent, while the proportion who have a negative image of the EU has rise to 27 per cent since autumn 2015.”
In the past six months the positive image of the EU has lost ground in 20 member states, most strikingly in Romania (down 15 per cent), Croatia (down 14 per cent) and Lithuania (down 10 per cent).
Both Italy (down six per cent) and Germany (down five per cent) also saw a dip. More than a third (36 per cent) of Britons had a totally negative view of the EU.
Austria (37 per cent), Cyprus (41 per cent) and Greece (51 per cent) were the only countries to have a less positive view.
Last night Conservative MP Andrew Bridgen, who led the Vote Leave campaign in the East Midlands, said: “Britain has often been portrayed as the country which has been rocking the boat, but it would seem from the results of the European Commission’s own poll that we are not the only member state to have fallen out of love with the EU.
Credit to Express.co.uk
A medical practice was thrown into turmoil when a patient’s father lunged at a surgeon with a knife, shouting “Allahu akhbar” and threatening to behead him.
The incident took place in the town of Troisdorf on Monday morning. Speaking with FOCUS Online, Dr. Attila Tan, the surgeon who was attacked, recounted his horrific experience.
He said: “The patient came in at 10am, accompanied by his girlfriend, who was veiled. He radiated aggression, which increased when I began to treat him,”
The man was released from the practice in mid-July, having undergone treatment for a broken leg, but returned on Monday in pain.
Dr. Tan said: “I explained everything to him, and even showed him exercises he should do. But he didn’t listen to me at all.”
The 19 year old then stormed out of the practice, before returning with his brother and father, who was armed with a knife which had a 30cm serrated blade.
The surgeon was operating on another patient when his wife called for help at the practice’s reception. The men had attacked and insulted Dr. Tan’s wife, one of them throwing a marble bust at her, which narrowly missed.
The father of the man with the broken leg rushed at Dr. Tan, with a knife, and shouted “Allahu akhbar” before threatening to behead the surgeon.
The sons of the attacker then held Dr. Tan down. The doctor told Focus Online: “Their father kept screaming at me — ‘Apologise to my son, get on your knees and kiss his hand’.”
Panic broke out in the practice, with one 82-year-old patient even jumping through the window to escape the violence. Police arrived before the confrontation could escalate as, when the father and sons trio stormed the practice, some patients and colleagues of Dr. Tan had left to notify the authorities.
One witness recalled: “We heard things flying around, and screams and stuff. Then three times ‘Allahu akbar’ was shouted. At that moment I thought, it’s all over. I thought he killed Dr. Tan and his wife.”
Credit to breitbart.