Monday, August 1, 2016
This Is The Weakest U.S. Economic ‘Recovery’ Since 1949
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
Italian Banks Crash Despite EU Stress Tests
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
New Agenda 21 Policies Call for 90% Depopulation of the US
Four years ago, a Medford, Oregon man was jailed for collecting rainwater and snow runoff on his very own property while the developing world is trashing their environment at alarming rates, suffocating waterways, rivers, and lakes with trash and other forms of pollution.
Agenda 21 have morphed into Agenda 2030 which has now morphed into Vision 2050. In the video below are the noteworth and provisions of the newest flavor of Agenda 21.
In the video, you heard me mention the emergence of the Megacities concept. Here is the map for this dastardly notion:
The legend of the map indicates that each of the 11 megacity regions will considt of 6 million people, each. Where will the other 250 million Americans have gone?
I support Agenda 21. And despite all my scandals, I will be the President in 2016! And….I am crazy!
Hilllary Clinton is a supporter of Agenda 21 and its policies.
Credit to Common Sense
Pope: Wrong to Equate Islam With Terror and Violence
“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
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