For those lucky Americans who can afford to own a house instead of being stuck renting the New Normal American dream where they are prohibited from peddling fiction as their annual rent increases by 10% or more each year, here is the breakdown of the best and worst cities for home price appreciation in the U.S.
Just one week after the US Department of Commerce quietly slashed historical US capex spending by billions of dollars following a major data revision it was time for another major revision to a series that is nearer and dearer to most Americans' hearts, namely Disposable Personal Income. Here, the US Dept of Commerce just "revised" personal wages high enough to add over $70 billion in disposable income to US pockets over the past 6 months.
After yesterday's US and UK market holidays which resulted in a session of unchanged global stocks, US futures are largely where they left off Friday, up fractionally, and just under 2,100. Bonds fell as the Federal Reserve moves closer to raising interest rates amid signs inflation is picking up. Oil headed for its longest run of monthly gains in five years, while stocks declined in Europe.
When the main economic event this week hits this Friday at 8:30 am EDT, when the BLS releases the May payrolls report, Wall Street consensus wil be expecting a 160,000 print, a number which will have a big impact on market expectations for a Fed rate hike at the June or July FOMC meeting. However, consensus may be disappointed for one reason: the Verizon strike could chop off as much as 35,000 workers from the headline payrolls print.
The Fed’s crusade to pump-up inflation toward its 2.00% target by hammering-down interest rates to the so-called zero bound is economically lethal. The former destroys the purchasing power of main street wages while the latter strip mines capital from business and channels it into Wall Street financial engineering and the inflation of stock prices.
The mainstream media mouthpieces for the establishment peddle false narratives, disingenuous storylines, and outright propaganda to keep the ignorant masses confused, oblivious to reality, misinformed, and passively submissive to the opinions of highly paid “experts” and captured fiscal authorities. We are living in hard times. The reason tens of millions of Americans are rejecting the establishment and voting for Trump and Sanders is because of economic hardship. Most Americans have been screwed over by the system and are finally getting fed up. They aren’t exactly sure who screwed them, how they were screwed, or how to stop getting screwed, but they are angry. And someone is going to pay. The status quo is beginning to get nervous. Their usual propaganda, scare tactics and misinformation campaigns don’t seem to be working.
The Fed’s paint-by-the-numbers Keynesian incrementalism leaves it blind to the underlying rot in the US economy and to drastically over-estimate its capacity to maintain a stable growth equilibrium. In fact, corporate America is being strip-mined by Fed-fueled financial engineering and flyover America is sinking irretrievably into debt, dependency and shrinking living standards.
The posse of fools in the Eccles Building is so petrified of a stock market hissy fit that it has more or less created a Wall Street doomsday machine.
The broadest measure of the stock market has risen by 125% since 1999. The real median family income has fallen by 7%. Stated differently, the bicoastal elites who own most of the nation’s financial assets or who feed off the financial system and a debt-swollen central state in Washington, believe themselves to be in the pink of prosperity. They do not understand, of course, that this is all a giant bubble which at length will burst in spectacular fashion, causing their own unearned windfalls to shrink in the process. In the meanwhile, they may come to understand that the flyover zone of America has been left behind. The main street insurgency fueling Donald Trump’s shocking rise to the top of the Presidential race proves that much in spades.
The underlying economic ugliness that triggered the August and January meltdowns emerges once again.
The US Treasury yield curve is flattening again, with parts finally in 2016 surpassing the bearishness exhibited to start 2015. The mainstream is just now starting to notice likely because unlike last year there are no longer credible excuses to simply wish it away. “Transitory” is not a word you find much anymore, replaced instead by reluctant and forced acknowledgement that there is real economic peril here. Bearishness in the yield curve is not something new, however, only the notice of it.
Everyone who follows the statistics of rising income and wealth inequality knows we're becoming a nation of haves and have-nots. What's not being discussed is the role of housing.
At the end of the day, the seasonally maladjusted data for April retail sales amounts to no more than a swiggle in the larger trend. To wit, consumption spending financed by the growth of transfer payments and household borrowing is coming up hard against Peak Debt, while tepid growth in wage and salary income remains hostage to a domestic economy plagued with structural barriers to growth, an aging business cycle and a gathering global recession from which it is not remotely decoupled. So contrary to Reuters and its Keynesian quote standbys, it is not true that “the demise of the U.S. consumer have been greatly exaggerated”. Actually, it can be hardly exaggerated enough.
Forget the "wall of worry," former Reagan OMB Director David Stockman warns a shocked CNBC anchorette that "the frogs are in the boiling water again on Wall Street...and they don't have enough sense to get out." The last 600 days of range-bound trading marks the top he explains adding that "we have reached the cyclical top in both GDP and earnings," which leaves a market trading at extremely expensive levels - "why would you stay in?" Stockman believes that the world economy is heading into a "deep and lasting deflationary recession." There is no evidence that America is immune, he adds, warning of the potential for 40% downside and just 2% upside in stocks...
While the 1998 Viagra "spike" came and went, in recent years, pharmaceutical preparation, i.e., drug prices have been soaring higher with every passing year, and according to today's PPI report, at the wholesale level, drug prices in April surged by 9.6% over the past year, the biggest increase since 1982 when excluding the Viagra outlier, and certainly the most in the 21st century.