Despite the great shale revolution, US exports posted a $0.4 billion decline to $188.9 billion in October driven by decreases in industrial supplies and materials ($1.3 billion), other goods ($0.2 billion), consumer goods ($0.2 billion), and capital goods ($0.1 billion). This was offset by a $2.7 billion increase in imports to $230.7 billion broken down by increases in industrial supplies and materials ($0.9 billion); automotive vehicles, parts, and engines ($0.9 billion); capital goods ($0.8 billion); and consumer goods ($0.6 billion). End result: a September trade balance of $41.8 billion, which was higher than the highest forecast of $41.6 billion among 72 economists queried by Bloomberg, and the highest deficit print in 4 months.
Did you know that 40 percent of all American workers make less than $20,000 a year before taxes? And 65 percent of all American workers make less than $40,000 a year before taxes. If you work on Wall Street, or have a cushy job with the federal government, or work for a big tech firm out on the west coast, life is probably pretty good for you right now. But the truth is that most Americans are not living the high life. In fact, most Americans are just trying to figure out how to survive from month to month. If we truly did have a free market capitalist system, the entire country would be a land of opportunity and things would be getting better for everybody. Unfortunately, that is not the case at all. The following are 21 facts about "wealthy America" and "poor America" that are hard to believe...
If ever there was a symptom of the instant gratification meme of the new normal (why wait when you can have it all now?), it is 'vice'. That is why Southbay Research's Vice Index (composed of prices paid, volume, and frequency of sales in liquor sales, gambling, and prostitution) is so worrisome, as WSJ reports, "it's signalling that consumer spending growth is about to drop and stay subdued for a few months." Southbay's Zatlin notes that measuring this kind of discretionary spending provides a window into the true state of the economy - which fits with recent macro data on retail sales (and forecasts for the holiday season as hope of the 'second-half' recovery fade quietly into next year.
Well over a year ago, we first suggested that the conventional wisdom thesis for the bounce in home prices - namely a spurt in household formation - was dead wrong. Sure enough, as has been confirmed empirically, the only reason for the latest dead cat bounce in home prices has been the Fed, and banks complicit in engaging in "foreclosure stuffing." And while it was easy to deflect the topic of just what is driving the housing market (because none of the bulls would want to admit it is just another credit and liquidity-driven bubble) for over a year, with the traditional "things will be back to normal soon" fall back used every time, as time passed and none of the traditional ingredients for a housing recovery fell into place, some started scratching their heads. This came to a boiling point today, when real-estate firm Trulia, looking at the latest Census Bureau data on household formation, finally threw in the towel and rang the panic button as not only have young Americans set anchor in their parents' basement, but even refuse to get a job.
Desperate people do desperate things, and it appears that Americans are rapidly becoming a lot more desperate. An epidemic of thievery is sweeping across America, and authorities are not quite sure what to make of it. So why is all of this happening? Well, as we have written about previously, crime is on the rise in the United States, and poverty is absolutely exploding. In fact, according to the latest numbers from the U.S. Census Bureau, 49.2 percent of all Americans are receiving benefits from at least one government program each month. Over the past five years, we have seen an unprecedented rise in the number of people that cannot take care of themselves without help from the government. Millions upon millions of Americans that have been forced into poverty are becoming increasingly angry, frustrated and desperate. And what we are watching right now is only just the beginning - all of this is going to get a whole lot worse.
Following the disappointing delayed durable goods print from last week, it was expected that today's Factory orders number would disappoint as well, and sure enough, it did not disappoint... in that expectation. With consensus looking for a 1.8% increase in September for the headline number, the delayed September number came out at 1.7% for the headline, the 6th miss in the past 9 months, while the ex-transport factory goods print dropped -0.2% following the August ex transports falling -0.4%. In other words, it was all transports once again, reflecting the rebound in orders for civilian aircraft as China's excess capacity bubble now seems to include all Boeing aircraft from 737 to 787.
Did you know that the number of Americans on welfare is higher than the number of Americans that have full-time jobs? Did you know that 1.2 million public school students in the U.S. are currently homeless? Anyone that uses the term "economic recovery" to describe what is happening in the United States today is being deeply insulting to the nearly 150 million Americans that are considered to be either "poor" or "low income" at this point. Yes, things are great in New York City, Washington D.C. and San Francisco, but almost everywhere else economic conditions continue to steadily get worse. The gap between the wealthy and the poor is at a level that America has never seen before, and this is beginning to create a "Robin Hood mentality" that could cause a tremendous amount of social chaos in the years ahead. Despite unprecedented borrowing by the federal government in recent years, and despite unprecedented money printing by the Federal Reserve, poverty in the United States keeps getting worse with each passing year. The following are 29 incredible facts which prove that poverty in America is absolutely exploding
The average 401(k) and other defined contribution (DC) plan participant now defers over 8% of their annual income toward retirement savings through their plan and social security taxes, making it one of the largest expenses for households. However, as HelloWallet found, retirement readiness remains stubbornly low: the typical worker near retirement only has about 2 years of replacement income saved, or about 15 years short of the median lifespan post-retirement. One explanation for the stubbornly low retirement readiness of workers may be an increase in household debt. With more household income going to pay off debt, households may have less money to save and face higher costs of living in retirement. In fact, over 60% of workers accumulated more debt than they contributed to retirement savings between 2010 and 2011.
For the greater part of human history, leaders who were in a position to exercise power were accountable for their actions. The problem we are faced with today is that our political and (frequently) business leaders are not being held responsible for their actions. Thomas Sowell sums it up well: "It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong." Fortunately, there is an institution that exercises control over the academics at the Fed; it is called the 'real' market economy... and it has badly humbled the professors at the Fed.
As reported previously, the latest meme surrounding the D.C. impasse is that Obama is suddenly willing to compromise on a short-term, supposedly six-week funding and debt ceiling extension, on the verge of his latest talks with republicans at the White House scheduled for this morning, as previously floated by the GOP. Throw some additional headlines such as "Ryan steps up to shape a deal" (in line with what we predicted yesterday) and "The ice breaks; fiscal talks set", by The Hill, and "GOP quietly backing away from Obamacare" from Politico, and one can see why futures are in breakneck soaring mode this morning, driven as usual by the two main JPY cross (USD and AUD), the first of which is less than 100 pips now away from being Stolpered out. So will a compromise deal finally emerge 7 days ahead of the first X-Date, or will a last minute snag once again derail the (non)-negotiations? We will know quite soon.
Earlier this week, we followed up the CBO’s publication of its 2013 Long-Term Budget Outlook with a chart that we believe should have been included. But what would Rick Santelli say? Only Rick would think to mix our debt projections with cheeseburgers and a magnifying glass. Here’s his entertaining "I will gladly pay you Tuesday for a cheeseburger today" take on our chart...
The U.S. Census Bureau announced today that in 2012, real median household income and the poverty rate were not statistically different from the previous year. The 88-page report (found here) contains a plethora of statistical data, slicing and dicing income and poverty data by race, gender, and so on but in order to see through the haze, the following three charts sum it all up perfectly (sadly). The poverty rate in the US is stable at 15% - practically the highest since the mid 1960s and real household incomes are stagnant at 1997 levels. Spot the cyclical recovery...
As opposed to the "pixie dust tout of fairy tales forever" that is trotted out by the herd every day, the fllowing brief look at Taper realities, 'manufactured' numbers unreality, systemic Muni bonds concerns, and of course, political risk provide color for what was described this morning on CNBC as a market bereft of 'bear market theses. As Tartakower once wrote, "The winner of the game is the player who makes the next-to-last mistake;" until then ts all foreplay.
On the eve of the eighth anniversary of Hurricane Katrina the Greater New Orleans Community Data Center, which has been tracking recovery indicators since the early months after the storm, issued a snapshot of post-Katrina statistics... and the results are mixed. From the good (63% of New Orleans students passing vs 30% pre-Katrina); to the bad (rising adult unemployment and child poverty rates); to the ugly (rapidly collapsing population dynamics reflecting a very 'detroit'-like scenario), it seems there is still work to be done...