This week the BLS released its latest "American Time Use Survey" and unlike last year, this time we were not surprised to learn that not only are Americans far more preoccupied with sleeping and watching TV than working, but they have never slept more and worked less in the past decade. Perhaps in addition to obesity, the ongoing deterioration in the fundamentals of the US economy, already crushed by the Fed's central planning capital misallocation, may have something to do with this latest disturbing trend. Just perhaps. As John P. Robinson, a sociology professor at the University of Maryland, correctly observes, "The data defies popular expectations. People say they're too busy for leisure and don't have time to sleep, but that seems not to be the case."
For over 5 years we have been explaining the hole that the fed has been digging (most ironically here). This morning's op-ed by Warsh and Druckenmiller highlights many of the problems but we leave it to Marc Faber to succinctly sum up the dilemma that the Fed faces (and by dilemma we mean, the plan) - "The more they print, the more inequality there is, the weaker the economy will become." Simply put, "it's a catastrophe," Faber told CNBC, "what the Fed has done is to lift asset prices, and the cost of living. In the meantime, the cost of living increases are higher than the wage increases. The typical American household income is going down in real terms." Recovery?
Ever since an über-strong U.S. dollar crushed the export sector in the mid-1980s, the U.S. economy hasn’t looked quite the same. This is not a problem of the past however, as export growth already lags behind every one of the past ten expansions, even the 1980s, thanks to a drop in the first quarter. The chart below shows that exports are no longer distinct from other parts of the economy (nearly all of them) that haven’t measured up to a “normal,” credit-infused, post-World War II business cycle. Together with emerging global risks, it begs the question of whether sagging exports can drag the U.S. into recession.
Spend any time watching business media, and you could not help but notice the extreme amount of optimism about the financial markets. Despite weak economic data and geopolitical intrigue, the complacency and "bullishness" are at extreme levels. Considering that the markets have been primarily advancing on the back of continued flows of liquidity from the Federal Reserve combined with artificially suppressed interest rates; what do you think the impact on the financial markets will be? “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” - Andy Grove
What happens when huge, reckless buyers with nearly endless resources cut back after a phenomenal binge? Well, we know what happened in 2008.
"Balance-sheet wealth is sustainable only when it comes from earned success, not government fiat," is the ugly truth that former Fed governor Kevin Warsh (amazing what truths come out after their terms are up) and hedge fund billionaire Stan Druckenmiller deliver in the following WSJ Op-Ed. The aggregate wealth of U.S. households, including stocks and real-estate holdings, just hit a new high of $81.8 trillion. No wonder most on Wall Street applaud the Fed's unrelenting balance-sheet recovery strategy.The Fed's extraordinary tools are far more potent in goosing balance-sheet wealth than spurring real income growth. Corporate chieftains rationally choose financial engineering - debt-financed share buybacks, for example - over capital investment in property, plants and equipment. The country needs an exit from the 2% growth trap. There are no short-cuts through Fed-engineered balance-sheet wealth creation. The sooner and more predictably the Fed exits its extraordinary monetary accommodation, the sooner businesses can get back to business and labor can get back to work.
- Must be an early winter: Housing Falters as Forecasters See U.S. Sales Dropping (BBG)
- China Property Failures Seen as $33 Billion in Trusts Due (BBG)
- Polish Prime Minister Says Recording Scandal May Trigger Early Election (WSJ)
- Iraqi forces ready push after Obama offers advisers (Reuters)
- Priorities: U.S. cuts aid to Uganda, cancels military exercise over anti-gay law (Reuters)
- Kurds' Takeover of Iraqi City of Kirkuk Strengthens Their Hand (WSJ)
- U.S. says government lab workers possibly exposed to anthrax (Reuters)
- Netflix Up 21% With Tesla: The best U.S. stocks this month are ones that just a few months ago were the biggest losers (BBG)
- Architects of Iraq Invasion Return to Blame Obama (BBG)
- Nato claims Moscow funding anti-fracking groups (FT)
- Lawmakers Skeptical GM Bosses Were Unaware of Defect (WSJ)
- Corinthian Colleges Warns of Possible Shutdown (WSJ)
- Taiwan's Quanta to start mass production of Apple's smartwatch in July (Reuters)
The only thing that can be said about Janet Yellen’s simple-minded paint-by-the-numbers performance yesterday is that the Keynesian apotheosis is complete. American capitalism and all political life, too, is now ruled by a 12-member monetary politburo, which is essentially accountable to no one except its own misbegotten doctrine that prosperity flows from the end of a printing press.
- Currency Probe Widens as U.S. Said to Target Markups (BBG)
- Battle for Iraq refinery as U.S. hesitates to strike (Reuters)
- Ukraine forces battle separatists after truce 'refused' (Reuters)
- Fed Dots Ignored as Investors Focus on Yellen’s Message (BBG)
- Retirees Suffer as $300 Billion 401(k) Rollover Boom Enriches Brokers (BBG)
- American Apparel ousts CEO; source says Dov Charney 'will fight like hell' (LA Times)
- House Panel Is Subpoenaed as Trading Probe Heats Up (WSJ)
- GM Officials Ignored Alert on Car Stalling (WSJ)
- Russia’s $20 Billion Bond Void Filled by China to Mexico (BBG)
The United States Of Debt: Total Debt In America Hits A New Record High Of Nearly 60 Trillion DollarsSubmitted by Tyler Durden on 06/17/2014 21:22 -0400
What would you say if we told you that Americans are nearly 60 trillion dollars in debt? Well, it is true. When you total up all forms of debt including government debt, business debt, mortgage debt and consumer debt, we are 59.4 trillion dollars in debt. 2008 should have been a major wake up call that resulted in massive changes. But instead, our leaders just patched up the old system and reinflated the old bubbles so that they are now even larger than they were before. They assure us that they know exactly what they are doing and that everything will be just fine. Unfortunately, they are dead wrong.
Do you remember the serfs and servants and villeins and peasants in the good old times of feudalism and the Middle Ages? If you don’t, I have good news for you! The custom of working in return of goods instead of salary revives in Greece of modern European Union and of exquisite Euro area. The results of a survey conducted by the Labor Institute of the Confederation of Labor Union (GSEE) are shocking but not unexpected...
The situation in Iraq is serious, and is probably going to get worse before it gets better. The potential for this recent action to morph into a regional conflict is very high. That means that oil could go a lot higher, and if it does, we can expect the odds of a global economic recession and an attendant financial crisis to go up considerably from here. Before we dive into what's actually happening over there right now, we need to begin with a longer and deeper historical context of the region, which is essential to understanding pretty much everything in the Middle East. The western press likes to report on things as if they suddenly occur for no discernible reason, context-free and unconnected to our actions and activities over there. But the story of the Middle East is a story of intense external meddling -- especially by the US, recently.
Fresno police have arrested a 64-year-old man suspected of cooking methamphetamine in his apartment at a retirement community. KFSN-TV reports Robert Short was pulled over as part of a routine traffic stop late Saturday and officers found meth in his car. Investigators then went to Short’s apartment in the California League-Fresno Village, where they found a half pound of meth, heroin and materials for a meth lab.
First the good news. According to the "Sickness Absence" survey of 330 firms, conducted by the EEF, or the UK's manufacturing association, the number of days taken off work through sickness is at a record low. The survey found that over the past two years overall levels of worker absence reached a record low of 2.1%, equal to 4.9 days per worker per year. Now the bad news: while short-term absence is indeed at record low levels, long-term absence has increased, with almost two fifths of companies saying long term absence has increased in the last two years. Among the problems associated with long-term absence: mental health problems. Finally, the hilarious news. Since every organization these days has a clear and present agenda, the EEF being no exception, it was quick to scapegot the increase in long-term absence on what else - the same bogeyman that everyone in Europe now hates, one which despite constant pleas to crush it continues to be perpetually elusive: austerity.
It was the best of times, it was the worst of times. Empire Fed jumped to 19.28, notably better than the 15.00 expectation and reached highs not seen since June 2010, and up from the 19.01 last month. It doesn't get much better than that - even in the V-shaped recovery off the recession lows: if only sentiment surveys were the same as hard data - the US recovery would never be stronger. Alas, despite all this exuberant cycle high-ness - if only in the eyes of beholders, and certainly not in Q1 US GDP of -2.0%, the number of employees index tumbles from 20.88 to 10.75 and worse still the forward-looking index dropped after 3 months of gains. However, the worst news, comes for those who continue to, incorrectly, predict a CapEx renaissance: The capital expenditures index fell for a second consecutive month, dropping to 11.8, and the lowest since February.