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Guest Post: 20 Signs The U.S. Economy Is Heading For Big Trouble In The Months Ahead

Tyler Durden's picture




 

Authored by Michael Snyder at The Economic Collapse blog,

Is the U.S. economy about to experience a major downturn?  Unfortunately, there are a whole bunch of signs that economic activity in the United States is really slowing down right now.  Freight volumes and freight expenditures are way down, consumer confidence has declined sharply, major retail chains all over America are closing hundreds of stores, and the "sequester" threatens to give the American people their first significant opportunity to experience what "austerity" tastes like.  Gas prices are going up rapidly, corporate insiders are dumping massive amounts of stock and there are high profile corporate bankruptcies in the news almost every single day now.  In many ways, what we are going through right now feels very similar to 2008 before the crash happened.  Back then the warning signs of economic trouble were very obvious, but our politicians and the mainstream media insisted that everything was just fine, and the stock market was very much detached from reality.  When the stock market did finally catch up with reality, it happened very, very rapidly.  Sadly, most people do not appear to have learned any lessons from the crisis of 2008.  Americans continue to rack up staggering amounts of debt, and Wall Street is more reckless than ever.  As a society, we seem to have concluded that 2008 was just a temporary malfunction rather than an indication that our entire system was fundamentally flawed.  In the end, we will pay a great price for our overconfidence and our recklessness.

So what will the rest of 2013 bring?

Hopefully the economy will remain stable for as long as possible, but right now things do not look particularly promising.

The following are 20 signs that the U.S. economy is heading for big trouble in the months ahead...

#1 Freight shipment volumes have hit their lowest level in two years, and freight expenditures have gone negative for the first time since the last recession.

#2 The average price of a gallon of gasoline has risen by more than 50 cents over the past two months.  This is making things tougher on our economy, because nearly every form of economic activity involves moving people or goods around.

#3 Reader's Digest, once one of the most popular magazines in the world, has filed for bankruptcy.

#4 Atlantic City's newest casino, Revel, has just filed for bankruptcy.  It had been hoped that Revel would help lead a turnaround for Atlantic City.

#5 A state-appointed review board has determined that there is "no satisfactory plan" to solve Detroit's financial emergency, and many believe that bankruptcy is imminent.  If Detroit does declare bankruptcy, it will be the largest municipal bankruptcy in U.S. history.

#6 David Gallagher, the CEO of Town Sports International, recently said that his company is struggling right now because consumers simply do not have as much disposable income anymore...

"As we moved into January membership trends were tracking to expectations in the first half of the month, but fell off track and did not meet our expectations in the second half of the month. We believe the driver of this was the rapid decline in consumer sentiment that has been reported and is connected to the reduction in net pay consumers earn given the changes in tax rates that went into effect in January."

#7 According to the Conference Board, consumer confidence in the U.S. has hit its lowest level in more than a year.

#8 Sales of the Apple iPhone have been slower than projected, and as a result Chinese manufacturing giant FoxConn has instituted a hiring freeze.  The following is from a CNET report that was posted on Wednesday...

The Financial Times noted that it was the first time since a 2009 downturn that the company opted to halt hiring in all of its facilities across the country. The publication talked to multiple recruiters.

The actions taken by Foxconn fuel the concern over the perceived weakened demand for the iPhone 5 and slumping sentiment around Apple in general, with production activity a leading indicator of interest in the product.

#9 In 2012, global cell phone sales posted their first decline since the end of the last recession.

#10 We appear to be in the midst of a "retail apocalypse".  It is being projected that Sears, J.C. Penney, Best Buy and RadioShack will also close hundreds of stores by the end of 2013.

#11 An internal memo authored by a Wal-Mart executive that was recently leaked to the press said that February sales were a "total disaster" and that the beginning of February was the "worst start to a month I have seen in my ~7 years with the company."

#12 If Congress does not do anything and "sequestration" goes into effect on March 1st, the Pentagon says that approximately 800,000 civilian employees will be facing mandatory furloughs.

#13 Barack Obama is admitting that the "sequester" could have a crippling impact on the U.S. economy.  The following is from a recent CNBC article...

Obama cautioned that if the $85 billion in immediate cuts -- known as the sequester -- occur, the full range of government would feel the effects. Among those he listed: furloughed FBI agents, reductions in spending for communities to pay police and fire personnel and teachers, and decreased ability to respond to threats around the world.

He said the consequences would be felt across the economy.

"People will lose their jobs," he said. "The unemployment rate might tick up again."

#14 If the "sequester" is allowed to go into effect, the CBO is projecting that it will cause U.S. GDP growth to go down by at least 0.6 percent and that it will "reduce job growth by 750,000 jobs".

#15 According to a recent Gallup survey, 65 percent of all Americans believe that 2013 will be a year of "economic difficulty", and 50 percent of all Americans believe that the "best days" of America are now in the past.

#16 U.S. GDP actually contracted at an annual rate of 0.1 percent during the fourth quarter of 2012.  This was the first GDP contraction that the official numbers have shown in more than three years.

#17 For the entire year of 2012, U.S. GDP growth was only about 1.5 percent.  According to Art Cashin, every time GDP growth has fallen this low for an entire year, the U.S. economy has always ended up going into a recession.

#18 The global economy overall is really starting to slow down...

The world's richest countries saw their economies contract for the first time in almost four years during the final three months of 2012, the Organisation for Economic Co-operation and Development said.

The Paris-based thinktank said gross domestic product across its 34 member states fell by 0.2% – breaking a period of rising activity stretching back to a 2.3% slump in output in the first quarter of 2009.

All the major economies of the OECD – the US, Japan, Germany, France, Italy and the UK – have already reported falls in output at the end of 2012, with the thinktank noting that the steepest declines had been seen in the European Union, where GDP fell by 0.5%. Canada is the only member of the G7 currently on course to register an increase in national output.

#19 Corporate insiders are dumping enormous amounts of stock right now.  Do they know something that we don't?

#20 Even some of the biggest names on Wall Street are warning that we are heading for an economic collapse.  For example, Seth Klarman, one of the most respected investors on Wall Street, said in his year-end letter that the collapse of the U.S. financial system could happen at any time...

"Investing today may well be harder than it has been at any time in our three decades of existence," writes Seth Klarman in his year-end letter. The Fed's "relentless interventions and manipulations" have left few purchase targets for Baupost, he laments. "(The) underpinnings of our economy and financial system are so precarious that the un-abating risks of collapse dwarf all other factors."

So what do you think is going to happen to the U.S. economy in the months ahead?

 

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Mon, 02/25/2013 - 19:21 | 3275656 TruthInSunshine
TruthInSunshine's picture

A Beautiful Deleveraging in reality = indebted, broke ass debt serfs buying what they need, not want, in increasingly smaller quantities, all over the world.

Welcome to The Bernank's "Virtuous Circle" monetary policy catching up to reality, where the lag is great & the closing of the gap will be tremendous.

Mon, 02/25/2013 - 19:21 | 3275668 LawsofPhysics
LawsofPhysics's picture

Bingo.  Long sharcropping and all physical assets of real value.

Mon, 02/25/2013 - 21:23 | 3276070 Zap Powerz
Zap Powerz's picture

Um, Whatev.

Like, did you guys see Jackie Obama last night at the Oscars! Like O. M. G.!!!!!!

She is so cool and amazing! I loved her dress. She is like, a totally classy woman and stuff!

 

 

^^^

That is what the VAST majority of Americans are thinking about right now.  Not the debt Tsunami that will crush our economy and destroy their way of life.

Mon, 02/25/2013 - 22:09 | 3276216 Antifaschistische
Antifaschistische's picture

no debt tsunami...  :)

My favorite is the MSM (White House PR Machine) is running news stories non stop on how the sequester will result in the total shut down of all meat processing plants in the US, which will not only result in widespread terminations in the meat processing/packing plants, but will also remove chicken from the tables of America.

And...that lines at airports will be as much as 3 hours long with a 10% layoff of TSA agents.  (this one I don't get since at least 70% just stand around doing nothing anyway - a 10% reduction would mean...now only 60% of them stand around doing nothing)

If the meat processing story is true...and all USDA inspectors will be furloughed, then it's obviously political sabotage to beat the American people into submission and agreement to burn another trillion on the US Credit Card.

I'll turn into a vegetarian before I'd agree to another cent of borrowing. 

Mon, 02/25/2013 - 22:35 | 3276295 TuesdayBen
TuesdayBen's picture

MSM trying to scare sheeple into believing shrinking Gubmint just a tiny bit yields catastrophe

Mon, 02/25/2013 - 23:13 | 3276422 Stuck on Zero
Stuck on Zero's picture

If the "sequester" is allowed to go into effect, the CBO is projecting that it will cause U.S. GDP growth to go down by at least 0.6 percent and that it will "reduce job growth by 750,000 jobs".

 

If that's the case then why did Congress vote for it?  Also, if cutting spending costs jobs then if we increase spending we'll have many more jobs.  Nothing but complete BS from the government.

 

 

 

Tue, 02/26/2013 - 08:28 | 3276996 kralizec
kralizec's picture

#13 & #14 are bullshit, who the hell put that crap in there?

$85b less spent than the asshats want and its all doom and gloom?

Anybody dumb enough to believe these jackasses will ever seriously CUT anything raise your hand, someone will be there shortly to kick your ass!

Tue, 02/26/2013 - 02:19 | 3276741 U4 eee aaa
U4 eee aaa's picture

Let them eat horse!

Tue, 02/26/2013 - 03:37 | 3276792 Totentänzerlied
Totentänzerlied's picture

They are entirely justified in their assumption that none of the sheeple will stop and think "maybe the government shouldn't be involved in airport security and meat packing in the first place". The USDA's job is make sure government-approved toxins and poisons get on your table and in your body. Fuck 'em.

Mon, 02/25/2013 - 22:43 | 3276319 DoChenRollingBearing
DoChenRollingBearing's picture

@ Zap Powerz

Sadly, you are right.  I understand why ZH is so bearish tonight.

Mon, 02/25/2013 - 23:06 | 3276398 Go Tribe
Go Tribe's picture

That was Jackie Obama? I thought it was Shaq in a dress.

Mon, 02/25/2013 - 23:15 | 3276429 Mr Pink
Mr Pink's picture

I thought they were giving Chewbacca a lifetime achievement award

Tue, 02/26/2013 - 02:33 | 3276744 Midas
Midas's picture

First Wookie

Mon, 02/25/2013 - 22:46 | 3276332 DoChenRollingBearing
DoChenRollingBearing's picture

@ LawsofPhysics

+ 1

I know a guy in the rural SE who sharecrops out some of his land.  I agree with you, but you do need to have an enforcement mechanism (either the local .gov or be armed...) to make sharecropping stable should things get rough.

I completely agree with you re being long "assets of real value."

Mon, 02/25/2013 - 19:37 | 3275740 algol_dog
algol_dog's picture

Just a minute TIS - What about German business confidence?  Hmm?

Mon, 02/25/2013 - 19:38 | 3275741 blindfaith
blindfaith's picture

yes, and they will be very happy to hear on their bought and paid for trolls in the main street media the the government says that inflation is .....ZERO.  I want to move there, this ZERO inflation place....don't you?

Mon, 02/25/2013 - 19:21 | 3275659 LawsofPhysics
LawsofPhysics's picture

"#2 The average price of a gallon of gasoline has risen by more than 50 cents over the past two months.  This is making things tougher on our economy, because nearly every form of economic activity involves moving people or goods around."

---------------------------------

Sorry, I view this as a positive as I would happily welcome sharecroppers and my farming co-op would do fine if we didn't have to move things as far.  Fuck it, I'll feed and work with my neighbors.  All you crowded new-age city folk can fuck off.

Mon, 02/25/2013 - 19:27 | 3275699 Shell Game
Shell Game's picture

+1

Mon, 02/25/2013 - 19:36 | 3275737 RebelDevil
RebelDevil's picture

Cheap Energy is always the basis for excellent economic growth (as in the Industrial Revolution).

Expensive Energy = Trouble.

Mon, 02/25/2013 - 19:48 | 3275772 Shell Game
Shell Game's picture

In the case of the U.S.-Bubble-A., 'artificailly' cheap energy, due to the exorbitant privelage of reserve currency status, and world MIC, led not to excellent economic growth, but massively unsustainable economic growth and the explosion of criminality in the power elite.  Fuck cheap energy, I'll take moderately affordable energy and honest money. Fuck the unholy 'growth' mantra...

Mon, 02/25/2013 - 20:24 | 3275872 dick cheneys ghost
dick cheneys ghost's picture

best comment I've read in sometime...................

Mon, 02/25/2013 - 22:52 | 3276336 DoChenRollingBearing
DoChenRollingBearing's picture

Indeed, Shell Game and "dick cheneys ghost", very perceptive.

Mon, 02/25/2013 - 22:39 | 3276303 Never One Roach
Never One Roach's picture

My sister is in Korea...says gas there over $8 a gallon. We got it good here as the above post states. Articial, yes.

Mon, 02/25/2013 - 22:52 | 3276350 DoChenRollingBearing
DoChenRollingBearing's picture

The distances are less in South Korea, 6 hours takes you across the whole country any direction.  Their country is more geared to serious manufacturing, transport costs for their products (to port) are not as high as in larger countries.  In our case, almost nothing for bearings from the plant to Busan.

France, for example, is as large as TEXAS, transport costs (with a similar $8.00 or so for gasoline) will hurt them more than Korea.

Nice info re Korea, a country I am always interested in, thanks.  + 1

Tue, 02/26/2013 - 05:08 | 3276849 dubbleoj
dubbleoj's picture

Korea is gorging itself on full-priced samsung products and gucci belts, waistlines are expanding in tandem. Debt consumption is rising so fast that credit card spending is no longer allowed to be deducted from tax forms starting this year as it has been in the recent past. Dont wait up, we're catching up to you guys quick. 

Mon, 02/25/2013 - 19:49 | 3275773 OldE_Ant
OldE_Ant's picture

chuckle.  You forgot the increase in SSI taxes as well as gas prices.  I just saw $4gas again in my area.

But hey we can cover it with the gains in the market for the year.  Oh yeah that's gone as of today as well.

All with the USD going up, oil NG down.  Who'd have thunk.

Ah the benefits of a centrally planned economy.

I'm going long on Bens schlong because he must be getting real hard right now.

85B - fuck this double it bitches to 170 and toss an extra 85B to the US govt for a year of sequestration for a cool 245B - god damn we are going to have to order some extra ink and paper for the printers that's a lot of hundreds.

Mon, 02/25/2013 - 20:26 | 3275878 markitect
markitect's picture

I filled up a zip car in Downtown Chicago Last week $4.40 gal.  Gas is paid for in the hourly zip car rate but they have to be losing their ass.  I dont see how $9 / hr covers it all.

Mon, 02/25/2013 - 22:48 | 3276335 cbaba
cbaba's picture

Its all big Ponzi .

You don't see the scam here, most of the business is not profitable at all, the super cheap credit available from Fed and banking cartel with leverage ratio of 10  makes banks lend anybody investing very big, billion or more, these are not need to be profitable. The main scam here is to go and open the company to the public and sell shares at any arbitrary price, this is the moment they make money and they make their  biggest buck here, if you look at their balance sheets they have some profit but also they have lots of debt..

Wait few years for interest rates to rise, you will not believe what you see, the most famous companies will go bankrupt within months....

 

Tue, 02/26/2013 - 05:14 | 3276855 Poor Grogman
Poor Grogman's picture

Airlines...

Mon, 02/25/2013 - 20:05 | 3275819 1100-TACTICAL-12
1100-TACTICAL-12's picture

The city and the burbs will definitely not be the place to be. A couple of turnips and a pork chop will give ya a go at some yuppie's fake boobed trophy wife.

Mon, 02/25/2013 - 20:24 | 3275871 22winmag
22winmag's picture

If that's the case, I'm going twice in exchange for a can of beef stew. I have cases stacked to the roof so I'm gonna have to stay in shape.

Mon, 02/25/2013 - 21:44 | 3276132 ncdirtdigger
ncdirtdigger's picture

Go long viagra

Mon, 02/25/2013 - 22:41 | 3276311 Never One Roach
Never One Roach's picture

All those "cheap" zero-down houses built by the millions in the burbs don't look so cheap now. Sometime speople learn.

 

Sumtimes they don't.

Mon, 02/25/2013 - 19:21 | 3275662 TeMpTeK
TeMpTeK's picture

The 200+ pnt correction test run is over... Onward!

Mon, 02/25/2013 - 20:26 | 3275879 max2205
max2205's picture

Ben will see saw bonds and stocks till you beg to get off the ride.  He needs the ten year below 1.8% and will wack stocks but keep an uptrend till he exits

Mon, 02/25/2013 - 19:21 | 3275665 BKbroiler
BKbroiler's picture

#21 - Bunga Bunga collateral damage

Mon, 02/25/2013 - 19:25 | 3275670 tawdzilla
tawdzilla's picture

The epitome of the wealth effect 

Mon, 02/25/2013 - 19:22 | 3275672 Tijuana Donkey Show
Tijuana Donkey Show's picture

American spring bitchez! The plan was to get everyone amped out, buy guns, and then kill each other! Why round everyone up, when they can just all kill each other? I'm gonna mount a 50 Cal on my Rascal, and riot as long as the battery holds out. 

Mon, 02/25/2013 - 21:09 | 3276032 gaoptimize
gaoptimize's picture

That is an expensive kill.  Beter keep moving near the trees.

Mon, 02/25/2013 - 23:09 | 3276408 PeterSchump
PeterSchump's picture

Try to buy any ammo lately? I can't get enough to shoot myself, never mind my fellow citizens. Keep trying. Something else is brewing.

Mon, 02/25/2013 - 19:23 | 3275673 dick cheneys ghost
dick cheneys ghost's picture

21) Jim Cramer is a douchebag

Mon, 02/25/2013 - 20:17 | 3275849 azzhatter
azzhatter's picture

with apologies to douchebags worldwide

Mon, 02/25/2013 - 19:23 | 3275675 Iriestx
Iriestx's picture

Reader's Digest has gone bankrupt like 11 times in 5 years.  This is a sign that print is dead, not that the US economy is in the toilet.

Mon, 02/25/2013 - 20:08 | 3275827 mr. mirbach
mr. mirbach's picture

Clissic Blue Hair Scare - Readers Digest is bankrupting! Better buy some Gold!

Mon, 02/25/2013 - 19:23 | 3275676 francis_sawyer
francis_sawyer's picture

#21... Cramer is wildly bullish!

Mon, 02/25/2013 - 19:25 | 3275682 nobusiness
nobusiness's picture

Sequestration is not an issue.  The federal government will spend more next year and the rest of this year than it did last year not less.  Infact with sequestration the national debt will go up yes up 7 trillion over the next 10 years.

 

all it does is reduce the increase in spending.  to call it austerity is stupid.

 

 

Mon, 02/25/2013 - 19:46 | 3275763 McMolotov
McMolotov's picture

Whatever, dude. Did you hear they're increasing chocolate rations?! Let's celebrate the good news with some Victory Gin.

Mon, 02/25/2013 - 22:21 | 3276255 eclectic syncretist
eclectic syncretist's picture

Proles aren't allowed to drink gin, just shitty beer in dirty glasses.

Mon, 02/25/2013 - 19:57 | 3275781 HungryPorkChop
HungryPorkChop's picture

I think the new model is Small Business can F'ng Die as long as I can continue to bail out the banks..  What is the definition of that type of economic system?

Mon, 02/25/2013 - 20:02 | 3275809 McMolotov
McMolotov's picture

The kind that ends with dead bankers.

Mon, 02/25/2013 - 22:49 | 3276342 Kprime
Kprime's picture

I believe they call it France or French, yah one of the two or both.

Mon, 02/25/2013 - 19:25 | 3275683 deerhunter
deerhunter's picture

Did I really hear that there are 1 million,,,, yes,  1 million  civilian Pentagon employees?  Is that even possible?  

Mon, 02/25/2013 - 19:26 | 3275690 dick cheneys ghost
dick cheneys ghost's picture

sickening aint it?

Mon, 02/25/2013 - 19:30 | 3275716 Shizzmoney
Shizzmoney's picture

In this sense, I hope the sequestration happens.  Fire 'em all....most of 'em are probably hired to spy on us, anyways.

Mon, 02/25/2013 - 19:35 | 3275732 Shell Game
Shell Game's picture

Fucking shut down that Utah Data Center. Fucking control freaks..

Mon, 02/25/2013 - 20:52 | 3275986 EmmittFitzhume
EmmittFitzhume's picture

They won't fire the spys

Mon, 02/25/2013 - 21:07 | 3276025 krispkritter
krispkritter's picture

Then it's up to us to 'fire' them...

Tue, 02/26/2013 - 03:42 | 3276795 Totentänzerlied
Totentänzerlied's picture

Exactly. The cops and soldiers are the very last ones to stop getting paid. And when they do, it's well and truly over.

Mon, 02/25/2013 - 19:28 | 3275702 ejmoosa
ejmoosa's picture

The government is not here for us.  We are here for the government.  We have millions employed for the support and defense of 1 POTUS, 1 VPOTUS, 100 Senators, 435 Congressmen and 9 Supreme Court Justices.  The rest of us are either members of support, or the peasants who are paying the taxes.  

Mon, 02/25/2013 - 19:51 | 3275782 John Law Lives
John Law Lives's picture

Let some overpaid bureaucrats take a pay cut.  I view that as a positive development.

Mon, 02/25/2013 - 21:57 | 3276174 yogibear
yogibear's picture

How many ghost payrollers? The Pentagon has so much waste.

Tue, 02/26/2013 - 09:56 | 3277219 esum
esum's picture

after nam i got a brief stint at the national military command center in the pentagon. i had no desire for a mil career and what i saw was like a comedy show. melvin laird would come in with an immense entourage to WATCH THE WAR ON A BIG SCREEN in a conference room that would hold hundreds. I often thought why doesn't the useless fuck get on a plane and go see it up close and personal, the smells and the noise and the blood and the guts. the 1 stars licking the balls of the 2 stars smelling the ass of the 3 stars blowing the 4 star... visualize a general carrying a tray of coffee like a waiter to get brownie points.

wash dc is a sinkhole/cesspool that produces nada. you could remove 50% of it and not notice any change except in gtown and amongst the lobbyists and the masserati dealership (ferrari and bugatti also). just how can anyone expect that a community organizer, commie, disbarred lawyer, asst professor can have a clue? actually his goal was to wreck america and he is succeeding... are obamaphones in the cuts... are 40 million dollar vacations, designer dresses and ss for the kids and valerie.... how about golf with tiger...

Mon, 02/25/2013 - 22:40 | 3276309 RockyRacoon
RockyRacoon's picture

... 1 million  civilian Pentagon employees?

Have you seen the size of that building?  It takes a lot of folks mopping hallways, dusting stuff, washing windows, and changing toilet paper rolls.

 

Mon, 02/25/2013 - 19:25 | 3275686 ejmoosa
ejmoosa's picture

#21 US corporate profit growth for the last four quarters has fallen to below 7 % and shows no sign of turning around and accelerating.

Mon, 02/25/2013 - 22:39 | 3276305 espirit
espirit's picture

US corporations quit investing in Amerika a long time ago.

So why should the Proles?

Tue, 02/26/2013 - 13:35 | 3278180 peter4805
peter4805's picture

It's not all bad news. Americans everywhere will be breathing a sigh of relief when they hear the drone fleet keeping the country safe from terrorist threats will not be subjected to cutbacks. In fact the citizenry will be delighted to learn the size of the fleet will be substantially increased!

Mon, 02/25/2013 - 19:28 | 3275703 JustObserving
JustObserving's picture

The Fed is already insolvent:

 

The Fed owns $2.844 billion of long-term debt securities.  It also has $253 billion of other assets for which is does not disclose a detailed breakdown, but there is probably not much liquidity to them.  But let's focus just on the securities.

 

The price of these securities have declined about 2.5% since their high prices and low yields were reached in June.  But let's use a smaller percent price drop because the Fed has been purchasing long-term debt for a while, meaning that some of their paper has higher yields.  This is also a conservative approach to take. 

 

So instead of a 2.5% decline, let's assume the average price of the long-term paper owned by the Fed has declined by just 2% since June.  Because of the intense leverage that the Federal Reserve employs, this means the mark-down on its $2.844 trillion of securities is, in reality, a staggering $57 billion loss, which is actually greater than the Federal Reserve's $55 billion equity.  Because the loss on the Federal Reserve’s securities is already greater than its equity, this means that the Fed is already technically insolvent.

 

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/25_Ja...

 

Mon, 02/25/2013 - 19:30 | 3275709 Iriestx
Iriestx's picture

You can't be insolvent as long as you have ink for the printers.

Mon, 02/25/2013 - 19:35 | 3275734 Winston Churchill
Winston Churchill's picture

The FedRes is indeed bankrupt.But whilst it can create money from thin air

to pay its debts as they fall due,it is not insolvent.

A distinction with a big difference,in the current circumstances.

Mon, 02/25/2013 - 21:03 | 3276019 hamstercheese
hamstercheese's picture

It is not insolvent so long as the human race ubiquitously accepts its funny money as currency.  It, and use your imagination to think of who else, will become bankrupt when that currency is no longer wanted as a medium of exchange, a store of value or a unit of accounting.  Any one of those public trusts fails, bye bye Fed.  But those who run this monster know this, and they'll have another currency waiting in the wings to take it's place.  US Dollar B.

Mon, 02/25/2013 - 22:01 | 3276183 yogibear
yogibear's picture

Their pobably laughing about countries still accepting the US dollar.

Mon, 02/25/2013 - 19:29 | 3275707 Seasmoke
Seasmoke's picture

#21 How do the Yankees plan on selling any of those $1000 club box seats. That Place is going to be scary.

Mon, 02/25/2013 - 19:34 | 3275726 kaiserhoff
kaiserhoff's picture

I'd rather wander over to the park and watch a Little League game.  You can bunt, steal, hit and run...

The players are smarter, and now and then, they pay attention to the coaches.

Mon, 02/25/2013 - 19:35 | 3275731 caimen garou
caimen garou's picture

don't worry ben will make it look like those seats were bought and put cardboard cut outs sitting in them, sheep wont know the difference!

Mon, 02/25/2013 - 21:21 | 3276063 cynicalskeptic
cynicalskeptic's picture

Corporate $$$$ - you don't think actiual people are buying them, so you?     Even if individuals could buy them they don't - better to have work buy it so you can write off the cost.

The New Nomeklatura live in their own bubble/

Mon, 02/25/2013 - 19:30 | 3275715 mikmid
mikmid's picture

When currency, stock markets, interest rates, bonds, economic indicators, commodities and the truth are so managed (manipulated) by our government and wall street for the benefit of themselves I think it is a given that a crash is coming. We just do not know when.

Mon, 02/25/2013 - 21:41 | 3276119 Kirk2NCC1701
Kirk2NCC1701's picture

Just like in the pre-1989 DDR (Deutsche Demokratische Republik), i.e. former East Germany. They cooked the books, and controlled all banking and media. 

/Dissent from party line ended your career as fast as an anti-____ comment in the US today.  Otherwise the two (countries) were nothing alike.  /sarc

Mon, 02/25/2013 - 19:30 | 3275717 kaiserhoff
kaiserhoff's picture

Barack Obama, who he be? 

Oh, that's the Dude who has been AWOL on the economy for four years now.  Wut he know?

Mon, 02/25/2013 - 20:28 | 3275891 Bad Attitude
Bad Attitude's picture

Forward!

Hope and Change!

(Repeat until you believe.)

Mon, 02/25/2013 - 22:46 | 3276330 BigDuke6
BigDuke6's picture

A ZH conference in Vegas is the answer!

And totally tax deductable i'm sure.

People could walk around with name badges - with live fights, talks on gold and gun stalls for the preppers.

Mon, 02/25/2013 - 23:46 | 3276506 Mr Pink
Mr Pink's picture

Yeah.....let's get all of us ZH'ers in one place....I'd rather fill my swimtrunks with chum and float around on an intertube off of Seal Island...that way I have a chance to survive the weekend

Mon, 02/25/2013 - 19:30 | 3275718 caimen garou
caimen garou's picture

yes we can! sure

Mon, 02/25/2013 - 21:46 | 3276142 logicalman
logicalman's picture

Yes we IN the can.

Fixed it

Mon, 02/25/2013 - 19:32 | 3275721 Shizzmoney
Shizzmoney's picture

# 22) Personal Yearly and Weekly Incomes for 80% of us, suck balls (how does this guy NOT mention this?).

Mon, 02/25/2013 - 19:33 | 3275722 Tango in the Blight
Tango in the Blight's picture

Uncle Ben will just print moar $$$. This can go on for a long time.

Move along, nothing to see..

 

Mon, 02/25/2013 - 19:34 | 3275725 steve from virginia
steve from virginia's picture

 

 

Physical fuel shortages within 2 years, people cannot afford the 'New High-Priced' fracked nonsense that spammers and Ponzi-promoters are endlessly masturbating about.

 

These shortages will be permanent, by the way.

 

Right now there is a rolling 'mini-shortage' that appears currently as high prices in California and the Northeast. As the shortage rolls around the country, prices in different areas will rise dramatically and fall just as dramatically ... then fade out only to rise and fall elsewhere.

 

 

Mon, 02/25/2013 - 22:42 | 3276314 espirit
espirit's picture

I'll take mine as a "cocktail".

Tue, 02/26/2013 - 03:46 | 3276799 Totentänzerlied
Totentänzerlied's picture

Nah we got that fleet of 300,000,000 fully electric cars lying around here somewhere... we just misplaced it, I'm sure it'll turn up and then won't you feel silly!

Mon, 02/25/2013 - 19:36 | 3275738 booboo
booboo's picture

22. Wedding magazine is touting flour sack dresses as the new rage.

23. Women are signing up in droves at the Y.M.C.A. for Darning classes.

24. Warran Buffet was seen on a railroad hand cart pumping his way back to D.C. from Omaha.

 

Mon, 02/25/2013 - 19:36 | 3275739 OldE_Ant
OldE_Ant's picture

I love the smell of austerity in the morning.

Mon, 02/25/2013 - 19:41 | 3275748 Meat Hammer
Meat Hammer's picture

Quitting job, cashing out 401K, buying PMs, planting garden, stocking up on lead, popping popcorn, setting up chair on balcony, lighting cigar, watching smoke rise from the ghetto, getting into bed, watching bankers on tv fall out of windows of tall buildings, sleeping like baby.

 

Mon, 02/25/2013 - 20:26 | 3275876 moonstears
moonstears's picture

"stocking up on lead," better get on that one soon, meat, 'cause "lead" is tough to find!

Mon, 02/25/2013 - 20:31 | 3275900 Meat Hammer
Meat Hammer's picture

How true.  I should've said "feebly continuing to try and stock up on lead".  

Tue, 02/26/2013 - 00:13 | 3276564 Kirk2NCC1701
Kirk2NCC1701's picture

Well, maybe in a convenient form-factor and bundling.  But if you have the time and handy skills and right gear, you can still get it.  "Buy the pound" (deliberate play on words), and do a DIY on the rest -- Mr. 'Smith'.

Mon, 02/25/2013 - 22:05 | 3276194 yogibear
yogibear's picture

Half the people in Detroit don't even pay property taxes anymore. Plenty of banksters in NYC to use to perform gravity test with.

Mon, 02/25/2013 - 22:31 | 3276279 WmMcK
WmMcK's picture

+1 - Congrats! Big steps in the right direction.

Tue, 02/26/2013 - 09:20 | 3277113 Shizzmoney
Shizzmoney's picture

Jealous

Mon, 02/25/2013 - 19:46 | 3275762 PeeramidIdeologies
PeeramidIdeologies's picture

Here comes your biflation folks...
I was in a large sporting goods store pricng a new rig for the winter. Noticing some half bare shelves, I inquired about discounts. The floor clerk starting knocking off double digit % right away. Sensing a little blood in the water I starting checking out some of the high end stuff, the more I asked the cheaper things got. The guy was not letting me out of the store. I almost felt bad about the price we ended up with.... But I guess thems the breaks...

Bye bye retail sales....

Mon, 02/25/2013 - 20:48 | 3275974 RobertC
RobertC's picture

...don't worry; the store still made a profit...

Mon, 02/25/2013 - 21:07 | 3276024 PeeramidIdeologies
PeeramidIdeologies's picture

I'm not against them making a profit, but the increased bargaining power is a real plus. I would even challenge people to try it out for themselves.You might be surprised at the willingness to barter out there. Unfortunately Internet shopping is removing this tool from the consumer...

Mon, 02/25/2013 - 21:54 | 3276166 Oldrepublic
Oldrepublic's picture

Bargain like I used to do in the Middle East, offer half the price, and start walking out the door!

Mon, 02/25/2013 - 22:25 | 3276264 PeeramidIdeologies
PeeramidIdeologies's picture

Ah yes, True price discovery! Real economics at play!... Could the natural laws of commerce be showing through?
Na that's too much to hope for...

Mon, 02/25/2013 - 19:46 | 3275765 DeadFinks
DeadFinks's picture

Must. not. have. 2 consecutive quarterly negative GDP prints. The 0 administration will lie, beg, lie,steal and lie to avoid this.

Mon, 02/25/2013 - 19:48 | 3275771 miker
miker's picture

We have a mickey mouse economy.  Maybe it's a chicken shit economy; not sure.  At any rate, there is all manner of worthless, near worthless endeavors.  Ironically, some pay huge amounts of money to said workers. 

The stuff that is important is way underpaid; teaching....I mean really teaching.  Cops on the street.  Want that job?

Meanwhile educatd douchebags rake in millions because they can, have no sense of morality and the system is rigged.

As I've said before, it is all not going to end well.  Rich and poor alike will pay the price.  Unless you're rich enough to fly the coop!

Mon, 02/25/2013 - 20:04 | 3275813 TraderTimm
TraderTimm's picture

An "orderly" peso devaluation was advocated by the Mexico's new finance minister during the summer of 1994, but ex-President Salinas reportedly wanted to be one of the few recent Mexican presidents to leave office without a massive devaluation. When the government that took office on December 1, announced its economic plans, local and foreign investors saw that the $30 billion trade deficit would not be reduced in 1995. With the Mexican Central Bank running out of reserves to support the peso, they bet that Mexico would have to de-value its currency, which it did.

Just take the above and replace "Mexico" with "United States" and "peso" with "dollar". I'm sure the speech telling us that this is totally normal and will solve all our problems will be masterfully written. If they go the extra mile they'll say that there is no devaluation taking place - while doing it the next day.

 

Mon, 02/25/2013 - 22:37 | 3276300 css1971
css1971's picture

Petrodollar.

Mon, 02/25/2013 - 20:11 | 3275839 stiler
stiler's picture

hey, chicken shit is THE best manure in THE world.  ;-)

Mon, 02/25/2013 - 20:23 | 3275868 blue
blue's picture

Victory Garden, other than that I have no idea...ciao

Mon, 02/25/2013 - 20:27 | 3275884 Meat Hammer
Meat Hammer's picture

I'm looking forward to plummeting home values in the DC/Northern Virginia area.  

Mon, 02/25/2013 - 20:30 | 3275899 22winmag
22winmag's picture

"Barack Obama is *admitting* that the "sequester" could have a crippling impact on the U.S. economy."

 

Are you shitting me? He isn't admitting anything. He is scaring old ladies and mental incompetents into voting for him for a third term.

Mon, 02/25/2013 - 22:03 | 3276191 Ropingdown
Ropingdown's picture

Agree, and I'm disgusted.  All Obama has to do is proprose reprogramming budgets within departments and the cuts will be useful rather than random.  Congress would agree, I assume.  I'm so sick of the absolute BS I could scream.  Oh, what the hell, I'll post this and then scream.

Mon, 02/25/2013 - 23:16 | 3276431 PeterSchump
PeterSchump's picture

He doesn't need old ladies or mental incompetents. He has everyone else.

Mon, 02/25/2013 - 23:15 | 3276432 PeterSchump
PeterSchump's picture

He doesn't need old ladies or mental incompetents. He has everyone else.

Mon, 02/25/2013 - 23:22 | 3276454 PeterSchump
PeterSchump's picture

He doesn't need old ladies or mental incompetents. He has everyone else.

Tue, 02/26/2013 - 00:24 | 3276591 Kirk2NCC1701
Kirk2NCC1701's picture

Is he pulling a Kerry?  He was for it before he was against it?  My grandma may have been right:  "Politics is the whore of the world.

With all due respect, Grandma, I beg to differ:  My apologies to whores for their lack of hypocrisy in providing the same Quid Pro Quo service as politicians.

Mon, 02/25/2013 - 20:34 | 3275916 Son of Loki
Son of Loki's picture

Empty malls and surely not a good sign.

Mon, 02/25/2013 - 20:54 | 3275994 PeeramidIdeologies
PeeramidIdeologies's picture

Skeletons everywhere. I'm surprised you don't hear more about commercial real estate, it has to be in ugly shape these days.

Mon, 02/25/2013 - 23:55 | 3276525 Northern Lights
Northern Lights's picture

I'm seeing a lot of dead malls these days.  Some where there's only 40% tenancy and the main tenants are usually the big box kinds.

Mon, 02/25/2013 - 20:36 | 3275921 Tombstone
Tombstone's picture

20 reasons why socialism works every time.  Benny's gonna have to really step on the gas.  Sell stocks, buy gold/silver.  What might really happen is the markets continue to ignore reality and move much, much higher, sucking in every last fake dollar before going BOOM.

Mon, 02/25/2013 - 20:36 | 3275926 kito
kito's picture

some valid points, some ridiculous.....the big box stores are closing because of INTERNET SALES.............readers digest has also succumbed to the internet.....mostly an older readership that hasnt taken to reading online..................

Tue, 02/26/2013 - 00:19 | 3276574 TNTARG
TNTARG's picture

I knew it wouldn't take long before we started eating ourselves. How much now until we wake up with Human Spongiform Ence-phalopathy, HSE? Some notorious men are showing symptoms.

Mon, 02/25/2013 - 20:54 | 3275954 Getting Old Sucks
Getting Old Sucks's picture

Delete

Mon, 02/25/2013 - 21:02 | 3276015 wisehiney
wisehiney's picture

No problem. I'll just move on up to New York and get me some of them "Pet Food Stamps".

Mon, 02/25/2013 - 21:09 | 3276031 HurricaneSeason
HurricaneSeason's picture

I see the sequester as accomplishing very little, which means increasing the debt ceiling another $2 trillion and increasing the annual debt interest by 13% or $39 Billion along with $60 billion for Hurricane Sandy and the sequester accomplished nothing. Collecting full social security taxes and a little more tax revenue on the rich guys and we're still over $1 trillion a year in the red.  The Bernank is going to choke. He can't keep writing bad checks (not printing), if he expects to get paid back in full for the money he loaned, that he never had. That's the limiting factor. Can he $10 Trillion more or $3 Trillion more? There's no limit other than his guts at the poker table and he will choke. Interest rates through the roof and endgame of using resources very carefully.

Mon, 02/25/2013 - 21:15 | 3276049 q99x2
q99x2's picture

Just a thought. Close down the parasitic banks and imprison their CEOs. Arrest Bernanke and abolish the FED. Get those fucking monkeys off our backs and lets get back to prosperity.

Mon, 02/25/2013 - 21:29 | 3276088 Piranhanoia
Piranhanoia's picture

#1 on the to do list and +1 for truth, justice and the real American way.

Mon, 02/25/2013 - 21:21 | 3276064 q99x2
q99x2's picture

I'm listening to last nights Coast to Coast am, an interview with Ray Kurzwell. There's a dude in la la land. He thinks intelligence is the most important gidget. What good is intelligence without morality.

I don't like Ray Kurzwell very much but appreciate his accomplishments.

Mon, 02/25/2013 - 21:22 | 3276067 venturen
venturen's picture

Bonuses are up at Goldman so that Fed thing is working!

Mon, 02/25/2013 - 21:27 | 3276082 Piranhanoia
Piranhanoia's picture

Big 20?  Wow am I scared now.  All 20 are tiny little pieces of shit that barely make up a turd.  #20 tells you who the author works for.  I smell #2 and it ain't gasoline.

Mon, 02/25/2013 - 21:33 | 3276098 Crash Overide
Crash Overide's picture

So I am sitting over here thinking everyone knows this has all gone on for too long, the writing is on the wall.

I mean there is more debt than so called money on this planet. Where do you think it goes from here? It's laughable at this point.

 

I am long... gardens, stacking, bullets, communities, friends, brewing beer, and the rest of the world collectivly waking the fuck up

to the perpetuated fraud they have been forced to participate in by no fault of their own did they know they were buying a shit sandwich.

3  2  1  wait for it...

Tue, 02/26/2013 - 00:13 | 3276565 TNTARG
TNTARG's picture

There is more debt than collateral. A lot more.

Anyway I like your thinking over...

Mon, 02/25/2013 - 21:36 | 3276109 buzzsaw99
buzzsaw99's picture

The U.S. economy will be no different in the coming months than it has been the previous months which bodes ill for all but the fascist 1%.

Mon, 02/25/2013 - 22:02 | 3276188 hairball48
hairball48's picture

All this whining over $85billion? That's less than 10% of the projected deficit for this year. What will the sheeples do when the serious cutting comes? But oh...that's right, we can't "cut" anything can we? So the Treasury will just keep on spending and Bernanke will monetize it....and this will go on until...it can't.

I sure hope it's soon though.

:)

Mon, 02/25/2013 - 22:08 | 3276212 MedicalQuack
MedicalQuack's picture

Government needs technologists and current SEC nomination won't be able to keep up.  I made a post over at the Daily Kos about this.  Stupid people are sinking this country. I'm worried too and from a data standpoint watching mergers and acquistions it's not pretty as with data they gain a ton of control. 

http://www.dailykos.com/story/2013/02/24/1189518/-US-Needs-To-Hire-Techn...

Mon, 02/25/2013 - 22:44 | 3276321 El Hosel
El Hosel's picture

Stupid people are sinking this country? LOL ...  We are sunk if all it takes is stupid people.

Mon, 02/25/2013 - 22:46 | 3276333 NidStyles
NidStyles's picture

Government is the problem. Dailykos is garbage.

Tue, 02/26/2013 - 03:49 | 3276801 Totentänzerlied
Totentänzerlied's picture

CIA-affiliated garbage.

Mon, 02/25/2013 - 22:36 | 3276298 Rockfish
Rockfish's picture

$85 billion is a rather tiny but isn't that last straw that breakes the camels back.  

Mon, 02/25/2013 - 22:38 | 3276301 world_debt_slave
world_debt_slave's picture

The U.S. gov defaulted on it's national debt in 1971 and has steadily increased its deficit spending.

This is getting long in the tooth and needs to be extracted.

Mon, 02/25/2013 - 22:38 | 3276302 Cable Guy
Cable Guy's picture

The USA is so fragile.  Just a couple of down days in the stock markets and the sky is falling again.  Watch how quickly they fix that.  Uncle Sam will be buying equities big time tomorrow.  The powers that be know the formula.  Don't mess with pensions and you win the elections.  Don't bankrupt the 401k's and you'll contain civil unrest.....

Mon, 02/25/2013 - 22:46 | 3276329 Mr. Hudson
Mr. Hudson's picture

: "So what do you think is going to happen to the U.S. economy in the months ahead?"

The rich will get richer, and the poor will get poorer. The dumb will get dumber, and the horny will get hornier. Oh, and food prices will continue to rise.

Mon, 02/25/2013 - 22:52 | 3276353 RockyRacoon
RockyRacoon's picture
Allow me to enlighten you…

Why, all of a sudden yesterday, was everyone in both traditional and social media running around like the market had just crashed?

Allow me to enlighten you...

1. Nobody is trading stocks anymore, all of the most aggressive and vocal traders are doing options. This is how a slip of 1.5% on the S&P can feel and sound like there's some sort of major move afoot. These people you're listening subjected to are 10X leveraged currencies, triple long ETFs or they trade out of the money front month calls, LEAPs whatever. If you were slingin' around 50 grand in play money all day, you'd be doing the same thing, it's fine.

2. Cassandras get the most attention - pretty much the only thing they want anyway. There's very little attention paid to everyone else who is simply going about their business or who remembers the fact that stocks are supposed to go down once in awhile.

3. Guys talking about being all-in or all-out can and will change their opinions quickly. This is what they should be doing as professional, full-time speculators. But are you a full-time speculator? If someone can and frequently does go from fully invested to all cash to fully invested over the course of a few days, is there any particular reason that you should be paying attention to them? Will they personally be calling you to give you the second half of their trade? Well, most of you don't realize this so when someone says "ALL IN" or "ALL OUT", it gets you talking, thinking, retweeting, sharing etc.

4. There is not much real news so in its absence our imaginations are running wild.  We do this as a species, its okay. Gotta have something to talk about, right? A down day for stocks quickly becomes a crash these days given the state of our modern communications capabilities.

5. Some people selling services need you to believe that it is in your best interest to manically hop from foot to foot - and they are everywhere these days. If you're engaged in this kind of thing, I'll just assume that it's your profession or your hobby. That's cool, I have unprofitable, expensive hobbies too - golf, trying new restaurants, auto-erotic asphyxiation, etc.

Anyway, this is why people are acting the way they are. Do what the real wealthy people do - put it into context, be aware of it, and focus on the bigger picture of how you're going to accumulate more wealth and businesses and friends and art and experiences. Not on how you're going to avoid a 7% temporary drawdown in a stock portfolio.

Mon, 02/25/2013 - 23:05 | 3276397 thewayitis
thewayitis's picture

You have to be kidding me. This article is a joke right? Buy Gold my friend and forget about the stocks.....A slow death

Mon, 02/25/2013 - 23:18 | 3276438 reader2010
reader2010's picture

"Centuries ago, sailors on long voyages used to leave a pair of pigs on every deserted island. Or they'd leave a pair of goats. Either way, on any future visit, the island would be a source of meat. These islands, they were pristine. These were home to breeds of birds with no natural predators. Breeds of birds that lived nowhere else on earth. The plants there, without enemies they evolved without thorns or poisons. Without predators and enemies, these islands, they were paradise. The sailors, the next time they visited these islands, the only things still there would be herds of goats or pigs. .... Does this remind you of anything? Maybe the ol' Adam and Eve story? .... You ever wonder when God's coming back with a lot of barbecue sauce?"

- Chuck Palahniuk

Tue, 02/26/2013 - 09:50 | 3277195 d edwards
d edwards's picture

Soon, I beieve.

Mon, 02/25/2013 - 23:20 | 3276445 PeterSchump
PeterSchump's picture

The adware analytics are totally off tonight too.

Mon, 02/25/2013 - 23:34 | 3276478 ironmace
ironmace's picture

Holy shit, not Readers Digest??!!

It's the Seventh Sign, we are truly fucked.

Tue, 02/26/2013 - 00:04 | 3276543 are we there yet
are we there yet's picture

Don't forget sign #21 .... Obama is still in office blaming Bush.

Sign #22 .... Obama care is activating.

Sign #23 .... The public vocabulary is becoming aware of quadrillion as a word.

sign #24 .... Gun stores are more profitable than walmart.

sign #25 .... A perfectly good war in Seria is going to waste without us stepping in.

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