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12 Clear Signals That The U.S. Economy Is About To Really Slow Down
Submitted by Michael Snyder of The Economic Collapse blog,
A lot of things that have not happened since the last recession are starting to happen again. As you read the list below, you will notice that the year "2009" comes up again and again. There is a reason for that. Many of the same patterns that we witnessed during the last major economic downturn are starting to repeat themselves.
In fact, many of the things that are happening right now have not happened in quite a few years. For example, manufacturing activity in the U.S. has contracted for the first time in four years. The inventory to sales ratio is the highest that it has been in four years. Average hourly compensation just experienced the largest decline that we have seen in four years. We also just witnessed the largest decline in the number of mortgage applications that we have seen in four years. After everything that Barack Obama, the U.S. Congress and the Federal Reserve have tried to do, there has been no real economic recovery and now the U.S. economy is suddenly behaving as if it is 2009 all over again.
A whole host of recent surveys indicate that the American people are starting to feel a bit better about the economy, but the underlying economic numbers tell an entirely different story. The following are 12 clear signals that the U.S. economy is about to really slow down...
#1 The average interest rate on a 30 year mortgage has risen above 4 percent for the first time in more than a year.
#2 The decline in the number of mortgage applications last week was the largest drop that we have seen since June 2009.
#3 Mark Hanson is reporting that "mass layoffs" have occurred at three large mortgage institutions...
This morning I was made aware that three large private mortgage bankers I follow closely for trends in mortgage finance ALL had mass layoffs last Friday and yesterday to the tune of 25% to 50% of their operations staff (intake, processing, underwriting, document drawing, funding, post-closing).
This obviously means that my reports of refi apps being down 65% to 90% in the past 3 weeks are far more accurate than the lagging MBA index, which is likely on its' way to print multi-year lows in the next month.
#4 It was just announced that average hourly compensation in the United States experienced its largest drop since 2009 during the first quarter of 2013.
#5 As I wrote about the other day, the Institute for Supply Management manufacturing index declined to 49.0 in May. Any reading below 50 indicates contraction. That was the first contraction in manufacturing activity in the U.S. that we have seen since 2009.
#6 The inventory to sales ratio has hit a level not seen since 2009. That means that there is a lot of inventory sitting out there that people are not buying.
#7 According to the Commerce Department, the demand for computers dropped by a stunning 9 percent during the month of April.
#8 As I noted in a previous article, corporate revenues are falling at Wal-Mart, Proctor and Gamble, Starbucks, AT&T, Safeway, American Express and IBM.
#9 Job growth at small businesses is now at about half the level it was at the beginning of the year.
#10 The stock market is starting to understand that all of these numbers indicate that the U.S. economy is really starting to slow down. The Dow was down 216.95 points on Wednesday, and it dropped below 15,000 for the first time since May 6th.
#11 The S&P 500 has now fallen more than 4 percent since May 22nd. Is this the beginning of a market "correction", or is this something much bigger than that?
#12 Japanese stocks are now down about 17 percent from the peak of May 22nd. Japan has the third largest economy on the planet and it is one of the most important trading partners for the United States. A major financial crisis in Japan would have very serious implications for the U.S. economy.
If we were going to have an "economic recovery", it should have happened in 2010, 2011 and 2012. Unfortunately, as a recent Los Angeles Times article detailed, an economic recovery never materialized...
Real GDP growth — the value of goods and services produced after adjusting for inflation — is 15.4% below the 3% growth trend of past recoveries, wrote Edward Leamer, director of the UCLA Anderson Forecast. More robust growth will be necessary to bring this recovery in line with previous ones.
"It's not a recovery," he wrote. "It's not even normal growth. It's bad."
Now we are rapidly approaching another major economic downturn.
But poverty in America has continued to experience explosive growth since the end of the last recession and dependence on the federal government is already at an all-time high.
How much worse can things get?
Sadly, they are going to get much, much worse.
What the U.S. economy is experiencing right now is not just a cyclical downturn. Rather, we are in the midst of a long-term economic decline that is the result of decades of very foolish decisions by our leaders.
It is imperative that we get the American people educated about what is happening. If people do not understand what is happening, they are not going to get prepared for the hard years that are coming.
If you have a family member or a friend that does not understand the long-term economic collapse that is unfolding all around us, please show them my article entitled "40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To Believe". It goes a good job of pointing out many of the reasons why we are heading for complete and total economic disaster.
And the point is not to fill people with fear. Rather, there is a lot of hope in understanding what is happening and in getting prepared. As we have seen over in Europe, those that get blindsided by economic problems often become totally consumed with despair. Suicide rates have soared in economically-troubled nations such as Greece, Spain and Italy.
And the same thing is going to happen in the United States too. In fact, the suicide rate in the United States has already been rising according to the New York Times...
From 1999 to 2010, the suicide rate among Americans ages 35 to 64 rose by nearly 30 percent, to 17.6 deaths per 100,000 people, up from 13.7.
In fact, today more Americans are killed by suicide than by car accidents.
Isn't that crazy?
Unfortunately, this is only just the beginning. When the system fails, millions of Americans are going to be convinced that their lives are over. A lot of them are going to do some very stupid things. We want to try to prevent as much of that as possible.
Thanks to decades of incredibly foolish decisions by our leaders, an economic collapse is inevitable. This is especially true considering the fact that our leaders in Washington D.C. and elsewhere will not even consider many of the potential solutions which could help start turning our economic problems around.
So since there are no solutions on the horizon, we need to explain to people what is happening and help them to get as prepared as possible.
The years ahead are going to be very hard, but we have a choice as to how we will respond to the challenges in front of us.
We can face those challenges with fear, or we can face them with courage.
Choose wisely.
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Regarding #3, for those who aren't familiar with Mark Hanson, here's his (old) youtube channel, which helped me decide to short the markets HARD in 2008.
Amazing how people who tell the truth are ignored during times of increadible financial distress.
http://www.youtube.com/user/markmti?feature=watch
Hey Hedgeless Horseman, Truthinsunshine, McMolotov and everyone else who has gone MIA....I just cracked a beer and will putz around on here for a while and while I do I will be hoping that at some point you and many others who left for whatever reasom, decide to pop back in. I know Hedgeless said "see you at the next watering hole"....well I don't know where that one is, and there is still some water here, and good company. Here's to hoping you pop back in.
Maybe they got Prism / US984-XN'ed?
Maybe they're 'prepping' (I couldn't blame them).
Maybe they're decided to "spend more time with their family."
Or maybe it's so obviously gone beyond the point of humor and biting commentary there's not much point in debating and discussing when the outcome is pretty much unavoidable at this point.
There. I've set it up perfectly for one of them to pop in and blow away everything I've just said.
Things are about to get spooky in very real terms and who gives a shit about the stock market........
http://www.larryobrien.net
Hey fonz and all other ZHers.
I just got back on Monday (6-3-13) from extended overseas travels in Europe and Asia (Singapore Airlines puts all others with the possible exception of Virgin 1st Class to shame, by the way), and happened to take two very difficult but very worthwile detours to see the two wise men (the same ones who literally predicted with precision the timing and gravitas of the 2008 meltdown) during that time (since I was in their respective neck of the woods).
The two wise men claim central banks have been trying to coordinate the clipping of "market" participants' expectations & bets through a rotating stratagem, with Japan to be the first, then the ECB & then the Fed, but that it's not working out as expected due to a plethora of highly complex issues (the best laid plans of mice and men?) that they can't control (i.e. domestic politics, i.e. infighting, i.e. geopolitical events impacting commodity prices, i.e. some nations using current turmoil to aggressively push their parochial interests & forgoing pledges made on the monetary front, etc.).
To make a very long story short, Japan is blowing up at present due to a total lack of central bank credibility (this is now deeply entrenched and not reversible), the ECB won't have even a fraction of the time it previously thought it would to lay preparations for dealing with what will be a sudden cascade of very sharp EU member state sovereign debt crises that can no longer be delayed, and the Fed is fast approaching the fork in the road where it has to choose between capping U.S. interest rates on outstanding debt OR removing a huge amount of the present support it is now providing beneath risk asset classes.
They both believe Bernanke and his successor-waiting-in-the-wings have decided that capping U.S. interest rates on its debt repayments has clear priority status, so if that's true, it should be a fun year this and next.
I don't know if they'll be proven correct or not, but they're batting 1 for 1 on "big events" so far since I first met them back in this very month of 2007, so it will be interesting to see how things play out.
I was going to post this sooner than tonight, but traveling sucks because of all the details one must attend to upon their arrival back home.
p.s. - I still do not know how/why/what is up with not being able to send or receive messages, other than being able to accept or reject initial new contact requests, as things stood when I last logged on ZH. So if anyone who requested to add me as a contact is wondering what's up, know that I accepted those requests right down the line, but haven't been able to do anything else in terms of chat function (maybe https everywhere, adblock+, ghostery, DNTM, etc. is impeding this?).
Thanks for an excellent post.
They both believe Bernanke and his successor-waiting-in-the-wings have decided that capping U.S. interest rates on its debt repayments has clear priority status, so if that's true, it should be a fun year this and next.
Please explain what this will in fact mean for the average Amerikan. More financial repression? What?
My understanding is that they mean that Bernanke's historically unprecedented luxury of being able to float risk assets in a massive bubble re-flation exercise WHILE being able to SIMULTANEOUSLY suppress interest rates (at any interval on the spectrum, and in large measure according to them, or at least "at the margin" as grudgingly conceded by people like Krugman) is about to end.
He and his lackeys at the Fed will have to make a real decision as forced by real & mounting pressures to do one or the other, and won't be able to continue to do both, much longer, for many reasons.
My deduction is that there's pain in store for much of America either way, but doing the former will create more real economic repression for honest, hard working people, while doing the latter will end or significantly pare back the gravy train of ill gotten gains that the CronyComrades of the FRBNY have been receiving for the last 4+ years.
These guys don't exactly spoon feed answers to anyone, preferring to seemingly only reward those with humility, patience and the willingness to do some seriously heavy mental lifting.
They're both old school.
so for us common folk you're saying <the ponzi is about to jump the shark> ??
Great couple of posts, TIS!
Simple really. Means the average Amerikan's 401k will be worth approximately $0.01 somewhat soon.
but in a free market capitalist society isn't a 401k a communist entitlement for the lazy welfare queen and doesn't deserve it anyway /s
True price discovery will be the final slash in the death by 1,000 papercuts.
Double post. Phone locked up, was probably overloaded and having a hard time uploading to the NSA servers.
Triple Post!
welcome back
Good to have you back, as your contributions were missed.
Don't forget rates going up, a sign of economic optimisim ... or failure of policy. Investors going for variable rate instruments again, but US government doesn't want them to. See this dude's analysis:
http://confoundedinterest.wordpress.com/2013/ay06/06/growth-in-non-fixed-rate-notes-implications-for-mortgage-markets/
Don't know if I'm in that list, fonzannonn, but I'm still around.
Just don't have much more to say other than Fuck This Shit.
See ya on the other side.
> What the U.S. economy is experiencing right now is not just a cyclical downturn. Rather, we are in the midst of a long-term economic decline that is the result of decades of very foolish decisions by our leaders.
Bingo !
We have a winner.
The whole thing is held together by bubble gum and bailing wire.
don't forget the duct tape.
And the Gyzyms of Wall street bankers.
"Over the last four quarters, hourly compensation increased 4.5 percent . . . "
http://www.bls.gov/news.release/prod2.nr0.htm
we had a dead cat bounce, we were put on the ventilator. i see dead people!
Today's "leaders" are trained to carry the coolaid. They are taught in some management leadership program to chant the chants and walk the talk. None of them can think for themselves. 50 years of progressive education has given us "leaders: who have a lower IQ than a pile of pooooooooooooooooooo.
My Dad's bunions are hurting him real bad....like they did right before the 2009 collapse... a very bad sign a severe storm is on the horizon....a real bad storm..
It only seems foolish if you foolishly assume their stated goals are their real goals... Otherwise, it seems outright sinister... Because that's exactly what it fucking is. If they happen to be executing sinister plans foolishly, that does not make them any less evil.
Bam....we have only experienced what has happened not what we have been told is happening.
We have been the Frog in the cooking pot. Set in at pond temp and have had the temp raised daily untill we are cooking.
We knew it was a cooking pot but we have been told everything was fine. Now the water is too hot and there is nothing we can do.
Ribit, Ribit....
Fuck.
Just wait till Obamacare arrives. Everything I've been reading indicates healthcare costs are going up dramatically, which is less the masses have to spend on iphones etc.
Short the dollar, go long vaseline!
K-Y. Tastes better.
you are so correct sharky. To think people were so stupid as to beieve they could invite 30 million to the buffet and have them eat on "anybody-but-my" dime is unfucking believeable.
But alas, they believed.
Hey!, what's the big deal!
You just print doctors, nurses, radiologists, medicines ...
Just like the Federal Reserve does!!!
Not sure what that point was...
From my perspective, that's a fine list of people trying to kill us for $$$.
But, I may be biased- thought I had appendicitus several months ago, and made my once-a-decade trip to the local sawbones. After two misdiagnoses, a CAT scan, and the experience of having an orderly dismiss me from a gurney where I was prepped for surgery and walk me to the entrance of the hospital, I got a shiny bill for better than seven grand for neither dianosis nor pain relief. When I got that gag billl in the mail after an additional week of feeling like I had been hung by the guts from a meat hook, I took the liberty of filing it in the circular folder.
Not for nothing, but I would have paid the bill if they had helped, no matter how long it took- but if I take my car to a mechanic and he tells me that he doesn't know what's wrong, and he can't fix it, I'm not paying him shit. Scrubs don't change that equation.
Prometheus
Are you NSA? Reading my snail mail? I had a similar situation where we had to go to the ER and the doctor there said "You have to go somewhere else". So we did and got treated at another hospital. Of course we recieved a full bill for the first ER. I disputed it and in a letter sent in April used the mechanic analogy. Similar wording. Great minds? BTW the letter seems to have worked.
American taxpayers cannot afford the cost of amnesty.
The cost of illegal immigration and amnesty could amount to $6.3 trillion, which would fall on American taxpayers over the long term, according to a Heritage Foundation analysis. As Heritage showed, the majority of illegal immigrants receiving amnesty would receive far more in taxpayer-funded benefits than they would pay in taxes. Even critics of the Heritage study admit amnesty will cost trillions of dollars. Whether it is $4 trillion, $6 trillion or more, the additional costs to the U.S. taxpayer are still too high.
Article continues:
http://blog.heritage.org/2013/05/22/cost-of-illegal-immigration-and-amne...
$525,000 per illegal?
Over a lifetime. Read it, Amigo.
boned.
Even the prepared will not be prepared, we will be using tears to reconstitute our powdered eggs. Watching the speed of the governments clamping down on freedom and capital controls is the tell.
Wouldn't urine be better .... it's already seasoned with salt .... has sufficient volume .... and is the right color .... just sayin' ?
TAPERING IS NOT GOING TO HAPPEN
More likely .... Tapiring .... where they tongue your ant hole !
PUKE
When the economy grinds to a halt .... it's call Stagstipation !
When lap dog Bernanke cuts off the 80 billion per month of free money the U.S. Economy will go into high speed reverse.
I once had some Mexicans change the gears in my 1970 Chevy pickup's differential ... the junk yard gears were like new .... somehow they flipped the package .... I had a super low 1st gear .... and 4 speed reverse with the Granny gear !
... and you sold it to the Fed!
There will be an increase before there is a decrease- the whole fucking thing (insurance companies, pension funds, state and local govts) is being propped up by the stock market- these sociopathic fucks will hyperinflate before they allow one whiff of deflation.
Faster than the gears on a french tank
Batchat go fast.
JJ. The economy is already in reverse. The 85B only support stocks and attempts to pin interest rates. He is losing.
Does not provide jobs or goods and services. If increased to 1 trillion, still no jobs.
So what is Michael Snyder's idea of preparation? Anybody know?
my guess is writing regurgitated top ten lists for money.
I think he'd say that it was highly individualistic based on where you are, Have family?, Location, community, etc
Were fuckin cooked.
"Mark Hanson is reporting that "mass layoffs" have occurred at three large mortgage institutions"
Now what, Bubble Bernanke, Evans, Dudley and Yellen? You saturated all the muppets and youngins with debt, lowered interest rates to record lows and printed like there was no tomorrow.
The Fed is in a real bind now and stuck in a box with not much to show except buying time.
Do ya print and blow up the US dollar faster? It's an old favorite by once great nations.
These kinds of things happen all the time. We don't live long enough to realize it.
Banksters bring it about. When bankster heads begin to roll it goes away.
these 12 reasons plus the 25 reasons from the other day plus the 18 reasons from before that and the 22 reasons before even that..., well all counted there are some 459 reasons why the US economy is about to collapse.
What is the 1 reason it hasn't done so yet?
Bernanke and the 85,000,000,000.00 per month FREE $$.
Hasn't?
It is, right now as we live.
It falls slowly, not in a great crash bang boom.
But ever so slowly... gradually... bit by bit...
We're riding the dying horse.
It will take years.
And one day, the last person will realize it and ask why nobody saw it... and everybody else will ask him where he's been...
It will by then have already happened... as in past, done, over with....
That, my friend is the Historical Decline of Empire
F&B, if you look at a historic graph of Rome, it appears (today) to have been an almost instant collapse.
But that is looking at a current graph of events over a thousand years ago. The actual decline took many generations.
We are now collapsing the same way, but we are doing it in real time, so it appears to be slower, IMO.
In my lifetime I've seen us go from the world leader in every category....manufacturing, quality, style, education, quality of life, scientific acheivement, a place people came to improve themselves and their lives....to the relative shithole we're in now.
It was just one day at a time, but the slope gets steeper and we're sliding fast.
Spot on.
On a smaller scale, sorta, for us, today, the Titanic sank in a jiffy, but for those on board at the time it took hours.
Essentially the only thing QE whatever has done is feed the appetite of the great beast DEBT DESTRUCTION. The gaping moaw of the monster has sucked in all the QE-Money and extinguished it, and it crys for more. The real economy, that messy hands on matter of actually DOING something, rather than moving playing cards around on tables, has been very quietly dying.
Yeah...it is amazing that after all the trillions TRILLIONS! of indebtedness thrown with wild abandon at any financial entity that lobbied for it we still have a sinkhole in the middle of our economy. Low employment, growth well below true inflation and piss poor prospects.
If that's all we get for 5 trillion $ we are in serious trouble. Reason # 460.
the american "real" economy has been dying in earnest since '81 but had the viral injection in 1913. It's a hundred year oligarchian clusterfuck, gotta love rapacious profit/rent seeking greed.
"Hail to the Thief" _ radiohead
Please hold strong when it goes.
No one but yourself between your future and the hordes.
Chicken feed is up. Both scratch and laying pellets. Anyone eat chicken?
We, as a country, peaked in 1972. It is a 70 year decline on average. So...my chicken feed is up...while my wages are down. Having no debt saves me...and the chickens. Got out of the market a little early...but safe. PM is real...or so history says.
Chickenfeed. Yup that describes the average Amerikan's take home pay after expenses.
Chickenfeed. Pay your bills and you've got no scratch left. Make soup with water and rabbit pellets.
That's b/c all the grains that go into chickenfeed are no longer produced. The damn government created a policy of corn ethanol, and now the farmers are growing crap corn for that, and not all the stuff that is needed for animal food.
Amazing, I know.
It is late at night here, reading the ole ZH blog.
Outside, the frogs and crickets are chirping about the farm pond and everything is peaceful. The new Superfly Trap is working great. The goats, cow, chickens, dogs and cats are asleep and we are getting some needed rain.
That is really all a Free Man wants, to work his land, provide for his family and put something aside for the next generation of kids.
Is that not all men, in every country?
As much as I have travelled around the world, the friends I have made in so many lands tell me the same thing.
It is the Evildoers, the lovers of Money and Power who seek to rule us and send us to our deaths for their "Wealth."
"Wealth" is what I have right now, here at Fez Farm.
We must evolve and fight The Monster.
perhaps if we evolve, there will be no need to fight as the Monster will become obsolete.
or so that's what i thought the crickets were sayin...
There are very well paid defense contractors in my neck of the woods that recently started keeping chickens and goats in their back yards. People are planting berry bushes, onions, squash, cucumbers, peas, runner beans, etc on what once was a manicured and flower-gardened back yard. Elaborate decks are being torn down in favor of tomatoes and herbs. These people are DC workers who make the long commute into our capitol daily. In the evenings they talk about how their fruits and veggies are doing, and which feeds are preferable for chickens and goats. Its been interesting to watch this transformation. I do believe they know something that some of the people only suspect.
PS Hats off to Laws who called this over two years ago. He's right, go long sharecroppers.
Just be sure to keep paying those/that ever-increasing property taxes/rent on that pond or Big Brother will find a better use for it.
I'm not believing all this doom and gloom! It's a wind up right? The guy on cnbc today says he expects 3.5% growth by the 4th quarter. Tell me he kkknows what he's talking about! Get me MDB on the phone now. I demamd a recount. Bah!
Wrap your hands around your ankles, Bernanke will make you shiver when he delivers.
That little squirt .... he'd need a stool to reach me .... and he also has a good 6" of my butt cleavage to get passed .... before he nears the glory hole .... no, I don't think it will happen ?
A September or October surprise is seeming more and more likely.
I want my mommy!
Does your mommy know how to skin and dress a deer or rabbit, can goods, preserve vegetables and fruit, dry fruit, make peanut butter, bake bread for starters? If so, oh hell yes, and learn from her.
Well done, Michael.
The only point of dissonance for me is that they are not true 'leaders'; they are not true statesmen/women. They are 'false prophets' only pretending to lead.
My fellow ZHers, I wanna see the confetti burn off this market like the rest of ya . I know its gonna happen. Its so obvious. However, articles from the collapse blog dont add much value in my opinion. Have you looked at the advertising on the economic cllapse blog? I just cant take his message seriously because his income depends on it. It's no different to the vested media whores talking up the market, just on the flip side thats all. I know he's gotta earn an income and I do appreciate the factoids he provides but the medium and the message need to be separated a little more.
"The medium is the massage!" Marshall McLuhan
I only come here for Philippino Cupid and lightsabre ads these days
In the land of the blind the one eyed man is king. Contracts from July 2015 on are backwardated. July silver backwardation is smaller. Its fits the longer projected estimate a few have forwarded. Backwardation occurs with the “contract roll”, as people sell the expiring contract and buy one farther out. Expected a modest equity pull back anyway and its already here. Pick some up along the way, not a hard view for now on what...
https://www.youtube.com/watch?v=ANyo4yn5GRs