12 Signs That The Inevitable Economic Slowdown Is Now Here

Tyler Durden's picture

Authored by Michael Snyder via The Economic Collapse blog,

Since the election there has been this perception among the American public that the economy is improving, but that has not been the case at all.  U.S. GDP growth for the first quarter was just revised up to 1.2 percent, but that is even lower than the average growth of just 1.33 percent that we saw over the previous ten years.  But when you look even deeper into the numbers a much more alarming picture emerges.  Commercial and industrial loan growth is declining, auto loan defaults are rising, bankruptcies are absolutely surging and we are on pace to break the all-time record for most store closings in a single year in the United States by more than 20 percent.  All of these are points that I have covered before, but today I have 12 new facts to share with you. 

The following are 12 signs that the economic slowdown that the experts have been warning about is now here…

#1 According to Challenger, the number of job cuts in May was 71 percent higher than it was in May 2016.

#2 We just witnessed the third worst drop in U.S. construction spending in the last six years.

#3 U.S. manufacturing PMI fell to an 8 month low in May.

#4 Financial stocks have lost all of their gains for the year, and some analysts are saying that this is “a terrible sign”.

#5 One new survey has found that 39 percent of all millionaires “plan to avoid investing in the coming month”.  That is the highest that figure has been since December 2013.

#6 Jobless claims just shot up to a five week high of 248,000.

#7 General Motors just reported another sales decline in May, and it is being reported that the company may be preparing for “more job cuts at its American factories”.

#8 After an initial bump after Donald Trump’s surprise election victory, U.S. consumer confidence is starting to fall.

#9 Since Memorial Day, Radio Shack has officially shut down more than 1,000 stores.

#10 Payless has just increased the number of stores that it plans to close to about 800.

#11 According to the Los Angeles Times, it is being projected that 25 percent of all shopping malls in the United States may close within the next five years.

#12 Over the past 12 months, the number of homeless people living in Los Angeles County has risen by a  staggering 23 percent.

And in case those numbers have not persuaded you that the U.S. economy is heading for rough times, I would encourage you to go check out my previous article entitled “11 Facts That Prove That The U.S. Economy In 2017 Is In Far Worse Shape Than It Was In 2016” for even more eye-popping statistics.

During a bubble, it can feel like the good times are just going to keep rolling forever.

But that never actually happens in reality.

The truth is that we are in the terminal phase of the greatest debt bubble of all time, and the evidence is starting to mount that this debt bubble has just about run its course.  The following comes from Zero Hedge

A recurring theme on this website has been to periodically highlight the tremendous build up in US corporate debt, most recently in April when we showed that “Corporate Debt To EBITDA Hits All Time High.” The relentless debt build up is something which even the IMF recently noted, when in April it released a special report on financial stability, according to which 20% of US corporations were at risk of default should rates rise. It is also the topic of the latest piece by SocGen’s strategist Andrew Lapthorne who uses even more colorful adjectives to describe what has happened since the financial crisis, noting that “the debt build-up during this cycle has been incredible, particularly when compared to the stagnant progression of EBITDA.”

 

Lapthorne calculates that S&P1500 ex financial net debt has risen by almost $2 trillion in five years, a 150% increase, but this mild in comparison to the tripling of the debt pile in the Russell 2000 in six years. He also notes, as shown he previously, that as a result of this debt surge, interest payments cost the smallest 50% of stocks in the US fully 30% of their EBIT compared with just 10% of profits for the largest 10% and states that “clearly the sensitivity to higher interest rates is then going to be with this smallest 50%, while the dominance and financial strength of the largest 10% disguises this problem in the aggregate index measures.”

The same report noted that net debt growth in the U.S. is quickly headed toward negative territory, and the last time that happened was during the last recession.

We see similar things when we look at the 2nd largest economy on the entire planet.  According to Jim Rickards, China “has multiple bubbles, and they’re all getting ready to burst”…

China is in the greatest financial bubble in history. Yet, calling China a bubble does not do justice to the situation. This story has been touched on periodically over the last year.

 

China has multiple bubbles, and they’re all getting ready to burst. If you make the right moves now, you could be well positioned even as Chinese credit and currency crash and burn.

 

The first and most obvious bubble is credit. The combined Chinese government and corporate debt-to-equity ratio is over 300-to-1 after hidden liabilities, such as provincial guarantees and shadow banking system liabilities, are taken into account.

We just got the worst Chinese manufacturing number in about a year, and it looks like economic conditions over there are really starting to slow down as well.

Just like 2008, the coming crisis is going to be truly global in scope.

It is funny how our perspective colors our reality.  Just like in 2007, many are mocking those that are warning that a crisis is coming, but just like in 2009, after the crisis strikes many will be complaining that nobody warned them in advance about what was ahead.

And at this moment it may seem like we have all the time in the world to get prepared for the approaching storm, but once it is here people will be talking about how it seemed to hit us so quickly.

My hope is that many Americans will finally be fed up with our fundamentally flawed financial system once they realize that we are facing another horrendous economic crisis, and that in the aftermath they will finally be ready for the dramatic solutions that are necessary in order to permanently fix things.

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Raffie's picture

Thank God for BITCOIN HEDGE.

Other wise all might be lost.

FreeShitter's picture

Who has time for an economic slowdown when you have bitcoin?

Raffie's picture

Not sure WHAT ratio I'd say for hedging in crypto and PM.

I'm thinking right now %70-80 crypto and rest PM (silver not gold).

38BWD22's picture

 

 

There is an excellent chance that bad times are just ahead (but I have been a bear for too long for my guesses to be worth anything).

Holding some gold (more so than crypto, also I prefer Au to Ag) and BTC (as a small speculation) are great hedges for almost any portfolio re any tough times coming...

Son of Loki's picture

I'm also adding some covfefe every chance I get, just for some extra protection.

38BWD22's picture

 

 

That's diversification!

sincerely_yours's picture

"to permanently fix things"

Dream on.

Is-Be's picture

Monotheism is the curse.

Take your dreams of Armageddon elsewhere.

(Satan is one clever deity, no? He wears the garb of righteousness and polishes your Ego with whispers that YOU alone have the truth).

ebworthen's picture

I love shooting the stripes in before the 8-ball, so much easier to see and visualize.

Thank the good Lord I'm not in the Casino of Wall Street; worse than fucking Roulette.

Raffie's picture

convert 1/2 your gold for silver.

Should be around 70:1

TruxtonSpangler's picture

I know the sales director for the largest restaurant vendor in the area, he says sales are down 23% YoY...

38BWD22's picture

 

 

Yow!  See the railroad guy's comments below for even more perspective.

 

Sudden Debt's picture

I talked to a restaurant chain holder on friday and his sales where up 43% year to date.

There's no slowdown just yet in any sector I've seen so far.

I wouldn't short anything just yet.

City_Of_Champyinz's picture

I was talking to an engineer who does piping designs for steel mills, refineries, food production factories, pretty much anything industrial.  He has not bid a job in over 6 months.  Only bid 3 over the last year. He stated that he has never seen anything like it before.  Anecdotal for sure, but I know this guy I don't think he is exaggerating.

1033eruth's picture

HA, what a dope.  That's right, rest your entire thesis on the results of ONE restaurant chain.

Use your favorite search engine and type, "restaurant bankruptcies".

You'll learn something new.

TruxtonSpangler's picture

YMMV, this guy sells to practically EVERY single and different type of retaurant in the tri county area Ventura, Santa Barbara & San Luis Obispo

Is-Be's picture

Bitcoin? When the Algos have Quantum computer plug-ins? 

Quantum computers can mine every bitcoin in a nano- second. 

frank further's picture

Well, what are they waiting for?

E-Knight's picture

Can we PLEASE stop having this author on here? LITERALLY every post is some end of the world, he's been at it for 10 years, got tired of it 5 years ago.

Sudden Debt's picture

believing in end of the world crap only makes people unhappy.

I stopped giving a fuck about that also 5 years ago. Just make money and live the now.

 

If you see how many fear channels there are on youtube about any subject, it's just mindbogling.

And they're making shitloads of money. the youtube block showed how much money they made and how they now had to get by on only 10 to 20K a month from their youtube channel...

poor guys... and all they kept spewing out was fear about crap that never materialises. 

There is fake news in the alternative media, and it's the fearcrap. And there's a lot of simpleminded people who live by it.

MUST BUY THAT DVD AND THEIR HEALTH PRODUCTS SO THEY CAN KEEP TELLING US THE TRUTH... MUST....

yeah...

If telling the truth is a source of a very good income, it's bound to be fake because they need that paycheck every month and they'll invent it on the spot.

And they'll just replay the same crap every week, every month. Doom is always 3 to 6 months from now.

 

That last EMP crap thing? man o man... and one of the tylers likes to spew that crap also. It's also the bitcoin guy.

all bullshit for his own profit. 

My guess he's the same guy from SGTreport. A religious nut who always boosts his own business and spreads fear for his own profit.

There's just to many who just guess their way in and say I KNOW FROM A SOURCE CLOSE TO...

And they make a lot of money from all of this crap. Way to much.

Fake news in here in the MSN, the alternative media,it's allover. There's simply nobody you can believe.

 

Burltron's picture

Exactly right. Good post.

Son of Captain Nemo's picture

"Okay" S D while much of what you say may be true if you live in the "CONUS"... You can't deny that if you live in Syria, Iraq, Afghanistan, Libya, Yemen and Ukraine... that the things you are talking about ISN'T HAPPENING FOR THOSE PEOPLE your governments is daily bombing the "SHIT OUT OF" that... Oh "by the way"... is contributing to this "bubble problem" the author is talking about!.... And that your government will continue to press there agenda on Russia' and China's border(s) UNTIL SOMETHING REALLY HAPPENS that will make your "World" look like Syria, Iraq, Afghanistan, Libya, Yemen and Ukraine ON STEROIDS!!!

JUST B.S.?...

Keep watchin it brotha get real where you live!!!

PlayMoney's picture

No hedges needed. With central banks printing a couple of hundred billion a month they can keep this going until 2037. I did the math (common core).

Justin Case's picture

That's what Mugabe was thinking too.

null's picture

And might have gotten another 20 years out of it if he had equivalent media support. They are the only ones that can really pull the plug. Even CB voices can be muted effectively, making the actual numbers mostly irrelevant.

Is-Be's picture

That's what Mugabe was thinking too.

And he was also thinking "Ideally Zimbabwe should have 5 million citizens"

It has go 16 million. Do the maths.

Which all goes to show, Zimbabwe is well ahead of the pack.

order66's picture

Shocking to read this coming from "The Economic Collapse Blog".

 

sinbad2's picture

When in fear or in doubt, run in circles scream and shout.

JRev's picture

Truly shocking! We've been downgraded from "economic collapse" to "slowdown," big news.

This is more exciting than Bush-era terror threat level meter. 

GunnerySgtHartman's picture

PMs all around.  Lead, too.

Arnold's picture

Mortuary services and sympathy cards.

Son of Loki's picture

PMs are relatively high risk without lead backup.

sinbad2's picture

If you make your own from car batteries, the lead is harder and more slippery, courtesy of the antimony selenium cadmium and other metals they add to the lead.

Spike the Railroader's picture

The railroad I work for has been putting in pine ties instead of fir or spruce. The wood is cheaper, and it seems as if the company is worried about the upcoming financial instability. In some places, instead of big repair projects, they have been waiting for derailments and then taking the insurance money to fix problem spots. So far 5400 people have been laid of, due to the down tick in coal demand. 

 I feel as if I am hanging on by a thread, and I can not wait till everything goes upside down. It is due time for the system to reset itself, minus the banking system that has been drowning the employees in a debt sea. 

38BWD22's picture

 

 

Save, save, save!  In a bankruptcy, they *might* take away pensions...

Spike the Railroader's picture

Yup, they have been talking about taking the railroad pensions for years. We fund our own retirement from our own paychecks. We do not get social security, therefore the gubermint wants to try and take a share. 

I have been stacking for a while, but between making ends meet, it has been slow go on the AG. 

Hard labor will come in handy to rebuild once this all comes to pass. 

38BWD22's picture

 

 

"They say" that transportation figures are a leading economic indicator.  Funny that BARRON'S no longer has the "freight car loading" figures that they used to publish each week IIRC.

Keep us up to date, great pair of posts.

Is-Be's picture

You have created a pool of money? Eee! I'm not too sure about that idea.

As for PMs, be advised that hordes of gold are discovered under Roman villas in England, stored there no doubt in anticipation of the Empire's collapse. Fat lot of good it did them.

Store Love. You might need your neighbors.

Spike the Railroader's picture

No, there is no pool of money....nor am I greedy or envious of wealth. 

You have got that right!!! Love... you have to give it away in order to get it. To horde it is to lose love.

The whole way out of this mess is to share with our neighbors. We need to get back to taking care of eachother. 

38BWD22's picture

 

 

THOSE are lessons I have been learning over past 4 years, 8 months and 3 days.

+ eternity

Justin Case's picture

Store Love leads to blue balls.Spread it.

Wild tree's picture

The only change I would suggest Roller Bearing, is to trade the suspicious might, into will. It will come about as fast as a 2x4 to the head.

I hope your business in Peru will survive the approaching storm.

38BWD22's picture

 

 

Clearly we do too.  Thank you.

You are likely right, it will hit hard and fast.

We have paid down over 60% of our debt from its peak.  Who does our comoany owe the rest to?

Me.  

We should do OK, we almost own the Korean vehicle replacement bearing business.  TODAY I advised some customers that we are tightening credit to THEM.  If we lose some customers, that's OK.  They may be lousy payers to our competitors.  And if they want oddball-sized KOREAN pieces, then pay cash....

Wild tree's picture

I wish you and your company well. I have always enjoyed your posts, for they belong to an honorable man IMHO. May God grant you peace, and the way.