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Net Worthless: People As Corporations

Tyler Durden's picture




 

US Households haven't shaken their 'junk bond' credit rating, given their poor income statement and balance sheet. Reversing Mitt Romney's famous quote "corporations are people", Bank Of America remains skeptical of this self-sustaining recovery - expecting second half growth to slow significantly as businesses and households react to the risk of a major fiscal shock (and in the short-term, momentum looks unsustainable). From an income statement perspective, 'a paycheck just ain't what it used to be' with food and energy prices rising and payroll growth (typically a good proxy for income growth) is disappointingly timid leaving real disposable income diverging weakly from a supposed job recovery. The balance sheet perspective has been helped by the rise of the equity market but the recovery in net worth in the last three years has barely outstripped income growth, leaving the ratio deeply depressed. The upshot is that the recent pick-up in consumption is not being fueled by income or wealth gains, but mainly by drawing down savings. Many households remain deeply distressed and react to higher costs of living by drawing down savings further. In sum, a true virtuous cycle still seems a long way off. As weather effects fade and gas pain builds the data should soften.

 

Bank Of America Merrill Lynch: If people were corporations

We are skeptical. Looking out to the second half, we expect growth to slow significantly as businesses and households react to the risk of a major fiscal shock. Moreover, even in the near term, some of the momentum looks unsustainable. To see why, let’s reverse Mitt Romney’s famous quote that “corporations are people” and look at the household sector as though it were a corporation. In our view, given their poor income statement and balance sheet, US households haven’t lost their “junk bond” credit rating.

Income Statement: Slipping

Normally a strong job market means both solid income growth and high consumer confidence. Unfortunately, these income and confidence channels are weak today. Despite the drop in the unemployment rate, workers are very worried about job security. Most of the drop in unemployment is due to people exiting the labor force. A better measure of the health of the job market is the ratio of employment to working age population. By that gauge there has been no improvement. Surveys of consumers continue to show deep skepticism about the labor market.

 

 

While there has been a notable pick up in payrolls, real disposable income is the ultimate driver of spending in consumption models. Normally, payroll growth is a good proxy for the direction of income growth, but in the past year, real income growth has slowed even as payrolls pick-up.

 

 

Indeed, the gap has gotten even bigger in the past three months, with payroll growth accelerating to a 2.2% annual rate, while income has actually fallen slightly. This is because virtually every other factor that goes into the calculation of real disposable income has been weak: wage growth continues to slow, gas prices have been cutting into real incomes, non-wage income such as rent and proprietor’s income has weakened, the growth in transfer payments such as unemployment insurance has slowed and the growth in taxes has been strong. As they say, a paycheck just ain’t what it used to be.

Balance Sheet: A Long Road Back

We are equally concerned about the household balance sheet. The recovery in the stock market has been partly offset by the continuing drop in home prices. In the standard life cycle model of the consumer, households attempt to build their net worth to cover there future spending needs, particularly for retirement. During the asset price boom, the ratio of net worth to income surged, setting up the baby boom generation for its looming retirement. The crisis pushed the clock back to the mid 1990s. The recovery in net worth in the last three years has barely outstripped income growth, leaving the ratio deeply depressed.


 


A Constrained Consumer

The upshot is that the recent pick-up in consumption is not being fueled by income or wealth gains, but mainly by drawing down savings. The saving rate is prone to revisions, but assuming we can trust the data, the saving rate has fallen back to its lowest level in the economic recovery.

 

 

In our view, US households want to raise, not lower, their saving rate. The retirement savings of the baby boom generation were devastated during the crisis, the large budget deficit creates worries about both higher taxes and cuts in future entitlements.

 

The job market has gotten more uncertain. And most people no longer view the housing and stock markets as reliable sources of capital gains. All of this points to a desire to increase savings.

 

We think the drop in the saving rate is partly unintended and temporary. Many households remain deeply distressed and react to higher costs of living by drawing down savings further. In addition, mild winter weather may have drawn forward spending on autos and at retail establishments. As the weather effects fade, so could the consumer. The surge in gas prices will likely both constrain the rebound in the saving rate and hurt spending on other items.

In sum, a true virtuous cycle still seems a long way off. As weather effects fade and gas pain builds the data should soften. We expect consumer spending to underperform relative to the overall economy on a trend basis. And growth will likely be particularly weak in the second half. We expect businesses to recognize the risks of the fiscal cliff first and pull back on hiring. Then with weaker job growth and with the growing awareness of the cliff, consumers will likely start delaying some discretionary spending.

 

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Fri, 04/06/2012 - 00:52 | 2321331 Rahm
Rahm's picture

Wheres my m'f'in bailout.... Bitchez!

Fri, 04/06/2012 - 01:03 | 2321340 Seasmoke
Seasmoke's picture

you have to make your own bailout

Fri, 04/06/2012 - 01:33 | 2321368 AldousHuxley
AldousHuxley's picture

you will be bailed out with more debt borrowed from your future and children.

 

 

People are corporations in that both are leveraged with debt and mostly do bullshit.

Fri, 04/06/2012 - 01:57 | 2321388 The Big Ching-aso
The Big Ching-aso's picture

 

 

Soylent Green is people. Soylent Green is a corporation. People are corporations. Corporations are people. People are corpses.  Corpses are corporations.

What's my point?

I don't phuckin' know.   But it sounds good.

  

Fri, 04/06/2012 - 08:09 | 2321614 CPL
CPL's picture

internethighfive.jpg

Fri, 04/06/2012 - 11:44 | 2322266 prains
prains's picture

Corporations are people when one of them gets executed

Fri, 04/06/2012 - 03:16 | 2321452 Sudden Debt
Sudden Debt's picture

PRINT IT YOURSELF YOU LAZY BASTARD!

Fri, 04/06/2012 - 00:54 | 2321332 drwillia1
Fri, 04/06/2012 - 01:40 | 2321377 Gidas19
Gidas19's picture

Sheeple!!! My gold will pay for my kids education...

Fri, 04/06/2012 - 02:05 | 2321392 Manthong
Manthong's picture

 “as businesses and households react to the risk of a major fiscal shock.”

Why ever would they say that?

What news from the government or the state controlled media would lead anyone to consider that anything the government or the Fed is doing entails any risk?

If we need to be concerned with “really, really bad outcomes” like a major fiscal shock shouldn’t the government have our best interests at heart and suggest that we acquire some gold to protect against that risk?

Fri, 04/06/2012 - 04:49 | 2321498 francis_sawyer
francis_sawyer's picture

Why give up your gold for an Alinsky education...

Just get your kid to read ZH...

Fri, 04/06/2012 - 05:21 | 2321509 jeff montanye
jeff montanye's picture

portfolio management is the most important thing that is not taught (much) in schools, imo.  household maintenance is a close second.

Fri, 04/06/2012 - 00:59 | 2321334 Sandmann
Sandmann's picture

It is amazing how so-called Democracies can load all the pain onto households and hand over Citizens like Serfs to Banks as indentured slaves, It is fantastic that people are forced to run down savings and become forced-borrowers in many cases to compensate from being wiped-out as Shareholders in Banks that free of Shareholder obligations with State funding now restore their profits by gouging Customers and those who borrowed from them in the past.

The manner in which Politicians have allowed the public to be hooked up to milking machines and tapped regularly is reminiscent of The Matrix

Fri, 04/06/2012 - 01:03 | 2321343 Freddie
Freddie's picture

TV/media/Hollywood is The Matrix that controls the sheep.

Fri, 04/06/2012 - 04:53 | 2321500 francis_sawyer
francis_sawyer's picture

It's the SHEEP that allow themselves to be controlled... Hollywood has no bearing on how I live my life (nor the life of anyone who can identify BS)...

Fri, 04/06/2012 - 09:20 | 2321806 Jumbotron
Jumbotron's picture

Not so fast francis-sawyer.  While I would agree that as far as consumerism oriented and political agit-prop goes the TV/Media/Hollywood cabal have an effect on certain members of the population....perhaps more than we care......it's a little callous to say its the SHEEP who allow themselvs to be controlled in the larger picture of what this post is about.....namely the epochal shift in the American economy and the people who are behind much of that shift.

Good for you for not allowing Hollywood to shackle your mind....My TV has been unwired to both cable and OTA broadcasts for nearly 10 years......and my movie going days are really limited.  However.....what makes you any different from the other SHEEP when you are getting fleeced by the bankers and their political lapdogs and whores.  And it truly is in that order.....Bankers rule at the top.....politicians are there to manage the people in order to feed the banks more deposits for loans that grease the whoile financial system and for the managing of all the rest of society that has only tangential effect on the finacial system but is still important such as laws that promote stability and a orderly society....military spending to protect our "way of life"....etc. etc.

So what exactly are YOU doing to promote a sound currency....putting white collar banking criminals in jail.....promoting American manufacturing as both an economic and security bulwark against enemies of the state.....how are you keeping your currency from debasing itself everyday.....how are you keeping your food cheaper.....your energy costs cheaper......etc. etc.

And please don't tell me you are cutting back on energy use and buying generic food.....that's only a SHEEP"S way of reacting to the fundamental issue and problem at hand.

Unless you are either...A: running for office high enough to make a difference (which forget it you won't ) or B: willing to pick up the gun as our Forefathers did back in the Revolution and forcibly change things .....how are you not a SHEEP as well.

I'm not a hypocrite here.....I know I am a SHEEP......but I'm a smart enough SHEEP to know that there is nothing this SHEEP can do but prepare myself for when the collapse comes and surrvive it.  

Fri, 04/06/2012 - 09:21 | 2321829 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Hollywood suffers from ideological problems of the socialist left. Why do you think movie ticket profits are dropping? Watch any movie from the last 10 odd years and notice a trend. They are all extremely PC! No substance whatsoever. Hollywood should go bankrupt.

Fri, 04/06/2012 - 07:14 | 2321574 Widowmaker
Widowmaker's picture

Fuck you, Sandmann -- MISSION ACCOMPLISHED!

 

Fri, 04/06/2012 - 20:33 | 2323771 Rynak
Rynak's picture

 

It is amazing how so-called Democracies can load all the pain onto households and hand over Citizens like Serfs to Banks as indentured slaves

It isn't, if you consider that the popular type of "democracy" even THEORETICALLY (let alone practically) has nothing to do with "demographics":

People do not vote for policies - they vote for people making policies. And those people they vote for, do not represent any specific policy, because they are allowed to enact whatever policy they want, regardless of what they said or are saying.

Or in short: All we have is a popularity contest: People get to decide the most popular personality. THAT is the scope of modern "democracy": Personalites.

This is what we have in theory, assuming that it actually technically works properly. In practice, we have even less than this.... considering that a selected few decide the options people can vote for, as well as rig votes.

 

Fri, 04/06/2012 - 01:03 | 2321339 Freddie
Freddie's picture

Hope and Change.   Baby boomers and seniors are screwed especially if there are 4 more years of Hope.  

Young people who graduated college at the start of Hopium may see their lives delayed at least another 4 years.  The debt is so off the charts that there may not be a recovery for a decade or TWO.   They can start their professional life around age 32 or 34.  New college grads will get jobs before these early thirty somethings ever get hired.  Sad.  The majority voted for Hope.

Many thanks to the Tyler's for toning down the Mrs. Hope 2012 banner ads.  I know you guys/gals need money for the site but I get sick at the sight of....

Fri, 04/06/2012 - 01:24 | 2321357 dbomb12
dbomb12's picture

That is a very optimistic forecast, with the amount of debt and unfunded Govt. liabilities and the casino known as wall street i do not see recovery I see collapse and reset

Fri, 04/06/2012 - 02:02 | 2321391 Yes_Questions
Yes_Questions's picture

 

 

umostxactly.

+.5

 

Half because its the reset, not the collapse, that concerns me.

Fri, 04/06/2012 - 01:29 | 2321361 Lednbrass
Lednbrass's picture

No matter who "wins" its 4 more years of Hopium- the choice is between two guys who relied on the credit card when given executive power, favor an expensive global empire we cant afford and a domestic welfare state, and will let the financial system continue business as usual.

Ho Hope, no Change on the horizon in any direction. As I think we are likely to see some serious unraveling of the system in the next term I see it as voting for who I want to be on the bridge of the Titanic when it starts taking on serious water.

Its a damn tough call, I hate them both. Just another choice between gonhorrea or syphilis, and Im sick of having no option but disease.

Fri, 04/06/2012 - 02:11 | 2321395 Manthong
Manthong's picture

We won't be on that stuff for four years..

In two years we'll be hooked big time on pure, uncut Desparium.

Fri, 04/06/2012 - 13:50 | 2322629 Jumbotron
Jumbotron's picture

In two years we'll be hooked big time on pure, uncut Desparium.

You don't know how right you are.  I've been saying from time to time for well over a year on this site that 2013 starts the real Long Emergency for America as the Conservatives become just as disillusioned at the end of Romney's presidency as liberals are over Obummer's now.

The Sheelple will start to truly awake to the fact that America is truly like the Titanic.....struck by an iceberg and already sinking with no hope.  However....most of the sheep will continue to listen to the left and then the right for perhaps 1 maybe 2 election cycles until they either accept the new reality and build on it or there is upheaval and revolution in the streets.

My guess is 2020 give or take when the realization turns into some sort of action.  Good or bad.

Fri, 04/06/2012 - 02:23 | 2321405 AldousHuxley
AldousHuxley's picture

government exist to keep the populace just satisfied enough to not overthrow the elites to make it seem all "fair" to keep the slaves working.

 

 

Fri, 04/06/2012 - 08:17 | 2321622 James-Morrison
James-Morrison's picture

I always vote for the "term limit" party: the best way to throw a monkey wrench into the machine is to force constant change.

Vote out incumbents. And that includes replacing Obama with Romney -- even though they are the same. It's like a Molotov cocktail thrown into the voter booth.

Do it often and at every voting opportunity.

Fri, 04/06/2012 - 10:38 | 2322072 tamboo
tamboo's picture

good luck with that jimbo.

 

Researchers remote Hack Voting Machine for $26
Fri, 04/06/2012 - 14:25 | 2322785 JW n FL
JW n FL's picture

 

 

http://www.youtube.com/watch?v=GamR4y_ykA0

How to Hack a Voting Machine

Uploaded by on Oct 28, 2006

Here's a study done by Princeton on how to hack a voting machine running Diebold software. Now go tell your friends...

 

Since 2006 this has been common knowledge!

 

http://www.youtube.com/watch?v=rVTXbARGXso

Hacking Democracy - Full Length

When you can't control the Politicians or the voters, then you control the counting! Go back to paper votes and we will have a President that was voted in!

P.S. This movie is called "Hacking Democracy" because voting is a democratic process. They makers are aware that the U.S. was founded as a Constitutional Republic.

truthseekertimes.ca

 

So! how come the Corporate Owned Media does not put this information in Heavy Rotation on CNN / FOX and / other Bullshit Sheepeople Entertainment, Offical Version Relay Channel(s)!

 

Fri, 04/06/2012 - 01:03 | 2321341 M4570D0N
M4570D0N's picture

Fear not! Obama just signed the JOBS Act. I cannot forsee anything possibly going wrong with crowdfunding allowed for small private businesses with no requirement for independent audit, or any kind of transparency. WTF is asymmetric information anyways?

Fri, 04/06/2012 - 02:17 | 2321398 Hansel
Hansel's picture

Lots of people seem to be bashing the JOBS act's crowdfunding, but I don't get why.  It's not like regulations stopped MFG, BSC, LEH, AIG, Enron, Worldcom, Groupon, MBS, etc., etc.  We should all agree that the SEC does nothing, nothing gets regulated, and ratings agencies wait until a company defaults to tell people a company/country has defaulted.

Markets are all buyer beware.  What should happen is to have the SEC disbanded, all regulations trashed, and tell people, "if you want to buy some piece of paper from some organization, do your homework."  More regulation isn't going to fix anything.  The SEC is worthless.

Fri, 04/06/2012 - 01:04 | 2321342 non_anon
non_anon's picture

It happened in the 30's when farms were foreclosed on and soup lines were long, welcome back to the 30's, only worse, more yet to see.

Fri, 04/06/2012 - 02:17 | 2321400 A Nanny Moose
A Nanny Moose's picture

Shit...in the 30's people still knew how to grow/obtain food. Anyone here know how to grow a friggin Happy Meal?

Fri, 04/06/2012 - 08:57 | 2321741 hardcleareye
hardcleareye's picture

My mother in law ran a hardware store in Queens on Jamaica Ave, during Prohibition, the depression and then WW2, I have great memories of her telling stories of what it was like to live during those times.  Their house on LI was foreclosed on during the depression and the family moved into the back of the store, which they managed to keep afloat.

To the day she died the woman refused to borrow any money for anything and counseled the family to not buy things unless they could pay cash.  "If you can't pay cash for it you don't need it."  The women was a pack rat...  anything of potential value/use was saved for the "future". 

That generation is gone, I wonder what they would say if they could see what is going on today?

Fri, 04/06/2012 - 01:20 | 2321349 deflator
deflator's picture

   I have a problem with the idea of lack of income growth being deflationary since there is going on nearly 10,000 people reaching 65 every day(for the next 19 years) and eligible for a free government check every month on top of their exponential growth in equities all those years of upside based on the surpluses of energy the world was able to produce in the past that have been extrapolated into the future indefinitely.

 This article is wrongheaded in that it is assuming from a flawed perspective. It is like the baby boomers who say SSI is failing because, "the government spent the money instead of saving it like they should have". Nevermind that it is a debt based economic model and saving fiat would be no different than printing fresh. "money" in a debt based economic model is lent into existence as a claimcheck against future resources. The government has been doing it's job of steadily creating claimchecks against future resources and so far it has been working. The problem is eventually with all fiat currencies there are too many claimchecks and too few resources. Once the cat is out of the bag...

Fri, 04/06/2012 - 02:00 | 2321390 PrintPressPimpin
PrintPressPimpin's picture

great analysis... why would they save the money? that's not the way the system is set up to  work...we are fortunate to be so enlightened.

Fri, 04/06/2012 - 02:31 | 2321411 deflator
deflator's picture

yeah, saving I think would imply holding onto past and present resources to be used in the future, I really don't hear anyone complaining that we should be saving anything for the future. ANWAR anyone?

Fri, 04/06/2012 - 02:58 | 2321431 deflator
deflator's picture

Pretty sweet fuckin setup ain't it to be in the boomer era where you can get your claimchecks(against the future) in earlier than them that ain't even born yet eh?(Typical Ponzi) Just let the magic of compound interest work for you then tell the ignorant youngsters that them that understands compound interest collects it and them that don't pays it lol and then create laws that enforce it? what can go wrong?

Fri, 04/06/2012 - 02:28 | 2321410 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

They didn't read the history books. You see, it is not a ponzi if you can print the payment method. Or that's the theory.  It has been tried before.  Many times.

http://www.youtube.com/watch?v=H7aSB9c54TI

"and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." - Thomas Jefferson

 

 

 

Fri, 04/06/2012 - 01:15 | 2321351 LouisDega
LouisDega's picture

My wife is a coupon Bitchezz. Loves them coupons.

Fri, 04/06/2012 - 01:19 | 2321354 Mike Cowan
Mike Cowan's picture

Tyler, I can assure you that I am worthless.

Fri, 04/06/2012 - 01:29 | 2321363 q99x2
q99x2's picture

Mitt Romney lied. That old railroad case was never definitively decided.

Fri, 04/06/2012 - 02:45 | 2321423 groundedkiwi
groundedkiwi's picture

Romney will have his 2012 running slogan America, Back on Track. I have already heard the expression used a few times by the Repubs.

Fri, 04/06/2012 - 09:27 | 2321858 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Back on track to oligarchy!

Fri, 04/06/2012 - 01:33 | 2321370 Burnbright
Burnbright's picture

Funny that the title makes a comparison between people and corporations which is exactly how the government tries to force us to be viewed under the law.

Fri, 04/06/2012 - 05:30 | 2321511 spentCartridge
spentCartridge's picture

Legal land isn't law.

 

Learn why and .gov force becomes apparent ...

Fri, 04/06/2012 - 01:36 | 2321374 lolmao500
lolmao500's picture

Pulitzer Winning Author Sues Obama Administration Over the NDAA

Chris Hedges: "No Outcry Within Media" on NDAA

http://www.youtube.com/watch?v=GYo2c2V0JLk&

Win!

Fri, 04/06/2012 - 01:46 | 2321383 blunderdog
blunderdog's picture

    The upshot is that the recent pick-up in consumption is not being fueled by income or wealth gains, but mainly by drawing down savings.

Yep, Bernanke's plan is actually working.  Kill the savers and drive every single dollar out into the market to restore aggregate demand.

Uy.

Fri, 04/06/2012 - 06:42 | 2321543 barroter
barroter's picture

...or, drive every single dollar into the marketplace to be extracted by the elites.  Gotta loosen the death-grip skinflints have on their money.  How else can the monied elites get their grubby hands on it?

Fri, 04/06/2012 - 09:51 | 2321915 trembo slice
trembo slice's picture

They just print it and hand out interest free loans.  Driving this money into the economy will boost spending giving the appearance of recovery.

Fri, 04/06/2012 - 07:26 | 2321578 Widowmaker
Widowmaker's picture

Its confiscation of the retired man's wealth through inflation liquification.

This is no accident.  The young don't have the wealth so they are starved from its accumulation, the old are being liquified for Fraud Inc.  This is the largest [generational] robbery in history, slow motion.  Think of it as one of those videos that show a plant growing for a perspectve of time.  That vortex is your spawn's future.

You aint seen nothing yet.

THe only upshot is a shot down TBTF GSE - the Fed.

Locked and loaded.

Fri, 04/06/2012 - 01:52 | 2321385 Yes_Questions
Yes_Questions's picture

 

 

Wage earner, meet ropes.

Ropes...

..?

Oh, I see you already met?

 

Well then, lets dispense of the formalities and get on to business, shall we?

Fri, 04/06/2012 - 02:07 | 2321393 Yes_Questions
Yes_Questions's picture

 

 

Happy Hunger Games!

Fri, 04/06/2012 - 05:41 | 2321523 Colonial Intent
Colonial Intent's picture

The original was much better than the american remake, But then thats true about many things.....

 

http://www.imdb.com/title/tt0266308/

Fri, 04/06/2012 - 02:25 | 2321407 Curt W
Curt W's picture

not sure what the hang up is?

Fri, 04/06/2012 - 10:53 | 2322125 Incubus
Incubus's picture

rope a dope, bro.

 

 

Fri, 04/06/2012 - 02:10 | 2321396 Ted Baker
Ted Baker's picture

CNBC HEADLINES READ:- MARKETS EXPECT ANOTHER MONTH OF 200K JOB GROWTH..

REPLY: MARKETS DO NOT EXPECT ANOTHER MONTH OF 200,000 JOB GROWTH....THE MARKETS EXPECT ANOTHER MONTH OF ULTRA-LOW WAGES ($3 DOLLARS/HOUR), PART-TIME (2-3 HOURS A DAY) AND LOW PRODUCTIVITY 175-190K JOB GROWTH...

NOT ONLY WILL THE US CREDIT RATING ONCE AGAIN BE CUT BUT CHANCES OF ZERO GROWTH AND EVEN RECESSION IS LOOMING....

ON THE WIRES:-
EQUITY MARKETS TO CORRECT BY ANOTHER 5-10%
FINANCIALS TO SINK
JPMORGAN WILL BE INVESTIGATED
GOLD TO SPIKE AND SWISS FRANC TO BREAK THE FLOOR
QE3 CALL AROUND THE 15-20TH APRIL
MXN,CAD AND BRL CURRENCIES TO SPARK
CRISIS IN SPAIN, PORTUGAL, ITALY AND FRANCE TO ACCELERATE OVER THE NEXT 2 MONTHS

Fri, 04/06/2012 - 03:22 | 2321456 deflator
deflator's picture

 Nice deflationary picture all those caps represents but  what about those 10,ooo baby boomers retiring every day for the next 19 years collecting free government checks? 3.6 million new people every year collecting a government check. Do you wonder why home depot and lowes stock is at 52 week highs? These folks have money and are bidding up building materials renovating their homes with their free government checks.

Fri, 04/06/2012 - 03:29 | 2321457 deflator
deflator's picture

Let me put it this way..., Do you expect the U.S. government to allow interest rates to go up as your rant would seem to imply or do they continue to use financial repression to keep interest rates artificially low indefinitely?

Fri, 04/06/2012 - 02:16 | 2321399 Curt W
Curt W's picture

< Total economic collapse in a year

<This really sucks, but at least water and power still work

Fri, 04/06/2012 - 02:37 | 2321416 zonetraders
zonetraders's picture

bunds and schazt are racing away.

Imminent crisis in EU coming again....the new quarter begins with a bang

 

http://capital3x.com/trades/bond-market-trends-suggesting-eu-crisis-retu...

Fri, 04/06/2012 - 02:50 | 2321427 PhattyBuoy
PhattyBuoy's picture

Sobering study shows that half of all Americans have virtually no savings ...

http://www.interest.com/cd-rates/advice/sobering-study-shows-that-half-o...

 

 

Fri, 04/06/2012 - 07:07 | 2321566 barroter
barroter's picture

Good article. The 401k/IRA craze that we've seen has a problem, most people are clueless as to how manage investments.  Sure, you can do it yourself, but if a company you invest in LIES through their teeth on their 10k statements, where does that leave you? Access to real information isn't available to your average Joe, even IF he could understand it.

Hire a financial manager? Ok, fine. Just hope he isn't clueless. Or more probably, he isn't tapped into the movers and shakers that play markets like a kid's game. Again, it's access to true information and most retail style financial managers don't have that avenue to the best, quickest info.  Also, don't forget to pay those fees, whether the market is up or down. Add to that the loyalty of the manager may just be to his employer, not YOU.

The "I"ll have to work til 70" isn't well thought out by most.  What jobs will you be able to do at 70? Will your health allow you to work? Just plain aging will weaken your body and your energy level is NO where near it once was.  I can see employers not wanting to deal with that; skipping over you for the comparably spry 50 yr old instead.  I think any job you might find at that age isn't going to pay that well I imagine.

There's going to be an awful pychological shock to those who spent a lifetime of spending foolishly, or those who had spend every dollar to just survive in the past.  Counting pennys when your 72 is NO fun.

 

 

 

 

 

Fri, 04/06/2012 - 10:30 | 2322036 Thisson
Thisson's picture

Or if you have a 401k and know what you're doing, you're still denied access to the investment vehicles you need.  The 401k at the firm I work at doesn't even allow you to hold cash.  You must be 100% long, all the time.  The "safe" options include a money-market style investment, which we know can bar redemption with just 1 e-mail to the SEC and some guaranteed-income fund which is really an annuity and thus subject to the counterparty credit risk of the 401k-management firm's subsidiary in which the funds are invested.  As if that's not bad enough, if the @#%^ really hits the fan, the government will grab the money to pay its own bills.  We've seen this in Argentina and, most recently, in Greece.  The only real choice for saving for the future seems to be physical gold held in your own posession.

Fri, 04/06/2012 - 02:53 | 2321433 lolmao500
lolmao500's picture

Leeeeeeeeeroooooooooooyyyyyyyyy Jeeeeeeeeeennnnnnnnnnnnkinnnnnnnnsssssssss!

Fri, 04/06/2012 - 03:46 | 2321467 ss123
ss123's picture

"we expect growth to slow significantly as businesses and households react to the risk of a major fiscal shock."

Um, exactly what is this "major fiscal fiscal shock"?

Is it bacon being at $5/lb.?

Fri, 04/06/2012 - 03:54 | 2321471 Dorky
Dorky's picture

GM will fail.

All those channel stuffing will come back to haunt the US.

The government will bail out GM with billions and billions of debt.

 

Fri, 04/06/2012 - 08:40 | 2321669 CheapBastard
CheapBastard's picture
GM bonuses to exceed 50% of some salaries

NEW YORK (CNNMoney) -- Less than two years after getting a U.S. government bailout, General Motors is handing out bonuses that, in some cases, could exceed 50% of workers' salaries.

 

http://money.cnn.com/2011/02/11/news/companies/gm_bonus/index.htm

 

Taxpayers are doggone generous.....they must have lots of money...this article about all the 'debt' problems of people have must be wrong.

Fri, 04/06/2012 - 05:17 | 2321508 PR Guy
PR Guy's picture

And see how badly the Irish households are doing. Wealth there being totally destroyed (and the situation even worse since these end of 2010 figures). There is one massive transfer of wealth going on.

 

http://www.irishtimes.com/newspaper/frontpage/2012/0406/1224314441366.html

 

Fri, 04/06/2012 - 05:32 | 2321516 I am Jobe
I am Jobe's picture

Nothing ever shocks me. Thanks ZH, the past few years the develaging has been nothing but long coming. The final leg is almost here and will last for a long time.

No Housing recovery

No Jobs Recovery

Yeah, inbred sheeples keep going to the polls and voting for the same idiots over and over and over. Who the F is dumb? Too many homos in USSA now. Prefer to tweet and post on FB and get metrosexual looks to compte with GF's and wives.

Fri, 04/06/2012 - 05:35 | 2321518 spentCartridge
spentCartridge's picture

Off topic (sort of) Irishman Ben Gilroy serves Irish .gov with summons ...

 

http://www.youtube.com/watch?feature=player_embedded&v=086U_Kb01Os#

Fri, 04/06/2012 - 06:14 | 2321530 mayhem_korner
mayhem_korner's picture

 

 

Chart #5 tells a big story to me.  The new "jobs" replacing the lost ones just don't pay.  Census workers, burger flippers, and the back-up Walmart greeter count in the ADP data, but aren't worth a whole lot.

Fri, 04/06/2012 - 08:20 | 2321623 memyselfiu
memyselfiu's picture

If you're a tradesperson of any stripe (especially electrical) come to Canada- they're literaly pulling greenhorns off the street and handing them apprenticeships.

I recall my father saying that was the way it was back in the 60's.

 

Friend of mine just got a job offer at a gold mine- $42/hr + full benefits, camp costs and flights for 1 trade, $46/hr for two!

Fri, 04/06/2012 - 06:51 | 2321548 The Alarmist
The Alarmist's picture

Real GDP for the nation is pretty much where it was in 2007, but we've added several million heads to the population since then, so per capita Real GDP has declined over the period.

Enough said?

Fri, 04/06/2012 - 06:56 | 2321555 magpie
magpie's picture

Don't forget the very bullish debt growth.

Fri, 04/06/2012 - 07:02 | 2321560 jjsilver
Fri, 04/06/2012 - 07:39 | 2321594 Mark Wilson
Mark Wilson's picture

Ask Wesley Snipes about the IRS.

Fri, 04/06/2012 - 08:33 | 2321638 hardcleareye
hardcleareye's picture

Joe Banister is a ex IRS agent, his interview and thoughts are intriguing. 

http://agentfortruth.com/

"Joe Banister is the first and thus far only IRS Criminal Investigation Division Special Agent ever to conduct, while serving as a special agent, an investigation into allegations that the IRS illegally administers and enforces the federal income tax.  He respectfully reported the results of his investigation to his IRS superiors, up to and including the IRS Commissioner.  Rather than address the legitimate concerns raised by one of their own distinguished investigators, his IRS superiors suspiciously refused to address the chilling evidence of IRS wrongdoing raised in his report and instead encouraged him to resign from his position. "

Fri, 04/06/2012 - 09:59 | 2321935 trembo slice
trembo slice's picture

and Irwin Schiff

Fri, 04/06/2012 - 07:23 | 2321581 Freewheelin Franklin
Freewheelin Franklin's picture

US household net worth priced in gold:

http://pricedingold.com/networth/

Fri, 04/06/2012 - 07:28 | 2321585 magpie
magpie's picture

wonder how that chart from 2010  continues into 2012

Fri, 04/06/2012 - 10:39 | 2322075 rosiescenario
rosiescenario's picture

The Chinese should be very worried........when the customer catches a cold, the supplier gets the flu.

 

Obviously, the few jobs being created are at payment levels that yield 0 discretionary income while the jobs lost did provide that. The net....our standard of living continues to decline.

Fri, 04/06/2012 - 10:50 | 2322108 Incubus
Incubus's picture

What did I tell you people?  It's 2016 or 2017.  As they say, "hope dies last."

Don't underestimate the willingless of people to want to "hope" for a better outcome when everything says that "crash and burn and cook in the flames of your own naivety and stupidity" will be the only outcome.

Fri, 04/06/2012 - 19:48 | 2323670 GeoffreyT
GeoffreyT's picture

Not for nothin'... if people were corporations, they would face FAR lower effective tax rates on their incomes.

When it comes to being taxed, the number of deductions available to an individual is highly restricted, whereas corporations get to deduct vitually every cost associated with their existence: their 'lodgings' (rent), their utilities, their transport costs, their fucking POSTAGE... right down to the costs of having 'guests' over for cocktails. Probably even the tranny hookers and child prostitutes they use to 'honeypot' politicians and judges and senior police.

AFTER all that shit is deducted, corporations pay tax on the residual (unless they have some other excuse not to). 

 

Now, consider Joe Sixpack-Schlubstein III... he gets to deduct fuck-all when you actually look at it. He doesn't get to deduct every penny he spends on keeping his-self alive, then declare that he will pay tax on whatever's left - whereas the corporation does.

 

Imagine the fucking hue and cry if corporations got taxed on straight-up REVENUE, like we poor cunts.

 

Note - I am not advocating that corporations be taxed on revenue: I want .gov starved to the point where we can crush its skull like an egg, and then hold mock trials for all the swaggering fuckbags who torment our lives (before we gut them in the public square and neuter their children to put a stop to the stain they introduce into the human genome).

 

BUT...if corporations were treated with 'personhood' for tax purposes, they would make sure 'persons' got to deduct every cent associated with keeping themselfves fit for work.

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