• StalingradandPoorski
    03/04/2015 - 16:46
    What people and central bankers do not understand, is that you can't devalue your way to prosperity. Absolutely nothing has changed since the last crisis. The same too big too fail banks have only...

Savings Rate

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US Savings Rate Surges To Highest Since 2012 As Consumers Save "Gas Tax Cut" Instead Of Spending





Following December's worse than expected drop in personal spending (and slowing groweth in incomes), analysts wewre expected the usual hockey-stick bounce... it did not happen. Despite all the exuberance over low gas prices, US personal spending dropped 0.2% in January - twice as bad as the 0.1% drop expected and the 3rd miss in a row. The spending drop was driven in large part by a slide in non-durables. Personal income also missed excpectations, rising just 0.3% (against a +0.4% expectation) hovering at its lowest growth since September. The savings rates surged to 5.5% - its highest since Dec 2012.

 
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14 Signs That Most Americans Are Flat Broke And Totally Unprepared For The Coming Economic Crisis





With more than 60 percent of all Americans are living paycheck to paycheck, and a whopping 24 percent of the country has more credit card debt than emergency savings, when the coming economic crisis strikes, more than half the country is going to be financially wiped out within weeks. If you are trusting in the government to save you when things fall apart, you will be severely disappointed.

 
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Retail Sales Plunge Twice As Much As Expected. Worst Back-To-Back Drop Since Oct 2009





Following last month's narrative-crushing drop in retail sales, despite all that low interest rate low gas price stimulus, January was more of the same as hopeful expectations for a modest rebound were denied. Falling 0.8% (against a 0.9% drop in Dec), missing expectations of -0.4%, this is the worst back-to-back drop in retail sales since Oct 2009. Retail sales declined in 6 of the 13 categories.

 
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Economists: They Can Add But Can't Put Two & Two Together





Once again we found ourselves bewildered while watching financial discussions on television. All one needs to do to follow along is forget your rational objective analysis at the door, have another glass of the proverbial “Kool-Aid™, and chant with the congregation panel “everything is just awesome!” Why? Because it’s in the “numbers!” When you listen to most of these debates by economists using today’s “numbers” one can’t help but think any release of data must be taken as holy writ. For our money, when it comes to this new theology of economics, we’d rather be with the heretics. Maybe we don’t understand how they can believe the numbers they recite. But we do no one thing above all else. We won’t partake in the Kool-Aid.

 
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Why Bank Of America Is Stumped: Despite "Lower Gas Prices" US Consumer Spending Has Plunged





"According to the University of Michigan survey, consumers have not been this upbeat since January 2004, when the economy was booming. The natural outcome should be for consumers to splurge, hitting the malls and going out to restaurants. But much to our surprise, the data suggest otherwise." - BofA

 
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There Are No "Tailwinds"





The economy being talked about in the media just doesn’t exist, no matter how you view the unemployment rate. There is no spending because there is no income(marginally deficient). Instead, what we see is instability where these low levels of activity and true wealth creation persist. There are no “tailwinds” to be found here, only confusion about the relative state of progress. Going from really bad to less bad is not recovery, just another fact of an unstable economy plodding its way toward the next, and eventual, dislocation.

 
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US Household Spending Tumbles Most Since 2009; Salaries Have Smallest Monthly Increase In 7 Months





Simply atrocious income and spending numbers: if this data is even remotely correct, then the balance sheet of the US consumer is in horrible shape.

 
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Brazil's Economy Is On The Verge Of Total Collapse





Today's Brazilian economic data follows up quite well to our article from a month ago "Brazil's Economy Just Imploded" and as the earlier article on the crashing Brazilian Real hinted, things for the Brazilian economy how gone from imploding to, well, worse because not only did the twin fiscal and current account deficits rise even more, hitting a whopping 11% of GDP - the worst since August 1999, but its government debt soared to 63.4% in 2014, up from 56.7% a year ago, and the highest since at least 2006. In short - the entire economy is now on the verge of total collapse.

 
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The Data Doesn't Lie - Here's What's Really Driving Interest Rates!





Hilsenrath claims a little birdie (Fed insider) told him that rates will be raised later this year. We expect the Fed is just jerking him around. There is nothing fundamentally or otherwise to suggest rates will move up. We're not sure if Hilsenrath is part of the game or just a gullible fool who is being used to keep the market off balance. Why would the Fed want the market off balance? The Fed does so intentionally because theory suggests such a strategy will improve the effectiveness of monetary policy. Regardless of what the Fed says, the reality is that interest rates are not moving up anytime soon. Here's why...

 
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The Next Victim Of Crashing Oil Prices: Housing





While a record amount of ink has been spilled praising the benefits of plunging crude price on the US consumer, so far this has manifested merely in soaring consumer confidence, if not in an actual boost to retail sales. Less has been written about the adverse side-effects of plunging oil, even though by now even the most “undisputed” permabulls have been forced to admit that the imminent collapse in capital spending is truly “unprecedented”, a phrase Goldman uses in the chart below.  So what does plunging CapEx actually mean for the economy, aside from a major haircut to 2015 GDP, and what other areas of the economy will be affected by the Saudi Arabian scorched earth war on the US shale industry?

 
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The US Hasn't "Decoupled" And There Ain’t No Giant "Oil Tax Cut"





The touts have it backwards. This isn’t about greeters at Wal-Mart handing out tax cuts to hard-pressed American consumers. Its about the coming liquidation of the massive malinvestments and bloated economies that have been enabled by rampant central bank money printing and the resulting madcap expansion of unrepayable debt. Buying-the-dip was always a strategy that would work until it didn’t. The “oil tax cut” tale is designed to ensure that Wall Street’s Muppets will be the last to get the word.

 
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Sayonara Global Economy





The surreal nature of this world as we enter 2015 feels like being trapped in a Fellini movie. The .1% party like it’s 1999, central bankers not only don’t take away the punch bowl – they spike it with 200% grain alcohol, the purveyors of propaganda in the mainstream media encourage the party to reach Caligula orgy levels, the captured political class and their government apparatchiks propagate manipulated and massaged economic data to convince the masses their standard of living isn’t really deteriorating, and the entire façade is supposedly validated by all-time highs in the stock market. It’s nothing but mass delusion perpetuated by the issuance of prodigious amounts of debt by central bankers around the globe. But now, the year of consequences may have finally arrived.

 
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David Rosenberg Has A Question For His Clients





David Rosenberg, formerly of Merrill Lynch and currently of Gluskin Sheff, who famously flip-flopped from being a self-described permabear to uber-bull last summer for the one reason that has yet to manifest itself in any way, shape or form, namely declaring that wage inflation as imminent (it wasn't, but perhaps Mr. Rosenberg was merely forecasting the trajectory of his own wages) and generally an end to deflation, has a rhetorical question for his paying clients, as asked in his letter to investors from January 2. To wit: "THIS IS WHAT PASSES FOR ANALYSIS?" We too follow up with an identical question not only for Mr. Rosenberg's clients, but for our own readers.

 
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Brazil's Economy Just Imploded





China may have mastered the art of fabricating economic data to a level unmatched by anyone except the US Department of Labor, but its derivative countries have much to learn. And none other more so than one of China's favorite sources of commodities over the past decade: Brazil. It is here that things are going from worse to catastrophic, as disclosed in today's update of Brazil's fiscal picture.

 
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The Keynesian End Game Crystalizes In Japan’s Monetary Madness





If the BOJ’s mad money printers were treated as monetary pariahs by the rest of the world, it would at least imply that a modicum of sanity remains on the planet. But just the opposite is the case. Establishment institutions like the IMF, the US treasury and the other major central banks urge them on, while the Keynesian arson squad led by Professor Krugman actually faults Japan for being too tepid with its “stimulus”. Now comes several new data points that absolutely confirm Japan is a financial mad house...

 
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