This report was originally published by Michael Snyder at The Economic Collapse
The pace at which things are changing is shocking the experts. Just a few months ago, many of the experts were still talking about how the U.S. economy was “booming”, but since then a major shift has taken place. Most of the headlines have been about the huge stock market declines that we have been witnessing, but things have not been going well for the real economy either. Home sales are way down, auto sales are plummeting, the retail apocalypse is escalating, the middle class continues to shrink and economic optimism is rapidly evaporating. We haven’t seen anything like this since 2008, and many believe that the economic downturn that is now upon us will ultimately be even worse than what we experienced a decade ago. The following are 11 signs that the U.S. economy is starting to slow down dramatically…
#1 When economic activity is rising, demand for oil increases, and oil prices tend to go up. But when economic activity is slowing down, demand for oil diminishes, and oil prices tend to go down. That is why what is happening to the price of oil right now is so alarming…
US oil prices plummeted 7% to a one-year low of $55.69 a barrel on Tuesday. It was crude’s worst day since September 2015.
The losses in the oil world have been staggering as worries deepen about excess supply. Crude is down 12 straight days, the longest losing streak since futures trading began in March 1983.
#2 One new poll has found that only 13 percent of Americans plan to buy a home in the next year. That number has fallen for three quarters in a row, and it is now down by almost half over the last twelve months.
#3 As the market dries up, the inventory of unsold homes is absolutely soaring nationwide…
With that in mind, it comes as no surprise that inventory countywide soared 86% among single-family homes and 188% among condos in October compared to a year prior, according to newly published data by the Northwest Multiple Listing Service. It was the most massive year-over-year increase on record, dating back to the Dotcom bust, a rhythm that has some asking: Is the housing industry about to go bust?
#4 California once had the hottest housing market in the entire nation, but now home prices in the state are plummeting like it is 2008 all over again.
#5 According to the latest Bank of America survey, global fund managers are the most bearish that they have been since the financial crisis of 2008…
According to the survey, 44% of the fund managers expect global growth to decelerate in the next year, the worst outlook since November 2008. What’s more, 54% are anticipating a slowdown in Chinese growth in the next year, the most bearish they’ve been in over 2 years.
#6 America’s ongoing retail apocalypse just continues to accelerate. According to a recent Bloomberg article, things are going so poorly for some mall operators that they “handing over their keys to lenders even before leases end”…
Things are getting worse for malls across America. So much worse that their owners are walking away early from struggling properties, a trend that has mortgage bond investors bracing for losses.
Mall operators, eyeing defaults caused or made more likely by shuttered stores such as Sears Holdings Corp., are handing over their keys to lenders even before leases end. That’s forcing loan-servicing companies to either take a shot at running the properties or sell them cheap. And if they’re unable to salvage the debt payments, investors in commercial mortgage-backed securities will take a hit.
#7 Despite the eruption of a major trade war, the U.S. trade deficit with the rest of the world is on pace to set a brand new all-time record in 2018.
#8 One new study discovered that 62 percent of all U.S. jobs do not currently pay enough to support a middle class lifestyle.
#9 At this point, most Americans barely have any financial cushion at all. According to one recent survey, 58 percent of all Americans have less than $1,000 in savings.
#10 Right now, more than half of all U.S. children are living in households that receive financial assistance from the federal government.
#11 As the economy slows down, an increasing number of Americans are being forced into the streets. More than half a million Americans are currently homeless, and that number is growing with each passing day.
Meanwhile, more troubling news continues to emerge from Wall Street on a daily basis. One of the big stories this week has been the fact that General Electric appears to be on the verge of “collapse”. They have been completely locked out of the commercial paper market, they are being completely overwhelmed by the giant mountain of debt that they are carrying, and their formerly “investment grade” bonds are now being traded like junk. The following comes from Zero Hedge…
Two weeks after we reported that GE had found itself locked out of the commercial paper market following downgrades that made it ineligible for most money market investors, the pain has continued, and yesterday General Electric lost just over $5bn in market capitalization. While far less than the $49bn wiped out from AAPL the same day, it was arguably the bigger headline grabber.
The shares slumped -6.88% after dropping as much as -10% at the lows after the company’s CEO, in an interview with CNBC yesterday, failed to reassure market fears about a weakening financial position. The CEO suggested that the company will now urgently sell assets to address leverage and its precarious liquidity situation whereby it will have to rely on revolvers – and the generosity of its banks – now that it is locked out of the commercial paper market.
GE is not a financial company, but could this be a candidate to become “the next Lehman Brothers”?
The upward economic downturn of the last couple of years is totally gone, and many believe that there will soon be a feverish race for the exits on Wall Street. If you have not already positioned yourself for the coming crisis, now is the time to do so. As we saw in 2008, markets tend to go down a whole lot faster than they go up.
And once things get really crazy on Wall Street, the real economy can fall apart at a pace that is breathtaking. In 2008, millions of people lost their jobs within a matter of months. This will happen again, and there are an increasing number of signs that this is going to happen much sooner than most people had anticipated.
About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.
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If we have a collapse, it will be right on time. We have had an economic crash pretty well every 8 years. This one is going to be epic, so maybe this takes between 8 to 10 years to happen.
The plan has always been to pump and dump the economy so that the US can get out from its debts. By crashing the economy – and the dollar – it is possible to hand back to the Chinese a laughing bag of dog crap that is the money the US owes. The same is happening with the UK with Brexit: crash out of the EU, crash the pound (Britain is completely in debt to overseas investors) and then pay those debts back with worthless pounds.
And then to re-boot with an impovershed, third-world, low-wage population that can replace the cheap workers of China. And then the Chinese can start to bring in manufacturing to the US and re-invest in the US under their control.
You spin it delightfully. The US never “pays back” its debts. If all debt was paid back money would disappear. Why would China bringing manufacturing back to the highly regulated and certainly by their measure ultra high labor costs with a problematic work force of minorities and the largely unskilled?
They’re pumping through debt and collapsing when it can no longer be sufficiently serviced in the consumer driven “economy” in the absence of traditional value added manufacturing. The “master plan” is to tread water as long as possible, export as much manufacturing as possible and then facilitate more users of the USD in exclusive international transactions. “Confessions Of An Economic Hit Man” is an eye opener.
“Home sales are way down, auto sales are plummeting, the retail apocalypse is escalating, the middle class continues to shrink and economic optimism is rapidly evaporating. ”
Home sales and auto sales ARE dropping like rocks a s expected since consumers are saturated with debt and have the big ticket items they want.
There is a very BIG shift in retail sales as buyers go digital. Consider that Alibaba had a $30 billion dollar “no real holiday sale” American consumers are also buying digitally. I expect a BIG Christmas in the USA. Optimism is NOT “rapidly evaporating” yet. On the contrary optimism for businesses and consumers is much higher and Christmas will be the barometer.
Oil prices are falling because production in the USA is increasing. Check the rig count. New rigs are being added every week. Shale oil is profitable at about $30 bbl. The US became ENERGY SELF SUFFICIENT in October. 🙂
Everything was moving along nicely until the Fed decided to start raising interest rates for whatever reason.
It is the pension crisis. Cities and States need at least an 8% return for their pension funds to remain solvent.
For their CURRENT funds to emain solvent, for the most part they are robbing peter to pay paul
US oil prices plummeted 7% to a one-year low of $55.69 a barrel on Tuesday.
If you remember 2009, oil prices were very high, then they plunged right before the economic collapse.
Maybe a prelude to something?
Oil prices are strongly influenced by governments and cartels. I don’t believe they are a reliable indicator.
That being said…supply and demand are still paint a picture of what is going on in the economy. Lots of supply and diminishing demand is very telling. IHMO
Econ 101 would have us believe that and on a local level it holds but I’m not so sure anymore that the same argument applies at the global level. The global economy simply cannot change at rate and magnitude necessary to correlate with oil price swings. On top of that, there are massive supplies in storage around the world to buffer the demand swings that do occur. Just my observation as an Oil & Gas accountant. I certainly don’t pretend to have the answers.
The economy is floundering and business refuses to lower prices on anything. Right! Lowering prices is not a part of capitalistic greed. Elections are all about the continued fleecing of the public, a winner every time without fail.
The price of natural gas right before/during the 2008 crash jumped to $14/million BTU. This was due to speculators fubaring the market. Right now we’re around $3/mmbtu. Crazy ups and down in markets were the norm right before the crash.
Lemme give you an eye opener on that one. My company can’t because of the tariffs. We’re trying to hold. At 25% there’s going to be no way in the world, we’d have to fire so many people we’d not be functional.
Here’s the fun part, the retail stores won’t take the price increase.
That means whoever is large enough to eat these things and whoever has excess people to lay off MIGHT survive it. A while. Maybe. They’ll take this opportunity to be last man standing. Expect to see a lot less competition by the time this is over. You know what less competition means, right? Higher prices…
Al, you have, once again, demonstrated that you have absolutely no idea what in the hell you are talking about.
THE SKY IS FALLING!
THE SKY IS FALLING!
– Michael (Chicken Little) Snyder
If you say that enough decades in a row, you might be right one day.
How is it possible that every month I say, “Thank God I had this extra time because I am so much better prepared.”
Just this month I really took care of Cheese…”Glorious Cheese”. I like pasta more than rice (although cheese and rice is good),consequently I have a lot of pasta bucketed. One of the best things that goes with pasta is cheese (i.e. Mac’n Cheese). But I only had about 25 2 lb. blocks of cheddar cheese in the freezer. But that is hardly enough. So I’ve bought some powdered cheese (Hosier Farms and Auguson Farms).
But recently I discovered No. 10 cans of Cheddar Cheese. Officially they have a best buy date of 3-5 Years but are good LONG AFTER that (maybe indefinitely). See:
Walmart with free delivery: Ricos: Cheddar Condensed Aged Cheese Sauce, 107 oz $7.98.
I will be swimming in cheese…will you?
Don’t forget to stockpile some wine with all that cheese. Very barterable ya know!
This will never happen. The Democrats have just seized Congress, and they will NEVER allow themselves to be associated with an economic crash. Before Democrats the economy was booming off the charts, the Democrats get elected and start processing 85 subpoenas, impeachment talk, and lawsuits, and the bottom falls out of the economy.
They will never allow this story to happen…
You give those clowns credit for a lot more intelligence than they have ever demonstrated they are worthy of.
Regardless of the economy, some things remain the same.
Having a business of your own gives you more freedom of choice. There is always the chance that your business can grow into something extremely profitable, but even if it doesn’t, done correctly, it will provide extra money. And who couldn’t use a little extra cash.
Prices are rising everyday on everything….other than oil at this time. The wages are not keeping up with the cost of necessities. If people have no money to buy, how can the economy stay solvent? The elites are too greedy, and too stupid to do anything but fleece the populations. I maybe a simple person with a simple view. Eventually everyone will be in the same boat, and then everyone will be willing to do anything to survive, including begging for government camps to work in for only food and shelter. My mother told me that during the “Great Depression” there was plenty of goods, but no one had any money to buy anything.