I think we’ve all wondered just how long an economy built on fake money and debt can keep going – we may be about to find out.
Forget about the stock market slide for a bit – at any rate, it might shoot up 500 points tomorrow on a rumor that the Chinese central bank is going to print up 67 trillion-zillion Yuan. But there are some things which make you wonder about how things are going:
Walmart is going to close 269 stores. Of course, they also plan to open some stores – but it will be a net reduction in Walmart locations in 2016.
Conveniently after the market closed, the Fed estimated 4th quarter 2015 growth at a mere 0.6%.
Empire State manufacturing drops to a low not seen since 2009.
GM/Ford credit risk is pretty high.
Corporate earnings are not exactly what you’d like them to be.
Sports Authority decided they’d rather not pay their debts right now. The energy isn’t right, I guess…
And, a house which has sat empty in San Francisco since 2000 and has holes in the roof and fire damage is listed for $600,000.00.
If all of this – and there is plenty more out there – doesn’t give you a whiff of 2008, then I don’t know what will.
To be sure, I’m ready for some magical trick of debt and fake money to pull us through at least until the day after Election Day. The Powers That Be have managed to keep this ball in the air for seven years and I’m not at all certain they don’t have more in their bag of trickery (though getting unemployment down to 5% by magically removing people from the labor force appears to have gone as far as it can…to get it to 4.5% would take some really interesting “calculations”). But the fundamental problems remain:
1. We have far more debt – personal and government – than we can repay at the moment. This is because
2. We don’t make, mine and grow nearly enough to pay for our debts and current operating expenses and
3. Far too many people are out of the productive economy for the productive economy to support.
Eventually, it all goes smash. Whether it happens this year or next or in 2019 or what have you is immaterial – it will go smash unless and until we radically alter how we do business. We need to balance the budget (it could be done in under five years from any day we say, “go” on); we need to remove the taxes and regulations which prevent full exploitation of America’s vast resources; we need to make welfare far more inconvenient than working (and thus force people back into the productive economy if they are in any way capable of participating). All of these things are currently impossible – because the political class in power doesn’t want to do it. And they don’t want to do it because doing it would remove the need for, precisely, the political class in power (ie, politicians who “solve” problems and “do the business of the American people”). Will 2016 usher in a different sort of political class? Probably not – even electing someone like Ted Cruz would only be a step in the right direction…but unless someone is really willing to go to the mat (like Scott Walker did in Wisconsin) to take on the deep, structural reforms, all we’ll be doing is, at best, delaying the day of reckoning.
Blogs For Victory 
Excellent recap. I’m reminded of Herbert Stein’s Law.
Let’s jump in the way back machine to 2005 and consider what our government was telling us about oil:
The US government knows that conventional oil is running out fast. According to a report on oil shales and unconventional oil supplies prepared by the US office of petroleum reserves last year, “world oil reserves are being depleted three times as fast as they are being discovered. Oil is being produced from past discoveries, but the reserves are not being fully replaced. Remaining oil reserves of individual oil companies must continue to shrink. The disparity between increasing production and declining discoveries can only have one outcome: a practical supply limit will be reached and future supply to meet conventional oil demand will not be available.”
And an even better progressive analysis is:
As one US analyst said this week: “Just kiss your lifestyle goodbye.”
That was the general “consensus” at the time, so take that into account when Obama tells us that climate change is our greatest threat. If Democrats did not have manufactured wedge issues, what would they run on?
http://www.theguardian.com/science/2005/apr/21/oilandpetrol.news
The Democrat debate is on tonight. I was thinking that they should hold the next debate at a time when even more people will tune in. Maybe during the Super Bowl.
How about those Cardinals!!!!
Go Broncos.
The Broncos have not been winning so much as not quite losing, and they did the same on Sunday. Tom Brady is responding to a comment that he is a crybaby by being a crybaby.
#BoltUp! But the Broncos just have to win…can’t stand the thought of the Patriots getting to the Super Bowl again…
Watch out for the Arizona Cardinals. This is our year.
But the Broncos just have to win…can’t stand the thought of the Patriots getting to the Super Bowl again…
You are preaching to the choir, my friend…..
Watch the game and you will see the announcers swooning over Brady and his team.
Because everyone likes a dynasty…except Chargers fans!
Some economic “experts” think oil could hit $10.00 a barrel, pretty much tanking the one element of the U.S. economy that was strong when everything else was falling apart, and the only segment that offers good incomes to people without a lot of education, if they are willing to work hard.
At $10.00 a barrel, the small oil companies are bankrupt, the big ones are sitting back and waiting for drilling to be profitable again, a lot of the workers have found other, less volatile, areas in which to work, the support industries are either out of business or downsized so dramatically they will need a long time to get back up to speed when the prices rise again, as they are sure to do. Probably once the U.S. is shut down. Manufacturing of the various kinds of equipment related to the industry will have to gear up, and we will be far behind the curve. This is all more political than economic. When a nation like Saudi Arabia, with its population so heavily dependent on the government, is broke but still refusing to take any action to slow down drilling to let the price of oil rise so it can meet its own obligations, you know there is something going on.
I sure am glad we are funneling so many hundreds of billions of dollars to Iran, so they can dump even more cheap oil on the market.
West Texas crude is down to $27.00 and change today, showing a drop of over 70% in the past two years—in the only industry in the United States to show growth and increased employment when the rest of the economy was in the toilet.
Great move, Barry and Kerry.
Went over to FinViz to check the economic news – all the regular business outlets were reporting a recovery in Asia as crude prices rose…then over to Zero Hedge which had this:
Stocks, Crude Tumble As Offshore Yuan Sinks To Day Session Lows
Business news is just enormously funny – unless they absolutely have to, they won’t report bad news and they latch on to even the tiniest bit of good news as proof that everything is peachy.
“Last week, the lead of one news story said, ‘Gasoline prices are on the rise, and Republicans are licking their chops,’” Obama said in a 2012 speech in Miami, Florida. “Only in politics do people greet bad news so enthusiastically.”
“And you can bet that since it’s an election year, they’re already dusting off their three-point plans for $2 gas,” Obama continued. “I’ll save you the suspense: Step one is drill, step two is drill, and step three is keep drilling. We heard the same thing in 2007, when I was running for president. We hear the same thing every year. We’ve heard the same thing for 30 years.”
“Well the American people aren’t stupid,” Obama said in a speech in Miami. “You know that’s not a plan — especially since we’re already drilling. … You know there are no quick fixes to this problem, and you know we can’t just drill our way to lower gas prices.”
http://dailycaller.com/2014/12/05/obama-in-2012-we-cant-just-drill-our-way-to-lower-gas-prices/#ixzz3xsXBFA4o