America Faces No Greater Threat Than Joe Biden and the Democrat Party. Their Assault to Our Borders Is As Great As Their Assault to Free Speech and Free Elections
Sunday, April 2, 2023
DID JOE BIDEN'S CRONY BANKSTERS DESTROY THE AMERICAN ECONOMY............... Again??? - Summers: We’ll Either Have ‘Substantially Unsustainable Inflation’ or ‘Fairly Hard’ Downturn Due to Bank Issues
Bank TURMOIL Will Make Getting a Mortgage IMPOSSIBLE
During an interview aired on Friday’s edition of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers stated that “we are still a substantially unsustainable inflation country unless the economy turns down fairly hard” due to issues in the banking system.
Summers said that while the most recent PCE numbers are better than previous numbers, “I don’t think one should make too much of that. I think we are still a substantially unsustainable inflation country unless the economy turns down fairly hard in response to the credit issues raised by the banking system, and we don’t know yet whether that’s going to happen.”
He added, “So, in a sense, the outcomes here are a bit bifurcated. Either the banking crisis will pass without incident and without large impact on credit, in which case we really do have serious inflation issues and the Fed will have to tighten much more than is priced in, or we’re going to see some kind of real downturn here. And I think both are plausible outcomes and I recognize that there’s a chance we’ll skate through right in between, but I have to say that seems very much odds off to me. Soft landings are very hard, even in the best environment.”
A devastating car market crash is now in motion, and it will trigger brutal consequences for buyers, sellers, and dealers. The U.S. auto market entered 2023 in a massive bubble, with average new car prices hitting an absolute record high while used car prices were almost 42% higher compared to 2019 levels. But now several factors are contributing to a collapse in the value of cars. At the same time, auto loan debt levels are shooting up and even borrowers with good credit scores are becoming unable to afford car payments and having their vehicles repossessed. A famous industry executive said this could lead the country to the next great financial crisis, and considering the pace at which this downturn is unfolding, it looks like his warning is spot on.
In February 2023, the average cost of a new car climbed to $50,000 in the United States, up from just $38,948 in December 2019. That marked the highest price for a new car in history, according to data compiled by Edmunds. At the same time, a growing number of consumers are having to stretch their budgets to afford a new vehicle. The average monthly payment for a new car is up 26% since 2019 to $718 a month, and nearly one in six new car buyers is spending more than $1,000 a month on vehicles, also a record. Other costs associated with owning a car have also shot up, including insurance, gas, and repairs. "With new car prices as high as they are, it's getting more and more difficult for most Americans to stomach these payments," stresses Ivan Drury, Edmunds director of insights.
After the pandemic broke out, automakers expected car demand to collapse, which led them to reduce output, and microchip manufacturers followed suit. With a shortage of new cars hitting the market in 2020, consumers started to use their stimulus checks and took advantage of low-interest rates to purchase used cars instead, driving up prices four times faster than the growth seen in the inventory of new cars. “The perfect storm of supply and demand created a temporary and unsustainable spike in used car prices, says Motley Fool’s analyst Sean Williams. A huge bubble was formed, but a reckoning has just arrived.
The repercussions of the car market collapse can throw the entire country in disarray. We must consider that the U.S. car industry is a significant contributor to the country's economy, accounting for millions of jobs and billions of dollars in revenue. A crash in this market can result in a significant economic downturn, leading to widespread job losses, bankruptcies, and a sharp decline in consumer spending. It can also disrupt the supply chain for many other industries. Given that car manufacturers rely on a vast network of suppliers to produce their vehicles, when the crash finally occurs, it will trigger a domino effect on these suppliers, leading to mass disruption in many sectors. When Musk says this could turn into a financial nightmare, he isn't bluffing. We should all pay very close attention to the next developments of this crisis because it will ultimately impact all of us. That’s why in today’s video, we compiled several facts that prove that the U.S. auto market is in huge trouble.
Consumer Sentiment Cracks: First Drop in Four Months
Consumer sentiment unexpectedly worsened in March as worries over a looming recession took hold.
The University of Michigan’s index of consumer sentiment fell to 62.0 in March from 67 in February, an eight percent decline. Compared with a year ago, the index is down four percent.
The midmonth preliminary reading came in at 63.4, so the final number indicates that sentiment continued to deteriorate as March progressed. Economists had expected the final March reading to more or less hold steady with the mid-month score.
Surprisingly, it was not the banking crisis that depressed consumer sentiment.
“This month’s turmoil in the banking sector had limited impact on consumer sentiment, which was already exhibiting downward momentum prior to the collapse of Silicon Valley Bank. Overall, our data revealed multiple signs that consumers increasingly expect a recession ahead,” said Joanne Hsu, the director of the survey.
There were steep declines in both the assessment of current conditions and expectations for the future.
“While sentiment fell across all demographic groups, the declines were sharpest for lower-income, less-educated, and younger consumers, as well as consumers with the top tercile of stock holdings. All five index components declined this month, led by a notably sharp weakening in one-year business conditions,” Hsu said.
Year-ahead inflation expectations fell from 4.1 percent in February to 3.6 percent, the lowest reading since April 2021. Long-run inflation expectations came in at 2.9 percent for the fourth consecutive month.
Walmart Reports A Large Number Of Store Closings As Catastrophic Retail Collapse Intensify
A large number of Walmart stores are set to close down permanently next month as conditions continue to deteriorate for U.S. grocers. The biggest retailer in the world hasn’t been immune from the devastating effects of the retail apocalypse, and now several locations that have served their communities for years are about to disappear. Believe it or not, the top retail chain is reporting lagging sales growth and a myriad of challenges that include wage and consumer inflation and declining demand. The outlook is very grim, and many other big U.S. grocery chains are following Walmart’s move and shuttering multiple locations to survive the perfect storm that has already begun.
According to The U.S. Sun, over a hundred locations are on the chopping block due to “poor sales performance”. On top of that, the retail giant has decided to put an end to its nine-year experiment with pick-up-only locations and confirmed it would lay off thousands of workers at its e-commerce fulfillment centers across the country.Moreover, in a recent interview with Fox News, the former Walmart CEO pointed to several reasons why the company was struggling and warned Americans about the “detrimental impact that mass layoffs could have on the U.S.'s feeble economy.”
"It's crazy right now. We're stuck in this loop of wage inflation, product inflation, and cost inflation. And it's just that cycle keeps going. And I think, unfortunately, an inevitable byproduct of some of the Fed's moves during the pandemic,” said Bill Simon, who left his position as Walmart’s chief executive officer in 2014. Walmart has already informed investors that it expects sales growth to significantly slow down, especially in the second half of this year. On Tuesday, Walmart forecasted net sales growth of 2.5% for the current fiscal year, well below Wall Street’s prediction for a 3.3% increase. It expects adjusted earnings in a range between $5.90 per share for 2024, missing analysts’ forecast of $6.50.
Refinitiv data shows that this would mark the weakest sales growth for the retailer since its 2010 fiscal year, and the first drop in annual earnings since fiscal 2009. But Walmart is far from the only large retailer that is facing closure as sales decline. As a perfect storm of events hits food supply chains, several grocery stores nationwide are also shutting down. A new report by Best Life reveals that dozens of Winn-Dixie stores are closing right now. A spokesperson for Southeastern Grocers Inc., Winn-Dixie's parent company, called the decision to close "difficult." "While we understand that closing stores will impact local communities, we want to assure you this decision was not made lightly," the spokesperson said.
Moreover, so far this year 6 Lucky supermarkets have been shuttered. And another one is on the chopping block this month after 40 years in business. In February, Green Zebra, a grocery chain that earned the love of loyal customers all across Portland, Oregon went bankrupt. The niche grocery market was known for its healthier meals, but unfortunately, the chain went under and is now closing all of its current locations. The goodbye occurs after 10 years in business.
The shutdown of so many stores is not only affecting the bottom lines of businesses but also leading to a surge in unemployment and higher prices, making it increasingly difficult for consumers to afford the basic necessities of life. Local communities are also feeling the impact, as empty storefronts and vacant malls have become the new norm. We must wake up to the fact that the retail apocalypse is not just a temporary setback but a long-term crisis that requires immediate action.
A CLOSE LOOK AT BIDENOMICS
CALIFORNIA HAS THE MOST ILLEGALS IN THE COUNTRY AND THE MOST HOMELESS. NOT HARD TO DO THE MATH ON THAT ONE.
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THE NIGHTMARE BEGINS IN JULY!? FINANCIAL CRISIS 2.0, PAYCHECK TO PAYCHECK CROWD
A decent, safe, and affordable home is something all Americans need to thrive. For decades, low-income families have struggled to have access to affordable rental homes, but now this is a huge problem for the middle class, too. Millions of middle-income earners can’t afford rent in major U.S. cities due to the steep rise in prices recorded since the pandemic. Without significant pay raises or government assistance, these middle-class households are being shut out from typical middle-class neighborhoods, and this is triggering a chain reaction that leads to systemic poverty and lingering inequality. In other words, housing costs are squeezing the life out of middle-class Americans.
The typical home now costs about $80,000 more than it did just two years ago, and the average rent in the U.S. is over $1,000 more expensive than in 2020. Rents are climbing an average of 3.5% annually, the study found, while middle-class renters’ incomes have declined 9% over the past decade. In most metropolitan areas across the country, the American middle class has been spending far more on housing than they can afford, researchers found. The study highlights that 21.2% of middle-class homeowners and 46.3% of middle-class renters in the United States are either moderately or severely burdened by housing costs — defined as spending more than 30% or more than 50% of their income on housing, respectively.
"Ultimately, we're in a rental affordability crisis," noted Whitney Airgood-Obrycki, a research associate with the Harvard Joint Center for Housing Studies. Believe it or not, 15 years ago, more than two-thirds of people who rented an apartment or a single-family home in the U.S. earned less than $30,000 a year, the study shows.
Every year that passes by, it gets even harder for middle-class renters who cannot qualify for subsidized housing to find affordable apartments on the market. Renters need to earn $21.21 an hour to afford a modest, two-bedroom apartment in the U.S., according to the National Low Income Housing Council, significantly more than the average national hourly wage of $16.38. This is why 51% of renters in the middle class are unable to afford a place to live in most U.S. cities.
The savings that used to be associated with the middle class have dried up in the past few years, as wage growth stagnated. Not only does this make it harder for people to stay in the middle class, but it makes coming up with high sums to rent or buy city apartments impossible. “If there aren’t enough cheaper options, it becomes a chain, with a middle-class person living in an apartment a lower-income person might have occupied, and so on,” Apartment List Senior Research Associate Sydney Bennet said. “If you miss that gap in the middle for housing, it has a chain reaction.”
And the aftermath of that is systemic poverty and an increasingly unequal America, where only those at the very top of the economic chain can own their homes and build equity through properties while the middle class is hollowed out. This isn’t only a housing and rental crisis, this is the reflection of the crumbling foundations of a broken society. And nothing that our leaders are doing is making things any better. The financial meltdown that we’re witnessing today is a reminder that more distress is coming for everyday Americans. And sadly, it looks like real estate will be the next domino to fall.
Report: 62% of American Consumers Live Paycheck to Paycheck
A report revealed 62 percent of United States adults live paycheck to paycheck.
A report by PYMNTS and LendingClub, a peer-to-peer lending platform, revealed that as of February, 62 percent of Americans live paycheck to paycheck, including 48 percent of high-income consumers.
The report noted that though inflation is lower than it was in July, consumers are still contending with rising costs.
“Inflation has made life more and more expensive, and consumers have already made moves to cope, such as pulling back on discretionary expenses,” the report read. “But one can only pull back so far on spending, and PYMNTS’ data reveals that consumers are finding another way to navigate their lower purchasing power.”
The report observed that for some people “supplemental income may be the key” and noted that about a quarter of consumers had a side job in addition to 17 percent who had other forms of supplemental income.
The report noted 39 percent of those who lived paycheck to paycheck “with issues paying their bills” mentioned “extraordinary expenses” as their reason for seeking side work.
Some 55% percent of respondents reported their supplemental income grew as a share of their total income over the last 90 days.
The report surveyed 4,125 U.S. consumers from Feb. 7 to Feb. 23 and also considered economic data from other sources.
A February press release from LendingClub indicated that in January 60 percent of consumers were living paycheck to paycheck, two percent lower than in February.
The press release also touched on data about outstanding credit card balances, with the average consumer having credit card debt totaling 35 percent of their savings.
However, this figure varied among different consumer groups. Those who indicated they were living paycheck to paycheck without issues paying their bills maintained credit card balances equaling 62 percent of their savings, and those who were living paycheck to paycheck and had trouble paying their bills had credit card debt exceeding their available savings by more than 50 percent.
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