Sunday, July 3, 2022
BIDENOMICS - IT'S OFFICIAL! - JOE BIDEN HAS DESTROYED THE ECONOMY!
THE RICH RUN FROM THE REVOLUTION. BUT WE KNOW WHERE THEY LIVE!
Chris Hedges | Myopic Elites
Richard Wolff: This Is the Worst Economic Period in My Lifetime
https://www.youtube.com/watch?v=hz97wPA2_n4
Americans are deeply pessimistic about the economy despite the attempts of many commentators to
highlight how "good" the economy is on paper. Richard Wolff discusses why so many people feel the economy
is not working for them, and what socialist should do to rally voters around a program that will make the
economy work for everyone.
Most of us are working as hard as we can, but our living standards continue to be systematically destroyed by rampant inflation, soaring everyday expenses, rising mortgage rates, crashing financial markets, and the reckless policies of our leaders.
15 Signs That The U.S. Economy Is Starting To Slow Down Dramatically
https://www.youtube.com/watch?v=KQKPS4bNrII
The pace at which economic conditions are deteriorating is shocking the experts. Just a few months ago, authorities were saying everything was under control and things would soon start improving again. But since the start of 2022, a major shift has taken place. Most of the headlines have been about the highest consumer prices in decades and how poorly American families are faring in this economy. To make things worse, huge stock market declines and a cooling housing market are having a major impact on our economic activity. At this point, consumers can't afford to meet their basic needs. Home sales and auto sales are dropping like a rock, business bankruptcies, layoffs, and unemployment claims are ticking back up, and the U.S. middle-class continues to get squeezed. At this point, a series of new Fed surveys are showing that manufacturing activity in the U.S. is dramatically slowing down. A new report released by the Richmond Fed indicated that factory activity contracted in the U.S. last month, with the Fifth District Survey of Manufacturing Activity index dropping 23 points from a positive reading of 14 in the month prior to a minus nine, the lowest reading since May 2020, when much of the economy was still suffering from business shutdowns. In a separate report, the New York Fed’s Empire State survey of manufacturing showed that business activity sharply plunged in June. The index of general business conditions fell 36.2 points to a negative reading of 11.6 last month. “New orders declined and fell into negative territory. Shipments fell at the fastest pace since early in the pandemic and also turned negative. Both the prices paid and prices received indexes are still elevated, indicating strong inflationary pressures remain despite the slowdown in orders,” the report revealed. New data shows that the U.S. economy has shrunk at an even faster rate than expected during the first quarter of 2022. The Bureau of Economic Analysis's third and final estimate of first-quarter GDP was released on Wednesday morning, and it showed a 1.6% annualized drop in economic growth in the first three months of 2022, more than the 1.4% previously reported and which was expected by economists, according to estimates from Bloomberg. "The economy is slowly sliding in the direction of weakness as consumers are buying less to keep GDP afloat," FWDBONDS Chief Economist Christopher Rupkey stressed in a note. Right now, optimism is being replaced by a growing feeling of frustration and disbelief as more and more people started realizing that the economic downturn that is now upon us will ultimately be even worse than what we experienced a decade ago. Most of us are working as hard as we can, but our living standards continue to be systematically destroyed by rampant inflation, soaring everyday expenses, rising mortgage rates, crashing financial markets, and the reckless policies of our leaders. And the worst part of it all is that we are still only in the very early chapters of this crisis. It looks like the second half of this year will be even more turbulent than the first half, and that is going to have severe implications for all of us. For that reason, today, we gathered new numbers that show just how profound is the economic slowdown of 2022. For more info, find us on: https://www.epiceconomist.com/ And visit: http://theeconomiccollapseblog.com/
It is pathetic that Biden, Powell, Yellen, and others continue to regurgitate that the economy is strong and the balance sheets of voters are strong. They continue to say they can't see a recession. Nothing could be further from the truth.
July 3, 2022
Jerome Powell and Janet Yellen should be fired
Janet Yellen and Jerome Powell are supposed to be economic experts yet they continue to show their pure ignorance on what causes inflation or when it will occur.
One is the Treasury Secretary, the other is the Chairman of the Board of the Federal Reserve. But neither knows beans about inflation, which is why we have so much of it.
The Federal Reserve has two jobs: Watching unemployment and controlling inflation, but Powell said he really doesn't understand what caused the current inflation. He's a fan of the junk economic thought known as "Modern Monetary Theory" and it shows.
Before we ended up with the inflation we see today, Yellen and Powell repeatedly claimed that inflation was transitory and so their delayed actions to put a stop to it compounded the problem. Powell kept interest rates artificially low for too long, which punished savers and pushed investors into chasing the prices of other assets such as stocks, bonds, real estate, and artificially created assets like cryptocurrencies.
This week, Powell blamed inflation on the unvaccinated. I'm not kidding. That is pure B.S and exactly what a politician pushing an agenda would say:
What did we get wrong? And that really was looking at these supply-side issues and believing that they would be resolved relatively quickly.
By that I mean there were gonna be vaccinations — everyone would get vaccinated — so the millions of people who dropped out of the labor force would come right back in, so wages wouldn’t be under such pressure. That didn’t happen.
Besides the artificially low interest rates that caused asset prices to spike, the Federal Reserve printed massive amounts of money to support the government's profligate spending on COVID handouts, paying people not to work among other wasteful schemes, and that caused demand to go up, which brought us classic demand-pull inflation.
Lower down on the economic production hierarchy, below the inflationary surge of money, we have Biden's disastrous energy policies which caused energy prices to spike, because energy is priced in dollars -- worldwide. Throughout the presidential campaign and throughout his term in office Joe Biden has stated one of his primary goals was to destroy the fossil fuel industry. That sent the message to traders, speculators, OPEC, Russia, and others that the U.S would not be a competitor any more and prices soared. Energy prices affect huge swaths of the economy and inflation spiked further, as if the Fed's monetary print-fest weren't enough. It doesn't take an "expert" to recognize that, but somehow Yellen, Powell, economists and people pretending to be journalists won't admit the obvious.
As energy prices, food, asset prices, rents, and everything else spikes, we have a classic case of cost-push inflation where money is transferred (or redistributed) from one sector to another, which harms everyone, especially the poor, middle class, and small businesses.
As the price of everything goes up, workers naturally demand higher wages and we get into a disastrous inflation spiral.
Biden and his people say they are doing everything to lower inflation and energy prices, but that is a lie. All we have to do is look back to 2008 and then-President George W. Bush to see how to lower energy prices.
The price of crude went above $140 a barrel and gasoline was over $4 per gallon at the pump in July 2008. Disposable income was decimated. Bush opened up drilling (Drill, baby drill!), and by January 2009, when Barack Obama and Joe Biden took office, the price of crude was around $40 a barrel and gasoline was under $2 per gallon.
That move alone, begining with just the talk of it, contributed greatly to the economic recovery that followed.
Of course Biden won't do that and his administration, including Powell and Yellen won't suggest that he does because the extremist green agenda is their primary goal, not inflation.
It is pathetic that Biden, Powell, Yellen, and others continue to regurgitate that the economy is strong and the balance sheets of voters are strong. They continue to say they can't see a recession. Nothing could be further from the truth.
In the first quarter, the economy shrunk 1.6%, and the second quarter may barely eke out a gain if they are lucky, but many economists are forecasting worse. The public, especially the poor, the middle class, and the small businesses feel like they are in a recession.
Eventually, the slow economy will yield statistically lower inflation rates but if energy prices remain near today's levels the economy will be in trouble for a long time.
Stocks Tumble into the Worst First Half in over 50 years
Wall Street racked up more losses for stocks Thursday, as the market closed out its worst quarter since the onset of the pandemic in early 2020.
The S&P 500 fell 0.9 percent, its fourth consecutive drop. The benchmark index is now down 21 percent since it hit an all-time high at the beginning of the year. It entered a bear market earlier in June.
All told, the S&P 500′s performance in the first half of 2022 was the worst since the first six months of 1970.
“And in 1970 there was a solid rebound after that first half decline,” said Lindsey Bell, chief markets and money strategist at Ally Invest. “This time around, the impact of the Fed, the impact of inflation and the uncertainty of where growth goes from here is really weighing on investors’ minds. … We just don’t know when the clouds of uncertainty are going to start to clear.”
The market’s steep decline this year has all but wiped out its gains from 2021, what was a banner year for the market as it emerged from its previous bear market in early 2020.
Rising inflation has been behind much of the slump for the broader market this year as businesses raise prices on everything from food to clothing and consumers are squeezed tighter. Inflation remains stubbornly hot, according to a series of recent economic updates.
The Federal Reserve and other central banks have been aggressively raising interest rates to try and slow economic growth in order to cool inflation. Higher rates can bring down inflation, but they also risk a recession by slowing the economy too much. They also push down on prices for stocks, bonds, cryptocurrencies and other investments.
“What the market is trying to assess is when does it seem as if the Fed is going to have what it needs to ascertain that inflation is plateauing,” said Quincy Krosby, chief equity strategist for LPL Financial.
The S&P 500 fell 33.45 points to 3,785.38 Thursday. It lost 16.4 percent in the April-June quarter, its biggest quarterly decline since it slumped 20 percent in the first three months of 2020, when the pandemic upended the global economy in a matter of weeks.
The Dow Jones Industrial Average fell 253.88 points, or 0.8 percent, to 30,775.43. The Nasdaq slid 149.16 points, or 1.3 percent, to 11,028.74.
Small company stocks also fell. The Russell 2000 lost 11.38 points, or 0.7 percent, to 1,707.99.
The yield on the 10-year Treasury, which helps set mortgage rates, fell to 3.01 percent from 3.09 percent late Wednesday.
Technology companies were among the biggest weights on the market, as investors continued to favor utilities and other traditional defensive stocks. Apple fell 1.8 percent, while Exelon rose 2.2 percent.
Retailers and other companies that rely directly on consumer spending also posted some of the biggest losses, as they have all year. Amazon slipped 2.5 percent and Best Buy shed 2.9 percent.
Investors got another update on inflation Thursday. A measure of inflation that is closely tracked by the Fed rose 6.3 percent in May from a year earlier, unchanged from its level in April. The report from the Commerce Department also said that consumer spending rose at a sluggish 0.2 percent rate from April to May.
The update follows a worrisome report earlier this week showing that consumer confidence slipped to its lowest level in 16 months. The government has also reported that the U.S. economy shrank 1.6 percent in the first quarter and weak consumer spending was a key part of that contraction.
The situation has become even more complicated following added supply chain problems because of COVID-19 lockdowns in China and Russia’s invasion of Ukraine. The war in Ukraine prompted a surge in oil prices this year that resulted in record high gasoline prices.
The OPEC oil cartel and allied producing nations decided Thursday to increase production of crude oil, but the amount will likely do little to relieve high gasoline prices at the pump and energy-fueled inflation plaguing the global economy.
“There’s no doubt this has been a difficult two quarters for the market, the U.S. economy, the U.S. consumer, and for the Fed’s job to control and curtail inflationary pressure,” Krosby said. “And yet, as we get into the beginning of the second half, so far companies have been managing and it’s the guidance they offer that is going to help set the tone over the next couple of weeks.”
Summers: Risk of Recession in 2022 Is ‘Significantly Higher’ Than It Was Six, Nine Weeks Ago
During an interview aired on Friday’s broadcast 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 the risk of a recession this year “are significantly higher than I would have judged six or nine weeks ago.”
Summers said, “I think you have to say that whatever you thought about recession risks a month ago, the recession risks through the year 2022 have to have gone up in a quite material way. I felt for a long time, as you know, David, that we’re not going to have inflation return near target without a significant economic downturn. But that downturn could happen either because interest rates set by the Fed rise very, very sharply or it could happen because of a kind of self-fulfilling process coming out of the high inflation and reductions in people’s incomes. And the latter possibility is looking like — is looking more likely today than it was.”
He added, “I think the risks of a 2022 recession are significantly higher than I would have judged six or nine weeks ago.” And “I think you have to say that the chance that a recession [that’s] ultimately dated as having begun during 2022 has gone up significantly.”
Follow Ian Hanchett on Twitter @IanHanchet
Subscribe to:
Posts (Atom)