One thing that almost everyone can agree upon is that our system of public education is broken. We spend far more money on public education than anyone else in the world, and yet the results are depressing to say the least. Considering how much we are putting into education, we should be producing the best students on the entire planet, but it just isn’t happening. Personally, I attended public schools from kindergarten all the way up through law school, and the quality of education that I received was extremely poor. Even on the collegiate level, most of the courses were so “dumbed down” that even the family dog could have passed them. And of course millions of other people all over the country would say the same sorts of things about their own educations. Many refer to what is happening to our society as “the dumbing down of America”, and if we don’t get things fixed the United States is on course to become a second class nation.
If you believe that I am exaggerating, I would like you to consider the following numbers. The following are 14 facts that prove that America’s absolutely pathetic system of education deserves an “F” grade…
#1 Somewhere around 50 million students attend public schools in America today.
#2 Education is the most expensive item in 41 different state budgets.
#3 The latest PISA tests show that U.S. students are below average compared to the rest of the industrialized world…
One of the biggest cross-national tests is the Programme for International Student Assessment (PISA), which every three years measures reading ability, math and science literacy and other key skills among 15-year-olds in dozens of developed and developing countries. The most recent PISA results, from 2015, placed the U.S. an unimpressive 38th out of 71 countries in math and 24th in science. Among the 35 members of the Organization for Economic Cooperation and Development, which sponsors the PISA initiative, the U.S. ranked 30th in math and 19th in science.
#4 A report from the Educational Testing Service found that American Millennials are way behind Millennials in most other industrialized nations…
Half of American Millennials score below the minimum standard of literacy proficiency. Only two countries scored worse by that measure: Italy (60 percent) and Spain (59 percent). The results were even worse for numeracy, with almost two-thirds of American Millennials failing to meet the minimum standard for understanding and working with numbers. That placed U.S. Millennials dead last for numeracy among the study’s 22 developed countries.
#5 According to one very disturbing study, fewer than half of all high school graduates “are able to proficiently read or complete math problems”.
#6 According to U.S. News & World Report, “inflation-adjusted spending per student in American public schools has increased by 663 percent.”
#7 In 2015, the percentage of students in our public schools coming from low income homes crossed the 50 percent mark. That was the first time that had happened in at least 50 years.
#8 One study found that a whopping 76 percent of all high school graduates “were not adequately prepared academically for first-year college courses.”
#9 The following are five numbers which show how far the quality of college education has fallen in the United States…
-“After two years in college, 45% of students showed no significant gains in learning; after four years, 36% showed little change.”
-“Students also spent 50% less time studying compared with students a few decades ago.”
-“35% of students report spending five or fewer hours per week studying alone.”
-“50% said they never took a class in a typical semester where they wrote more than 20 pages.”
-“32% never took a course in a typical semester where they read more than 40 pages per week.”
#10 Just 36 percent of all full-time college students receive a bachelor’s degree within four years, and just 77 percent of all full-time college students have earned a bachelor’s degree by the end of six years.
#11 One survey found that nearly 10 percent of our college graduates believe that Judge Judy is on the Supreme Court…
#12 Another survey found that 29 percent of all U.S. adults cannot name the Vice-President.
#13 And yet another survey found that only 43 percent of all U.S. high school students knew that the Civil War was fought some time between the years of 1850 and 1900.
#14 Perhaps worst of all, 75 percent of our young adults cannot find Israel on a map of the Middle East.
This is what happens when we put federal bureaucrats in charge of education.
All over the country there are calls to abolish the Department of Education. For example, the following was published on CNBC…
The DOE currently employs 5,000 government workers and has an annual budget of $73 billion, yet according to the CATO Institute, it has not affected student outcomes in any demonstrable way over its 40-year history . It has successfully created a system that requires educators to teach reams of “politically-correct” content and focus on scoring well on standardized tests. It has created an atmosphere of testing in our schools, putting intense pressure on teachers and students to “ace the test” rather than mastering the material. This promotes a culture of teaching to the test and score tampering.
Unfortunately, abolishing the Department of Education is not going to be easy, because there is a tremendous amount of money at stake. And whenever there is a tremendous amount of money at stake, there are going to be very powerful interests that are determined to keep things just the way that they are…
The major stakeholders in K-12 public education are at an impasse. Teachers’ Unions are primarily concerned with self-preservation, maintaining extravagant perks for union administrators and exerting disproportionate political influence. A handful of publishing houses sell us $8 billion worth of warmed- over text books every year. Testing companies collectively spent tens of millions lobbying in states and on Capitol Hill from 2009 to 2014. These politically powerful, entrenched special interests are heavily invested in maintaining the failing status quo.
But even though there is going to be a lot of resistance, I am going to try to abolish the Department of Education anyway. I believe that full control over education should be returned to the state and local levels, but that is just the beginning.
Ultimately, we need to rebuild our system of education from the ground up. Instead of politically-correct indoctrination centers that endlessly pump progressive propaganda into impressionable young minds, we need to transform our public schools into institutions that focus on the essentials. We need a renewed emphasis on reading, writing, math and the skills that will enable our young people to function successfully once they get out into the real world.
At one time America’s system of education was the best in the world, and we can get there again. But of course the left is going to fight against the changes that need to be made every step of the way.
Not even during the worst parts of the last recession did things ever get this bad for the U.S. retail industry. As you will see in this article, more than 300 retailers have already filed for bankruptcy in 2017, and it is being projected that a staggering 8,640 stores will close in America by the end of this calendar year. That would shatter the old record by more than 20 percent. Sadly, our ongoing retail apocalypse appears to only be in the early chapters. One report recently estimated that up to 25 percent of all shopping malls in the country could shut down by 2022 due to the current woes of the retail industry. And if the new financial crisis that is already hitting Europe starts spreading over here, the numbers that I just shared with you could ultimately turn out to be a whole lot worse.
I knew that a lot of retailers were filing for bankruptcy, but I had no idea that the grand total for this year was already in the hundreds. According to CNN, the number of retail bankruptcies is now up 31 percent compared to the same time period last year…
Bankruptcies continue to pile up in the retail industry.
More than 300 retailers have filed for bankruptcy so far this year, according to data from BankruptcyData.com. That’s up 31% from the same time last year. Most of those filings were for small companies — the proverbial Mom & Pop store with a single location. But there are also plenty of household names on the list.
Yes, the growth of online retailers such as Amazon is fueling some of this, but the Internet has been around for several decades now.
So why are retail store closings and retail bankruptcies surging so dramatically all of a sudden?
Just a few days ago, another major victim of the retail apocalypse made headlines all over the nation when it filed for bankruptcy. At one time Gymboree was absolutely thriving, but now it is in a desperate fight to survive…
Children’s clothing chain Gymboree has filed for bankruptcy protection, aiming to slash its debts and close hundreds of stores amid crushing pressure on retailers.
Gymboree said it plans to remain in business but will close 375 to 450 of its 1,281 stores in filing for a Chapter 11 bankruptcy reorganization. Gymboree employs more than 11,000 people, including 10,500 hourly workers.
And in recent weeks other major retailers that were once very prosperous have also been forced to close stores and lay off staff…
This hemorrhaging of retail jobs comes on the heels of last week’s mass layoffs at Hudson Bay Company, where employees from Saks Fifth Avenue and Lord & Taylor were among the 2,000 people laid off. The news of HBC layoffs came on the same day that Ascena, the parent company of brands like Ann Taylor, Lane Bryant, and Dress Barn, told investors it will be closing up to 650 stores (although it did not specify which brands will be affected just yet). Only two weeks ago, affordable luxury brand Michael Kors announced it too would close 125 stores to combat brand overexposure and plummeting sales.
In a lot of ways this reminds me of 2007. The stock market was still performing very well, but the real economy was starting to come apart at the seams.
And without a doubt, the real economy is really hurting right now. According to Business Insider, Moody’s is warning that 22 more major retailers may be forced to declare bankruptcy in the very near future…
Twenty-two retailers in Moody’s portfolio are in serious financial trouble that could lead to bankruptcy, according to a Moody’s note published on Wednesday. That’s 16% of the 148 companies in the financial firm’s retail group — eclipsing the level of seriously distressed retail companies that Moody’s reported during the Great Recession.
You can find the full list right here. If this many major retailers are “distressed” now, what are things going to look like once the financial markets start crashing?
As thousands of stores close down all across the United States, this is going to put an incredible amount of stress on shopping mall owners. In order to meet their financial obligations, those mall owners need tenants, but now the number of potential tenants is shrinking rapidly.
I have talked about dead malls before, but apparently what we have seen so far is nothing compared to what is coming. The following comes from CNN…
Store closings and even dead malls are nothing new, but things might be about to get a whole lot worse.
Between 20% and 25% of American malls will close within five years, according to a new report out this week from Credit Suisse. That kind of plunge would be unprecedented in the nation’s history.
I can’t even imagine what this country is going to look like if a quarter of our shopping malls shut down within the next five years. Already, there are some parts of the U.S. that look like a third world nation.
And what is this going to do to employment? Today, the retail industry employs millions upon millions of Americans, and those jobs could start disappearing very rapidly…
The retail sales associate is one of the most popular jobs in the country, with roughly 4.5 million Americans filling the occupation. In May, the US Bureau of Labor Statistics released data that found that 7.5 million retail jobs might be replaced by technology. The World Economic Forum predicts 30 to 50 percent of retail jobs will be gone once struggling companies like Gymboree fully hop on the digital train. MarketWatch found that over the last year, the department store space bled 29,900 jobs, while general merchandising stores cut 15,700 positions. At this rate, one Florida columnist put it soberingly, “Half of all US retail jobs could vanish. Just as ATMs replaced many bank tellers, automated check-out stations are supplanting retail clerks.”
At this moment, the number of working age Americans that do not have a job is hovering near a record high. So being able to at least get a job in the retail industry has been a real lifeline for many Americans, and now that lifeline may be in grave danger.
For those running our big corporations, losing these kinds of jobs is not a big deal. In fact, many corporate executives would be quite happy to replace all of their U.S. employees with technology or with foreign workers.
But if the middle class is going to survive, we need an economy that produces good paying jobs. Unfortunately, even poor paying retail jobs are starting to disappear now, and the future of the middle class is looking bleaker than it ever has before.
Since the election there has been this perception among the American public that the economy is improving, but that has not been the case at all. U.S. GDP growth for the first quarter was just revised up to 1.2 percent, but that is even lower than the average growth of just 1.33 percent that we saw over the previous ten years. But when you look even deeper into the numbers a much more alarming picture emerges. Commercial and industrial loan growth is declining, auto loan defaults are rising, bankruptcies are absolutely surging and we are on pace to break the all-time record for most store closings in a single year in the United States by more than 20 percent. All of these are points that I have covered before, but today I have 12 new facts to share with you. The following are 12 signs that the economic slowdown that the experts have been warning about is now here…
#1 According to Challenger, the number of job cuts in May was 71 percent higher than it was in May 2016.
#2 We just witnessed the third worst drop in U.S. construction spending in the last six years.
#3 U.S. manufacturing PMI fell to an 8 month low in May.
#4 Financial stocks have lost all of their gains for the year, and some analysts are saying that this is “a terrible sign”.
#5 One new survey has found that 39 percent of all millionaires “plan to avoid investing in the coming month”. That is the highest that figure has been since December 2013.
#6 Jobless claims just shot up to a five week high of 248,000.
#7 General Motors just reported another sales decline in May, and it is being reported that the company may be preparing for “more job cuts at its American factories”.
#8 After an initial bump after Donald Trump’s surprise election victory, U.S. consumer confidence is starting to fall.
#9 Since Memorial Day, Radio Shack has officially shut down more than 1,000 stores.
#10 Payless has just increased the number of stores that it plans to close to about 800.
#11 According to the Los Angeles Times, it is being projected that 25 percent of all shopping malls in the United States may close within the next five years.
#12 Over the past 12 months, the number of homeless people living in Los Angeles County has risen by a staggering 23 percent.
And in case those numbers have not persuaded you that the U.S. economy is heading for rough times, I would encourage you to go check out my previous article entitled “11 Facts That Prove That The U.S. Economy In 2017 Is In Far Worse Shape Than It Was In 2016” for even more eye-popping statistics.
During a bubble, it can feel like the good times are just going to keep rolling forever.
But that never actually happens in reality.
The truth is that we are in the terminal phase of the greatest debt bubble of all time, and the evidence is starting to mount that this debt bubble has just about run its course. The following comes from Zero Hedge…
A recurring theme on this website has been to periodically highlight the tremendous build up in US corporate debt, most recently in April when we showed that “Corporate Debt To EBITDA Hits All Time High.” The relentless debt build up is something which even the IMF recently noted, when in April it released a special report on financial stability, according to which 20% of US corporations were at risk of default should rates rise. It is also the topic of the latest piece by SocGen’s strategist Andrew Lapthorne who uses even more colorful adjectives to describe what has happened since the financial crisis, noting that “the debt build-up during this cycle has been incredible, particularly when compared to the stagnant progression of EBITDA.”
Lapthorne calculates that S&P1500 ex financial net debt has risen by almost $2 trillion in five years, a 150% increase, but this mild in comparison to the tripling of the debt pile in the Russell 2000 in six years. He also notes, as shown he previously, that as a result of this debt surge, interest payments cost the smallest 50% of stocks in the US fully 30% of their EBIT compared with just 10% of profits for the largest 10% and states that “clearly the sensitivity to higher interest rates is then going to be with this smallest 50%, while the dominance and financial strength of the largest 10% disguises this problem in the aggregate index measures.”
The same report noted that net debt growth in the U.S. is quickly headed toward negative territory, and the last time that happened was during the last recession.
We see similar things when we look at the 2nd largest economy on the entire planet. According to Jim Rickards, China “has multiple bubbles, and they’re all getting ready to burst”…
China is in the greatest financial bubble in history. Yet, calling China a bubble does not do justice to the situation. This story has been touched on periodically over the last year.
China has multiple bubbles, and they’re all getting ready to burst. If you make the right moves now, you could be well positioned even as Chinese credit and currency crash and burn.
The first and most obvious bubble is credit. The combined Chinese government and corporate debt-to-equity ratio is over 300-to-1 after hidden liabilities, such as provincial guarantees and shadow banking system liabilities, are taken into account.
We just got the worst Chinese manufacturing number in about a year, and it looks like economic conditions over there are really starting to slow down as well.
Just like 2008, the coming crisis is going to be truly global in scope.
It is funny how our perspective colors our reality. Just like in 2007, many are mocking those that are warning that a crisis is coming, but just like in 2009, after the crisis strikes many will be complaining that nobody warned them in advance about what was ahead.
And at this moment it may seem like we have all the time in the world to get prepared for the approaching storm, but once it is here people will be talking about how it seemed to hit us so quickly.
My hope is that many Americans will finally be fed up with our fundamentally flawed financial system once they realize that we are facing another horrendous economic crisis, and that in the aftermath they will finally be ready for the dramatic solutions that are necessary in order to permanently fix things.
Next month, citizens of Puerto Rico are going to vote on statehood, and the absolutely devastating economic collapse that is gripping the island could be enough to push pro-statehood forces over the edge to victory. Of course Congress has the final say on whether Puerto Rico becomes a state or not, but it is going to be very difficult to deny Puerto Rico’s 3.4 million residents statehood if they strongly insist that they want it. Needless to say, if Puerto Rico becomes the 51st U.S. state that would greatly benefit the Democrats, because the population of Puerto Rico is very liberal.
Puerto Rico does not get to vote in presidential elections, but they do help select the nominees for both parties. In 2016, 58,764 votes were cast in the Democratic caucuses held in Puerto Rico, and only 36,660 votes were cast in the Republican primary. As a state, it is doubtful whether Puerto Rico would send any Republican lawmakers to Washington for decades to come.
So if Puerto Rico becomes a state, the Democrats would add two new senators and probably four or five representatives.
Puerto Rico would be the 30th largest state in the entire country, and so it would instantly have more political power than 21 other U.S. states.
This upcoming vote on June 11th is going to be extremely important, and pro-statehood forces are working very hard to get a positive result. The following info about the referendum in June comes from Wikipedia…
The fifth referendum will be held on June 11, 2017 and will offer two options: “Statehood” and “Independence/Free Association.” It will be the first referendum not to offer the choice of “Commonwealth.” Newly-elected Governor Ricardo Rosselló is strongly in favor of statehood for Puerto Rico to help develop the economy and help to “solve our 500-year-old colonial dilemma … Colonialism is not an option …. It’s a civil rights issue … 3.5 million citizens seeking an absolute democracy,” he told the news media. Benefits of statehood include an additional $10 billion per year in federal funds, the right to vote in presidential elections, higher Social Security and Medicare benefits, and a right for its government agencies and municipalities to file for bankruptcy. The latter is currently prohibited.
At approximately the same time as the referendum, Puerto Rico’s legislators are also expected to vote on a bill that would allow the Governor to draft a state constitution and hold elections to choose senators and representatives to the federal Congress.
Over the past decade, Puerto Rico has been suffering through a nightmarish economic recession that never seems to end. The island was recently forced to declare the equivalent of bankruptcy because it is facing $123 billion in debt and pension obligations. At this moment 46 percent of the residents of Puerto Rico are living below the poverty line, the unemployment rate is 11 percent, and authorities just announced that another 179 public schools will be closing down.
It has been argued that the Obama administration could have done much more to alleviate the economic problems in Puerto Rico but that it purposely chose not to do so.
Well, the worse economic conditions get in Puerto Rico, the better it is for pro-statehood forces. Puerto Ricans are being told that becoming a state is the key to Puerto Rico’s long-term economic future, and at this point many are willing to do just about anything to get the economic suffering to end. The following is a short excerpt from a New York Times article entitled “Amid Puerto Rico’s Fiscal Ruins, a New Push for Statehood“…
A vigorous push for statehood was a central campaign promise of Gov. Ricardo Rosselló, 38, who was inaugurated in January. Next month, he will ask residents to vote, in a nonbinding referendum, for statehood as part of a long-term fix for a commonwealth facing a period of severe austerity that is likely to include shuttered public schools, frozen salaries, slashed pensions and crimped investments in public health. The island remains in the grip of a recession that has lingered for much of the past decade.
Could it be possible that this is what liberals have wanted all along?
Could it be possible that Obama and his minions saw Puerto Rico as a chess piece that could be used to permanently shift the balance of power in Congress?
Of course if Puerto Rico becomes a state that would have implications for presidential elections as well.
In the end, it will be Congress that decides what the fate of Puerto Rico will be, but if the people of Puerto Rico truly want to become the 51st U.S. state it is going to be really hard to deny them that opportunity indefinitely.
Last year at their national conventions, the Democrats and the Republicans both took the position that the citizens of Puerto Rico should be able to make this decision for themselves. But once faced with a final decision, it is inevitable that many Republican members of Congress would be opposed to statehood.
Personally, I believe that either independence or “free association” would be much better for Puerto Rico, and let us hope that the people of Puerto Rico choose that direction.
But when people are really hurting, they will often grasp any sort of olive branch that is being offered to them, and right now the progressives are really pushing statehood.
Of course for strategists on the left, the goal is not to help the suffering people of Puerto Rico.
Rather, the endgame is complete domination of the U.S. political system by any means necessary.
Puerto Rico has collapsed financially and has “filed for the equivalent of bankruptcy protection”. When this was announced on Wednesday, it quickly made front page news all over the planet. For decades, Puerto Rico has been considered to be the territory most likely to become “the 51st U.S. state”, and there have even been rumblings that we could soon see a renewed push for statehood. But that is on the back burner for now, because at the moment Puerto Rico is dealing with a nightmarish financial crisis that is the result of an accelerating economic collapse. Unfortunately, many Americans still don’t believe that what has happened to Puerto Rico could happen to us, even though signs of major economic trouble are emerging all around us.
Almost two years ago I issued a major warning about the debt crisis in Puerto Rico, and now the day of reckoning for “America’s Greece” has finally arrived…
Saddled by mountainous debts and undermined by rapid population loss, Puerto Rico filed for the equivalent of bankruptcy protection Wednesday in a historic move that will trigger a fierce legal battle, with the fate of the island’s citizens, creditors and workers at stake.
The oversight board appointed to lead the U.S. territory back to fiscal sustainability declared in a court filing that it is “unable to provide its citizens effective services,” crushed by $74 billion in debts and $49 billion in pension liabilities.
Like Greece, Zimbabwe, Venezuela and so many others, what has happened in Puerto Rico shows us that it is simply not possible to live way above your means indefinitely. If your debt grows much faster than your economy, eventually you reach a point where financial disaster is inevitable. This is a lesson that our leaders in Washington D.C. desperately need to learn before it is too late for the United States.
Since 2007, the population of Puerto Rico has declined by 10 percent and the number of jobs in that nation has declined by 20 percent. It is a long-term economic collapse that just continues to get even worse with each passing month.
Unfortunately for Wall Street, many large U.S. financial institutions have invested very heavily in Puerto Rico’s bonds. In fact, it has been estimated that 180 mutual funds have “at least 5% of their portfolios in Puerto Rican bonds”.
At this point, U.S. firms stand poised to lose billions of dollars as their investments become worthless, and many of these firms were totally blindsided because they were assured that this could not happen…
The financial collapse promises to impose deep losses on bondholders who for years snapped up Puerto Rico’s securities, which are tax-free throughout the U.S. U.S. states can’t file for bankruptcy, and investors bought the bonds assured that it wasn’t a legal option for Puerto Rico either.
The scale of the restructuring is far larger than Detroit’s record-setting $18 billion bankruptcy, and it’s unclear how long a court proceeding would last or how deep would be the cuts that are imposed on bondholders.
So how far will the financial collapse of Puerto Rico ultimately ripple through our financial system?
It is hard to say, but without a doubt this is a major concern.
Meanwhile, corporate insiders are selling stocks at the fastest pace that we have seen in seven years. The following comes from Business Insider…
As the investing public has continued to devour stocks, sending all three major indexes to record highs in the last few months, corporate insiders have been offloading shares to an extent not seen in seven years. Selling totaled $10 billion in March, according to data compiled by Trim Tabs.
It’s a troubling trend facing an equity market that’s already grappling with its loftiest valuations since the 2000 tech bubble. If the people with the deepest knowledge of a company are cashing out, why should investors keep buying at current prices?
What do those corporate insiders know that the rest of us do not?
Perhaps they are just being rational. If I was a top corporate insider at one of these “unicorns” that have market caps in the tens of billions of dollars even though they are consistently losing hundreds of millions of dollars a year I would be selling too.
You make money in the stock market by selling at the right time. Those that sold their Pets.com stock at the peak of the dotcom bubble got quite wealthy, but those that held on all the way through the stock market crash got completely wiped out.
There have been some analysts that have suggested that one way to make money in the stock market is to simply do what the insiders are doing. If they are buying, then that is supposedly a time to buy, and if they are selling that is supposedly a time to sell.
Personally, I would rather use my limited resources to get prepared for the horrific crisis that is inevitably coming, but not everyone agrees with that outlook.
The crisis in Puerto Rico developed over an extended period of time, and there were plenty of warning signs.
So anyone that is still holding Puerto Rican bonds at this point is quite foolish.
Similarly, the warning signs here in the U.S. have been mounting for quite a while. Just yesterday, we got more exceedingly bad news for the U.S. auto industry, and we are on pace to absolutely smash the all-time record for most retail store closings in a single year.
Just because a crisis does not arrive on the exact month or year that you were anticipating does not mean that it has been canceled.
I warned about a looming financial cataclysm in Puerto Rico nearly two years ago, but they somehow managed to hang on until now. And even though the U.S. financial system is still afloat for the moment, everyone should be able to see that we are definitely living on borrowed time.
So don’t look down on Puerto Rico, because what is happening to them is eventually coming here too.
Those that were predicting that the U.S. economy would be flying high by now have been proven wrong. U.S. GDP grew at the worst rate in three years during the first quarter of 2017, and many are wondering if this is the beginning of a major economic slowdown. Of course when we are dealing with the official numbers that the federal government puts out, it is important to acknowledge that they are highly manipulated. There are many that have correctly pointed out to me that if the numbers were not being doctored that they would show that we are still in a recession. In fact, John Williams of shadowstats.com has shown that if honest numbers were being used that U.S. GDP growth would have been consistently negative going all the way back to 2005. So I definitely don’t have any argument with those that claim that we are actually in a recession right now. But even if we take the official numbers that the federal government puts out at face value, they are definitely very ugly…
Economic growth slowed in the first quarter to its slowest pace in three years as sluggish consumer spending and business stockpiling offset solid business investment. Many economists write off the weak performance as a byproduct of temporary blips and expect healthy growth in 2017.
The nation’s gross domestic product — the value of all goods and services produced in the USA — increased at a seasonally adjusted annual rate of 0.7%, the Commerce Department said Friday, below the tepid 2.1% pace clocked both in the fourth quarter and as an average throughout the nearly 8-year-old recovery. Economists expected a 1% increase in output, according to a Bloomberg survey.
Even if you want to assume that it is a legitimate number, 0.7 percent economic growth is essentially stall speed, and this follows a year when the U.S. economy grew at a rate of just 1.6 percent.
So why is this happening?
Of course the “experts” in the mainstream media are blaming all sorts of temporary factors…
Economists blamed the weather. It was too warm this time around, rather than too cold, which is the usual explanation for Q1 debacles.
And they blamed the IRS refund checks that had been delayed due to last year’s spectacular identity theft problem. Everyone blamed everything on these delayed refund checks, including the auto industry and the restaurant industry. But by mid-February, a veritable tsunami of checks went out, and by the end of February, the IRS was pretty much caught up. So March should have been awash in consumer spending. But no. So we’ll patiently wait for that miracle to happen in second quarter.
They always want us to think that “boom times” for the U.S. economy are right around the corner, but those “boom times” have never materialized since the end of the last financial crisis.
Instead, we have had year after year of economic malaise and stagnation, and it looks like 2017 is going to continue that trend. The following are 11 reasons why U.S. economic growth is the worst that it has been in 3 years…
#1 The weak economic growth in the first quarter was the continuation of a long-term trend. Barack Obama was the only president in history not to have a single year when the U.S. economy grew by at least 3 percent, and this is now the fourth time in the last six quarters when economic growth has been less than 2 percent on an annualized basis. So essentially this latest number signals that our long-term economic decline is continuing.
#2 Consumer spending drives the U.S. economy more than anything else, and at this point most U.S. consumers are tapped out. In fact, CBS News has reported that three-fourths of all U.S. consumers have to “scramble to cover their living costs” each month.
#3 The job market appears to be slowing. The U.S. economy only added about 98,000 jobs in March, and that was approximately half of what most analysts were expecting.
#4 The flow of credit appears to be slowing as well. In fact, this is the first time since the last recession when there has been no growth for commercial and industrial lending for at least six months.
#5 Last month, U.S. factory output dropped at the fastest pace that we have witnessed in more than two years.
#6 We are in the midst of the worst “retail apocalypse” in U.S. history. The number of retailers that has filed for bankruptcy has already surpassed the total for the entire year of 2016, and at the current rate we will smash the previous all-time record for store closings in a year by nearly 2,000.
#7 The auto industry is also experiencing a great deal of stress. This has been the worst year for U.S. automakers since the last recession, and seven out of the eight largest fell short of their sales projections in March.
#8 Used vehicle prices are falling “dramatically”, and Morgan Stanley is now projecting that used vehicle prices “could crash by up to 50%” over the next several years.
#9 Commercial bankruptcies are rising at the fastest pace since the last recession.
#10 Consumer bankruptcies are rising at the fastest pace since the last recession.
#11 The student loan bubble is starting to burst. It is being reported that 27 percent of all student loans are already in default, and some analysts expect that number to go much higher.
And of course some areas of the country are being harder hit than others. The following comes from CNBC…
Four states have not yet fully recovered from the Great Recession. As of the third quarter of last year, the latest data available, the economies of Louisiana, Wyoming, Connecticut and Alaska were still smaller than when the recession ended in June 2009.
Other states that have recovered have seen their economic recoveries stall out. Those include Minnesota, North Dakota, New Mexico, Oklahoma, South Dakota and West Virginia.
We should be thankful that we are not experiencing a full-blown economic meltdown just yet, but it is undeniable that our long-term economic decline continues to roll along.
And without a doubt the storm clouds are building on the horizon, and many believe that the next major economic downturn will begin in the not too distant future.
There is much debate about where the U.S. economy is ultimately heading, but what everybody should be able to agree on is that economic conditions are significantly worse this year than they were last year. It is being projected that U.S. economic growth for the first quarter will be close to zero, thousands of retail stores are closing, factory output is falling, and restaurants and automakers have both fallen on very hard times. As economic activity has slowed down, commercial and consumer bankruptcies are both rising at rates that we have not seen since the last financial crisis. Everywhere you look there are echoes of 2008, and yet most people still seem to be in denial about what is happening. The following are 11 facts that prove that the U.S. economy in 2017 is in far worse shape than it was in 2016…
#1 It is being projected that there will be more than 8,000 retail store closings in the United States in 2017, and that will far surpass the former peak of 6,163 store closings that we witnessed in 2008.
#2 The number of retailers that have filed for bankruptcy so far in 2017 has already surpassed the total for the entire year of 2016.
#3 So far in 2017, an astounding 49 million square feet of retail space has closed down in the United States. At this pace, approximately 147 million square feet will be shut down by the end of the year, and that would absolutely shatter the all-time record of 115 million square feet that was shut down in 2001.
#4 The Atlanta Fed’s GDP Now model is projecting that U.S. economic growth for the first quarter of 2017 will come in at just 0.5 percent. If that pace continues for the rest of the year, it will be the worst year for U.S. economic growth since the last recession.
#5 Restaurants are experiencing their toughest stretch since the last recession, and in March things continued to get even worse…
Foot traffic at chain restaurants in March dropped 3.4% from a year ago. Menu prices couldn’t be increased enough to make up for it, and same-store sales fell 1.1%. The least bad region was the Western US, where sales inched up 1.2% year-over-year and traffic fell only 1.7%, according to TDn2K’s Restaurant Industry Snapshot. The worst was the NY-NJ Region, where sales plunged 4.6% and foot traffic 6.3%.
This comes after a dismal February, when foot traffic had dropped 5% year-over-year, and same-store sales 3.7%.
#6 In March, U.S. factory output declined at the fastest pace in more than two years.
#7 According to the Bureau of Labor Statistics, not a single person is employed in nearly one out of every five U.S. families.
#8 U.S. government revenues just suffered their biggest drop since the last recession.
#9 Nearly all of the big automakers reported disappointing sales in March, and dealer inventories have now risen to the highest level that we have seen since the last recession.
#10 Used vehicle prices are absolutely crashing, and subprime auto loan losses have shot up to the highest level that we have seen since the last recession.
#11 At this point, most U.S. consumers are completely tapped out. According to CNN, almost six out of every ten Americans do not have enough money saved to even cover a $500 emergency expense.
Just like in 2008, debts are going bad at a very alarming pace. In fact, things have already gotten so bad that the IMF has issued a major warning about it…
In America alone, bad debt held by companies could reach $4 trillion, “or almost a quarter of corporate assets considered,” according to the IMF. That debt “could undermine financial stability” if mishandled, the IMF says.
The percentage of “weak,” “vulnerable” or “challenged” debt held as assets by US firms has almost arrived at the same level it was right before the 2008 crisis.
We are seeing so many parallels to the last financial crisis, and many are hoping that our politicians in Washington can fix things before it is too late.
On Monday, the most critical week of Trump’s young presidency begins. The administration will continue working on tax reform and a replacement for Obamacare, but of even greater importance is the fact that if a spending agreement is not passed by Friday a government shutdown will begin at the end of the week…
Trump has indicated that he wants to tackle the repeal and replacement of Obamacare and introduce his “massive” tax plan in the next week, all while a shutdown of parts of federal government looms Friday.
By attempting three massive political undertakings in one week, investors will have a sense of whether or not Trump will be able to deliver on pro-growth policies that would be beneficial for markets.
If Trump can pull off the trifecta, it could restore faith that policy proposals like tax cuts and infrastructure spending are on the way. If not, look out.
Members of Congress are returning from their extended two week spring vacation, and now they will only have four working days to get something done.
And I don’t believe that they will be able to rush something through in just four days. The Republicans in Congress, the Democrats in Congress, and the Trump administration all want different things, and ironing out all of those differences is not going to be easy.
For example, the Trump administration is insisting on funding for a border wall, and the Democrats are saying no way. The following comes from the Washington Post…
President Trump and his top aides applied new pressure Sunday on lawmakers to include money for a wall on the U.S.-Mexico border in a must-pass government funding bill, raising the possibility of a federal government shutdown this week.
In a pair of tweets, Trump attacked Democrats for opposing the wall and insisted that Mexico would pay for it “at a later date,” despite his repeated campaign promises not including that qualifier. And top administration officials appeared on Sunday morning news shows to press for wall funding, including White House budget director Mick Mulvaney, who said Trump might refuse to sign a spending bill that does not include any.
And of course the border wall is just one of a whole host of controversial issues that are standing in the way of an agreement. Those that are suggesting that all of these issues will be resolved in less than 100 hours are being completely unrealistic. And even though the Trump administration is putting on a brave face, the truth is that quiet preparations for a government shutdown have already begun.
The stage is being set for the kind of nightmare crisis that I portrayed in The Beginning Of The End. The stock market bubble is showing signs of being ready to burst, and an extended government shutdown would be more than enough to push things over the edge.
Let us hope that this government shutdown is only for a limited period of time, because an extended shutdown could potentially be catastrophic. In the end, either the Trump administration or the Democrats are going to have to give in on issues such as funding for Obamacare, the border wall, Planned Parenthood, defense spending increases, etc.
It will be a test of the wills, and it will be absolutely fascinating to see who buckles under the pressure first.
More than 3,500 retail stores are going to close all across America over the next few months as the worst retail downturn in U.S. history gets even deeper. Earlier this week, Sears shocked the world when it announced that there is “substantial doubt” that the company will be able to “continue as a going concern” much longer. In other words, Sears has announced that it is on the verge of imminent collapse. Meanwhile, Payless stunned the retail industry when it came out that they are preparing to file for bankruptcy. The “retail apocalypse” that I have been warning about is greatly accelerating, and many believe that this is one of the early warning signs that the economic collapse that is already going on in other parts of the globe will soon reach U.S. shores.
I have repeatedly warned my readers that “Sears is going to zero“, and now Sears is officially saying that it might actually happen. When you file official paperwork with the government that says there is “substantial doubt” that the company will survive, that means that the end is very near…
The company that operates Sears, the department store chain that dominated retail for decades, warned Tuesday that it faces “substantial doubt” about its ability to stay in business unless it can borrow more and tap cash from more of its assets.
“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” Sears Holdings said in a filing with the Securities and Exchange Commission. Sears Holdings operates both Sears and Kmart stores.
In the wake of that statement, the price of Sears stock dipped 13.69% to $7.85 a share.
Personally, I am going to miss Sears very much. But of course the truth is that they simply cannot continue operating as they have been.
For the quarter that ended on January 28th, Sears lost an astounding 607 million dollars…
The company said it lost $607 million, or $5.67 per diluted share, during the quarter that ended on Jan. 28. That compared with a loss of $580 million, or $5.44 per diluted share, a year earlier. It has posted a loss in all but two of the last 24 quarters, according to S&P Global Market Intelligence.
How in the world is it possible for a retailer to lose that amount of money in just three months?
As I have said before, if they had employees flushing dollar bills down the toilet 24 hours a day they still shouldn’t have losses that big.
This week we also learned that Payless is heading for bankruptcy. According to Bloomberg, the chain is planning to imminently close at least 400 stores…
Payless Inc., the struggling discount shoe chain, is preparing to file for bankruptcy as soon as next week, according to people familiar with the matter.
The company is initially planning to close 400 to 500 stores as it reorganizes operations, said the people, who asked not to be identified because the deliberations aren’t public. Payless had originally looked to shutter as many as 1,000 locations, and the number may still be in flux, according to one of the people.
Of course these are just two examples of a much broader phenomenon.
Never before in U.S. history have we seen such a dramatic wave of store closures. According to Business Insider, over 3,500 retail locations “are expected to close in the next couple of months”…
Thousands of mall-based stores are shutting down in what’s fast becoming one of the biggest waves of retail closures in decades.
More than 3,500 stores are expected to close in the next couple of months.
Once thriving shopping malls are rapidly being transformed into ghost towns. As I wrote about just recently, “you might be tempted to think that ‘Space Available’ was the hottest new retail chain in the entire country.”
The demise of Sears is going to be an absolute nightmare for many mall owners. Once “anchor stores” start closing, it is usually only a matter of time before smaller stores start bailing out…
When an anchor store like Sears or Macy’s closes, it often triggers a downward spiral in performance for shopping malls.
Not only do the malls lose the income and shopper traffic from that store’s business, but the closure often triggers “co-tenancy clauses” that allow the other mall tenants to terminate their leases or renegotiate the terms, typically with a period of lower rents, until another retailer moves into the anchor space.
Years ago I wrote of a time when we would see boarded-up storefronts all across America, and now it is happening.
Instead of asking which retailers are going to close, perhaps we should be asking which ones are going to survive this retail cataclysm.
In the past, you could always count on middle class U.S. consumers to save the day, but today the middle class is steadily shrinking and U.S. consumers are increasingly tapped out.
For instance, just look at what is happening to delinquency rates on auto loans…
US auto loan and lease credit loss rates weakened in the second half of 2016, according to a new report from Fitch Ratings, which said they will continue to deteriorate.
“Subprime credit losses are accelerating faster than the prime segment, and this trend is likely to continue as a result of looser underwriting standards by lenders in recent years,” said Michael Taiano, a director at Fitch.
The last time so many Americans got behind on subprime auto loans was during the last financial crisis.
We are seeing so many similarities to what happened just prior to the last recession, and yet most Americans still seem to think that the U.S. economy is going to be just fine in 2017.
Unfortunately, major red flags are popping up in the hard economic numbers and in the financial markets.
The last recession probably should have started back in late 2015, but thanks to manipulation by the Fed and an unprecedented debt binge by the Obama administration, official U.S. GDP growth has been able to stay barely above zero for the last year and a half.
But just because something is delayed does not mean that it is canceled.
All along, our long-term economic imbalances have continued to get even worse, and a date with destiny is rapidly approaching for the U.S. economy.