Evidence The Housing Bubble Is Bursting?: “Home Sellers Are Slashing Prices At The Highest Rate In At Least Eight Years”

The housing market indicated that a crisis was coming in 2008.  Is the same thing happening once again in 2018?  For several years, the housing market has been one of the bright spots for the U.S. economy.  Home prices, especially in the hottest markets on the east and west coasts, had been soaring.  But now that has completely changed, and home sellers are cutting prices at a pace that we have not seen since the last recession.  In case you are wondering, this is definitely a major red flag for the economy.  According to CNBC, home sellers are “slashing prices at the highest rate in at least eight years”…

After three years of soaring home prices, the heat is coming off the U.S. housing market. Home sellers are slashing prices at the highest rate in at least eight years, especially in the West, where the price gains were hottest.

It is quite interesting that prices are being cut fastest in the markets that were once the hottest, because that is exactly what happened during the subprime mortgage meltdown in 2008 too.

In a previous article, I documented the fact that experts were warning that “the U.S. housing market looks headed for its worst slowdown in years”, but even I was stunned by how bad these new numbers are.

According to Redfin, more than one out of every four homes for sale in America had a price drop within the most recent four week period…

In the four weeks ended Sept. 16, more than one-quarter of the homes listed for sale had a price drop, according to Redfin, a real estate brokerage. That is the highest level since the company began tracking the metric in 2010. Redfin defines a price drop as a reduction in the list price of more than 1 percent and less than 50 percent.

That is absolutely crazy.

I have never even heard of a number anywhere close to that in a 30 day period.

Of course the reason why prices are being dropped is because homes are not selling.  The supply of homes available for sale is shooting up, and that is good news for buyers but really bad news for sellers.

It could be argued that home prices needed to come down because they had gotten ridiculously high in recent months, and I don’t think that there are too many people that would argue with that.

But is this just an “adjustment”, or is this the beginning of another crisis for the housing market?

Just like a decade ago, millions of American families have really stretched themselves financially to get into homes that they really can’t afford.  If a new economic downturn results in large numbers of Americans losing their jobs, we are once again going to see mortgage defaults rise to stunning heights.

We live at a time when the middle class is shrinking and most families are barely making it from month to month.  The cost of living is steadily rising, but paychecks are not, and that is resulting in a huge middle class squeeze.  I really like how my good friend MN Gordon made this point in his most recent article

The general burden of the American worker is the daily task of squaring the difference between the booming economy reported by the government bureaus and the dreary economy reported in their biweekly paychecks. There is sound reason to believe that this task, this burden of the American worker, has been reduced to some sort of practical joke. An exhausting game of chase the wild goose.

How is it that the economy’s been growing for nearly a decade straight, but the average worker’s seen no meaningful increase in their income? Have workers really been sprinting in place this entire time? How did they end up in this ridiculous situation?

The fact is, for the American worker, America’s brand of a centrally planned economy doesn’t pay. The dual impediments of fake money and regulatory madness apply exactions which cannot be overcome. There are claims to the fruits of one’s labors long before they’ve been earned.

The economy, in other words, has been rigged. The value that workers produce flows to Washington and Wall Street, where it’s siphoned off and misallocated to the cadre of officials, cronies, and big bankers. What’s left is spent to merely keep the lights on, the car running, and food upon the table.

And unfortunately, things are likely to only go downhill from here.

The trade war is really starting to take a toll on the global economy, and it continues to escalate.  Back during the Great Depression we faced a similar scenario, and we would be wise to learn from history.  In a recent post, Robert Wenzel shared a quote from Dr. Benjamin M. Anderson that was pulled from his book entitled “Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-1946”

[T]here came another folly of government intervention in 1930 transcending all the rest in significance. In a world staggering under a load of international debt which could be carried only if countries under pressure could produce goods and export them to their creditors, we, the great creditor nation of the world, with tariffs already far too high, raised our tariffs again. The Hawley-Smoot Tariff Act of June 1930 was the crowning folly of the who period from 1920 to 1933….

Protectionism ran wild all over the world.  Markets were cut off.  Trade lines were narrowed.  Unemployment in the export industries all over the world grew with great rapidity, and the prices of export commodities, notably farm commodities in the United States, dropped with ominous rapidity….

The dangers of this measure were so well understood in financial circles that, up to the very last, the New York financial district retained hope the President Hoover would veto the tariff bill.  But late on Sunday, June 15, it was announced that he would sign the bill. This was headline news Monday morning. The stock market broke twelve points in the New York Time averages that day and the industrials broke nearly twenty points. The market, not the President, was right.

Even though the stock market has been booming, everything else appears to indicate that the U.S. economy is slowing down.

If home prices continue to fall precipitously, that is going to put even more pressure on the system, and it won’t be too long before we reach a breaking point.

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.

Oil Prices Have Been Rising And $4 A Gallon Gasoline Would Put Enormous Stress On The U.S. Economy

Thanks to increasing demand and upcoming U.S. sanctions against Iran, oil prices have been rising and some analysts are forecasting that they will surge even higher in the months ahead.  Unfortunately, that would be very bad news for the U.S. economy at a time when concerns about a major economic downturn have already been percolating.  In recent years, extremely low gasoline prices have been one of the factors that have contributed to a period of relative economic stability in the United States.  Because our country is so spread out, we import such a high percentage of our goods, and we are so dependent on foreign oil, our economy is particularly vulnerable to gasoline price shocks.  Anyone that lived in the U.S. during the early 1970s can attest to that.  If the average price of gasoline rises to $4 a gallon by the end of 2018 that will be really bad news, and if the average price of gasoline were to hit $5 a gallon that would be catastrophic for the economy.

Very early on Tuesday, the price of U.S. oil surged past $70 a barrel in anticipation of the approaching hurricane along the Gulf Coast.  The following comes from Fox Business

U.S. oil prices rose on Tuesday, breaking past $70 per barrel, after two Gulf of Mexico oil platforms were evacuated in preparation for a hurricane.

U.S. West Texas Intermediate (WTI) crude futures were at $70.05 per barrel at 0353 GMT, up 25 cents, or 0.4 percent from their last settlement.

If we stay at about $70 a gallon, that isn’t going to be much of a problem.

But some analysts are now speaking of “an impending supply crunch”, and that is a very troubling sign.  For example, just check out what Stephen Brennock is saying

“Exports from OPEC’s third-biggest producer are falling faster than expected and worse is to come ahead of a looming second wave of U.S. sanctions,” said Stephen Brennock, analyst at London brokerage PVM Oil Associates. “Fears of an impending supply crunch are gaining traction.”

So how high could prices ultimately go?

Well, energy expert John Kilduff is now projecting that we could see the price of gasoline at $4 a gallon by winter

Energy expert John Kilduff counts Iran sanctions as the top reason West Texas Intermediate (WTI) could climb as much as 30 percent by winter, and that could spell $4 a gallon unleaded gasoline at the pumps.

“The global market is tight and it’s getting tighter, and the big strangle around the market right now is what’s in the process of happening with Iran and the Iran sanctions,” the Again Capital founding partner said on CNBC’s “Futures Now.”

About two months from now, U.S. sanctions will formally be imposed on Iran, and that is going to significantly restrict the supply of oil available in the marketplace.

So refiners that had relied on Iranian oil are “scrambling” to find new suppliers, and this could ultimately drive oil prices much higher

Iran’s oil exports are plummeting, as refiners scramble to find alternatives ahead of a re imposition of U.S. sanctions in early November. That in turn has helped drain a glut of unsold oil.

“To the extent we’re seeing the Iran barrels lost to the market, you’re looking at a WTI price and Brent in the $85 to $95 range, potentially,” Kilduff said.

Other sources are also predicting that oil prices will rise.

Barclays is warning that “prices could reach $80 and higher in the short term”, and BNP Paribas is now anticipating that Brent crude will average $79 a barrel in 2019.

In addition to the upcoming Iranian sanctions, rising global demand for oil is also a major factor that is pushing up prices.

For example, many Americans don’t even realize that China has surpassed us and has now become the biggest crude oil importer on the entire planet

China became the world’s largest crude oil importer in 2017, surpassing the US and importing 8.4 million barrels per day.

The US only imported 7.9 million barrels per day in 2017, according to the US Energy Information Administration.

So what is the bottom line for U.S. consumers?

The bottom line is that gasoline prices are likely to jump substantially, and that is going to affect prices for almost everything else that you buy.

Excluding tech products, virtually everything else that Americans purchase has to be transported, and so the price of gasoline must be factored into the cost.

So if gasoline prices shoot up quite a bit, that means that almost everything is going to cost more.

And this would be happening at a time when inflation is already on the rise

According to data from the Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers, less food and energy, hit 2.4% in July 2018. That’s its highest reading since September 2008.

Of course 2.4 percent doesn’t really sound that scary, and that is how the government likes it.

But if the rate of inflation was still calculated the way it was back in 1990, the current inflation rate would be above 6 percent.

And if the rate of inflation was still calculated the way it was back in 1980, the current inflation rate would be above 10 percent.

Inflation is a hidden tax on all of us, and it is one of the big reasons why the middle class is being eroded so rapidly.

Please do not underestimate the impact of the price of oil.  It shot above $100 a barrel in 2008, and it was one of the factors that precipitated the financial crisis later that year.

Now we are rapidly approaching another crisis point, and there are so many wildcards that could potentially cause major problems.

One of those wildcards that I haven’t even talked about in this article would be a major war in the Middle East.  One of these days it will happen, and the price of oil will instantly soar to well above $100 a barrel.

We live at a time of rising global instability, and we should all learn to start expecting the unexpected.

This article originally appeared on The Economic Collapse Blog.  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.

 

Beware – The Last 7 Times The Yield Curve Inverted The U.S. Economy Was Hit By A Recession

Seven times since the 1960s we have seen the yield curve invert, and in each of those seven instances an economic recession in the United States has followed.  Will this time be any different?  Today, the yield curve is the flattest that it has been in 11 years, and many analysts believe that we will see an inversion before the end of 2018.  If an inversion does take place, experts will be all over the mainstream media warning about “an imminent recession”.  Unfortunately, most Americans don’t understand these things, and when they hear terms like “yield curve” they tend to quickly tune out.  So in this article we are doing to define what a yield curve is, why it is so important, and why another U.S. recession may be rapidly approaching.

Let’s start with a really basic definition of a yield curve.  This one comes from Investopedia

A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates. The most frequently reported yield curve compares the three-month, two-year, five-year and 30-year U.S. Treasury debt. This yield curve is used as a benchmark for other debt in the market, such as mortgage rates or bank lending rates, and it is also used to predict changes in economic output and growth.

But most of the time, the experts that are talking about “the yield curve” are talking about the difference between interest rates on two-year and ten-year U.S. Treasury bonds.  The following comes from CNBC

Start with a government issued two-year Treasury bond and a 10-year Treasury bond. They both pay interest. Typically, the 10-year pays a higher interest rate than the two-year to compensate buyers for the time difference. The difference between the interest rates in these two bonds is called the “spread”. If the spread is greater than zero, it means the two-year interest rate is lower than the 10-year, and that is normally the case.

A normal spread for these two bonds will take the appearance of a rising chart — an upward sloping yield curve. But when the spread goes negative, the yield curve “inverts” giving the appearance of a negative yield curve.

An “inverted yield curve” strikes fear among investors because it makes lending unprofitable.

As a USA Today article recently explained, our banks borrow at short-term rates and lend that money out at long-term rates…

Banks borrow at short-term rates, lend long term and profit from the difference. So the gap between long and short rates predicts future loan profitability. The bigger the gap, the more eager banks are to lend. The yield curve is a great predictive proxy for future lending.

Lending matters because loans allow for economically expansive activities. Sally deposits $10,000 at Community Banks-R-Us, which can keep $1,000 in reserve and lend out $9,000 to Jim’s Widgets. Jim uses that to grow his business. Hence lending can fuel growth. So, steeper yield curves spur economic activity. Flatter curves render less.

Our economy is fueled by debt, and an inverted yield curve tends to greatly discourage lending.  When banks cut back on lending, that has the effect of “choking off” the economy, and that usually leads to an economic contraction…

In this interest-rate environment, banks would lose money by making loans. Not necessarily on all loans, but it does make some loans unfeasible and some less profitable, forcing banks to cut back on making loans; thereby choking off the access to credit markets that businesses need to grow. When it becomes harder for businesses to borrow, many businesses cancel or delay projects and hiring. Weaker businesses go out of business because they lose access to credit, which in turn causes layoffs. When this happens, it takes about a year, on average, for the U.S. economy to slip into a recession.

The yield curve inverted prior to the recession of 2008, and lending started to get a lot tighter.  The resulting recession was a surprise to many Americans, but it should not have been.  It was simply the logical conclusion of basic economic forces at work.

In fact, an inverted yield curve has preceded every single recession since the 1960s, but Federal Reserve Chair Jerome Powell doesn’t seem concerned that it is about to happen again…

Asked whether “a dramatic change in the shape of the yield curve in any way influence the trajectory you guys are on with respect to normalizing interest rates and the balance sheet,” Powell stated “no,” adding that “what really matters is what the neutral rate of interest is.

That’s the interest rate level that neither stimulates growth or slows it down — something that changes over time and which Fed officials try hard to gauge.

Interestingly, yield curves are about to “invert” in Japan, Germany and China too.

But it should be noted that there are some experts that insist that we are focusing on the wrong things.  One of those experts is Ken Fisher

Almost everyone everywhere misses that the total global yield curve matters much more than America’s. And it’s doing just fine, thank you. Today’s global financial system is super interconnected. Behemoth banks can borrow in low-rate countries such as Germany, transfer funds here, hedge for currency risk and lend to Jim’s Widgets in mere seconds.

The global yield curve combines every developed country’s curve, weighted by the size of each economy. You get Britain’s 0.88 percent 10-year/three-month spread, Canada’s 0.69 percent gap, Germany’s 0.92 percent, France’s 1.23 percent, Japan’s 0.18 percent and the rest. Mash them all together based on GDP weighting, and that gets you a 0.9 percent global spread that’s bouncing along, going nowhere fast. Current U.S. yield curve fears miss this.

In the end, Fisher may be right.

Without a doubt, the global financial system is more interconnected today than ever before, and we may find a way to muddle through even if the yield curve inverts in the United States.

But I wouldn’t count on it.  An inverted yield curve has accurately predicted a recession every single time since the 1960s, and it is not likely to be wrong this time around either.

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.

Nearly 40 Million Americans Are Still On Food Stamps

If the U.S. economy is “doing well”, then why are almost 40 million Americans still on food stamps?  That number is almost exactly where it was at the end of the last recession, and supposedly we have made so much progress since that time.  Of course any progress that has been made has been extremely uneven.  Earlier today, I wrote about how the gap between the rich and the poor in this country is the biggest that it has been since the 1920s.  For years, the Federal Reserve’s quantitative easing program pumped “hot money” into the financial markets, and that was an enormous blessing to the top 1 percent.  But meanwhile tens of millions of average families have continued to struggle and the middle class has continued to decline.  In the U.S. today, 66 percent of all of our jobs pay less than 20 dollars an hour, and close to 40 million Americans rely on the federal government to feed them every month.  The following comes from Bloomberg

Judging by the number of Americans on food stamps, it doesn’t feel like one of the best job markets in almost a half century and the second-longest economic expansion on record.

Enrollment in the Supplemental Nutrition Assistance Program, better known as food stamps, fell to 39.6 million in April, the most recent government data show. That’s down from a record 47.8 million in 2012, but as a share of the population it’s just back to where it was as the economy emerged from the longest and deepest downturn since the Great Depression.

It is hard to argue that we are a “prosperous nation” with a number like that hanging over our heads.

Yes, some Americans have prospered individually in recent years, but many more have been deeply suffering.

In order for a family of four to qualify for food stamps, they must make less than $2,665 a month

SNAP is available for households with incomes up to $2,665 per month for a family of four, or 130 percent of the federal poverty level. Recipients are also subject to asset and employment tests, and states can modify the program with federal permission. Households receiving SNAP had an average monthly gross income of $814 in 2016, and 20 percent had no income.

Could your family survive on just $2,665 a month?

Yet that is exactly where tens of millions of Americans find themselves today.

Yesterday I wrote about the “cesspool” that the once beautiful city of Portland, Oregon has become, and in this article I would like to share with you an excerpt from an article about the epidemic of squatters in the city of Detroit

The Detroit Land Bank owns nearly 30,000 residential structures in the city, and with as many as 4,300 of them occupied — it’s a magnitude unlike any other place.

Squatters are a tricky problem: remove them and add to the city’s homeless population and its massive inventory of abandoned buildings. Let them stay, and the land bank is summoned often to investigate what some of its occupants may be up to: dog fighting, prostitution, drug dealing, overdoses, gambling, gun possession or running a chop shop.

Detroit police also are called regularly to land bank properties to investigate dead bodies — at least 50 homicides over the last four years.

This is what life is like for much of the country today.  The small sliver of our population that is “living the high life” is greatly outnumbered by people just barely surviving from month to month.

In fact, 102 million working age Americans do not have a job at this moment.  In case you were wondering, that number is substantially higher than it was at any point during the last recession.

If you can believe it, during the last recession we never even hit the 100 million mark.

There are so many parallels that could be made between the current state of affairs and America in the 1920s.  During the “roaring twenties”, everybody thought that the good times would last forever and that stock prices would go up indefinitely, and then one day we suddenly plunged into the worst financial crisis and the worst economic depression that the nation had ever seen.

And most people don’t even realize that we are far more vulnerable today than we have ever been in all of U.S. history.  I have been sharing numbers that back up that premise on an almost daily basis, and today let me share another example with you that comes from Mike Maloney

  • Just prior to the dotcom collapse of 2000 and the hundreds of bankruptcies that followed, 9% of the S&P 1,500 were zombie companies.
  • Just prior to the 2008 financial crisis and the hundreds of bankruptcies that followed, 12% of the S&P 1,500 were zombie companies.
  • Right now, 15% of the S&P 1,500 are zombie companies.

Just like the “roaring twenties”, our current debt-fueled economic bubble will burst as well, and many believe that it will result in the worst economic crisis that America has ever known.

But as long as the music on Wall Street keeps playing, the optimists will continue to insist that “happy days are here again” and that the party can keep on going indefinitely.

Of course no party lasts forever, and eventually the moment will come when it is time to turn out the lights for good.

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.

Would This Have Happened Under President Hillary? Holiday Retail Sales Soar Compare To Last Year

We are nearly a year into Donald Trump’s presidency, and the economic numbers continue to look quite good.  On Monday, we learned that U.S. retail sales during the holiday season are projected to be way up compared to 2016.  Yes, there are all sorts of economic red flags popping up all over the place, and I write about them regularly.  And without a doubt, 2017 has been one of the worst years for brick and mortar retail stores in a very long time.  But when something good happens we should acknowledge that too, and many are giving President Trump credit for the fact that retail sales are projected to be up 4.9 percent this holiday season compared to last year…

Despite thousands of store closings this year, Americans supplied a final flurry of spending to give retailers their best holiday season sales since 2011, figures released Tuesday show.

U.S. year-end holiday retail sales rose 4.9% compared to the same period last year, a welcome gift to U.S. retailers amid new signs of consumer confidence.

Of course this doesn’t mean that things have completely turned around for the retail industry.  We still absolutely shattered the all-time record for store closings in a single year, and the final number is going to be somewhere right around 7,000.  The following comes from CNBC

A larger-than-average slew of retail bankruptcies and stores being shuttered rocked the industry this year, making headlines and dragging even some of the better-performing companies such as Home Depot, TJ Maxx and Costco down with the dismal news.

So far in 2017, 6,985 store closure announcements have been made, according to a tracker from FGRT (formerly Fung Global Retail & Technology). That’s up more than 200 percent from a year ago, based on the firm’s findings.

More specifically, the number of store closings is up 229 percent compared to last year.

So yes, we are still very much in the midst of a “retail apocalypse”.

And actually, earlier this month we got news that Toys R US has filed for bankruptcy protection and could soon close as many as 200 stores

It’s hardly fun and games for the toy industry this holiday season with the bankruptcy of Toys ‘R’ Us hurting the fortunes of toymakers Mattel (MAT) and Hasbro (HAS). The sector’s prospects aren’t expected to improve anytime soon.

Toys ‘R’ Us, which filed for bankruptcy in September, is now said to be considering closing as many as 200 U.S. stores, roughly 21 percent of its brick-and-mortar locations, because of lackluster sales.

The fact that retail sales are up so much during this holiday season may slow the retail apocalypse, but it certainly will not end it.

We have got so much work to do to turn the economy around, but at least we have taken a few small steps in the right direction.  The recent tax bill that Congress passed was one of those small steps, but there is still so, so much more that needs to be accomplished.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

We Have Tripled The Number Of Store Closings From Last Year, And 20 Major Retailers Have Closed At Least 50 Stores In 2017

Did you know that the number of retail store closings in 2017 has already tripled the number from all of 2016?  Last year, a total of 2,056 store locations were closed down, but this year more than 6,700 stores have been shut down so far.  That absolutely shatters the all-time record for store closings in a single year, and yet nobody seems that concerned about it.  In 2008, an all-time record 6,163 retail stores were shuttered, and we have already surpassed that mark by a very wide margin.  We are facing an unprecedented retail apocalypse, and as you will see below, the number of retail store closings is actually supposed to be much higher next year.

Whenever the mainstream media reports on the retail apocalypse, they always try to put a positive spin on the story by blaming the growth of Amazon and other online retailers.  And without a doubt that has had an impact, but at this point online shopping still accounts for less than 10 percent of total U.S. retail sales.

Look, Amazon didn’t just show up to the party.  They have been around for many, many years and while it is true that they are growing, they still only account for a very small sliver of the overall retail pie.

So those that would like to explain away this retail apocalypse need to come up with a better explanation.

As I noted in the headline, there are 20 different major retail chains that have closed at least 50 stores so far this year.  The following numbers originally come from Fox Business

1. Abercrombie & Fitch: 60 stores
2. Aerosoles: 88 stores
3. American Apparel: 110 stores
4. BCBG: 118 stores
5. Bebe: 168 stores
6. The Children’s Place: hundreds of stores to be closed by 2020
7. CVS: 70 stores
8. Guess: 60 stores
9. Gymboree: 350 stores
10. HHgregg: 220 stores
11. J.Crew: 50 stores
12. JC Penney: 138 stores
13. The Limited: 250 stores
14. Macy’s: 68 stores
15. Michael Kors: 125 stores
16. Payless: 800 stores
17. RadioShack: more than 1,000 stores
18. Rue21: up to 400 stores
19. Sears/Kmart: more than 300 stores
20. Wet Seal: 171 stores

If the U.S. economy was really doing well, then why are all of these major retailers closing down locations?

Of course the truth is that the economy is not doing well.  The U.S. economy has not grown by at least 3 percent in a single year since the middle of the Bush administration, and it isn’t going to happen this year either.  Overall, the U.S. economy has grown by an average of just 1.33 percent over the last 10 years, and meanwhile U.S. stock prices are up about 250 percent since the end of the last recession.  The stock market has become completely and utterly disconnected from economic reality, and yet many Americans still believe that it is an accurate barometer for the health of the economy.

I used to do a Black Friday article every year, but I have ended that tradition.  Yes, there were still a few scuffles this year, but at this point the much bigger story is how poorly the retailers are doing.

So far this year, more than 300 retailers have filed for bankruptcy, and we are currently on pace to lose over 147 million square feet of retail space by the end of 2017.

Those are absolutely catastrophic numbers.

And some analysts are already predicting that as many as 9,000 stores could be shut down in the United States in 2018.

Are we just going to keep blaming Amazon every time another retail chain goes belly up?

What we should really be focusing on is the fact that the “retail bubble” is starting to burst.  In the aftermath of the last financial crisis, retailers went on an unprecedented debt binge, and now a lot of that debt is starting to go bad.

In fact, in a previous article I discussed the fact that “the amount of high-yield retail debt that will mature next year is approximately 19 times larger than the amount that matured this year”.  This is going to have very serious implications on Wall Street, but very few people are really talking about this.

Most stores try to stay open through Christmas, but once the holiday season is over we will see another huge wave of store closings.

And as individual stores close down, this will put a lot of financial pressure on malls and shopping centers.  Not too long ago, one report projected that up to 25 percent of all shopping malls in the entire nation could close down by 2022, but I tend to think that number is too optimistic.

The retail industry in the United States is dying, and the biggest reason for that is not Amazon.

Rather, the real reason why the retail industry is in so much trouble is because of the steady decline of the middle class.  The gap between the ultra-wealthy and the rest of us is greater than ever, and we can clearly see the impact of this in the retail world.

Retailers that serve the very wealthy are generally doing well, and those that serve the other end of the food chain (such as dollar stores and Wal-Mart) are also doing okay.

But virtually all of the retailers that depend on middle class shoppers are really struggling, and this is going to continue for the foreseeable future.

Most American families are either living paycheck to paycheck or are close to that level, and these days U.S. consumers simply do not have much discretionary income to play around with.  More hard working Americans are going to fall out of the middle class with each passing month, and that is extremely bad news for a retail industry that is literally falling apart right in front of our eyes.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

As America Gives Thanks, Homelessness Continues To Set New Records In Major Cities All Over The Nation

If the economy is doing just fine, then why is homelessness at levels not seen “since the Great Depression” in major cities all over the country?  If the U.S. economy was actually in good shape, we would expect that the number of people that are homeless would be going down or at least stabilizing.  Instead, we have a growing national crisis on our hands.  In fact, within the past two years “at least 10 cities or municipal regions in California, Oregon and Washington” have declared a state of emergency because the number of homeless is growing so rapidly.

Things are particularly bad in southern California, and this year the Midnight Mission will literally be feeding a small army of people that have nowhere to sleep at night…

Thanksgiving meals will be served to thousands of homeless and near-homeless individuals today on Skid Row and in Pasadena and Canoga Park amid calls for donations and volunteers for the rest of the year.

The Midnight Mission will serve Thanksgiving brunch to nearly 2,500 homeless and near-homeless men, women and children, according to Georgia Berkovich, its director of public affairs.

Overall, the Midnight Mission serves more than a million meals a year, and Berkovich says that homelessness hasn’t been this bad in southern California “since the Great Depression”

Berkovich said the group has been serving nearly 1 million meals a year each year since 2013.

“We haven’t seen numbers like this since the Great Depression,” she said.

And of course the official numbers confirm what Berkovich is claiming.  According to an article published earlier this year, the number of homeless people living in Los Angeles County has never been higher…

The number of homeless people in Los Angeles has jumped to a new record, as city officials grapple with a humanitarian crisis of proportions remarkable for a modern American metropolis.

Municipal leaders said that a recent count over several nights found 55,188 homeless people living in a survey region comprising most of Los Angeles County, up more than 25% from last year.

If the California economy is truly doing well, then why is this happening?

We see the same thing happening when we look at the east coast.  Just check out these numbers from New York City

In recent years the number of homeless people has grown. Whereas rents increased by 18% between 2005 and 2015, incomes rose by 5%. When Rudy Giuliani entered City Hall in 1994, 24,000 people lived in shelters. About 31,000 lived in them when Mike Bloomberg became mayor in 2002. When Bill de Blasio entered City Hall in 2014, 51,500 did. The number of homeless people now in shelters is around 63,000.

For New York, this is the highest that the homeless population has been since the Great Depression, and city leaders are trying to come up with a solution.

Meanwhile, things are so bad in Seattle that “400 unauthorized tent camps” have popped up…

Housing prices are soaring here thanks to the tech industry, but the boom comes with a consequence: A surge in homelessness marked by 400 unauthorized tent camps in parks, under bridges, on freeway medians and along busy sidewalks. The liberal city is trying to figure out what to do.

Are you noticing a theme?

Homelessness is at epidemic levels all over the U.S., and this crisis is getting worse with each passing day.  Some communities are trying to care for their growing homeless populations, but others are simply trying to force them to go somewhere else.  They are doing this by essentially making it illegal to be homeless.  In some cities it is now a crime to engage in “public camping”, to “block a walkway” or to create any sort of “temporary structure for human habitation”.  These laws specifically target the homeless, and they are very cruel.

Many of us tend to picture the homeless as mostly lazy older men that don’t want to work and that instead want to drink or do drugs all day.

But the truth is that women and children make up a significant percentage of the homeless.  In fact, the number of homeless children in our country has increased by about 60 percent since the end of the last recession.

And there are thousands upon thousands of military veterans that are homeless.  For example, a 34-year-old man named Johnny that served in the Marine Corps recently used his last 20 dollars to buy fuel for a woman that had run out of gas and was stranded along I-95 in Miami

Pulled over on the side of I-95, McClure, 27, was approached by a homeless man named Johnny. She was apprehensive at first, but Johnny told her to get back into her car and to lock the doors while he walked to get her help. He went to a nearby gas station, used his last $20 fill a can and brought it back to fill up her car.

Grateful, but without a dollar to repay him, McClure promised she would come back with something.

In the weeks since, she’s returned to the spot along I-95 where Johnny stays with cash, snacks and Wawa gift cards. Each time she’s stopped by with her boyfriend, Mark D’Amico, they’ve learned a bit more about Johnny’s story, and become humbled by his gratitude.

Deciding that they wanted to do even more for Johnny, they started a GoFundMe page for him and have since raised approximately $250,000.

So it looks like there is going to be a happy ending to Johnny’s story, but the truth is that more people are falling into homelessness with each passing day.

If things are this bad now, how much worse will they become as the economy really starts slowing down?  Already, we have shattered the all-time yearly record for retail store closings, and we still have more than a month to go.  The following is from a CNN article entitled “Is This The Last Black Friday?”

A record number of store closures — 6,735 — have already been announced this year. That’s more than triple the tally for 2016, according to Fung Global Retail and Technology, a retail think tank.

And there have been 620 bankruptcies in the sector so far this year, according to BankruptcyData.com, up 31% from the same period last year. Prominent names such as Toys R Us, Gymboree, Payless Shoes and RadioShack have all filed this year, and Sears Holdings (SHLD), which owns both the iconic Sears and Kmart chains, has warned there is “substantial doubt” it can remain in business.

Sadly, analysts are projecting that the number of store closings could be as high as 9,000 next year.

Yes, there are some areas of the country that are doing well right now, but there are many others that are not.

Let us always remember to have compassion on those that are struggling, because someday we may be the ones that end up needing some help.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.