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Page added on February 13, 2014
No Janet Yellen, The Economy Is Not “Getting Better”
On Tuesday, new Federal Reserve Chairman Janet Yellen went before Congress and confidently declared that “the economic recovery gained greater traction in the second half of last year” and that “substantial progress has been made in restoring the economy to health”. This resulted in glowing headlines throughout the mainstream media such as this one from USA Today: “Yellen: Economy is improving at moderate pace“. Sadly, tens of millions of Americans are going to believe what the mainstream media is telling them. But it isn’t the truth. As you will see below, there are all sorts of signs that the economy is taking a turn for the worse. And when the next great economic crisis does strike, most Americans will be completely and totally unprepared because they trusted our “leaders” when they told us that everything would be just fine.
It is amazing how deceived people can be. Just consider the case of 56-year-old Brian Perry. He is a former law clerk that has applied for nearly 1,500 jobs since 2008 without any success. But he says that he is “optimistic” that he will get another job soon because he believes that the economy is recovering…
By his own count, Brian Perry has applied for nearly 1,500 jobs since being let go as a law clerk in 2008. The 56-year old Perry lives in Rhode Island, where the 9.1 percent unemployment rate is 2.5 percentage points above the national average.
Perry remains optimistic that a job is forthcoming. He thinks a more robust economy would create better opportunities for the long-term unemployed like him.
Let us certainly hope that Perry does find a new job soon. But if he does, it won’t be because we are experiencing an “economic recovery”. Just consider the following facts…
-In January, we were told that the U.S. economy “created” 113,000 new jobs. But that figure was arrived at only after adding a massive seasonal adjustment. In reality, the U.S. economy actually lost 2.87 million jobs in January. During the past decade, the only time the U.S. economy has lost more jobs in January was during 2009. At that time, the U.S. economy was suffering through the peak of the worst economic downturn since the Great Depression.
-Prominent retailers are closing hundreds of stores all over the United States. Things have gotten so bad that some are calling this a “retail apocalypse“…
- JC Penney, which lost $586 million in three months in 2013, is planning to close 33 stores in 19 states and lay off 2,000 people. JC Penney’s stock has lost 84 percent of its value since February 2012.
- Sears has decided to shut down its flagship store in Downtown Chicago, and it has closed 300 stores in the United States since 2010. Stock analyst Brian Sozzi noted that Sear’s inventory levels have fallen by 23.7 percent since 2006. He also noted that Sears had $4.4 billion in cash and equivalents in 2005 but $609 million in cash and equivalents in 2012. Sozzi, who calls himself a guerrilla analyst, has a blog full of disturbing pictures of empty Sears stores.
- Macy’s, one of the few retail success stories, is planning to close five stores and eliminate 2,500 jobs.
- Radio Shack is preparing to close 500 stores, according to The Wall Street Journal.
- Best Buy recently closed 50 stores and eliminated 950 jobs at stores in Canada.
- Target announced plans to eliminate 475 jobs and not fill 700 empty positions to reduce costs.
- Aeropostale is planning to close 175 stores.
- Blockbuster has closed down all of its stores.
-McDonald’s is reporting that sales at established U.S. locations were down 3.3 percent in January.
-In January, real disposable income in the U.S. experienced the largest year over year decline that we have seen since 1974.
-As I wrote about the other day, the number of “planned job cuts” in January was 12 percent higher than 12 months earlier, and it was actually 47 percent higher than in December.
-Only 35 percent of all Americans say that they are better off financially than they were a year ago.
-What is happening to the U.S. stock market right now very closely resembles what happened to the U.S. stock market just before the horrific stock market crash of 1929. Just check out the chart in this article.
For dozens more statistics that show that the U.S. economy is not improving, please see this article and this article.
Meanwhile, things continue to unravel all around the rest of the globe as well.
In previous articles, I have detailed how the reckless money printing by the Federal Reserve has inflated massive financial bubbles in emerging markets all over the planet. Now that the Fed is “tapering”, those bubbles are starting to burst and we are witnessing a tremendous amount of economic chaos. Here are three more examples…
#1 Ghana:
Ghanaian Economist Dr. Theo Richardson says Ghana’s economy will crash by June this year if the Bank of Ghana continues with its kneejerk measures to rescue the cedi.
“The government is facing liquidity problems and if we don’t get the appropriate remedies to address the issues at hand the situation may worsen and by June the economy may crash,” Dr. Richardson said.
#2 Kazakhstan:
With only $24.5 billion left in FX reserves after valiantly defending major capital outflows since the Fed’s Taper announcement, the Kazakhstan central bank has devalued the currency (Tenge) by 19% – its largest adjustment since 2009. At 185 KZT to the USD, this is the weakest the currency has ever been as the central bank cites weakness in the Russian Ruble and “speculation” against its currency as drivers of the outflows (which will be “exhausted” by this devaluation according to the bank). The new level will improve the country’s competitiveness (they are potassium heavy) but one wonders whether, unless Yellen folds whether it will help the outflows at all.
#3 India:
In the wake of a global stock market sell-off driven by worries over slower growth in emerging markets, the head of India’s central bank, Raghuram Rajan, criticized the U.S. Federal Reserve as it pressed on with plans to dial back its monthly bond purchases: “International monetary co-operation has broken down,” said Rajan, who added that “the U.S. should worry about the effects of its polices on the rest of the world.”
We have reached a “turning point” for the global financial system. Things are beginning to fall apart both in the United States and all around the world.
But at least the dogs at the White House are eating well. Just consider the following photo that was recently tweeted by Michelle Obama…
23 Comments on "No Janet Yellen, The Economy Is Not “Getting Better”"
Poordogabone on Thu, 13th Feb 2014 10:39 pm
Janet Yellen’s head looks like a bubble about to pop.
Bandits on Thu, 13th Feb 2014 11:13 pm
How the hell do they compile their growth figures?
I’ll take a flying guess……….
Mergers and takeovers, they pick over the carcasses of dead and dying companies, obtain synergies, shed the dead ends and people and book increased sales. The initial expenditure is written off the failed company can no longer show a loss so all is well in fantasy land.
Bottom line is that there is NO MORE GROWTH, Wall Street has the media in its pocket promoting BAU. The alternative is to sign their own death warrant. So this charade will continue indefinitely, while ever the mining of the pockets of the gullible is a viable concern. Consumerism is keeping the system afloat……….for now.
ghung on Thu, 13th Feb 2014 11:43 pm
That photo reminds me of an 18th century French painting, pre-revolution.
MSN fanboy on Thu, 13th Feb 2014 11:48 pm
The economy is growing and will continue to do so, more jobs are created and filled every month.
We have growth of Alternative finance, the Knowledge Economy, Oil production (Making us less reliant on the ME)Gas production soon to be exported.
Most importantly the green technological revolution. One may just view the recent rise in solar and wind uptake and we will be fine.
Besides Global Warming means Americas GDP will grow, as our comparative advantage increases (Bananas) etc…
Amazing how you guys all agree uniformly, wake up too the facts.
Oil Vampires on Fri, 14th Feb 2014 12:36 am
ghung- Its like you can hear the mobs outside with their pitchforks and torches getting ready for the feast !
action on Fri, 14th Feb 2014 1:02 am
I didn’t know Michelle had a sister – shazam!
action on Fri, 14th Feb 2014 1:06 am
La Guillotine is hungry.
Makati1 on Fri, 14th Feb 2014 1:31 am
We reached Peak Capitalism long ago. We are now financial cannibals, eating our young’s future.
Janet signed on to the Financial Titanic as Captain at just the point where the shout is heard: “ICEBERG AHEAD!”
Davy, Hermann, MO on Fri, 14th Feb 2014 2:14 am
Guys, the global system is rigged in just about every way. Once the rules are bent and broken you create a “moral hazard”. At that point all the shyster accountants, attorneys, lobbyist, investigators et al start following the unspoken changes. Corruption, manipulation, and legalized theft begins. There is no stopping this when it is let out of the bag. The system is consumed from the inside like the movie “Alien”. We are now in a society that is a house of cards with the 5% taking from the base. The financial system is a Ponzi scheme of debt. There are so many debts, unfunded liabilities/pensions, and CDS that the incoming money is beginning to be short on the cover. The market is a classic bubble viewed by most any fundamental and previous burst bubble characteristics. This racket can continue as long as the wealth transfer is tolerated by the other 95%. The market maintains confidence. The world global economy prevents regional crashes that can cause a contagion. I have read the market is all about the fed and the yen/dollar carry trade. Watch the carry trade and the S&P 500 and see the influence. The FED, well you have heard about the money printing already. The statistics agencies, media, investigators and congress are all playing their part in this deception and racket. I don’t think it is a big conspiracy it is multiple smaller ones in every country, market, agency, and government. Corruption is at the root of the system now it is in every part.
I leave you a quote by C.L. Lewis that best describes what our system is now:
“I live in the Managerial Age, in a world of “Admin.” The greatest evil is not now done in those sordid “dens of crime” that Dickens loved to paint. It is not done even in concentration camps and labour camps. In those we see its final result. But it is conceived and ordered (moved, seconded, carried, and minuted) in clean, carpeted, warmed and well-lighted offices, by quiet men with white collars and cut fingernails and smooth-shaven cheeks who do not need to raise their voices. Hence, naturally enough, my symbol for Hell is something like the bureaucracy of a police state or the office of a thoroughly nasty business concern.”
Northwest Resident on Fri, 14th Feb 2014 3:31 am
Davy — Great analysis of our financial situation — another one from you, actually. But you know, there is one very useful outcome of all the transfer of wealth to the top 1%. That is, global consumption and especially consumption in the USA has been dramatically reduced. Somewhere in the world, forests still stand, animals still live, fish still swim and energy still lies untapped — because Americans didn’t have the money to consume as much as they would have otherwise.
Davy, Hermann, MO on Fri, 14th Feb 2014 4:03 am
N/R true a silver lining to the rape and pillage. I might add it is almost worthwhile considering all Mother Earths critters being saved. “BUT” poor bastards still eat and procreate. Take away a decent living and they tend to breed more. They tend to tear things up. They get into the traditional crimes. This is opposed to educating creating enlightenment. Less consumption but more filth
Arthur on Fri, 14th Feb 2014 8:48 am
Since 1987 we had Greenspan, Bernanke and now Yellen. The rule of the 2% continues and so does the century old Jekyll Island scam, that formed the foundation of all major global political and war upheavels since. A future renewal of Constitutional America will have to start with the abolishment of or at least nationalisation of the FED.
Davy, Hermann, MO on Fri, 14th Feb 2014 11:33 am
I wonder Arthur about the FED’s demise. Its future is limited. In a collapsed world with no fiat currency it will go the way of all those Roman organizations as the barbarians closed in on the base of the empire. I imagine it still has some steam left in it. The faithful will look to their god to save them when things fall apart. They will follow the FED to the Jim Jones’ punch bowl of Kool-Aid. That Kool-Aid is a worthless fiat currency that was inflated away or just unusable in a collapsed world. Folks things may fall completely apart before hyperinflation ruins the fiat currencies of the world. The FED is like the federal government, Walmart, Wall Street, and other TBTF organizations that is they are TBTF until they fail. Like Kunstler says any organization built at a national or global level will be subject to its own collapse irregardless of a wider collapse. An energy decent will destroy the economics and functionality of these organizations
Ricardo on Fri, 14th Feb 2014 12:12 pm
U.S has about 40 million government workers, fired 2/3’s of them, reduce taxes, problem solved.
Makati1 on Fri, 14th Feb 2014 12:40 pm
Davy, “…educating creating enlightenment…”. Has it? It seems that the most ‘educated’ countries are those in the most trouble. And the most ‘educated’ are at the helm, creating the destruction. Africans/Asians/Latinos are not destroying the world, Westerners are.
Davy, Hermann, MO on Fri, 14th Feb 2014 12:43 pm
Makati, true, I am talking the lowest rung people needing some basic education or they are little more than heathens. It is societies fault that these folks are not given a chance
Makati1 on Fri, 14th Feb 2014 3:34 pm
So true, Davy, unfortunately, so true.
John D on Fri, 14th Feb 2014 6:07 pm
This is why the definition of a ‘gaffe’ is when a politician screws up and tells the truth my mistake.
Davy, Hermann, MO on Fri, 14th Feb 2014 7:01 pm
Ha, great one John D!
ghung on Sat, 15th Feb 2014 4:18 am
@Ricardo – Fire 26 million out of 40 million government workers? Sure. Let’s dump another 26 million people into the unemployment roles. It’s not like they spend money in your neighborhood or anything. Then, again, maybe we could just fire a few million a month.
That’s the problem with contraction. A shitload of people aren’t going to be happy. Not at all.
Davy, Hermann, MO on Sat, 15th Feb 2014 12:33 pm
Guys, I read “Zero Hedge allot” the bear noise is increasing. This is an off time of the year for corrections but it is near. This is a good one for your morning breakfast or hangover…kinda like needing to puk but holding it back. The puk often has a way of forcing its way out. 2014 will be interesting and a roller coaster. I would be very careful with you 401K now. It is also a good time to play the market if you feel lucky. It will be a volatile situation beyond the market manipulations. These market makers are finding out about unintended consequences.
george on Sat, 15th Feb 2014 1:43 pm
fanboy thanks for the laugh hahahaha
Danny on Sun, 16th Feb 2014 5:08 am
Worried about 401k? I am way past that I am worried about the life of my family and myself….This wave is going to be the mother of all waves crashing down on us…..I wish all I had to worry about was 401k…stuff…on another note it is interesting how much advertising is focusing on 401ks…more commercials than car and phones