U.S. Economy Is About To Really Slow Down (12 Clear Signals)

12 Clear Signals That The U.S. Economy Is About To Really Slow Down (Economic Collapse, June 5, 2013):

A lot of things that have not happened since the last recession are starting to happen again.  As you read the list below, you will notice that the year “2009” comes up again and again.  There is a reason for that.  Many of the same patterns that we witnessed during the last major economic downturn are starting to repeat themselves.  In fact, many of the things that are happening right now have not happened in quite a few years.  For example, manufacturing activity in the U.S. has contracted for the first time in four years.  The inventory to sales ratio is the highest that it has been in four years.  Average hourly compensation just experienced the largest decline that we have seen in four years.  We also just witnessed the largest decline in the number of mortgage applications that we have seen in four years.  After everything that Barack Obama, the U.S. Congress and the Federal Reserve have tried to do, there has been no real economic recovery and now the U.S. economy is suddenly behaving as if it is 2009 all over again.  A whole host of recent surveys indicate that the American people are starting to feel a bit better about the economy, but the underlying economic numbers tell an entirely different story.  The following are 12 clear signals that the U.S. economy is about to really slow down…

#1 The average interest rate on a 30 year mortgage has risen above 4 percent for the first time in more than a year.

#2 The decline in the number of mortgage applications last week was the largest drop that we have seen since June 2009.

#3 Mark Hanson is reporting that “mass layoffs” have occurred at three large mortgage institutions…

This morning I was made aware that three large private mortgage bankers I follow closely for trends in mortgage finance ALL had mass layoffs last Friday and yesterday to the tune of 25% to 50% of their operations staff (intake, processing, underwriting, document drawing, funding, post-closing).

This obviously means that my reports of refi apps being down 65% to 90% in the past 3 weeks are far more accurate than the lagging MBA index, which is likely on its’ way to print multi-year lows in the next month.

#4 It was just announced that average hourly compensation in the United States experienced its largest drop since 2009 during the first quarter of 2013.

#5 As I wrote about the other day, the Institute for Supply Management manufacturing index declined to 49.0 in May.  Any reading below 50 indicates contraction.  That was the first contraction in manufacturing activity in the U.S. that we have seen since 2009.

#6 The inventory to sales ratio has hit a level not seen since 2009.  That means that there is a lot of inventory sitting out there that people are not buying.

#7 According to the Commerce Department, the demand for computers dropped by a stunning 9 percent during the month of April.

#8 As I noted in a previous article, corporate revenues are falling at Wal-Mart, Proctor and Gamble, Starbucks, AT&T, Safeway, American Express and IBM.

#9 Job growth at small businesses is now at about half the level it was at the beginning of the year.

#10 The stock market is starting to understand that all of these numbers indicate that the U.S. economy is really starting to slow down.  The Dow was down 216.95 points on Wednesday, and it dropped below 15,000 for the first time since May 6th.

#11 The S&P 500 has now fallen more than 4 percent since May 22nd.  Is this the beginning of a market “correction”, or is this something much bigger than that?

#12 Japanese stocks are now down about 17 percent from the peak of May 22nd.  Japan has the third largest economy on the planet and it is one of the most important trading partners for the United States.  A major financial crisis in Japan would have very serious implications for the U.S. economy.

If we were going to have an “economic recovery”, it should have happened in 2010, 2011 and 2012.  Unfortunately, as a recent Los Angeles Times article detailed, an economic recovery never materialized…

Real GDP growth — the value of goods and services produced after adjusting for inflation — is 15.4% below the 3% growth trend of past recoveries, wrote Edward Leamer, director of the UCLA Anderson Forecast. More robust growth will be necessary to bring this recovery in line with previous ones.

“It’s not a recovery,” he wrote. “It’s not even normal growth. It’s bad.”

Now we are rapidly approaching another major economic downturn.

But poverty in America has continued to experience explosive growth since the end of the last recession and dependence on the federal government is already at an all-time high.

How much worse can things get?

Sadly, they are going to get much, much worse.

What the U.S. economy is experiencing right now is not just a cyclical downturn.  Rather, we are in the midst of a long-term economic decline that is the result of decades of very foolish decisions by our leaders.

It is imperative that we get the American people educated about what is happening.  If people do not understand what is happening, they are not going to get prepared for the hard years that are coming.

If you have a family member or a friend that does not understand the long-term economic collapse that is unfolding all around us, please show them my article entitled “40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To Believe“.  It goes a good job of pointing out many of the reasons why we are heading for complete and total economic disaster.

And the point is not to fill people with fear.  Rather, there is a lot of hope in understanding what is happening and in getting prepared.  As we have seen over in Europe, those that get blindsided by economic problems often become totally consumed with despair.  Suicide rates have soared in economically-troubled nations such as Greece, Spain and Italy.

And the same thing is going to happen in the United States too.  In fact, the suicide rate in the United States has already been rising according to the New York Times

From 1999 to 2010, the suicide rate among Americans ages 35 to 64 rose by nearly 30 percent, to 17.6 deaths per 100,000 people, up from 13.7.

In fact, today more Americans are killed by suicide than by car accidents.

Isn’t that crazy?

Unfortunately, this is only just the beginning.  When the system fails, millions of Americans are going to be convinced that their lives are over.  A lot of them are going to do some very stupid things.  We want to try to prevent as much of that as possible.

Thanks to decades of incredibly foolish decisions by our leaders, an economic collapse is inevitable.  This is especially true considering the fact that our leaders in Washington D.C. and elsewhere will not even consider many of the potential solutions which could help start turning our economic problems around.

So since there are no solutions on the horizon, we need to explain to people what is happening and help them to get as prepared as possible.

The years ahead are going to be very hard, but we have a choice as to how we will respond to the challenges in front of us.

We can face those challenges with fear, or we can face them with courage.

Choose wisely.

1 thought on “U.S. Economy Is About To Really Slow Down (12 Clear Signals)

  1. As someone who considers my life over, I understand what you write here. Suicide is one way to exit without being homeless and hungry, and the number is growing quickly. I have a fatal illness, in my case, it doesn’t matter, but there are many who will exit because they have no other options. We no longer have families to support each other, our social system has been fragmented and divided beyond recognition.
    We cannot trust the numbers given us each month. Mfg index down to 49%……please recognize that under the bush administration, flipping hamburgers was re- categorized as mfg. I am sure the numbers have been below 49 for a while. Everywhere I go, I see empty storefronts and shops, over 58K mfg plants have been closed since 2008, and the small ones were probably not counted.
    As for the frail banking system, I remind you of what happened about 18 months ago. The IMF suggested that all the major banks should have 5 cents on deposit for every dollar they claim as an asset. The banks would have had to borrow the five cents! The banking industry is the weakest link in the chain, and what is happening to JP Morgan is the tip of the iceberg. It is a giant shell game, and most people are beginning to realize it. If anyone reading this is in financials, get out! If you look at our markets, they are the ones getting the worst beating. Rising interest rates will keep the truth hidden for a while longer (they hope).
    In 1995, our GDP was pretty well balanced, and 16% was in financials. In 2008, 63% of our GDP was based in financials. Please recognize financials don’t create any jobs. All loans, including credit card and auto, are packaged into bonds and sold on Wall Street. The fact the lending interest rates are up to 4% so quickly tells me the buyers are getting skittish. None of the outrages that caused the crash of 2008 have been fixed, and banks are in the gambling business. The fact the FED is talking about turning down the endless tap of free money for them when their gambling is a mistake is scaring the greedy markets. The financial system create nothing but spread sheets, no jobs, and no growth.
    Japan tried a page out of the FED playbook, selling excessive bonds in hopes of keeping their system going. For the first time in their history, their bonds are not getting buyers because nobody will pay cash for them. Bonds are government versions of cash investments, and when people stop buying them, it means there are real problems ahead. It could spread over here, and the Japan fallout is directly relational to what has happened to our market over the past few days. Today, the FED stepped in, bought up debt, and the market closed up 80 billion.
    When 85% of our market is in High Frequency Trades, that is buying and selling huge amounts of securities in less than the blink of an eye, our market is being drained, not invested into.
    As for poverty in America, most of us never experienced it, and I don’t think people will take it lying down. That is why they have militarized the police departments in every city in America. I see a military dictatorship coming, and I am glad I won’t be alive for it.
    Historically, our economy has always come out of depressions by the building of new companies and housing starts. That isn’t happening this time, the corporations are in power, not the people.
    I never wanted to see an era in history like the 1930s, but that is what we face today.
    Thank you for all you do. It is very brave in light of all the supervision given anyone who says anything today. I have much respect for your work.

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