12 Clear Signals That The U.S. Econom...

12 Clear Signals That The U.S. Economy Is About To Really Slow Down

Posted in the Kingsland Forum

“Commander & Chef”

Since: Sep 11

Saint Marys, GA

#1 Jun 12, 2013
I'm not sure about some of the conclusions this guy reaches but the list is interesting.

#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...

#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.


“It's comong.”

Since: Nov 12

Location hidden

#2 Jun 12, 2013
I think I would look toward the dollar, Bernake, the bond market and foreign economies.

“It's comong.”

Since: Nov 12

Location hidden

#3 Jun 12, 2013
Think about this: What would it take to collapse the dollar? What effect would that be on our economy if that happened? Is what Bernanke is doing, heading in that direction?
The Fed currently buys $85 billion in mortgage and Treasury debt each month in order to keep interest rates low. They buy it with what? Money that has yet to be printed.

“Commander & Chef”

Since: Sep 11

Saint Marys, GA

#4 Jun 12, 2013
In order for a currency to collapse, it has to have another currency to collapse against. What other currency is strong enough for the dollar to collapse against?

Macon, GA

#5 Jun 12, 2013
I see most of your twelve points and agree that the market will indeed correct before the end of this year. But looking at the market which historically takes a summer hiatus, it has actually outperformed this season when it typically recedes.

Of course any rapid growth in the market is momentarily exciting and followed by fears of a major correction or downturn. But I'm in for the long haul, as it has done better by me than real estate or any other investment.

My biggest concern is the rise in capital gains and where it will end. 5 percentage point or a 33% increase from 2012 to 2013 is worrisome as is the rise in Medicare tax on those gains.

Another sign of the government attempting to finance ineptness through taxation versus good business practice.

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