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


by Michael

A member of the U.S. Navy aboard the Arleigh Burke-class guided-missile destroyer USS James E. Williams

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 atWal-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.

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  • Bwhhaaa hhaaa hhaaaa

    Over the last few years, various experts and pundits have been warning that if something didn’t change for the better, we would be going over an economic cliff in the near future. I hate to be the bearer of bad news, but we are already over that cliff and have been plunging for awhile now. What we are possibly only weeks away from experiencing will be the sudden splat at the end of our fall. If you aren’t out of the market, invested in hard assets, stocked up on food, paid off your debts and learned to be self-sufficient as possible, you probably don’t have enough time now. Still, get on with it, and use the time you have left very wisely to prepare as much as you can, because your financial future and possibly your life will depend on what you do from here on out.

    • Popcorn

      So Chicken Little, you say the sky is falling? I hate to break it to you but all this means is that the average standard of living will go down a bit, back to realistic, sustainable levels instead of people buying a new electric car, 50″ TV, and Smartphone every time the wind changes directions.

      This correction is necessary and healthier for society in the long run. Sense of entitlement became blown WAY out of proportion and now people will start to realize that no, you aren’t really entitled to squat and if you borrow money for something you probably shouldn’t have bought the thing you borrowed for with the exception of investments like a home and then when you buy that, plan to stay there instead of worrying over housing market fluctuations.

      • Bwhhaaa hhaaa hhaaaa

        I’d have a discussion with you on the lack of reality in your argument, but what you have said proves that you are literally the walking dead, and I tend not to talk to dead people.

      • Darin

        Common sense isn’t welcome here, only apocalyptic prophecy and fear mongering. Most here are more likely to believe in the possibility that they will have to shoot their way out of a zombie mob than what you described.

  • hvaiallverden

    Whats the Problem.

    The problem is simple to solve, the issue is DO you have the gutts to do it..
    I have sayed and does it again, the only difference between You and the Icelanders, is that They did something about IT.
    You havent.
    There is Nothing that has to do with size, thats a flattout lie. The basic problem is the same, to ceap an finnacial monster arificialy alive, by indusing money into it, lie about everything, fake reports/stats/tax/documents/papers and all done under a corrupt political/juristical/finnacial elite. That ensured that nothing would happened to the system that made this crimes, possible.

    And we are witnessing monetary policy and use of it, at rates that defy everything reagarding math and logic.
    This is a sefdestructive path, willingly or not, its no where near sustainability. Its a f… dead end.

    Solution:
    Eraze the debth, eraze all debth, incl education, everything.
    And jail the Bankers.
    AND restore capitalism, in its true nature about Ballance.
    We are in the aftermath of massive industrial canibalism, resulting in ever increasing monopolistic monolits, controlling everbigger parts of every day life, and have done nothing to give wealth to us all, but to a ltile click that runns of with almoust everything, when even collecting rainwater is a fellony, the insanity have reached new levels, and all in the name of “growth” of “private” corps, marching into everything.
    Thats not Capitalism, thats Mafia/Fascism/Comunism/NeoFaudalism.

    A goverments sole porpouse is to take care of infractructure, and issues agreed upon at self cost, never meanth to make money, and tax is always as a mean to make investments in the region/issues the initial governing was suposed to do, to take care and make it better.
    To maintain a system as roads needs founding, and just to give you an example, as a Norwegian I pay lesser TAX than YOU and have free school(up to master) and health care, and so on.
    ANd we have our own currency.

    But the present level in the UssA is beyound sanity and as it turns out, not sustainable in the long runn, this present goverment is a crystal clear example on how to f…. things beyound reapair.
    And end the insane wars, this one alone drags half of You anual state income, directly to destroy others land and lifes.
    With a goverment highjacked by RobberBarons and their Hendgmen.

    And the USA would be in good shape withing some few years, instead of indebthed and as a
    slave, in a world controlled by RobberBarons.
    They know it, but you dont belive it, sounds to good to be true, well its true, and the issue is not even new, the alternatives is there, just open your eyes.

    Cause and effect.

    peace

    • dfsammarone

      YOU SHOULD RUN FOR PRESIDENT! I’ll be your campaign manager.

    • sam

      you forgot stop all wars immediately.

  • Nick athens

    i don’t normally like ALEXMARK posts as they are usually just fear mongering based on a single piece of data forecasting an apocalypse..This one however was a good one, more fact based. thank you.

    • dfsammarone

      agreed.

  • Vox

    These facts are just meant to harm B-Rock. He’s a SuperStar and he pulled us back from the brink. He’s the Black Messiah we’ve all waited for. He’s not just a sodomite, he’s a savior.

    • dfsammarone

      He really is a Rock Star!
      He has the records to prove it.

  • Barry Sucks

    obama setting the country back into the stone age.