The government is already in a soft default and is addicted to low interest rates: Government expenses at $3.87 trillion while receipts enter at $3.29 trillion.
The term default has varying definitions depending on whether you are an individual, a big bank, or the government. For you as an individual, default will occur when you are unable to pay your debts with the income you are generating. You are constrained by your income. As we saw with the housing crisis, when […]
Working for peanuts: Half of American workers earn less than $28,031 per year and household income now back to levels last seen two decades ago.
Every fall, two pieces of data are released reflecting the earning potential of American families and workers. The low wage economy has certainly taken a toll on how much Americans earn. Social Security data was recently released and shows that 50 percent of the country earns less than $28,031. This is the per capita wage. […]
One-third of working Americans support two-thirds of the population: The hidden figures of those not in the labor force and transfer payments.
There still seems to be little acknowledgement of the massive army of people now falling into the category labeled as not in the labor force. Some of this growth is predictable like many older Americans hitting retirement age. But this only explains a small portion of the change since many older Americans are needing to […]
The stock market correction has arrived: Massive global volatility, central bank wizardry, geo-political instability, and people finally realizing how overvalued the market has become.
The stock market is finally reflecting the true nature of the global economy. There is massive geo-political instability, central bank double-speak, and a growing trend of low wage labor. In the US, it is no surprise that subprime auto debt has grown at an outstanding pace simply because people are too broke to finance a […]
The new subprime is in auto loans: One third of all new auto loans are of the subprime variety. Repossession are up 70 percent.
Leave it to Wall Street to resurrect the subprime loan. This time, subprime has found a comfortable home in the automotive industry. In the car addicted US culture, subprime debt is back in a massive way. Subprime auto debt is the new risky debt product. This is a big deal. $924 billion in total auto […]
The New Normal for the American Dream – 3 Cornerstones: Low wage jobs, high levels of college debt, and a retirement that consists of working until you pass away.
There seems to be a growing acceptance that the American Dream is hardly as accessible as it once was. Low wage jobs, higher education tuition pushing many into untenable levels of debt, and a new vision of retirement all seem to connect into one new theme. The new theme revolves on a much more challenging […]
China ghost cities and real estate correction: China’s GDP and individual household wealth is heavily tied to real estate. What happens when a correction hits?
China has had one of the wildest real estate sectors of any large global economy. Chinese real estate values have appreciated dramatically largely shutting out regular workers in the country. It is an interesting situation. You hear countless stories of young males trying to find a potential mate and given the restrictive one child policy, […]