Tag Archives: Great Depression

Donald Trump warns “A Great Depression is Coming”

Donald-Trump-Public-Domain-Whitehouse.gov-Photo

Important Takeaways:

  • Do you believe Donald Trump? He is entirely convinced that if we stay on the path that we are currently on we are heading into a “great depression”, and many believe that he is right on target.  Unemployment is rising, manufacturing activity is contracting, bankruptcies are soaring, home sales have fallen to depressingly low levels, the cost-of-living crisis never seems to end, poverty is soaring and homelessness is at the highest level ever recorded.  Since Barack Obama first entered the White House, our politicians in Washington have been propping up the economy by adding 25 trillion dollars to the national debt.  Now our national debt has crossed the 35 trillion-dollar mark, and our politicians continue to spend money at a pace that is absolutely absurd.  But despite this tremendous influx of borrowed cash, the wheels are starting to come off the U.S. economy anyway.
  • This week, everyone is talking about a “recession” because of what has been happening in the financial markets.
  • Prior to Tuesday’s session, more than 6 trillion dollars in global stock market wealth had already been wiped out…
  • Bloomberg estimates that approximately $6.4 trillion has been erased from the value of global stock markets over the past three weeks.
  • Last Friday, the Sahm rule was triggered when the unemployment rate went up again…
    • The Sahm rule, created by the former Federal Reserve official Claudia Sahm, triggers when the unemployment rate’s three-month moving average moves 50 basis points above its 12-month low.
    • That rule was triggered Friday, with the moving average rising 53 basis points above that one-year trough, according to the real-time Sahm Rule Recession Indicator from the St. Louis Federal Reserve.
  • The Sahm rule has successfully predicted every single recession since 1970, and it is indicating that another recession is here.
  • Today, we learned that Dell is planning another round of mass layoffs…
    • While Dell has confirmed the layoffs, it hasn’t revealed how many employees are losing their jobs. SiliconAngle reports that roughly 12,500 Dell employees are being laid off this week, citing an unnamed source. Impacted employees are primarily on Dell’s sales and marketing teams. A layoff tracker has since reported the same number.
    • Former Dell employee Ian Armstrong, who previously worked on the company’s UX design team for eight years, called the layoffs a “bloodbath” in a post, reporting that Dell has now laid off 24,500 staff in the past 15 months.
  • Meanwhile, the cost-of-living crisis continues to crush working families all over the nation.
  • At this point, it takes an additional thousand dollars a month for the typical U.S. household to buy the exact same goods and services that it did three years ago…
    • The typical U.S. household needed to pay $227 more a month in March to purchase the same goods and services it did one year ago because of still-high inflation, according to calculations from Moody’s Analytics chief economist Mark Zandi shared with FOX Business.
    • Americans are paying on average $784 more each month compared with the same time two years ago and $1,069 more compared with three years ago, before the inflation crisis began.
  • That is one of the primary reasons why credit card debt is at an all-time high and credit card delinquencies are soaring into the stratosphere…
  • As I discussed a few days ago, we are witnessing a very alarming surge in business bankruptcies…
    • Over the past year, business bankruptcy filings are up 40.3 percent, and have now reached a number not seen since the second quarter of 2020, at the peak of lockdowns. American households are following along, with total bankruptcy filings up 16.2 percent in the past year, including 132,710 new filings in the second quarter of 2024 alone.
  • A 40 percent increase in one year is quite serious.

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Taiwan’s earthquake preparedness saved a lot of lives as well as the global tech economy

2024-Taiwan-Earthquake

Important Takeaways:

  • From Taiwan to South Korea to Silicon Valley, some of the most important nodes in the global tech economy are in disaster-prone places
  • Considering that Wednesday’s quake was the strongest in Taiwan in 25 years — and that earthquakes of similar strength have killed tens of thousands of people or more in other countries — this could have been much worse.
  • There was one other way in which Taiwan — and the world — avoided a worse outcome from the earthquake: the island’s all-important semiconductor manufacturing industry seemed to emerge largely intact.
  • To say that Taiwan is important to the global tech industry is like saying oxygen is important to breathing. Taiwan as a whole is responsible for making 80 to 90 percent of the world’s most advanced computer chips — ones for which there is no current substitute.
  • While earthquakes and volcanoes are just one threat to Taiwan’s semiconductor foundries, the better-known one is the People’s Republic of China.
  • Should Taiwan’s chip foundries be destroyed in such a conflict, the damage to the global economy could be on par with the Great Depression.

Read the original article by clicking here.

52% think we will enter a 1930s-like Depression in the next few years

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Important Takeaways:

  • Most Still See Another Depression Ahead
  • Despite claims by President Joe Biden about the strength of America’s economy, most Americans still think we’re headed toward another Great Depression.
  • The latest Rasmussen Reports national telephone and online survey finds that 52% of American Adults believe it is likely that, over the next few years, the United States will enter a 1930s-like depression, including 21% who say a major depression is Very Likely. Thirty-six percent (36%) don’t think another Great Depression is likely over the next few years, including 11% who say it’s Not At All Likely. Another 11% are not sure.

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Young Adults staying home rather than moving out

Young-Adults-live-with-Parents-Chart

Important Takeaways:

  • A majority of young adults in the U.S. live with their parents for the first time since the Great Depression
  • 52% of young adults resided with one or both of their parents
  • The number living with parents grew to 26.6 million
  • Growth was sharpest for the youngest adults (ages 18 to 24) and for White young adults.
  • The share of young adults living with their parents is higher than in any previous measurement (based on current surveys and decennial censuses). Before 2020, the highest measured value was in the 1940 census at the end of the Great Depression, when 48% of young adults lived with their parents.

Read the original article by clicking here.

Pandemic inflicts historic U.S. job losses, as states struggle to reopen

By Lucia Mutikani and Maria Caspani

WASHINGTON (Reuters) – The coronavirus pandemic triggered the steepest monthly loss of U.S. jobs since the Great Depression, government data showed on Friday, while Michigan and California prepared to put people back to work after a manufacturing shutdown.

Labor Department data for April showed a rise in U.S. unemployment to 14.7% – up from 3.5% in February – demonstrating the speed of the U.S. economic collapse after stay-at-home policies were imposed in much of the country to curb the pathogen’s spread.

Worse economic news may yet come. White House economic adviser Kevin Hassett said the unemployment rate is likely to move up to around 20% this month.

The economic devastation has put a sense of urgency into efforts by U.S. states to get their economies moving again, even though infection rates and deaths are still climbing in some parts of the country.

At least 40 of the 50 U.S. states are taking steps to lift restrictions that had affected all but essential businesses.

Two manufacturing powerhouses, Michigan and California, outlined plans on Thursday to allow their industrial companies to begin reopening over the next few days.

Public health experts said reopening prematurely risks fueling fresh outbreaks. They also have raised concerns that a state-by-state hodgepodge of differing policies confuses the public and undermines social distancing efforts.

“If we make a mistake and react too quickly, the situation is only going to get worse,” New York Governor Andrew Cuomo told a news conference. “We have people who are dying.”

The virus has killed nearly 76,000 Americans with more than 1.26 million confirmed cases, according to a Reuters tally.

An astounding 20.5 million U.S. jobs were lost in April – the steepest loss since the Great Depression some 90 years ago – and the jobless rate broke the post-World War Two record of 10.8% in November 1982, the government said.

Just as the pathogen itself has hit black and Hispanic Americans particularly hard – they are overrepresented in the U.S. death toll relative to their population size – minorities also have suffered greater job losses during the crisis.

The April unemployment rate was 14.2% for white Americans, but the rate reached 16.7% among African Americans and 18.9% among Hispanic Americans, the data showed.

Adding to the pain, millions of Americans who have lost their jobs have been unable to register for unemployment benefits. A survey released last week by the left-leaning Economic Policy Institute found that up to 13.9 million people have been shut out of the unemployment benefits system.

‘JUST SO TENSE’

Rita Trivedi, 63, of Hudson, Florida, was furloughed as an analyst at Nielsen Media Research on April 23 and has struggled to secure benefits from the state’s troubled unemployment system. Trivedi worries that she does not have enough money to cover her husband’s medical bills and other expenses.

“I’m more than anxious, I’m more than worried – it’s ‘can’t sleep’ kind of anxious,” Trivedi said in an interview. “I’m just so tense thinking about these things and how to manage.”

Tom Bossert, Trump’s former White House homeland security adviser, said the national trend of new cases outside New York – where the situation has stabilized – was of great concern.

“What we’re looking for now is red flags for reopening, and unfortunately we’re seeing those red flags – about a 2 to 4% daily increase in the rest of the country when you take New York out of the analysis,” Bossert told ABC News.

That increase, if not contained, could lead to “really devastating results in the next 72 days,” Bossert added.

Governor Gretchen Whitmer on Thursday gave the go-ahead to Michigan manufacturers to restart on Monday, removing a major obstacle to North American automakers seeking to bring thousands of idled employees back to work this month.

In California, her fellow Democratic Governor Gavin Newsom unveiled rules permitting manufacturers in his state – ranging from makers of computers, electronics and textiles to aerospace and chemical plants – to reopen as early as Friday.

President Donald Trump, seeking re-election in November, initially played down the threat posed by the coronavirus and has given inconsistent messages about how long the economic shutdown would last and the conditions under which states should reopen businesses.

“Those jobs will all be back, and they’ll be back very soon,” Trump told Fox News on Friday.

A member of Vice President Mike Pence’s staff has tested positive for the virus, briefly delaying Pence’s Friday flight to Iowa and prompting some fellow passengers on Air Force Two to disembark, according to a White House official.

Trump said certain White House staff members have started wearing masks, one day after the White House said his personal valet had tested positive.

As many as 75,000 Americans could die due to alcohol or drug misuse and suicide triggered by the pandemic, according to a report by the Well Being Trust, a national foundation working on mental health and wellbeing.

(Reporting by Lucia Mutikani, Jeff Mason, Mari Caspani, Andy Sullivan, Lisa Shumaker, Rajesh Kumar Singh and Susan Heavey; Writing by Will Dunham, Editing by Howard Goller)

China Could Be Facing Their Own “1929 Stock Crash”

The Chinese government has been scrambling over the last few days in an attempt to stave off a massive stock collapse similar to the 1929 U.S. stock market crash which caused the Great Depression.

The Wall Street Journal said Wednesday that it appears the Chinese government is losing control of the market despite efforts to stop the slide.  The stock market has already begun to impact other parts of the Chinese economy, with the country’s bond and currency markets starting declines.

The Shanghai Composite Index (SCI) fell 5.9% on Wednesday and has lost 33% of its value since a peak on June 12.  The total of the loss, $3.5 trillion, is nearly five times the value of computer giant Apple, Inc.

“Beijing’s latest bid to calm the market has had the opposite effect,” said Bernard Aw, market analyst at IG Group, told the Journal. “The panic is spreading, and authorities appear to be grasping at straws to hold back the tide.”

While most of the world is focused on Greece, which as a nation has a gross domestic product for a year that totals only 13% of the losses on the Chinese stock market since June 12.

“China’s stock market had become detached from the reality of China’s own economy, and appallingly overvalued,” Patrick Chovanec, managing director at Silvercrest Asset Management, posted on Twitter.

Chinese government officials pushed more money to brokerage houses Wednesday in an attempt to prop up the market.  Over 1,300 Chinese companies, almost half the total in the market, have suspended their stock trading.

Scary Stock Market Parallel

Mark Hulbert, Editor of the Hulbert Financial Digest, warns that another Great Depression could happen soon.

According to Hulbert, the stock market parallels the behavior of the stock market before the 1929 crash. A chart comparing today’s market to the market of 1928-29 is making its rounds around Wall Street, and experts are frightened by what they see.

“…the market over the past two months has continued to more or less closely follow the 1928-29 pattern outlined in that two-months-ago chart. If this correlation continues, the market faces a particularly rough period later this month and in early March,” Hulbert wrote in his analysis of the stock market.

Although the markets’ correlation is uncanny, Tom McClellan of the McClellan Market Report, mentioned “…there is no guarantee that the market has to continue following through with every step of the 1929 pattern…” However, McClellan does believe there is reason for caution between now and May 2014.

Homeless Children In New York Near Great Depression Levels

A new report in the New York Times says that homeless children in New York City have reached the highest level since the Great Depression.

The report shows a pattern in New York of rents rising while low-income wages such as jobs with fast food restaurants have stagnated making it impossible for many one-parent families to be able to afford a place to live.

However, at least two-thirds of the homeless children in New York do not have a working parent in their family and many of those children have parents addicted to drugs or alcohol.

The waiting list for public housing in the city has close to 250,000 people according to the Times report. The number of poor in the city has risen to the level that almost half of those in the city are living at or below the poverty line.

New York is not the only city dealing with a problem concerning homeless children. The United States is has the second highest rate of child poverty in any developed nation, behind only Romania.

Why we are on the brink of the greatest Depression of all time

By Wayne Allyn Root

Published August 23, 2012

Everywhere from FoxNews.com to CNBC.com, I suddenly see commentators warning of pending doom, economic collapse, and a new Great Depression. Welcome to my club. Perhaps America’s politicians and economists should have paid attention to an entrepreneur and small businessman that has been warning of economic collapse and a new Great Depression publicly for over two years. Continue reading →