pafret Loc: Northeast

"Are We In A Recession Already?"
by Charles Hugh Smith



"Recessions are typically only visible to statisticians long after the fact, but they are often visible in real time on the ground: business volume drops, people stop buying houses and vehicles, restaurants that were jammed are suddenly sepulchral and so on.

There are well-known canaries in the coal mine in terms of indicators. These include building permits, architectural bookings, air travel, and auto and home sales. Home sales are already dropping in most areas, and vehicle sales are softening. Airlines and tourism may continue on for awhile as people have already booked their travel, but the slowdown in other spending can be remarkably abrupt.

All nations are mosaics of local economies, and large nations like the U.S. are mosaics of local and regional economies, some of which (California, Texas, New York) are the equivalent of entire nations in and of themselves. As a result, there can be areas where the Great Recession of 2008-09 never really ended, and other areas that have experienced unprecedented building booms (for example, the San Francisco Bay Area where I live part-time.)

Changes in sentiment are reflected in different sectors of the economy: people become hesitant about big purchases first (autos, houses) and then start deciding to save more by spending less (Christmas shopping, eating out, vacations, etc.)

Given the structural asymmetries of our economy (a few winners, most people lucky to be losing ground slowly), each economic class also responds differently. The lower 60% of households don't have the disposable income of the top 10%, so "cutting back" for them might be buying fewer fast-food meals per week.

The top 10% have the majority of the nation's disposable income, just as they own two-thirds of the wealth. If the sources of their income tanks (tech bubble pops, etc.), then signs of recession in this class will be a decline in high-cost consumption: luxury store sales, fancy restaurants, etc. In other words, different classes, sectors and regions of the economy can be in recession while others are still doing fine.

As a result, the value of declaring the entire nation in or out of recession is limited. While national conditions such as mortgage rates and Treasury yields are consequential, the recessionary effects will likely be as asymmetric as the economy: the effects will vary considerably depending on how each sector, class and region are doing.

To summarize: the top 10% may never experience a recession that guts the bottom 90%, who depend on wages rather than earnings from capital. As this chart illustrates, wages (employee compensation) has been in structural decline."

- http://charleshughsmith.blogspot.com/
- https://www.zerohedge.com/news/

BigMike Loc: yerington nv

We will be. We live in the largest debt bubble of all time and every bubble bursts. Even now the stage is being set to blame it on central banking and do something about it the bankers won't like...like take away their ability to create fiat currency.

Coos Bay Tom Loc: coos bay oregon

They will blame it on the banks but the Tax cuts to zillionaires and the trade war are what really did it. The usual scapegoats ---the poor will suffer the most.

nwtk2007 Loc: Texas

I remember Bush saying "we need revenue" after getting elected on "no new taxes!"

pafret Loc: Northeast

It is remarkable that none of our pols ever consider reducing expenditures unless it is something that benefits the populace. This attitude began with that i***t Lyndon Johnson proclaiming that we could afford guns and butter, to justify the costs of the needless wars he waged. It has not changed since. Our GDP is over fifty percent DOD/Military and this is insane.

Sicilianthing

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There was never any real recovery...

I’ve posted hundreds of topics about the economy since 2014 when the data came out that nothing has really improved and the banks and companies just kicked the cans Down the road and swept everything else off under the desk into SHADOW Inventory Landia

Now all the chickens are coming home to Roost Rotten Eggs...

Trump is screwed, they’ve got him trapped
He’s holding the bag of rotting trash
The Econmy is fragmenting again as we type...

The Global toxic assets balloon has not been remedied
This is the last Great American holiday... so enjoy it...
the Retail apocalypse will go into overdrive after new year as companies shutter Thousands of Stores...
Millions of Layoffs coming...

I can go on for pages...

Comment Loc: California

Tom: The zillionairs are the only people who pay taxes. Why should they not get a tax cut. 49% of Americans pay no taxes. If U rob the rich to enrich the poor nonproductives then U would have no rich to tax cause U have already stripped them of their wealth. Since when have U ever worked for a poor person for free? If I were wealthy I would leave the zone that wanted to rob me of my wealth and relocate outside the USA. what do U think the USA would look like with no rich people in it? The rich pay for the gov. U don't and I don't. Although, I am taxed @ $3,000,--4,000 annually. Man: with all respect, U are not seeing the real world. People have choices; and one of those choices is not to be over taxed by nonproductives.

Sicilianthing

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The IRS created all these patches and an Albatross Mess...

The 16th was unlawfully ratified and the t***h is coming out just like the s**m on the 17th too.

pafret Loc: Northeast

The rich have r****d the government to continue accumulating wealth. They aren’t going to leave because just like Willy Sutton's comment on robbing banks, this is where the money grows. Between owning all of the industries, government giveaways or corporate charity and investing in the Federal Reserve's inflation creating bonds, they are siphoning off far more than their fair share of the wealth created by the workers of this nation.

Without those non-productives you so easily discard there would be no economy and no nation.

Coos Bay Tom Loc: coos bay oregon

It cost him being re elected

Coos Bay Tom Loc: coos bay oregon

Well I do understand that the rich pay most of the taxes. If big industry had to pay more taxes they would invest in developement higher wages etc. to get tax breaks. That would put people to work instead of being non productive. With all respect.

shanson

No Tom, Industry would move production off shore to avoid paying taxes.

Coos Bay Tom Loc: coos bay oregon

Laws can be made to prevent that just like laws allowed it.

Coos Bay Tom Loc: coos bay oregon

Sicilianthing

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Correct answer.