Sicilianthing

Oilmageddon ! Don't say you weren't warned.

"significant and synchronized" global recession..."death spiral"... "Global stock market sell off"... "Debt jubilee"

You won't hear any of those words coming out of Barack ScumBag Obama's mouth when he talks about the economy.

But you should.

NEW YORK – The selloff on Wall Street continued Friday, with the Dow closing down 211.75 points, ending at 16,204.83, off 1.29 percent.

A CNBC article posted Friday as the top headline on the Drudge Report warned that the global economy is trapped in a “death spiral” dubbed by Citibank strategist Jonathan Stubb as “Oilmageddon” – referring to the dramatic drop in world oil prices and the possibility of a global economic meltdown, or “Armageddon.”

“The world appears to be trapped in a circular reference death spiral,” Citi strategists led by Jonathan Stubbs said in a report Thursday, as reported by CNBC.

“Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth) … and repeat. Ad infinitum, this would lead to Oilmageddon, a ‘significant and synchronized’ global recession and a proper modern-day equity bear market.”

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Stubbs noted crude oil prices have tumbled by about 70 percent since the middle of 2014. The dollar, meanwhile, has risen about 20 percent against an international basket of currencies, with the prospect the world economy will grow sluggishly, increasing only by 2.7 percent in 2016, half the growth Citi projected only last month.

Minimum wage jobs and foreign workers

Meanwhile, popular economic blog ZeroHedge.com took the air out of President Obama’s announcement Friday that unemployment has fallen to 4.9 percent by pointing out that 70 percent of the job gains in January went to minimum-wage workers.

ZeroHedge.com further reported that 1.4 million relatively high-paying manufacturing jobs lost by the U.S. economy since December 2007 have been replaced by 1.6 million relatively low-paying waiter and bartender jobs created in the U.S. economy.

Since December 2007, considered by many to be the start of the current prolonged recession that ZeroHedge.com suggests has the possibility of developing into a second Great Depression, all job gains in the U.S. economy have gone to foreign-born workers.

According to the Bureau of Labor Statistics, since December 2007, the U.S. has added just 186,000 native-born workers while adding 2.5 million foreign workers.

Reasons for the 2016 stock market crash

What appears to be shaping up as the “Crash of 2016” is being blamed on a historic drop in oil prices and the fall of Chinese currency.

The price of crude oil has plunged to $26.30 a barrel, its lowest since May 2003. The problem today clearly is a global oil oversupply that has discredited the “peak oil” fears of previous decades that the world was exhausting the supply.

In January, China allowed the biggest fall in the yuan in five months, causing trading in its stock market to be suspended twice. China’s currency has continued to drop since a 2 percent devaluation last August touched off a global stock-market selloff that prefigured what global equity markets are experiencing in January.

On Feb. 2, Bloomberg reported the Chinese government is stepping up efforts to ward off a potential economic crisis in which an estimated $1 trillion in capital outflows left China last year and mounting bad debts threaten to cripple the Chinese banking system.

On Dec. 16, 2015, the Federal Reserve Open Market Committee decided to raise rates for the first time since June 29, 2006, increasing the target federal funds rate modestly, from zero to 25 basis points (0.25 points).

WND has reported analysts’ warnings that the Federal Reserve’s quantitative easing policy – under which it printed money to buy U.S. Treasury debt – was an artificial means to contain interest rates at near zero that would backfire in a broad stock-market selloff once the Fed began to raise benchmark interest rates.

As WND reported last month, William White, the Swiss-based chairman of the OECD’s review committee and former chief economist of the Bank of International Settlements, has warned that the global financial system has become dangerously unstable, facing “an avalanche of bankruptcies” worse than 2007 at a time when central banks have run out of “macroeconomic ammunition” to fight downturns.

“Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief,” White said.

“It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something,” he cautioned.

White noted European banks already have admitted to holding $1 trillion of non-performing loans.

“The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly,” he said. “Debt jubilees have been going on for 5,000 years, as far back as the Sumerians.”

Raylan Wolfe Loc: earth

Sicilian

lpnmajor Loc: Arkansas

How many times do I have to explain, that an economic system designed to syphon off real wealth, leaving "virtual promissory notes" in exchange - is doomed to an adjustment - when too many people try to cash in those promissory notes at once - only to find out that they're worthless.

Those running THESE Ponzi schemes are the elite - and untouchable - because they said so.

c.murray132

My belief is that the abundance of oil is due to private industry not accepting Obama's stated goal of making energy costs skyrocket. The Dow was too high because of quantitative easing pumping money into the market to prevent facing the reality most things are over-valued.
Look at the percentage of the federal budget is borrowed, use that as a clue as to what percentage the Dow is over-valued.

Kevyn

Unemployment just went below 5% for the first time in many years, wages made modest gains, I can fuel my car for 20 instead of 60 bucks a tank, the US dollar is stronger than it has been against foreign currency's in over a decade. And all you do is piss and moan about how you are getting screwed. Cash in your stocks quick and buy gold, booze and ammo. tune in your radio at four AM when you can get the "real scoop" on what's happening unfiltered by common sense or education.

MarvinSussman

The economy belongs to Congress, where all spending bills start. Obama can only veto. This is what Congress should do:

We hold these t***hs to be self-evident but our website will answer your questions:

1. During World War II, Americans working double shifts and weekends bought “War Bonds” and, at peace, cashed in their bonds for cars and homes, finally getting the prosperity that ENOUGH government spending, as Keynes advised, could have given them a decade earlier, when Hitler’s pre-war spending brought prosperity to Germany,
2. Deficit spending provides private savings and replaces dollars exported by trade deficits. A law requiring balanced budgets would cause an economic disaster: deflation!
3. “Budget Deficit = Private Savings +Trade Deficit” is our proper budget goal. Less spending would increase unemployment; more spending would increase inflation. So, Congress’ spending should be limited ONLY by the onset of harmful inflation when it’s controlled by the Fed with moderate long-term interest rates and by Congress with adequate progressive taxes on discretionary incomes, financial t***sactions, and estates.
4. Congressional spending tends to increase our GDP growth rate and as long as our GDP growth rate exceeds the Fed's interest rate, our national debt can grow indefinitely and safely. (Check the math at: http://www.levyinstitute.org/publications/?docid=1379.).
5. Almost 90% of Congress’ spending becomes the money we use to pay our taxes. The rest lands in our savings accounts or those of foreign exporters sending us bargains.
6. Our dollar’s reserve currency status favors US consumers, traders, etc., and forces our Treasury to maintain a LARGE national debt, MUCH of it held by foreign exporters.
7. Foreign exporters will either accept our dollars and bonds or stop selling us goods.
8. The Fed’s purchase of US debt increases bank deposits and asset prices; decreases interest rates, US debt, and debt interest expense; and shifts potential debt problems toward inflation problems. (The Fed returns 94% of its annual profit to our Treasury.)
9. Our Treasury borrows the annual federal budget deficit not because Congress needs money but only to absorb just enough bank reserves to enable the Fed to stay on its targeted federal funds interest rate, the basis of other rates. When Congress has a budget surplus, US bonds become scarce and Wall Street cries: “We need more debt!”
10. Wars are won with infrastructure so our needs are unlimited but we should now be building enough to stay well ahead of a China racing 24/7. Since a pot-hole could delay a vital delivery, all infrastructure is necessary for defense. Since Congress is responsible for national defense, it should pay for all infrastructure, including all pot-holes, all pre-K to PhD education, and all healthcare, all of which are ABSOLUTELY NECESSARY for our defense. State and local governments, knowing their own needs and resources, would manage most of the infrastructure, spending in coordination with the Administration.
11. Although the CBO uses a 1.6 multiplier for infrastructure spending, our GDP really grows at about twice the rate of Congress’ spending. Our Debt/GDP ratio dropped from 120% in 1944 to 30% during 35 prosperous years due to moderate inflation, high tax rates, and spending on GI housing and education, the Marshall Plan, nuclear energy, the Korean War, Cold War rearmament, the Interstate Highway, NASA, the Vietnam War, etc.
12. High federal spending with sufficiently high tax revenue can produce lower budget deficits than low spending with low tax revenue. And produce added infrastructure!
13. Only i***ts would refuse a salary boost to avoid a tax hike but, to avoid hiking taxes, i***ts in Congress, ignoring the opportunity costs, won’t boost our infrastructure! Congress’ past spending gave us t***sistors, integrated circuits, robots, computers, the internet, jet planes, rocket ships, solar and wind energy, LCD and touch-screens, the mouse, SIRI, search algorithms, GPS, genomics, and a vibrant pharmaceutics industry!
14. Increased output for the same input is anti-inflationary so when Congress gains infrastructure and productivity by hiring the unemployed, inflation is not increased. The stuff that the unemployed get now with stamps would instead be bought with workers’ salaries, ending humiliations of the idle poor and resentments of the working poor.
15. While excessive unemployment exists, excessive federal deficits are due only to low tax revenue, not to spending that hires the unemployed to build infrastructure.
16. Excessive unemployment implies a failure of Congress to provide infrastructure for national defense. Members of Congress who refuse to hire the unemployed to build infrastructure are endangering our existence as a free nation as well as betraying the wish of our Founding Fathers that we “…promote the general Welfare and secure the Blessings of Liberty to ourselves and to POSTERITY…”, which inherits our infrastructure!
V**ers, give your adorable grandchildren the arsenal they will need for survival!
© 2016 Marvin Sussman, All Rights Reserved. Permission granted only to copy entirely.
Questions? Get answers from economists at www.umkc/econ/???/.edu
The statements above are based upon the following sources:
*“Austerity” (Oxford U. Press) by Mark Blyth, Brown Univ. Professor of International Political Economy.
*”Diagrams & Dollars; Modern Money Illustrated” (e-book) by J.D. Alt, Writer, Architect.
*“Freedom from National Debt” (Two Harbors Press) by Frank N. Newman, former Deputy Secretary of the …. US Treasury, recipient of the Treasury’s annual “Alexander Hamilton” award.
*”Modern Money Theory” (Palgrave Macmillan) by Prof. L. Randall Wray, UMKC Economics Department.
*NewEconomicPerspectives.org by Dr. Stephanie Kelton, Chairperson of UMKC Economics Department.
*“Seven Deadly Innocent Frauds of Economic Policy” (Oxford Univ. Press) by Warren Mosler, economist.
*”The T***h about the National Debt: Five Myths and One Reality” (Harvard Business School Press) by ------…Francis X. Cavanaugh, US Treasury economist for over 30 years.

PeterS

Well, it's about time for another recession. Is your suggestion that we go into a panic? Thank god we have a proactive government that's willing to shore up our economy during recessions is it!

PeterS

I don't agree completely but very funny. Perfect description of Sici and his cohorts!

PeterS

Marv, I've tried your www.umkc/econ/???/.edu and all I get is 'page not available' Could you check the link and give us the correct one. Over all good information, thanks...

rebob14

OPEC's delibrate continued pumping of un-needed oil was the opportunity for the U.S to leave the global commodities market system and use our technical sk**l to create energy independence. Despite decades of political posturing re: this, our d********g and corrupt "leadership" has done the exact opposite and will now "lead" us into another recession. The same low-information v**ers will be the first on the streets when they discover that the wealth of the 1% won't even come close to providing the goodies they desire. That happy event will be the time for gun control, but it will be far, far too late! The white middle class has become Carthage and Rome is already here!!!

MarvinSussman

Link is not yet available. Work in progress. If you have a question, post it here. I guarantee an answer that economist will support.

Sicilianthing

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And they're all going to DIE soon.

Sicilianthing

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The Retail Apocalypse has begun in the U.S. Thousands of stores will be closing laying off 2million employees in the next 6months

Sicilianthing

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Mathematically unsustainable and I've been telling people since before 2008 crash.

This is the Longest SUCKERS Rally in Human Histtory !

I'm OUT

Sicilianthing

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We are Ready to Fight !

Let em' bring it.