iftttwall

As we noted previously (here and here), the exuberance over ‘lower’ gas prices is a little overdone. Perhaps more worrying though, as Bloomberg’s Jo Brusuelas notes, wholesale gasoline futures are pointing to about a 5% rise in gasoline prices during the next few weeks. This would essentially erase the entire decline in gas prices seen since Sept. 1. As Brusuelas warns, because recent gains in inflation-adjusted personal disposable income on a per capita basis can be directly tied to falling gasoline prices, rising prices may come at an inopportune time for many larger retailers.

 

 

Via Bloomberg’s Joseph Brusuelas,

Real per capita disposable income is up 0.9 percent on a year ago basis – weak under any conditions. The reversal of those modest gains due to rising gas prices would not bode well for what is shaping up to be the most challenging holiday spending season since 2009.

Consumer spending and sentiment are notoriously sensitive to price increases at the pump. If gasoline futures are correct, the 5 percent increase in prices may result in as much as a $40 billion hit to consumer wallets just as the traditional holiday spending season hits its stride during the next few weeks.

 

While gasoline prices are down 16 percent since the February peak, the combined effects of the $148 billion increase in tax rates on upper income households and the resetting of the payroll tax effectively offset potential early-year gains in personal disposable income.

For middle income consumers and those further down the income ladder, small changes in disposable income can have a significant effect on discretionary spending. Among this group, 48 million individuals receive food stamps and will already see a net loss of about $16 billion in transfer payments due to cuts in the Supplemental Nutrition Assistance Program.

Under conditions of weak income growth and modest employment gains, aggressive discounting by retailers has not translated into a sustained acceleration in overall spending.

Demand for services has averaged 1.8 percent during the expansion, well below the 3 percent level seen during the previous two business cycles. On a year-ago basis, overall retail spending peaked in 2010 and has continued to decelerate since.

Meanwhile, November gains in retail outlays were directly tied to transitory events rather than a broader shift in the overall behavior of consumers. Auto purchases in October were pushed forward into November due to the government shutdown. The spillover of the “iPhone effect” into November also temporarily boosted the overall level of spending and probably helped mask underlying weakness in the retail sector.

 

Since the end of the Great Recession, the upper two quintiles of income groups have emerged relatively unscathed while the lower three quintiles continue to bear the disproportionate burden of the adjustment underway in the domestic labor market and broader economy. This suggests the status quo in the economy and overall spending will probably continue to hold; upper-income consumers benefiting from historically low interest rates, home price increases and appreciation in equity markets will contribute the lion’s share of gains in holiday spending this year.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/IIbeiCttAUo/story01.htm Tyler Durden

As we noted previously (here and here), the exuberance over ‘lower’ gas prices is a little overdone. Perhaps more worrying though, as Bloomberg’s Jo Brusuelas notes, wholesale gasoline futures are pointing to about a 5% rise in gasoline prices during the next few weeks. This would essentially erase the entire decline in gas prices seen since Sept. 1. As Brusuelas warns, because recent gains in inflation-adjusted personal disposable income on a per capita basis can be directly tied to falling gasoline prices, rising prices may come at an inopportune time for many larger retailers.

 

 

Via Bloomberg’s Joseph Brusuelas,

Real per capita disposable income is up 0.9 percent on a year ago basis – weak under any conditions. The reversal of those modest gains due to rising gas prices would not bode well for what is shaping up to be the most challenging holiday spending season since 2009.

Consumer spending and sentiment are notoriously sensitive to price increases at the pump. If gasoline futures are correct, the 5 percent increase in prices may result in as much as a $40 billion hit to consumer wallets just as the traditional holiday spending season hits its stride during the next few weeks.

 

While gasoline prices are down 16 percent since the February peak, the combined effects of the $148 billion increase in tax rates on upper income households and the resetting of the payroll tax effectively offset potential early-year gains in personal disposable income.

For middle income consumers and those further down the income ladder, small changes in disposable income can have a significant effect on discretionary spending. Among this group, 48 million individuals receive food stamps and will already see a net loss of about $16 billion in transfer payments due to cuts in the Supplemental Nutrition Assistance Program.

Under conditions of weak income growth and modest employment gains, aggressive discounting by retailers has not translated into a sustained acceleration in overall spending.

Demand for services has averaged 1.8 percent during the expansion, well below the 3 percent level seen during the previous two business cycles. On a year-ago basis, overall retail spending peaked in 2010 and has continued to decelerate since.

Meanwhile, November gains in retail outlays were directly tied to transitory events rather than a broader shift in the overall behavior of consumers. Auto purchases in October were pushed forward into November due to the government shutdown. The spillover of the “iPhone effect” into November also temporarily boosted the overall level of spending and probably helped mask underlying weakness in the retail sector.

 

Since the end of the Great Recession, the upper two quintiles of income groups have emerged relatively unscathed while the lower three quintiles continue to bear the disproportionate burden of the adjustment underway in the domestic labor market and broader economy. This suggests the status quo in the economy and overall spending will probably continue to hold; upper-income consumers benefiting from historically low interest rates, home price increases and appreciation in equity markets will contribute the lion’s share of gains in holiday spending this year.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/IIbeiCttAUo/story01.htm Tyler Durden

Resource pressure is a constant. 

 

While the US continues to engage in a delusional energy “debate” about whether we will continue to burn coal and whether natural gas is a panacea, China is struggling to acquire and deploy of energy resources to support its economic growth targets.

China has an environment versus growth problem.    Already China is the #1 importer of oil in the world. That‘s right.  China imports more oil than the United States.  

 

The US can hold its energy consumption below GDP growth through increased energy efficiency (technological improvements) and because our economy is more “services based” than China’s.

 

China on the other hand has to continue to consume more energy, particularly oil. The emerging and growing middle class there wants to buy cars, as is typical when annual GDP per capital hits $10,000-20,000 per year.  With 4X the population of the US, if China approaches even 50% of the US’s car ownership rates, it will have  TWICE as many cars in nominal terms.

 

Consider the following data point: China is adding one million new cars to its expanding road and highway network every single month.

This kind of growth will strains China’s energy and water supplies. Whenever the gap between demand and supply is enormous, literal fortunes can be made.

 

For more market insights as well as three FREE hard hitting Special Investment reports showing you how to protect your portfolio, swing by: http://phoenixcapitalmarketing.com/special-reports.html

 

Phoenix Capital Research

 

 

 

 

 

 

 

 

 

 

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bOshbbfSv38/story01.htm Phoenix Capital Research

Via Taiwanese Animators,

 

Black Friday is America’s most honest holiday. It is immediately preceded by Thanksgiving, which is when Americans of all races, except the native kind, get together and exchange a mutual wink and a nod that they’re giving thanks for the majestic land that God inexplicably bestowed upon them (but for realz, we really scored with this sweet continent we got here) and then have a turkey dinner. But Black Friday actually embodies the pioneer spirit that carried smallpox riddled settlers from one coast to the other. Like raiders in the night, shoppers drunk on red wine and diabetes crouch before the gates of the enemy’s castle, or Best Buy, waiting to storm through the breach and rape and pillage and ask if this can be returned if it turns out your sister already has one.

America’s founders would have been perfectly at home in such an environment. The only reason the Native Americans ever gave them some food to eat is to stop these insane pale-faced, pantaloon wearing, toothless swamp dwellers, from cannibalizing each other every time the mail boat from England showed up a day late. Guys, for serious, have some corn, and put down that kid’s leg! It doesn’t go in your mouth! Even after the nation had been founded, Black Friday survived every year of the American Civil War, and even the great depression, when there was nothing to fight over but Hoover Bread, and Hoover Pies, and Hoover Beer; all three are just variations of sawdust.

Sadly, Black Friday crusaders of today are on average 5 times the body mass of the founding fathers. They are only able to ransack a big box store with three vertical steps or less. But in the interest of keeping an American tradition alive, they will continue to drive their accessibility scooters toward those sliding glass doors, wallets in one hand and 2nd Amendment protector in the other, in the hope of passing on to the next generation those most American of values: the kind with a spinning blue light on it.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/COZ6xyHpqIo/story01.htm Tyler Durden

A week after spiking above $900, before dropping 50% in the following 48 hours amid last week’s Senate hearings, Bitcoin has recovered the losses (i.e. doubled) and is now trading at record high levels against the USD – $930on Mt.Gox. Notably, in China, Bitcoin remains well off its record highs (5200 vs 6989 highs).

 

 

 

As Mike Krieger asks, is Bitcoin the Black Swan no one saw coming?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/yOifY7yKxB0/story01.htm Tyler Durden

Submitted by Michael Snyder of The Economic Collapse blog,

Are you deeply concerned about the future of America?  Is something in your gut telling you that our system is fundamentally broken and that the mainstream media is not telling you the truth about what is happening?  If so, you are definitely not alone.  Right now, there are millions upon millions of Americans that are absolutely horrified as they watch this nation deteriorate.  In fact, according to an analysis of recent polling data conducted by Real Clear Politics, approximately 68 percent of all Americans believe that the country is on the wrong track and only 23.5 percent of all Americans believe that the country is on the right track.

And of course our problems did not appear just recently.  In fact, many of them are the result of decades of very foolish decisions and they are not going to be fixed easily.  Unfortunately, there is very little consensus among Americans about how to fix any of our problems.  There is more anger, frustration, hatred and division in the United States today than there has been in decades, and there is very little hope that the great storms that are looming on the horizon will be averted.  Those that are wise are preparing for what is coming.  Those that are not are going to be absolutely blindsided by what is rapidly approaching.

Once upon a time, America was the wealthiest nation on the entire globe by a huge margin and it had the largest and most thriving middle class the world had ever seen.  But now America is drowning in the biggest ocean of red ink in the history of the planet and the middle class is being systematically destroyed.

If you read my articles on a regular basis, you already know all of this.  But now there are certain factors that are going to cause the problems of the middle class to greatly accelerate.

For instance, just consider what Obamacare is going to do to millions of American families.

The Foundry recently posted a story that detailed the extreme hardship that Obamacare is going to impose on one middle class family in Sonora, California.  This particular family is very healthy and does not have a history of health problems.  Up until now, they have had a health insurance policy with Anthem Blue Cross Insurance that they have been very happy with.

Back in 2011, this family was paying $389 a month for health insurance.

In 2012, due to changes in California law that figure went up to $499 a month.

Now, this family has just received a letter informing them that their current plan is being canceled and that if they want a new plan it is going to cost them $1,252 a month.

Needless to say, that news did not go over very well with that family.

Just think about it.

Can you come up with an extra $753 a month for health insurance?

Most American families certainly cannot.

Well, Kate Joy and her husband sat down and started trying to figure out how they could squeeze the new health insurance policy into their budget.  It turned out that they would have to cut out a lot of things.  The following is a list of the proposed cuts that they have come up with so far…

• Stop paying the extra payment on my mortgage: $100/month
• Stop eating out: $150/month
• Don’t go to the movies: $36/month
• Switch to getting a haircut every other month: $15/month
• Stop getting manicures: $40/month
• Stop monthly charitable donations to Wounded Warrior and Habitat for Humanity: $70/month
• Stop saving for an annual anniversary getaway: $60/month
• No Christmas gifts to extended family: $40/month
• Quit buying beef at the grocery store: $100/month
• Teeth cleaning only once per year: $30/month
• Cancel all magazine/newspaper subscriptions: at least $30/month
• Cut DISH service to cheaper plan: $50/month
• Cancel land line phone service: $70/month

If they make all of those cuts, it will save the family $791 a month.

Understandably, that family is having a very hard time feeling optimistic about the future right now.  In fact, at the end of the article Kate Joy is quoted as saying the following…

"I fear for what’s coming."

And of course her family is not the only one that is being absolutely hammered by Obamacare.

In a previous article, I discussed the results of one study which showed that health insurance premiums for men are going to go up by an average of 99 percent under Obamacare and health insurance premiums for women are going to go up by an average of 62 percent under Obamacare.

 

And a different study found that health insurance premiums for healthy 30-year-old men are going to go up by an average of 260 percent under Obamacare.

All of this is going to suck a tremendous amount of "discretionary income" out of the economy.

In addition, millions upon millions of Americans are going to make the choice to go without health insurance altogether.  And considering the level of care that we get in many of these hospitals that is understandable.  For example, the body of 57-year-old Lynne Spalding was recently discovered in a stairwell at San Francisco General Hospital 17 days after she had disappeared from her hospital room.

Those that provide our "health care" don't care about us as much as they did in the old days.  Instead, the health care industry just wants to get as much money out of us as rapidly as they can and then move on to the next victim.

And of course health care is not the only thing that middle class families have to be concerned about these days.  Our national employment crisis is getting even worse, incomes are shrinking, and Obama is pushing Congress to approve a secret treaty that will ship millions more of our jobs out of the country.

And there are certainly a lot of troubling economic signs as we head toward 2014.  Just consider the following examples…

-Pending home sales in the United States have fallen for five months in a row.

 

-Machinery giant Caterpillar is reporting negative retail sales growth in every region on the globe.  Historically, the sales growth of Caterpillar has been one of the most important indications of where the economy is headed next.

 

-Major banks are warning the Federal Reserve that they may have to start charging depositors a fee.  In other words, you may soon have to pay for the "privilege" of putting your money in the bank.

Of course this is just the beginning.  Things are going to get much, much worse in the years ahead as our economy continues to deteriorate.

And as things continue to fall apart, people are going to become a lot more desperate.  To get an idea of what is coming to America, just look at what is happening in Greece.  Some poor people in Greece have become so desperate that they are literally infecting themselves with HIV just so that they can get monthly government payments…

Suicides rose by 17% between 2007 and 2009 and to 25% in 2010, according to unofficial 2010 data (398). The Minister of Health reported a further 40% rise in the first half of 2011 compared with the same period in 2010. Suicide attempts have also increased, particularly among people reporting economic distress (610). Homicide and theft rates have doubled. HIV rates and heroin use have risen significantly, with about half of new HIV infections being self-inflicted to enable people to receive benefits of €700 per month and faster admission on to drug-substitution programmes. Prostitution has also risen, probably as a response to economic hardship. Health care access has declined as hospital budgets have been cut by about 40% (398) and it is estimated that 26 000 public health workers (9100 doctors) will lose their jobs (611). Further cuts are expected as a result of recent negotiations with the IMF and European Central Bank.

If you doubt this, you can find the original report with these findings right here.

A lot of people accuse me of being a "doom and gloomer" for writing articles like this.

A lot of people accuse me of trying to spread worry and fear.

But I do not see it that way at all.

I was recently asked what the number one issue is that has me so worried that it keeps me up at night.

Do you know what my answer was?

"Nothing."

Nothing that I write about keeps me up at night.

I am not worried about what is coming and I do not believe in giving in to fear.

Rather, I believe that there is hope in understanding what is happening, and I believe that there is hope in getting prepared.

Do you want to know who is going to be totally giving in to worry, fear and despair in the years ahead?

The people that are not getting prepared right now.

Do you want to know who is going to be jumping off the top of tall buildings in the years ahead?

The people that are laughing at articles like this one.

For most adults in America, they primarily define their lives by their jobs, their material possessions and by all of the toys that they have accumulated.  When those things get taken away, we are going to see a national hissy fit that is absolutely unprecedented.

The Republicans are not going to save us from the storm that is coming and neither are the Democrats.

It is coming.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/GDcpH-Auzdk/story01.htm Tyler Durden

Submitted by Michael Snyder of The Economic Collapse blog,

Are you deeply concerned about the future of America?  Is something in your gut telling you that our system is fundamentally broken and that the mainstream media is not telling you the truth about what is happening?  If so, you are definitely not alone.  Right now, there are millions upon millions of Americans that are absolutely horrified as they watch this nation deteriorate.  In fact, according to an analysis of recent polling data conducted by Real Clear Politics, approximately 68 percent of all Americans believe that the country is on the wrong track and only 23.5 percent of all Americans believe that the country is on the right track.

And of course our problems did not appear just recently.  In fact, many of them are the result of decades of very foolish decisions and they are not going to be fixed easily.  Unfortunately, there is very little consensus among Americans about how to fix any of our problems.  There is more anger, frustration, hatred and division in the United States today than there has been in decades, and there is very little hope that the great storms that are looming on the horizon will be averted.  Those that are wise are preparing for what is coming.  Those that are not are going to be absolutely blindsided by what is rapidly approaching.

Once upon a time, America was the wealthiest nation on the entire globe by a huge margin and it had the largest and most thriving middle class the world had ever seen.  But now America is drowning in the biggest ocean of red ink in the history of the planet and the middle class is being systematically destroyed.

If you read my articles on a regular basis, you already know all of this.  But now there are certain factors that are going to cause the problems of the middle class to greatly accelerate.

For instance, just consider what Obamacare is going to do to millions of American families.

The Foundry recently posted a story that detailed the extreme hardship that Obamacare is going to impose on one middle class family in Sonora, California.  This particular family is very healthy and does not have a history of health problems.  Up until now, they have had a health insurance policy with Anthem Blue Cross Insurance that they have been very happy with.

Back in 2011, this family was paying $389 a month for health insurance.

In 2012, due to changes in California law that figure went up to $499 a month.

Now, this family has just received a letter informing them that their current plan is being canceled and that if they want a new plan it is going to cost them $1,252 a month.

Needless to say, that news did not go over very well with that family.

Just think about it.

Can you come up with an extra $753 a month for health insurance?

Most American families certainly cannot.

Well, Kate Joy and her husband sat down and started trying to figure out how they could squeeze the new health insurance policy into their budget.  It turned out that they would have to cut out a lot of things.  The following is a list of the proposed cuts that they have come up with so far…

• Stop paying the extra payment on my mortgage: $100/month
• Stop eating out: $150/month
• Don’t go to the movies: $36/month
• Switch to getting a haircut every other month: $15/month
• Stop getting manicures: $40/month
• Stop monthly charitable donations to Wounded Warrior and Habitat for Humanity: $70/month
• Stop saving for an annual anniversary getaway: $60/month
• No Christmas gifts to extended family: $40/month
• Quit buying beef at the grocery store: $100/month
• Teeth cleaning only once per year: $30/month
• Cancel all magazine/newspaper subscriptions: at least $30/month
• Cut DISH service to cheaper plan: $50/month
• Cancel land line phone service: $70/month

If they make all of those cuts, it will save the family $791 a month.

Understandably, that family is having a very hard time feeling optimistic about the future right now.  In fact, at the end of the article Kate Joy is quoted as saying the following…

"I fear for what’s coming."

And of course her family is not the only one that is being absolutely hammered by Obamacare.

In a previous article, I discussed the results of one study which showed that health insurance premiums for men are going to go up by an average of 99 percent under Obamacare and health insurance premiums for women are going to go up by an average of 62 percent under Obamacare.

 

And a different study found that health insurance premiums for healthy 30-year-old men are going to go up by an average of 260 percent under Obamacare.

All of this is going to suck a tremendous amount of "discretionary income" out of the economy.

In addition, millions upon millions of Americans are going to make the choice to go without health insurance altogether.  And considering the level of care that we get in many of these hospitals that is understandable.  For example, the body of 57-year-old Lynne Spalding was recently discovered in a stairwell at San Francisco General Hospital 17 days after she had disappeared from her hospital room.

Those that provide our "health care" don't care about us as much as they did in the old days.  Instead, the health care industry just wants to get as much money out of us as rapidly as they can and then move on to the next victim.

And of course health care is not the only thing that middle class families have to be concerned about these days.  Our national employment crisis is getting even worse, incomes are shrinking, and Obama is pushing C
ongress to approve a secret treaty that will ship millions more of our jobs out of the country.

And there are certainly a lot of troubling economic signs as we head toward 2014.  Just consider the following examples…

-Pending home sales in the United States have fallen for five months in a row.

 

-Machinery giant Caterpillar is reporting negative retail sales growth in every region on the globe.  Historically, the sales growth of Caterpillar has been one of the most important indications of where the economy is headed next.

 

-Major banks are warning the Federal Reserve that they may have to start charging depositors a fee.  In other words, you may soon have to pay for the "privilege" of putting your money in the bank.

Of course this is just the beginning.  Things are going to get much, much worse in the years ahead as our economy continues to deteriorate.

And as things continue to fall apart, people are going to become a lot more desperate.  To get an idea of what is coming to America, just look at what is happening in Greece.  Some poor people in Greece have become so desperate that they are literally infecting themselves with HIV just so that they can get monthly government payments…

Suicides rose by 17% between 2007 and 2009 and to 25% in 2010, according to unofficial 2010 data (398). The Minister of Health reported a further 40% rise in the first half of 2011 compared with the same period in 2010. Suicide attempts have also increased, particularly among people reporting economic distress (610). Homicide and theft rates have doubled. HIV rates and heroin use have risen significantly, with about half of new HIV infections being self-inflicted to enable people to receive benefits of €700 per month and faster admission on to drug-substitution programmes. Prostitution has also risen, probably as a response to economic hardship. Health care access has declined as hospital budgets have been cut by about 40% (398) and it is estimated that 26 000 public health workers (9100 doctors) will lose their jobs (611). Further cuts are expected as a result of recent negotiations with the IMF and European Central Bank.

If you doubt this, you can find the original report with these findings right here.

A lot of people accuse me of being a "doom and gloomer" for writing articles like this.

A lot of people accuse me of trying to spread worry and fear.

But I do not see it that way at all.

I was recently asked what the number one issue is that has me so worried that it keeps me up at night.

Do you know what my answer was?

"Nothing."

Nothing that I write about keeps me up at night.

I am not worried about what is coming and I do not believe in giving in to fear.

Rather, I believe that there is hope in understanding what is happening, and I believe that there is hope in getting prepared.

Do you want to know who is going to be totally giving in to worry, fear and despair in the years ahead?

The people that are not getting prepared right now.

Do you want to know who is going to be jumping off the top of tall buildings in the years ahead?

The people that are laughing at articles like this one.

For most adults in America, they primarily define their lives by their jobs, their material possessions and by all of the toys that they have accumulated.  When those things get taken away, we are going to see a national hissy fit that is absolutely unprecedented.

The Republicans are not going to save us from the storm that is coming and neither are the Democrats.

It is coming.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/GDcpH-Auzdk/story01.htm Tyler Durden