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A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences.

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there is a decay of conscience, the pulpit is responsible for it))) --


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X22 Report is a daily show that will cover issues surrounding the economic collapse

Wednesday, October 16, 2013

By Michael Mccune: The Rant (US Government auditor for 16 years In Cheyenne, WY. -Third Quarter Economic News Getting Bleaker- (( to Have Michael send you the Rant to your Email contact Him Here ((

Third Quarter Economic News Getting Bleaker
There's an old folk song from the early 60s, The Times They Are A-changin'.
Then it was a slap by the WWII kids against their parents who were part of "The Greatest Generation" who wanted to enjoy what it had earned on the battlefields in peace . The kids were looking for something to rebel against but had never faced a real hardship of their own so they lashed out at the lack of tribulation in their life.
Americans do not have to look for that today. In fact the generation that enjoyed that song and made it a Top 10 hit on the pop charts is probably longing for a bit more stability--especially financially. The bad news is rolling in from all sides for the American consumer's future.
Wells Fargo Financial did an in-depth survey of American income and found that, for 2013, the American consumer is going to have on of the worst years in the last half century and things are looking even bleaker for 2014.
WF Senior Analyst Gina Martin-Adams' forecast doesn't just put the American consumer in trouble for the last half of 2013 but also spells trouble for staple stock investments like tobacco, food and household products. She downgraded the entire consumer staple sector to "underweight.'(1)
She wrote: "Staples earnings revision momentum dropped at a rate seven times faster than the S&P 500 over the past three months. We expect further downward pressure to continue with U.S. consumer disposable income growth hovering near 50-year lows with commodity prices on the verge of deflation."
That was shot No. 1 against a long-term recovery from the recession. The second salvo came from a poll conducted by AP and the NORC Center for Public Affairs Research, a group with pro-government intervention leanings.(2)
Its survey, released today, found the over-60 crowd is delaying retirement plans and is also contemplating an after-work life that includes some work time rather than a complete break from the work force. Back in 1995 this same survey group expected to retire by age 63. The average retirement age is now expected to be 66. But a depressing 82 percent of Americans over the age 50 indicated they will have to supplement their retirement nest eggs by working after retirement.
This is bad news for the under 30 crowd who are seeking jobs. The expected job openings will simply not be there in the current economic climate so the fancy degrees and repayment of the overwhelming student debt (now estimated to be more than $1.2 trillion) are going to be put on hold.
Olivia Mitchell, a retirement expert who teaches financial planning courses at Pennsylvania University points to the big decline for the past seven years in retirement accounts, particularly 401(k)s and the extra effort required to rebuild those accounts to pre-recession levels. This effort aimed to recapture original investment levels means America's economy is still not where it should be at this time if there were a full recovery and that the last six years have essentially been lost 'profitable' work years for the senior group.
What wasn't addressed is how much the delay in getting onto that first rung of the economic ladder is going to clobber the newest generation of workers. It was this long-term unemployment crisis among the young that precipitated the euro crisis which is still on-going. Lost years at any time cannot be made up but no one has set up fundamentally sound charts to show what the situation will be in another 10 years because the volatility of economic forces is still rising while there has never been a historical period of similar circumstance to compare projections to.
At this point all projections are guesswork because the textbooks give the same basic solution to this type of economic turmoil--reliance on the government intervention.
We've had six years of unrelenting, ever-accelerating intervention from the government and the Federal Reserve. It may have stemmed the tide in 2009 but it has not addressed the long-term problems of over-regulation and over-taxation. In fact, government intervention has only exacerbated the problems and has weakened Main Street America.
The only solution for government is to create enough inflation that it can legitimately claim to be "able to cover its debt" without an steep decline in Americans' standard of living. Right now, that problem is seemingly impossible by historical standards.
The effect will be felt on Wall Street first. The third quarter earnings season is underway and the results are confusing.(3)
America's masses will be inundated with 'good reviews' where companies have "exceeded analysts' expectations."  This is because analysts have been steadily lowering their projected expectations with the proverbial meat cleaver throughout the quarter.
All 10 sectors have seen this phenomena. But it is particularly highlighted by the materials sector (IYM). Overall profit expectations have been trimmed 50% during the past three months for all sectors but in the IYM it has gone from a 15% projection in July to 1% today--just ahead of the first reports rolling in.
How bad is the S&P 500 projection picture? If only Bank of America and Morgan Stanley are dropped from the projections, the overall S&P board drops to a negative .4% growth for the third quarter. Think of that a moment. Four full years into Barack Obama's recovery and the dismissal of two banks equates to a minus 4-10ths a percent economic snapshot.
With inflation from money-printing and debt monetization activities alone, how bad is the economic picture when they are expected to be better than a negative .4%?
Reliance on government is proving particularly faulty. Since the leadership of government cannot even allow military chaplains to bring up the God of the Bible when talking to their charges, where then do they expect America to go next? What is third on the list in the economic textbooks?
There aren't any choices listed after reliance on government. The 'Times They Will Be A-Changin'. Whether we like it or not.
"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson
(1)-Talking Numbers, Yahoo Finance, Wells Fargo: American Consumer Is In Trouble, 10-13-2013
(2)-Associated Press, Half of Older Workers Delay Retirement Plans, 10-14-2013
(3)-Breakout, Yahoo Finance, 3 Sectors That Will Blow Your Mind, 10-14-2013

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