Proverbs 22:3 NLT

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

-- (((Charles Finney, said the following: “If
there is a decay of conscience, the pulpit is responsible for it))) --


THOSE WHO WILL DO NOTHING NOW, WHEN IT COSTS THEM LITTLE - WILL DO EVEN LESS LATER, WHEN IT COST THEM EVEN MORE


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In Defense Of A Nation

Friday, October 25, 2013

By Michael Mccune: The Rant (US Government auditor for 16 years In Cheyenne, WY. -Simple Math to Know: No Jobs=No Housing, No Housing=Bad Economy- (( to Have Michael send you the Rant to your Email contact Him Here (( mccrant@gmail.com))

Simple Math to Know: No Jobs=No Housing, No Housing=Bad Economy

Wall Street moves upward nicely during the third quarter earnings report season as company after company "meets or exceeds" analysts' expectations are the essence of headlines dominating the finance pages--just as the Rant predicted would happen in early October.

 

What the headlines fail to mention is the met or exceeded expectations are vastly lower than they were in July when the quarter started and none of the original predictions made at that time are being met now. But that isn't mentioned in Washington or on the Street because then the populace might know how they are being fleeced.

 

Delve into the numbers behind the numbers in a couple of well-established economic indicators and you find the trouble spots missing from the headlines that sound a death knell for a long-term recovery.

 

Today's topics start with the unemployment numbers before heading for the housing sector.

 

Wall Street received a jolt when the economy did not generate the expected 184,000 jobs in the delayed September report but only produced 148,000 new jobs.

This report followed the last Rant topic of high unemployment among youth and its "lost generation" dimension. Combined the two bleak reports led to LESS UNEMPLOYMENT.

 

The explanation is a simple one again, the number of people in the work force decline by more than the number of people still looking for jobs so the unemployment rate fell but that does not mean the economy is recovering but rather the economy is faltering some more as the work force is shrinking.

 

The drop-out rate in the work force keeps the unemployment number looking good despite the housing market's woes.

 

Remember for a moment that the Washington elitists are counting on record number of young healthy adults signing up for Obamacare or the system sinks under its own weight. Remember the rising tide of unemployed, uneducated youth (16-24 years of age) inhabiting the landscape. Now add in the fact the prime home-acquiring age group (those 25-34 years old) and factor in their unemployment rate (25%) and you can easily see vicious economic "headwinds" as Obama euphemistically refers to them. 

 

Combine the above factors with the overlooked statistic that it is not individuals pushing the housing market's recent gains but investment-prone businesses looking for a return on investment and you can see the train wreck's origin.

 

What's more ominous for the U.S. economic recovery prospects is, in September, residential housing construction employment fell by almost half. The builders are seeing a saturated market. The lag in home construction is due to a market that has over-built once again, anticipating a return to the good old days only to find out the market that went away during the 2007 meltdown was indeed a mirage that cannot be recaptured. The new market doesn't have the same impact because the economy, despite the unprecedented printing press run by the Federal Reserve, isn't going anywhere, even with Wall Street's announced successes.

 

The surge in unemployed and not-in-school youth means this will be a long-term solution. Remember the two age groups in the study follow closely on the heels of each other. Both sectors are facing the prospect of a life-long struggle to get meaningful employment. This means they, in all likelihood, will never get into the housing market. That's a full generation missing in action on the economic front. It is a factor that has not yet been built into any economic model I've looked at.

 

Toss in the factors the older generation is going to have to work longer to recover the lost wealth of the recession and the fact many Americans are falling into the reverse-mortgage lure and there is an economic cornerstone collapse in the making on two main fundamentals--jobs and housing.

 

Yet the analysts who should know better try to play down the bad factors in an effort to keep Wall Street's recovery humming along. Jeff Kolko, chief economist for Trulia.com, admitted the jobs report is terrible news for the housing sector. Then he qualifies the sting of what he is saying by ignoring other factors.

 

"The economy helps the housing market and the housing market should help the jobs market but right now neither of those are working like they should. Construction is still about 40% below normal levels; construction has really been the laggard in this economy. A lot of young people are still living in their parents homes. They haven't formed households so there is less demand for new construction. The final step in the housing market recovery is for young people to start finding jobs, getting back to work and eventually moving out of their parents' homes." (1)

 

How those who have no education will get employed, he doesn't explain. How having the older set put off retirement stifling a natural flow of open jobs for the younger citizens to move into will hurt the economy, he doesn't explain. How having a large sector of the population obtain student debt to get a degree in an unnecessary liberal arts area but then can't find a job in the real world is solving the problem, he doesn't explain.

 

A lot of the unmentioned factors working against a long-term economic recovery are similar to the problems of balancing the Obamacare books for the next 10 years. But just because those problems are ignored does not mean they go away.

 

The wreck of those two factors should coincide with the displacement of the dollar as the world's benchmark currency. That collision of reality is not too far off, a collision that should also demonstrate the lie of the government-invented "knowledge" factor as a crucial new piece of the GDP.

 

"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson

(1)--Yahoo Finance, "How the Job Market is Killing Housing", Oct. 25, 2013

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