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Friday, May 23, 2014

Defining a 'Recovery in Progress'

Simple question:  How do you tell if a recovery exists?

Not a completed recovery but just one that is occurring?

One way is unemployment figures..

We're told as of April 2014, its 6.3% which seems pretty low compared to say 12 months ago much less 24, 36 or 48 months prior..

So that's good right?

Of course there are over 4 million people who have been out of work since the recession began who Still can not find a living wage but the Bureau of Labor Statistics doesn't count them so.. eh..
But here's the funny thing..

6.3% is supposed to mean that percentage of the US adult population is out of work and yet other statistics show that for one reason or another, 1 in 3 Americans do not generate a paycheck.. (33%)

So.. hmm..  don't think we can really take unemployment too serious..

OK, so what else determines a recovery in progress?

Housing..   People's homes going up in value and others able to buy that a couple years for whatever reason may have not been able to..

But as we showed before, the only homes that are selling like hotcakes are those valued at $1 million and upwards..
Why?   Mostly foreign investment and its a great way for super-wealthy people in other countries to dodge their tax responsibilities where they reside

Real Estate is also the only loophole to the Patriot Act thanks to the National Association of Realtors' lobby where foreigners can bring in large amounts of cash into this country without a background check of where it came from

Is your home worth over $1 million?

We will assume it is not, and those homes are either staying still or homes for sale are having to drop in price to attract a buyer..

Not to be promoting one website over another but check out Zillow.com     Enter any address you wish of a property you know to be for sale...

Notice the original asking price compared to what its dropped to and what Zillow says market value is..  We practically guarantee 7 out of every 8 homes listed at $450k and under is Still depreciating
And of course mortgage companies have raised interest rates by 1.5% in the last year even though the money they're getting from the Fed to lend out has stayed at near zero for 5+ years..

So we're going to assume if Americans aren't buying homes to live in, there isn't a recovery in progress occurring through housing..

So... What's next?

Consumption..   Is the US consumer spending and through their purchasing power and the personal debt taken on, stirring the wheels of 'recovery'?

Nope..
From Bloomberg:

US Retail Profits Miss By Most In 13 Years: "Consumer Is Not Back"

"Chains are missing projections by an average of 3.2 percent, with 87 retailers, or 70 percent of those tracked, having reported, researcher Retail Metrics Inc. said in a statement today. 

That’s the worst performance relative to estimates since the fourth quarter of 2000, when they missed by 3.3 percent. Over the long term, chains typically beat by 3 percent, the firm said.

“The American consumer is not fully back and remains cautious,” Ken Perkins, Retail Metrics’ president, wrote in the report.
What’s more, the expectations the chains are missing have been significantly lowered. While analysts now project retailers’ earnings fell an average of 4.1 percent, back in January they had estimated a 13 percent gain.

Most retail segments are showing profit declines, with department stores, teen-apparel chains and home-furnishing stores faring the worst, Retail Metrics said. About 41 percent of retailers have missed estimates, while 45 percent have beat."

Yes we know, we know..  its the fault of the weather  ~Big Yawnnn..

Thirteen years would make that since 2001...
Hmmm..  if the unemployment picture is still terrible, housing is in a rut and the consumer is floundering like a beached whale, then where is the engine driving this recovery in progress?

Or maybe.. 

There isn't one?

But don't tell that to the President or the corporate media or Wall Street..

There's midterms coming up..  And network advertisers to appease...  And stocks and commodities and 'great investment opportunities' to sell..
Shouldn't be a hard sell anyhow..   Who wants to think on Debby Downer realities when there's a full weekend of picnics, auto-racing and hot dog eating to come..

So we did our part.. We kept you abreast of things

Now we're off to the beach to get baked a nice crispy brown...

See everyone again on Tuesday..