WE HAVE MOVED!

"And I beheld, and heard the voice of one eagle flying through the midst of heaven,
saying with a loud voice: Woe, woe, woe to the inhabitants of the earth....
[Apocalypse (Revelation) 8:13]

Thursday, May 24, 2018

ECONOMIC CRISIS: More Than 4 Out Of 10 Americans Do Not Even Have Enough Money To Cover An Unexpected $400 Expense

ECONOMIC CRISIS: More Than 4 Out Of 10 Americans Do Not Even Have Enough Money To Cover An Unexpected $400 Expense
ONLY AN EAGLES WINGS OF FAITH AND HOPE WILL SURVIVE THE DAYS AHEAD

The U.S. economy is not doing nearly as well as the mainstream media would have you believe.  A few days ago I wrote about a new study that discovered that nearly 51 million U.S. households “can’t afford basics like rent and food”, and just yesterday I discussed the fact that we are on pace for the worst year for retail store closings ever.  Now we have just gotten new numbers from the Federal Reserve which are absolutely staggering.  According to the Fed’s latest study, more than 4 out of every 10 Americans do not even have enough money to cover an unexpected $400 expense without borrowing the funds or selling something.  In essence, nearly half the country has no significant financial cushion whatsoever.  So what are all of those people going to do when the next economic crisis hits?



Sadly, living on the edge has become a daily reality for tens of millions of Americans.  The following is from a CNN article about the Fed’s new report…
Can you cover an unexpected $400 expense?
Four in ten Americans can’t, according to a new report from the Federal Reserve Board. Those who don’t have the cash on hand say they’d have to cover it by borrowing or selling something.
According to the report, the exact figure is 41 percent.
41 percent of all U.S. adults cannot cover an unexpected $400 expense.
Let that number sink in for a moment.
I am sorry – if you can’t come up with $400 right now without borrowing it, you are broke.  And as of right now that is the financial condition of 41 percent of all Americans.
Amazingly, the Federal Reserve is actually trying to spin this report as good news
“This year’s survey finds that rising levels of employment are translating into improved financial conditions for many but not all Americans,” Fed Governor Lael Brainard said.
Really?
Fortunately, there are others that are seeing right through the spin and are telling it like it is
“The finding that four-in-ten adults couldn’t cover an unexpected $400 expense without selling something or borrowing money is troubling,” said Greg McBride, chief financial analyst at Bankrate.com. “Nothing is more fundamental to achieving financial stability than having savings that can be drawn upon when the unexpected occurs.”
And that wasn’t the only bad news in the report.
Here are some more incredible facts from the report as summarized by Zero Hedge
  • One-third of those with varying income, or 10 percent of all adults, say they struggled to pay their bills at least once in the past year due to varying income
  • Over three-fourths of whites were at least doing okay financially in 2017 versus less than two-thirds of blacks and Hispanics.
  • Over a quarter of young adults ages 25 to 29, and slightly more than 1 in 10 in their 30s, live with their parents.
  • Over two-fifths of young adults in their late 20s provide financial assistance to their parents
  • Nearly 25 percent of young adults under age 30, and 10 percent of all adults, receive some form of financial support from someone living outside their home.
  • While 8 in 10 adults living in middle- and upper-income neighborhoods are satisfied with the overall quality of their community, only 6 in 10 living in low- and moderate-income neighborhoods are satisfied
  • Seven in 10 low-income renters spend more than 30 percent of their monthly income on rent
And on top of all of that, here is one more really alarming number to chew on
Even without an unexpected expense, the report reveals, 22% of adults expected to forgo payment on some of their bills in the month of the survey. “One-third of those who are not able to pay all their bills say that their rent, mortgage, or utility bills will be left at least partially unpaid.”
When 22 percent of the people in your country cannot pay their bills this month, that is called a crisis.
Yes, we are hopeful for better things for the U.S. economy under President Trump.  But the current blind optimism that we are witnessing out there right now is simply absurd
A new poll shows an overwhelming number of Americans believe President Trump is playing a positive role in the current state of the economy.
The CBS survey reveals almost 70% of respondents think the president is –either mostly or somewhat– responsible for the current economic climate.
Additionally, around 65% of Americans believe the economy is doing well, compared to under 10% who think it’s doing ‘very poorly.’
Ladies and gentlemen, the U.S. economy has not had a full year of 3 percent GDP growth since the middle of the Bush administration.
This is the longest stretch of below 3 percent growth in all of U.S. history by a very wide margin.
So please don’t try to tell me that the U.S. economy is “doing well” until we can get back above that 3 percent number.
The sad truth is that we have been in a very long period of economic stagnation, and during this period wealth is being increasingly concentrated at the very top of the pyramid and the middle class is being systematically eviscerated.
Tens of millions of families are just barely scraping by from month to month, and when an unexpected emergency happens that is often enough to push a lot of families completely over the edge.
In fact, my good friend Daisy Luther recently wrote about how this actually happened to her own family…
Before my daughter’s illness, I was doing everything “right.”
  • I had enough money in my emergency fund to carry me through 3 lean months
  • I had numerous credit cards with zero balances
  • My only debt was my car
  • My kids are going to school without student loans
  • I opted out of health insurance because it was more financially practical to pay cash (and I still agree with that decision)
Everything was great.
Until it wasn’t.
I am sure that many of you can identify with Daisy.
Most of us have had a life-altering event cause serious financial stress at some point.  And close to half the country is completely unprepared for such an event.
For years, I have been strongly encouraging my readers to build up their emergency funds, because one thing that you can count on in life is that the unexpected will happen.  Having a good financial cushion is one of the best things that you can possibly do for yourself and your family financially, and if you haven’t gotten started on that yet, I would urge you to do so as soon as possible.



77 Million Square Feet Of Retail Space And Counting – America’s Retail Apocalypse Is Spiraling Out Of Control In 2018

In 2017 we absolutely shattered the all-time record for retail store closings in a single year, and this year it looks like we are going to shatter the record once again.  In fact, there are some that are projecting that up to 9,000 retail stores could close by the time that we get to the end of this calendar year.  Already, the amount of retail space that has shut down is simply jaw-dropping.  If you total up all of the retail store closings that have been announced so far in 2018, it accounts for 77 million square feet of retail space.  Let that number sink in for a bit.  Many shopping centers and strip malls around the country already have a post-apocalyptic feel to them, and more “space available” signs are going up with each passing day.  And in case you are tempted to think that I am making this figure up, here it is straight from Bloomberg

At last count, U.S. store closures announced this year reached a staggering 77 million square feet, according to data on national and regional chains compiled by CoStar Group Inc. That means retailers are well on their way to surpassing the record 105 million square feet announced for closure in all of 2017.
In the end, we could shatter the all-time record that was established just last year by 20 or 30 million square feet.
At moments such as this, the phrase “retail apocalypse” doesn’t really seem to fit the gravity of what is actually taking place.
And unfortunately for the retail industry, it doesn’t appear that this crisis is going to end any time soon.  Here is more from Bloomberg
And with shifts to internet shopping and retailer debt woes continuing, there’s no indication the shakeout will end anytime soon. “A huge amount of retail real estate in the U.S. is going to meet its demise,” says James Corl, managing director and head of real estate at private equity firm Siguler Guff & Co. Property owners will “try to re-let it as a gun range or a church—or it’s going to go back to being a cornfield.”
Will retail real estate be the trigger for the next great debacle on Wall Street?
Some people think so.
A lot of major retail projects are going to go belly up, and somebody is going to be left holding the bag.
And the warning signs are definitely there.  In fact, retail sector debt defaults set a brand new record during the first quarter of 2018…
Financial stress in the retail industry is at a historic high.
Moody’s said in a report on Tuesday that retail sector defaults hit a record high during the first three months of 2018 as the rise of e-commerce and decline of malls continues to eat away at profits.
But the mainstream media is telling us that the U.S. economy is in great shape, and so everything is going to work out okay, right?
Sadly, nothing has changed regarding the long-term trends that are eating away at our economy like a cancer.  Just a few days ago I wrote about a brand new report that found that nearly 51 million U.S. households “can’t afford basics like rent and food”.  The real reason why our retailers are in decline is because the middle class is being systematically destroyed.  Once upon a time the middle class had plenty of discretionary income, but now the middle class is disappearing right in front of our eyes, but most of us are in such a state of denial that we won’t even admit what is happening.
Hopefully as stores continue to close by the hundreds people will start waking up.  The following is a list of just some of the major retailers that are closing stores in 2018
  • Abercrombie & Fitch: 60 more stores are charted to close
  • Aerosoles: Only 4 of their 88 stores are definitely remaining open
  • American Apparel: They’ve filed for bankruptcy and all their stores have closed (or will soon)
  • BCBG: 118 stores have closed
  • Bebe: Bebe is history and all 168 stores have closed
  • Bon-Ton: They’ve filed for Chapter 11 and will be closing 48 stores.
  • The Children’s Place: They plan to close hundreds of stores by 2020 and are going digital.
  • CVS: They closed 70 stores but thousands still remain viable.
  • Foot Locker: They’re closing 110 underperforming stores shortly.
  • Guess: 60 stores will bite the dust this year.
  • Gymboree: A whopping 350 stores will close their doors for good this year
  • HHGregg: All 220 stores will be closed this year after the company filed for bankruptcy.
  • J. Crew: They’ll be closing 50 stores instead of the original 20 they had announced.
  • J.C. Penney: They’ve closed 138 stores and plan to turn all the remaining ones into toy stores.
  • The Limited: All 250 retail locations have been closed and they’ve gone digital in an effort to remain in business.
  • Macy’s: 7 more stores will soon close and more than 5000 employees will be laid off.
  • Michael Kors: They’ll close 125 stores this year.
  • Payless: They’ll be closing a whopping 800 stores this year after recently filing for bankruptcy.
  • Radio Shack: More than 1000 stores have been shut down this year, leaving them with only 70 stores nationwide.
  • Rue 21: They’ll be closing 400 stores this year.
  • Sears/Kmart: They’ve closed over 300 locations.
  • ToysRUs: They’ve filed for bankruptcy but at this point, have not announced store closures, and have in fact, stated their stores will remain open.
  • Wet Seal: This place is history – all 171 stores will soon be closed.
A lot of people are blaming online retailers such as Amazon.com for the decline of brick and mortar stores, and without a doubt online sales are rising, but they still account for less than 10 percent of the entire retail industry.
And it isn’t just retailers that are closing locations.
Personally, I was greatly saddened when it was announced that Subway was planning on shutting down 500 locations in the United States…
Feeling the need to improve its store fleet amid intense competition in the sandwich industry, Subway is planning to close 500 U.S. locations this year, according to Bloomberg News.
Subway restaurants are small in size, but ubiquitous. The chain is the largest in the U.S. by store count of any quick-service chain with nearly 26,000 locations, well above the 14,000 McDonald’s (mcd, +0.29%) restaurants in this country. This has long been a point of pride for the company.
I have always been a big fan of Subway, and if they ever closed my hometown location I would be seriously distressed.
And banks are closing locations at an astounding rate as well.  In fact, from June 2016 to June 2017 the number of bank branches in the United States fell by more than 1,700.
That was the biggest decline that we have ever seen.
If the U.S. economy really was in good shape, none of this would be taking place.  Something really big is happening, and what we have seen so far is just the very small tip of a very large iceberg.