The United States Is Close To A Recession

5logan-real-pic

The economic cycle is way too long!

Last year Jim Rodgers predicted that the U.S. would be in a recession. 100%

4258af0aef90e7f313101f2b2aab7f40

https://www.bloomberg.com/news/articles/2016-03-04/jim-rogers-there-s-a-100-probability-of-a-u-s-recession-within-a-year

I don’t understand how it is possible that the U.S. isn’t in a recession already. Or is it and it is all being covered by all fake news and fake data?

Here is what we know:

1. We have 96 Million people looking for work

2. Shadow Stats show that the unemployment rate is 20% and hasn’t fallen

3. 40 million plus Americans are in poverty

4. The jobs data was faked under President Obama and we need an investigation into this issue.

5.  Gold will go to 5,000,  heck 10,000!  (Buy Jim Richards book to find out why!)

6. CPI inflation data is bogus.  Inflation rates are much higher.

7. Americans have 1.3 trillion dollars of student loan debt and over 1 trillion dollars of auto loan debt.  Do we need anyone evidence that the system is collapsing.

8. Harry Dent said so.

9. We have too many men sitting at home playing Game of War instead of working.  They won’t leave their parents basement which stunts economic consumption.

10. We are 20 trillion dollars in debt, that is with a freakin’  T, damm it.   What is wrong with you people?  20 trillion dollars in debt!

april-fool

APRIL FOOL!

I just listed a lot of the worthless Anti American alt-fact garbage that has been seeping into the drinking water since 2009.  Here is a more realistic look at the economy that may not appeal to the drama queens among us who prefer a mentally incoherent world view.

1. Myth: 96 million people are out of work.

Reality
:  If you count total non-farm payroll and then add the 20% of working Americans (farm payroll) &  private household employees then we have 153 million plus people working.  Unemployment claims are at 4 decade lows.  Job openings are at 5.6 million. If someone you know, who was fired in 2008 has sat home for 8 years thumbing their nose at the job market because it doesn’t pay enough, that is on them. We lost 8.8 million jobs in the Great Recession but created over 16.2 million since then and almost all of them have been full time jobs. Please circle the timeline where we lost 96 million workers who are now looking for work!

d7a0ade619e59cd79ea9989289063e62

2. Myth: Shadow stats show an unemployment rate of over 20%”

Reality:
Shadow stats are called shadow for a reason.  It is smoke and mirrors. These fake data have shown the unemployment rate to be of over 20% since 2008. I don’t have the heart to put up their chart because it’s just too embarrassing.

3. Myth: 40 million plus people are in poverty.  This is true, but the data should be interpreted in context.

poverty

poverty-race

poverty-young-adults

Concentrated poverty is the biggest issue in America from my perspective.   For years I have stressed the importance of education, training and even a jobs guarantee program as a means to fight poverty.  High school dropouts, especially those  with substance abuse issues are doing horrible in this economy and require federal intervention. On the other hand, educated Americans are doing just fine.

More information on poverty in American can be found in this article:

https://loganmohtashami.com/2016/09/13/positive-u-s-wage-poverty-data/

4. Myth: Under President Obama, the jobs data was faked:

Reality:
President Trump recently addressed this issue and now all the jobs data is real, problem solved!

5. Myth: Gold will go to 5,000 heck 10,000.  Buy Jim Richards book.

Reality:
Same story in a new, shiny gold cover!

Before and after 
download                 51bmOorQk5L._SX342_BO1,204,203,200_

6. Myth: CPI inflation is bogus.  Inflation is much higher.

Reality:
 This one is kind of embarrassing for the inflation hawks.  Inflation hasn’t had a core 3% headline print this entire century. The world is dealing with demographic deflationary factors and Germany and Japan have a lot debt priced in negative territory.

From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2017/03/31/two-measures-of-inflation-and-fed-policy

CPI AND PCE inflation

Despite the fact that the inflation hawks  got everything they wanted for Christmas (20 trillion in debt, big deficits,  4 trillion in #QE and not one core print over 3%), they still can’t get inflation to budge.  Alas!

7. Myth: Americans have  1.3 trillion dollars of student loan debt and over 1 trillion dollars of auto loan debt, and this alone will make the economy collapse.

Reality
: Let’s put this into perspective: a) 70% of student loan debt is under 14K; 13% is over 50K  and  3% is over 100K.   Forty percent of total student loan debt is from Grad students. But,  college dropouts account for  about 30% of all student loan debt and a high level of these loans go delinquent with an average  balance is 9K .  The rule of thumb is despite the amount of your student debt, if you finish school you will have earning power with that degree.

College Education = Income and work

Education Income MM

16933505_10154539668433250_1392947425_n

Also, in regard to auto loan debt, the sub prime portion of this sector isn’t as big as you think. Unlike the housing boom and bust, the underwriting for car loans is much different. The exotic debt structure of housing subprime loans are not like the relatively straight forward car loans of the past 8 years.  When manufacturing went into a recession, we did see an uptick in car delinquencies in those oil states.  A lot of the economic damage that was done by the stronger dollar and the crash in oil prices has past. Keep an eye out for delinquent trends but don’t equate repossessions to foreclosures.

8. Myth: Harry Dent said so, so it must be true.

Dent 2013

Dent 2014

Reality: Harry Dent has been so wrong for so long he is running into his own stronger demographic timeline by the year 2020, ouch!  But until then expect another epic whiff for 2017 as this was yet another year the great Harry Dent called for a collapse.

9. Myth: We have too many men sitting at home playing Game of War.

Reality
:  This means more money in the hands of app makers and these working people will continue to consume goods and services.

10. Myth: We are 20 trillion dollars in debt and the end is near!

Reality:
We also have  near 20 trillion dollars in GDP and 125 trillion dollars in financial assets and GDP combined.  We are borrower rates near all time lows and the Dollar is still king dollar around the world.

For those of you still eager to belie that a recession is just around the corner, here are some real things to look for:

1. Find a major sector that has a high multiplier and his heavily  over invested . You can’t have a recession without this.

2. Look for leading economic indicators to fall for 4-6  consecutive months.

From Doug Short
https://www.advisorperspectives.com/dshort/updates/2017/03/17/conference-board-leading-economic-index-february-highest-in-decade

LEI

3. Look for a rise in unemployment claims across multiple sectors.

Doug Short:
https://www.advisorperspectives.com/dshort/updates/2017/03/30/weekly-unemployment-claims-down-3k-from-last-week-worse-than-forecast

Claims

4. Look for the Fed to take steps to fight inflation – this indicates some sector is overheating.

5. Remember that none of the above factors have happened yet!

And lastly, let’s remember that the election of Donald Trump did not create a stock market crash as David Stockman predicted. The stock market, in contrast to the flaming Twitter sphere, has been in one of its quietest periods in recent history.

AMERICAT STOCK MAN PIC

Wait… I forgot one more thing

C8QItdaXYAQe9TT (1)

 Every year around this time we get the very sub par 1st quarter GDP print and all the bears scream the recession is coming, the recession is coming.  Since 2010 we have basically avg a sad 1% GDP print and no recession has come from it once.

If you shared this article because of the headline only and didn’t bother to read it, you’re the bear I am talking about.

This is America folks, don’t bring that weak Anti American RT pro Russian garbage in this country!

"<

Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing marketLogan Mohtashami is a senior loan officer at AMC Lending Group,  which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data  daily on his own facebook page https://www.facebook.com/Logan.Mohtashami