U.S. Economy Teetering on the Brink of Recession – Ep 82

U.S. Economy Teetering on the Brink of Recession – Ep 82


* Another week and another round of bad economic news
* Wall Street may be finally paying attention
* JOLT Report projected at 5.158 million; came in at 4.994 million
* April Retail Sales expected to rise .2%; came in flat
* X Automobiles expected an increase of .5, actual number was .1
* Beneath the surface there was a collapse in retail sales in all areas except groceries
* Weakest year over year increase in retail sales since 2009
* Department Store Sales experienced the biggest drop since January 2014
* A look beneath the headlines of the jobs numbers reveals that the jobs are not good jobs
* The Birth/Death Model assumption added 175,000 jobs to the last jobs report
* These numbers came from a biased source
* The fact that there is no spending is evidence that the job market is not as robust as the numbers claim
* Jobs numbers can be made up but retail sales can't
* Wall Street is surprised that we have weak data because they believe we are experiencing job growth
* March Business Inventories up .1% versus expectation of .2%
* February Business Inventories was revised down from .3% to .2%
* I estimate that Q1 GDP will contract by greater than 1%
* The Atlanta Fed just revised down their Q2 GDP estimate to .7, which would indicate the U.S. economy contracted for the first half of the year
* The Fed is still looking for 3% rise in GDP for 2015, which would mean we would need growth of 6% for the last half of the year
* It is more likely that we will get a negative number again for Q2
* Two consecutive contracting quarters will indicate an official recession
* If we are in a recession, the Fed will not raise rates and is more likely to respond with stimulus
* I predicted that a pause in QE3 would trigger another recession
* When the Fed is unable to raise rates to stimulate the economy, the only trick they will have up their sleeve will be QE4
* When that happens, the moves we saw today in the FOREX and Precious Metals markets will look tame by comparison
* The dollar has already broken its uptrend
* Europe, with the exception of Greece is experiencing growth in GDP, and Great Britain is doing better than Europe, because they shrunk their government instead of applying stimulus
* What we are going to get next is old-fashioned Keynesian, pump-priming stimulus
* Will that give us economic growth? Not a chance.
* The last three rounds of QE didn't give us economic growth and neither will the next one
* It may blow more air into the stock market bubble, but the air is going to come out of the dollar bubble even faster
* Where is the Fed's balance sheet going to be at the end of QE4? It is 4.5 trillion right now.
* How can anyone possibly believe Janet Yellen when she says she is going to shrink the balance sheet?
* Are creditors are going to get wise and there is going to be a run on the dollar
* You can see the beginnings of it today
* The dollar was down across the board
* Gold was back to about $1,250; every time it gets to this level it gets knocked down by short-sellers, but eventually they are going to have to give up
* All this bad economic data is going to sink in
* It is not the weather
* The market still has to adjust for the reality that the economy is really weak
* The Fed will not admit that QE didn't work, so in the face of recession they will have to do it again
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