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Archive → May 23rd, 2016

What Happens When Recession Hits?

What Happens When Recession Hits?
4782ee2d-1bbf-48c6-a64e-814be44e3385 By Briton Ryle
Written Wednesday, May 18, 2016 Wealth Daily
It’s going to happen. There’s no way to avoid it. At some point, the U.S. economy will hit a recession. GDP will shrink, earnings will decline, and people will get fired.

That’s how economies work — they expand as businesses invest and people take on debt and buy stuff. And then they seemingly hit a wall, people pull back on spending, and businesses follow suit, and everything tanks for a few quarters.

The only real uncertainty is when. When does the U.S. economy hit that proverbial wall?

It’s been eight years since the stock market bottomed on March 10, 2009. And it’s been eight years of virtually uninterrupted bull market. Sure, there have been some pretty good sell-offs. There was the EU debt crisis, the Greek bailouts, and the Chinese economic slowdown…

The Fed has kicked off a couple stock market sell-offs: first when Bernanke tapered the QE3 bond-buying program, and again when Yellen hiked interest rates.

Through all of these potential bombshells, the U.S. economy has chugged along, putting up consistently weak ~2% growth numbers. Even a record string of employment gains hasn’t been able to shift the growth needle higher…

So it’s no wonder that people are getting more and more concerned that a U.S. recession is imminent. If you can’t get growth to accelerate, well, there must be underlying problems that are preventing the economy from operating efficiently. It’s like we’ve been running on borrowed time, and that time is running out…

Financial Engineering Isn’t Growth

Of course, there are underlying problems with the U.S. economy that are preventing it from firing on all cylinders. We have been relying on financial engineering to fuel growth. The Fed made money cheap by squashing interest rates under the misguided hope that companies would borrow money and invest it for growth.

The Fed got the first part right: companies have borrowed money. The corporate bond market has gone ballistic over the last few years. But companies haven’t invested the money in growth. Instead, they’ve bought back their own stock and raised dividends.

It looks like growth, I guess. Earnings per share grow and valuation metrics like price-to-earnings (P/E) ratios have stayed somewhat reasonable.

But it’s not “real” growth. Corporate revenues aren’t really growing. Earnings per share grow because there are fewer shares out there after companies buy them back. But overall revenue? Not growing. In fact, revenue hasn’t really grown in years. It peaked in late 2011:

spy real sales growth small

When you look at a chart like this that clearly shows revenue for the S&P 500 has been in decline for years, well, it makes you wonder how the U.S. economy hasn’t already dipped into recession…

Close to the Brink

The truth is the U.S. economy has come very close to a recession several times in the last few years (a recession is defined as two consecutive quarters of negative GDP growth). Most recently, growth went negative for the third quarter of 2015, and the first quarter of this year narrowly escaped being a negative number.

You’re not wrong if you think it won’t take much to tip the balance firmly into negative territory.

But here’s one thing that people sometimes miss about recessions: the U.S. economy doesn’t tend to drift into recession. It pretty much always takes some kind of economic shock to send the U.S. economy into a serious recession.

Oil embargos (1970s), financial crises (2008–9), terrorist attacks (2001), and sky-high interest rates (1980s) are the type of shocks that have caused the last few recessions. It also helps to have an economy that’s vulnerable to shocks. Like when 9/11 happened, the U.S. economy was already reeling from the popped Internet bubble. It just needed a small push to fully melt down.

In 2008–9, the economy was incredibly leveraged to a housing bubble. A small tick lower in home prices set off a wave of defaults that once again crushed the economy.

So what’s it going to be this time? What kind of fundamental shock will we see push the U.S. economy into recession?

The Economic Crystal Ball

Frankly, it doesn’t take a lot of imagination to come up with some catalysts that could send the U.S. economy reeling. Swing a dead cat, and you’ll probably hit several…

There’s China. If that economy seriously implodes, well, that would probably do it…

There’s terrorism. Given the success that the ISIS wing nuts have had getting into Europe, we can’t rule out their potential of infiltrating the U.S. I don’t worry so much about illegal Mexicans coming over the southern U.S. border. I worry way more about terrorists coming in that way…

There’s debt. I don’t mean government debt. I worry more about corporate and household debt. Seems to me we are pretty much at full employment, and the economy can’t grow. What happens when layoffs tick up and employment growth wanes? We could see spending dry up quick, and that S&P 500 revenue chart I shared with you earlier takes a nosedive…

So those are a couple things that could go really wrong. And there are a lot more. To make matters worse, I am having a harder and harder time coming up with positive catalysts for the U.S. economy. We’ve been in an eight-year sweet spot to get some good growth going, and it hasn’t really happened.

Make a note: Goldman Sachs downgraded U.S. stocks to “neutral” this morning. That’s not a sell signal, exactly. And it’s fine if you want to question Goldman Sachs’ motivation for such a sweeping action (could they be short?). But don’t ignore the potential for an increase in headwinds for the economy… and the stock market.

Until next time,

brit''s sig

Briton Ryle

Source: Will County News

Wages in the U.S.

Editors Note: Work for government and get the best Pensions, most days off, best health care, yearly increase in wages, Higher wages, and rarely get laid off.

By Briton Ryle
Written Monday, May 23, 2016
I wish I knew what Speaker of the House Paul Ryan’s problem is. I wish I had a clue why he keeps siding with big business to screw the average American over.

Paul Ryan is the most powerful man in the House of Representatives. He is the young face of the Republican Party, and he will presumably make a run for the White House at some point. And I guess if getting the backing of big business is all you need to further your career ambitions, then he’s on the right track. Because he’s certainly not doing anything to help the average American get ahead. In fact, he’s trying to make it so businesses can keep taking advantage of you…

First it was the fiduciary rule. If you don’t know, the fiduciary rule means an investment advisor is required to put your interest above his or her own. Investopedia defines a fiduciary like this:

The fiduciary is expected to manage the assets for the benefit of the other person rather than for his or her own profit, and cannot benefit personally from their management of assets.

Without a fiduciary rule, it is perfectly legal for an investment advisor to tell you to buy an asset because he will make a big commission on it. Paul Ryan thinks this is perfectly fine. He’s actively trying to kill the fiduciary rule so Wall Street can continue to take advantage of you. And I’m sure Wall Street has made the appropriate campaign donations to make sure their interests come before yours.

Yeah, it stinks. I’ve written about it before. But no one seems to care. Still, it ticks me off when politicians lie right to your face, tell you they support the American people, and then screw you over…

Who knows, maybe Speaker Ryan’s latest assault on your standard of living will get you fired up.

Do You Deserve a Raise?

Have you seen the charts about how wages for the American worker haven’t risen in like 10 years? It’s true, and it’s one of the biggest reasons Americans are struggling…

jobsday

It’s also no coincidence that Corporate America has more cash in the bank than ever. Quite simply, they are making money by paying workers less.

Now, when he was elected Speaker of the House, Paul Ryan gave a nice little rah-rah speech about how he was the friend of the American people. He said:

Here’s the problem. They’re working hard. They’re paying a lot. They are trying to do right by their families. And they are going nowhere fast. They never get a raise. They never get a break… They are working harder than ever to get ahead. Yet they are falling further behind.

If you didn’t know, the Department of Labor just issued a new rule about overtime pay to try and make sure workers get paid their due. Here’s a brief explanation of the new rule:

The threshold that currently stands at $23,660 — meaning anyone earning less than that it is owed time and a half for working more than 40 hours a week — hasn’t been updated since 1975, the number of salaried workers who were guaranteed extra pay for extra work has dropped from 12 million to 3.5 million.

The new rule, when it goes into effect in December, will increase that threshold to $47,476. The administration has estimated that 4.2 million workers will become newly eligible for extra pay, leading to a $12 billion increase in wages over the next decade.

As it now stands, if you make more than $23,660, you don’t have to be paid overtime for working more than 40 hours a week! Now, more people will get paid overtime when they work overtime. If you look back to that Paul Ryan quote, you’d think this would be exactly the kind of rule he would support.

You’d also be wrong.

Here’s an excerpt from the statement Ryan released:

This regulation hurts the very people it alleges to help. Who is hurt most? Students, non-profit employees, and people starting a new career… By mandating overtime pay at a much higher salary threshold, many small businesses and non-profits will simply be unable to afford skilled workers and be forced to eliminate salaried positions, complete with benefits, altogether. We are committed to fighting this rule and the many others that would be an absolute disaster for our economy.

Wait, what? Didn’t Ryan say earlier that Americans are working harder but never get a raise, never get a break? Well, which is it? Do you deserve to get paid for your work or not?

Why Making More Money is Bad for You 

I’d love to hear exactly why you making more money is bad. Ryan says companies won’t hire new workers and will eliminate current jobs. That doesn’t make any sense.

The reality is, if your company is asking you to work more, it means there’s plenty of business to be done. No company is going to eliminate jobs when there is plenty of work on the books…

And in fact, both Goldman Sachs and the National Retail Federation have studied the issue, and they say new overtime rules will add between 100,000 and 120,000 jobs. Why? Because instead of paying the overtime, companies will simply add workers.

Bottom line: It is a lie to say that companies can’t pay people more.

Remember when Wal-Mart raised its hourly wage by $1? People freaked out that it would hurt the company. And sure enough, the first quarter after the wage hikes went in place, Wal-Mart profits were down $1 billion. The stock got creamed, as it was obvious that higher wages were hurting…

But did you see Wal-Mart’s earnings report last week? They crushed it, and the stock jumped +10% the very next day.

Again: It is a lie to say that companies can’t afford to pay people more. They can. If you want to see American economic growth pick up, and if you want to see your standard of living rise, then don’t listen to Paul Ryan. He’s part of the problem.

Until next time,

brit''s sig

Source: Will County News

No free will? Nonsense!

No free will? Nonsense!

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bathroom symbols“What has been is what will be, and what has been done is what will be done, and there is nothing new under the sun. Is there a thing of which it is said, ‘See, this is new’? It has been already in the ages before us.” Ecclesiastes 1:9-10 (ESV)

 

Without anyone taking notice, change agents distort key words in our language. This blurs, diminishes and distorts our thinking process to the great advantage of unseen authority. This process is so gradual as to be imperceptible.

Out of it evolves very sophisticated control, the purpose of which is plunder.

When our words are manipulated, our thoughts are manipulated into false realities and illusions. Consequently, our competitiveness and survival instincts are reduced in favor of dependence on government authority. We have seen in one generation the masculine neutered and the feminine reduced and the rise and mainstream promotion of the concept of “gender nonconforming.” Gender nonconforming was neither a mainstream phrase nor concept a generation ago.

Most people were not aware, because it was done gradually, that erasing traditional sexual norms began a number of years ago.  The subtle, almost imperceptible move includes the substitution of the word “gender” – a grammatical term – for the word sex – a biological term – as a distinguishing descriptor for male or female.

The effect is to program the mind. When one suffers from anorexia, she (odds are it’s a female) looks in the mirror and sees herself as fat. It doesn’t matter what reality is; whether she is normal weight or rail thin. That person creates an alternate reality in her mind. Anorexia is a mental disorder. One seeking to help that person shrug off this false sense of self would not reinforce that unreality by telling her she is fat. Rather, one would help her seek treatment for it so she could begin to recognize she is not fat and is destroying her health.

Likewise, one who looks in the mirror and sees himself or herself as opposite of his or her biological sex is creating an alternate reality. It is a mental disorder and should not be coddled or reinforced. Nor should anyone else be forced into accepting that person’s alternate reality as reality.

Lo and behold, in its June 2016 issue, the magazine The Atlantic reprises an old “study” and tells us that a concept once only considered in scientific circles is coming mainstream.

That concept is that there is no free will. The human brain is merely a chemical machine only subject to impulses or “neuron-firing” over which man has no control any more than he can control his heartbeat.

The 2002 study involved separating people into two groups and having one group read a passage telling them their actions will have no consequences and the other read a passage that is neutral on the topic of morality. After watching the first group behave immorally and unethically in a series of actions – for instance, taking more money from an envelope than they were instructed to take – researchers determined they had made some great discovery: When there are no consequences for their actions some people will do most anything.

This plays right into the hands of the moral relativists and secular humanists driving society today. If one cannot control his impulses – if there is no free will – then he cannot be held responsible for his actions and face their consequences. Ergo there are no consequences so man can do anything that pleases him.

This humanist philosophy – the notion that man is his own god and arbiter of what is right – is form of universalism. Universalism is socialism, communism and democracy in the political sphere.

Universalism trumpets perfect freedom… while resulting in total slavery. Universalism leads to superstitious and even barbaric beliefs and practices.

Once this philosophy takes hold, sodomite marriage, bigamy, polyamory, pedophilia and bestiality all become acceptable and the new “normal.” What was sin and perversion yesterday is now not only state-sanctioned but state-promoted.

The natural progression then is that they become codified into law.

These perversions are currently practiced in cultures in which normal, healthful God-sanctioned relations between men and women are obliterated by pagan religions (e.g., Islam, Satanism, secular humanism). They are anathema to the Christian family as established by God: one man and one woman married for life, with children.

Of course, the God-centered man recognizes the idea that there is no free will as nonsense. A compassionate God would not create a man who could not control his actions and then judge him for those actions.

The God-centered man recognizes a supreme authority who will judge all actions and that as a result of that judgment that there are consequences to those actions. So free will is God-given.

By erasing the notion of free will, the power elite seek to erase the notion of God. It’s part and parcel of their ongoing effort to force out and suppress – through intimidation and oppression – Christian beliefs in favor of the new secular system.

That’s because the Christian is an individualist and cannot consider himself part of the state collective. The Christian sees himself as a servant of God, not the state.

Politically correct = No free will

Those who propagate this system are the ones who would monopolize all power and wealth. They are always very careful to establish their governments as popular fronts. Sometimes they call them democracy, sometimes communism. People who pay no attention to words and semantics see them all as the same.

The word political means the total aggrandizement of the state. This means that if one is “politically correct” – the goal of notions like “gender nonconforming,” “non-binary” and “no free will” – then his every breath and utterance is toward the aggrandizement of the state or the government. We practice political correctness, and become its perfect agents.

Even most organized churches, when incorporated, are political corporations created for a political purpose, and that is the aggrandizement of the state and the political order. Under these churches we become “politically correct” but spiritually wrong.

The push to relieve you of any responsibility so that you will surrender whatever is asked of you — even your life — to the state is the foundation of the new secular system. It is supreme and total deception. It is completion of the tower of Babel. It is the conclusion and finished man without the spirit of Christ.

The politically correct man wants the external authority of government instead of the spirit and mind of Christ. However the Christian’s total allegiance is to the Living God. He will not sacrifice himself for the body politic.

Thus, he cannot be manipulated by the secularists because he knows that human liberty is of God, not a privilege of the state.

Source: Will County News

Illinois Republican Chairman Chairman Schneider kept the Illinois Convention Honest

Republican Convention Delegate from Will County David E. Smith then took it upon himself to attempt the monumental task of getting a petition signed by the heads of 50 delegations before 9:30 a.m. the next morning to reinsert the prior 2012 language.

2016 Gop Convention

Yesterday was the concluding meeting of Delegates at the Republican Convention held in the late Spring every 4 years in Illinois. One day earlier, the Platform Committee announced to a packed audience the detailed and nuanced draft platform that was 98% agreed. However, the committee had taken out the wording from the 2012 Platform that ”While not universally achievable, the ideal environment for children is within a two-parent family based on the principle of marriage between one man and one woman” and substituted the following sentence, “ We acknowledge and welcome the diversity of opinions within our party regarding families, including the views that marriage is defined as the union of one man and one woman, that non-traditional families are worthy of the same respect and legal protections as traditional families and that marriage ought to be the purview of religious institutions and not of the government.”

Late in the afternoon Crete Township Republican Chairman, Executive Director of the Illinois Family Institute and Republican Convention Delegate from Will County David E. Smith then took it upon himself to attempt the monumental task of getting a petition signed by the heads of 50 delegations before 9:30 a.m. the next morning to reinsert the prior 2012 language. No one in the history of Illinois Republican Conventions has been able to meet this high hurdle before. Four years ago in Tinley Park a group came close after working TWO days to get the signatures.

David E. Smith’s volunteers did work through the night and ended up with 71 signatures in order to be challenge proof. In the final hour of the Convention, Chairman Schneider came to the point of dealing with David E. Smith’s resolution. Chairman Schneider outlined to all in attendance the rules where each side could have three persons make short speeches on their side of the argument and that a standing vote would follow where there would be an actual count of each person standing. In high drama, eloquent arguments were made. With almost a thousand delegates voting, 79% voted to reinstate the language that included ”While not universally achievable, the ideal environment for children is within a two-parent family based on the principle of marriage between one man and one woman”.

Kudos to David E. Smith, his numerous volunteers and supporters for successfully making a historic motion from the floor and having it pass with a vast majority of delegates unifying around the prior language. Kudos to GOP lawyers John Fogarty Jr. and Laura Jacksack for their fair and accurate advice to the committees and leadership. David E. Smith stopped Chairman Schneider afterwards and thanked him for the clean, fair and straightforward way he allowed it to come to a vote. As Delegate Sharee Langenstein artfully noted “We now have a new, and obviously better and more fair, chairman.”

feb2016 a

Written by Ed Ronkowski 5/23/2016

Source: Will County News

Another Terrifying Picture of a Hillary Presidency

Alabama Sen. Jeff Sessions said the Second Amendment right to keep and bear arms would become nearly extinct if Hillary Clinton wins the presidency. Sessions told “Fox News Sunday” that “Hillary Clinton is the most anti-Second Amendment president perhaps we’ve ever had” and cautioned voters to consider the damage to gun rights her presidency would cause. The senator said Clinton would pick a liberal Supreme Court Justice to fill the court’s vacancy, with potentially disastrous ramifications. “And what that means is, it’s no longer a personal right to have a gun, but every city, county, and state can completely ban firearms in America,” Sessions told Fox News. “This would be the greatest reduction of Second Amendment rights since the founding of the republic.”

Source: Will County News