Young adults too broke to get loans

It's not because legions of Americans under age 35 have suddenly become fiscally responsible. It's more likely that their shaky economic foundations either prevent them from qualifying for a loan or even thinking about applying for one, according to those studying the trend.

"It's a sign of economic struggle, not economic success," said Richard Fry, senior economist at the Pew Research Center. "They don't have the mortgage, but they don't have the house."
The center found that young adults' debt levels dropped nearly 14% between 2001 and 2010, while rising 63% for those age 35 and older, according to a recent Pew study.

The real-world ramifications are eye-popping. The share of younger households owning their primary residence fell to 34% in 2011, down from 40% in 2007. Only 66% owned or leased at least one vehicle in 2011, down from 73% four years earlier, as car loans plunged. Credit card balances have also fallen.

The only debt on the rise is student loans. In 2007, just over a third of young households had outstanding student debt. That jumped to 40% in 2010. Read more >>

Marc Faber: Global Recession Dead Ahead

 

Faber warns that economies of the world may be on the brink of a serious slowdown. Faber indicated that while investors remain focused on Greece and Europe – other issues, bigger issues are looming.

And they’re more threatening. “As an observer of markets – whenever everyone focuses on one thing – like Greece and Europe – maybe they miss issues that are far more important – such as a meaningful slowdown in India and China.” The latest reports from Beijing would support Faber's assertion. The HSBC Flash Purchasing Managers Index, slipped to 48.7 in May from 49.3 in April. That marks the seventh straight month that the index has been below 50, a level which indicates economic activity is contracting.

Faber also cited weakness in the high-end as another key catalyst that’s very negative. “There are more and more stocks that are breaking down – economic sensitive stocks and companies that cater to the high-end,” he said. "That suggests to me the economy is likely to weaken and the huge asset run is likely to come to an end with significant asset deflation.” Read more >>

Survey: Economists more bleak about US economy

Image via WikipediaFewer U.S. companies expect to hire new workers in coming months, as business economists grow increasingly pessimistic about the overall economy's growth in the coming year.

Nearly 85 percent of economic experts surveyed expect the economy to grow at a meager 2 percent or less over the next 12 months, according to the National Association for Business Economists. In July only 23 percent of the survey's respondents predicted such slow growth.

Additionally, the number of companies that plan to hire more workers fell from 42 percent to 30 percent, while the number of companies laying workers off rose. The group reports that 13 percent of respondents have reduced their staff, up from 8 percent in July.

One-fifth of the economists say the European debt crisis has hurt sales, with the average estimate around 10 percent, and 30 percent expect the squeeze to continue into the first quarter of 2012.

The quarterly survey includes the views of 70 economists for private companies and trade groups who are NABE members. The data are reported by broad industry group. More...

India, Indonesia, China And Wider Asia Buy Physical Gold And Silver On Dip As Stagflation Threatens

Stagflation or low economic growth, high unemployment and rising inflation is a clear and present danger to the UK, EU and U.S. economies and other economies internationally.

This is especially the case in the UK where house prices have begun to fall again and may be set for sharp falls. Internationally, we are seeing significant debt deflation where the value of goods and assets bought with debt are falling (cars, property etc) while the value of finite, essential goods such as food and energy are rising.

Safe haven and inflation hedging diversification into gold is likely to continue as inflation is deepening and there is a distinct whiff of stagflation in the air. More...

8 in 10 Americans: Economy is in poor shape

Image by DonkeyHotey via FlickrMore than 80% of Americans surveyed say the economy is in poor shape, with unemployment still the public's top concern, according to the latest CNN/Opinion Research Corporation survey.

Not everyone is down in the dumps. Seventeen percent of Americans say the economy is somewhat good. Only 1% say the economy is very good.

And that's pretty much the same way Americans have answered since Sept. 2008, on the eve of President Obama's election.

The reason for the dour outlook? Thirty-eight percent of respondents cited unemployment as the most important economic issue facing the country. The federal budget deficit was the second most popular answer, with 28%.

Rising gas prices (21%), mortgage and housing costs (6%) and taxes (4%) round out the top five concerns. More...

U.S. Economy Losing to Sweden & Singapore

The U.S. has slipped down the ranks of competitive economies, falling behind Sweden and Singapore due to huge deficits and pessimism about government, a global economic group said Thursday.

Switzerland retained the top spot for the second year in the annual ranking by the Geneva-based World Economic Forum. It combines economic data and a survey of more than 13,500 business executives.

Sweden moved up to second place while Singapore stayed at No. 3. The United States was in second place last year after falling from No. 1 in 2008.

The WEF praised the United States for its innovative companies, excellent universities and flexible labor market. But it also cited huge deficits, rising government debt and declining public faith in politicians and corporate ethics. More...

Obama Must Create 230,000 Jobs A Month Until The End Of His Second Term For Return To Breakeven - ZeroHedge

Recently there has been a surge in cherry picked employment charts highlighting that the Obama administration has done a great job in rescuing the economy. The premise goes: after dropping to as much as 700K+ jobs lost per month, the administration has managed to pull off a miraculous recovery and now we are riding on a wave of 8 consecutive "private jobs" beats in a row. This argument is so shallow we won't even bother with it. Perhaps the "economists" who espouse this theory will be so kind in their next iteration of their charts to overlay the monthly US debt issuance side by side with the jobs number.

Because you see if you drown the economy in unrepayable debt, while using transfer payments to fund the digging of trenches by every man, woman and child who makes up the labor pool, then yes - you may get 0%, or even negative, unemployment overnight. Will it bankrupt the country (even faster)? Why, of course. But whoever said those who discuss politics subjectively ever care about the long-term implications of reality. More...

401(k) Withdrawals see biggest spike in five years

Image by ZaCky ॐ via FlickrAaron Smith, CNNMoney
Withdrawals from 401(k) retirement saving plans saw their biggest spike in at least five years, Fidelity Investments said on Friday, in the latest sign of hardship amid a dismal economy.

Fidelity reported that 62,000 people made hardship withdrawals from their 401(k) workplace plans during the second quarter. That's up from 45,000 participants during the prior quarter, a 37% increase. That means that 2.2% of Fidelity participants took a hardship withdrawal in the second quarter, compared to 2% in the same period last year.

Fidelity also said that 11% of participants took out loans from their 401(k) over the past 12 months, an increase of 2% from the prior year. The average loan amount was $8,650 at the end of the second quarter.

Fidelity said the top reasons people took loans and withdrawals were to prevent foreclosure or eviction, pay for college, or purchase a home.

"The current economy has forced some workers to borrow from their 401(k) accounts in order to pay for critical living expenses, ultimately jeopardizing their future retirement," said James MacDonald, president of workplace investing for Fidelity Investments. More...

Consumer Confidence: Into the Death Zone

abcnews.com

Consumer confidence matched its low for the year this week, with the ABC News Consumer Comfort Index extending a steep 9-point, six-week drop from what had been its 2010 high.

The weekly index, based on Americans’ views of the national economy, the buying climate and their personal finances, stands at -50 on its scale of +100 to -100, just 4 points from its lowest on record in nearly 25 years of weekly polls, set in December 2008 and January 2009.

Underscoring its current deep weakness, the CCI has been -50 or lower just 27 times in 1,284 weekly polls – all but one of them since August 2008. (The other, February 1992.) It's in effect the death zone for consumer sentiment.

The CCI has been this low twice previously this year, in February and April, then advanced through late June before turning back down. Compare -50 to its 24-year average, -13.

The index's recent trend anticipated the latest data from the U.S. Department of Commerce, which today reported that personal expenditures and personal incomes alike were flat in June, the first time personal incomes hadn’t risen month-to-month in nearly a year. Like the CCI, these data signal the economy’s continued struggles and, with 9.5 percent unemployment, the pernicious effect of a jobs market that’s been so weak for so long.

Among the CCI’s individual measures, 92 percent of Americans now say the national economy is in bad shape, the most since mid-April; 76 percent call it a bad time to spend money, the most since early May; and 57 percent say their own finances are hurting.

Ratings of the economy overall are a dramatic 29 points worse than their long-term average. Ratings of the buying climate are 13 points worse, as are ratings personal finances. Majorities have rated their own finances negatively every week of 2010, save the first week of the year.

Click here for tables with this week’s CCI data.

8Million US jobs vanish forever -- never coming back

Image by Big Fat Rat via Flickr

Courtesy CNN
The recession killed off 7.9 million jobs. It's increasingly likely that many will never come back. The government jobs report issued Friday shows that businesses have slowed their pace of hiring to a relative trickle.

"The job losses during the Great Recession were so off the chart, that even though we've gained about 600,000 private sector jobs back, we've got nearly 8 million jobs to go," said Lakshman Achuthan, managing director of Economic Cycle Research Institute.

Excluding temporary Census workers, the economy has added fewer than 100,000 jobs a month this year -- a much faster and stronger jobs recovery than occurred following the last two recessions in 2001 and 1991.

But even if that pace of hiring were to double immediately, it would take until 2013 to recapture the lost jobs. And the labor market very likely doesn't have years before it gets hit with the shock of the inevitable next economic downturn.

"It's virtually certain that the next recession will come before the job market has healed from the last recession," said Achuthan. More...

Pew: 92% of Americans give economy Negative Rating

Pew Research Center for the People & the Press

Americans are united in the belief that the economy is in bad shape (92% give it a negative rating), and for many the repercussions are hitting close to home. Fully 70% of Americans say they have faced one or more job or financial-related problems in the past year, up from 59% in February 2009. Jobs have become difficult to find in local communities for 85% of Americans. A majority now says that someone in their household has been without a job or looking for work (54%); just 39% said this in February 2009. Only a quarter reports receiving a pay raise or a better job in the past year (24%), while almost an equal number say they have been laid off or lost a job (21%). Read more

View more Daily Numbers
Go to PewResearch.org homepage

Consumer sentiment drops in April

MarketWatch
As economic worries persist, U.S. consumer sentiment dropped in early April, according to media reports on Friday of the Reuters/University of Michigan index.

The consumer sentiment index fell to 69.5 in April from 73.6 in March. Economists surveyed by MarketWatch had been expecting the sentiment index to hit 75 in April. The index hit a 28-year low of 55.3 in November 2008.

While the economy has been picking up, consumers remain worried about jobs and their personal finances.

Elsewhere Friday, fresh data from the Commerce Department showed that new construction of U.S. housing units revealed an upward trend in place since the beginning of the year. Starts rose 1.6% in March to a seasonally adjusted 626,000 annualized units, stronger than the 610,000 pace expected by economists surveyed by MarketWatch. Read more about housing starts.

According to a Reuters report, the reading on current economic conditions fell to 80.7 in April from 82.4 in March. The consumer expectations reading fell to 62.3 from 67.9, according to Reuters. Also according to Reuters, the one-year inflation expectation index rose to 2.9% from 2.7%.

How a New Jobless Era Will Transform America

Don Peck
The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.

Late last year, the average duration of unemployment surpassed six months, the first time that has happened since 1948, when the Bureau of Labor Statistics began tracking that number. As of this writing, for every open job in the U.S., six people are actively looking for work.

All of these figures understate the magnitude of the jobs crisis. The broadest measure of unemployment and underemployment (which includes people who want to work but have stopped actively searching for a job, along with those who want full-time jobs but can find only part-time work) reached 17.4 percent in October, which appears to be the highest figure since the 1930s. And for large swaths of society—young adults, men, minorities—that figure was much higher (among teenagers, for instance, even the narrowest measure of unemployment stood at roughly 27 percent). One recent survey showed that 44 percent of families had experienced a job loss, a reduction in hours, or a pay cut in the past year.

There is unemployment, a brief and relatively routine transitional state that results from the rise and fall of companies in any economy, and there is unemployment—chronic, all-consuming. The former is a necessary lubricant in any engine of economic growth. The latter is a pestilence that slowly eats away at people, families, and, if it spreads widely enough, the fabric of society. Indeed, history suggests that it is perhaps society’s most noxious ill.

The worst effects of pervasive joblessness—on family, politics, society—take time to incubate, and they show themselves only slowly. But ultimately, they leave deep marks that endure long after boom times have returned. Some of these marks are just now becoming visible, and even if the economy magically and fully recovers tomorrow, new ones will continue to appear. The longer our economic slump lasts, the deeper they’ll be.

If it persists much longer, this era of high joblessness will likely change the life course and character of a generation of young adults—and quite possibly those of the children behind them as well. It will leave an indelible imprint on many blue-collar white men—and on white culture. It could change the nature of modern marriage, and also cripple marriage as an institution in many communities. It may already be plunging many inner cities into a kind of despair and dysfunction not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years. More...

Govt Lied - Revised Job Report Show Nearly 1Million More Jobs Losses Than Reported

Bloomberg
The U.S. may lose 824,000 jobs when the government releases its annual revision to employment data on Feb. 5, showing the labor market was in worse shape during the recession than known at the time. Click here for a Bloomberg Multimedia interactive visual analysis of the economy’s job losses.

Originally the Labor Department said the economy shed 4.8 million jobs, with most of those losses coming after September 2008. This weeks looming revision shows instead that 5.6 million jobs were eliminated in that time. It also lays bare a fundamental problem the government has when it tallies up the monthly job numbers.

[The fundamental problem is called LYING].

Roubini: 4Q GDP a Joke

Image via Wikipedia

Roubini Calls U.S. Growth ‘Dismal and Poor,’ Predicts Slowing
Simon Kennedy and Erik Schatzker
Bloomberg
New York University Professor Nouriel Roubini, who anticipated the financial crisis, called the fourth quarter surge in U.S. economic growth “very dismal and poor” because it relied on temporary factors.

Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said.

“The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor,” Roubini told Bloomberg Television in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland. “I think we are in trouble.”

Roubini said while the world’s largest economy won’t relapse into recession, unemployment will rise from the current 10 percent, posing social and political challenges.

“It’s going to feel like a recession even if technically we’re not going to be in a recession,” he said.

U.S. employers slash 85,000 jobs in December

Reuters
U.S. employers unexpectedly cut 85,000 jobs in December, government data showed on Friday, cooling optimism on the labor market's recovery and keeping pressure on President Barack Obama.

KEY POINTS: * The Labor Department said November payrolls were revised to show the economy actually added 4,000 jobs in that month rather than losing 11,000 as initially reported. With revisions to October, however, the economy lost 1,000 more jobs than previously estimated over the two months. * The unemployment rate was unchanged at 10 percent in December.* Analysts polled by Reuters had expected nonfarm payrolls to be unchanged last month and the unemployment rate to edge up to 10.1 percent. * High unemployment is one of the toughest domestic challenges facing Obama. The administration's success in getting people back to work will shape prospects for Obama's own political future.

Marc Faber – U S Dollars Will Be Worthless

Thud, Dud, and Crud

"Orders/inventory ration tumbled to 1.43 from 1.89 in August. Folks, that is the largest one-month decline in the ISM orders/inventory ratio since December 1980! The ISM was 53 that month – the next month it went to 49.2 (is that in the market?) and seven months later, we were in the early stages of the famed double-dip recession (which nobody saw coming at the time). Food for thought."

Lunch With Dave 100209

Mad Max in Detroit - Pastors Wear Handguns in Pulpit

Image via Wikipedia

Fox News
The Rev. Lawrence Adams teaches his flock at the Westside Bible Church to turn the other cheek. Just in case, though, the 54-year-old retired police lieutenant also wears a handgun under his robe.

Adams is one of several Detroit clergymen who have taken to packing heat in the pulpit. They have committed their lives to a man who preached nonviolence and told followers to love their enemies. But they also say it's up to them to protect their parishioners in church.

"As a pastor, I'm referred to as a shepherd," Adams said. "Shepherds have the responsibility of watching over their flock. Do I want to hurt somebody? Absolutely not!"

Responding to a break-in at his church Sunday evening, Adams surprised a burglar carrying out a bag of loot and shot the man in the abdomen after the man swung the bag at him.

The burglar survived — for which Adams is grateful — but the reverend said he could have been hurt or killed if he had not been armed.

Detroit had the nation's highest homicide rate last year among cities of at least 500,000 residents. The city has been losing manufacturing jobs for decades, and these days about one in four working-age residents is without a job.

The northwest Detroit neighborhood surrounding Adams' church isn't one of the city's most dangerous. But there have been many recent reports of crimes in the area, including four burglaries, three auto thefts, one armed robbery and four assaults, including one with intent to murder.

"It's getting worse because of the economy," Adams said. "People are out of work and feel they have to provide for their families."

Prior to 2000, anyone who wanted to carry a concealed weapon in Michigan had to show a need to do so. Now, gun owners simply have to pass a stringent background check and complete eight hours of handgun training.

"I get people from all walks of life, including pastors," said Rick Ector, owner of Rick's Firearm Academy in Detroit. "But it's not anything specific to pastors. Detroit is not a very safe place."

Michigan allows pastors to decide if someone registered to carry a handgun can do so for protection inside churches.

The clergy in Detroit who arm themselves say they do so because of the high overall crime rate. But churchgoers elsewhere have been the target of violent attacks several times in recent years:

Last year in a New Jersey church, a man fatally shot his estranged wife and a man who intervened in the attack.

A pastor was found stabbed to death in August in an Oklahoma church.

A Maryville, Ill., preacher was gunned down during his Sunday sermon in March.

In December 2007, a gunman killed two people at a Christian youth mission center near Denver and two others at a megachurch in Colorado Springs.

Near Detroit, a man was shot to death in 2003 while worshipping in a Catholic church. And an attacker fatally shot a woman and wounded a child inside another Detroit church three years ago because of a domestic dispute.

"I don't know what kind of issues people are bringing with them. You could be running from estranged husband, boyfriend," said Bishop Charles Ellis III, pastor of the 6,500-member Greater Grace Temple in Detroit.

Ellis said he sometimes carries a gun, but never in the pulpit. His church has a "ministry of defense" for Sunday services made up of about 18 armed congregants who are off-duty law enforcement officers.

Clergy are adjusting to society, said the Rev. Kenneth J. Flowers, pastor of Greater New Mt. Moriah Baptist Church in Detroit.

"In addition to their faith, they are carrying weapons," said Flowers, who does not carry a gun. "There used to be a time when everybody respected a pastor. Even a drunk would straighten up if a preacher came by."

Many people are uncomfortable with the idea of an armed clergy, because Christ preached against violence and taught people they should love their enemies.

"But the scriptures also are clear that civil authority is part of God's plan," said Claude Wiggins, a former pastor and current assistant at the Detroit Baptist Theological Seminary.

"In our country, it says in due process that you may bear arms to protect yourself. While we should be committed to trusting God, that doesn't prevent us or command us to be totally passive," Wiggins said.

Al Meredith, pastor of the Wedgwood church in Fort Worth, said some off-duty police officers who are deacons at his church carry guns, but he's uncomfortable with the idea of an armed congregation.

"It discourages the crazies from acts of violence if they see uniforms around, but I don't want everybody bringing guns," Meredith said. "My ultimate conviction is what does the word of God say and what would Jesus do? Can you in your wildest imagination ever see Jesus packing a .38? I can't imagine Peter and Paul carrying .45s."

The Rev. William Revely, who sometimes wears his .357-caliber handgun while preaching at the Holy Hope Heritage Church in Detroit, does not worry whether it might be wrong for a man of God to carry a firearm in church.

"I've always felt that the only way to handle a bear in a bear meeting is to have something you can handle a bear with," said the 68-year-old pastor, who practices at a gun range with another pastor. "We have to be realistic. I know too many people who've been shot, carjacked."

Adams said most — if not all — of Westside's 50 members have supported his actions after encountering the burglar.

"People want to look at Christians and the church as believers in God and ask 'Why doesn't God protect you?" Adams said. "The reality is God has given man free will. We have to use our God-given talents and protect ourselves."

Ron Paul: Cash for Clunkers screws the poor

Ron Paul explains why "Cash for Clunkers" hurts poor people and is bad for the economy.

Also see: Cash for clunkers: an irresponsible govt scam