List of 24 Points Pressing Hard toward Recession

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List of 24 Points Pressing Hard toward Recession by David Haggith for The Great Recession

  • The US stock market is slightly overbought (which is not a positive in terms of head room for more of a rally).
  • It’s massively built up on debt that is now more expensive to maintain and/or obtain.
  • The Fed is still rapidly tightening money supply and says it will continue to do so for several more months.
  • Interest rate increases and money tightening that already happened through this past December will continue to worsen economic conditions until summer because any changes by the Fed have about a half year lag time for the general economy.
  • That also means all the tightening that continues between now and September, will continue to pile more and more weight on top of the economy until next February, which is why the Trump admin. is screaming the Fed went too far.
  • 2019 Q1 US corporate earnings are coming in almost as poorly as economists said they would, and they don’t look set to start rising much in the next quarter … if at all.
  • Measures used to help earnings beat much lower expectations (and not by much) were mostly cost-saving measures, not revenue boosters, or they were mere accounting choices. Earnings are after-taxe numbers, so they benefited hugely in 2018 from the Trump Tax Cuts in a way that had nothing at all to do with companies doing better business. They are also reported as a “per share” number, and the main thing that changed was the number of outstanding shares in the denominator as a result of stock buybacks. So, really, earnings were pathetic!
  • Transportation is declining as product shipments decline. West-coast port imports plunged 19% from the previous quarter (3% YoY). Trucking lost ground four months in a row.
  • Manufacturing is slowing in the US and Europe. PMI plummeted in the US to a 31-month low, taking us back to the Obama era. Businesses reported significant slowing in output, new orders, and hiring. China had a March growth spurt but only because of a massive stimulus pump. China injected 200-billion yuan of liquidity in one shot into its economy, and interest rates still jumped up.
  • Business inventories are growing while sales are declining, meaning production has to slow more than it already has because back pressure is building.

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David Haggith

Knave Dave — vigilante against the false profits of The Great Recession Too many criminal CEOs still fill their porky bellies with the biggest taxpayer bailouts in the history of the world. These bailouts protect their reputations, saving them from the fall they should have taken. They continue to receive bonuses for having done an unparalleled job of destroying their companies! Many of their companies wouldn’t be making any profit at all if not for the interest they’re making off of nearly free government bailouts. Just this week Hewlett-Packard fired its CEO, but is still paying him a bonus of millions of dollars in exchange for a year of corporate wandering in the wilderness. Netflix’s CEO cost his company hundreds of thousands of subscribers and had to reverse his decision. Bank of America’s CEO launched a debit-card fee plan that was immediately stupid in the eyes of many, but greed an arrogance led him to think he could pass it by his customers, and he lost customers in droves and had to reverse his decision, as did the many major banks that followed him. Since these corporate leaders do things most of us can immediately see as being dumb, why are they rewarded with salaries a thousand times greater than many of us make?