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Posts Tagged ‘Recession’

The Next Recession and the Next Housing Crisis

Last year, PBS reported that hundreds of thousands of financially distressed Florida homeowners have been compelled to modify their home loans. This entailed getting reducing interest rates, but not reduced home loan principals. Those reduced interest rates have one problem.

They eventually go up–and soon.

Just like teaser rates for subprime mortgages a few years ago, these modified loans are about to blow up at a time when the US economy is hurtling toward the most severe recession since the Great Depression. This financial train wreck will strike somewhere between October 1, 2016 and the end of June 2017. See The Coming Recession: It’s Going to Be a Big One–JohnHively.wordpress.com

This goes to prove the old saying; The more things change, the more they stay the same. But in our case, the saying should be, “The more the economy changes, the worse it gets for us, the 99 percent.”

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Franklin Roosevelt

The next recession is unfolding, and it’s going to be the worst one since the Great Depression. I’ve been watching this historically weak US economic expansion unravel since November 2015. See https://johnhively.wordpress.com/2015/11/06/the-coming-recession-and-us-senator-elizabeth-warrens-seniors-and-veterans-emergency-benefits-act-save-benefits-act/. We will officially go into recession somewhere between late this year and June 2017.

Nothing can stop it. Not declining gasoline and oil prices, not falling interest rates.

The corrupt US government has passed legislation over the decades that have redistributed massive amounts of income and wealth from the 99 to the 1 percent. The 1 percent currently steal over 37 percent of all income produced in the US compared to 8 percent in 1980. See https://johnhively.wordpress.com/2015/12/29/new-study-the-middle-class-is-losing-ground-as-wall-street-senators-ron-wyden-mitch-mcconnell-orrin-hatch-and-others-continue-to-use-the-federal-government-and-the-federal-reserve-to-redistribute/. Now the 99 percent can’t purchase enough goods and services to keep the economy and the financial markets chugging along. The economy is set to collapse upon itself. However, there is even worse news.

Sometime between the November elections of 2016 and whenever the new president is inaugurated Wall Street Senator Ron Wyden will introduce the Trans Pacific Partnership (TPP) into committee. This is the largest income and political power redistribution scam in world history. The TPP is falsely marketed as a trade agreement, but it has virtually nothing to do with trade.

President Obama, ever the servant of Wall Street executives, has already signed this scam without a single word of debate in the halls of one of the most corrupt political bodies in the world–the US congress. So the TPP becomes law, unconstitutionally at that, if it passes through the US House and the US Senate.

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The TPP will only make matters worse for the 99 percent as this recession swings into full gear. The TPP will redistribute trillions of dollars of income from the 99 to the 1 percent on a yearly basis, as well as steal their state and local voting rights in many cases.

Here’s how bad this coming recession will be without the TPP:

* Effective interest rates will sink into negative levels, like in Europe.
* The nation will flirt with deflation, and possibly fall into it, because trillions of dollars have been redistributed from the 99 to the 1 percent, so demand for goods and services will be weaker than at any time since the Great Depression.
* Instead of 48 million Americans on food stamps, like during the current so-called economic expansion, 60 to 90 million Americans will be on food stamps.
* Unemployment will hit 10 to 18 percent, and will stay above 10 percent for years.
* Mortgage defaults will hit record levels.
* Home prices will decline 20 to 60 percent, and maybe more.
* On average, stocks will lose 20 to 60 percent of their values, and maybe more.
* We’re still feeling the impact of the last recession, and so too will we feel the impacts of this recession for years and years unless….
* Anticipate a possible political revolution as grassroots insurgents take over both major political parties. Think Bernie Sanders and Elizabeth Warren for the Democratic Party, and who knows for the Republican Party?
* Anticipate possible violence as the police and military crack down on protesters.
* Anticipate a US political and economic rejuvenation after many years of hard struggle. People like Wyden, one of the principal architects of this recession, will be a historical footnote.

This Depression will be worldwide.

Imagine what this recession will be like with the TPP.

Now, if we can just stop Wyden and the TPP in congress, that will make our task of a restored America for everyone much easier in the long run. And it will be in the long run that we win.

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The Top 1 Percent’s Share of Income from Wealth Has Been Rising for Decades, thanks to legislation supported by Wall Street senator’s Ron Wyden, Mitch McConnell, and Orrin Hatch, as well as President’s Bill Clinton, Barack Obama, George W. Bush, Ronald Reagan and George H.W. Bush. We can’t forget Wall Street executives and the Koch brothers are also keen political supporters of the 1 percent massing more and more of the nation’s wealth, which is mostly accrued by the rich via legislation supported by those listed above, among many others.

By the way, wealth is assets, such as stocks, bonds, gold, houses, and other things of value. Income is money derived from either salaries, wages, dividends or capital gains.

Source: Economic Policy Institute

The result of an unequal flow of political power is an unequal flow of income and an unequal flow of wealth. The result of all of that is an economy tittering on the brink of the next great depression, which will be far worse for the 99 percent than the last recession.

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A new study by the Wall Street rating agency called Standard and Poor’s reveals what many already know. High income inequality suppresses the demand for goods and services, depressing GNP growth, and leading to more severe economic crashes than would otherwise be the case.

Here’s what the report won’t tell you. The rich invest their money in the political markets and in other investment areas such as stocks and bonds.

The money going into the political markets is used to convince politicians to pass legislation that redistributes income and wealth from the 99 to the 1 percent, such as free trade treaties. In other words, government corruption is far greater during times of inequality, and also because of it.

The investment money that goes into corporate stocks push up the value of those assets. It’s just a bidding process. So when more people purchase shares of any corporations than those who are selling their shares, the value of those shares go up. The same thing is true of bonds. None of these purchases add to GNP growth, and all of these purchases can result in redistributing income from the 99 to the 1 percent.

When corporate shares head down in value, CEO’s typically cut jobs or employee compensation, or ship jobs overseas to lower wage nations, which pushes profits higher, resulting in rising share and bond prices. The result is nothing more than income redistribution.

And so when inequality rises, it snowballs via the methods above, until such time as somebody decides such inequality is a bad thing. That only happens during the most severe economic crisis’s, such as during the Great Depression when there’s less money to go around to corrupt government.

Check out the story by clicking on the link below.

Wall Street Analysts Research: High Inequality Makes US Vulnerable to Crashes–Billmoyers.com

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How can the US government charge Edward Snowden with revealing the existence of the National Security Agency (NSA) spy program on US citizens since the New York Times revealed it’s existence ten years ago? And what about New York Times reporter, James Risen? He wrote a detailed book about it called State of War. So far as I can tell in rereading the book, Snowden hasn’t revealed any information that hasn’t already been revealed.

Snowden’s defense may be simple. How can he have revealed something that has already been revealed on the New York Times best seller list? The government’s case is weak, at best.

All the crap being said about Snowden is nonsense, about being a traitor and other stuff, especially since Washington Post journalist Robert Novak revealed the identity of CIA deep undercover operative Valerie Plame right there on the pages of the Post a decade ago. That information was given to him by George W. Bush’s Undersecretary of State Richard Armitage. According to court records, this was authorized by then Vice President Dick Cheney. They revealed her identity and, in doing so, blew up a multi-billionaire dollar CIA front company named Brewster-Jennings, which she had worked for as an under cover agent, and which was used to monitor the movements of weapons and nuclear materials across the middle east. Why didn’t Novak, Cheney and Armitage go to prison? Why didn’t the Bush regime go after them? Oh, that’s right. It was all politically motivated, but the damage to national security was done.

So what has Snowden done? Nothing so far as damage to national security, and nothing so far as information that you can obtain from your local library.

At best, the government might be able to convict Snowden of giving out information by having read it in Risen’s book.

This suggests that all of this nonsense about Snowden is another attempt to distract the public. But from what impending disaster? A coming recession worst than last time? The potential and likely astronomical cost of the Affordable Care Act when it takes full effect on January 1, 2014? A secretly scheduled attack on Iran? Who knows?

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Although the US as a whole is doing better than when the Republican created economic collapse began four years ago, most Americans do not feel better off when it comes to their personal finances. There’s a reason for this. The rich have been stealing 93 percent of all income growth during these years. The rest of us are getting nothing but our jobs and incomes redistributed to the 1 percent via the policies of Obama and the policies put in place before the current president. So it’s impossible for us to feel better about our personal finances.

Click on the link below for more on this story.

Americans Feel No Better Off Than Four Years Ago–Pew Rearch Center

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The United States manufacturing sector drifted back into recession last month. “In a surprise to Wall Street, the monthly snapshot from the Institute for Supply Management fell below the 50 level that separates contracting from expanding output for the first time in three years.”

That’s the first indication that the overall US economy is heading into recession. It is a necessary step toward recession, but the other steps necessary to get into recession have not followed, at least not yet.

President Obama is loathe to look at the real reason for the weakness of the economy, which is the massive redistribution of income from the 99 to the 1 percent that the federal government has engineered at the behest of the 1 percent over the last thirty years. That has left the demand sector weak, incapable of moving forward without government help.

In other words, the economic royalists have weakened the economy so badly with their income redistribution scam that the corporate economy can no longer stand on its own.

We’re in a long-term series of fits and starts and falling that is really a slow motion collapse of the economy.

Where have you gone President Franklin Roosevelt?

Related story

US Manufacturing Sector Back in Recession–The Guardian

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