The Dreaded D Word

From Zerohedge again:

One Sick Labor Market

There were so many disturbing elements to the May jobs data that we’re not sure we can do justice to the litany of disappointments (with some help from our friends at the Investor’s Business Daily):

  • The share of long-term unemployment is at its highest level since the Great Depression (42%).
  • Fully 54% of college degree graduates under the age of 25 are either unemployed or underemployed.
  • 45 million Americans are on food stamps — one in seven residents.
  • 47% of Americans are on some form of government assistance.
  • The employment-to-population ratio for 25-54 year olds is now 75.7%, lower than it was when the recession supposedly ended in June 2009.
  • The number of people not in the labour force has swelled eight million since the recession ended; absent that effect, the unemployment rate would be 12% right now (about the same as President Obama’s election chances would be).
  • The number of people confident enough to leave their jobs fell 11% in May
    for the second month in a row to 891k, the lowest since November 2010.
  • The ranks of the unemployed who have been looking fruitlessly for work for at least 27 weeks jumped 310k in May, the sharpest increase since May 2011.
  • The unemployment rate for males aged 16-19 is 27% and for males between 20 and 24 it is 13%. Draw your own conclusions from a social (in)stability standpoint.
  • One in seven Americans are either unemployed or underemployed.
  • Only one in six of the youth are working full-time and three-in-five are living with their folks or another relative (as per the NYT).
  • A mere 16% of the 2009-2011 graduating class has found full-time work, while 22% are working part-time. Even those hired from 2006-08, just 23% are working full-time.
  • According to a poll cited in the NYT, just 14% of high-school grads today believe they will have a more successful financial future than their parents Line of the day, as depressing as it is, comes from an 18-year old: “Thank God I had a buddy at Burger King who could help me out”. Fast-food has emerged as the fast-growing industry in a country once led by technology. Even tech now is fuelled more by companies that produce nifty consumer gadgets and feed our narcissistic needs than those who focus on improving the nation’s capital stock which is the ultimate trailblazer for productivity growth and durable gains in our standard-of-living.

Something to think about on a Wednesday afternoon dear readers.

On Dangerous Environments

Staying with ZH for a bit longer:

This is an extremely dangerous environment: one in which the primary prop for the markets (central bank intervention) is becoming both less effective and politically toxic. Indeed, it’s clear at this point that the EU isbeyond intervention since neither the ECB, IMF, nor the ESM have the firepower to hold things together.

Dangerous indeed. Pair this with Denninger’s statements the other day and you have the blueprint for the coming weeks & months.

Apocalypse? Nope. Radical change in your day to day? Probably.

The powers that be, conspiratorial or not, typically solve big stuff like this with all out war & devastation on a grand scale.

With regard to the Sanford incident…

Because of where we are as a nation and where we are headed into the fall, I believe (invoking emotion & opinion and not fact) it is different this time.

It is clear that the current regime is collaborating with the usual race suspects, as well as the media to foment what is likely to be a very bloody summer across America. Create the crisis, implement the solution.

only the best cheater wins

On open mics and foreign pandering

This guy is merely a cog. He wields no actual power, and makes no decisions except what he wants as a midnight snack.

If you believe any different, you are essentially a fool.

While these actions will impact the upcoming unpleasantness, your day to day marches on as usual. Keep your head up, your wits about you, and your powder dry. Do not let this paltry distraction allow your focus to shift from building your tribe and asserting your individual Liberty.

So, let’s talk econ…

Extend & Pretend Coming to an End

Go read, then come back. Good times.

Lots of info in there, but let me tell you. I own a real estate company. I have for almost ten years now, and while I mostly deal residential and the Florida condo market, I can echo the bullet points in the article above verbatim. Here’s why:

In a recent interview with The Casey Report Miller details a dramatic turn for the worse in the commercial real estate market he has witnessed in the last few months. His company deals with distressed commercial real estate. This segment of his business was booming in 2009 and into the middle of 2010. Then magically, there was no more distress as the “extend and pretend” plan was implemented by the governing powers. The distressed market dried up completely until November 2011. Miller describes what happened next:

“All of a sudden, right after Thanksgiving in 2011, the floodgates opened again. In the last six weeks we probably picked up seven or eight receiverships – and we’re now seeing some really big-ticket properties with major loans on them that have gone into distress, and they’re all sharing some characteristics in common. In 2008 and 2009, these borrowers were put on a workout or had a forbearance agreement put into place with their lenders. In 2009, their lenders were thinking, “Let’s do a two- or three-year workout with these guys. I’m sure by 2012 this market is going to get a lot better.” Well, 2012 is here now, and guess what? It’s not any better. In fact I would argue that it’s still deteriorating.”

Why the sudden surge in distressed properties coming to market in late 2011? It seems the FASB finally decided to grow a pair of balls after being neutered by Bernanke and Geithner in 2009 regarding mark to market accounting. They issued an Accounting Standards Update (ASU) that went into effect for all periods after June 15, 2011called Clarifications to Accounting for Troubled Debt Restructurings by Creditors. Essentially, if a lender is involved in a troubled debt restructuring with a debtor, including a forbearance agreement or a workout, the property MUST be marked to market. Andy Miller understands this is the beginning of the end for “extend and pretend”

Remember when they said, “Hey, move that date out cause by then, the market will have gotten better…”?

Well, here we are and it hasn’t. In fact, the fundamentals have not changed since 2008. The amount of debt in the system has not cleared and we are again at the precipice of the cliff. One has to wonder when we will actually make a move.

I have personally been waiting for such an event for over four years now, saying constantly, that “something has indeed got to give”, yet here we are.

This is a badness thing.

CA’s Salient Points on Gunwalker

Read the post here. Important bits below:

– The Communist President of the United States is well on the path to re-election.

– There is NO – repeat: NO – effective political opposition to the President and his treasonous policies in the House, the Senate, or the judiciary.

– You have an army of more than 2.15 million Federal leeches and tyrants standing over you.

– There will be a massive tax hike on January 1, 2013 that will further tank the already-moribund American economy.

– The few electoral political restraints on the Mighty Kenyan and his stooges will disappear should he be re-elected to a second term.

– The Republican Party is completely finished as anything but a junior collaborator in the destruction of America.

– And most importantly to each of you, you and your families are consider irredeemable kulaks by the Obama regime – suitable only for plunder and eventual relocation to reeducation facilities.

Yes, it can, and will happen here. Yes, some of your neighbors will be cheering this on – at least 44% of them. This is the battlespace in which you will be forced to operate in. There are workflows and processes that will successfully oppose this tyranny.

Prep and plan now. Time truly is running out.