Free Republic

A surprisingly large share of Americans are in a precarious financial state, according to a new, detailed study from The Pew Charitable Trust. For its study, Pew sampled nearly 8,000 individuals, and it found that the typical American household’s finances have not recovered in any substantial way since the downturn, especially in regards to income, savings and covering emergency expenses. Pew’s conclusions have strong implications for the future of housing, so we have spotlighted several of the study’s most notable findings: 1. Income Instability – For the typical U.S. family, earnings have grown just 2 percent from 1999 to 2009, and more than half of U.S....

... It's fueling financial turmoil on Wall Street with Standard & Poor's Ratings Service recently warning that a stunning 50% of energy junk bonds are "distressed," meaning they are at risk of default. Overall, about $180 billion of debt is distressed. It's the highest level since the end of the Great Recession and much of it is in energy companies. ... Not a repeat of 2008...

The outlook for the global economy next year is darkening, with a U.S. recession and China becoming the first major emerging market to slash interest rates to zero both potential scenarios, according to Citi. As the U.S. economy enters its seventh year of expansion following the 2008-09 crisis, the probability of recession will reach 65 percent, Citi's rates strategists wrote in their 2016 outlook published late on Tuesday. A rapid flattening of the bond yield curve towards inversion would be an key warning sign.

If you recall, the popular storyline since late last year has been that the U.S. economy is moderately improving while the world’s other major economies – Japan, China, and Europe – are rolling over. The U.S. economy would power through. Moreover, stock prices had achieved a permanently high plateau.

Over the past year we have regularly contended that a far greater threat to the global economy than either corporate earnings, currency devaluations, rate cuts (or hikes), reserve outflow, or even the stock market, is the sudden, global trade crunch which has been deteriorating rapidly since late 2014 and has seen an even more dramatic drop off as 2015 is winding down. Actually, that is incorrect: global trade is merely a manifestation of the true state of the above listed items. ... We have in the past joked that the only thing that could possibly save the world from what...

Akin OyedeleOctober 31, 2015We recently detailed why some economists are spooked about the economy. Harvard professor Larry Summers also noted that the consensus of economists has failed to forecast a recession one year in advance in post-war America. So, once again, we may not know for sure until we are really close to an economic downturn, or even in one. However, it doesn't exactly look like we're there. If you were, however, trying to build a case that we're near recession, the manufacturing sector is where you'd start. It's A Services Economy "We are seeing questions come up as to...

U.S. orders for long-lasting goods such as heavy machinery or airplanes fell in September for the second month in a row, offering little evidence that manufacturers are ready to rebound after a prolonged bout of softness. Durable-goods orders fell a fell a seasonally adjusted 1.2% in September following an even sharper 3% decline in the prior month, the Commerce Department said Tuesday. Previously the government had said orders dropped 2.3% in August.

As this is championship season in sports (yes, it’s always championship season for some sport), let’s begin our discussion with a sports analogy. Over the course of a game, we have seen our beloved Home team riddled with injuries. Our star players have been physically and emotionally clobbered, as the Visitors have used every tool at their disposal against us, regardless of the rule book. They tripped and tackled our starters, given us two broken legs and three broken arms, driving five of our best out of the game. Kicking our boys during time outs, shooting darts from dart guns,...

During HSBC's Global Investment Seminar in New York this week, Harvard professor and economist Larry Summers brought up secular stagnation. In 2013, Summers revived the phrase, which, over time, has come to mean all sorts of things to different people. But at its core, secular stagnation refers to a global economy growing at a slow rate because there is too much saving and not enough investment. And right now, a lot of savings (and other monies) are heading out of emerging markets and into the developed world. "I would suggest that the defining financial development of the last year is...

When the global economy is doing well, the amount of stuff that is imported and exported around the world goes up, and when the global economy is in recession, the amount of stuff that is imported and exported around the world goes down. It is just basic economics. Governments around the world have become very adept at manipulating other measures of economic activity such as GDP, but the trade numbers are more difficult to fudge. Today, China accounts for more global trade than anyone else on the entire planet, and we have just learned that Chinese exports and Chinese imports...

The biggest bank in the western world has just come out and declared that the global economy is “already in a recession”. According to British banking giant HSBC, global trade is down 8.4 percent so far this year, and global GDP expressed in U.S. dollars is down 3.4 percent. So those that are waiting for the next worldwide economic recession to begin can stop waiting. It is officially here. As you will see below, money is fleeing emerging markets at a blistering pace, major global banks are stuck with huge loans that will never be repaid, and it looks like...

Everybody knows that “greedy bankers” were to blame for the Crash of 2008. The Democrats and their willing accomplices told us that years ago and they are sticking to their story. But there is another suspect that ought to be right in the dock along with the bankers. Its mild-mannered name is “agency debt.” It’s the debt of federal agencies and government-sponsored enterprises (GSEs) that is not included in the National Debt. In other words, when you go to the U.S. Treasury’s Debt to the Penny page, and find that on September 27, 2015 the debt was $18,151,073,031,331.50 you...

THE PHILIPPINES appears least vulnerable to major risks that could darken the economic growth outlook and affect the sovereign credit scores of emerging markets, debt watcher Standard & Poor’s Ratings Services said in a new report. In a Sept. 29 report, titled: “Who’s at Risk? Emerging Market Sovereigns are Facing Adverse Global Trends,” S&P cited three risks on the growth prospects of 22 emerging economies: capital outflows from developing to advanced markets once the Federal Reserve hikes interest rates, unwinding of domestic credit built up in recent years and China’s economic growth slowdown. Among 22 markets it assessed, the Philippines...

You would think that the simultaneous crashing of all of the largest stock markets around the world would be very big news. But so far, mainstream media in the United States are treating it like it isn't really a big deal.Over the last 60 days, we have witnessed the most significant global stock market decline since fall 2008, and yet most people still seem to think that this is just a temporary "bump in the road" and that the bull market will soon resume. Hopefully they are right.When the Dow Jones Industrial Average plummeted 777 points on Sept. 29, 2008,...

Marc Ambinder, writing at The Week, seems to have taken the next leap in the evolution of American politics this season and – at least as an exercise in theory – asked us to consider what a Trump presidency would look like. While the primary could still play out in any number of interesting ways, it seems well past the point where such a future can be entirely written off so Marc isn’t submitting this to some science fiction outlet. It’s true that supporters of the more “conventional” candidates could all coalesce around one Anti-Trump over the fall and winter...

My 22-year-old son lives at home and still depends on his old man for spending money. My profoundest fear is that like Will Ferrell's character in "Wedding Crashers," he will never leave the nest. I'm not alone. There are some 20 million college grads living at home. A 2014 study reported by CNNMoney found that half of kids who are two years out of college rely on their parents to pay some or all of their bills. It's the new normal for 20-somethings. Gee, parents sure are getting a great financial return on the $150,000 they've shelled out for...

OTTAWA (Reuters) - Having staked his reputation on strong economic management, Canadian Prime Minister Stephen Harper has decided that the best way to win re-election when the headlines say recession is to convince the country it is no longer in one. Tuesday brought the worst kind of news for a prime minister campaigning for a rare fourth term in office: government data that confirmed Canada's economy contracted for the second quarter in a row, the technical definition of recession. But Harper shrugged off the data from the first half of the year, saying Canada had a "couple of weak months,"...

What is the topic that dominates today conversations in financial circles? “It isn’t Greece, or the U.S. economy, or China…It is the lack of liquidity in the markets and what this might mean for the world economy—and their businesses. Market veterans say they have never experienced anything like it.

Did you see what just happened? The devaluation of the yuan by China triggered the largest one day drop for that currency in the modern era. This caused other global currencies to crash relative to the U.S. dollar, the price of oil hit a six year low, and stock markets all over the world were rattled. The Dow fell 212 points on Tuesday, and Apple stock plummeted another 5 percent. As we hurtle toward the absolutely critical months of September and October, the unraveling of the global financial system is beginning to accelerate. At this point, it is not...

Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession. But a new study by the respected National Bureau of Economic Research finds, "Yes, it did. We find that adherence to that act led to riskier lending by banks." Added NBER: "There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts," or predominantly low-income and minority areas. To satisfy CRA examiners,...