Posted on 10/18/2015 6:56:45 PM PDT by SeekAndFind
Edited on 10/18/2015 8:36:26 PM PDT by Admin Moderator. [history]
Now that a major global recession has begun, you would expect major retailers like Wal-Mart to run into trouble as consumer spending dries up, and that is precisely what is happening. On Wednesday, shares of Wal-Mart experienced their largest single day decline in 27 years after an extremely disappointing earnings projection was released. The stock was down about 10 percent, which represented the biggest plunge since January 1988. Over 21 billion dollars in shareholder wealth was wiped out on Wednesday, and this was just the continuation of a very bad year for Wal-Mart stockholders. Overall, shares had already declined by 22 percent so far in 2015 before we even got to Wednesday. Here is more on this stunning turn of events from Bloomberg…
See link for Bloomberg text.
If it was just Wal-Mart that was having trouble, that would be bad enough. But the truth is that signs that the U.S. economy has entered another major downturn are popping up all around us. Just consider the following list of economic indicators that Graham Summers recently put out…
The Fed has now kept interest rates at zero for 81 months.
This is the longest period in the history of the Fed’s existence, lasting longer than even the 1938-1942 period of ZIRP.
And the US economy is moving back into recession. Consider that…
1) Industrial production fell five months straight in the first half of 2015. This has never happened outside of a recession.
2) Merchant Wholesalers’ Sales are in recession territory.
3) The Empire Manufacturing Survey is in recession territory.
4) All four of the Fed’s September Purchasing Manager Index (PMI) readings (Philadelphia, New York, Richmond, and Kansas City) came in at readings of sub-zero. This usually happens when you are already 4-5 months into a recession. (H/T Bill Hester)
Another huge red flag is the fact that month after month fewer products are being shipped around the country compared to last year.
If less stuff is being shipped around by truck, rail and air, is it a sign that the economy is getting better or is it a sign that the economy is getting worse?
The answer, of course, is self-evident. With that in mind, please read the following excerpt which comes from a recent article by Wolf Richter…
It has been crummy all year: With the exception of January and February, the shipping volume has been lower year-over-year every month!
The index is broad. It tracks data from shippers, no matter what carrier they choose, whether truck, rail, or air, and includes carriers like FedEx and UPS.
Evidence keeps piling up in the most unpleasant manner that something isn’t quite right in the real economy. The world is now in an inexplicable slowdown – “inexplicable” for central bankers who’ve cut interest rates to zero or below zero years ago, and who’re still dousing some economies with QE even as governments are running up big deficits. And yet, despite seven years of this huge monetary and fiscal stimulus, the global economy is deteriorating.
Okay, so is there anyone out there that still believes that the U.S. economy is in good shape?
The Obama administration will probably not admit it for a very long time, but the truth is that the numbers very clearly tell us that we are in a recession.
Anybody out there, whether an “expert” or just someone you happen to know, that tells you that everything is just fine is either completely ignorant or they are purposely lying to you.
And just like in 2008, state and local governments are starting to get into tremendous financial trouble as the real economy sputters. For example, the governor of Illinois has told reporters that “we are out of money now” and that pension fund payments will be delayed as a result…
See link for Bloomberg text.
When these sorts of things started happening in 2008, Fed Chairman Ben Bernanke and the Bush administration went into full-blown denial mode. They kept telling all of us not to worry and that everything would be okay, and that just made things worse in the end.
The same thing is happening now. The Obama administration and the mainstream media keep talking about an “economic recovery” even in the face of numbers such as I have discussed in this article.
Perhaps things are going well for you personally at the moment, and that is great. But now is not the time to buy lots of new toys. Nor is it the time to accumulate more debt.
Instead, now is a time to position yourself for a period of difficulty that could stretch on for years.
The next recession is here, and it is going to grow progressively worse.
The wise will take heed and make preparations, but the foolish will just keep on doing what they have been doing until it is far too late.
What “next recession”? We never came out of the last one.
I asked someone stocking shelves late at night in a Walmart how often they do this. He said that they have to stock the shelves every night because customers clear off the shelves during the day. Probably not every department is like that.
If Walmart is not doing so well, it could mean that people have more money now and don't want to put up with the factors you mention.
If you’re interested, a large, distributed textiles production industry will happen in the U.S.A. before very long. Oil consumption is increasing, and oil production will decrease (transportation for imports, rising fuel prices everywhere, costs go up).
Every day Obama is in office is like a day in heaven.
Don’t you people realize that Obama has created billions of jobs. When he won the election we where losing a trillion jobs a week! Unemployment was like 150%! AND EVER SINCE WE HAVE ADDED NEW JOBS EVERY MONTH AND UNEMPLOYMENT IS NOW AT HISTORIC LOWS OF 5.1% !
Stop all the hating on Obama! Racist haters! He is not only a Constitutional Scholar he is an economic genius and a Nobel Peace Prize winner.
Is a Sarc tag necessary?
They need to have a large army of under 30 hour employees to fit the Obamacare model of no medical benefits for employees under 30 hours.
But is that kind of employment going to work for millions of people trying to support themselves or their families?
If they work two of the 30 hour or less jobs they might do better, but the cost of providing their medical coverage under Obamacare is a burden.
I work two jobs right now, one for the government where I get the bennies at a higher cost because of Obamacare, the other for a private employer where I get extra cash to pay the bills.
The other folks out there don’t have it that well and one wonders how they make ends meet? Do they live with relatives? Can they afford a home? How do they do it?
I am a regular shopper at Walmart and I can vouch for the fact that its prices are shooting up. This may backfire. I go elsewhere for those items whose prices I can beat: milk, meat, produce among others.
The problem with McDonald's doesn't seem to be affordability or prices -- rather, competition & changing tastes. People nowadays, especially the young, have more options, and they're all gravitating to tastier or healthier fare.
Not that I'm an economist; there are probably a lot of things going on that are way over my head. I have no real answer. However, it seems recently that a lot of these venerable places are imploding.
The "dollar" stores used to have very good buys. But that was when they first started and were stocked with regular- and large-sized closeout items purchased from wholesale and retail grocers who were going out of business. For example, one could get a large bottle of expensive Kalamata Olives for a dollar. They had different items all the time, depending what their buyers could find in closeouts. Now suppliers are packing items in special, small packages and bottles designed to be sold only in dollar stores, resulting in the not very good buys you referenced.And the items available rarely change.
Really? Gasp. It’s a good thing I don’t have asthma.
Please note that it is rare to find a traditional "home ec" course being taught in the High Schools, heaven forbid a child learn from their mother or grandmother at this point how to sew a garment. Textiles, are dead here. I can not even find reasonably priced socks that I like that are domestically made.
If textiles is going to come back, it will have to employ people that are already here picking our fruit and vegetables... for slave wages.
Also, one household out of 20 has a net worth of $1 million dollars. a lot of that is in house's value, but there is nothing wrong with that.
I understand exactly what you mean; the DG by me (where I would only go if I needed one thing - like your staples) has high employee turnover as though some low-paid employees are expected to run the whole thing.
I see; I was never in them until the second phase (as they weren’t around yet in my area). Now we have a few of them in town, and they all sell the same things - like walking along the boardwalk on the Jersey shore...
LOL! Yah...that’s the answer! /s
Alternatively, Walmart et al face a regulatory and tax regime not experienced by the current disruptive competition from the Internet.
Nice summary. You forgot one item though - no 22 ammo. I used to make a bi=weekly trip for 22 that wound up being a nearly full cart of oil or air cleaners etc. Now I don’t even bother going to the store. Shop in my undies and don’t have to be exposed to snot nosed kids carrying the plague.
I don’t believe for a second that the increase in wages has anything at all to do with what is going on with that company. I don’t know if Walmart is reporting that or some pundits have come out with that. Last week, at their headquarters, they laid off hundreds of people. As a pundit said, there has to be a limit to their growth in final terms, but what is going on now seems to be a decline, not merely reaching a plateau.
It is hard for me to believe it is competition from Amazon that is causing problems.
At my local 99cents store I buy canteloupe, small watermelon, dog treats, yogurt, cheese, raisins, soup, fresh veggies, apples, nuts, spices, chips, Arizona iced tea, frozen pancakes and waffles, low sodium black beans, salmon burgers, chocolate chip cookies, tuna, bagels, English muffins, candy, toothpaste, rubbing alcohol, paper plates, etc. If I had to do it, I think I could survive with ample protein and wide variety of food for under 5 bucks a day. Of course, going out to eat too often and going to sports bars during football season obliterates the food budget. If only the 99cents store sold ammunition. LOL
I hear it. And many people have complained that they cannot add things to their cart, as i could not last month. BTW, if you want some links to good buys i have found (no affiliation with me), like these (a bit dated), http://peacebyjesus.witnesstoday.org/Goodbuys.html, let me know. I try to find the best buys by the grace of God.
Also, one household out of 20 has a net worth of $1 million dollars. a lot of that is in house’s value, but there is nothing wrong with that.”
Agree with you that a lot of we oldster’s accumulated wealth is in the value of our homes but that can only be used if we choose to sell. I have considered selling mine on more than one occasion but what then? Any other place that I consider safe to live is not affordable so there is no reason to. It’s just such an upside down world.
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