I don’t depend on the vagaries of the stock market. That’s a leading indicator of speculation. Here are the real leading economic indicators of where our economy is now and where it is headed, no matter who wins tomorrow:
Major retailer closing stores and laying off employees:
Circuit City announced this morning that it is closing 155 stores and eliminating 17 percent of its employees as the struggling Richmond-based retailer tries to conserve cash and fend off pressure from vendors.
Lots of other retailers who have announced store closings:
Over the past six months, there has been a flurry of announcements from retailers that they are closing stores, slowing expansion plans or ceasing operations altogether.
From Foot Locker and Home Depot to Ann Taylor and Linens ‘n Things, we round up more than 30 retailers that are closing (at least some) of their doors.
Banks going insolvent and being closed by regulators:
State regulators closed Freedom Bank of Bradenton, Fla. on Halloween, in what was the 17th U.S. bank or thrift failure of 2008.
US automobile sales way, way down:
U.S. auto sales slumped in October, with General Motors Corp. (GM) reporting its first month of less than 200,000 sales since at least the 1970s, as slumping consumer confidence and the worsening credit crunch kept buyers away from showrooms. […]
GM car sales fell 34% while light trucks slid 51%.
Home foreclosures up, home prices down:
Foreclosure sales continued to drive price declines and fueled an increase in sale transactions in key local markets across the nation during August …
Nov. 3 (Bloomberg) — More Americans threw in the towel in October as monthly bankruptcy filings topped 100,000 for the first time since bankruptcy laws were tightened three years ago.
Businesses and individuals in the U.S. filed 108,595 bankruptcy petitions of all types, up 13 percent from the prior month, according to data provided by Automated Access to Court Electronic Records, a service of Jupiter eSources LLC in Oklahoma City.
U.S. retail grocery-store prices rose 7.6 percent in September from a year earlier, the report stated, citing the Bureau of Labor Statistics.
A lousy job market for everyone:
The unemployment crunch that is working its way into southeastern Minnesota appears to reach across many industries and types of occupations, counselors for dislocated workers say.
The nonpartisan Committee for a Responsible Federal Budget estimated recently that the $700 billion economic rescue plan aimed at salvaging the troubled U.S. banking system would push the nation’s deficit to more than $1 trillion in the coming fiscal year.
And things could get much worse very quickly:
In its latest economic outlook, Merrill Lynch economists “worry about inflation, or more precisely,” a lack of it. From crashing global equity markets, falling commodity prices, rising unemployment, stagnant wages, over-indebted households, declining production, the continuing housing crisis, and more. […]
“This recession is unlike any seen in the last five decades.” Typically caused by inflation, inventory cycles or aggressive Fed tightening. “This is a balance sheet recession deeply rooted in asset liquidation and debt repayment, and would seem to have more in common with pre-WW I cycles.” […][
Even The New York Times published a rare ahead-of-the-curve October 28 admission. In an Eric Dash article headlined: “Consumers Feel the Next Crisis: Credit Cards.” As they’re squeezed by an “eroding economy.” An “already beleaguered banking industry” is threatened as lenders are sharply curtailing credit card offers and “sky-high credit lines.” Even creditworthy consumers are affected because of growing amounts of bad loan losses. An estimated $21 billion in the first half of 2008. […]
In [The Global Europe Anticipation Bulletin (GEAB)] October 15 28th edition. About a “global systemic crisis.” An alert because its researchers believe that before summer 2009 “the US government will be insolvent (and will) default and be prevented to pay its creditors (holders of US Treasury Bonds, of Fannie May and Freddy Mac shares, etc.).” […]
GEAB states: “the whole planet has become aware that a global systemic crisis is unfolding, characterised by the collapse of the US financial system and its contagion to the rest of the world.” As a result, “a growing number of global players are beginning to act on their own.” In their own self-interest. Because US policies are ineffective. The crisis is very serious and “far more important, in terms of impact and outcome, than” in 1929. With the US economy weaker now than then. Because of unmanageable public debt. Reckless consumer borrowing and spending. Enormous current account and budget deficits. A hollowed out industrial base, and a highly inflated dollar.
With that in mind, it’s up to “vigilant” citizens and “clear-sighted” leaders to assure that America won’t “drive the planet into a disaster.” It will take divergent policies. What’s “good for the rest of the world will not be good for the US.” America defaulting will be partly from “this decoupling of decision-making….” A new dollar will be “imposed.” And “one morning (in) summer 2009….after a long week-end or bank holiday,” Americans will discover that their “US T-Bonds and Dollars are only worth 10 per cent of their value….”
The next President and the next Congress will be faced with extremely difficult choices. Expect things to get worse before they get better. Don’t count on any universal health care bill passing Congress. Don’t expect a tax cut if you make less than $250,000. Just hope you can keep your job, because many, many more jobs are going to go bye-bye in the next few months, and the next few years. I don’t envy the likely President, Barack Obama, one bit. He will have to be FDR on steroids to get us out of the mess the Republican Crime Syndicate has left us.
And pray like hell McCain doesn’t pull off some miracle comeback. Because his solution to all our economic problems? More wars in all likelihood. That’s how the militarists in Japan and the fascists in Italy and Germany responded to the Great Depression and we all know where that ended up.
