A crushing blow to male earnings – From 1969 to 2009 male earnings have fallen by 28 percent. The slow decline of the American middle class.
The contraction of the US middle class continues to roll along. There are major generational rifts that are hitting the economy. For example between 1960 and 2009 the number of men working fulltime has fallen from 83 percent to 66 percent. A large number of people are categorized under “not making formal wages†and this group has tripled from 6 percent to 18 percent. It is a troubling revelation that provides more insight into the reality that half of Americans make $25,000 or less per year. It also sheds some light on the massive number of working poor that are also part of the 46 million Americans now receiving food assistance. The decline in wages is real and the massive impact in net worth is also a big indicator of the crushing blow being experienced by the middle class.
The engineering of bigger financial bubbles – corporate profits as a percent of GDP at record levels while unemployment is historically high and record number of Americans on transfer payments. Paying interest on excess reserves to banks for our own bailout funds.
The market is perched on the edge of a chair looking out for what the Federal Reserve and European Central Bank have to say. The almighty Oz is the only game in town. With the Fed, the expectation is of some sort of additional quantitative easing to prime the economy once again whereas the market is looking for some big sort of action by the ECB to keep the Euro together. One thing is certain however and that is we are now in a bailout bubble. The markets are now managed proxy systems of the too big to fail banks. The system has been very effective in siphoning off wealth from the middle class of many countries and creating massive wealth discrepancies that have not been witnessed since the Great Depression. Many in the public are woefully uninformed since rarely is this analysis leaked out in the media. Yet as we go down this road, it is becoming more obvious that to keep this system going, more and more bailouts are required.
Ph.D. in food stamps – the rise of food stamp usage among those with advanced degrees. Record number of households on food stamps.
t is hard to declare a recovery when a record 22.3 million households are now on food assistance. The latest data shows that 46.5 million Americans are still relying on SNAP, the food assistance program, to get by each month. Since this data lags, we see that in May we added 77,000 jobs but added 222,000+ Americans to the food stamp program. This is not a positive economic calculus. The recent rallies were all spurred by the utterance of more bailouts with more debt. Will these promises be enough to give us a positive second half of the year? Central banks and the government are stepping up in historic fashion just to keep the system from coming apart. Think about the fact that over 46 million Americans rely on a small check each month just to get food into their household. Some companies have seized this trend to their advantage. Some with advanced degrees are turning to food assistance in larger numbers. Where do we go from here?
Retirement means having to work in current economy – new survey shows 34 percent of workers in their 60s do not plan on retiring. The hunger for higher yields in a weak stock market.
The chase for yield is causing money to flow into unlikely places in the market. The low performance market has taken a toll on retirement planning models for millions of Americans nearing retirement age. Many of the models were built on the assumption that stock market gains would return 7 to 10 percent annual gains year-over-year. So of course many of the models had extremely generous projections. This of course applies to those that actually were able to save some money. Many Americans are unable to save any money. One out of three Americans has not one dollar set aside for retirement. Those that have invested in the stock market have seen one of the worst periods ever. For example, even with the recent rally the S&P 500 is back to a point last seen in 1999. Over this 13 year window boring CDs outperformed the stock market. Yet this raises an important question about retirement. How will millions of Americans retire when they have so little money to their name?