40 US Economic Indicators Why a “Reset” Is on the Horizon – Part Four

Part four of our series illustrates forty US economic indicators that clearly demonstrate that the US is in free fall. Set against the backdrop of QE and ZIRP central bank policy, the conditions for a crash which will dwarf the 2008 crisis remains a distinct probability, The underlying reality suggests that the much vaunted “reset” has never been more likely and is now very much on the horizon.

1. Zero interest policy has to remain in place, as interest rates will further damage an already very fragile economy
2. Expansion of QE is a certainty, with a recent Federal Reserve publication admitting as much
3. Bond market yields falling to record lows
4. Serious dislocations in the derivative markets are now occurring. 75% of US derivatives are interest rate swaps.
5. Labour force participation rate at 62.5%
6. 95m people economically inactive
7. 45m people on food stamps
8. Heavy dumping of US treasuries continues
9. Student loans standing at $1 trillion
10. Motor vehicle loans standing at $1 trillion
11. Russell 2000 currently stands at around 80x reported earnings.
12. S&P 500 stands at around 25 x reported earnings
13. Corporate debt to GDP ratio at highs consistent with an imminent recession
14. $6 trillion dollar corporate bond market has doubled since 2009 due to ZIRP policy. Their average credit rating is JUNK
15. Delinquency rate on commercial and industrial loans has increased 40% in 2 years
16. Market Indicators suggest another housing crisis is looming fuelled by rising house prices, mortgages and corresponding divergence in household income
17. Central Banks are running out government bonds to purchase
18. US debt is fast approaching $20 trillion dollars
19. US government pension funds have a $7 trillion shortfall
20. US unfunded liabilities stands at $200 trillion
21. Personal healthcare expenditure has soared 45% since 2009
22. All Sectors debt securities and loans stands at $62 trillion, an increase since 2009 of 20%
23. Industrial production recently declined for nine months in a row, usually only seen during economic downturns
24. Total Business Sales have been in decline for two years
25. For the first half of 2016 and year on year, layoff announcements at major organisations are 24% than last year
26. The fall in temporary workers in the US has fallen to levels last seen prior to the 2008 crash
27. Federal Tax and State Tax receipts have fallen to levels, last seen prior to 2008 crash
28. US coal production is at 35 year lows
29. Since Obama took office, approximately 14m Americans have left the workforce
30. US factory orders recently declined for 18 months in a row
31. Depressed Oil prices are damaging US shale oil companies, the latter aggravated by the threat of JUNK bond impairments
32. Stresses within US banks are becoming more common and with decreasing intervals between each event.
33. Large scale Technology company layoffs already seen in 2016
34. Bank of America is cutting 3500 jobs in an announcement today, the latest in a long list of layoffs announced in this sector
35. Significant layoffs in the retail sectors announced in 2016, including Walmart and Macys
36. The pace of layoffs announced by U.S.-based oil companies rose for a second-straight month in July announcing 45,346 job cuts , a 19% increase in planned payroll reductions from June
37. Total layoffs in the US oil sector now stands at 95k jobs in 2016
38. IT sector has announced 50k layoffs so far in 2016
39. US commercial bankruptcies have risen, year on year for the last seven years. Up 51% in the 9 months to June 2016
40. The July report for the Cass Freight Index shows shipments down 2.6%, year on year and expenditure down 5.1%, year on year