Millennials – Page 6 – The Burning Platform

ANOTHER BLS BULLSHIT REPORT – 101k MORE PEOPLE EMPLOYED – 144k LEAVE WORKFORCE

Here we go again. The BLS reports manipulated unemployment figures designed to mislead the ignorant masses about how shitty their lives are. The MSM dutifully reports the lies without digging into the numbers, as their job is to peddle the propaganda and keep the financial ponzi scheme going.

You know the economy sucks. You know the real unemployment rate is at least 15%. You know your real wages haven’t gone up since 2000. You know 90% of the Obama jobs being “created” are shit service jobs paying shit wages. You know bullshit when you see it.

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The fact that Trump is so far ahead in the polls is because people in this country know they are getting fucked over, lied to, and screwed by the bankers, corporations and captured politicians.

Here are some of my observations about the BLS data you will not hear on CNBC and Bloomberg, nor read on Marketwatch or the WSJ:

Continue reading “ANOTHER BLS BULLSHIT REPORT – 101k MORE PEOPLE EMPLOYED – 144k LEAVE WORKFORCE”

MILLENNIALS ARE TO BLAME

As usual, the mainstream media reporter buries the lead in the body of the story. There is much scorn for the millennial generation by the older generations. Of course millennials will have the lowest credit scores. They have lower paying jobs and less time to build up a credit history. Duh.

The chart below actually shows Generation X to be in the worst shape. Millennials have a debt to income level of 1.5, while Gen X has a debt to income level of 2.5. Even Boomers have a debt to income level of 1.9.

Millennials are burdened with more student loan and auto loan debt than Gen X at similar ages. The eye opener is how few millennials are using credit cards – far less than Gen X at the same age. This fact combined with the fact that millennials have just surpassed the dying off Boomers as the largest generational cohort in the country, explains why retail sales have gone stagnant and credit card debt is billions lower than it was in 2008.

The millennials may have their issues, but not going into credit card debt as the political and financial status quo desires could be a game changer. An ever expanding level of consumer debt is the only thing sustaining this Ponzi Scheme. If the millennials refuse to cooperate, the game is over.

Guest Post by Quentin Fottrell

This generation of Americans has the lowest credit score

The largest generation of Americans has the lowest credit scores.

Millennials — those roughly defined as aged between 19 and 34 — have the lowest credit scores of any generation of Americans. They have an average credit score of 625 on an average debt of $52,120. By comparison, Generation X (aged 35 to 49) have a credit score of 650 on average debt of $125,000, while both baby boomers and the Greatest Generation (with a combined age of between 50 and 87) have credit scores of 709 on average debt of $87,438.

“It’s important to keep in mind that credit scores are built on credit experiences,” says Michele Raneri, vice president of analytics and business development at Experian, while talking about millennials. “While this generation has been slower to use credit, they have plenty of opportunities to build a positive credit history.”

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U.S. Households Under Pressure: Stagnant Incomes, Rising Basic Expenses

Guest Post by Charles Hugh Smith

How do you support a consumer economy with stagnant incomes for the bottom 90%, rising basic expenses and crashing employment for males ages 25-54? Answer: you don’t.

Frequent contributor B.C. passed along a sobering set of charts that provide context for How The Average U.S. Consumer Spends Their Paycheck. The basic story is well-known to the bottom 90%: most of the household income goes to taxes, housing, food and transportation, with healthcare and insurance, pensions and retirement contributions rounding out the big-ticket items. (Higher education is, as we all know, paid with student loans by all but the top-tier of families.)

Here’s the question this raises: is the sliver that’s left enough to support a $17 trillion consumer economy? The answer is obvious: no.

Stagnant household income has a number of systemic causes, including the generational decline of full-time employment (A Rising Share of Young Adults Live in Their Parents’ Home) and the concentration of wage gains in the top 10%. These dynamics are not easily addressed, for the simple yet profound reason that the amount of human labor that generates a meaningful profit in a stagnant, over-indebted, financialized economy is declining.

The only way most enterprises can sustainably earn a profit is to offload costly human labor (with its immense burdens of healthcare, pensions, workers compensation, disability insurance, etc., and the heavy regulatory burdens of workplace rules) and replace it with networked software and smart machines.

The types of human labor that generate hefty profits are increasingly scarce, and as a result entry-level pay and employment are both capped by the high costs of human labor (even at minimum wage) and the relatively meager profits generated by conventional labor.

Most of the big profits are generated not by labor but by financialization, stock buybacks and other financial gaming of debt and leverage.

The few areas of human labor that generate hefty profits are either in the protected fiefdoms of state-enforced cartels, or in financial services (i.e. those playing the financial games with debt and leverage) or those creating the software and machinery that replaces costly human labor.

Here are B.C.’s comments on the data:

Nearly half of disposable income is spent on housing and food.

More than 50% of disposable household income is spent on housing and transportation (overwhelmingly autos).

25% of disposable income is spent on autos and health care.

Two-thirds of gross income is spent on taxes, housing, transportation, and health care.

Millennials, most especially males, coming of age since the mid- to late 2000s do not earn enough to afford the major components of household spending, i.e., taxes, housing, autos, and health care (insurance).

Continue reading “U.S. Households Under Pressure: Stagnant Incomes, Rising Basic Expenses”

Millennials shun the new home sales market: in the face of tight inventory, why are builders not building new homes?

Guest Post by Dr. Housing Bubble

One of the many interesting dynamics of the current housing market is the lack of new home sales and also, new home construction. New housing construction tends to be a boom for the economy across all income levels. Why? People when buying a new home also tend to fill the house with the general crap that occupies a place (i.e., new beds, stoves, microwaves, televisions, etc). This crap filling exercise sets off an avalanche of economic activity. You also have construction and the inherent supplies that go into building a new McMansion. Yet the new home buying audience in Millennials tends to be in a tighter economic position than their Taco Tuesday baby boomer parents. For these reasons we have an unusually large number of grown adults living at home with parents. It is highly doubtful that these grown adults are suddenly going to cause a surge in more expensive home buying. But the new home buying that is happening is going to a smaller group of people pushing prices higher on a small amount of inventory.

New home sales dynamics

With inventory in the market still being tight, it is surprising but not shocking that home builders simply are not out in the market aggressively building homes. You have this big group of younger adults but are they going to mimic the trend that followed the baby boomers? That is the big question and so far it doesn’t seem to be the case.

Take a look at this chart:

Continue reading “Millennials shun the new home sales market: in the face of tight inventory, why are builders not building new homes?”

FOURTH TURNING – THE SHADOW OF CRISIS HAS NOT PASSED – PART FOUR

In Part One of this article I explained the model of generational theory as conveyed by Strauss and Howe in The Fourth Turning. In Part Two I provided an overwhelming avalanche of evidence this Crisis has only yet begun, with debt, civic decay and global disorder propelling the world towards the next more violent phase of this Crisis. In Part Three I addressed how the most likely clash on the horizon is between the government and the people. War on multiple fronts will thrust the world through the great gate of history towards an uncertain future.

War on Multiple Fronts

“The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, a total war. Every Fourth Turning has registered an upward ratchet in the technology of destruction, and in mankind’s willingness to use it.” – Strauss & Howe – The Fourth Turning

The drumbeats of war are pounding. Sanctions are implemented against any country that dares question American imperialism (Russia, Iran). Overthrow and ignominious imprisonment or death awaits any foreign leader questioning the petrodollar or standing in the way of America spreading democracy (Iraq, Libya, Syria, Ukraine, Egypt). The mega-media complex of six corporations peddle the government issued pabulum about ISIS being an existential threat to our freedoms; Russia being led by the new Hitler and poised to take over Europe; Syria gassing innocent women and children; and Iran only six months away from a nuclear bomb (they’ve been six months away for the last fourteen years). Hollywood does their part with patriotic drivel like American Sniper, designed to compel low IQ unemployed American youths to swell with pride and march down to enlistment centers, located in our plentiful urban ghettos.

The most disconcerting aspect of Fourth Turnings is they have always climaxed with total destructive all-out war. Not wars to enrich arms dealers like Iraq, Afghanistan, and Syria, but incomprehensibly violent, brutal, wars of annihilation. There are clear winners and losers at the conclusion of Fourth Turning wars. Leaders mobilize all forces, refuse to compromise, define their enemies in moral terms, demand sacrifice on the battlefield and home front, build the most destructive weapons imaginable, and employ those weapons to obtain victory at any cost.

It may seem inconceivable that war on such a scale will happen within the next ten years, but it was equally inconceivable in 1936 that 65 million people would die in the next ten years during World War II. We valued all the wrong things and made all the wrong choices leading up to this Crisis and during the early stages of this Crisis. The accumulation of unmet obligations, unpaid bills, un-kept promises and unresolved issues will provide the fuel for an upheaval that will shake our society to its core and transforms the country’s direction for the next sixty years. The outcome of the conflict could be tragedy or triumph. Our choices will make a difference.

There will be war on many fronts, and they have already begun. The culmination will likely be World War III, with the outcome highly uncertain and potentially disastrous.

Continue reading “FOURTH TURNING – THE SHADOW OF CRISIS HAS NOT PASSED – PART FOUR”

MILLENNIALS: “I’M BACK!!!!”

So the government puts out a report showing that 50% of 25 year olds are living with their parents in our supposedly booming economy. They blather about how this is a real problem when it is the Federal government that has wrapped them in the chains of $1 trillion of student loan debt in the forlorn hope there would be good jobs waiting for them after getting that degree in psychology. If the unemployment is really 5.6%, how come they can’t get jobs?

The report (from the Fed) says it’s a problem that the “hot” housing market has kept millennials from buying homes. That’s a good one. The Fed and their Wall Street scum owners, along with the Fedgov agencies (Fannie & Freddie), have manufactured the “hot” housing market to artificially pump up prices to fix the insolvent balance sheets of the Wall Street banks. Mortgage applications are mired at 1998 levels because hedge funds, flippers, and Chinese billionaires have been encouraged by the Fed to pile in and pump up prices.

It’s despicable how the Fed and Bloomberg write this drivel and don’t address the true reasons millennials have been fucked over by the system they created and support.

Via Bloomberg

The Simple Reason Millennials Aren’t Moving Out Of Their Parents’ Homes: They’re Crushed By Debt

Millennials are not budging from their parents’ basements, even though the job market is on the mend. One really big reason? Student loans.Last year, the rate of 25- to 34-year-olds living at home rose to 17.7 percent among men and 11.7 percent for women, Census data showed last week. That is a record high for both genders. Continue reading

NO ONE TOLD YOU WHEN TO RUN, YOU MISSED THE STARTING GUN

Ticking away the moments that make up a dull day
You fritter and waste the hours in an offhand way.
Kicking around on a piece of ground in your home town
Waiting for someone or something to show you the way.

Tired of lying in the sunshine staying home to watch the rain.
You are young and life is long and there is time to kill today.
And then one day you find ten years have got behind you.
No one told you when to run, you missed the starting gun.

Pink Floyd – Time

I stumbled across two mind blowing charts yesterday that had me pondering how generations of Americans had frittered their lives away, spending money they didn’t have on things they didn’t need, utilizing easy to acquire debt, and saving virtually nothing for their futures or a rainy day. We are a nation of Peter Pans who never grew up. While I was driving home from work, one of my favorite Pink Floyd tunes came on the radio and the lyrics to Time seemed to fit perfectly with the charts I had just discovered.

We were all young once. Old age and retirement don’t even enter your thought process when you are young. Most people aren’t sure what they want to do for the rest of their lives when they are in their early twenties. Slaving away at your entry level low paying job, chasing the opposite sex, getting drunk, and having fun on the weekends is the standard for most young people. But you eventually have to grow up. Because one day you find ten years have got behind you. No one tells you when to grow up. And based on the charts below, tens of millions missed the starting gun.

I graduated college in 1986 and started my entry level CPA firm job, making $18,000 per year. I did live at home for a year and a half before getting an apartment with a friend. I was able to buy a car, pay off my modest student loan debt, go out on the weekends, and still save some money. I was in my early 20’s and had opened a mutual fund account at Vanguard. Anyone who entered the job market from the mid 1970s through the mid 1980’s, which would be the late Baby Boomers and early Generation Xers, had job opportunities and the benefit of low stock market valuations.

P/E ratios of the market were single digits in the late 70s and early 80s, versus 20 today. Dividend yields on stocks averaged 5% for the S&P 500, versus 1.9% today. The Dow bottomed out at 759 in 1980, while the S&P 500 bottomed at 98. A 20 year secular bull market was about to get under way. Baby Boomers and Generation Xers had the opportunity of a lifetime. Even after six years of the bull, when I graduated from college the Dow stood at 1,786 and the S&P 500 stood at 521. I had just begun to invest when the 1987 crash wiped out 20% in one day. It meant nothing to me. I didn’t have much to lose, so I just kept investing.

The 20 year bull market took the Dow from 759 to 11,722 by January 2000. The S&P 500 rose from 98 to 1,552 by March 2000. You also averaged about a 3% dividend yield per year over the entire 20 years. Your average annual return, including reinvested dividends, exceeded 17%. Anyone who even saved a minimal amount of money on a monthly basis, would have built a substantial nest egg for retirement. If you had invested in 10 Year Treasuries, your annual return would have exceeded 11% over the 20 years. Even an ultra-conservative investor who only put their money into 5 year CDs would have averaged better than 7% per year over the 20 years.

Even with the two stock market collapses since 2000, your average annual return in the stock market since 1980 still exceeds 11%. That’s 34 years with an average annual total return of better than 11%. Every person who had a job over this time frame should have accumulated a decent level of retirement savings. That is why the chart below is so shocking. Over 15% of all people 60 and older and 23% of people 45 to 59 years old have NO retirement savings. None. Nada. Zilch. This means 25 million Boomers and Xers are stuck living off a Social Security pittance and choosing between keeping the heat on or eating a feast of Ramen noodles and Friskies. It seems they let 30 years get behind them. They missed the starting gun.

I’m not shocked that over 50% of 18 to 29 year olds have no retirement savings. With the terrible job market, declining real wages, massive levels of student loan debt, two stock market crashes in the space of eight years, and 4% annual returns since 2000, young people today have neither the means nor trust in the system to save for retirement. Their elders had no such excuse. Just a minimal amount per paycheck saved over the last 30 years would have compounded to well over $100,000, even at modest salary levels. It is disgraceful that 25 million people over the age of 45 have saved nothing for their retirement. Far more disgraceful is the median household retirement balance of $3,000 for all working age households. There are 122 million households in this country and 61 million of them have $3,000 or less in retirement savings.

The far worse data points are the $12,000 median retirement balance of aged 55 to 64 households and the $10,100 median retirement balance of aged 45 to 54 households. These people are on the edge of retirement and have less than one year’s expenses saved. There is no legitimate excuse for this pitiful display of planning. These people had decades to save, strong financial market returns, and if they worked for a decent size organization – matching contributions to their retirement accounts. They didn’t need a huge salary. They didn’t need to save 20% of their salary. They didn’t have to be an investing genius. A savings allocation of just 3% to 5% would have grown into a decent sized nest egg after a few decades of compounding.

We know from the data in the chart, it didn’t happen. The concept of delayed gratification is unknown to the millions of nearly broke Boomers and Xers, shuffling towards an old age of poverty, misery and regret. A 64 year old has a life expectancy of about 20 years. They’ll have to budget “very” frugally to make that $12,000 last. The question is how did it happen. I don’t buy the load of crap that you can’t judge people as groups. I judge people by their actions, not their words. I know you can’t lump every Boomer and Xer into one box. Individuals in every generation have bucked the trend, lived within their means, saved for the future, and accumulated significant nest eggs for their retirement. But the aggregate numbers don’t lie. The majority of those over the age of 45 have squandered their chance at a relatively comfortable retirement. These are the people who most vociferously insist the government do something about their self created plight. It’s their right to free healthcare, free food, subsidized housing, free utilities, higher minimum wages, and a comfortable government subsidized retirement. They are wrong. They had a right to life, liberty and the pursuit of happiness. It was up to them to educate themselves, get a job, work hard, and accumulate savings.

The generations of live for today, don’t worry about tomorrow Americans over the age of 45 have no one to blame but themselves. They bought those 4,500 sq foot McMansions with negative amortization 0% down mortgages. They had to keep up with the Jones-es by putting in granite counter-tops, stainless steel appliances, home theaters, Olympic sized swimming pools, and enormous decks. They have HDTVs in every room in their house and must have every premium cable channel, along with the NFL package. They upgrade their phones every time Apple rolls out a new and improved version. They pay landscapers to manicure their properties. They lease new BMWs every three years. They have taken exotic vacations on an annual basis. They haven’t packed a lunch for themselves since they were 16 years old. Eating out for lunch and dinner has been a staple of their existence for decades. That morning Starbucks coffee is a given. A new wardrobe of name brand stylish clothes for every season is a requirement because your neighbors and co-workers are constantly judging you. Nothing proves you’re a success like a Rolex watch, Canali suit, Versace boots, or Gucci handbag. The have it now generations got it then and have virtually nothing now because they acquired all of these things with debt.

Real cumulative household income is up 10% since 1980. Consumer debt outstanding has risen from $350 billion in 1980 to $3.267 trillion today. That is a 933% increase. We’ve had decades of faux prosperity aided and abetted by Wall Street shysters, corrupt politicians, mega-corporation mass merchandisers, and Madison Avenue maggots trained in the methods of Edward Bernays to convince willfully ignorant consumers to consume. And consume we did. Saving, not so much. You can blame the oligarchs, bankers, retailers, and politicians for the fact you didn’t save, but it rings hollow. No matter how much propaganda is spewed by the ruling class, we are still individuals with free will. The older generations had choices. Saving money requires only one thing – spending less than you make. Most Boomers and Xers chose to spend more than they made and financed the difference. When the average credit card balance is five times greater than the median retirement account balance, you’ve got a problem. The facts about our consumer empire of debt are unequivocal as can be seen in these statistics:

Average credit card debt: $15,593
Average mortgage debt: $153,184
Average student loan debt: $32,511

$11.62 trillion in total debt
$880.3 billion in credit card debt
$8.05 trillion in mortgages
$1.12 trillion in student loans

I don’t blame those in their 20’s and 30’s for not having retirement savings. Anyone who entered the workforce around the year 2000 has good reason to not trust the system or their elders. There have been two stock market collapses and every asset class is now extremely overvalued due to the criminal machinations of the Federal Reserve. There are far less good paying jobs. Real wages keep declining. They were convinced by their elders to load up on student loan debt, leaving them as debt serfs. The Wall Street/Federal Reserve scheme to boost home prices and repair their insolvent balance sheets has successfully kept young people from ever being able to afford a home. So you have young people unable to save, invest or spend. You have middle aged and older Americans with little or no savings, mountains of debt, low paying service jobs, and an inability to spend. The only people left with resources are the .1% who have captured the system, peddle the debt, and reap the rewards of consumption versus saving. They may be able to engineer a stock market rally to further enrich themselves, but they can not propel the real economy of 318 million people. Our consumer society is dying – asphyxiated by debt – shorter of breath and one day closer to death.

I’d love to offer some sage advice on how to fix this problem, but it’s too late. Too many people missed the starting gun. More than ten years got behind them. No one is going to come to the rescue of people who never saved for their future. The Federal government has already made $200 trillion of entitlement promises it can’t keep. State governments have made tens of trillions in pension promises they can’t keep. They can’t tax young people who don’t have jobs. Older generations who think the government is going to rescue them from their foolish shortsighted choices are badly mistaken. Their benefits are likely to be reduced because the unsustainable will not be sustained. The 45 to 64 year old cohort who chose not to save can run and run to try and catch up with the sun, but it’s too late. It’s sinking. Their plans have come to naught. They are destined for lives of quiet desperation. There is nothing more to say.

So you run and you run to catch up with the sun but it’s sinking
Racing around to come up behind you again.
The sun is the same in a relative way but you’re older,
Shorter of breath and one day closer to death.

Every year is getting shorter; never seem to find the time.
Plans that either come to naught or half a page of scribbled lines
Hanging on in quiet desperation is the English way
The time is gone, the song is over,
Thought I’d something more to say.

Pink Floyd – Time