American Economics Thread

[Serb]

Stock buybacks, that’s what.

That's the company using its own profits to buy its own stock to propel its price per share, by decreasing the supply of available shares in the market, hence increasing the remaining major shareholders' stock value (it also creates further positive momentum as other market participants then also pile on to increase demand seeing this an as a 'good' signal, for some reason, in this strange capitalist society, it increases the share price and market capitalization overall following it too). That's one of the dumbest things in the US turbo-capitalism experiment failure. Imagine a company instead of re-investing their profits into long-term strategic research and capex, to create more innovation, jobs, and economic growth, just essentially throws their money away on some virtual instant casino and gets rewarded for it.

That's because they don't need to be productive to grow anymore, they just need to have the right connections in the government and industry. Executives get rewarded for that with stock options (shareholders see the short-term share price as the end all be all) and get chosen based on their social connections, like feudal lords, as opposed to creating something of value. They can afford to squander money like that on nothing essentially, just some shareholder greed, because they don't make profits from productivity, but leeching.

For example, this can't even theoretically happen in China because the government controls half of the economy right away, and those happen to be the most rent-seeking prone sectors, whereas they left the private ownership companies to deal with innovation and global markets where they have to innovate if they want to survive inside of more dynamic and emergent sectors only. China also controls the majority of the institutional funding available for companies overall, so of course they would not nudge the companies they are majority shareholders in to waste money. But, even when that is not the case, basically Chinese government has its people inside of every major corporation there to make sure that something inefficient like that doesn't happen, and if it happens, they can do Alibaba-style fracture.

 

[HighGround]

I am sure that the editors at Pravda believed much of what they wrote too.


The new refrigerator is statistically Made in China, replacing a statistically Made in USA old model. Even if made in the US, the IP is likely to be Chinese since many US appliance companies are owned by Chinese companies or simply rebrand Chinese IP models, such as GE appliances owned by Haier and almost every company using Midea as their microwave supplier.

The refrigerator consumes electricity in USA, not China.

Funny thing - if you add the entire US manufacturing sector to China, US GDP is still bigger than China's. Throw in Japan's, and its still bigger.

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That means that even if China competes in literally every single high value industry in the world, it will still have a smaller nominal GDP than the US. And why is that? Because the US can basically create GDP out of thin air from printing USD.

GDP isn't a measurement of who has the most manufacturing.

As long as US can force others to trade USD numbers for physical objects and labor, then China can't catch US in nominal GDP no matter what. It doesn't matter if China controls literally every single high tech product market in the world. EUV lithography doesn't matter, real estate reform doesn't matter, none of that shit matters for overtaking US nominal GDP as long as the USD has purchasing power.

United States became the largest economy by GDP long before the Pound Sterling lost its reserve status.

that is indeed the case, but this is the problem:

if you can force a large portion of the world to use USD, those you can't force directly will still need USD to trade with them, effectively also forcing them to use USD. You have to create an entire alternative economic system, and have the means to defend its members.

You just have to diversify trade... which is effectively what's happening.

 

[FairAndUnbiased]

The refrigerator consumes electricity in USA, not China.



GDP isn't a measurement of who has the most manufacturing.



United States became the largest economy by GDP long before the Pound Sterling lost its reserve status.



You just have to diversify trade... which is effectively what's happening.

The US became largest by GDP when GDP mostly measured manufacturing.

Here is the fundamental problem:

US GDP is mostly services. Services are generally difficult to trade and can be scaled indefinitely. Yet the USD economic activity generated by the service sector can be used to buy physical objects through forcing the world to use the USD, either directly (forcing countries to accept USD) or indirectly (controlled countries demanding only USD for a key product like oil).

The end result is that the US generates USD and buys physical products. This is only sustainable as long as people trade physical products for USD numbers that, due to sanctions and inflation, are increasingly looking like they're hard to exchange for something else.

Such a deal, therefore, is only sustainable with coercion. Coercion only works if there is no question of will and capability to coerce. But the will and capability to coerce is now being questioned. The reason is that manufacturing physical products can also result in manufacturing weapons to resist coercion. Energy consumption is a measure of manufacturing.

 

[Sinnavuuty]

American Dream!!!

Part 9:

Small businesses have been shedding workers for the last few months...

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ADP data shows small businesses with 1-49 workers have been reducing workers for four months. Those with 20-49 workers have shed workers for 7 straight months.

And more workers are being laid off with each passing day. Here's just one recent example...

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Nearly 40% of Michelin's workforce reportedly took the company up on voluntary severity offers following news of impending layoffs.

Sources familiar with the situation told The Gazette that the company was planning to downsize only 80 positions — or about 21.6% of its workforce. Instead, about 38% of the workforce decided to accept the voluntary severity.

According to the summary of benefits provided to The Gazette, Michelin plans on “reducing production by 50% transitioning to a 5-day working schedule.”

CNBC is reporting that existing home sales dropped once again during the month of August...

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Sales of previously owned homes fell 2.5% in August from July, to a seasonally adjusted annualized rate of 3.86 million units, according to the National Association of Realtors.

That is slightly lower than what analysts expected. Sales were 4.2% lower than August 2023. It marks three straight months of sales below the 4 million mark, annualized.

A curious situation. A gang of migrants from Venezuela known as Tren de Aragua is now taking over territory that used to belong to local gangs, and the members of these local gangs are furious that the migrants are getting much more in government handouts than they are...

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“There’s been a lot going on with (the migrant gangs) that nobody’s even hearing about,” Zacc Massie, 27, a street leader who first went to prison in 2015 and just recently got out.

“They’re moving in our own territory and robbing people but they don’t get arrested like we do. I actually talked to one on the translator app. He told me all the things he got going on; how they helped him get a car, an apartment, (EBT) card, all this stuff. They giving them thousands, we get maybe $400 a month. And they don’t even have Social Security numbers!”

It is being reported that US consumer confidence has fallen by the most in over three years...

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Consumers' view on the economy tumbled in September, falling by the largest level in more than three years as fears grew about jobs and business conditions, the Conference Board reported Tuesday.

The board's consumer confidence index slid to 98.7, down from 105.6 in August, the biggest one-month decline since August 2021. The Dow Jones consensus forecast was for a reading of 104. By contrast, the index had a reading of 132.6 in February 2020 , a month before the Covid pandemic hit.

Each of the five components the organization samples fared worse on the month, with the biggest fall coming among those aged 35-54 and earning less than $50,000.

And banks continue to permanently close more branches at a frightening rate...

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US banks have closed more than 50 branches in just two weeks, as the march towards online banking continues to decimate local services.

Wells Fargo, Chase, and Fulton were among the banks that closed locations between August 19 and September 7. Bank of America and Chase gave notice to close the most locations, notifying the regulator that they will close a further twelve of their branches each.

The last full-size Kmart store in the continental United States is about to close for good...

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The last full-size Kmart store in the continental United States is set to close in October, leaving only one downsized location remaining, reports say.

The department store chain, which once operated around 2,300 locations in the early 1990s, will shutter the full-size store in Bridgehampton, New York, on Oct. 20, Newsday is reporting, citing an employee there.

That means a smaller Kmart store in Miami will become the last one remaining in the U.S. Kmart, which is now owned by Transformco, also has three stores in the U.S. Virgin Islands.

The number of Americans filing first unemployment claims has reached the highest level in more than a year...

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The number of people filing for unemployment for the first time was at its highest levels in more than a year, partly due to storm damage and labor stoppages.

Initial jobless claims for the week ending Oct. 5 came in at 258,000, up 33,000 from last week's level of 225,000, and the highest since it reached the same level in August 2023, data from the Labor Department shows.

According to Primerica’s latest Financial Security Monitor report, the percentage of middle-income households who “rate their personal financial situation negatively” has reached the highest level on record...

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Primerica’s latest Financial Security Monitor report for the third quarter found 55% of middle-income households now rate their personal financial situation negatively, a 6-point jump from the previous survey.

“For the first time in a year, a majority of middle-income households are feeling negative about their personal finances,” said Glenn Williams, CEO of Primerica. “In fact, this latest report represents the highest negative rating we’ve seen since we began fielding the survey exactly four years ago.”

 

[Sinnavuuty]

American Dream!!!

Part 10:

Thanks to the never-ending cost-of-living crisis, it now costs $4.4 million to live “the American Dream” over the course of a lifetime…

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You can live the American Dream, but it will cost you.

The lifetime tab for such aspirations as owning a home, driving new cars, raising kids and taking annual vacations comes to a cool $4.4 million, according to Investopedia, the financial media site.

That’s more than the average American earns in a lifetime.

The company that makes more French fries than any other in North America is cutting production and laying off workers amid a dramatic slowdown in consumer demand...

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Lamb Weston, the largest producer of French fries in North America and a major supplier to fast-food chains, restaurants and grocery stores, is closing a production plant in Washington state. The company announced last week that it would lay off nearly 400 employees, or 4% of its workforce, and temporarily cut production lines in response to slowing customer demand.

There was a time when Boeing was flying high, but now it has decided to lay off approximately 10% of its entire workforce…

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/index.html

The CEO of Boeing told employees late Friday that the company plans to cut 10% of its total staff “over the coming months.”

“Our business is in a difficult position, and it is difficult to overcome the challenges we face together,” said Kelly Ortberg, who started at CEO of the troubled aircraft maker two months ago and has been dealing with a strike by 33,000 hourly workers for half his time on the job.

The banking sector continues to struggle deeply. So far this year, banks in the United States have permanently closed more than 700 local branches...

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US banks closed more than 700 branches in the first nine months of the year, forcing thousands to travel further to access vital services.

Bank of America closed the most locations of any bank, shuttering 132 between January and September.

U.S. Bank followed swiftly behind, having closed 101 of its own branches.

After 75 years, True Value has been forced to file for bankruptcy and will “sell substantially all of its operations to a rival”...

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True Value, a 75-year old hardware store brand, has filed for bankruptcy and is selling substantially all of its operations to a rival, the company announced Monday.

In a press release, True Value said it will continue day-to-day operations of selling hardware and other homeware tools to its 4,500 independently operated locations during the Chapter 11 process, which includes a $153 million stalking horse bid from rival company Do it Best .

Hundreds of 7-Eleven stores closing their doors...

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Several hundred “underperforming” 7-Eleven locations across North America is closing, the convenience store announced.

Seven & I Holdings, the chain's Japan-based parent company, revealed in an earnings report Thursday that 444 locations of 7-Eleven are shutting down because of a variety of issues, including slowing sales, declining traffic, inflationary pressures and a decrease in cigarettes purchases.

Home Depot apparently believes tough times are ahead, because they are shedding millions of square feet of warehouse space...

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Home Depot is hastily exiting warehouse space, to the tune of 3.2 million square feet in a month, according to Bisnow.

Since late August, Home Depot has put up nearly 4 million square feet of warehouse space for sublease, including a 1.3M SF Phoenix warehouse and a 1.1M SF distribution center in the Inland Empire, according to CoStar Analytics.

Things are so bad that even Disney is laying off employees...

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According to sources cited by Deadline, Disney is pushing ahead with new layoffs as part of a broader “cost-saving initiative.” About 300 employees across Disney’s corporate divisions will be impacted this week.

The layoffs of 300 employees began on Tuesday and will continue until the end of the week. They are all US-based employees who work across the company’s corporate operations, including legal, HR, finance, and communications.

 

[Sinnavuuty]

American Dream!!!

Part 11:

A wave of articles about the American economy has emerged in recent weeks.

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What can stop the American economy now?

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The American economy has left other rich countries in the dust

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America’s economy is bigger and better than ever

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U.S. Economy Again Leads the World, IMF Says

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IMF lifts US growth forecast but marks down China

The US economy is booming and so is the debt.

500 billion more US debt in 2 weeks!

Let's go to the real world (or economy):
A recent poll found that 79% of Americans believe the U.S. is on the wrong track right now.

Traditionally, the performance of the home improvement sector has been a very important economic indicator. And right now the construction materials sector is really struggling. For example, True Value has been performing so poorly that it was eventually forced to file for bankruptcy…

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True Value, a 75-year old hardware store brand, has filed for bankruptcy and is selling substantially all of its operations to a rival, the company announced Monday.

In a press release, True Value said it will continue day-to-day operations of selling hardware and other homeware tools to its 4,500 independently operated locations during the Chapter 11 process, which includes a $153 million stalking horse bid from rival company Do it Best.

Meanwhile, Home Depot says sales in 2024 will be down significantly from 2023…

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The home improvement retailer said it now expects full-year comparable sales to decline by 3% to 4% compared with the prior fiscal year. It had previously expected comparable sales, a metric that takes out the impact of store openings and closures and other one-time factors, to decline about 1%.

Another giant in the home improvement industry, PPG, has decided it’s time for mass layoffs…

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PPG — a global manufacturer of paints, coatings, and specialty materials — is laying off nearly 2,000 workers as it trims operation costs and sells off a chunk of its architectural business.

The cuts will impact about 1,800 positions, primarily in the U.S. and Europe. PPG didn’t disclose when the layoffs would occur.

Meanwhile, pharmacies continue to close across the country at a frightening rate. In fact, Walgreens just announced that it will permanently close 1,200 stores...

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Walgreens said on Tuesday it would shut 1,200 stores over the next three years as new CEO Tim Wentworth plots a turnaround at the struggling pharmacy chain operator hit by sluggish consumer spending and low drug reimbursement rates.

The restaurant industry is also being hit hard in this tough economic environment. Last week, it was announced that TGI Fridays was closing stores nationwide...

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Your ability to enjoy a plate of loaded potato skins and $5 happy hour drinks is slowly dwindling, as TGI Fridays has closed 12 U.S. locations in the past month and shuttered 35 restaurants across the pond.

According to the company’s location section on its website, multiple TGI Fridays locations in the Northeast closed last week, including in Clifton Park, Middletown and Poughkeepsie, New York; Allentown, Pennsylvania; Enfield, Connecticut; and Leesburg, Virginia.

Additional closures from earlier this month took place in the Southeast and Midwest regions, in states like North Carolina, South Carolina, Wisconsin, Michigan and Indiana, as well as two locations in Minnesota.

 

[Sinnavuuty]

American Dream!!!

Part 12:
Denny's has decided to close 150 stores...

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Denny’s is closing 150 restaurants over the next year, and the 71-year-old diner chain is mulling a major change to its 24/7 operating hours.

Fifty locations are set to close by the end of 2024, while the remaining 100 will shutter in 2025, Denny’s announced in an earnings call Tuesday. That amounts to a tenth of its restaurants, leaving 1,375 locations once completed. A specific list of closing restaurants weren’t immediately announced.

Speaking of closures, another major retailer has announced it will close all of its stores…

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Buybuy Baby is shuttering all of its stores roughly a year after new owners tried to revive the brand.

The company announced on its website that it is transitioning to an online-only model after recognizing the need for a “a strategic reset.”

“With this shift, we’ve come to the difficult decision of closing our physical stores by the end of this year,” the company wrote. “We understand this may be disappointing news, and we want all our customers to know this wasn’t a choice we took lightly.”

Even churches are feeling the pain of the "booming" economy. According to a recent study conducted by Lifeway Research, giving is down from coast to coast…

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A majority of Protestant pastors are blaming a poor economy for their struggling bottom lines after experiencing double-digit declines to zero improvement in financial offerings from churchgoers over the last year, data from a new study released by Lifeway Research show — but the sentiment is divided along political lines.

“National trends of a favorable stock market along with unfavorable inflation and interest can influence a local congregation’s finances, but so do more local factors that contribute to economic problems or prosperity in the church’s community,” Scott McConnell, executive director of Lifeway Research, said in a statement on the study. “In general, pastors have turned a little more negative in describing economic forces impacting their church this year.”

All of this news shows that most consumers don’t have a lot of disposable income to spend right now. Or as Gerald Storch put it during a recent interview with Maria Bartiromo, “consumers are running out of money”…

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US corporate media outlets continue to push propaganda that the economy thrives ahead of the presidential elections, cheerleading the most recent retail sales print. However, most Americans know MSM is full of ‘malarkey’ because inflation and interest rates force many to spend more but receive less. Many folks have depleted their personal savings and racked up insurmountable credit card debt just to keep up with rising food, energy, insurance, and shelter costs. This toxic mix of inflation, sparked by failed Bidenomics, has hit low- and middle-income families the hardest, potentially leading to a breaking point this upcoming holiday shopping season.

“It’s very clear that consumers are running out of money. They’re increasingly stressed by inflation and the exhaustion of their pandemic-era savings. When you take a look over the last several years, what you see month after month, everyone talks about, the consumer’s still spending. They might be, but they’re spending less than the growth of inflation,” Storch Advisors CEO Gerald Storch told Fox Bussiness’ Maria Bartiromo on Thursday during an interview.

Overall, the home sales industry is in its “worst year since 1995” for existing home sales…

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Sales of existing homes in the U.S. are on track for the worst year since 1995—for the second year in a row.

Persistently high home prices and elevated mortgage rates are keeping potential home buyers on the sidelines. Sales of previously owned homes in the first nine months of the year were lower than the same period last year, the National Association of Realtors said Wednesday.

Existing-home sales in September fell 1% from the prior month to a seasonally adjusted annual rate of 3.84 million, NAR said, the lowest monthly rate since October 2010.

And it looks like this month could be even worse than last month, because the number of mortgage applications submitted is dropping dramatically…

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Mortgage applications decreased 17% from one week earlier as mortgage rates surged, according to data from the Mortgage Bankers Association’s (MBA) weekly application survey for the week ending October 11, 2024.

The Market Composite Index, a measure of mortgage loan application volume, decreased 17% on both a seasonally adjusted and an unadjusted basis from one week earlier.

If you can believe it, a Manhattan office building that sold for $332 million in 2006 actually sold for $8.5 million…

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The sale of a nearly 1 million-square-foot Manhattan office building listed on the online auction site Ten-X was completed Tuesday for only $8.5 million.

That’s 97 percent less than the $332.5 million that the seller, Swiss bank UBS, paid for the Midtown property in 2006. The loss on the building at 135 West 50th Street was minimally offset by a $6 million gain UBS realized by buying and selling the ground beneath it in the interim.

UBS and its brokers at JLL listed the 920,000-square-foot building for sale on the online platform. The two-day auction kicked off July 30 with a starting bid of $7.5 million. The sale ended the next day after Ten-X lowered the reserve price. The winning bidder, whose identity has yet to hit property records, closed about 70 days later.

The banking industry is also headed for big trouble. In fact, the government closed another bank on Friday…

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Friday, The First National Bank of Lindsay was closed by the Office of the Comptroller of the Currency (OCC), with the Federal Deposit Insurance Corporation (FDIC) appointed as receiver. The OCC acted after identifying false and deceptive bank records and other information suggesting fraud that revealed depletion of the bank’s capital. The OCC also found that the bank was in an unsafe or unsound condition to transact business and that the bank’s assets were less than its obligations to its creditors and others.

The OCC is referring the matter to the United States Department of Justice, which has a wide variety of tools to hold individuals accountable for criminal acts and focuses on victims in all of its matters.

A staggering percentage of credit cardholders in the U.S. have already maxed out at least one credit card...

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Nearly 2 in 5 cardholders (37%) have maxed out a credit card or come close since the Fed started raising interest rates, Bankrate’s Credit Utilization Survey found. That includes 20% who have maxed out a credit card and 17% who have come close to maxing one out.

 

[Sinnavuuty]

Global Superpowers ranking for 2024.

Source:

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The Great Powers Index: 2024 How the Leading 24 Countries Are Doing and Their Prospects for the Next 10 Years - RAY DALIO

 

[FairAndUnbiased]

Global Superpowers ranking for 2024.

Source:

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The Great Powers Index: 2024 How the Leading 24 Countries Are Doing and Their Prospects for the Next 10 Years - RAY DALIO

What is per capita military strength?

 

[SlothmanAllen]

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has achieved early production yields at its first plant in Arizona that surpass similar factories back home, a significant breakthrough for a US expansion project initially dogged by delays and worker strife.

The accomplishment is a sign of progress for Washington’s efforts to revitalize American semiconductor manufacturing. TSMC, the main chip manufacturing partner for

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and

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, is in line to win $6.6 billion in government grants and $5 billion in loans — plus

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— to build three fabrication facilities, or fabs, in Arizona. The award, like almost all others from the 2022

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, isn’t yet finalized.

TSMC could now be keen to expand its US presence further, depending in part on the possibility of more government backing, Cassidy added, citing early conversations in Washington about a second Chips Act. There is room for at least six total fabs at the Phoenix complex.

I don't want people to get gaslit by the title, but it seems like an interesting development for Taiwan's expansion into the United States. Obviously this is early days, and we don't know how things will pan out between TSMC and Intel's attempts at revival going forward.