Wednesday, November 17, 2021

Top 1% Gains More Wealth Than the Combined GDPs of Japan, Germany, UK, France, India and Italy...

Top 1% Gains More Wealth Than the Combined GDPs of Japan, Germany, UK, France, India and Italy, Bottom 50%--You Get Nothing

By Charles Hugh Smith - November 17, 2021 (full article here)

Given that political power in America is a pay-to-play auction in which the highest bidder wins, how this incomprehensibly lopsided ownership of wealth plays out is an open question.

Wealth inequality easily falls into an abstraction unless we contextualize it in meaningful ways. I've annotated two St. Louis Federal Reserve (FRED) charts--the net worth of America's top 1% and the net worth of America's bottom 50% of households, roughly 66 million households--to show their net worth and their share of all household net worth, and put this in the context of inflation and GDP (gross domestic product) of the U.S. and other nations.




These charts may look complicated but the idea is actually pretty simple: I've noted how each group (the top 1% and the bottom 50%) did at the top and bottom of each bubble: the dot-com bubble in 2000, the stock/housing bubble that topped in 2007, and the current bubble, noting the pre-pandemic data at the end of 2019 and the most recent totals (2nd quarter 2021).

Next, I pose a simple question: if the net worth of each group had tracked the growth of America's GDP (i.e. its real economy), where would its net worth be now? All else being equal, the assumption that net worth would rise more or less in lockstep with the expansion of the entire

economy makes sense.

I note both the dollar amount of each group's net worth and their share of total household wealth to track their slice of wealth relative to the entire pie of wealth and to each other's slice. In other words, as the net worth pie expands, does each group expand its share of the pie or not?

What we find is a stunning asymmetry: if the top 1%'s net worth has risen along with GDP since 2000, it would now be about $21 trillion. Instead, it's now over $43 trillion, a $22 trillion gain above where it would be had it tracked GDP growth. 

 ..read full article here

 

Monday, November 15, 2021

DO NOT MISTAKE DEBT FOR WEALTH, CONSUMERS WILL SWIPE CREDIT CARDS FOR THE HOLIDAYS


 DO NOT MISTAKE DEBT FOR WEALTH, CONSUMERS WILL SWIPE CREDIT CARDS FOR THE HOLIDAYS

Back with another dose of economic reality: Americans have accumulated record savings during the shut-down, so why is debt rising? = Most of the savings is sitting with the top 10% of the population. Come back again for the latest economic / financial news, U.S. economy, global economy featuring several reports each week discussing: the stock market, money matters, financial news, housing market report, economic collapse, recession watch, unfolding financial crisis, preparing for the next economic decline, credit cards, banking, lending, interest rates, loans, mortgages, credit scores, and a lot more. This channel contains news and analysis that often includes 'one mans opinion'. The information conveyed should never be taken as investment advice. Everyone should do their own due diligence and research before making investment and money decisions

Will Amazon's 1.29 million Employees Still Have Their Jobs Or Be Replaced By Robotics?

 

Will Amazon's 1.29 million Employees Still Have Their Jobs Or Be Replaced By Robotics?
Written by: Amal Khairallah


Robots 'to replace up to 20 million factory jobs' by 2030 according to analysis firm Oxford Economics. In 2019 Amazon announced that in 2021, it would be opening a $40 million Robotics  hub in West of Boston, Massachusetts. This would  mean 200  job opportunities for those with a knack for tech and advanced manufacturing.  These teams would be responsible for designing, building, programming, shipping and of course maintenance of the robots all under one roof. These techs and engineers will ensure speedy delivery of  your packages to you, eliminating the need for paid human workers at their fulfillment centers inserting no-pay, no 401k robots to take their place.


If you  recall, in 2005 Amazon launched their corporation with a mere 12,000 employees, expanding to 56,000, in 2010 beefing up their workforce in 2016  by  65.79%  to a whopping 566,000 employers. And in 2020 when the 2020 health crisis was born, this was gloom and doom for 25,000 retailers who  permanently closed their doors, the majority located in malls, Coresight reports. 

     The list of retailers and the number of closed stores  included: GNC, up to 1200 stores,  Pier 1 Imports:936, Stage:738,  Men's Wearhouse:500, New York & Co:405,  GameStop:320 minimum, Signet Jewelers:300, Stein Mart: Up to 281, Bed Bath& Beyond:Up to 260, Victoria's Secret: 250, AT&T: 250, Chico's: Up to 250, Tuesday Morning:232, Gap:Up to 230, JC Penny:204, Family Video:200, Children's Place:200, Art Van Furniture:200, Macys:  The first of 125. For a more extensive list of closed Retailers in 2020, read this article : These Chains Are Permanently Closing the Most Stores in 2020


      This health crisis may have permanently shutdown many if not all retailers big and small, but Amazon was determined to prosper in these times of secular decline: expanding its warehouses, using this advantage as a massive buying opportunity while unveiling its robots and beef up their tech and manufacturing team.

  According to Forbes, In 2020, Amazon spent  42.7  Billion on Research and Development,  specifically: "technology and content."  This research 

Amazon's Research and Development included: expenses in content, technology, payroll, new and existing products and services: to design, development, maintenance of stores, to infrastructure costs for network equipment, servers, "data center related depreciation and amortization."

The Amazon's 10K Annual Report released this statement:  "We seek to invest efficiently in numerous areas of technology and content so we may continue to enhance the customer experience and improve our process efficiency through rapid technology developments, while operating at an ever-increasing scale",  the 


These article  headlines speak for themselves of Amazon's success.

Seatle Times reported:Amazon again posts record sales and profit amid rising pandemic costs. Faulkner of The Verge authored:Amazon Doubled Its Profit During A Pandemic


Amazon's net sales in the 4th quarter 2020, 

increased 44% to $125.6 billion in the fourth quarter, compared with $87.4 billion in fourth quarter 2019, while  the net income increased to 7.2 Billion in the same quarter compared to 3.3 Billion in 2019.


Will  Amazon Fulfillment  Robots  replace Human workers?

In 2012 Amazon Acquired Kiva Systems in Massachusetts for a whopping $775 Million

And did a name change to "Amazon Robotics". This Amazon hub which is located  in Boston specializes in Research and Development for Robots in fulfillment Centers opening up 200 employment  opportunities for those in the field of tech and manufacturing.

Redwood Logistic cites that Amazon had already deployed over 200,000 robots to more than 50 fulfillment centers.


Amazon's successful  domination of the retail sector comes interestingly through  securing tax credits and incentives, INC.com tells us. 


Amazon is not only a retail Giant but is taking its financial power  and spreading its riches  into the Real Estate Market thanks too "incentive and grant programs". The qualifications for these financial assistance programs is that Amazon have a long-term investment in job creation, "new economic opportunity, and incremental tax revenue," Amazon Spokesperson said CNBC reported.

In 2020 Amazon was set to build its Second Headquarters in Northern Virginia,  after being approved by the state and local government for a generous  $573 Million in "performance-based incentives,  not to mention a $23 million cash to be  paid over 15 years. Following that Real Estate Project Amazon had more  upcoming plans to build an "Operations Center of Excellence" in Nashville, Tennessee,  where they will collect $102 million in "performance-based  incentives   to invest there  CNBC said.


We will  soon find out  whether

Amazon's  "performance based incentives," and grants will be solely for  job creation and employment growth for humans or setting the stage to outsource humans in Amazon fulfillment Centers  displacing them with robots.


Moving onto the  351,000 Jobless claims that were filed  last week,  worse than initially  predicted a 16,000 increase from the week before, CNBC reported .


Amazon as we know it wants to be active everywhere.

"We Are The Package Delivering Safety Ensuring, NHS Supporting, Virus Research  Enabling,Vaccine Accelerating, Childcare Juggling, Still Climate Pledge,Supporting Change, Embracing Amazon Team Working For A Better Future," Amazon proudly says.


Thursday, October 14, 2021

America's Bottom 50% Have Nowhere To Go But Down

America's Bottom 50% Have Nowhere To Go But Down

by Charles Hugh Smith
Monday, October 11, 2021

 One might anticipate that the bottom 50%'s meager share of the nation's exploding wealth would have increased as smartly as the wealth of the billionaires, but alas, no.

America's economy has changed in ways few of the winners seem to notice, as they're too busy cheerleading their own brilliance and success. In the view of the winners, who just so happen to occupy all the seats at the media-punditry-Federal Reserve, etc. table--the rising tide of stock, bond and real estate bubbles are raising all boats. What's left unsaid is except for the 50% of boats with gaping holes below the waterline, i.e. stagnant wages and a fast-rising cost of living.

The truth the self-satisfied winners don't include in their self-congratulatory rah-rah is there's no place for the bottom 50% of American households to go but down. All the winnings flow to those who already owned assets back when they were affordable-- the already-wealthy--whose wealth has soared as assets have shot to the moon while the the burdens of inflation and debt service hit the bottom 50% the hardest. 

Meanwhile, the Federal Reserve is whining that inflation isn't high enough yet for their refined tastes. Boo-hoo, how sad for the Fed--inflation isn't yet high enough. Oh wait--didn't they each mint millions by front-running their own policies? No wonder...Read full article here

Read full article here

 

 

Sunday, September 19, 2021

High Home Prices are Driving People to the Edge!

By Amal Khairallah  - September 19, 2021

More people are renting because they can't afford to buy homes
. Many home-buyers are throwing the towel on the  housing market and renting instead. Back in 2019 One CBS News  Headline  read: The Average Family Can't Afford To Buy A Home In 71% Of The Country. The NAHSB (National Association Of Home Builders) provided us with more eye opening  hard to swallow numbers.  21.1 Million Americans can't afford to purchase a $100,000 Home, when the  income requirements to buy that  single family home was only $25,505. 


Now think in real and not Nominal terms where can anyone possibly finds a home for  $100,000  in 2021 ? How about trying a  third world country where you may still face  difficulty finding your dream home for $100,000 in a rough  neighborhood.
"There are so many aggressive shoppers out there and I'm not willing to compete with that, Kelly Robinson an Indianapolis resident, said. What about the  aggressive cash offers coming in from these mystery buyers where they are willing to pay any give price for a home, you name it they got it, no  second thoughts. Robinson, set her budget to purchasing a home at max $250,000, but quickly learned that these mystery home buyers were willing to pay  $100,000 over the asking price for a home in the suburb of Greenwood.That means more housing competition for the shrinking Middle-Class, who earn a modest  $77,000 per year. They either feel outbid with the housing price wars or let down for taking on a heavy burden for the overly priced residential home they purchased.

 Stagflation is here to stay where employee earnings are not catching up fast enough to correct hot inflation rates to giving the average American a human living wage. INC.com Headlined an article :  In 75 Percent of America the Average Worker Can't Afford the Median Home. As I write this article, prices are changing at a rapid pace, sort of the way menu prices at restaurants fluctuated every half an hour during the Depression.  We blame rising housing prices  on the lack of supply,  to keep up with demand, not the highest bidders private institutions  who take the steal for the  home with their top dollar while jacking up the housing prices for the average Joe.

 Zoning laws restrictions have also halted the building of  single family homes, another push-back creating both a shortage of housing supply and less to none affordability options for the blue collar employee let alone the average Joe. If you don't mind  cutting corners by utilizing slab foundations to build your home there are savings there for you. Do you know that  65% of Americans opted to do slab building in 2020 with the rise of building materials of their new single family homes. Slab foundations might be low cost and maintenance, but the downside to these inexpensive built homes remains the following, no space for water heaters, HVAC systems, also, the electrical or plumbing issues that may arise would require repairman to break through the slab to get to wires which can be a costly bill for you.

So, why is  Middle- Class America resorting to renting or purchasing  homes that are built with slab foundations? Back in 2018 the New York Post article titled Why the middle class can’t afford life in America anymore, they summed up the Middle-Classes strife and why they are quickly evaporating  away  even as they earn $75,000 annually not a human living wage. 

Middle-class life is now 30 percent more expensive than it was 20 years ago,” Quart writes, citing the costs of housing, education, health care and child care in particular. “In some cases the cost of daily life over the last 20 years has doubled.” Keep in mind these numbers are in the year 2018, indicating the percent increase in 2021 are most likely much higher. 

 Teachers are feeling the financial  squeeze taking on extra work in  addition to  grading papers,becoming Uber drivers by night  just  to pay for those un-affordable housing costs so they can  keep their homes. Teachers are killing themselves,” Barry says in the new book, “Squeezed: Why Our Families Can’t Afford America” (Ecco). That is were stagflation kicks in where salaries are lagging the catching up on real time living expenses that are  off the charts. Barry and his wife Nicole, both teachers, where her husband Barry took on an Uber Job in order to pay for their 1,500 square foot starter home costs  $680,000  in San Jose and this was in 2018. 


“I shouldn’t be having to drive Uber at eight o’clock at night on a weekday. I just shut down from the mental toll: grading papers between rides, thinking of what I could be doing instead of driving — like creating a curriculum.”



Sunday, April 25, 2021

REALTORS ARE STUNNED, HOUSING BUBBLE PERFECT STORM, HOME-OWNERSHIP DROPS, MORTGAGE LOANS BACK DEMAND

Real estate agents are stunned and describing the current housing market as “Shocking!” “Brutal!”. We look at the insane demand for homes, bidding wars, and the underlying reasons for the insanity. Also, why is home-ownership dropping again?