Another Wild Week in the Economy
David and I pride ourselves on being optimistic, happy homos. We’re “glass half full” people or, more aptly, “yea, room for vodka” people. That said, this was a no good, horrible, shitty week.
Russia is taking over the world. Bond has gone dirty. Joaquin is clobbering the East Coast like ‘Today’ is clobbering ‘GMA’. The stock market is down 5 percent for the year and the economy is, “unexpectedly”, in the toilet.
We say “unexpectedly” facetiously because revered economists are surprised by this week’s economic data and we’re surprised it took the major economic data to show them the economy is weak. Apparently, revered economists don’t pay attention to fundamental data.
Doghouse Bombing Marijuana
On Monday, the Department of Commerce released its August Personal Incomes and Outlays Index. Household spending prematurely rose 0.4 percent in August, topping estimates for a 0.3 percent gain and inline with a revised July increase. Personal incomes rose by 0.3 percent in August, shy of estimates for a 0.4 percent gain. As we’ll see, incomes dropped like marijuana on a doghouse in September.
Miley Cyrus Nudity Torture
On Wednesday, the International Monetary Fund’s (IMF), Christine Lagarde, reduced both 2015 and 2016 global growth predications. Also, the annual shutdown of the government was averted on Wednesday because both parties agreed to increase the debt ceiling.
Follow in the government’s footsteps. Max out your credit cards and, rather than reduce expenses to pay them off, simply increase your maximum balance. There! Crisis averted. Like people-Yelp, this perpetual increase won’t end well. As the bane of anti-capitalists said, “The problem with socialism is you eventually run out of other people’s money.”
While many will argue the U.S. is not a socialist country, we’re not capitalists. We’re corporatists, which is why The Fed will fight the rise of interests rates for as long Miley Cyrus tortures us with her nudity.
Get Paid to Do Nothing
On Thursday, when Russia expanded its boarders, the Institute of Supply Management (ISM) released its September ISM Manufacturing Index. It showed that factory activity fell from 51.1 in August to 50.2 in September. A score of 50 means nothing’s happening, so factories are practically doing nothing. More concerning was the announced 58,877 job cuts tracked by Challenger, Gray and Christmas. Job cuts are up 93.2 percent year-over-year and total 493,431 year-to-date.
On Friday, the Department of Labor released it’s September Employment Situation Index. New jobs came in well below expectations, magnified by the fact that the two previous months were significantly revised down. While the headline unemployment number is 5.1 percent with the conveniently revised mathematical equation, real unemployment remains stuck in double-digits at 10 percent. Labor participation, also, fell to a 40-year low.
The Red Pill or the Blue Pill
So, um, what’s this mean? Like seriously, cut spending, increase savings and pay off debt. Being indebted to another entity makes our economic situation more precarious. Stock up on cash. Cash balances out stock market volatility and prepares you for Armageddon.
While I’m admittedly being dramatical, our prescription is serious. Finally, increase income streams. Traditional jobs are becoming less and less reliable. Prepare yourself by increasing income sources. The average millionaire has at least seven streams of income. Be a millionaire, if only in your mind.
That’s this week’s Money Conscious Mash Up. Come back every Sunday for our not-so-funny take on a not-so-interesting topic. If that doesn’t sell you, nothing will.