Is America headed for an economic collapse?
If so, presidential candidates are remaining eerily quiet about what’s being described as “a huge disaster waiting to happen.”
The U.S. stock market is on the verge of a massive collapse, warned David Stockman, OMB director during the Reagan administration, on CNBC’s “Futures Now” program. He said the recent price action has him even more convinced than ever that the bottom is about to fall out.
Stockman believes the excessive monetary policy from central banks around the world has created a “debt supernova,” and all the signs point to “the end of the central bank enabled bubble,” which could cause a worldwide recession.
In fact, he said, there’s no way to roll back the artificially inflated bubbles the Federal Reserve has caused.
“I think what we are seeing is the beginning evidence that the central bank-driven credit economy is over, and we are in a new era,” he said. “It’s a huge disaster waiting to happen.”
Now that the presidential hopefuls are duking it out in debates, it’s hoped whoever ends up occupying the Oval Office in 2016 will be equipped to handle the seemingly insurmountable challenge of an economic crisis.
For years, Obama has attempted to convince Americans an economic recovery is just around the corner. But more and more, the stark numbers are not supporting this administration’s assurances. Both domestic and international affairs are contributing to increasing concerns that something “big” is imminent.
Financial Times reports the media sector has been “in freefall” since Walt Disney revised its growth outlook for its ESPN sports channel this week. Viacom shares fell by more than 14 percent. Comedy Central, MTV and Paramount Pictures hit earnings forecasts, but missed estimates on revenues. 21st Century Fox closed down more than 6 percent.
Overall, the S&P 500 Media Index fell more than 2 percent on Friday, down 9 percent from its July high. Disney’s disappointing earnings Tuesday led to the worst two-day drop in the S&P 500 Media Index since 2008.
“A bull market without Apple Inc. is one thing,” notes Bloomberg. “Removing cable television and movie stocks from the 6 1/2-year rally in U.S. equities is a little harder to imagine.”
These losses are impacting the paychecks of three of the top-paid media CEOs. Les Moonves (CBS Corp.), Bob Iger (Walt Disney) and David Zaslav (Discovery Communications) saw their jumbo pay packages cut by tens of millions of dollars in the two-day stock rout.
Media stocks were the pillar of the bull market, out-performing automakers, retail stores and banks. However in two days, the decline of just five stocks (Disney, Time Warner, Fox, CBS, Comcast) wiped out almost $50 billion of value.
CNS News reported on Friday there was a record 93,770,000 Americans not in the American labor force last month, and the labor force participation rate remained at 62.6 percent, exactly where it was in June – a 38-year low.
Additionally, 6,325,000 million people were employed part time for economic reasons (involuntary part-time workers) in July. These are individuals who would prefer full-time employment but are working part-time because their hours had been cut back or because they were unable to find a full-time job. A record 56,209,000 women were not in the labor force, and the Washington Examiner reports, “All of the employment gains among women since the recession hit in December 2007 have been taken by foreigners, even at a time when the numbers of U.S.-born women surged more than 600,000, according to new federal statistics.”
While the unemployment rate is still “officially” 5.3 percent, Shadowstats reports the figure is closer to 24 percent.
These reports are just a hint of the true shakiness of the stock market in particular and the economy in general. The Dow Jones industrial average was on track for its seventh straight day of decline, its longest losing streak since 2011.
The election issue most important to voters – by far, according to numerous surveys – is the economy and jobs.
According to a July 23-28 Quinnipiac University poll, economy and jobs ranked as the top issue this election at 37 percent, followed by health care (13 percent), terrorism (12 percent), foreign policy (9 percent), immigration (9 percent), climate change (6 percent), federal deficit (6 percent) and taxes (3 percent).
But most politicians have remained eerily silent on the threats facing the American economy and, more significantly, what might be done to address them. Most hit the standard talking points about education and jobs creation, but collectively appeared at a loss when it comes to plans to boost the economy.
Back in June, the Washington Examiner reported 72 percent of voters feared an economic crash, the “highest ever” expressing concern. Current news is only likely to exacerbate those numbers.
“Republicans need to get into the game on better turf and that means talking in specifics about how we will bring the economy back and help create the jobs that go with real recovery,” pollster David Winston said at the time.
Some candidates offer a few crumbs. In late July, Texas Gov. Rick Perry warned the “next crash is on the horizon.” Perry has a strong economic track record but a weak standing as a GOP presidential candidate.
As long ago as 2011, Donald Trump warned about trouble looms for the U.S. economy: “If oil prices are allowed to inflate and keep inflating, if the dollar keeps going down in value, I think there’s a very distinct possibility that things could get worse.”
However no mainstream political figure has offered concrete recommendations on what to do if the American economy crashes.