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Weathering the Economic Collapse: Can You Reduce Any of These 10 Fixed Expenses? |

Weathering the Economic Collapse: Can You Reduce Any of These 10 Fixed Expenses? |.

The bells are tolling on the American economy.  Every day, another expert is warning us of the imminent demise of our way of life. If you’re paying attention, you can see it coming, like some huge storm system, bearing down on you. You don’t stand there and wait for it to hit you.  You don’t have to be a passive victim of the economy. It’s time to sit down and take a long hard look at where your money is going. Lots of financial experts give tips about reducing your discretionary spending but what about those fixed expenses? You can free up some large sums of money by reducing your monthly output.

Most of us have a set of fixed expenses.  Some of these are vital, some are not, and what is vital for me might not be important for you.

What fixed payments come out of your bank account every month?

  • Mortgage/Rent
  • Home Insurance
  • Car payment
  • Car insurance
  • Cable/Satellite/Internet
  • Gym membership/Exercise classes
  • Loan payments
  • Cell phone bill/Home phone bill
  • Child support/alimony payments
  • Tuition
  • Extracurricular activities for the kids

Some of these, you can’t do anything about.  However, some of these payments can be reduced or gotten rid of altogether.

The real question is, if your financial circumstances changed dramatically, could you afford your current lifestyle? If the answer to that question is  ”No” then you need to figure out how to reduce your regular monthly output.

Keep in mind that what works for my family may not work for your family.  It will depend whether your spouse is on board, how dire your situation is, and with how much importance you weigh your frugality makeover what you opt to change. Some of these measures would be drastic, and others would only cause a minor change in your lifestyle. Let’s take a look at each of these expenses individually and ask some important questions.

 

  1. Mortgage/Rent This is often the biggest expenditure that many families make each month.  When you buy a house, realtors will nearly always show you homes at the top of your price range. When you are looking for rentals, most people search at the high end of their budgets.  That’s fine in good times, but if things go awry, you’re stuck at that same level because banks and landlords don’t care that you lost your job or took a financial hit.  Sometimes moving to a less expensive place is your only option if you wish to make big financial changes. This can free up as much as a thousand dollars a month for some families. Moving is expensive, though, and you have to figure that in to the potential savings. If you are only going to save, let’s say, $50 a month by moving, it will be more than a year before you recoup your expenses, and that is going to do little to change your overall outlook. If you are moving to drop your expenses, it needs to be a substantial monthly savings to make it worthwhile. If you own your home, consider refinancing at a better interest rate.
  2. Home/Car Insurance You have to have insurance so this is not an expense that you can cut out of your budget altogether. However, you can shop around for better prices. You can look into changing your coverage. Do you have duplications in coverage? For example, my insurance company offers roadside assistance for about $40 per year, but my vehicle came with 3 years of free roadside assistance. You can drop your rate further by increasing your deductible, but if you do that, be sure you have access to the deductible amount should an accident occur.  If you have several cars in your family, you might not need to have rental car coverage on your policy.
  3. Car Payment As with a home payment, most people push the envelope and get the nicest vehicle that they can afford. What you drive is a status symbol in North America, and practicality doesn’t always come into the decisions.  The best option is to get something that you can afford to pay for in full so that you don’t have a payment. Consider trading in the vehicle you are making payments on for one that you can pay for outright or make payments on for a short period of time. But if you made the decision in less frugal days, you might be what car dealers call “upside down” in your financing. That means that you owe more on your vehicle than it is worth. If that is the case, then you will basically have to pay someone to take it off your hands and that is not always worth your while. If you find yourself in that situation, the best thing you can do is use some of your freed up money to pay off your loan as quickly as possible. At least then, the bank gets less interest from you. If you have more than one vehicle, is it possible to become a one car family? This will drop your automotive maintenance costs, get rid of an insurance payment, and take away a monthly payment if both vehicles are being financed. If one of your vehicles is paid for, consider getting rid of the one that is being financed.
  4. Cable/Satellite/Internet This is an area in which cuts can almost always be made.  We don’t have cable or satellite, but we do have the best internet available.  In our home internet is vital for my job and also for my daughter’s school.  Since we have internet, if we have the urge to watch something we can stream it for free online.  For your entertainment needs consider something like Netflix. It’s a fraction of the price of a monthly cable or satellite bill and you can choose what you want to watch commercial free at any point in time, not just when it’s on network television.  You have the added bonus of avoiding those pesky commercials too.  Expect an outcry if you get rid of these services, but also know that your family will get used to it quickly.  Trust me, they’ll live.
  5. Gym membership/Exercise Classes Being healthy is a top priority if you want to live a frugal lifestyle, but that doesn’t mean you have to spend high monthly fees to do so.  You can kill two birds with one stone by coming up with some productive active things to do: chop wood, build, garden or farm.  If you live in a place where it’s reasonable to do so, walk instead of driving – you’ll get some exercise and save gas money and wear and tear on your vehicle.
  6. Loan Payments Look at paying off your debts as quickly as possible using the snowball method.  Instead of just making your regular monthly payment, take the smallest debt and pay it off as fast as you can while still making your minimum payment on other debts.  Once the smallest payment is paid off, take what you were paying on that and apply it to the next smallest debt, and on and on until you are beautifully debt-free! Then, once you have no debt, commit yourself to staying that way.
  7. Phone Bills Most people do not need both a home phone and a cell phone. One or the other will nearly always suffice.  I actually don’t have either one.  I use internet phone service which costs $2.99 per month for the odd telephone call I have to make and email for everything else. It takes some getting used to but you might find that you welcome the peace of people being unable to interrupt you just as you sit down to dinner. You can free up a lot of money each month by getting rid of the phone, but expect people to look at you strangely when they ask for your number and you say, “I don’t have one.”
  8. Child Support/Alimony Payments There really isn’t a lot you can do about this kind of monthly expense. These numbers are set by the courts and you will go to jail or have assets seized if you don’t make them. As a single mom, I can tell you that there were times when we depended on child support payments to buy our groceries, so the argument can be made that if you have children, it’s your responsibility to make these payments.
  9. Tuition If your child is in college or a private school, tuition payments are a fixed expense that you can’t really do much to reduce.  You can apply for scholarships, but aside from this, the price is the price. You don’t want your child to start off adult life in debt if you can help it, so if you can find a way to make these payments instead of using student loans, you are giving your son or daughter the biggest possible gift: financial freedom.
  10. Extracurricular Activities for the Kids This one really depends on your family. If your child is just killing time, then the extracurriculars may not be of high importance.  On the other hand, if they are a talented athlete or budding musician, you may find this is a very worthwhile expenditure.  Some families who homeschool look to extracurricular activities as a way for their kids to socialize with their peers, and that is also very important.  If the activity is not a serious pursuit, sometimes it can be replaced with lower cost activities through the local community center or YMCA.  Some children are really over-programmed, with an evening activity every day of the week and two on weekends. Kids need downtime and the freedom to just go outside, climb a tree, and look at the clouds floating by.

 

It’s far better to make these changes before you’re forced to do so by circumstances.  If you can reduce your fixed monthly expenditures, you’re less likely to default on things that are true necessities, like keeping a roof over your head and food in the cupboards.  I would prefer to control the cuts myself rather than have the decisions made for me by foreclosures or repossessions.

Despite what the government wants us to believe, the financial situation in this country is not getting better, and it isn’t going to improve for a very long time. The economic storm is bearing down on us, and the most important preparation you can make right now is to figure out how to weather it.

Have you made any dramatic changes to your fixed expenses? What advice can you give to people who are just beginning to make these changes? Please share your suggestions in the comments below.

About the author:

Please feel free to share any information from this site in part or in full, giving credit to the author and including a link to this website and the following bio.

Daisy Luther is a freelance writer and editor.  Her website, The Organic Prepper, offers information on healthy prepping, including premium nutritional choices, general wellness and non-tech solutions. You can follow Daisy on Facebook and Twitter, and you can email her at daisy@theorganicprepper.ca

If you enjoyed this article, please Vote for The Organic Prepper as a top prepping web site.

– See more at: http://www.theorganicprepper.ca/weathering-the-economic-collapse-can-you-reduce-any-of-these-10-fixed-expenses-03082014#sthash.JzYwQmVm.dpuf

Weathering the Economic Collapse: Can You Reduce Any of These 10 Fixed Expenses? |

Weathering the Economic Collapse: Can You Reduce Any of These 10 Fixed Expenses? |.

The bells are tolling on the American economy.  Every day, another expert is warning us of the imminent demise of our way of life. If you’re paying attention, you can see it coming, like some huge storm system, bearing down on you. You don’t stand there and wait for it to hit you.  You don’t have to be a passive victim of the economy. It’s time to sit down and take a long hard look at where your money is going. Lots of financial experts give tips about reducing your discretionary spending but what about those fixed expenses? You can free up some large sums of money by reducing your monthly output.

Most of us have a set of fixed expenses.  Some of these are vital, some are not, and what is vital for me might not be important for you.

What fixed payments come out of your bank account every month?

  • Mortgage/Rent
  • Home Insurance
  • Car payment
  • Car insurance
  • Cable/Satellite/Internet
  • Gym membership/Exercise classes
  • Loan payments
  • Cell phone bill/Home phone bill
  • Child support/alimony payments
  • Tuition
  • Extracurricular activities for the kids

Some of these, you can’t do anything about.  However, some of these payments can be reduced or gotten rid of altogether.

The real question is, if your financial circumstances changed dramatically, could you afford your current lifestyle? If the answer to that question is  ”No” then you need to figure out how to reduce your regular monthly output.

Keep in mind that what works for my family may not work for your family.  It will depend whether your spouse is on board, how dire your situation is, and with how much importance you weigh your frugality makeover what you opt to change. Some of these measures would be drastic, and others would only cause a minor change in your lifestyle. Let’s take a look at each of these expenses individually and ask some important questions.

 

  1. Mortgage/Rent This is often the biggest expenditure that many families make each month.  When you buy a house, realtors will nearly always show you homes at the top of your price range. When you are looking for rentals, most people search at the high end of their budgets.  That’s fine in good times, but if things go awry, you’re stuck at that same level because banks and landlords don’t care that you lost your job or took a financial hit.  Sometimes moving to a less expensive place is your only option if you wish to make big financial changes. This can free up as much as a thousand dollars a month for some families. Moving is expensive, though, and you have to figure that in to the potential savings. If you are only going to save, let’s say, $50 a month by moving, it will be more than a year before you recoup your expenses, and that is going to do little to change your overall outlook. If you are moving to drop your expenses, it needs to be a substantial monthly savings to make it worthwhile. If you own your home, consider refinancing at a better interest rate.
  2. Home/Car Insurance You have to have insurance so this is not an expense that you can cut out of your budget altogether. However, you can shop around for better prices. You can look into changing your coverage. Do you have duplications in coverage? For example, my insurance company offers roadside assistance for about $40 per year, but my vehicle came with 3 years of free roadside assistance. You can drop your rate further by increasing your deductible, but if you do that, be sure you have access to the deductible amount should an accident occur.  If you have several cars in your family, you might not need to have rental car coverage on your policy.
  3. Car Payment As with a home payment, most people push the envelope and get the nicest vehicle that they can afford. What you drive is a status symbol in North America, and practicality doesn’t always come into the decisions.  The best option is to get something that you can afford to pay for in full so that you don’t have a payment. Consider trading in the vehicle you are making payments on for one that you can pay for outright or make payments on for a short period of time. But if you made the decision in less frugal days, you might be what car dealers call “upside down” in your financing. That means that you owe more on your vehicle than it is worth. If that is the case, then you will basically have to pay someone to take it off your hands and that is not always worth your while. If you find yourself in that situation, the best thing you can do is use some of your freed up money to pay off your loan as quickly as possible. At least then, the bank gets less interest from you. If you have more than one vehicle, is it possible to become a one car family? This will drop your automotive maintenance costs, get rid of an insurance payment, and take away a monthly payment if both vehicles are being financed. If one of your vehicles is paid for, consider getting rid of the one that is being financed.
  4. Cable/Satellite/Internet This is an area in which cuts can almost always be made.  We don’t have cable or satellite, but we do have the best internet available.  In our home internet is vital for my job and also for my daughter’s school.  Since we have internet, if we have the urge to watch something we can stream it for free online.  For your entertainment needs consider something like Netflix. It’s a fraction of the price of a monthly cable or satellite bill and you can choose what you want to watch commercial free at any point in time, not just when it’s on network television.  You have the added bonus of avoiding those pesky commercials too.  Expect an outcry if you get rid of these services, but also know that your family will get used to it quickly.  Trust me, they’ll live.
  5. Gym membership/Exercise Classes Being healthy is a top priority if you want to live a frugal lifestyle, but that doesn’t mean you have to spend high monthly fees to do so.  You can kill two birds with one stone by coming up with some productive active things to do: chop wood, build, garden or farm.  If you live in a place where it’s reasonable to do so, walk instead of driving – you’ll get some exercise and save gas money and wear and tear on your vehicle.
  6. Loan Payments Look at paying off your debts as quickly as possible using the snowball method.  Instead of just making your regular monthly payment, take the smallest debt and pay it off as fast as you can while still making your minimum payment on other debts.  Once the smallest payment is paid off, take what you were paying on that and apply it to the next smallest debt, and on and on until you are beautifully debt-free! Then, once you have no debt, commit yourself to staying that way.
  7. Phone Bills Most people do not need both a home phone and a cell phone. One or the other will nearly always suffice.  I actually don’t have either one.  I use internet phone service which costs $2.99 per month for the odd telephone call I have to make and email for everything else. It takes some getting used to but you might find that you welcome the peace of people being unable to interrupt you just as you sit down to dinner. You can free up a lot of money each month by getting rid of the phone, but expect people to look at you strangely when they ask for your number and you say, “I don’t have one.”
  8. Child Support/Alimony Payments There really isn’t a lot you can do about this kind of monthly expense. These numbers are set by the courts and you will go to jail or have assets seized if you don’t make them. As a single mom, I can tell you that there were times when we depended on child support payments to buy our groceries, so the argument can be made that if you have children, it’s your responsibility to make these payments.
  9. Tuition If your child is in college or a private school, tuition payments are a fixed expense that you can’t really do much to reduce.  You can apply for scholarships, but aside from this, the price is the price. You don’t want your child to start off adult life in debt if you can help it, so if you can find a way to make these payments instead of using student loans, you are giving your son or daughter the biggest possible gift: financial freedom.
  10. Extracurricular Activities for the Kids This one really depends on your family. If your child is just killing time, then the extracurriculars may not be of high importance.  On the other hand, if they are a talented athlete or budding musician, you may find this is a very worthwhile expenditure.  Some families who homeschool look to extracurricular activities as a way for their kids to socialize with their peers, and that is also very important.  If the activity is not a serious pursuit, sometimes it can be replaced with lower cost activities through the local community center or YMCA.  Some children are really over-programmed, with an evening activity every day of the week and two on weekends. Kids need downtime and the freedom to just go outside, climb a tree, and look at the clouds floating by.

 

It’s far better to make these changes before you’re forced to do so by circumstances.  If you can reduce your fixed monthly expenditures, you’re less likely to default on things that are true necessities, like keeping a roof over your head and food in the cupboards.  I would prefer to control the cuts myself rather than have the decisions made for me by foreclosures or repossessions.

Despite what the government wants us to believe, the financial situation in this country is not getting better, and it isn’t going to improve for a very long time. The economic storm is bearing down on us, and the most important preparation you can make right now is to figure out how to weather it.

Have you made any dramatic changes to your fixed expenses? What advice can you give to people who are just beginning to make these changes? Please share your suggestions in the comments below.

About the author:

Please feel free to share any information from this site in part or in full, giving credit to the author and including a link to this website and the following bio.

Daisy Luther is a freelance writer and editor.  Her website, The Organic Prepper, offers information on healthy prepping, including premium nutritional choices, general wellness and non-tech solutions. You can follow Daisy on Facebook and Twitter, and you can email her at daisy@theorganicprepper.ca

If you enjoyed this article, please Vote for The Organic Prepper as a top prepping web site.

– See more at: http://www.theorganicprepper.ca/weathering-the-economic-collapse-can-you-reduce-any-of-these-10-fixed-expenses-03082014#sthash.JzYwQmVm.dpuf

Putin Targets America’s Achilles Heel: “He’s Going to Destroy the Stock Markets”

Putin Targets America’s Achilles Heel: “He’s Going to Destroy the Stock Markets”.

Mac Slavo
March 5th, 2014
SHTFplan.com

Putin-Target-Americas-Achilles-Heel

In 2012 an elite insider claimed that on or around March 4, 2014 the doomsday clock would ring, the effect of which would be a complete collapse of the U.S. economy. How former Vice Presidential adviser Grady Means came to this conclusion with a specific target date may forever remain clouded in secrecy. But given the state of current affairs around the world today, one can’t help but consider that maybe Grady Means was on to something. With the fight over political and resource control in the Ukraine heating up, is it possible the Means was referring to this very set of circumstances?

We know the U.S. economy is literally on the brink of a collapse. All we need now is a triggering mechanism.

Contrarian investor and commentator Greg Mannarino thinks it could be happening right now, and he explains his highly viable theory in the broadcast below.

In essence, Mannarino warns that Russia’s Vladimir Putin may be using the current geo-political climate to position his pieces on the grand chessboard with the end game being a total wipe out of domestic equity markets and the U.S. dollar itself .

Given the horrid economic fundamentals in the U.S., mounting and un-serviceable debt levels, and the fact that China is now moving lock-step with their Russian counterparts, could we be seeing the final stages of a coordinated strike on U.S. economic and financial interests?

A few more moves and it could be Checkmate:

Putin understands the Achilles heel is this hyperinflated stock market… this man is brilliant.

Since we realize all warfare is based on deception, this backing off of troops here is  a part of the play.

When he re-introduces those troops and makes his move here it’s going to crush the U.S. equity markets and take trillions of dollars out of this market and a lot of peoples’ pockets.

Vladimir Putin is not in any way going to back down to Barack Obama or any of the Western powers. He has no reason to do that. He understands where this going and what he needs to do to make this work here.


(Video via Steve Quayle / Watch at Youtube)

So this is the set up in my opinion.

He’s allowing cash to flow back into the world markets, more specifically into the U.S. equity market. He’s going to re-introduce his troops almost in a Blitzkrieg type fashion and he’s going to destroy the stock markets.

We also know this… Vladimir Putin has been betting against the U.S. dollar for years by acquiring gold, just like you should be doing.

… The debt of the United States is in the biggest bubble in the history of the world. He knows all this.

This relief rally here… I can’t imagine that it’s going to last because he’s going to re-introduce troops here. It’s going to destroy this relief rally and then some.

We’re going to get panic selling… I think it can happen pretty soon.

Vladimir Putin is pulling a huge bluff on everyone right now allowing equities on a global scale to rise, only to reverse this move and crush equity markets which will destroy the United States economy.

The wealth effect that the Fed has created… Vladimir Putin knows that it is nothing more than smoke and mirrors. And he’s going to take advantage of that.

Make no mistake. Vladimir Putin strives to make Russia a global super power. China wants the same. In order for that to happen the United States of America must be crushed, and that starts with destroying our economy. And if that means a temporary destruction of global equity markets then that’s what Russia and China will do. Unlike President Obama, who bases his decisions on political surveys and half baked short-term platitudes, these nations operate with stratagems spanning decades.

For all we know, it was Putin himself who orchestrated the Ukranian coup. He’s a former KGB operative, a brilliant strategist and he comes from the ‘old school’ of Russian thought. Every move is carefully calculated and executed. While President Obama plays checkers, Putin is executing a Réti Maneuver designed to confuse and frustrate his opponent while leaving multiple pathways for the fait accompli.

The majority of informed readers understand that the collapse of America as we know it today is inevitable. It has always only been a question of “when.”

Perhaps Vladimir Putin will soon give us an answer.

Putin Targets America's Achilles Heel: "He's Going to Destroy the Stock Markets"

Putin Targets America’s Achilles Heel: “He’s Going to Destroy the Stock Markets”.

Mac Slavo
March 5th, 2014
SHTFplan.com

Putin-Target-Americas-Achilles-Heel

In 2012 an elite insider claimed that on or around March 4, 2014 the doomsday clock would ring, the effect of which would be a complete collapse of the U.S. economy. How former Vice Presidential adviser Grady Means came to this conclusion with a specific target date may forever remain clouded in secrecy. But given the state of current affairs around the world today, one can’t help but consider that maybe Grady Means was on to something. With the fight over political and resource control in the Ukraine heating up, is it possible the Means was referring to this very set of circumstances?

We know the U.S. economy is literally on the brink of a collapse. All we need now is a triggering mechanism.

Contrarian investor and commentator Greg Mannarino thinks it could be happening right now, and he explains his highly viable theory in the broadcast below.

In essence, Mannarino warns that Russia’s Vladimir Putin may be using the current geo-political climate to position his pieces on the grand chessboard with the end game being a total wipe out of domestic equity markets and the U.S. dollar itself .

Given the horrid economic fundamentals in the U.S., mounting and un-serviceable debt levels, and the fact that China is now moving lock-step with their Russian counterparts, could we be seeing the final stages of a coordinated strike on U.S. economic and financial interests?

A few more moves and it could be Checkmate:

Putin understands the Achilles heel is this hyperinflated stock market… this man is brilliant.

Since we realize all warfare is based on deception, this backing off of troops here is  a part of the play.

When he re-introduces those troops and makes his move here it’s going to crush the U.S. equity markets and take trillions of dollars out of this market and a lot of peoples’ pockets.

Vladimir Putin is not in any way going to back down to Barack Obama or any of the Western powers. He has no reason to do that. He understands where this going and what he needs to do to make this work here.


(Video via Steve Quayle / Watch at Youtube)

So this is the set up in my opinion.

He’s allowing cash to flow back into the world markets, more specifically into the U.S. equity market. He’s going to re-introduce his troops almost in a Blitzkrieg type fashion and he’s going to destroy the stock markets.

We also know this… Vladimir Putin has been betting against the U.S. dollar for years by acquiring gold, just like you should be doing.

… The debt of the United States is in the biggest bubble in the history of the world. He knows all this.

This relief rally here… I can’t imagine that it’s going to last because he’s going to re-introduce troops here. It’s going to destroy this relief rally and then some.

We’re going to get panic selling… I think it can happen pretty soon.

Vladimir Putin is pulling a huge bluff on everyone right now allowing equities on a global scale to rise, only to reverse this move and crush equity markets which will destroy the United States economy.

The wealth effect that the Fed has created… Vladimir Putin knows that it is nothing more than smoke and mirrors. And he’s going to take advantage of that.

Make no mistake. Vladimir Putin strives to make Russia a global super power. China wants the same. In order for that to happen the United States of America must be crushed, and that starts with destroying our economy. And if that means a temporary destruction of global equity markets then that’s what Russia and China will do. Unlike President Obama, who bases his decisions on political surveys and half baked short-term platitudes, these nations operate with stratagems spanning decades.

For all we know, it was Putin himself who orchestrated the Ukranian coup. He’s a former KGB operative, a brilliant strategist and he comes from the ‘old school’ of Russian thought. Every move is carefully calculated and executed. While President Obama plays checkers, Putin is executing a Réti Maneuver designed to confuse and frustrate his opponent while leaving multiple pathways for the fait accompli.

The majority of informed readers understand that the collapse of America as we know it today is inevitable. It has always only been a question of “when.”

Perhaps Vladimir Putin will soon give us an answer.

The Top 12 Signs That The U.S. Economy Is Heading Toward Another Recession

The Top 12 Signs That The U.S. Economy Is Heading Toward Another Recession.

 By Michael Snyder, on March 5th, 2014 

12 Signs

Is the U.S. economy steamrolling toward another recession?  Will 2014 turn out to be a major “turning point” when we look back on it?  Before we get to the evidence, it is important to note that there are many economists that believe that the United States never actually got out of the last recession.  For example, data compiled by John Williams of shadowstats.comshow that the U.S. economy has continually been in recession since 2005.  So if anyone out there would like to argue that America is experiencing a recession right now, I certainly would not have a problem with that.  In fact, that would fit with the daily reality of tens of millions of Americans that are deeply suffering in this harsh economic environment.  But no matter whether we are in a “recession” at the moment or not, there are an increasing number of indications that we are rapidly plunging into another major economic slowdown.  The following are the top 12 signs that the U.S. economy is heading toward another recession…

#1 We recently learned that the number of new mortgage applications in the United States had fallen to the lowest level that we have seen in nearly 20 years.

#2 Radio Shack has announced that it is going to close more than 1,000 stores.  This is just another sign that we are in the midst of a “retail apocalypse“.

#3 The ISM Services index just fell to its lowest level in 4 years, and ISM Services Employment just experienced its largest decline since the collapse of Lehman Brothers.

#4 Obamacare is really starting to hammer the U.S. health care industry

“The Affordable Care Act is creating significant financial uncertainty to health care organizations,” said a survey respondent from the health care and social assistance industry.

“With little warning, the negative impact on revenuehas been unprecedented.”

#5 Trading revenue at the “too big to fail” banks on Wall Street is way down

Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) are bracing investors for a fourth straight drop in first-quarter trading, a period of the year when the largest investment banks typically earn the most from that business.

Citigroup finance chief John Gerspach said yesterday his firm expects trading revenue to drop by a “high mid-teens” percentage, less than a week after JPMorgan Chief Executive Officer Jamie Dimon said revenue from equities and fixed income was down about 15 percent. If trading at the nine largest firms slumps that much, it would extend the slide from 2010’s first quarter to 36 percent.

#6 One of the “too big to fail” banks, JPMorgan, is planning to fire “thousands” more workers.

#7 Moody’s has downgraded the credit rating of the city of Chicago again.  Now it is just three notches above junk status.

#8 The U.S. economy actually lost 2.87 million jobs during the month of January according to the unadjusted numbers.  Over the past decade, the only time the U.S. economy has lost more jobs during the month of January was in 2009 at the peak of the last recession.

#9 In January, real disposable income in the U.S. experienced the largest year over year decline that we have seen since 1974.

#10 Only 35 percent of all Americans say that they are better off financially than they were a year ago.

#11 Global retail sales for machinery giant Caterpillar have fallen for 14 months in a row.

#12 The economic data show that virtually all of the largest economies on the planet are slowing down right now.  The following is from a recent Zero Hedge article

The last 3 weeks have seen the macro fundamentals of the G-10 major economies collapse at the fastest pace in almost 4 years and almost the biggest slump since Lehman. Despite a plethora of data showing that ‘weather’ is not to blame, US strategists, ‘economists’, and asset-gatherers are sticking to the meme that this is all because of the cold on the east coast of the US (and that means wondrous pent-up demand to come). However, as the New York Times reports, for the earth, it was the 4th warmest January on record.

For much more on how the rest of the global economy is also slowing down, please see my recent article entitled “20 Signs That The Global Economic Crisis Is Starting To Catch Fire“.

Meanwhile, things in Ukraine continue to become even more tense, and the Russian government continues to debate how it will respond if the U.S. does end up deciding to hit Russia with economic sanctions.

According to one Russian news source, the Russian parliament is actually considering the confiscation of the property and assets of U.S. businesses in Russia if the U.S. decides to go ahead with economic sanctions against Russia…

The upper house of Russia’s parliament is mulling measures allowing property and assets of European and US companies to be confiscated in the event of sanctions being adopted against Russia over its threatened military intervention in Ukraine.

We are talking about banks, retail chains, mining operations, etc.

U.S. companies have billions invested in Russia, and all of that could be gone in an instant.

So let us certainly hope that economic war between the United States and Russia is averted.  Our economy is hurting enough as it is.

But no matter how things with this crisis in Ukraine play out, it looks like hard times are ahead for the U.S. economy.

Unfortunately, most Americans never learned the lessons that they should have learned back in 2008.

They just assume that the federal government and the Federal Reserve have fixed our problems and have everything under control, so they are not preparing for the next great crisis.

In the end, tens of millions of Americans will be absolutely devastated when they get absolutely blindsided by what is coming.

Time Is Running Out

The New Normal Paradox: All The Job Gains With Half The Hiring? | Zero Hedge

The New Normal Paradox: All The Job Gains With Half The Hiring? | Zero Hedge.

While everyone obsesses over the monthly payrolls report, which on a trailing 12 month basis is once indicating the creation of roughly 2 million jobs each year, or roughly where it was before the crisis (red line chart below), one aspect that is largely ignored is the amount of hiring.

Why is hiring important?

Because that is the actual process by which those without a job end up with a job. And as we just learned today after the latest JOLTS release, which showed that there were over 4 million job openings (4,001 to be precisely) for the first time since 2008, a far more important number is the update on Hires which at 4.5 million barely changed from last month, but more importantly, is barely a fraction of where it should be based on the number of job gains reported by the BLS monthly. The chart below confirms this stunning discrepancy: a surge in jobs with barely half the pre-recession hiring?

 

How does one explain this discrepancy in which the US economy supposedly is growing at its historic peak pace while hiring is at half the peak pace? Simple: the gains in nonfarm payrolls are due a decline in layoffs and other separations, not an increase in hirings: i.e., normal labor demand driven growth.

Which means that anyone hoping for a brisk increase in wages, i.e. worker leverage, is in for a prolonged shock.

The chart above simply shows that the leverage is and continues to be with the employers – instead of letting people go (or workers quitting at their volition) at anything close to a traditional pace, employers have a huge bargaining chip – a job. Because if a worker does not want to perform a job, tough: there are about 3 people willing to fight for every job opening. It also means that those who lose their job will find it doubly more difficult time to reenter the workforce as there simply is not enough hiring.

Which means that wage deflation, at least among prevailing jobs, will continue leading to declining real disposable income, a declining in personal savings and the continued use of “student loans” (since credit card deleveraging continues) to fund everyday lifestyles, at least until such time as the hiring trend has normalized.

The really bad news: while such a normalization will eventually happen, according to our back of the envelope calculations, it will take place some time in… 2020.

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