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Global Trade Is Collapsing

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When the global economy is doing well, the amount of stuff that is imported and exported around the world goes up, and when the global economy is in recession, the amount of stuff that is imported and exported around the world goes down.  It is just basic economics.  Governments around the world have become very adept at manipulating other measures of economic activity such as GDP, but the trade numbers are more difficult to fudge.  Today, China accounts for more global trade than anyone else on the entire planet, and we have just learned that Chinese exports and Chinese imports are both collapsing right now.  But this is just part of a larger trend.  As I discussed the other day, British banking giant HSBC has reported that total global trade is down 8.4 percent so far in 2015, and global GDP expressed in U.S. dollars is down 3.4 percent.  The only other times global trade has plummeted this much has been during other global recessions, and it appears that this new downturn is only just beginning.

For many years, China has been leading the revolution in global trade.  But now we are witnessing something that is almost unprecedented.  Chinese exports are falling, and Chinese imports are absolutely imploding

Growth of exports from China has been dropping relentlessly, for years. Now this “growth” has actually turned negative. In September, exports were down 3.7% from a year earlier, the “inevitable fallout from China’s unsustainable and poorly executed credit splurge,” as Thomson Reuters’ Alpha Now puts it. Most of these exports are manufactured goods that are shipped by container to the rest of the world.

And imports into China – a mix of bulk and containerized freight – have been plunging: down 20.4% in September from a year earlier, after at a 13.8% drop in August.

This week it was announced that Chinese GDP growth had fallen to the lowest level since the last recession, and that makes sense.  Global economic activity is really slowing down, and this is deeply affecting China.

So what about the United States?

Well, based on the amount of stuff that is being shipped around in our country it appears that our economy is really slowing down too.  The following comes from Wolf Richter, and I shared some of it in a previous article, but I think that it bears repeating…

September is in the early phase of the make-or-break holiday shipping season. Shipments usually increase from August to September. They did this year too. The number of shipments in September inched up 1.7% from August, according to the Cass Freight Index.

But the index was down 1.5% from an already lousy September last year, when shipments had fallen from the prior month, instead of rising. And so, in terms of the number of shipments, it was the worst September since 2010.

It has been crummy all year: With the exception of January and February, the shipping volume has been lower year-over-year every month!

The index is broad. It tracks data from shippers, no matter what carrier they choose, whether truck, rail, or air, and includes carriers like FedEx and UPS.

What major retailers such as Wal-Mart are reporting also confirms that we are in a major economic slowdown.  Wal-Mart recently announced that its earnings would fall by as much as 12 percent during the next fiscal year, and that caused Wal-Mart stock to drop by the most in 27 years.

And of course this is going to have a huge ripple effect.  There are thousands of other companies that do business with Wal-Mart, and Reuters is reporting that they are starting to get squeezed…

Suppliers of everything from groceries to sports equipment are already being squeezed for price cuts and cost sharing by Wal-Mart Stores. Now they are bracing for the pressure to ratchet up even more after a shock earnings warning from the retailer last week.

The discount store behemoth has always had a reputation for demanding lower prices from vendors but Reuters has learned from interviews with suppliers and consultants, as well as reviewing some contracts, that even by its standards Wal-Mart has been turning up the heat on them this year.

“The ground is shaking here,” said Cameron Smith, head of Cameron Smith & Associates, a major recruiting firm for suppliers located close to Wal-Mart’s headquarters in Bentonville, Arkansas. “Suppliers are going to have to help Wal-Mart get back on track.”

Similar things are going on at some of the other biggest companies in America as well.

For instance, things have gotten so bad for McDonald’s that one franchise owner recently stated that the restaurant chain is “facing its final days”

“McDonald’s announced in April that it would be closing 700 ‘underperforming’ locations, but because of the company’s sheer size — it has 14,300 locations in the United States alone — this was not necessarily a reduction in the size of the company, especially because it continues to open locations around the world. It still has more than double the locations of Burger King, its closest competitor.”

However, for the franchisees, the picture looks much worse than simply 700 stores closing down.

“We are in the throes of a deep depression, and nothing is changing,” a franchise owner wrote in response to a financial survey by Nomura Group. “Probably 30% of operators are insolvent.” One owner went as far as to speculate that McDonald’s is literally “facing its final days.”

Why would things be so bad at Wal-Mart and McDonald’s if the economy was “recovering”?

Come on now – let’s use some common sense here.

All of the numbers are screaming at us that we have entered a major economic downturn and that it is accelerating.

CNBC is reporting that the number of job openings in the U.S. is falling and that the number of layoffs is rising

Job openings fell 5.3 percent in August, while a 2.6 percent rise in layoffs and discharges offset a 0.3 percent gain in hires. Finally, the amount of quits — or what Convergex calls its “take this job and shove it” indicator because it shows the percentage of workers who left positions voluntarily — fell to 56.6 percent from 57.1 percent, indicating less confidence in mobility.

And as I discussed the other day, Challenger Gray is reporting that we are seeing layoffs at major firms at a level that we have not witnessed since 2009.

We already have 102.6 million working age Americans that do not have a job right now.  As this emerging worldwide recession deepens, a lot more Americans are going to lose their jobs.  That is going to cause the poverty and suffering in this country to spike even more, if you can imagine that.

Just consider what authorities discovered on the streets of Philadelphia just this week

Support is flooding in for a homeless Philadelphia family whose two-year-old son was found wandering alone in a park in the middle of the night.

Angelique Roland, 27, and Michael Jones, 24, were sleeping with their children behind cardboard boxes underneath the Fairmount Park Welcome Center in Love Park when the toddler slipped away.

The boy was found just before midnight and handed over to a nearby Southeastern Pennsylvania Transportation Authority police officer, who took him to the Children’s Hospital of Philadelphia.

He was wearing a green, long sleeve shirt, black running pants and had a diaper on, but did not have shoes or socks.

Could you imagine sleeping on the streets and not even being able to provide your two-year-old child with shoes and socks?

These numbers that I write about every day are not a game.  They affect all of us on a very personal level.

Just like in 2008 and 2009, millions of Americans that are living a very comfortable middle class lifestyle today will soon lose their jobs and will end up out in the streets.

In fact, there will be people that will read this article that this will happen to.

So no, none of us should be excited that the global economy is collapsing.  There is already so much pain all around us, and what is to come is beyond what most of us would even dare to imagine.

The Economic Collapse



53 Comments on "Global Trade Is Collapsing"

  1. Pennsyguy on Sun, 25th Oct 2015 12:57 pm 

    A collapsing economy will cause desperate people to support extremist political demagogues who have simple answers and can provide scapegoats to blame. The U.S. 2016 elections should be interesting.

  2. Mike616 on Sun, 25th Oct 2015 1:13 pm 

    A downturn isn’t a collapse.
    Interesting there are no charts here.

    Walmart is not the only store in town. Amazon doing very well.

    McD’s has been selling factory food for years. People are tired of it. They’ve raised prices to the level of Real Food so people moved to Real Food stores, like your local bagel place, that make real food and PAY Their Employee’s FAR Better.

    And yes poverty in America is Worse: Thanks Republicans: 35 Years of Economic Policy FAiLURE.

    33 Million jobs shipped to China. The Traitor Idiot Party Must BE DESTROYED. Not counting the Mexican Jobs.

    Fire the RACIST ASSHOLES. No More Republicans EVER.

  3. MrNoItAll on Sun, 25th Oct 2015 1:26 pm 

    We’ve had recessions before and always climbed back out of them and found our way into yet another burst of excessive consumption to reinvigorate the national and global economies. But this time, it is going to be a different story. There will be NO recovery from this recession and soon to be depression that we are sliding deeper into day by day. As short and others have frequently pointed out on this forum, the economy is a function of the energy — excess energy — that drives all economic activity in our modern world. You can deny peak oil and you can pretend that alt energy sources are going to keep this clown show affectionately referred to as “BAU” going. But denying reality never changes anything. Fact is, the world is running out of energy — economically accessible oil that provides excess energy to run the world economy on. There are NO new magnificent reservoirs of oil waiting to be discovered that will save our sorry asses for another few years or so. The entire history of the Age of Oil must be viewed against the background of BOOM and BUST — with every bust followed by a new boom. But I hate to tell you boys, there will not be another boom. This is IT — the LAST BUST. And we’re going to ride this bust all the way down to the bitter end, and we’ll be turning back time as we go, probably ending up with a population and an economy that closely approximates the 15th or 16th century (give or take a century)). Settle in for the long haul, make sure you’re stocked up, because it is going to be one hell of wild ride once this sucker really gets going.

  4. Davy on Sun, 25th Oct 2015 1:41 pm 

    Mike, you are blind to what is happening and why. Collapse is a process and a downturn is part of that process. The key variable is a downward process. We are seeing clear evidence of a long term downward trend.

    Blaming this on the republicans shows how little depth there is to your understanding of something that is global and all inclusive. You are a typical cornucopian that dismisses the bad or the bad is really good. I am surprised you didn’t throw in some greens in with the corn.

  5. GregT on Sun, 25th Oct 2015 1:55 pm 

    Thanks Davy,

    You literally took the words right out of my mouth.

  6. onlooker on Sun, 25th Oct 2015 2:48 pm 

    with global trade faltering who will feed those countries who are very food insecure? Nobody.

  7. shortonoil on Sun, 25th Oct 2015 2:49 pm 

    “and global GDP expressed in U.S. dollars is down 3.4 percent.”

    Considering that real GDP has been disguised by Central Bank monetary policy for several years, 3.4% sounds reasonable. The Etp Model states that real GDP (non inflated by excess currency creation) in 2015 should fall by 2.4%, and slow its decline rate to 1.5% by 2030. In essence it is stating that the world is now in a deflationary spiral.

    About every economic metric available, from employment, commodity prices to the DBI, indicates that this is the situation we are now facing. It will be necessary for authority figures to recognize that the world is now facing a resource depression of unparalleled magnitude. Any other reaction will only have more detrimental consequences as the situation worsens. A continuation of “the kick the can down the road approach” will only advance the day when we will have run completely out of road.

    http://www.thehillsgroup.org/

  8. Rodster on Sun, 25th Oct 2015 4:04 pm 

    “We’ve had recessions before and always climbed back out of them and found our way into yet another burst of excessive consumption to reinvigorate the national and global economies.”

    Except what happened in 2008 wasn’t a recession but a DEPRESSION. That’s why the Central Banks keep trying to sell the public on inflation because deflation is what’s really occurring and it’s just another term for a Depression.

    All anyone needs to do is look at the “BDI Index” as a barometer for global trade. The BDI has crashed several times to all time lows.

  9. Rodster on Sun, 25th Oct 2015 4:16 pm 

    “And yes poverty in America is Worse: Thanks Republicans: 35 Years of Economic Policy FAiLURE.
    33 Million jobs shipped to China. The Traitor Idiot Party Must BE DESTROYED. Not counting the Mexican Jobs.”

    That’s funny because the Demicans and Republocrats are one and the same. The two party system is a fucking joke. What we have today is Diet Coke vs Diet Pepsi and the two party system looks for uninformed voters to make them think the parties are actually different.

    You say the Repulocrats shipped 33 million jobs to China. Oh really? You know who started the ball rolling? It was Bill Clinton with help from the Republocrats who passed NAFTA. You want to know how the TPP was passed which MEANS more jobs heading East? Obama and the Republocrats. The same goes for Obamacare.

    As you can hopefully see both parties are playing you and are really two sides of the same coin.

  10. Dredd on Sun, 25th Oct 2015 4:48 pm 

    You ain’t seen nothin’ yet (The Extinction of Robust Sea Ports)

  11. Plantagenet on Sun, 25th Oct 2015 6:39 pm 

    1. Kudos to Davy, Greg and Rodster for excellent posts.

    2. The FED is doing everything it can to push a US recession out into the future. Of course, that means when the recession eventually hits, its gonna be a doozy!

    3. Cheers!

  12. BC on Sun, 25th Oct 2015 8:01 pm 

    https://app.box.com/s/12zogn2ovmprfmirc2ixftrj3g8aivx1

    http://wolfstreet.com/2015/10/25/china-containerized-freight-index-ccfi-shanghai-scfi-drop-to-new-lows/

    http://alphanow.thomsonreuters.com/2015/10/news-in-charts-china-has-slowed-but-it-has-not-rebalanced/

    http://www.reuters.com/article/2015/10/19/us-wal-mart-suppliers-insight-idUSKCN0SD0CZ20151019

    Growth of world trade is effectively recessionary (at least based on historical precedent, not the new normal of secular stagnation).

    http://www.chinaknowledge.com/Newswires/NewsDetail.aspx?type=1&cat=INV&NewsID=64863

    And China’s economy is quite likely in recession, probably measured.

    Mike616, Amazon, FB, Google, etc., are doing well but in the process cannibalizing existing sectors. This is different than the “creative destruction” of the past that we so often hear about; rather, it’s “destructive destruction”, in that the losses in competing sectors are not made up for by NET NEW GROWTH of revenues, profits, investment, capital formation, employment, and purchasing power of labor.

    Also, do social media and ad revenue-generating search firms actually add to net capital formation/accumulation and productive wealth? I’m skeptical.

    https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2f8L

    Short, right about incipient deflation, which is reflected by a contraction in S&P 500 “revenues”, as well as a 2008- and early 1980s-like collapse in the acceleration of money velocity to private GDP.

    https://app.box.com/s/x85ciaw5unj1fih8m8iebx63s8nlhqhx

    https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2iGs

    Moreover, we are about to experience increasing liquidity constraints in global financial markets coinciding with credit risk spreads widening and bank C&L loan delinquencies and charge-offs increasing YoY again for the cycle.

    The Fed will soon be compelled to resume QEternity, printing AT LEAST an additional $3 trillion more over the next cycle to fund the fiscal deficit to prevent nominal GDP from contracting.

    As I’ve said before, we’re looking at a growing pile of some serious scat.

    Rodster, correct. We have the rentier-socialist Demo-republico-plutocrats and a system of no representation without taxation and the best gov’t the top 0.001%’s money can buy.

    Plant, right about the Fed’s (and most other CBs) desperate attempt to postpone the inevitable end-game for the fiat digital debt-money petrodollar reserve currency regime (similar to the end of sterling after WW I-II (that began in the 1850s) and prior to Bretton Woods; US going on the classical gold standard in 1900 after the Yukon gold strikes; the Spanish milled dollar in the 18th-19th centuries; and the Dutch reserve currency in the 17th-18th centuries).

    The next reserve currency has already been created and will be increasingly utilized by the TBTE banks and the largest supranational non-bank companies; but it won’t mean the “end of the US$ reserve currency” per se but more like a transition to a reserve currency based on a weighted basket of commodities-based currencies that will be reserved by the IMF (usurping national CBs) with the BIS as the central bank of central banks, elements that are part of “The Plan” by the Rockefeller-Rothschild’s int’l banking syndicate’s objective to merge the US, Canada, UK, and Europe into the Transatlantic Federation or Fortess Europa against China-Russia and Radical Islam.

  13. makati1 on Sun, 25th Oct 2015 8:59 pm 

    Hungry? You might try this new restaurant…

    “Ordinarily, an exclamation of: “Waiter, there’s a fly in my soup!” would result in a grovelling apology from the restaurant manager. In Grub Kitchen, however, staff would likely respond with a polite: “Is everything to your taste?”

    Britain’s first insect restaurant, in Pembrokeshire, south-west Wales, is due to open its doors next week and the head chef is confident diners will “love” his bug-laden dishes….”

    http://www.independent.co.uk/life-style/food-and-drink/news/grub-kitchen-welcome-to-britains-first-insect-restaurant-a6706891.html

    Bon appetit!

  14. jjhman on Sun, 25th Oct 2015 9:01 pm 

    As far as the economy goes there is a difference between the Rs and the Ds.

    I agree that they both kowtow to the Wall St bankers but consistently the Dems make some effort to ease the burden on the lower income groups and the Rs shamelessly move the rules to favor only the richest.

    TheRs consistently try to damage Social Security, Medicare and any regulation of business. They brag about it!

    Worse look at the bozos on the Supreme Court. Clarence Thomas? God help us. I think he would vote to reinstate slavery if he was told to. And Scalia is the guy who argued with a straight face that a comma in the 2nd amendment meant that every goon in Texas could own an assault rifle.

    Sometimes it’s a small difference, sometimes it’s a big difference. But it’s a difference worth paying attention to and voting on.

  15. penury on Sun, 25th Oct 2015 9:06 pm 

    As I have stated on numerous occasions follow the money. If commodity prices are falling, the BDI collapsing, exports disappearing, imports not increasing due to a lack of buyers and sales at the low end disappearing, the world has a problem. Consider that the GDP of the world is approximately 48 trillion dollars and the total debt owed is about 79 trillion dollars, it does not take an economist to see the problem. People have no money.

  16. Bloomer on Sun, 25th Oct 2015 9:24 pm 

    Workers wages started to fall when manufacturers moved their operations overseas. Now there are fewer and fewer people left to purchase those good made offshore as the consumer has maxed out their credit limit.

    Interest rates can’t be lowered any further and the only bright light is fuel prices is falling. Whether or not less expensive energy is enough to spark the economy remains to be seen.

  17. apneaman on Sun, 25th Oct 2015 9:59 pm 

    Banks are seriously discussing negative interest rates for normal people’s savings

    http://www.businessinsider.com/banks-discussing-negative-interest-rates-for-consumers-2015-10?r=UK&IR=T

  18. yukonfisher on Sun, 25th Oct 2015 10:02 pm 

    The bank of Canada has had as its central task, this past 5 years, keeping inflation UP to 2%. Interesting when one considers how big a problem inflation was not so long ago. The Bank is unable to achieve its goal, so, next step? Choose another mandate!!!!!

  19. penury on Sun, 25th Oct 2015 10:09 pm 

    Bloomer” Whether or not less expensive energy is enough to spark the economy remains to be seen.” I think you have the cart before the horse. As long as manufacturing, shipping and sales are non existant the low price of “fuel” is not at issue. If people have no jobs and cannot afford MCD. The economy cannot be sparked. Negative interest rates are a fact of life in the E.U. and are being considered by U.S. banks.

    L

  20. Demián on Sun, 25th Oct 2015 10:20 pm 

    To Rodster on Sun: about de BDI.
    The BDI in 2015 is in the lowest (back to the 80s) but we have to know that there are too many ships without work, the commodities prices are in the floor, and the US dollar has been very high.
    So, now a day I’m not sure that is de best barometer.
    I think that the world trade monitor could be better because use volume not price. Also the statistics of volume in shipping that use DWT (weight) in which we can see a real problem in globalizated trade.
    Anyway the BDI is still important.
    About Walmart or Glencore or VW or Shell or Exxon (the biggests of the biggers) is a sign of changing in the power that is going back to the States.
    I call this degobalization.
    About “Collaps” I think we can wait to use this concept, now is a stop and reverse.
    Sorry for my bad english…
    Today in Argentina we are changing president… The Pope must pray for him he will know what is collapse.

  21. BC on Mon, 26th Oct 2015 12:19 am 

    Negative interest rates (NIRP) are unequivocally a manifestation of deflation. Banks do not need/want savers’ deposits or rely on other banks lending to create deposits that become liabilities against which the banks are required to hold reserves at ZIRP.

    Rather, the banks can make money from buying Treasuries and MBS at ~2-4% YTM and selling at a premium to the central bank with fiat digital debt-money credits while the yield curve flattens and banks’ net margin contracts to the level of the deflationary 1930s and the spread between short-term commercial paper yields and Aaa bonds in the 1890s.

    IOW, we’ve been here before, compadres, and it’s called deflation of the debt-deflationary Long Wave Trough.

    In the history of “capitalism” (???) going back to the 17th century, deflation occurs once in a lifetime. Therefore, no one alive today has experienced the persistent structural effects of deflation.

  22. theedrich on Mon, 26th Oct 2015 1:38 am 

    Mikey’s answer:  “Fire the RACIST ASSHOLES. No More Republicans EVER.

    Yup, just what we need, Mikey:  a one-party state, with not even a shadow of an alternative, Fox-like view.  Stalin redux — the answer to Mikey’s prayers.  (And not just Mikey’s.)

    Since the Demonic Party has been moving in Mikey’s direction for a long time and is currently reaching for total control, it now appears quite possible that Mickey Mouse will get his wish.  Hitherto the Repubs have offered weak opposition, true, but it has been better than none.  Now it appears that, like the Wall-Street-supported Demonics, they are kowtowing to their contributors and agreeing that Big Brother should control all.  Thanks, Mikey, for giving us the answer.

  23. Davy on Mon, 26th Oct 2015 7:04 am 

    The statement people have no money is misleading. A better explanation is we as a society are not as rich as we think. This is especially true of the 1%. Their wealth is illusionary. The world is awash in debt. Debt is per Investopedia is “A debt arrangement gives the borrowing party permission to borrow money under the condition that it is to be paid back at a later date, usually with interest.” This seems straight forward enough especially for those who are not 1%’ers. You have a car loan and it gets paid back in 5 years. The economics of that is legitimate.

    What is illusionary are the really big debt and digital assets. These represent a societal narrative of future growth and prosperity that just isn’t true. Government unfunded liabilities, notional dollars in derivatives, and 401K’s that are based on market returns which are not valid. The future appears more and more that it is less and less. What could be more erroneous than that? We are living under false assumptions at the most basic level.

    Our system is operating under these false assumptions so we are making plans and decisions that are not valid because the system is not valid. It is not that people have or don’t have money at this level it is the global system at its most basic level is flawed. What makes this even more distorted is those who run things are doing everything they can to hide this fatal flaw.

    The confidence of the 1% is as critical as keeping the sheeples out of the street. Keep the sheeples fed and the 1%ers feeling rich this is the powers-to-be strategy. This strategy is in a finite world with population growing and the earth system declining. Does that sound fatal? Yes. The 1%ers and the sheeples are not dumb everyone knows something is wrong. Many of the 1%ers are engaged in the cover-up of the real issue of a global system’s poverty.

    This comes down to confidence that generates the liquidity needed to keep a fragile global supplying the vast “delocalized” locals. The just-in-time distribution and production facilitated by trade and exchange of digital money is frankly life or death for billions. This human situation is irreversible and brittle to change without disruption that stops confidence and liquidity. IOW you try to reform and the system seizes up. Reform can only be superficial because system itself is flawed at its core. This system feeds 7 BILLION people. It will not feed 7 BILLION people when it stops.

    The fact that we have much less wealth is a macro issue. This is increasingly being manifested with people with no money because the system is practicing a similar thermoregulation as the human body where it draws heat energy towards the core. The global system is suffering hyperthermia. The 1% and wealthy nations are concentrating power and wealth by necessity. You can call it greed but that is not the case in the macro. In the macro it is survival.

    The flip side of this action is a disconnect of reality. The system is structured so it cannot adjust to less wealth. The system is increasingly using the notional ideas of earning far into the future to justify current wealth. Wealth today is a façade of a system that is ready to break. The sum of assets and liabilities is equal that is a law of economics. The laws of nature are we are a finite world. The physical wealth does not change. Human wealth can change within this finite world but only qualitatively. Physical wealth is finite, period.

    Today we have malinvestment found in the waste of excess capacity, unproductive development, financial bad debt, and uneconomic structural conditions. All this malinvestment with population far in excess to the physical carrying capacity. When a significant amount of your wealth is generated digitally and by the finance sector something is wrong. When your ecosystem is in decline with localized failure something is wrong. When you have a global population in overshoot with your foundational resources depleting something is wrong.

    We have a system that is ready to break to a much lower economic activity because the basis of that system is flawed. This lower economic activity will not feed 7 BILLION people. Who knows how many it will feed but not 7 BILLION. We have invested poorly. We have allowed too many people. We soon will have to construct something new because what we have now is broke. Denial is the only thread that keeps confidence intact. When we lose confidence this “sucker is going to blow”. Thanks GW that fit perfect!

  24. sidzepp on Mon, 26th Oct 2015 8:57 am 

    NAFTA was signed by a Democrat President with a House and Senate that had Democratic majorities. So much for party ideology.

  25. Boat on Mon, 26th Oct 2015 9:11 am 

    sidzepp,

    Your right. Interesting many Dems and the candidates against the Trans-Pacific Partnership.

  26. Rodster on Mon, 26th Oct 2015 9:15 am 

    “To Rodster on Sun: about de BDI.
    The BDI in 2015 is in the lowest (back to the 80s) but we have to know that there are too many ships without work,”

    I think Zero Hedge posted an article stating it could date back to the 1970’s.

  27. Rodster on Mon, 26th Oct 2015 9:16 am 

    “Everyone Is Asking: “If Chinese Consumption Is Rising, Why Are Its Malls Empty?” – Here Is The Answer”

    http://www.zerohedge.com/news/2015-10-26/if-chinese-consumption-rising-why-are-its-malls-empty-many-ask-here-answer

  28. Rodster on Mon, 26th Oct 2015 9:50 am 

    Another worrying sign for global trade:

    “It’s crunch time for Wal-Mart as the iconic retail behemoth struggles to cope with the fallout from a move to spend billions on wage hikes for its meagerly compensated hourly employees. In order to avoid passing on rising labor costs to customers, the company has set its sights on the supply chain where some smaller vendors now say they’re being driven out of business entirely.”

    http://www.zerohedge.com/news/2015-10-26/hail-mary-time-wal-mart-vendors-pushed-brink-smaller-suppliers-will-go-out-business

  29. shortonoil on Mon, 26th Oct 2015 9:56 am 

    “The confidence of the 1% is as critical as keeping the sheeples out of the street.”

    The 1% are the primary debt holders; that is how they became the 1%. In a deflationary environment debt is the first part of the financial system to lose its value. Most of the collateral backing the world’s debt is debt, and that is leveraged by better than 50 to 1. Once the system begins to fail the 1% will be wiped out in short order.

    Of course they are very aware of their predicament. Their course of action will be to confiscate any real physical assets that have retained any value. The changes in law over the last couple of decades, that allow the government to attach almost anything, anytime, for any reason, reflects this paranoia. When things get bad enough they will try to use it.

    Once the populous realize what is happening they will hide their wealth; that will only make matters worse. What little trade that is still occurring will slow even further. In most parts of the world this will probably be finalized as central governments are dissolved, and regional entities emerge. Once stripped of their power base, the central governments, the 1% will disappear.

    Whether, or not a more equitable system can be constructed is yet to be demonstrated. To do so would require a new, and broader understanding of our most fundamental instinctual drives. Although our avatars over the millennium have pointed this out, we have done very little to accomplish it.

  30. onlooker on Mon, 26th Oct 2015 10:02 am 

    Think of it like the Titanic Short, the fact that the wealthy had their privileged deck up high did not save them. Same here the whole ship is going down and will be pretty much indiscriminate as too who will not make it. Maybe the wealthiest can hide in some well constructed bunkers or such but without the savvy to learn to live from the land they would ultimately perish also.

  31. Boat on Mon, 26th Oct 2015 10:37 am 

    onlooker,

    I think the wealthy booked the upper deck for the view and the cabins were nicer. Not for escape from a glacier.

    Maybe the wealthiest can hide in some well constructed bunkers or such but without the savvy to learn to live from the land they would ultimately perish also.

    Doomers love to and get to let these types of comments run wild. Ya’ll should get together and define what a crash is. We gonna have 438 nuclear meltdowns not counting military weapon meltdown or not? Are Large dams gonna be watched or not. To have discussions should you not have a few parameters?. Or we just all throw it out there. I got one……It’s gonna be bad. Fire, floods and whatnot.

  32. onlooker on Mon, 26th Oct 2015 10:44 am 

    No boat it is not comments running wild. It is basic thermodynamic laws and the realities of a population in overshoot of their carrying capacity. The true sensationalism is from the cornies who trot out some new technology like it will be the panacea to solve all our problems. They always logically say that to solve any problem you must first admit to it. Well we are not even at the stage of admitting hence your relentless denial.

  33. joe on Mon, 26th Oct 2015 11:44 am 

    This is history repeating, it’s anthropological in nature, read your history of the Greeks, Romans, Ottomans, British.
    For almost 80 years the elites lived in fear of communism and so had to hide the very worst of their greed from you, they even invented this thing called ‘socialism’ as a way to buy off the anger of the poor. Then after 1991, they could stop pretending to be YOUR friend. This is only the beginning guys. First they will mix us all up religiously and then control us by making us all afraid of each other. They really don’t care about peak oil, or gw or any of that, unless it impacts their power.

  34. JuanP on Mon, 26th Oct 2015 1:04 pm 

    There is so much waste everywhere around me, I would welcome a contraction in global trade and personal consumption. Globalization is peaking, its benefits already peaked. It is time for people to think about and act at the local level.

  35. penury on Mon, 26th Oct 2015 3:35 pm 

    Davy for you upper 10 per centers, you may not be as rich as you thought you were, but for us 80 per centers, there is no money. Want to prove me wrong? Visit the food banks in your areas on the days they are open, Visit the homeless camps and under the bridges where people camp. It it was not for EBT cards, free medical, and debt the bottom is already wiped out. Me well I guess I will wait four years for the new shoes instead of three. The old suit will have to do for a couple more years, fortunately Value Village ™ and Goodwill ™ have things I can pick up. Bo, I guess you are right. We are not as rich as we thought.

  36. Davy on Mon, 26th Oct 2015 4:31 pm 

    Pen, look, I live with poor people. My neighbors are poor. Some are doing fine but I live in the Ozarks which is a poor region. I take care of people around here with work and gifts. If you want me to feel guilty sorry ain’t gonna happen. You can whine up another tree.

  37. penury on Mon, 26th Oct 2015 5:17 pm 

    Well Davy do your neighbors agree with you that they just are not as rich as they thought they were?b And trust me I am not whining, It must be nice for you to play the rich squire with your poor neighbors, but remember I was talking about 80 per4 cent of the population and believe me I do not try to make anyone feel guilty. Just try to point out facts where needed.

  38. Davy on Mon, 26th Oct 2015 5:58 pm 

    Pen, you are whinning to me about your life being a failure. You have no clue about my life. A life good or bad is more than a bank account. Get a grip and grow up. Do you want to compare dicks next? What if I told you I have been in more than one near death situations. Do I then whine to you about how unfair it is you never had to go through that. Sorry, pen, you are a shallow person if you need to play the money card.

  39. makati1 on Mon, 26th Oct 2015 7:38 pm 

    penury, the ‘soup lines’ in America are ~17,000 miles long if you made them stand in line face-to-face. That is the distance from Johannesburg, South Africa, to Madrid Spain, to Moscow, Russia to Beijing, China, across the Bering Sea, Alaska and Canada to New York City. Government plastic hides the US 3rd world status. But that is becoming more and more obvious daily. And more and more precarious.

    My stepsister, that is just about finished with college at age 50, and about to become a registered nurse, just e-mailed me for info on moving out of the US with her husband an 4 kids. The smart people are leaving the sinking ship USS America.

  40. Davy on Mon, 26th Oct 2015 7:56 pm 

    Poor people, leave frying pan straight into the fire of doomed Asia. I would never do that to my family.

  41. penury on Mon, 26th Oct 2015 8:31 pm 

    Sorry Davy, not talking about my life, which is not any ones business but my own, I am talking about 80 per cent of the population of this country who are not wealthy ,have not inherited great fortunes of land or money and must get by on what they have. So do what I said go out and actually meet some of the people. And the only clue I have about your life is what you have posted here. Born rich, attended prestigious university, worked on Wall Street, own land and condos, did I forget anything?

  42. Davy on Mon, 26th Oct 2015 8:44 pm 

    Your wrong pen on the above and you are the one that drew first blood. I am sorry you are poor and unhappy. Do you want to continue or do we move on?

  43. Demián on Mon, 26th Oct 2015 10:08 pm 

    Rodster:
    “I think Zero Hedge posted an article stating it could date back to the 1970’s.”
    The BDI starts in 1985… but the average was more than 1000 points after 1988 and in 2015 is under 1000 again…

    How it works
    “The BDI contains route assessments based only on time-charter hire rates “USD paid per day per Metric Ton”.”
    So if there is a supply of empty ships costs goes down, if commodities cost less again the price must goes down.

  44. MrNoItAll on Tue, 27th Oct 2015 1:27 am 

    “The smart people are leaving the sinking ship USS America.”

    No, Mak, exactly the opposite. The smart (and rich) people are relocating TO America. Especially the rich and well connected Chinese, who are buying up high-priced real estate in many overpriced housing markets, blowing the bubbles even bigger. You should know that — you read the news. And not just Chinese, they’re coming from South America and other parts of the world too — wealthy people around the world are setting up for life in America when TSHTF in their home countries.

    I get the impression that you think America is going to melt down and self destruct in a collapse scenario. If true, your impression is illogical. America is set up to guarantee security once TSHTF, and can easily provide enough energy to keep critical industry and services going while protecting wealthy foreign nationals who relocate here.

    I think you have it bass-ackwards!

  45. onlooker on Tue, 27th Oct 2015 2:06 am 

    Exactly Mr. No. American has still by far the most potent military. It has relative to most countries a better resource per capita ratio,but more then anything is as the highest concentration of elites. Those elites have to live somewhere. It aint going to be Asia with its monstrous population and destroyed environment. Yes ultimately maybe all of humanity if f’d but US will hang on the longest. Oh and do not forget we have the South and Central America to exploit even more. What are they going to do about it?

  46. theedrich on Tue, 27th Oct 2015 4:04 am 

    Let’s see:  the Third World is essentially a mass of failed states with the inhabitants crawling over one another, destroying their environments and/or trying to crash Whiteland’s gates.  Penury blubbers about being too much of a loser to get the goodies he sees on his wide-screen color TV.  Europe under Angela the Genosuicidist is going down the tubes with the Mohammedan maniacs, narcotraffickers and sob-story parasites she is importing.  Peak Oil is here, now.  The global commons is in tragic condition with no hope of recovery.  The infantile Christian ideology which makes hypocrisy an absolute necessity dominates Western politics and calcifies Whitey’s mind.  And anyone who suggests effective measures to stop the death march is immediately destroyed by being labeled racist.  What’s not to like?  We can notice that the world trade Ponzi scheme is crumbling, but with enough hype about evil rich Westerners, a presidential fairy godmother will make everything perfect again.  Yes, Virginia, there is a Santa Claus.

  47. makati1 on Tue, 27th Oct 2015 7:46 am 

    Dream on, MrNo. Who said that the all of the rich are moving to the US? Give me a reference please. All of the ones I read say they are going to New Zealand and Australia or other points south of the equator. I suspect that the ones who are going to the US (mostly Chinese) are hoping to be kept out of the coming war, but they may just have jumped out of the frying pan into the fire. The US will not be safe in this one.

    Wait until the banks start to take their deposits, (bail-ins) their stock wealth evaporates and they are subject to the Police State and the whims of the current DC puppet. Coming soon to a location near you … and them. Wait and see.

  48. Davy on Tue, 27th Oct 2015 8:26 am 

    Mak, the information is at your finger tips, try googling. Yes, I know the truth is hard sometimes but you will feel honest when you do it.

  49. Rodster on Tue, 27th Oct 2015 8:43 am 

    “The US will not be safe in this one.”

    Actually, NO ONE will be safe this time. If you read Ben Bernanke’s recent memoirs, you get the picture that in 2008 the planet was headed for a catastrophic global collapse. And only by saving the TBTF Banks was disaster averted. In 2015 the situation around the world is x1000 worse than in 2008. We have a combined derivatives in excess of 1.5 Quadrillion and that number continues to grow by the month.

    The problem is the East in it’s GREED and STUPIDITY decided to copy the Western financial, banking, economic, business and currency models. In fact if you didn’t say which country was doing what to whom, you wouldn’t know it was the Chinese who totally fucked their future over.

    The Titanic will go down and the US/Russia/China and every industrialized economy on the planet are on the same ship.

    Add climate change, Geoengineering to the mix and as George Carlin used to say: “pack your shit folks, you’re going away”.

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