BREXIT Is Being Used To Deflect From The Economic Collapse

I actually could care less about BREXIT.   I have yet to encounter any valid analysis on why the issue matters at all.  What is valid is that the BREXIT theatrical show is being used to deflect scrutiny of the continuous economic reports  showing that the U.S. economy is collapsing.

The Chicago Fed National Activity index released today plunged to -.51 against Wall Street’s expectation of a .11 gain.  Last months data-point was revised lower to barely positive.  The way that this index is calculated, it takes a lot to move the needle.  A drop from a revised lower .05 to -.51 reflects heavy contraction in economic activity across a broad (85 indicators) spectrum of the economy.  The 3-month moving average declined from -.25 – which was revised lower from the original .22 reported – to -.36.

New home sales reported today – for whatever the data series is worth – indicated an 11% plunge from the previously reported number for April, which of course was revised lower. May’s print was down 6% from the revision.  Ironically,  yesterday the National Association of Realtor’s Chief Economic Clown was extolling the virtues of new home construction and sales activity.  Oops.

I suggested yesterday that existing home sales report was highly overstated by the seasonal adjustments imposed on the data collected.  The Census Bureau, which prepares the new homes sales data series, has admitted in the past its estimation and adjustment models tend to overstate sales when actual sales are in a downtrend.  Ergo, the incessant downward revisions of previous reports.  Same with existing home sales, as the NAR uses the same statistical modelling package as the Census Bureau.  The NAR’s report yesterday contained a significant downward revision for April’s report, not coincidentally.

To be sure, there are still some hot pockets of housing activity around the country.  But most of the large economic areas are experiencing falling demand, falling prices and rising inventory, especially in the upper price segment of the market.  The collapse of the current housing bubble will be even more spectacular than the last bubble collapse.

The U.S. economy is collapsing.  In the “inside out” world of U.S. financial media Orwellian propaganda, today’s jobless claims number is being used to substantiate a “tight labor market.”  That’s a complete fairy tale.  The reason jobless claims are historically low right now is that the number of workers as a percentage of the workforce who qualify to apply for benefits when they get fired is at a historical low.  This fact is substantiated by the historically low labor participation rate and the percentage of the workforce that is now part-time.   Part-timers do no qualify for company healthcare or unemployment insurance.  It’s that simple. the  I would question the data if jobless claims were high.

So the entire financial world is focused on what is largely an irrelevant  referendum  on whether or not the UK will remain in the EU.   Meanwhile, the rug is being pulled out from under the entire western economy, including and especially the U.S. economy.

7 thoughts on “BREXIT Is Being Used To Deflect From The Economic Collapse

  1. I think something really bad is coming down. I’m not
    talking market manipulation bullshit, I mean something
    really bad. You know these neocon assholes are not going to
    let the U.S. economy just roll over. The lies of the last eight
    years have worn thin, the game is over and it is time to cover
    their tracks. Get ready for a trigger point, south China Sea or
    some NATO incident on the Russian border or how about that
    powder keg in Syria ? When all else fails the neocons take all
    of us to war. I knew I picked a bad time to quit smoking.

  2. “Part-timers do no qualify for company healthcare or unemployment insurance. ”

    The phenomenon of workers being offered part time work rather than full time was kicked into high gear by the cost of providing healthcare placed on the back of employers by Obamacare. if hired for 30+ hours per week.

  3. So the entire financial world is focused on what is largely an irrelevant referendum on whether or not the UK will remain in the EU… No! It was about whether the EU will survive. The answer is: No!

  4. This article is wrong to say that part-timers do not qualify for unemployment insurance. Part-timers CAN qualify for unemployment insurance at least in PA and probably in most states. To be financial eligibility in PA you only have to earn enough in wages and credit weeks which even someone working just a low-paying part-time job can meet those requirements.

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