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It's a good
thing we're in a recovery and there's no real prospect of another downturn
(at least that's what Wall Street "strategists" and politicians
keep telling us). Otherwise, reports like these might be a cause for concern:
"Pawn Shops Go Upscale for
Affluent Clients" (USA
Today)
Maybe it's the
original artwork displayed around the office or the soft lighting, paneled
walls, Persian rugs and leather furniture. The receptionist adds to the aura,
too. So does the TV screen turned to a financial-news channel.
Whatever the
reason, Biltmore Loan and Jewelry feels more like a stock brokerage or
private-banking office than a pawn shop.
...
"We want
to give people a professional option with dignity," said David
Goldstein, Biltmore's president and a veteran jewelry retailer. "We're
private, quick and discreet."
Pawn-brokering
might be associated more with dingy storefronts cluttered with junk and
customers desperate to scrape up enough cash for groceries or rent. But the
recession, credit crunch and slow economic recovery have hit Americans up and
down the socio-economic ladder, and that has created an opportunity to serve
a more high-end clientele for firms like Biltmore.
"We're
seeing an increase in these kind of stores in
Beverly Hills and other affluent neighborhoods," said Emmett Murphy, a
spokesman for the National Pawnbrokers Association. "People in all walks
of life are in need of short-term credit."
"U.S.
Economic Confidence Falls to Lowest Since January" (Gallup)
Americans'
economic outlook weakens more than ratings of current conditions
PRINCETON, NJ
-- Gallup's U.S. Economic Confidence Index averaged -27 for the week ending
July 15, down four points from -23 each of the prior two weeks. This extends
a gradual decline in confidence that has been underway since late May, when
the index was at a four-year best of -16. The index was nearly this low a
month ago -- at -26 in mid-June -- and now stands at the lowest weekly
average since late January of this year.
"Americans
Joining Disability Now Outpacing Americans Finding Jobs" (The
Weekly Standard)
A new chart set
to be released by the Republican side of the Senate Budget Committee details
an alarming fact: In the last three months, more Americans have joined
disability than have found a job:
As the chart
shows, between April-June 2012, an estimated 246,000 Americans were added to
Social Security's disability insurance program. In that same time period,
only 225,000 American jobs were created.
These alarming
numbers, though, are part of a wider trend, as another chart, also set to be
released later today, from the Republican side of the Senate Budget Committee
shows:
As this chart
shows, since 2008, 3.6. million Americans have been
added to Social Security's disability insurance program. In that same time
period, a net total of 1.3 million jobs were lost.
"Fewer
U.S. Companies Planning to Hire; Europe Looms: Poll" (Reuters)
American
companies are scaling back plans to hire workers and a rising share of firms
feel the European debt crisis is taking a bite out of their sales, a survey
showed on Monday.
Only 23 percent
of the firms polled in June plan to add to staff in the next six months, the
National Association for Business Economics said on Monday.
NABE's prior
survey, conducted in late March and early April, had shown 39 percent of
companies planning to add workers.
Already, hiring
by U.S. companies has slowed dramatically in recent months as employers worry
about a sagging global economy hurt by Europe's snowballing debt crisis.
"Fiscal
Crisis in States Will Last Beyond Slump, Report Warns" (New
York Times)
WASHINGTON
— The fiscal crisis for states will persist long after the economy
rebounds as states confront financial problems that include rising health
care costs, underfunded pensions, ignored infrastructure needs, eroding
revenues and expected federal budget cuts, according to a report issued here
Tuesday by a task force of respected budget experts.
The severity of
the long-term problems facing states is often masked by lax state budget laws
and opaque accounting practices, according to the report, an independent analysis
of six states released by a group calling itself the State Budget Crisis Task
Force. The report said that the financial collapse of 2008, which caused the
most serious fiscal crisis for states since the Great Depression, exposed a
number of deep-set financial challenges that will grow worse if no action is
taken by national policy makers.
“The
ability of the states to meet their obligations to public employees, to
creditors and most critically to the education and well-being of their
citizens is threatened,” warned the two chairmen of the task force,
Richard Ravitch, the former lieutenant governor of
New York, and Paul A. Volcker, the former chairman of the Federal Reserve.
"ZIRP
Strikes Again: Pension Under-Funding For S&P 500 Companies Hits
Record" (Zero Hedge)
The public
pension and retirement 'schemes' are in considerable trouble (as we noted
here and here) and now, according to a recent S&P study, private
companies are at record levels of pension under-funding. Fiscal 2011 shows
that the under-funded level for S&P 500 companies' defined pensions
reached an epic $354.7 billion - an increase of over $100 billion from 2010
and surpassing the 2008 record of $308.4 billion - and OPEB under-funding
reached $223.4 billion. An aggregate $578 billion or 29.5% underfunding or
the $1.96 trillion in obligations is increasing as the rates of return are
reduced thanks to yet more unintended consequences of the Fed's ZIRP and
perhaps most worrying is there comment that "The American dream of a
golden retirement for baby boomers is quickly dissipating; plans have been
reduced and the burden shifted with future retirees needing to save more for
their retirement. For many baby-boomers it may already be too late to safely
build-up assets, outside of working longer or living more frugally in
retirement."
S&P 500
Pension Underfunding Compared to Market Level
Don't worry, be
happy. It's all good.
Michael J. Panzner
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