Financial Crisis - 2013 - ????

[American Patriot]

Ah that's all it is?

I wish I had 30k it takes for hookers and blow.

Not that I would spend it on hookers and blow.

I'd probably just keep my house and put one of my kids in it.

/sigh

[Ryan Ruck]

Egg, Turkey Meat Prices Begin To Rise As Bird Flu Spreads

May 12, 2015

Prices for eggs and turkey meat are rising as an outbreak of bird flu in the Midwest claims an increasing number of chickens and turkeys. Market experts say grocery stores and wholesalers are trying to stock up on eggs, but there's no need to worry about having enough turkeys for Thanksgiving.

The cost of a carton of large eggs in the Midwest has jumped nearly 17 percent to $1.39 a dozen from $1.19 since mid-April when the virus began appearing in Iowa's chicken flocks and farmers culled their flocks to contain any spread. Neighboring Nebraska reported its first case of bird flu Tuesday, affecting 1.7 million chickens at an egg farm in Dixon County.

A much bigger increase has emerged in the eggs used as ingredients in processed products such as cake mix and mayonnaise, which account for the majority of what Iowa produces. Those eggs have jumped 63 percent to $1.03 a dozen from 63 cents in the last three weeks, said Rick Brown, senior vice president of Urner Barry, a commodity market analysis firm.

Turkey prices, which had been expected to fall this year, are up slightly as the bird flu claimed about 5.6 million turkeys nationwide so far. About 238 million turkeys were raised in the U.S. last year.

The price of fresh boneless and skinless tom breast meat primarily used for deli meat has risen 10 percent since mid-April to $3.37 a pound, a USDA report said Friday. Frozen hens in the 8- to 16-pound range, those often used for home roasting, were up about 3 percent to $1.06 a pound.

Egg supplies are falling short of demand, the U.S. Department of Agriculture has indicated, and Brown said egg buyers such as grocery stores and wholesalers are trying to stock up for fear that another large farm with millions of chickens will be stricken - causing prices to spike higher.

"We're starting to see a little bit of that demand increase, and the sellers are reluctant to give clients too much more than they normally have because they know what's going on and they don't want to be caught short either," he said.

The number of Iowa chickens lost exceeds 26 million, the vast majority of which lay eggs for food use. That's about 41 percent of the leading egg state's layers and about 8 percent of the nation's laying hens. That many chickens would lay more than 500 million table eggs a month. For comparison, Iowa chickens laid 1.4 billion table eggs in March, before the disease struck. U.S. egg production for March stood at 7.42 billion table eggs.

Some companies are beginning to notice the impact of fewer eggs. Cereal maker Post Holdings Inc., which bought egg products supplier Michael Foods last year, said in its May 7 quarterly earnings report that about 14 percent of its egg supply has been affected by the bird flu outbreak. Post estimated the impact at about $20 million through the end of September.

Michael Foods primarily supplies extended shelf-life liquid and precooked egg products and eggs used in food ingredients.

The poultry industry can replenish the supply of chickens more quickly than beef or pork industries can rebound, but it still takes time to rebuild a flock.

"They're going to have to phase in replacing those flocks so they can get them get back into a laying schedule that results in a more even flow of eggs, and that's going to take six to nine months," said Tom Elam, an agricultural economist and poultry industry consultant.

It takes about four months for a hatched chick to be old enough to begin laying eggs, and it will typically be productive for about two years, Elam said. Many of the hens dying from the disease are younger and no pullets had been planned to replace them yet, Elam said. More than 350,000 pullets have been lost to bird flu - a very small portion of the 50 million egg-type chicks hatched in March, but it compounds the replenishment problem.

While new bird flu outbreaks are occurring in the turkey market - Minnesota, the nation's leading turkey producer, has 4 million confirmed dead birds so far - Elam said cold storage stocks and the number of hens still on farms suggest turkeys will be available for Thanksgiving.

"Anybody who wants a Thanksgiving turkey is going to be able to get one," he said. "They may have to pay a little more for it but we're not going to have national stock-outs for Thanksgiving turkeys, yet."

[Ryan Ruck]

Moody's Downgrades Chicago Debt To 'Junk' With Negative Outlook

May 12, 2015

Moody's downgraded Chicago's credit rating down to junk level "Ba1" from "Baa2."

The announcement, which the ratings agency released Tuesday afternoon, cited a recent Illinois court ruling voiding state pension reforms. Moody's said it saw a negative outlook for the city's credit.

Following that May court decision, Moody's said it believes that "the city's options for curbing growth in its own unfunded pension liabilities have narrowed considerably."

"Whether or not the current statutes that govern Chicago's pension plans stand, we expect the costs of servicing Chicago's unfunded liabilities will grow, placing significant strain on the city's financial operations absent commensurate growth in revenue and/or reductions in other expenditures," the agency said in a release.

The downgrade affected $8.9 billion of general obligation, sales, and motor fuel tax debt, according to Moody's.

The firm said its downgrades could trigger up to $2.2 billion in accelerated payments on Chicago debt.

[Ryan Ruck]

HSBC Warns: The World Economy Faces A 'Titanic Problem'

May 13, 2015

HSBC chief economist Stephen King is already thinking about the next recession.

In a note to clients Wednesday, he warns: "The world economy is like an ocean liner without lifeboats. If another recession hits, it could be a truly titanic struggle for policymakers."

Here's King (emphasis added):

Whereas previous recoveries have enabled monetary and fiscal policymakers to replenish their ammunition, this recovery — both in the US and elsewhere — has been distinguished by a persistent munitions shortage. This is a major problem. In all recessions since the 1970s, the US Fed funds rate has fallen by a minimum of 5 percentage points. That kind of traditional stimulus is now completely ruled out.

King notes that this far into the recovery, there's a lack of "traditional policy ammunition." For instance, Treasury yields have not risen, the budget deficit is not falling, and welfare payments are still on the rise.

As for what might trigger the next recession, King highlighted four things:

• Wage growth will hurt corporate earnings and reduce the share of corporate profit contributing to US gross domestic product (it also doesn't help that worker productivity is low). In turn, households and businesses will lose confidence in the economy, and the "equity bubble" will burst with collapsing stock prices.
• Nonbank financial systems such as insurance companies and pension funds will increasingly not be able to meet future obligations. This will cause a huge demand for liquid assets, forcing people to rush to sell despite no matching demand, triggering a recession.
• Forces beyond the Federal Reserve's control, including the possibility that China's economy and its currency could collapse. Weak commodity prices could also cause collapses in several emerging markets, as could continued strength in the US dollar.
• The Fed could cause the next recession by raising interest rates too soon, repeating the mistakes of the European Central Bank in 2011 and the Bank of Japan in 2000.

[Ryan Ruck]

Americans Not In The Labor Force Rise To Record 93,194,000

May 8, 2015

In what was an "unambiguously" unpleasant April jobs payrolls report, with a March revision dragging that month's job gain to the lowest level since June of 2012, the fact that the number of Americans not in the labor force rose once again, this time to 93,194K from 93,175K, with the result being a participation rate of 69.45 or just above the lowest percentage since 1977, will merely catalyze even more upside to the so called "market" which continues to reflect nothing but central bank liquidity, and thus - the accelerating deterioration of the broader economy.



End result: with the civilian employment to population ratio unchanged from last month at 59.3%, one can easily on the chart below why there will be no broad wage growth any time soon, which will merely allow the Fed to engage in its failed policies for a long, long time.

[Ryan Ruck]

The success continues!

US Economy Shrank At 0.7 Percent Rate In First Quarter

May 29, 2015

The U.S. economy went into reverse in the first three months of this year as a severe winter and a widening trade deficit took a harsher toll than initially estimated.

The overall economy as measured by the gross domestic product contracted at an annual rate of 0.7 percent in the January-March period, the Commerce Department reported Friday.

The revised figure, even weaker than the government's initial estimate of a 0.2 percent growth rate, reflects a bigger trade gap and slower consumer spending. It marked the first decline since a 2.1 percent contraction in the first three months of 2014, a slump that was also blamed on winter weather.

Economists expect a rebound in the current quarter to growth of around 2 percent and expect the economy to strengthen later this year.

Much of the new-found weakness came from a widening trade deficit, reflecting weaker exports and a bigger jump in imports than first estimated. Trade subtracted 1.9 percentage point from growth, up from the 1.25 percentage point drag initially estimated. American manufacturers are struggling with a stronger dollar, which hurts exports by making their goods more expensive on overseas markets and makes foreign goods cheaper for American consumers.

Consumer spending, which accounts for about 70 percent of economic activity, slowed to growth of just 1.8 percent in the first quarter, slightly below the 1.9 percent growth initially estimated. The government said consumers spent less on their cell phone services than first thought.

One of the biggest hits to the economy in the first quarter came from huge cutbacks in drilling activity by energy companies, a fallout from the big drop in oil prices over the past year. The government said that investment in the category that covers energy exploration plunged at a rate of 48.6 percent, the biggest drop since spring of 2009, when the country was still in recession.

Though falling GDP can be a sign of a recession, economists see little cause for concern with the first quarter drop. They are forecasting solid GDP growth the rest of the year, with steady job gains propelling the economy. A harsh winter is gone. So is a labor dispute that slowed trade at West Coast ports. Home sales and construction are rebounding. Business investment is picking up.

Many economists also suspect that the government's calculations have tended to underestimate growth in the first quarter of each year. The GDP has contracted in three quarters since the recession ended six years ago and all three declines came in the first quarter of the year.

While there is optimism that growth will revive as the year progresses, some sectors of the economy do remain subpar. Energy drillers, for example, have been damaged by persistently low energy prices and are still cutting jobs and slowing production, weakness that is expected to persist in the current quarter. The rise in the dollar is still making U.S. manufactured goods pricier overseas.

Yet the outlook has brightened considerably since winter. Most economists expect lower gas prices eventually to accelerate consumer spending, the main fuel for the economy.

Analysts generally foresee the economy growing at an annual rate of 2 percent to 2.5 percent in the current April-June quarter, with further strengthening later in the year.

"We got hit with a double-whammy in the first quarter," said Sung Won Sohn, an economics professor at California State University, Channel Islands. "We had a lot of adverse factors, from the harsh weather and consumers unwilling to spend their gas savings to a stronger dollar and weak economies overseas making the trade deficit larger."

So far, most consumers haven't used their gasoline savings to spend much more on other goods and services. The average U.S. pump price reached $2.03 a gallon in January, the lowest level in eight years. Though the average has risen back to $2.74, according to AAA, that's still nearly a dollar below its point a year ago.

"Even with the recent rise in gas prices, they are still well below the levels of a year ago, and eventually consumers will start spending those savings," said Joel Naroff, chief economist at Naroff Economic Advisors. "We are already seeing gains in restaurant sales."

Analysts also say that steadily solid hiring, which has helped cut the unemployment rate to a seven-year low of 5.4 percent, will continue to put money in more people's hands and fuel spending gains.

Some of the first quarter weakness may be revised away by government statisticians, who are studying whether their methods for making seasonal adjustments tend to overstate slowdowns during winter. The Bureau of Economic Analysis has said some adjustments will be reflected in the annual updates to economic growth it will issue in June.

(LOL! They're openly saying they're going to cook the books! :lool)

Mark Zandi, chief economist at Moody's Analytics, said he expects growth to reach an annual rate of around 3.5 percent in the second half of the year on the strength of job growth and consumer spending. For the full year, Zandi foresees growth of around 2.5 percent, roughly equal to last year's 2.4 percent.

Before the first quarter pullback, many economists had thought growth for the full year might hit 3.5 percent. That would have been the best showing in a decade and evidence that the economy had broken out of the subpar pace that's marked the first six years of the recovery.

Still, Zandi said he thinks "we are on track to get to full employment"- a roughly 5 percent jobless rate - "by this time next year, something we haven't seen in a decade." ()

[Ryan Ruck]

The Trucking Business Is Delivering Chilling News About The Economy

May 14, 2015

The vast $700 billion US trucking industry, with its 3.4 million drivers who hauled 10 billion tons last year -- 69% of the nation's freight -- is an early warning system for the overall economy. And it's been making the wrong rumbling sounds.

Rates for intermodal containers by rail dropped on a year over year basis in January, February, and March, according to the Cass Intermodal Price Index by Cass Information Systems. April hasn't been released yet. Cass tried to explain the March decline this way: railroads were facing weaker demand and losing pricing power as shippers were shifting loads to trucks because diesel has gotten cheaper.

But spot rates for tractor-trailers started dropping in April. It triggered all kinds of explanations at the time, for example, in the Journal of Commerce:

"Rather than a sign of underlying economic weakness, the softening spot market may indicate shippers are finding the trucking capacity they need, for now, with contractual partners."

Given the exuberance of record year 2014, carriers have added lots of new trucks to replace older equipment and to expand capacity. Swift Transportation , the largest U.S. truckload carrier, added over 900 trucks over the past three quarters, with more to come in 2015. J.B. Hunt added over 1,085 tractors in 2014. Smaller carriers added equipment as well. But by mid-April, the phrase "excess capacity" started cropping up.

In reality, over-the-road shipping volumes fell 5% in March from the prior year. It seemed like a fluke. But in April, according to the just released Cass Freight Index, shipping volumes fell again, this time by 2.5%. The index for shipping expenditures fell 3.5% in March and 4.7% in April.

We know the first quarter was crummy. But April is in the second quarter. This weakness is now infecting it as well. That's what the trucking industry is saying.

There are numerous reasons why this might be happening, including the $110-billion inventory buildup during the first quarter. Businesses will eventually whittle it down by trimming their orders. And sales continue to be lousy. For example, retail sales in April inched up only 0.9% year over year. That's less than the rate of inflation. So in terms of shipping volume, it marks a down month.

The trucking business is an early thermometer of the real economy. Things might turn around on a dime. There might be a sudden surge of sales that will propel the economy to escape velocity. But we doubt it, and we'll keep listening to the truckers for more clues going forward.

When the People's Bank of China spoke of "big downward pressure," it wasn't kidding.

[Ryan Ruck]

Union Pacific Furloughs About 900 Workers as Shipments Slow

May 29, 2015

Union Pacific has furloughed about 900 railroad workers because shipping demand has been weaker than expected.

The Omaha, Nebraska-based railroad said last month that it had begun reducing rail crews and storing some locomotives because shipping volume had been weaker than expected this year.

Union Pacific Corp. spokesman Aaron Hunt said the recent furloughs were also part of the railroad's effort to align its workforce with the current market.

The number of shipments Union Pacific has been delivering so far this year is down about 3 percent, which includes a 30 percent drop in coal carloads.

The Association of American Railroads says rail traffic nationwide is down less than 1 percent, but coal shipments are nearly 7 percent lower.

[Ryan Ruck]

Blame It on Global Cooling? Obama Has Lowest Average 1stQ GDP Growth of Any President on Record

May 29, 2015

Even if you leave out the first quarter of 2009—when the recession that started in December 2007 was still ongoing--President Barack Obama has presided over the lowest average first-quarter GDP growth of any president who has served since 1947, which is the earliest year for which the Bureau of Economic Analysis has calculated quarterly GDP growth.

In all first quarters since 1947, the real annual rate of growth of GDP has averaged 4.0 percent.

In the seven first quarters during Obama’s presidency, it has declined by an average of -0.43 percent. And if you leave out the first quarter of 2009 and look only at the first quarters of the six years since the recession ended, it has averaged only 0.4 percent.

In the six years of Harry Truman’s presidency for which the BEA has calculated quarterly GDP, the annual rate of growth in GDP in the first quarter averaged 4.5 percent.

During President Eisenhower’s eight years, it averaged 3.2 percent. During Kennedy’s three years, it averaged 4.9 percent. During Johnson’s five years, it averaged 8.3 percent. During Nixon’s six years, it averaged 5.3 percent. During Ford’s two years, it averaged 2.3 percent. During Carter’s four years, it average 2.4 percent. During Reagan’s eight years, it average 2.1 percent. During George H.W. Bush’s four years, it average 2.9 percent. During Clinton’s eight years, it averaged 2.6 percent. And during George W. Bush’s eight years, it averaged 1.7 percent.



President Obama took office on Jan. 20, 2009. In the first quarter of 2009, GDP declined at an annual rate of -5.4 percent. In the first quarter of 2010, it grew by 1.7 percent. In the first quarter of 2011, it declined -1.5 percent. In the first quarter of 2012, it grew 2.3 percent. In the first quarter of 2013, it grew 2.7 percent. In the first quarter of 2014, it declined -2.1 percent. And in the first quarter of 2015, it declined -0.7 percent.

In these seven first quarters that Obama has been president (2009 through 2015), the annual rate of growth in GDP has declined at an average rate of -0.43 percent.

But the National Bureau of Economic Research says the last recession, which began on December 2007 did not end until June 2009. If you leave out the first quarter of 2009, and only count the six years (2010-2015) since the recession ended in June 2009, real annual rate of growth of GDP in the post-recession first quarters of Obama’s presidency has averaged 0.4 percent.



When GDP declined at -1.5 percent in the first quarter of 2011—which was after the recession and two full years into Obama’s presidency—some blamed it at least partly on the weather.

“Some of the slowdown in growth was linked to bad weather in early 2011 and an 11.7 percent decline in defense spending,” said a Reuters story of May 27, 2011.

When real GDP declined at a rate of -2.1 percent in the first quarter of 2014, a May 30, 2014 New York Times story said: “Most economists on Wall Street and at the Federal Reserve blame a very cold winter for much of the slowdown.”

When real GDP declined at a rate of -0.7 percent in the first quarter of this year, the top paragraph of an Associated Press story said: “The U.S. economy shrank at a 0.7 percent annual rate in the first three months of the year, depressed by a severe winter and a widening trade deficit.”

But there seems something more at work here than climate patterns--or the Obama presidency.

Under previous presidents, real GDP sometimes grew massively during the first quarter. In 1950, under Truman, for example, GDP grew at an annual rate of 16.9 percent in the first quarter. In 1955, under Eisenhower, it grew at a rate of 11.9 percent.

Under Johnson, in the first quarters of both 1965 and 1966, it grew at a rate of 10.2 percent. Under Nixon, it grew at 11.1 percent in the first quarter of 1971, and 10.2 percent in the first quarter of 1973, it grew at 10.2 percent.

Under Ford, in the first quarter of 1976, it grew at 9.3 percent. Under Reagan, in the first quarter of 1984, real GDP grew at a rate of 8.2 percent.

But since 1984—more than three decades ago--there has been no first quarter, in any year, under any president, when real GDP grew even as fast as 5.0 percent. The closest it came was in the first quarter of 2006, when George W. Bush was president, and it hit 4.9 percent.

In the decades starting after World War II, average annual growth in GDP peaked in the 1960s.



In the 1950s, annual growth in GDP averaged 4.25 percent. In the 1960s, it climbed to 4.5 percent. But it dropped to 3.22 percent in the 1970s, then 3.15 percent in the 1980s, before ticking up to 3.23 percent in 1990s. In the 2000s, it averaged only 1.82 percent.

In the first five years of this decade (2010-2014), annual growth in GDP has averaged 2.2 percent. But that is less than the 2.7 percent it averaged in the first five years of the last decade (2000-2004) which was before the recession hit at the end of 2007 and brought the decade's average down to 1.82 percent.

If it were to maintain an average annual rate of 2.2 percent for the next five years, the American economy of this decade would still be growing at less than half the rate of the 1960s.

Should the long-term decline in U.S. economic growth be attributed to cold weather? Or should people in Washington, D.C., start looking around them for an anthropogenic cause.

[Ryan Ruck]

The "Illegal Immigrant" Recovery? The Real Stunner In The Jobs Report

June 6, 2015

Traditionally, when it comes to job numbers reported by the BLS's Establishment (the source of the monthly nonfarm payrolls change) and Household (the source of the monthly unemployment rate data) surveys, there is a substantial discrepancy. However, in May's far stronger than expected report, the two for the first time were almost identical: the Establishment Survey reported an increase of 280K jobs, while according to the Household survey 272K jobs were added.

Impressive numbers in a month in which only 215K jobs were expected to be added.

There were the usual kinks, of course. Two thirds of all jobs, according to the Establishment survey, were low-paying, low-quality jobs, primarily teachers, retail, temp help and waiters (something even CNBC has been forced to acknowledge):



This has been the case throughout the recovery, and helps explain why while wage growth while barely rising for all workers, remains depressed and even negative inr eal terms for production and non-supervisory workers, which account for 83% of all US employment.



There were other curiosities: the vast majority of jobs added in May, over 200K, were in the 20-24 age group, and the number of self-employed workers mysteriously soared by 350K to 10 million.

But the biggest surprise came from Table 7, where the BLS reveals the number of "foreign born workers" used in the Household survey. In May, this number increased to 25.098 million, the second highest in history, a monthly jump of 279K.



Assuming, the Household and Establishment surveys were congruent, this would mean that there was just 1K native-born workers added in May of the total 280K jobs added.

Alternatively, assuming the series, which is not seasonally adjusted, was indicative of seasonally adjusted data, then the 272K increase in total Household Survey civilian employment in May would imply a decline of 7K native-born workers offset by the increase of 279K "foreign borns."

But while all of these comparisons are apples to oranges, using the BLS' own Native-Born series, also presented on an unadjusted basis, we find the following stunner: since the start of the Second Great Depression, the US has added 2.3 million "foreign-born" workers, offset by just 727K "native-born".



This means that the "recovery" has almost entirely benefited foreign-born workers, to the tune fo 3 to 1 relative to native-born Americans!




How does the BLS determine a foreign-born worker? This is its definition:

The foreign born are persons who reside in the United States but who were born outside the country or one of its outlying areas to parents who were not U.S. citizens. The foreign born include legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants. The survey data, however, do not separately identify the numbers of persons in these categories.

In other words, the "foreign-born" catogory includes both legal and illegal immigrants unfortunately, the BLS is unable, or unwilling, to distinguish between the two.

As a result, it may well be, that the surprise answer why America's labor productivity (which recently posted its worst 6 month stretch in 22 years) has plummeted in recent years and certainly months, confounding economists who are unable to explain why "solid" labor growth does not translate into just as solid GDP growth...



... and why wage growth has gone precisely nowhere, is because the vast majority of all jobs since December 2007, or 75% to be specific, have gone to foreign-born workers, a verifiable fact. What is unknown is how many of these millions of "foreign-born" jobs have gone to illegal immigrant who are perfectly willing to work hard, and yet whose wage bargaining power is absolutely nil (after all they are happy just to have a job) thereby leading to depressed wages for native-born workers in comparable jobs, resulting in wage growth which over the past 8 years has been non-existant.



Incidentally, this is the same lack of wage growth which has allowed the Fed to pump some $4 trillion into the stock market. Because far more than merely a domestic politics issues, the lack of wage growth and downstream inflation, is precisely what has permitted the Fed to maintain QE as long as it has.

In other words, how many illegal workers cross the US border, may be the biggest variable shaping US monetary polic at the moment! And, in thought-experiment land, the more porous US immigration policy the longer the Fed will be allowed to maintain its ZIRP/QE experiment, and the higher the S&P will rise.

Could it be that illegal immigration is the best friend of that 0.1% of the US population which has benefited exclusively from the Fed's relentless injection of liquidity into risk assets via either ZIRP of QE?

Note: this article is not meant to side on either side of the illegal immigration debate: the upcoming presidential elections will do enough of that. It merely seeks to fill a gaping hole in economist models which are unable to explain or rationalize why America's seemingly "booming" jobs recovery, which is "firing on all fours" according to the BLS, is not manifesting itself in either inflationary pressures, or broad economic productivity.

[Ryan Ruck]

Dow Loses Gains For The Year; Transports Off 2%

June 8, 2015

U.S. stocks closed near session lows on Monday as investors weighed multi-month highs in bond yields amid greater expectations of tightening following Friday's strong jobs report.

The Dow Jones industrial average closed down about 80 points, posting losses of 0.32 percent year-to-date.

"I think everybody's a little unsettled about the way U.S. and European bond markets sold off in the last week," said David Kelly, chief global strategist at J.P. Morgan Funds.

Analysts noted relatively less volatility in bond and currency markets in Monday trade. The benchmark 10-year U.S. Treasury yield held slightly lower at 2.39 percent. The U.S. dollar pared recent gains, down about one percent against major world currencies with the euro rising to $1.1287. The stronger greenback has weighed on corporate earnings.

On Friday, a surge in bond yields to multi-month highs on a strong jobs report pressured equities, with U.S. stocks closing narrowly mixed.

Nonfarm payrolls for May beat expectations with the addition of 280,000 jobs. Analysts also cheered a greater-than-forecast 8 cent increase in hourly wages and a 5.5 percent unemployment rate. Signs of continued strength in the labor market strengthened the case for the Federal Reserve to begin raising short-term interest rates in September.

"I think the market's trying to figure out if (Friday's employment report) is going to move the Federal Reserve to act in September," said Robert Pavlik, chief market strategist at Boston Private Wealth. He also cited weakness in the Dow transports as weighing on stocks.

The Dow transports, led by a decline in airlines, closed down 2.06 percent for its worst day since January 6. The index posted its first positive week in four last Friday.

JetBlue closed down 7.2 percent for its worst day since Sept. 15, 2014. United Continental, American, Southwest and Delta held below their 50 and 200-day moving averages.

Apple closed 0.66 percent lower after falling more than 1 percent during its highly anticipated Worldwide Developers Conference at which the iPhone maker announced its new Apple Music service

The major indices extended recent losses, with the S&P 500 ending at 2,079, below its 100-day moving average of 2,084. Art Cashin, director of floor operations for UBS, said that level was one of support for the S&P, which faced resistance at 2,101.

"The technicals are deteriorating, and monetary conditions are deteriorating," said Bruce Bittles, chief investment strategist at RW Baird. He is watching to see whether or not the S&P 500 can hold above 2,070.

"The SPX is likely to reach oversold territory today for the first time since March, which we think will give way to improved short-term momentum during the latter half of the week," BTIG Chief Technical Strategist Katie Stockton said in a morning note. "The financial sector appears positioned to exhibit upside leadership, which could be just what is needed to restore confidence in the market."

Financials closed down 0.62 percent after failing to hold early gains. The S&P Regional Banking ETF (KRE) closed a touch higher. Morgan Stanley and KeyCorp briefly gained to levels not seen since September 2008. PNC Financial hit an all-time high.

"Probably another listless session in the absence of any hard data," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "Certainly the Greek saga continues."

Luschini and other analysts are looking ahead to Thursday's retail sales for insight on consumer spending, which has not picked up as much as many expected.

"We're at a juncture where markets have to weigh whether good economic data is good for corporate earnings," said Art Hogan, chief market strategist at Wunderlich Securities.

In the absence of major U.S. news and data releases on Monday, traders also kept an eye on overseas developments.

Turkey's ruling AK Party failed to win an outright majority in a parliamentary election for the first time since it came to power more than a decade ago.

Turkish stocks fell more than 5 percent on Monday, while the Turkish lira slid to a record low of 2.8 to the greenback.

Germany's DAX entered correction territory as European stocks declined on continuation of Greek debt negotiations. Last week, Athens postponed a payment deadline to the IMF.

Greece's creditors proposed extending the bailout to March 2016 in return for pension cuts, tax increases and other policy measures, the Wall Street Journal reported.

On Monday, European Central Bank governing council member Christian Noyer said if Greece had to leave the euro zone, it would not cause a problem for the currency bloc but rather for Greece itself.

The G-7 leaders also wrapped up a two-day summit in Bavaria, Germany.

The Dow Jones Industrial Average closed down 82.91 points, or 0.46 percent, at 17,766.55, with Intel leading decliners and Exxon Mobil the greatest advancer.

The S&P 500 closed down 13.55 points, or 0.65 percent, at 2,079.28, with information technology leading nine sectors lower and telecommunications the only advancer.

The Nasdaq closed down 46.83 points, or 0.92 percent, at 5,021.63.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 15.

About two stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 698 million and a composite volume of nearly 2.9 billion in the close.

Crude oil futures for July delivery settled down 1.67 percent at $58.14 a barrel on the New York Mercantile Exchange. Gold futures for August delivery settled up $5.50 at $1,173.60 an ounce.

Deutsche Bank closed up 4.96 percent after briefly leaping more than 5.5 percent on news of the appointment of John Cryan as co-CEO, effective July 1. Cryan replaces long-time executive Anshu Jain. Co-CEO Juergen Fitschen will remain in his position until next May, after which Cryan will become sole CEO.

McDonald's reversed initial gains to close down 0.2 percent after reporting a less-than-expected decline in global same-store sales as a 2.3 percent increase in European sales offset a 2.2 fall in the United States. Last month, the fast food retailer said it would stop reporting same-store sales beginning July.

[Ryan Ruck]

It's coming...

Greenspan: U.S. ‘Way Underestimating’ The National Debt

Former Fed chairman calls Social Security trust fund "nonsense" and "meaningless."

May 30, 2015

Alan Greenspan, former chairman of the Federal Reserve, said a Social Security Trust Fund does not exist and that the U.S. is “way underestimating” the size of its national debt.

“The notion that we have a trust fund is nonsense – that trust fund has no meaning whatsoever except for the fact as an all private fund to benefit programs, if it runs out of money, you can only pay out in cash flows that come in but the probability that will happen is not particularly high,” Greenspan told the Fiscal Summit held by the Peter G. Peterson Foundation.

“That means the trust fund is a meaningless instrument that has no function … it’s exactly the same thing as current expenses.”

The Social Security and Medicare Trustees 2014 annual report said while legislation is needed to address all of Social Security’s financial imbalances, “the need has become most urgent with respect to the program’s disability insurance component. Lawmakers need to act soon to avoid automatic reductions in payments to DI beneficiaries in late 2016.”

Lawrence Lindsey, former assistant to the president on economic policy in the Bush administration, said the national debt is closer to 300 percent of GDP with unfunded obligations for Social Security and Medicare included.

“That, by the way, is higher than Greece’s debt currently,” he said.

Greenspan said the White House and Congress are avoiding the fact that the government has committed itself to paying for pensions the nation cannot afford.

“It’s not that we’re getting like Greece. We’re getting like Illinois,” he said.

Richard W. Fisher, president/CEO of the Federal Reserve Bank of Dallas, called the fiscal crisis a “political train wreck ready to happen.”

“We have to somehow urgently come to grips with it,” he said.

Greenspan said the U.S. is “way underestimating” the national debt, which is currently at $18 trillion.

“Largely because we are not including what I would call contingent liabilities, that is the issue of, which is answered by a question: what is the probability that in today’s environment JP Morgan would be allowed to default? The answer is zero or less,” he said.

“Now, that means that whole balance sheet is a contingent liability. Now to be sure, while it’s contingent, there’s no interest payments but ultimately that overhangs the structure because we have committed in so many different ways to guarantee this, that and the other thing. It’s not only Fannie and Freddie but it’s a whole series of financial institutions and, regrettably, it is also non-financial institutions.”

Fisher said it is clear what steps the federal government must take to tackle its financial challenges but he has no idea where the nation’s fiscal policy is heading.

“Mexico, who we make fun of, has one of the best run governments in North America. They have a declared budget. Their debt as a percentage of GDP is miniscule compared to ours. They don’t run deficits more than 2.5 percent. They’re liberalizing their infrastructure. They become an exporting powerhouse. They have a totally independent central bank,” he said.

According to Greenspan, entitlement spending in the U.S. was 4.7 percent of GDP in 1967 compared to more than 14 percent today.

“Had we kept it at that level, our productivity would be far higher today. The average wage would be very significantly higher, the standard of living would be higher and what we have to do is think about how we are going to shrink that pie back and, to me, that is the single most important problem that confronts this country,” he said.

[Malsua]

When is welfare going to run out of Money? Can't we run out that one out first? After all, you don't pay into Welfare every paycheck, yet you do pay into SSDI.

[Ryan Ruck]

Quite the mystery isn't it?

[Ryan Ruck]

NYSE trading halted due to a "glitch". Officials denying it's a cyber attack. Tech bloggers stating otherwise. Reported by Rush.

[American Patriot]

It's a hacker.

[American Patriot]

In fact, news is freaking out, and Shep Smith is freaking "it's NOT an ATTACK".

LOL

[Malsua]

Zero Hedge, Wall Street Journal and other sites went down today. It's not just a glitch.

[American Patriot]

It's not a glitch.

Can't go into details.

But it's NOT a glitch.

[Malsua]

Definitely not a glitch despite media protestations to the contrary.