Economic reality check from a 'boots on the ground' source that stands in direct contrast to what the POTUS stated in his SOTU address earlier this week.

Coping: Economic “Reality Television” – The Art of Thrift
George Ure's Urban Survival
Jan 15, 2016
http://bit.ly/1J79kw6

[snip]

My ramble Thursday about thrift – and being in the critical habit of saving money – rang a loud bell with quite a few readers, including ... some keen insights from a reader who’s a CPA.

Hi George. I know you probably get a ton of emails, and I don’t want to waste your time, but today’s post hit a nerve.

I’m a CPA. I work from home. As such, I go visit most of my clients at their home or business. I just don’t want all those people coming thru my house.

Back in 2007 I began to notice a trend, although it was lost on me at the time. I would go visit a client in a brand new half-million dollar house, two mortgages, Cadillac Escalade and Mercedes in the driveway. AND NO FURNITURE! We would sit and discuss taxes on folding chairs at a card table. No savings (no 1099-INT) no retirement (no 1099-DIV or IRA forms) The tax guy sees everything. Nice fat six figure salary and about two missed paychecks from bankruptcy. NO FURNITURE.

No, I’m not kidding. Yes, it was multiple clients.

I stopped by the burger joint in one of these planned communities to chat with my friend, and former co-worker, [redact] one day. In passing he commented, “I don’t understand it. Million dollar homes and they come in here to get a $6 buck hamburger and their credit card declines.”

My danger alert system went WHOOP WHOOP.

A few months later I started getting emails about clients short selling rent property or homes, if the bankruptcy trustee was going to keep their refund, payment plan options for IRS, etc.

WHOOP WHOOP

I called and got my and my wife’s IRA money out of the market and into cash. I was about six months early, but we didn’t lose a dime.

This recovery sucks. Clients are paying $30,000 a year to provide insurance for employees that the employees don’t want, but it’s cheaper to buy it than pay the $100k penalty. Everybody is complaining about the cost of insurance. Food is up. Housing is up.

The only bright spot is gas prices, but on the other side O&G companies are going bankrupt and many will probably default on their debt. (Did you see BOKF yesterday?) Every default means that someone on the other end lost some life savings. Hell, I’ve lost $5k on an oil well when the bottom fell out and they couldn’t complete the well.

I guess where I’m going with this is that my danger alert system, which has been on “yellow alert” for a year or so, has started going WHOOP again.

We have an economy where growth is fueled by ever more debt, and the American consumer has reached “max debt.”

Yep, they may stimulate the market to ever more highs, but sooner or later – I’m betting sooner – there is going to be a crash. Party over. Maybe it originates in O&G. Maybe it’s already started. Maybe it’s subprime auto debt, maybe something else. I don’t know, but I can feel that a storm is coming.

I don’t know that I had a real point in writing except that your column today hit a nerve with me. I feast on every peoplenomics issue (subscriber name [redact]) as well as the daily writing.

Saving saving saving. Paying off the house if the nutjobs on wallstreet hold off on screwing us for 3 more years. Stocking food and bullets. Looking for a retreat location out your way (Marshall is my home town. Been on the Rusk to Palestine Texas State Railroad a couple of times.) Terrified of what’s coming.

That is all.