More Bad News for the Economy (SafeMoneyReport)

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More Bad News for the Economy 03/26

Just in case you need any more evidence of a capsizing economy, three new reports rip additional holes in the hull:

Torpedo #1: The durable goods report confirms that business investment continues to languish. Orders for non-capital defense goods, excluding aircraft, which is seen as a barometer for business spending, plunged 2.8 percent in February. Overall, orders for durable goods from manufacturers fell 1.2 percent in February. The big cutbacks were across the board: Computers and peripherals, autos, electrical equipment, appliances, aircrafts, and fabricated metal products all took a hit. By all accounts, durable goods orders were lousy. That's certainly not a sign of a burgeoning recovery.

Torpedo #2: The latest new home sales data show us that more Americans are putting off home-buying plans. Sales of new homes plunged a whopping 8.1 percent in February. Existing home sales also fell. Even some of the lowest mortgage rates in 40 years couldn't entice prospective homebuyers. The housing sector is beginning to collapse, and any benefit that it has been giving the economy is steadily disappearing.

Torpedo #3: The American Bankers Association report on credit card delinquencies illustrates that fewer Americans can pay their mounting debts. Credit card delinquencies jumped 4.07 percent in the fourth quarter. In addition, home foreclosures recently reached a record high. The go-go '90s are starting to catch up with Americans. The debt they've piled up is now crushing them as layoffs increase and incomes stagnate. Consumer spending has already cooled off in recent months. Look for the big chill to set in very soon.

Bottom line: This economy's a sinking ship. And when it goes under, stocks will get soaked as well.