$1,400,000,000,000 Gone In Less Than A Week – Stock Market In Turmoil As The Trade War Dramatically Escalates

Our trade war with China has begun to spiral out of control, and as a result global financial markets have been thrown into a state of turmoil.  On Monday, the Dow Jones Industrial Average fell 767 points, and that represented the sixth-largest single day stock market decline in all of U.S. history.  To put that into perspective, the biggest single day decline during the financial crisis of 2008 was just 777 points.  So what we witnessed on Monday was definitely very serious.  And the Nasdaq just got absolutely monkey-hammered as well.  On a percentage basis, it was down even more than the Dow was, and it has now fallen for six days in a row.  We have not seen a losing streak that long for the Nasdaq since President Trump was elected, and some analysts are convinced that even more chaos is on the way.

Overall, 1.4 trillion dollars in stock market wealth has been completely wiped out in less than a week

It took just four brutal trading days for a $1.4 trillion wipeout in the S&P 500 stock value. From the Federal Reserve’s disappointing comments on the future of interest rates to President Donald Trump’s surprise tariffs to China’s weaponizing of the yuan, the record-long bull market took a big hit in a relatively short time.

European stocks have been getting clobbered as well.  In fact, they just experienced their largest two day decline in three years.

After Trump imposed another wave of tariffs on China at the end of last week, we knew that the Chinese would retaliate.  But we expected that the retaliation would be at least somewhat proportional.

Instead, they decided to bring down the hammer.

When Chris Krueger was asked about China’s retaliation, he said that “on a scale of 1-10, it’s an 11”.  The Chinese have announced that they are going to completely stop buying U.S. agricultural products, and they shocked global financial markets when they allowed the yuan to drop like a rock early on Monday.  In response, the U.S. Treasury Department formally designated China as a “currency manipulator”, and it appears that any hopes for a trade deal between the United States and China before the 2020 presidential election are completely and utterly dead.  For an extended analysis of these events, please see the article that I just posted entitled “China Just Went Nuclear In The Trade War, And There Is No Turning Back Now”.

All along, most investors seemed to believe that all of the angry talk would eventually fade and that the U.S. and China would be able to work things out.

But that didn’t happen, and now we have crossed the point of no return.  Financial markets are finally starting to realize that this trade war is going to have very, very serious implications for major U.S. corporations, and this will especially be true for our largest tech companies.

Over the past two trading days, the big five tech companies have combined to lose 228 billion dollars in market value…

Tech’s big five companies lost $66 billion in market value on Friday, and Monday’s plunge brought the two-day drop to $228 billion. Apple had the biggest percentage decline, falling 5.2%. Apple told U.S. Trade Representative Robert Lighthizer in June that the latest proposed tariffs would hit “all of Apple’s major products.” Some analysts are projecting a significant impact.

Meanwhile, by the way, the price of gold has been soaring.

As I have repeatedly argued, something definitely needed to be done about China, but trying to bully them into making a deal was never, ever going to work.

They are a very proud people, and once we started repeatedly pushing them extremely hard, it was just a matter of time before they started pushing back

“Your back is put against the wall and you’re constantly being attacked. Pride starts to kick in, and it’s not surprising China has started to assert some of its force,” said Greg Peters, head of multi sector and strategy at PGIM Fixed Income. “I’m not sure what that means in real terms. It’s not different than any other life situations. You push someone hard enough and they start pushing back. … I never thought it was a good idea to act like it’s a scorched earth policy – I win, you lose. I continue to think that was never viable for the Chinese.”

Being aggressive can be an effective negotiating tool, but if you push too hard and too fast you run the risk of completely alienating the other party.

That appears to be what has happened in this case, and now all hopes for a trade deal are completely dead.  As Bonnie Glaser has noted, the “potential for compromise has past”…

“The timing couldn’t be worse,” said Bonnie Glaser, director of the China Power Project at the Center for Strategic and International Studies in Washington. “The potential for compromise has past. Both sides are digging in and both leaders are first and foremost concerned about their domestic audiences. Politics is in the lead.”

Hopefully the markets will bounce back on Tuesday.  After being down quite a bit earlier, Dow Jones Industrial Average futures are trading slightly higher as I write this article.

However, the truth is that this crisis isn’t going away.  There isn’t going to be a trade deal with China, and that is going to mean a tremendous amount of pain for the global economy.

When a financial bubble pops, usually there is some sort of trigger that causes it to happen.  In 2008, it was the subprime mortgage meltdown.  This time around, it looks like the trigger could be our trade war with China.

As I noted a few days ago, our financial markets are more primed for a crash than they have ever been before.  And we are moving into the season when big crashes tend to happen.

Things have not looked this ominous since 2008, and a lot of investors are starting to get very nervous.

We shall see how the rest of this year plays out, but right now events certainly seem to be moving in a very alarming direction.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

“The Stock Market Started To Fall In July…”

Will we look back on the month of July as a critical turning point for the stock market?  During the first half of 2019, stock prices soared to record high after record high even though we just kept getting one number after another that indicated that a new economic slowdown was starting.  Because of the disappointing performance of the U.S. economy, it was believed that we would see a rate cut from the Federal Reserve on Wednesday, and that is precisely what happened.  But instead of rejoicing, investors started to panic a bit, and the Dow Jones Industrial Average ended the day down 333 points.  We will get into why that happened in just a little bit.  But without a doubt it seems quite odd that the Fed’s very first rate cut since December 2008 actually caused stocks to go down.  On a historical basis, interest rates are already very low right now, and so this greatly limits what the Fed will be able to do once the next recession officially begins.  Of course most investors are not concerned with such considerations.  What they really want is for interest rates to be pushed all the way to the floor as quickly as possible, and so they were quite disappointed with what they heard from Fed Chairman Jay Powell on Wednesday.

But considering the fact that we haven’t seen a rate cut in more than a decade, the truth is that investors should have been thrilled by what happened.  When interest rates go down, that tends to promote more economic activity

As expected, the Fed lowered its federal funds rate by a quarter-percentage point to a range of 2% to 2.25%. The move is likely to ripple through the economy and financial system, nudging down rates for credit cards, home equity lines and auto loans and theoretically sparking more economic activity. While the rate cut should aid borrowers, it will frustrate savers who were just starting to benefit from higher bank account yields.

And more economic activity usually results in higher corporate profits, and higher corporate profits usually result in higher stock prices.

So why isn’t Wall Street rejoicing?

Well, it is because Fed Chairman Jay Powell told the press that this rate cut was just “a mid-cycle adjustment to policy” and that he didn’t anticipate that this was “the beginning of a lengthy cutting cycle”.

Many on Wall Street had been anticipating that the Federal Reserve would keep on cutting rates after this rate cut, but as I detailed the other day, the only way that would make sense is if we were plunging into a recession.

And while the Fed is definitely willing to admit that there are some trouble signs, they are not willing to completely throw in the towel on the “booming economy” narrative just yet.  The following comes from CNBC

In approving the cut, the FOMC cited “implications of global developments for the economic outlook as well as muted inflation pressures.” The committee called the current state of growth “moderate” and the labor market “strong,” but decided to loosen policy anyway.

Needless to say, President Trump was not thrilled by what happened on Wednesday.  He was hoping that this would be the beginning of a series of rate cuts, because the lower interest rates go the better chance he has of being re-elected.

In a two part tweet on Wednesday, Trump once again ripped into Jay Powell and the Federal Reserve

What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world….

….As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place – no inflation. We are winning anyway, but I am certainly not getting much help from the Federal Reserve!

And it will be very interesting to see if investors on Wall Street continue to vent their frustrations for the rest of the week.

At other times when Wall Street has been disappointed by the Fed, we have seen violent moves toward the downside, and it is entirely possible that such a scenario could play out once again.

In fact, one Morgan Stanley analyst had already been warning that the coming reversal “is likely to be sharper and deeper than one might expect”

Echoing Guggenheim’s fears that US equities are in for a dramatic collapse, Morgan Stanley’s Mike Wilson warns that “…if equity markets fail one more time at our key resistance point, we believe the reversal is likely to be sharper and deeper than one might expect, even if the earnings recession is more benign than we expect.

And Egon von Greyerz is even more pessimistic about what is right around the corner…

The messages from the ECB and the Fed couldn’t be clearer. They are seeing major problems in the financial system and in the world economy and they will do whatever it takes to save the system. But they will fail.

The autumn of 2019 will see a major shift in sentiment as markets turn from a secular bull to a secular bear. We are likely to see major crashes in many global stock markets. Virtually no one is prepared for this so there will be both panic and despair.

Of course the truth is that we have never been more perfectly primed for a stock market crash than we are right now, and things are lining up ideally for the sort of nightmare scenario that I have been warning about.

It is just a matter of time before all of our economic and financial bubbles burst, and when they do the pain is going to be off the charts.  I think that the CEO of Overstock.com recently made this point very well

Patrick Byrne, the CEO of online retailer Overstock.com, sounded an ominous note for the several years ahead as well. “I think it will be bad,” he said. “To be honest, I think that ’08 was the hors d’oeuvres course,” he said according to Fortune. Byrne, a longtime cryptocurrency enthusiast, compared what he anticipates will happen to the economy to what might happen to a bridge overloaded with too many vehicles. “It’s a little bit like asking me there’s a bridge that was designed to hold 20 cars passing over it at a time and there’s now 100 going over it,” Byrne said. “When’s it going to break? When’s it going to collapse? That’s really your answer.”

“I’m kind of shocked it’s gone on this long,” Byrne continued. “I think that we have deep, deep, structural, architectonic level problems in our economy that will surface.”

As Byrne aptly pointed out, the big surprise is that it has taken this long for everything to collapse.

We had far, far more time than we deserved to try to get things turned around, but we never actually fixed any of our long-term economic and financial problems.

Now the next crisis is at our door, and I believe that the remainder of this year will turn out to be quite “interesting” indeed.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

As Wall Street Celebrates Rising Stock Prices, Companies Are Literally Shutting Down All Over America

How long can the stock market possibly stay completely disconnected from economic reality?  On Monday, the Dow Jones Industrial Average rose just 27 points, but that was good enough to push it to yet another new all-time record high.  Investors have been absolutely thrilled by the extremely impressive bull run that we have witnessed so far in 2019, but there is no way that this is sustainable.  Wall Street may be celebrating for the moment, but meanwhile all of the hard economic numbers are telling us that we have now entered a new economic slowdown.  Just like in 2008, it appears to be inevitable that the party on Wall Street is about to hit a brick wall, but nobody should be surprised when it happens.  Everywhere around us there are signs of economic trouble, and right now companies are literally shutting down all over America.

For example, just take a look at what is happening to the trucking industry.  I recently warned about the trucking “bloodbath” that was unfolding, and over the past week it has greatly accelerated.

On the 12th of July, we learned that trucking giant LME had abruptly shut down.  The following comes from Zero Hedge

Less-than-truckload carrier LME has reportedly “suddenly and abruptly” shut down its operations, according to FreightWaves.

The company is a regional carrier based in Minnesota that operated throughout the Midwest. The company had terminals in 30 locations across the U.S. and through interline agreements services all of North America. It also worked with major companies like 3M, John Deere and Toro.

The company reportedly included “over 600 men and women” and has been listed as having 382 power units and 1,228 trailers, with 424 truck drivers.

Then today we learned that Timmerman Starlite Trucking suddenly shut down without any notice

40 year old California trucking outlet Timmerman Starlite Trucking, Inc. is the latest victim in the “trucking apocalypse” and announced that it would be shutting down effective immediately, according to FreightWaves.

30 employees are expected to lose their jobs as a result. The company is based in a mid sized city about 100 miles east of San Francisco and had a fleet of 30 trucks, 150 trailers and 28 drivers.

The company’s owner cited “a tough freight market and environmental regulations” as reasons for the shut down. The company announced the shutdown on its Facebook page.

Of course those two trucking companies are definitely not the only victims of this “bloodbath”.  According to Business Insider, ALA Trucking, Williams Trucking, Falcon Transport and New England Motor Freight have also completely ceased operations in 2019.

If the U.S. economy really was “booming”, this would not be happening.

Meanwhile, major retailers continue to fall like dominoes.  Charming Charlie is headed for bankruptcy and will be closing all of their stores

Fashion accessory retailer Charming Charlie will close all its stores after going bankrupt for the second time in less than two years. More than 3,000 full- and part-time employees could lose their jobs.

Charming Charlie Holdings Inc. filed for Chapter 11 protection in Delaware with plans for going-out-of-business sales at about 261 stores, according to court documents. The chain expects the liquidation to take about two months.

In addition, we just learned that Fred’s will be shuttering another 129 stores as it desperately attempts to stay alive…

Troubled discount merchandiser Fred’s has announced another round of store closures.

The chain will shutter 129 stores, leaving it with about 80 locations, USA Today reported. Going-out-of business sales have already begun.

Not too long ago, I went to a going out of business sale at a local store that was closing down, and it was definitely depressing.  At one time the shelves had been packed full of products, but by the time I got there people were clawing through the small handfuls of deeply discounted merchandise that still remained.

Sadly, such scenes are being repeated over and over again all around the country.  In fact, things are already so bad that even Manhattan retailing legend Barneys is likely headed for bankruptcy

Barneys may be on the cusp of filing for bankruptcy protection as the luxury Manhattan retailer contends with high rents and shoppers going online, according to two media reports.

Reuters, citing unnamed sources, reported Saturday that Barneys has tapped law firm Kirkland & Ellis LLP and is weighing a potential bankruptcy filing among other options that could occur in the coming weeks.

The all-time record for store closings in a single year was set in 2017 when 8,139 stores shut down.

According to a brand new report that was just released, we are on pace to absolutely shatter that old record.

In fact, Coresight says that the number of store closings in the U.S. could hit 12,000 by the end of this year…

The “going-out-of-business” sales and liquidation of other brands is expected to continue. Coresight estimates closures could reach 12,000 by the end of the year, the report said.

In The Beginning Of The End, I painted a picture of a future in which America’s communities would be littered by boarded up stores that had been abandoned by major retailers.

Now it is happening right in front of our eyes.

Everything that is taking place in the “real economy” makes perfect sense, and unfortunately our economic problems are likely to accelerate significantly in the months ahead.

What doesn’t make sense is what we are witnessing on Wall Street.

There is no way that stock prices should be rising like this, but financial bubbles don’t typically follow rational patterns.

Instead, they usually just keep going until something comes along to end them.

And considering everything that is going on in the world right now, that “something” could definitely arrive sooner rather than later.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Dow 27,000? I Think That We Have FINALLY Reached Peak Stock Market Absurdity

Even though everything else seems to be going wrong, the stock market just continues to soar to new record highs.  In fact, the Dow Jones Industrial Average closed above 27,000 for the first time ever on Thursday.  Investors continue to relentlessly believe that bright days are ahead even though we are on the brink of a war with Iran, we are in the middle of a trade war with China, California has been hit by more than 10,000 earthquakes over the past week, and all of the economic numbers are screaming that a recession is dead ahead.  There has certainly been a lot of craziness on Wall Street in recent years, but the truth is that stock prices have never been as absurd as they are right now.  It is inevitable that a very painful reality check is coming, but for the moment investors are celebrating another historic landmark

The 30-stock average broke above 27,000 for the first time in its history, rising 227.88 points, or 0.9% to 27,088.08. The Dow first closed above 26,000 in January of 2018, so it’s been a little more than a year-and-half trek between 1,000 point moves. The gains were largely driven by expectations the Fed will cut rates, insulating the market from a slowing economy and a trade battle with China.

But if things are so good, then why is the Federal Reserve talking about cutting interest rates?

Sadly, the truth is that the Federal Reserve is considering rate cuts because the economic numbers have been disastrous lately.  Global trade has fallen to the lowest levels that we have seen since the last recession, and manufacturing activity just continues to plummet.  Here in the United States, manufacturing activity just hit the “lowest level in nearly three years”

US manufacturing activity last month fell to its lowest level in nearly three years — well below the pace when President Donald Trump took office — another warning sign for the world’s largest economy as it marks the longest expansion on record.

The manufacturing slowdown was driven by weakening demand for US-made goods, with factories reluctant to produce stock they may not be able to sell, according to the Institute for Supply Management’s monthly survey.

Meanwhile, JPMorgan’s Global Manufacturing PMI just plunged to the lowest level in nearly seven years

It’s a bloodbath. No matter where you look, global manufacturing surveys are signaling growth is over (and in most cases, outright contraction is upon us).

JPMorgan’s Global Manufacturing PMI fell to its lowest level for over six-and-a-half years and posted back-to-back sub-50.0 readings for the first time since the second half of 2012.

But in the bizarro environment that we find ourselves in, investors see those absolutely horrible numbers as evidence that the Fed will soon cut interest rates, and that means it must be a good time to buy stocks.

Every bad economic number just seems to fuel the feeding frenzy, and there certainly have been a lot of bad numbers in recent days.

For example, we just learned that small business employment has been falling at a rate that we haven’t seen “in over 9 years”

The small business sector leads the cycle and employment here has plunged 61k in the past two months. Haven’t seen this in over 9 years; same decline we saw in Feb-March of 2008 when the consensus was busy calling for a soft landing.

That is terrible news, but for many investors that is a prime buying signal.

Everywhere we look we see signs of economic trouble.  The auto industry is mired in the worst slump in a decade, home sales have slowed dramatically all over the nation, and we are pace to absolutely shatter the record for most retail stores closed in a single year.  In fact, on Thursday we learned that another major retailer is completely liquidating

Fashion accessory retailer Charming Charlie will close all its stores after going bankrupt for the second time in less than two years. More than 3,000 full- and part-time employees could lose their jobs.

Charming Charlie Holdings Inc. filed for Chapter 11 protection in Delaware with plans for going-out-of-business sales at about 261 stores, according to court documents. The chain expects the liquidation to take about two months.

But in an environment where “bad news is good news”, that is just another indication that this is a perfect time for investors to gobble up stocks like there is no tomorrow.

For months, I have been documenting the numbers that indicate that a new economic downturn has already begun.  And one of the sectors where we can see this most clearly is in the trucking industry

Freight rates have dipped year-over-year for six months straight while loads on the spot market, in which retailers and manufacturers buy trucking capacity as they need it, rather than through a contract, fell by 50.3% in June year-over-year. Truckers have also continued to warn of a “bloodbath” as they slash their profit expectations and companies file for bankruptcy.

Yet no matter how bad things get for the real economy, the euphoria on Wall Street never seems to end.

Investors just continue to relentlessly pour more money into stocks when everything is telling them to stop.

In fact, even the bond market is flashing warning sign after warning sign.  The following example comes from CNN

Something happened in the bond market last week that has occurred before five of the past six major market meltdowns.

The yield on the benchmark 30-year US Treasury bond — the lesser-known but still important fixed income cousin to the 10-year — briefly dipped below 2.5%. In other words, the 30-year was yielding less than the Federal Reserve’s short-term federal funds rate.

But until the next market meltdown actually happens, the irrational optimists on Wall Street are just going to continue to mock those of us that are warning that the party cannot continue indefinitely.  Sadly, when the party on Wall Street finally ends it is likely to happen very suddenly, and the pain will be off the charts.

Let me say this one more time.  You only make money in the stock market if you get out in time.  If you are still holding on to your stocks after the big crash happens, it is not going to matter that the Dow once hit 27,000, because you will never see any of the money that you could have made if you had gotten out at the top of the market.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Economic Chaos Erupts! – Global Manufacturing Plunges, The Trade War Expands And The Nasdaq Enters Correction Territory

The global economic slowdown is really starting to accelerate.  Just within the past few days, we have gotten more really awful global manufacturing numbers, the trade war has expanded to more nations, and the Nasdaq has officially entered correction territory.  We have not witnessed this sort of global economic environment since the Great Recession, and if the economic chaos continues to escalate it won’t take too much to spark a brand new financial crisis.  Of course the global financial system is far more vulnerable than it was back in 2008, and so if we stay on the path that we are currently on we could be facing a nightmare scenario very rapidly.

Let’s talk about the manufacturing numbers first.  The numbers coming out of Germany are already at a crisis level, and manufacturing is also now contracting in Japan, South Korea and China as well.

Overall, global manufacturing as a whole has now fallen into contraction territory for the first time in seven years

Global manufacturing was the weakest since 2012 last month, a victim of mounting trade tensions and further reason to worry that the world economy is weakening.

With softness in Germany, Japan, the U.K. — as well as the lowest U.S. result in a decade — IHS Markit’s global Purchasing Managers Index fell to 49.8 in May, below the 50 level that divides expansion from contraction.

The reports underscore the growing threat posed by the escalating U.S.-China trade war, and they coincided with a fresh warning from Wall Street about recession risks.

The reason why so many people are freaking out about these numbers is because this is exactly what we would expect to see if we were entering a global recession.

Meanwhile, global financial markets are looking increasingly shaky.  On Monday, the Nasdaq fell another 120 points and it has now officially entered correction territory

Stocks ended mostly lower Monday, June’s first day of trading, amid reports that the U.S. government is planning to target a host of big tech companies with antitrust and business practice probes. Shares of Alphabet, Amazon, Facebook and Apple all weighed on the market during Monday’s session.

The Nasdaq dropped 1.6% to enter correction territory, closing more than 10% below its record high set in late April.

The term “correction territory” might not mean a lot to many of you, so let me put what is happening in terms you may understand.

On Monday alone, America’s most prominent tech stocks lost approximately 150 billion dollars in value.  It looks like the Trump administration is getting ready to go to war with the big tech companies, and that is really, really bad news for tech investors.  The following comes from Breitbart

The Masters of the Universe got hit hard by investors on Monday. Like $150 billion hard.

Shares of the top tech giants fell sharply on Monday after reports that U.S. antitrust regulators had divided up oversight of the sector, with the Department of Justice assuming responsibility for Alphabet and Apple and the Federal Trade Commission taking on Facebook and Amazon. This triggered fears that the government could mount challenges to the business models of the companies.

Shares of Alphabet dived 6.1 percent on Monday after the Wall Street Journal reported that the Justice Department is in the early stage of preparing an antitrust probe of the company. Reuters reported that the Department of Justice is also looking into Apple’s business for possible antitrust violations.

Speaking of war, our trade conflict with China continues to escalate.  The mainstream media hasn’t been talking much about it, but apparently the Chinese have decided to put purchases of U.S. soybeans “on hold” until a trade agreement is reached…

China, the world’s largest soybean buyer, has put purchases of American supplies on hold after the trade war between Washington and Beijing escalated, according to people familiar with the matter.

State-grain buyers haven’t received any further orders to continue with the so-called goodwill buying and don’t expect that to happen given the lack of agreement in trade negotiations, said the people, who asked not to be named because the information is private.

U.S. soybean farmers have been sitting on unprecedented amounts of soybeans in hopes that an end to the trade war would raise prices.

But instead, demand for U.S. soybeans is going to go through the floor, and this could potentially force thousands of soybean farmers into bankruptcy.

And in addition to our trade war with China, the Trump administration has apparently decided that now is a good time to start a trade war with Mexico

From produce to cars, a wide variety of Mexican goods could become more expensive if Trump follows through on his threat to hit Mexican imports with tariffs that soon could climb to 25%. Trump wants to pressure Mexico into doing more to halt the flow of Central American migrants to the U.S. via the Mexican border.

The tariffs, set to begin June 10, would gradually climb to 25% on Oct. 1 if Mexico doesn’t take steps “to dramatically reduce or eliminate” the number of migrants, Trump said Thursday. Such a strategy would hurt American shoppers, the economy and stocks, experts say, just as U.S. growth is slowing and the threat of more tariffs on Chinese imports looms larger.

At least in this case the U.S. and Mexico are still talking, and so perhaps some kind of resolution can be reached.

On top of everything else, the Trump administration has also just decided to add India to the trade war as well

Mr. Trump on Friday said India would be removed from the U.S.’s privileged-trading program called the Generalized System of Preferences on Wednesday. Under the decadeslong program meant for some developing economies, the U.S. had allowed India to avoid tariffs on certain exports to the U.S. in the interest of promoting tighter trade ties and development.

India, the U.S.’s ninth-largest trading partner, is a top beneficiary of the GSP program. Mr. Trump’s move will add tariffs of as much as 7% on Indian exports of goods like chemicals, auto parts and tableware to the U.S., which in 2018 accounted for more than 11%, or $6.3 billion, of India’s total exports of goods valued at $54.4 billion, according to the Congressional Research Service, a research agency for the U.S. Congress.

A global trade war is going to be incredibly painful for everyone, and this is all happening at a time when the global economy was already starting to slow down substantially.

Here in the United States, a lot of businesses are really starting to notice a big decline in economic activity.  Here is just one example that was published on Zero Hedge earlier today…

Down here, in Texas, I am seeing a big drop in economic activity over the last 6 months. Our healthcare businesses’ volume over this period is at 629, down from 770, year-on-year, almost a 20% decline, and the worst six month decline in our 15 year history. We have been pulling out all of the stops for business development, cutting overhead, and running all the QC traps to determine if it is something within our business, within our local market, within our industry, or having to do with the economy in general.

In this period, we have seen seven competitors go out of business in our city. We have recently confirmed similar experiences with colleagues in Kentucky, Colorado, and elsewhere in Texas. One of them asked me, “If this is not temporary, what would the strategy be?” My response was, “Hunker in the bunker and wait for everyone else to die.”

This is what we have all been preparing for, and things are going to get progressively tougher in the months ahead.

Unfortunately, most Americans are completely and totally clueless about what is ahead.  Today, 59 percent of all Americans are living paycheck to paycheck, and the truth is that the vast majority of us are entirely unprepared to go through another recession.

And of course many believe that what we are facing is going to be much worse than just a “recession”.  A perfect storm is rapidly coming together, and the chaos that we have seen so far is nothing compared to what is rapidly approaching.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

U.S. Stocks Have Now Fallen For 5 Weeks In A Row – That Is The Worst Stock Market Streak In Almost 8 Years

We haven’t seen stock prices slide like this in a long time, and if this keeps up we could soon be looking at an avalanche.  Our rapidly escalating trade war with China and more bad U.S. economic numbers pushed stocks down once again this week, and at this point the Dow Industrial Average has now fallen for five weeks in a row.  We haven’t seen a losing streak this long since June 2011, and it is yet another indication that we have reached a major turning point.  Some positive comments about China from President Trump on Friday helped to lift stocks a little, but it wasn’t enough to put stocks into the green for the week.  Of course the S&P 500 and the Nasdaq are both working on losing streaks as well.  According to CNBC, both of them have now declined for three weeks in a row…

But Friday’s gains were not enough to offset this week’s losses. The Dow dropped 0.7% this week to post its fifth consecutive weekly decline, its longest streak since 2011. The S&P 500 and Nasdaq fell a third straight week of losses, their longest slide since December 2018. The weekly losses come at a time when investors are growing more convinced that the trade war will take longer than expected to conclude and could hurt the economy.

Unfortunately, things are not likely to turn around any time soon.  As I discussed yesterday, there is not much optimism that a trade deal with China will happen any time in the foreseeable future, and that is going to continually weigh on the economy.

Meanwhile, we continue to get more numbers that indicate that the U.S. economy is starting to slow down significantly.  On Friday, a key survey of U.S. manufacturing activity plunged to the lowest level in more than 9 years

An IHS Markit “flash” survey of U.S. manufacturers fell to a nine-and-a-half-year low of 50.6 this month from 52.6 in April. Manufacturing conditions have been soft for months.

Even more ominous, was the firm’s survey of U.S. service-oriented companies such as banks and retailers. These slipped to a 39-month low of 50.8 from 52.7.

Lately you have heard me talk about a lot of things that haven’t happened in “8 years” or “9 years”.  In so many areas, we are seeing numbers that we have not seen since the last recession, and many believe that the worst is yet to come.

And actually things are even worse for the retail industry than they were at any point during the last recession.  We are already on pace to absolutely shatter the all-time record for store closings in a single year, and on Friday we learned that yet another retail chain is shutting down all of their stores

In another sign of traditional retailers’ struggles, Topshop plans to close all 11 of its US stores as its parent company seeks to restructure after filing for bankruptcy protection.

Arcadia Group, the London-based owner of fast-fashion chain Topshop Topman, said it was facing “unprecedented” market conditions in the retail sector.

Day after day we just continue to get more numbers that tell us that the U.S. economy is heading in the wrong direction.

And we received more confirmation of that fact when J.P. Morgan economists dramatically slashed their U.S. GDP forecast for the second quarter of this year…

J.P. Morgan economists said they now see much slower second-quarter growth of just 1%, down from their prior forecast of 2.25% and way off the 3.2% reported in the first quarter.

“The April durable goods report was bad, particularly the details relating to capital goods orders and shipments. Coming on the heels of last week’s crummy April retail sales report, it suggests second quarter activity growth is sharply downshifting from the first quarter pace, ” the economists wrote.

Meanwhile, more troubling economic news continues to come in from all over the globe.  We just learned that Mexico’s economy is officially shrinking, and the Chinese government was just forced to take over an insolvent bank for the first time ever

China’s financial regulators said on Friday the country’s banking and insurance regulator and the central bank, will take control of the small, troubled inner Mongolia-based Baoshang Bank due to the serious credit risks it poses. The regulator’s control of Baoshang will last for a year starting on Friday, the People’s Bank of China (PBOC) and China Banking and Insurance Regulatory Commission (CBIRC) said on their websites.

The stage is being set for the sort of global economic meltdown that we have been anticipating.  Of course if the U.S. and China were able to pull off a miracle and agree to a trade deal, that would be a tremendous boost to both the financial markets and the entire global economy.  But the only way that is going to happen is if one side or the other totally caves in.  The Chinese government has made a really big deal about the fact that they are not going to move from their current positions, and so the only way that a deal will happen at this point is if Donald Trump decides to wave a white flag and completely surrender to the Chinese.

What do you think the odds are of that happening?

But as the U.S. economy continues to deteriorate, the pressure on Trump to “do something” is going to be immense.

So we shall see what happens.  For now global financial markets are slowly sliding downhill, but eventually patience is going to run out and at that point we could see a mad dash for the exits.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Stocks And Bonds Are Both Sending The Exact Same Message As Wall Street Braces For A Very Uncertain Future

Slowly but surely, Wall Street is starting to understand that the good times are over.  For months, most investors were absolutely convinced that the U.S. and China would be able to work out a trade deal because the alternative would simply be too painful for both sides.  But now trade talks are completely dead, and Wall Street is starting to come to grips with the reality that we really are facing a very long trade war.  Unless there is a major miracle, this trade war with China is likely to last until the presidential election in 2020, and if Trump wins it could go a lot longer than that.  And of course this comes at a time when the U.S. economy is already slowing down dramatically.  The economic optimism of the last couple of years is being replaced by a deep sense of gloom, and we are starting to see this reflected in the behavior of the markets.

For example, on Thursday we witnessed “dramatic” moves in the bond market as investors engaged in a rush to safety…

Investors rushed into the safety of bonds Thursday and dumped stocks, as it appeared the trade war could be prolonged and more painful for the world economy than expected.

The moves in the bond market were dramatic, with the 10-year Treasury yield dropping about 8 basis points in its biggest one-day move since April 1. At the same, traders in fed funds futures bet on the Fed making two quarter-point rate cuts by the middle of next year and possibly a third in the second half of 2020.

Meanwhile, stocks continued to fall as well, although some positive remarks from President Trump caused a bump late in the day…

Wall Street is coming to grips with the idea that the US-China trade war will get worse before it gets better.

The Dow dropped 286 points, or 1.1%, on Thursday on fears about the tariff battle slowing global growth and dinging corporate profits. The index recovered somewhat toward the end of the day — at one point it was down nearly 450 points.

Unfortunately, stocks and bonds are both telling us the exact same thing.

According to the head of short U.S. rate strategy at Bank of America Merrill Lynch, U.S. financial markets are indicating that “we’re moving toward a worst case scenario, and that could persist for quite some time”

“The market is obviously telling you that it’s quite worried about some of the incoming data, including the PMIs this morning, the ongoing trade rhetoric and the move in risk assets,” said Mark Cabana, head of short U.S. rate strategy at Bank of America Merrill Lynch. Cabana said the market now believes a full blown trade war is coming, with taxes on all of China’s products.

“The concern the market has right now is that we’re moving toward a worst case scenario, and that could persist for quite some time. If that’s the case, then the market is believing the [weak] economic data, and the Fed will likely need to respond to that by trying to offset and prevent a recession,” he said.

Of course there is still enough hope in the marketplace to keep the floor from completely falling out from underneath investors, but at this point even CNBC’s Jim Cramer is admitting that “banking on hope” is not a good strategy…

“If you buy right now on anything other than a slammed, super-growth stock down on a general market pullback, well you’re banking on hope, and hope should never be a part of the equation,” the “Mad Money” host said.

From this point forward, we should start to see things escalate pretty quickly.

Relations with China are going to continue to deteriorate, and problems between the United States and China are going to expand well beyond the economic sphere.

But for the immediate future, most of the focus will be on the economic consequences of the trade war, and most of the “experts” are starting to openly admit that those consequences are going to be quite painful.  The following comes from CNN

“You can’t have the world’s two largest economies in a long, drawn-out mutually destructive trade war and not slow the global economy,” said Art Hogan, chief market strategist at National Securities Corporation.

Of course Hogan is 100 percent correct.  The trade war is going to hurt all of us economically, and very disturbing numbers are rolling in on a daily basis now.  For example, we just learned that new manufacturing orders just fell for the first time since the last recession

American business activity tumbled to a three-year low in May due in large part to concerns about tariffs, according to a report released on Thursday by IHS Markit. New manufacturing orders declined for the first time since August 2009.

And as I pointed out the other day, global exports have also fallen to the lowest level that we have seen since 2009.

Once the dominoes start falling, all of our economic and financial bubbles could start bursting at the same time, and that could potentially create a crisis unlike anything that any of us have ever seen before.

My wife and I are both feeling a tremendous sense of urgency right now.  So many of the things that we have been waiting and watching for are starting to unfold.

Many believed that 2019 was going to represent a major turning point, and that appears to be exactly what is happening.

So hold on to your hats, because the remainder of this year is likely to be extremely “interesting”.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Do NOT follow this link or you will be banned from the site!