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‘Near Perfect’ Indicator That Precedes Almost Every Stock Market Correction Is Flashing A Warning Signal

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Exclamation Marks - Public DomainAre we about to see U.S. stocks take a significant tumble?  If you are looking for a “canary in the coal mine” for the U.S. stock market, just look at high yield bonds.  In recent years, almost every single time junk bonds have declined substantially there has been a notable stock market correction as well.  And right now high yield bonds are steadily moving lower.  The biggest reason for this is falling oil prices.  As I wrote about the other day, energy companies now account for about 20 percent of the high yield bond market.  As the price of oil falls, investors are understandably becoming concerned about the future prospects of those companies and are dumping their bonds.  What is happening cannot be described as a “crash” just yet, but there has been a pretty sizable decline for junk bonds over the past month.  And as I noted above, junk bonds and stocks usually move in tandem.  In fact, junk bonds usually start falling before stocks do.  So does the decline in high yield bonds that we are witnessing at the moment indicate that we are on the verge of a significant stock market correction?

That is a question that CNBC asked in a recent article entitled “Near perfect sell signal says stocks should drop“…

The S&P 500 and the iShares iBoxx High Yield Corporate Bond ETF are a mirror image since the start of the year, but since the end of October, high yield has diverged to the lower right, and yet the S&P 500 has continued to record highs. Since separating in October, the S&P 500 is up 3 percent, while the high-yield ETF is down 4 percent.

On 10 occasions since 2007, the high-yield ETF dropped 5 percent in 30 trading days. During nine of those instances, the S&P 500 fell as well, with an average return of negative 9 percent, according to CNBC analysis using Kensho.

Only once did high yield give a false sell signal. That was last year, when the market was already entranced by the Federal Reserve’s quantitative easing program, which has seemed to elevate stocks with an abnormal consistency. And even then, the S&P 500 managed just a 0.4 percent climb amid the junk debt rout.

Personally, I am convinced that this correlation between junk bonds and stocks is very significant.

Let’s just go back and look at what happened during the financial crash of 2008 for a moment.

In the chart posted below, you can see that high yield bonds began crashing in the middle of September that year…

High Yield Bonds 2008

But U.S. stocks did not crash at the same time.  In fact, the chart below shows that they did not really begin crashing until early October…

Dow Jones Industrial Average 2008

That is why analysts often refer to junk bonds as a “leading indicator”.  What happens to high yield debt is often a really good indicator of what is about to happen to stocks.

Now let’s take a look at what is happening today.

Since the beginning of November, junk bonds have been falling steadily…

High Yield Bonds November

Meanwhile, the Dow has continued to reach new heights…

Dow Jones Industrial Average November

This is not a state of affairs that can persist indefinitely.  Either junk bonds will rebound or U.S. stocks will start falling.

If the U.S. economy was on solid footing, you could perhaps argue that it could go either way.

Unfortunately, that is not the case.  At this point, the stock market has become completely divorced from economic fundamentals.  Price to earnings ratios are at absurd levels, margin debt is hovering near record highs, and the “real economy” continues to fall apart.  We are enjoying a massively inflated standard of living which is being propped up by the largest mountain of debt in world history, and it is only a matter of time before reality starts catching up with us.

And the signs of our long-term economic decline are all around us if you are willing to look at them.  For example, the lead headline on the Drudge Report today was about how China has now overtaken us and has become the largest economy on the planet

Hang on to your hats, America.

And throw away that big, fat styrofoam finger while you’re about it.

There’s no easy way to say this, so I’ll just say it: We’re no longer No. 1. Today, we’re No. 2. Yes, it’s official. The Chinese economy just overtook the United States economy to become the largest in the world. For the first time since Ulysses S. Grant was president, America is not the leading economic power on the planet.

It just happened — and almost nobody noticed.

The International Monetary Fund recently released the latest numbers for the world economy. And when you measure national economic output in “real” terms of goods and services, China will this year produce $17.6 trillion — compared with $17.4 trillion for the U.S.A.

Meanwhile, some of the most iconic companies in the United States continue to struggle deeply.  For instance, Sears has just announced that the number of store closings for this year is going to reach a total of 235 and that the company lost more than half a billion dollars during the third quarter of 2014 alone…

Sears Holdings Corp., posted a disappointing third quarter Thursday that saw revenue, earnings, and sales at stores open at least a year all fall as the retailer tries to salvage its business.

Sears, which owns Kmart, lost $548 million, or $5.15 a share, for the period ended Nov. 1. That’s up from a loss of $534 million, or $5.03 a share, in the year-ago period.

Even though Sears is losing more than 500 million dollars a quarter, banks and investors continue to inject new money into the corporation.  That is a crying shame, because Sears is a company that is going to zero.  Anyone that is investing in Sears at this point is just pouring their money into a black hole.  As Kevin O’Leary would say, they are guilty of murdering money.

And of course what is happening to Sears is just part of the broader “retail apocalypse” that I keep writing about.  In order for retailers to thrive they need healthy consumers, and consumers are not financially healthy because the real economy is a disaster zone.

But these days so many people are in denial.  The stock market has been soaring for so long that many skeptics are now proclaiming that another 2008-style crash will never happen.  Even though the fact that we are in the midst of an absolutely insane financial bubble should be glaringly obvious to anyone with half a brain, these skeptics have convinced themselves that the current state of affairs can persist indefinitely.

Sadly, it looks like what is about to hit us in 2015 is going to serve as a very rude wake up call for them and for the millions of other Americans that currently have their heads in the sand.

  • Guest

    Let’s get the show on the road. This is dragging on forever. I’m tired of coming home from work each day, getting online and seeing that the stock market made new all-time highs, gold and silver were smashed down, etc. Simply put, I’m tired of the daily absurdities of this economy. I’m tired of being insulted by our “leaders” and the mainstream media. And I’m most definitely tired of being oppressed financially.

    • David R.(Canada)

      At least you understand what’s happening; most do not.
      At least you have a chance to protect yourself, while others max-out their credit-card this Christmas.

      • Mike Smithy

        I am starting to think that maybe I have the wrong approach to the collapse. Instead of remaining debt free, maybe I should employ the central bankster strategy and max out my credit and wait to be bailed out or receive debt forgiveness like all the other muppets will receive after SHTF.

        • danbax

          I keep getting sent 0 percent for a year credit cards that don’t expire till 2016.

          So the game will keep going for a while.

          • Orange Jean

            They are hoping you’ll fall into the trap of accepting those, then over extending yourself in debt… at which time the 0% interest increases to something like 20%+ and when you can’t pay it all off at once they’ll make a killing.

        • Zu schlau für diese Scheiße

          I hear that!

        • Hot Rain

          Absolutely do not do this . In any collapse scenario, bank debt will be transferred to the Fed Gov. This debt will be kept on the back burner as they will have more pressing issues. In do time, the reclaiming of debts, and all associated fees, will become do. At this time, the US Gov will become ruthless. ‘Debtors prisons’ will be nothing more than the FEMA camps.

        • grumpyhillbilly

          Not that I would do this, but I’ve wonder about borrowing from the banks and converting it to gold. Then buy a fake identity, and walk across the Rio Grande. The banksters are starting to corrupt my mind.

        • Gerroz Gsj

          Been thinking the same. Those of us who are smart and keep a healthy economy might get the shaft completely

    • MichaelfromTheEconomicCollapse

      Like most Americans, I find that I have such a short attention span these days. We are not a patient people, and we do not like waiting for things. This contributes greatly to our obsession with the short-term.

      But when the coming problems do arrive, nearly all of us will wish that we would have had more time to prepare.


      • Kim

        that’s understandable. but as time passes, this too will come to pass. in the meantime, prepare, endure and pray for the ability to cope with all of this craziness

        • K2

          Not all things come to pass. This is happening all over the world.

          • Richard O. Mann

            That it is happening all over the world should be another wake up call. When the system goes into shut down, it will be the whole world that goes. Every economy on earth right now seems to be going through down turns of one type or another. I think many are hanging on only because the US is still hanging. Once we slip over the edge we will have lots of company on the way down.

          • K2

            I know.

          • Guest

            There is a new economy coming. A food economy.

          • Richard O. Mann

            That is what I am thinking. It’s going to be based on what you have to trade in the way of food and other basic living materials such as cloths. Many are saying that you should stock up on gold and silver, but I have never known of either being good to eat.

          • jedrin

            Gold and silver are for a year or two after. First is food and water, next is security and then clothes. Clothes only last a little while in high stress use. I just bought a years worth of sock that will hold up and made in USA, Covert Threads, great socks. How each of us deals with this is what will be the outcome, either transformation or restoration. I choose restoration.

          • Cantilever

            Food and ammo…

      • CharlesH

        Michael, you’re a good person and I appreciate all that you do. You’re a huge source of information for me.

    • T.

      Just hold on – You will get your wish soon enough. The USS Titanic America just took another shot to the bow and is taking on water fast. With oil in the $66 dollar range – It is killing the highly leveraged (Debt laden) American shale oil companies and their financing. When these Junk Bonds and the Derivatives that counter them start to blow up – The downward financial spiral of everything will be on. It’s coming – Just hold your horses – Cause when it gets here you will Rue the day you wished for it.

      • MichaelfromTheEconomicCollapse

        Very well said T.


      • Guest

        Thanks. I have known for more than 10 years now that this Keynesian experiment in going to end very badly. I’m astounded that it has continued this long.

        • T.

          I have been watching it for an equally long time and am also astounded as are all honest people who are Aware. It shows us all – The breadth and magnitude of Their evil genius of Those who are doing this.

          • RICHARD

            After the crash I expect to see the world population drop 65% within a year.

          • Cluez Jones

            Well, I’m not sure about a 65% drop! but we definitely have a population bubble caused by all of the debt in the west. To me, the crash portends of massive famine. And we all know what men will do when driven by hunger: whatever it takes to be fed. I think we have a bumpy ride ahead folks.

    • No ountry like USA

      What is wrong in making money with new all time high?
      When market goes down I hope it goes min 40% because I will be buying same as in 2008 and you hide in your basement looking into your jars and cans.

      • MichaelfromTheEconomicCollapse

        What if it goes down all the way and never comes back?


        • Mike

          Then just about all of us will be dead. So I guess it won’t really matter.

        • No country like USA

          In that case I take my guns because it will be nasty out there :))

      • MichaelfromTheEconomicCollapse

        You assume that things are going to bounce back like last time.

        I don’t think that is a very safe assumption.


        • No country like USA

          I’ll take chance just as the last time and gamble some of my gains (not all of it) which I have been cashing since last week.
          Today I’m buying some gold stocks for short term (couple days) to sell just before Xmas.

      • alan

        Buy the dip. TPTB will not let this crash too much. If you cause the crash then you can buy in at the bottom and be rich. Its all just a scam.

        • Hot Rain

          And the world is positioning itself for life without the US and all it’s bulls*it..

          • No country like USA

            Life without USA..hahahaha
            You mean no life at all on planet Earth.

      • K2

        When its high…keep and eye…and be ready to sell when it starts falling continously.

        • Mike Smithy

          Just like all crashes, it will be sudden and violent. As the muppets make a mad dash for the door, only the well connected with insider information standing next to the door will make it out unscathed.

      • randyfreedom

        I am long VIX calls EVERY month as “insurance” for the coming collapse. With the money that will be made I will buy gold and silver – mostly silver. I will look to own farmland. I will buy more supplies. I will make sure I am not just watching this disaster unfold without protecting my family and myself. You will be able to buy stocks again, but be prepared to wait a long time. The next collapse will make most stocks look like Fannie Mae. Look at a chart of FNMA. “The best time to buy is when there is blood on the streets.” Well, there will be blood indeed. So prepare.

        • Hot Rain

          Question. If you are buying silver/gold, how will you use it later? Where will you sell it or trade it? If indeed the US has even a ‘partial collapse’, I don’t understand how precious metals can be used unless a black market/barter system arises quickly.
          And, what’s your opinion on the gold panda?

          • Drud

            Black markets will pop up very quickly. During the collapse of the Soviet Union, black markets sprang up almost overnight. I don’t know if gold and silver will be extremely valuable, however. I think for a total systemic collapse, which is what I believe will happen, it is the necessities that will become rare and nearly priceless: food, water (and water purification), toiletries (especially TP), energy (solar panels, propane bottles, batteries), guns (and ammo) and vices (booze, cigarettes, drugs) will be the most sought after items. Perhaps on will be able to purchase these things with gold/silver, perhaps not.

          • Hot Rain

            Govt knows black markets will spring up. That is why the cigarette guy was killed in NY by cops. That is why they left him on the ground dying with no medical intervention. So we can all be scared of them. Now they kill people for tax evasion? No amount of scare tactics will stop an underground barter system.

          • randyfreedom

            Easy. You wait for whatever replaces the USD to be issued and you convert at that point. Or, you sell it overseas. Or you move overseas to a country that is less affected and convert the gold to their currency. You dont need to barter unless the entire world goes down. If it gets to that forget gold. You need farmland, water, food and protection.

          • Hot Rain

            Some economists say the USD will be in a basket of currencies (reserve) I don’t know about money in a worst case scenario, but if I can get out, I am gone.

          • Peter

            Only one problem, if you look to the great depression and look at silver. Forget gold as the government needed it to back the dollar (not the case now).It crashed along with the economy. Industry stopped, they didn’t want it, no one had money to buy it and people were smelting the silver ware to eat. A one world currency wont need to be backed by anything, as they are the only player in town.

          • randyfreedom

            I think the best thing about gold and silver is that they are neutral to every currency. So, if you own gold and the strongest currency is say the Swiss Franc you can convert to the Franc. At that point you can then convert to any other currency if it makes sense to do so. If you hold on to any currency during a financial collapse you may get caught up in the turmoil and your currency my lose value – like what is happening to the Russian Ruble and the Yen.

          • Peter

            I hope your right, I’m a big supporter of the metals. keep in mind under a one world currency, gold is the “enemy”, as it will be the only competition around.They will do everything in their power to destroy it. They can set the prices of it too, one ounce gets you one gov-coin, take it or leave it.
            It all depends how it all goes down

          • randyfreedom

            Well that could happen if EVERY government is on board with that plan. If you were to present your gold in Brazil or some other country, you may not have the same potential issues.

          • northern vigor

            My wife asks me why we buy silver…answer…we need to pay the property taxes or we’ll be kicked off our farmland.

    • Mike Smithy

      Me too.
      +100 Mr. Guest

    • Zu schlau für diese Scheiße

      So it certainly does not make any sense that I see all of these sub-divisions going in around my neighborhood… $300.000 + homes, and people living in them with not landscaping, and they’re still building. Something’s not adding up.

      • Guest

        I see the same thing in my area. I don’t understand it either.

      • Orange Jean

        I hate to say it… but it’s called “a sucker is born every minute”! What this is about is it’s a “get rich quick” scheme for the developer, the banks that provide the mortgage, and the realtor that sells the properties.

        Someone who currently has enough income to get a mortgage in that price range will go into debt up their ears, based on the fantasy that eventually they’ll be able to sell it off and make a huge profit.

        In the meantime some people (including Michael, I’m afraid) will complain any time it appears that housing costs are going down… because now all those people who bought into the scheme to go into debt to become a “homeowner” can see their fantasy to make a killing when they sell the place crumble.

        • Patti Smith

          Buy a home to live in. Borrow as little as possible.


      Now is the time to take advantage of what is going on. Buy Gold and Silver, China is !

      • jumpstart

        How much gold and silver would you be willing to pay for a meal for your family, a days wages?

    • Mondobeyondo

      I’m tired of our elected leaders doing their “Rump Ranger” impressions….

      “He’s Rump Ranger
      Runs away in the face of danger
      Brings real heroes to the test
      A flaming queen of the Wild West

      “He’s Rump Ranger
      Puts the bandits on their knees
      ‘Cause that’s the way he likes them please
      “He’s Rump Ranger!”

      I think a lot of other people are sick to their stomachs of the status quo. Hence, the protests in Ferguson, among many other things.

    • disqus_c197zi57ib

      Don’t hasten what is sure to come. Instead use the time you have left to prepare in all areas of your life. Once this starts there will be no stopping it and it will change the world forever so you had better be very well prepared in all areas or you will die.

    • CharlesH

      I can so feel your pain and I hear your voice. We all know we’re living in perilous times but it just goes on and on.

  • K

    When you add to all you mention. The protests going on in many of the large cities. You can not help but wonder, how close to the edge we are. As I write this I am watching protests in New York city. There is at least a thousand involved, perhaps more. Hard to tell from the street level streaming media.

    • Drud

      I feel like we have been on the razors edge for years, (since 2011 when I first began to wake up). The system is a disaster, mathematically doomed, but it is a HUGE disaster. Shear momentum has kept it running longer than I would have thought possible. The question that remains (besides when it will begin) is how long will it take? Will the massive size of our system make it go slower or faster than past empires? The fall of Rome took centuries, the decline of the British Empire took decades, the fall of the Soviet Union only took a couple of years. My guess is that our fall is going to be the fastest and most brutal of all.

      • T.

        Yes. The Fastest and most Brutal of All. It is the End of the Age. The Collapse of the United States of America will be the most Brutal in all of recorded human His tory.

      • In all of these empires, cracks started appearing long before the ultimate collapse. The fall of the American Empire will take only a few years, after which we will lose all of our global influence. This will be disastrous for the world as a whole, because economically, socially, and politically the world is more networked than it ever has been. The fall of the US economically and politically will precipitate total chaos in China and Europe, then in energy producers like Russia and Middle Eastern countries. The picture of the years ahead does not look pretty.

  • Rufus T Firefly

    Time to buy stocks if chicken little is screeching the sky is falling.

    • MichaelfromTheEconomicCollapse

      And I assume that I am “Chicken Little”?


      • Guest

        I don’t think so. We’ll be proven right. It’s just taking longer than we thought it would.

      • WVBORN56

        I think you are right and more importantly God’s word tells me you are right. Are we getting close to Revelation chapter 6 (a loaf of bread for a days wages) and the great tribulation John foretold? I think yes because all the other signs are screaming yes. Israel is the key. (Psalm 83, Ezekiel 39 and Isaiah 17) Keeping watching.

        I enjoy your articles very much and think you are dead on!

        While physical preparation is important spiritual preparation is even more important!

        John 3:16 Bank on it!

      • Piper Michael

        You are Cassandra… and you are in some very wise company…

        Seriously, a rubber band can only stretch so far…
        The rule of 7’s, will be the end of the black horse rider…

      • Guest

        Nah, you’re just a Joow posing as a Christian who insists on silencing any dialogue about the nature of the state of U.S. decline.

        Your “endoftheamericandream” blog has about a year or so remaining before people wake up and realize how full of sh111t you are.

    • Priszilla

      Yes, and as soon as the man on the street is amplifying the bubble it is time to run for cover.
      Sell the small guy all your inflated stocks to get liquidity.
      Then buy his heirlooms when he is desperately looking to buy food.

      • Mike Smithy

        Yes. Wall Street loves bag holders and muppets.

      • Hot Rain

        You have a point about heirlooms. Smart folks should be selling everything right now. Downsize and hold on to antiques of value i e..old silver/gold items, high end stuff, no furniture. Get rid of collectibles, art..Buy a van, live in it, save your income. Barter skills for preps, jewelry or cash.
        Get liquid and mobile.

        • Priszilla

          Smart people have a house, a family home, in a boring small town, where nothing ever happens.

          Doctor, shopping, school and park in walking distance.

  • Cranky

    USA movement from #1 to #2 did not go unnoticed in Australia. In fact, it is being run as a headline event in mainstream news alongside a move to strengthen both economic and military ties with China.

  • Eddishun

    I really wish I could feel bad for em, but the greed has to stop. They been having too good a time for too long, and they have naught but contempt for the working poor and the struggling middle. They rub it in our faces and squeeze us dry, and still want more. Sorry, I feel nussing, Lebowski. Yeah, it’ll get hairy, but when you never had much, you won’t lose much….

  • alan

    I am sure the plunge protection team is standing by. These people have been in the business of theft for a long time. They aren’t just going to roll over.
    When the market hits 50,000 we’ll be saying the same thing.
    Look at Zimbabwe they are still functioning.

  • Mondobeyondo

    Short answer: Yes. There is trouble dead ahead, and we just missed the last exit ramp on this horror corridor.

    Danger, Will Robinson. Danger.

  • bert

    the dow will be over 20,000 next year. let the correction come, if it’s coming.


    What could put an end to this Fantasy Land? How about a Race War?

  • Preparequickly

    Thank you Micheal for righting these articles every few days. I walk 2.5 miles to town library twice a week to catch on news and to read your articles on varies websites you have. I know how it is to be ridiculed for prepping i have so for many times. When i retired in 2008 from 25 years at ups really didnt know how to make an income with depending on corporate world i have since learned a lot and made plenty to last selling from our from and trading with those that have no money.
    I started prepping in mid 95′ with 80 acres and old farm house preparing for what i thought to be y2k and kept at it with 6 more payments on the land and house will paid for in full (with enough on hand to pay off if needed). Apple, pear, cherry, walnut and pecan trees are planted. blueberry, mulberry bushes are planted cows, pigs, chickens are in the fields are reproducing. the 55 gallon drums of rice, grain, and oatmeal are in dry storage Bunker/storm shelters are dug at varies locations and stocked for a family of 5 for years(which it is only me and my wife now). The well has been dug and the water storage full. The wood pile has enough wood cut and stacked to last 6 winters. All bank accounts have been emptied the 3 different currency’s and silver and gold is locked and buried in safe places. The guns are locked and loaded safes are full with enough ammo to hold our own. We had power turned out years ago so we could be conditioned.

    • T.

      But; But; But; What about Your eternal Soul. Where is your planning for that? I don’t hear you mention This most prized of All possessions. Have you considered the claims of Jesus Christ? He can save you from All this world’s calamity and beyond.

      • Hot Rain

        Stop it.

        • T.

          As long as Almighty God gives me breath in this body – People like You will have to see and hear about Jesus Christ.

  • Hot Rain

    This whole dip in oil prices is a ruse (the intention to deceive)
    Street level gas prices will come back with a vengeance in 2015.

  • CharlesH

    I’m not completely convinced, yet, that this whole game can’t last forever. Numbers are infinite – so since everything we’re dealing with is made up from numbers – why can’t it go on forever – 1s 0s infinity?

    • Drud

      That is the very reason that it will ultimately collapse: if there is no scarcity, there is no value. There are a finite number of grains of sand on the earth, but still far too many for them to be used as currency.

  • steve

    I’ve been reading these postings for several years, now. Every year this person says that the next year will be terrible. Nothing’s happened out of the ordinary yet. The situation appears stable, not good, not too bad, either.

  • skeptical

    I don’t see how the recent drop in high yield bonds is anything like 2008 yet. In 2008, from mid-September to the beginning of october the high yield index dropped by about 12%. In the 2014 chart, the index drops from around 300 to 295, a modest 1.6% decline over a longer time period (1 month.) While I agree a crash could happen in 2015, I don’t see how the recent drop in the high yield index is significant. What am I missing? Yes, everyone seems to be shouting that the sky is falling these days, but I haven’t seen any really convincing evidence here.

  • The Realist

    Bitch all you want. Central Banks will keep the US markets up forever so they can put their country’s money here to work.
    Every time we start to sell a little, they come in and CRUSH the seller(s). The game will never end, only a war will rattle the market.

  • JailBanksters

    I liken the US to the Monty Python Dead Parrot sketch….

  • lucy

    Gold…silver….I swear if I hear or read those 2 words one more time, I’ll scream. If things get as bad as we (correctly) assume they will, holding on to your faith in God will be your best investment. I remember reading somewhere about the Weimar Republic and some of the tactics used to find whatever people were hiding….it will be nearly impossible to hide anything without divine intervention. Our governments are working for “the other side”….this is a spiritual battle…no one is going to want your gold and silver, except for the short term in the beginning. They will want your life and your soul. I don’t want this day of reckoning to come…..ever.

    • disqus_c197zi57ib

      It is people like you who are out of touch with what it will really take to survive that will die. You can eat your bible or throw it at the mob as they come for what you might have. You don’t know it yet but you are already a casualty.

  • Jay Sprueill

    The (green back) has to fail in order to bring in a one world currency. How plain is this, It has to happen, and It’s going to happen. 2015 is going to be a RIDE.

    • A world currency would actually be a positive development, IF agreed to by a world legislature democratically invested with its powers. The economies of many countries, generally smaller non-aligned ones, have been wrecked by the international bankers who engineer currency shocks, create despair, and install dictators. Jesus kicked out the money changers and it’s high time that we did it again.

      But I agree with you, world governance will not in the future take place through a UN Parliament, but in backroom meetings at the World Economic Forum.

  • James Staten

    If it is true that half of America only makes approx 28K a year, and if the dismal sales over Thanksgiving are accurate then 2015 is shaping up to be the year. I recently read a book about the Shemitah Year…2001, 2008 and next 2015….Every 7th year, very interesting

  • DJohn1

    I think the Securities Exchange needs to get involved in what is happening. If what you say is true, there is certainly some artificial manipulation going on and that spells fraud.
    People go to jail when the Securities police get involved.
    Sears is a dinosaur in the modern retail market place. It will go down unless something is done to revive it.
    Sears Outlets are doing well. They are a separate company.
    Where to begin? I saw the handwriting on the wall when Sears did away with their parts department in our town. We used to get parts and fix our own appliances when they went wrong.
    Sears had my business for years because I could readily get parts over the counter rather than ordering them on line.
    Parts have to be seen and compared in order for them to work on older machines.
    Kenmore and Craftsman are what made Sears a successful business. They were well thought out products. They were also made by different manufacturers over the years.
    The last and only refrigerator I will ever buy from them was made by GE and sold as a Kenmore. It went bad after a short time for appliances back then. That was 5 years.
    They had to have an appliance man out to fix it.
    My Craftsmen shop vacs lasted and lasted for years. Some of them only need a new motor even now. Or a new set of brushes for the motor.
    Consumer people have rated their products top notch over the years.
    Not so anymore. They have went China crazy just like Walmart and others. China does not put good quality in their products and it shows.
    But their prices are so much lower than the competition that they literally put everyone else out of business regardless of the fact that a lot of it is junk.
    Helen Hunt was always a hero to me. She only invested in things that she used in her own household. So if she had a Ford, then she invested in Ford with one exception. If the product was no good, she put her money elsewhere when she invested. It had nothing to do with the books. It had everything to do with compounding problems with everyone knowing that a product had become a lemon.
    When she died, her initial investment of about 5,000 dollars during the depression was at 26 million dollars.
    She lost half of it listening to investment councilors at the time.
    Right now we have a Whirlpool Dishwasher. The buttons behind the plastic on the front are going bad.
    We have had DVD Player from Samsung. It went bad. Very hesitantly I did purchase a Refrigerator from Samsung. So far so good. I only bought that because the wife thought it was a good one.
    I have a Honda Accord from 1997. It is finally giving out after all those years. Needs a water pump. I will probably just replace the water pump myself. Would I buy another one? ONLY after I located the starter, the water heater, the alternator, etc. Because they too are falling into the trap of making maintenance impossible in your own garage.
    What I am talking about is not the highly sophisticated books that they all falsify then correct two months later after the first of the year. I am talking about the silent majority of customers that trhey either like a product or they do not.
    The bottom line is will the product continue to sell?
    Trash and burn management is the sickness that all companies have to deal with. The idea being they move on before their mistakes become known to upper management. They are all vain and they are all flash and no fire.
    Part of the problem with all companies right now is college educated people with no empiracle experience in the products that pay their salaries.
    The idea is they have to move within 5 years either up or to a parallel position somewhere else. If you are moving up the ladder, then you can afford to get away before your poor management is found out.
    The whole idea being that college is a glass ceiling. You either have the degree or you do not. And anyone that has the degree supposedly moves up and anyone without is stuck. That whole idea of management came from after World War II when the military had an excess of people left over from the war in officer ranks. They got there in combat and earned those commissions the hard way.
    They had a certain amount of time to get a degree. Then they were demoted back to sergeants.
    One man saw through their college qualification. He went and got the easiest degree known to man. His degree was in ceramic pot making. Funny enough he ended up a two star general when transistors came in. He had a degree in ceramics. So the computer put him on the fast track.
    ‘My point is the way to invest in a depression is that you invest in only the products that meet your approval that you would buy yourself.

  • Guest

    of course, when you talk about junk bonds ” falling” or the yield falling, that means the price of the bond is going higher, a sign generally that people are “chasing” yield, which means they are actually willing to take on more risk for less return. People need to understand the inverse relationship with yields and price. As such. the bond market isn’t crashing as much as it is getting “frothy” , or too expensive. I too don’t believe this is sustainable, but I wanted to clear that point up for the readers, because I think there is a bit confusion in the article. Good work though 🙂

  • Guest

    Its easy to make charts say what ever you want. Your 2008 bond chart has a scale range of 70 points, while your current bond chart has a scale range of only 6 points. The “large drop” you are highlighting would only be a blip on the 2008 chart.

    • T.

      But LOOK at the TIME periods for BOTH charts. The last bond chart shows a period of about 40 days Which is equal in TIME to the 2008 chart at the beginning from 9/1 to approx. 10/10 and about the same number of points DOWN.

  • Sal

    I woke up two years before the financial crash of ’08 and that credit goes to my father, a wise man. Anybody who woke up before you are much wiser than most who follow the crowd post 2008. That being said I follow many sites read many books and take in so much valuable information. Anyone who is a true Prepper knows IT NEVER ENDS, prepping that is. Every time you think your done something else catches your eye or you learn something new that you must do and of course the constant rotation of stock. At this point I’ve done what I can for my family I’m sick and tired of WAITING. I wish it will never come but that’s for the naive as anyone who is awake knows its inevitable. I’m just sick of hearing its always next year and next year and next year!!! 2015 will pass and everyone will say “oh its going to be in 2016 for sure”. I know everyday is a BLESSING but lets get this show on the road!!!

  • The only way to fix this crisis is a complete reform of our currency system. We need a sovereign money system in which money is created by a department of the United States Treasury and spent into circulation by Congress, free of debt. The private banksters need to forbidden from making their own money, as they do now, on pain of prison for violation of counterfeit laws; they would only be permitted to lend out money placed within by depositors. In some way or another, all existing stocks, bonds, mortgages, and other “assets” need to be forcibly sold to the government and the revenue from asset sales placed into illiquid instruments issued by government, in order to stop private banks from causing rampant inflation.

    Home loans, auto loans, and other “non-productive” loans would be under the purview of state banks that would charge a low rate of interest (say 1-2% a year) while still being able to limit housing bubbles through the imposition of otherwise strict lending standards; this revenue would be forwarded to state governments at years’ end. State and local bonds could be effectively eliminated by allowing state governments to borrow from these banks on the same terms, as well as through transfer payments from the federal government (which would be reinvested with its Constitutional power to print money).

    Naturally, with the collapse in excess credit, stock market valuations would fall by 50% or more, as would asset prices and the entire FIRE economy. The GDP would probably fall 20% as the FIRE economy and construction sectors reduce in size, followed by a second drop due to a lack of credit for discretionary consumer purchases (iPhones, laptops, etc). Suburbanization could be systematically (and necessarily) ended at this point through government effort, and with it rampant energy consumption, which would in turn reduce the spending that we must maintain on the military-industrial complex.

  • northern vigor

    My grandfather lost his life savings three times in eastern Europe between the two world wars…eventually he lost his farm also when the commies pointed a gun at him and kicked him off it.
    Dad always wanted to keep a farm in North America after the war to make sure we had something to eat…but he did say the government would force farmers to feed the cities one day I asked how? He said they’d tax the land high enough that farmers would have to produce food for sale, to pay the taxes.
    I don’t know what or if that would happen that way, but I always remembered him saying it.
    Maybe mom was right…invest in a Bible.

  • Michael

    I’m not too excited about it at all. I figure it will be the perfect timing (since obviously the sheeple will be rioting) that our governemnt will make use of these “FEMA” camps and start there martial law take over and then the book of revelations will begin its story as the world decends into complete chaos. I mean all of mainstream media now days projects the end times and satanic rituals and symbolism all for everyone to see blindly. I don’t really see that being trendy for no reason.

  • Alleged Comment

    A self-fulfilling wish always plays out, huh?

  • Piper Michael

    Ross Perot was right… how do we all like the sound of that…
    “Great sucking sound.”
    The only solution will become evident as time and pain progresses, as you see the middle class become poor, and the poor become destitute… and the rich become as gods. The answer will be in knowledge, not ignorance, that the white man’s system of Babylon, centralized power, centralized money, centralized religion, centralized media, centralized education, centralization itself, are the tools of power, and must be allowed to complete their wave of destruction, for they will ultimately destroy even themselves.

    Regardless of your belief system, evil thrives when good people do nothing, this must be allowed so that the good can see The Truth. We are the hands of God’s Justice, and it is time for God’s System to take hold, on Earth as it is in heaven. The Rule of Gold must be conquered by the Golden Rule.

    In order to become a Type 1 civilization, this type 0 must be eliminated for all time. To do this, money must be redefined from something in the ‘hand’, to something in the ‘mind’. From something with inherent ‘value’, to something that merely represents True Value, you and I. Wealth must be seen again as lives, loves and lands, held in stewardship for all the generations of the Earth, not just numbers in a computer.

    We must also removes our minds from the 4th century, and move away from superstition as a founding principle, to be replaced with absolute truth, the secret in the rocks, that reveals the truth, that God lives in the rocks and stars, and man is the highest level of accomplishment. A truth revealed in the atom bomb, for truly, where does the energy come from?

    This was the knowledge of the ancients, that has been found and revealed again. The Rock, that knocks down the statue of the head of gold, is not the church, for the church is corrupt, and always has been. Giving moral authority to the statue, the horsemen, and is the mother of harlots that rides the Beast. Babylon is their System, money, politics, and religion, as One. To keep you as willing slaves. Understand, and the Truth will set you free.

    • GSOB

      “The answer will be in knowledge, not ignorance, that the white man’s system of Babylon, centralized power, centralized money, centralized religion, centralized media, centralized education, centralization itself, are the tools of power, and must be allowed to complete their wave of destruction, for they will ultimately destroy even themselves.”

      You white?

      • Piper Michael

        Yes. But ‘white’ refers to something not popular in modern christian parlance. Simply because we are spoiled brats, deceived, and confused by the power structures we all complain about… thinking we can fix it. We can’t, because it is anti-God’s System. What Daniel called “like babylon, but not as good”. We are are the Lost Ten Tribes. Israel is the ‘Chosen’, we are Israel.
        Now ask yourself who runs the whole planet?
        And when you find the right answers, you will see the fulfillment of prophecy.

        • GSOB

          You a Mormon?

          • Piper Michael

            Inquisitive aren’t you?
            I walked out of the hypocrite mammon worshiping churchian system, long ago.

          • Piper Michael

            I am a Heretic.

          • Piper Michael

            I am a Heretic.
            (This is my second attempt to post, maybe heretic is still a forbidden subject.)
            Basically, we deny the ‘Mystery Doctrine’ of Rome, that God, left us the Revealing word of how the Universe works, and man, destroyed it and replaced it with the Abomination of The Harlot.

  • FortuneSeek3rz

    The world has never been a better place to live in than it is right now. The stock market will rise and fall, but the important thing to remember is to stay diversified. Never put all of your eggs in one basket and you’ll be fine.

  • Before

    More dire predictions, never coming true. When are you going to slow down, Michael? Aren’t you a post millennialist anyway?

  • GSOB

    ‘Near Perfect’

    Ain’t that the truth

  • GSOB

    I read somewhere that China has just overtaken the United States as the world’s largest economy…

  • GSOB

    Does China have an ISIL problem?

  • wi wadee

    yeh, yeh chaos is always just around the corner,,,,now 2015. 2015 will come and chaos will be later may 3Q,4Q 2015, and the band plays on, and on Blah, blah blah
    With each prognostication chimera, we are one step closer to the Socialist paradise BHO is fearlessly leading us onward to.
    So please stop your fearin’ and hatin’

  • John

    What a comparison. The graphs show a drop of 20-25% for 2008 for high yield bonds (180 to 140). The graph for the present time shows a drop of 301 to 295, thus less than 2%. So it should drop much more before the trouble really starts I suppose. And that’s assuming this is indeed a real indicator.
    Let’s see what happens!
    Greetings from John from The Netherlands

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