The stock market is in far worse shape than we are being told. As you will see in this article, the average U.S. stock is already down more than 20 percent from the peak of the market. But of course the major indexes are not down nearly that much. As the week begins, the S&P 500 is down 9.8 percent from its 2015 peak, the Dow Jones Industrial Average is down 10.7 percent from its 2015 peak, and the Nasdaq is down 11.0 percent from its 2015 peak. So if you only look at those indexes, you would think that we are only about halfway to bear market territory. Unfortunately, a few high flying stocks such as Facebook, Amazon, Netflix and Google have been masking a much deeper decline for the rest of the market. When the market closed on Friday, 229 of the stocks on the S&P 500 were down at least 20 percent from their 52 week highs, and when you look at indexes that are even broader things are even worse.
For example, let’s take a look at the Standard & Poor’s 1500 index. According to the Bespoke Investment Group, the average stock on that index is down a staggering 26.9 percent from the peak of the market…
Indeed, the Standard & Poor’s 1500 index – a broad basket of large, mid and small company stocks – shows that the average stock’s distance from its 52-week high is 26.9%, according to stats compiled by Bespoke Investment Group through Friday’s close.
“That’s bear market territory!” says Paul Hickey, co-founder of Bespoke Investment Group, the firm that provided USA TODAY with the gloomy price data.
So if the average stock has fallen 26.9 percent, what kind of market are we in?
To me, that is definitely bear market territory.
The rapid decline of the markets last week got the attention of the entire world, but of course this current financial crisis did not begin last week. These stocks have been falling since the middle part of last year. And what Bespoke Investment Group discovered is that small cap stocks have been hurt the most by this current downturn…
Here’s a statistical damage assessment, provided by Bespoke Investment Group, of the pain being felt by the average U.S. stock in the S&P 1500 index:
* Large-company stocks in the S&P 500 index are down 22.6%, on average, from peaks hit in the past 12 months.
* Mid-sized stocks in the S&P 400 index are sporting an average decline of 26.5% since hitting 52-week highs.
* Small stocks in the S&P 600 index are the farthest distance away from their recent peaks. The average small-cap name is 30.7% below its high in the past year.
After looking at those numbers, is there anyone out there that still wants to try to claim that “nothing is happening”?
Over the past six months or so, the sector that has been hit the hardest has been energy. According to CNN, the average energy stock has now fallen 52 percent…
And then there’s energy. The dramatic decline in crude oil prices rocked the energy space. The average energy stock is now down a whopping 52% from its 52-week high, according to Bespoke. The only thing worse than that is small-cap energy, which is down 61%.
If you go up to an energy executive and try to tell him that “nothing is happening”, you might just get punched in the face.
And it is very important to keep in mind that stocks still have a tremendous distance to fall. They are still massively overvalued by historical standards, and this is something that I have covered repeatedly on my website in recent months.
So how far could they ultimately fall?
Well, Dr. John Hussman is convinced that we could eventually see total losses in the 40 to 55 percent range…
I remain convinced that the U.S. financial markets, particularly equities and low-grade debt, are in a late-stage top formation of the third speculative bubble in 15 years.
On the basis of the valuation measures most strongly correlated with subsequent market returns (and that havefully retained that correlation even across recent market cycles), current extremes imply 40-55% market losses over the completion of the current market cycle, with zero nominal and negative real total returns for the S&P 500 on a 10-to-12-year horizon.
These are not worst-case scenarios, but run-of-the-mill expectations.
If the market does fall about 40 percent, that will just bring us into the range of what is considered to be historically “normal”. If some sort of major disaster or emergency were to strike, that could potentially push the market down much, much farther.
And with each passing day, we get even more numbers which seem to indicate that we are entering a very, very deep global recession.
For instance, global trade numbers are absolutely collapsing. This is a point that Raoul Pal hammered home during an interview with CNBC just the other day…
Looking at International Monetary Fund data, “the year-over-year change in global exports is at the second lowest level since 1958,” Raoul Pal, Publisher of the Global Macro Investor told CNBC’s”Fast Money”this week.
Basically, it means economies around the world are shipping their goods at near historically low levels. “Something massive is going on in the global economy and people are missing it,” Pal added.
The steep decline in 2015 exports is second only to 2009, when the global recession led to a 37 percent drop in export growth.
We have never seen global exports collapse this much outside of a recession.
Clearly we are witnessing a tremendous shift, and it boggles my mind that more people cannot see it.
As for this current wave of financial turmoil, it is hard to say how long it will last. As I write this article, markets all over the Middle East are imploding, stocks in Asia are going crazy, currencies are crashing, and carry trades are being unwound at a staggering pace. But at some point we should expect the level of panic to subside a bit.
If things do temporarily calm down, don’t let that fool you. Global financial markets have not been this fragile since 2008. Any sort of a trigger event is going to cause stocks all over the world to slide even more.
And let us not minimize the damage that has already been done one bit. As you just read, the average stock on the Standard & Poor’s 1500 index is already down 26.9 percent. The financial crisis that erupted during the second half of 2015 has already resulted in trillions of dollars of wealth being wiped out.
When people ask me when the “next financial crisis” is coming, I have a very simple answer for them.
The next financial crisis is not coming.
The next financial crisis is already here.
An angry bear has been released after nearly seven years in hibernation, and the entire world is going to be absolutely shocked by what happens next.
All of a sudden, the Nasdaq is absolutely tanking. On Monday, it fell more than 1 percent after dropping 3.6 percent on Thursday and Friday combined. At this point, the Nasdaq is off to the worst start to a year that we have seen since 2008, and we all remember what happened back then. So why is this happening? In recent years, the Nasdaq has been ground zero for “dotcom bubble 2.0”. The hottest stocks in the entire world are on the Nasdaq – we are talking about stocks like Yahoo, Netflix, Apple, Tesla, Google and Facebook. Those stocks have gone to absolutely incredible heights, but now they are starting to fall. Some are blaming insider selling, and without a doubt the “smart money” is starting to flee the stock market. Just check out this chart. Others are blaming low expectations for first-quarter earnings or the tapering of quantitative easing by the Federal Reserve. But whatever is causing this decline, it is starting to get alarming. The Nasdaq just experienced its largest three day fall since November 2011.
No stock can resist gravity forever. What goes up must eventually come down. This is especially true for stock prices that become grotesquely distorted.
On Wall Street, a price to earnings ratio of 20 to 25 is usually considered fairly normal. In recent years, the price to earnings ratios for many of these “hot tech stocks” have gone way, way beyond that. For example, posted below is a screen capture from Bloomberg TV that was featured in a recent Zero Hedge article…
There is no way in the world that such valuations are justified.
We have been living in another dotcom bubble, and it was inevitable that it was going to burst at some point.
The following is how one financial industry insider described the carnage that we have seen on the Nasdaq over the past few days…
Gary Kaltbaum, president of money-management firm Kaltbaum Capital Management, describes the carnage of once high-flying “growth” names in the Nasdaq composite, that have come crashing down to earth: “The best we can describe what we have been recently seeing in ‘growth-land’ is a 50-car pileup,” Kaltbaum told clients in a morning research note. “Call them what you want … risk areas, growth stocks, froth areas … they are melting away.“
And of course it isn’t just the Nasdaq that has been seeing declines over the past few days. On Monday, some of the biggest names on the Dow also fell precipitiously…
Visa, Goldman Sachs and Boeing are among the biggest drags on the Dow Monday, falling 2.1%, 2.9% and 1.4% respectively. Weakness in these stocks is especially problematic since the Dow gives greatest weight to the stocks with the highest per-share prices. And at $203.41, $158.56 and $125.59 respectively, Visa, Goldman and Boeing are the stocks that really matter to the measure.
And the trouble in these stocks isn’t just today. So far this year, Visa is down 8.7%, Goldman is off 10.5% and Boeing is down 8.0%.
This recent decline has many analysts groping for answers.
Some believe that it is simply a “rotation” as investors leave growth stocks that have become overvalued and move into safer, more traditional stocks.
Others are pointing their fingers at the Federal Reserve…
Peter Boockvar, chief market strategist at Lindsey Group, believes it’s all about the Fed. “I’m still amazed at the complacency with the Fed taper, and a lot of people still don’t think it’s a big deal,” he said. “I just don’t think it’s a coincidence that the high-fliers are getting popped when the Fed is half way done with QE. We’ve got tightening smack in front of your face with the taper.”
In fact, some believe that the really big stock market decline will happen later this year when the Fed starts to wrap up quantitative easing completely…
Once the Fed begins to truly reduce its massive bond buying program later this year, markets could see a quarter of their value wiped off the books, a private equity pro told CNBC on Friday.
Jay Jordan, founder of the Jordan Company, issued the dire warning during an interview on CNBC’s “Squawk Box,” saying a 25 percent drop could extend to all asset classes. He blames the monetary policies of former Fed chair Ben Bernanke for artificially inflating asset prices through super-low interest rates.
Yet others point to the fact that we are now moving into earnings season, and it is being projected that corporate earnings will come in at very poor levels. In fact, it is being estimated that overall earnings for companies in the S&P 500 for the first quarter will be down 1.2 percent.
So what should we expect to see next?
Whether it happens this month or not, at some point a massive stock market correction is coming. In recent years, the financial markets have become completely and totally divorced from economic reality, and that is a state of affairs that cannot last indefinitely.
Many have compared the current state of affairs to 2008, but to me what is happening right now is eerily reminiscent of 2007. The Dow soared to record heights quite a few times that year, but there were constant rumblings of economic trouble in the background. Stocks began to drop steadily late in the year, and 2008 ultimately turned out to be an utter bloodbath.
I believe that what is happening right now is setting the stage for another financial bloodbath. I truly believe that we will look back on this two year time period and regard it as a major “turning point” for America.
And as I have written about previously, we are in far worse shape as a nation than we were back in 2008. We have far more debt, the “too big to fail banks” have a much larger share of the banking industry, the derivatives bubble has gotten completely and totally out of control, and our overall economy is far weaker than it was back then.
In other words, we are now even more vulnerable. When the next great financial crisis strikes us, it is going to be absolutely crippling.
Now is not the time to get complacent.
Now is the time to get prepared, because time is running out.
****IMPORTANT UPDATE**** Apparently the big Internet companies are not as “innocent” in all of this as they originally led us to believe. So this additional information changes some of the conclusions that I reached in my original article. It appears that some of the biggest Internet companies have been cooperating with the government in this data collection effort at least to a certain extent. The following is from an article in the New York Times that describes how the U.S. government has been getting user data from major Internet companies…
The companies that negotiated with the government include Google, which owns YouTube; Microsoft, which owns Hotmail and Skype; Yahoo; Facebook; AOL; Apple; and Paltalk, according to one of the people briefed on the discussions. The companies were legally required to share the data under the Foreign Intelligence Surveillance Act. People briefed on the discussions spoke on the condition of anonymity because they are prohibited by law from discussing the content of FISA requests or even acknowledging their existence.
In at least two cases, at Google and Facebook, one of the plans discussed was to build separate, secure portals, like a digital version of the secure physical rooms that have long existed for classified information, in some instances on company servers. Through these online rooms, the government would request data, companies would deposit it and the government would retrieve it, people briefed on the discussions said.
****END OF UPDATE****
The U.S. government has been hacking in to the servers of Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube and Apple and has been taking their user data without their knowledge or consent. According to the Washington Post, the information being stolen includes “audio and video chats, photographs, e-mails, documents, and connection logs”. This program is known as PRISM, and it was first revealed by the Washington Post on Thursday. Since the story broke, Director of National Intelligence James Clapper has admitted that PRISM exists and so has Barack Obama. The Washington Post initially claimed that all of the Internet companies were willingly handing over their user data to the government. Now we are learning that is NOT true. In fact, all of the Internet companies named in the Washington Post story have denied knowing about PRISM or ever giving the federal government permission to directly access their servers. So this means that the U.S. government has been stealing massive amounts of user data from the largest Internet companies in the world without their permission. Of course this is highly illegal and it directly violates the Fourth Amendment to the U.S. Constitution, but you can bet that the Obama administration is going to do everything that it can to get the courts to “make it legal”. Hopefully the revelation of this program will be enough to get the American people to realize that we are rapidly being transformed into a Big Brother police state that is descending into tyranny.
Barack Obama has described the systematic gathering of cell phone records and the Internet spying that the federal government has been doing as “modest encroachments” that we should all just accept as part of the price of living in a modern world, but if we allow the government to get away with this, where will it end?
Even if we had a total “Big Brother” society where the government watched everything that we did 24 hours a day, bad people would still do bad things. There would still be terror attacks and great tragedies. No matter how much the government intrudes into our lives, it can never guarantee us 100% safety.
Those that founded the United States understood this. They did not want this country to be turned into a police state. That is why they guaranteed us some very important protections in the Bill of Rights. If the government wants to do a search, there are some very important procedures that must be followed first.
Unfortunately, the Obama administration appears to believe that the Constitution does not apply to user data on the Internet. The NSA is apparently hacking into Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube and Apple and taking whatever they want without ever getting permission from those companies.
You can bet that there are some very, very angry executives at those companies right now that are trying to figure out how to respond to these revelations.
All of these companies have vehemently denied that they were involved. At this point, there is no reason to doubt their very strong denials.
For example, the following is what
Dear Google users—
You may be aware of press reports alleging that Internet companies have joined a secret U.S. government program called PRISM to give the National Security Agency direct access to our servers. As Google’s CEO and Chief Legal Officer, we wanted you to have the facts.
First, we have not joined any program that would give the U.S. government—or any other government—direct access to our servers. Indeed, the U.S. government does not have direct access or a “back door” to the information stored in our data centers. We had not heard of a program called PRISM until yesterday.
Second, we provide user data to governments only in accordance with the law. Our legal team reviews each and every request, and frequently pushes back when requests are overly broad or don’t follow the correct process. Press reports that suggest that Google is providing open-ended access to our users’ data are false, period. Until this week’s reports, we had never heard of the broad type of order that Verizon received—an order that appears to have required them to hand over millions of users’ call records. We were very surprised to learn that such broad orders exist. Any suggestion that Google is disclosing information about our users’ Internet activity on such a scale is completely false.
Finally, this episode confirms what we have long believed—there needs to be a more transparent approach. Google has worked hard, within the confines of the current laws, to be open about the data requests we receive. We post this information on our Transparency Report whenever possible. We were the first company to do this. And, of course, we understand that the U.S. and other governments need to take action to protect their citizens’ safety—including sometimes by using surveillance. But the level of secrecy around the current legal procedures undermines the freedoms we all cherish.
Facebook CEO Mark Zuckerberg has issued a similar denial. He insists that Facebook never even heard of PRISM until Thursday…
I want to respond personally to the outrageous press reports about PRISM:
Facebook is not and has never been part of any program to give the US or any other government direct access to our servers. We have never received a blanket request or court order from any government agency asking for information or metadata in bulk, like the one Verizon reportedly received. And if we did, we would fight it aggressively. We hadn’t even heard of PRISM before yesterday.
When governments ask Facebook for data, we review each request carefully to make sure they always follow the correct processes and all applicable laws, and then only provide the information if is required by law. We will continue fighting aggressively to keep your information safe and secure.
We strongly encourage all governments to be much more transparent about all programs aimed at keeping the public safe. It’s the only way to protect everyone’s civil liberties and create the safe and free society we all want over the long term.
So how has the U.S. government been getting this user data if they do not have the cooperation of these large Internet companies?
They have been stealing it.
Is this the kind of society that we want to have? Do we really want the government to be free to hack into the servers of Internet companies and take user data any time that it wants?
And guess what?
According to the Wall Street Journal, the NSA has also been gathering massive amounts of credit card data as well…
The National Security Agency’s monitoring of Americans includes customer records from the three major phone networks as well as emails and Web searches, and the agency also has cataloged credit-card transactions, said people familiar with the agency’s activities.
So if you ever bought something embarrassing with a credit card, there is a very good chance that the NSA knows about it.
If you don’t like where all of this is headed, then now is the time to stand up and say something about it.
Sadly, the truth is that most of our politicians see absolutely nothing wrong with our current system. The following is what Barack Obama said in response to the recent revelations about the NSA…
“You can’t have 100 percent security and also then have 100 percent privacy and zero inconvenience. We’re going to have to make some choices as a society,” he said. “I think that on balance, we have established a policy and a procedure that the American people should feel comfortable with.”
Do you feel comfortable with the fact that the NSA is hacking into major Internet companies and stealing their user data?
I know that I definitely am not.
I think that the journalist that originally broke the story about how the government is systematically gathering our phone records summed up what many of us are feeling right now pretty well…
“There is a massive apparatus within the United States government that with complete secrecy has been building this enormous structure that has only one goal, and that is to destroy privacy and anonymity, not just in the United States but around the world,” charged Glenn Greenwald, a reporter for the British newspaper “The Guardian,” speaking on CNN. “That is not hyperbole. That is their objective.”
What do you think?
Is all of this government spying good for America or bad for America?
Please feel free to share your opinion by posting a comment below…
On social media websites such as Twitter and Facebook, thousands of threats of violence were posted by supporters of Barack Obama on the evening prior to the election. If you doubt this, just go on Twitter and do a search for keywords such as “Romney riot”, “assassinate Romney” and “if Romney wins”. We have seen very serious threats of violence against Mitt Romney and his supporters for weeks, but little action has been taken to shut these threats of violence down, and now they are reaching a crescendo as we reach election day. At the moment, law enforcement authorities and the mainstream media do not appear to be taking these threats of violence very seriously, but they should. Just look at what happened when the San Francisco Giants won the World Series. Horrible rioting broke out in San Francisco and a city bus was even set on fire. But that little bit of rioting is nothing compared to what could happen on a nationwide basis if Mitt Romney wins this election – especially if there are allegations that Romney stole the campaign. If Romney is victorious, expect to see allegations of “voter fraud” and “election fraud” from the other side. If there is a belief that the Republicans “cheated” (whether true or not), this would provide all of the justification that those out committing violence would need. Many of them would actually consider themselves to be “standing up for democracy” or “fighting for their rights”. Hopefully the scenario that I just outlined will not play out. Hopefully Obama supporters will be calm if Romney is declared the winner. But we would be very foolish to ignore the thousands upon thousands of threats that we have seen over the past few weeks.
This is a topic I have written about before, and I received quite a bit of criticism for writing about it. Apparently supporters of Barack Obama should be allowed to endlessly spew out threats of physical violence against Mitt Romney and his supporters and nobody is ever supposed to say anything about it.
Yes, there are a lot of Republicans that are saying some very cruel things about Barack Obama, but people know that if you make a physical threat against Barack Obama you are likely to get a visit from the Secret Service.
Apparently the same thing does not apply to threats against Mitt Romney. Every single hour, large numbers of physical threats directed at him and his supporters continue to pour in. If these people mean just a small fraction of what they are saying, we are going to see American cities burn if Romney wins.
Most of the examples that I could have included below I decided not to post because of the vulgar language used. A lot of children will end up reading this, and so I decided to try to keep it as clean as possible.
The following are just a few examples of some of the “cleaner” threats of physical violence and rioting that have been posted on Twitter just tonight…
If obama doesn not win im gonna go burn down every house who has mitt romney signs outside their house! (Link)
If mitt Romney win tomorrow, point blank, we might just start a riot ! # Team Obama tho, so I got faith in our president. (Link)
If Romney wins, we gona start a riot (Link)
if Obama wins i will burn every romney sign in breezewood! (Link)
I always wanted to be in a Riot , and if Romney wins my dream might come true. (Link)
If Mitt Romney wins; I might go around blowing heads off (Link)
@Ska_Supernova: If romney win imma start a riot! (Link)
Lol but if you go for Mitt Romney i’m not going to burn you alive because that’s whatever you believe in. I’m
#teamobama tho (Link)
Romney better start digging his grave cuz if he become president somebody might assassinate him..ALL BLACKS AND MIDDLE CLASS GONE TURN UP!!! (Link)
I would personally assassinate Mitt Romney if he wins… but I think Al Qaeda will beat me too it! (Link)
If Romney gets elected I’m going to burn down the White House so he doesn’t have a home (Link)
Trust me, it gets a lot worse than what you just read. You can see more threats against Romney and his supporters from recent days in this article right here. But please be warned, some of the language used is quite shocking.
Of course many in the mainstream media insist that we don’t even have to worry about what might happen if Romney wins because Obama “has it all locked up”.
For example, as I am writing this Nate Silver of the New York Times is projecting that Barack Obama has a 92.2% chance of winning the election.
Other publications are expressing similar sentiments. An article on Business Insider today had the following headline: “Either The Polls Are All Wrong, Or Mitt Romney Doesn’t Really Have A Viable Path To Win The Election“.
I honestly don’t know how people get paid to write that kind of stuff. This election is super close and it has been for months. According to the latest Gallup tracking poll, Mitt Romney has a one point lead over Barack Obama with likely voters. A lot of people on both sides are proclaiming that it will be a landslide for their guy, but I simply do not see it that way.
This is going to be close. In fact, we may not have a winner on Tuesday night. In fact, if it goes into the courts we may not have a winner for weeks.
We could very easily end up with another Bush v. Gore scenario. Only this time it might tear the entire nation apart. Obama and Romney both have hordes of lawyers ready to roll, and neither of them would hesitate to contest the results of the election if there is still a realistic chance of winning.
The funny thing is that it really does not matter that much which candidate wins anyway. Our nation has been going downhill for decades no matter who has been in the White House, and it will continue to go downhill under either Obama or Romney. When you take a very close look at their policy positions, they actually agree far more than they disagree, and no matter who wins this race the next four years are going to be worse for America than the last four years have been.
But like so many millions of other Americans, I find election night to be absolutely fascinating. So I will be glued to my television just like so many other Americans will be.
And I think that a number of states will end up being much closer than most people originally thought that they would be.
For example, I believe that Romney has a very real shot of winning Pennsylvania and Wisconsin. I am not predicting that he definitely will win those states, but he does have a legitimate chance.
Romney might even make things interesting in Minnesota, although that is more of a long shot.
It should be very interesting to see how it all plays out.
Many Americans are happy that this election season will soon be over, but unfortunately this election should not really be viewed as the end of something. Rather, I believe that it will be the beginning of a disturbing new chapter in American history.
A whole host of polls and surveys have shown that the American people are angrier today than just about at any other point since World War II. In recent months, this anger and frustration have been bottled up as people have waited for election day. Right now, true believers on both the red team and the blue team are optimistic about the future because they are totally convinced that they are going to win this election.
But when a winner is finally announced, close to half the country is immediately going to be bitterly disappointed. And then when things continue to get worse in this country despite “their guy” winning, the winning side is not going to be so pleased either.
This election could end up being the “release point” for a lot of the anger and frustration that have been building up in this country for a very long time. You can almost feel the tension in the air. All it is going to take is just the right “spark” to set it off.
If you have any political signs in your yard or any political bumper stickers on your car, you might want to start taking them down – especially if you live in a densely populated area. Hopefully cooler heads will prevail, but I wouldn’t count on it. There is just so much hate and anger out there right now.
So pray for peace, but also watch your back.
Do you want to see where this country is headed? If so, don’t focus on the few areas that are still very prosperous. New York City has Wall Street, Washington D.C. has the federal government and Silicon Valley has Google and Facebook. Those are the exceptions. The reality is that most of the country has been experiencing a slow decline for a very long time and once thriving cities such as Gary, Indiana and Flint, Michigan have become absolute hellholes. They are examples of what the rest of America will look like soon. 60 years ago, most Americans were decent, hard working people and there were always good jobs available for anyone that was willing to roll up his or her sleeves and put in an honest day of work. But now all of that has changed. Over the past decade, tens of thousands of manufacturing facilities have shut down and millions of jobs have left the country. Cities such as Cleveland, Baltimore and Detroit were once shining examples of everything that was right about America, but now they stand out like festering sores. The “blue collar cities” have been hit the hardest by the gutting of our economic infrastructure. There are many communities in America today where it seems like all of the hope and all of the life have been sucked right out of them. You can see it in the eyes of the people. The good times are gone permanently and they know it. Unfortunately, the remainder of the country will soon be experiencing the despair that those communities are feeling.
The following are 12 hellholes that are examples of what the rest of America will look like soon….
#1 Gary, Indiana
Gary, Indiana was once a great industrial city.
Today, it is one of the ten most dangerous cities in America, and the population has fallen by about 50 percent.
The following is from a recent Daily Mail article….
Frequently rated one of the ten most dangerous cities in the United States, Gary once boomed with jobs and opportunities but now faces the acute difficulties of America’s growing rust belt, with 22 percent of families in the once-great city now lying below the poverty line.
This modern American ghost town began life as home for workers at the United States Steel Corporation plant until economic competition from abroad forced a 90 percent job cut.
It is hard to describe what is happening to Gary without using the word “depressing”. You can watch a great video that shows what Gary, Indiana looks like these days right here.
This is what happens when industry leaves and there are no jobs. Gary has become a wasteland and there is essentially no hope for a turnaround.
The following is how James Kunstler described what he experienced when he traveled through Gary, Indiana recently….
Between the ghostly remnants of factories stood a score of small cities and neighborhoods where the immigrants settled five generations ago. A lot of it was foreclosed and shuttered. They were places of such stunning, relentless dreariness that you felt depressed just imagining how depressed the remaining denizens of these endless blocks of run-down shoebox houses must feel. Judging from the frequency of taquerias in the 1950s-vintage strip-malls, one inferred that the old Eastern European population had been lately supplanted by a new wave of Mexicans. They had inherited an infrastructure for daily life that was utterly devoid of conscious artistry when it was new, and now had the special patina of supernatural rot over it that only comes from materials not found in nature disintegrating in surprising and unexpected ways, sometimes even sublimely, like the sheen of an oil slick on water at a certain angle to the sun. There was a Chernobyl-like grandeur to it, as of the longed-for end of something enormous that hadn’t worked out well.
Sadly, Gary is far from alone. There are a whole host of other formerly great U.S. cities that are degenerating into hellholes as well.
#2 Chicago, Illinois
There is something truly special about Chicago. Most of America loved the Bears of the Walter Payton era, the Bulls of the Michael Jordan era and the Cubs of the Ernie Banks era. Chicago is also known for great architecture and great pizza.
But these days “the windy city” is becoming known for other things.
The murder rate in Chicago is up 38 percent so far this year, and the recent spike in violence in the city has made national headlines.
As I noted the other day, there are only about 200 police officers in Chicago’s Gang Enforcement Unit to deal with an estimated 100,000 gang members.
That means that those officers are outnumbered 500 to 1, and more gang members pour into the city every single day.
The escalating violence in Chicago was detailed in a recent article in the Telegraph….
“This is a block-to-block war here, a different dynasty on every street,” said a dreadlocked young man heavily inked in gang tattoos who calls himself “Killer”.
“All the black brothers just want to get rich, but we got no jobs and no hope. We want the violence to stop but you ain’t safe if you ain’t got your pistol with you. Too many friends, too many men are being killed. We don’t even cry at funerals no -more. Nobody expects to live past 21 here.”
The victims and killers are mainly black males aged between 15 and 35, often with gang affiliations – but not exclusively. A seven-year-old girl, Heaven Sutton, was buried this month after being gunned down at her mother’s street sweet store. And last week, two girls aged 12 and 13 were shot and badly-wounded as they walked home from a newly-opened community centre.
If you are thinking of moving to Chicago, you might want to think again.
#3 Detroit, Michigan
I have written repeatedly about Detroit because it is a perfect example of what the rest of America is going to look like soon.
Once upon a time it was regarded as one of the top manufacturing cities the world had ever seen, but today it has become a total hellhole.
There are very few decent jobs available, poverty has exploded and crime is everywhere.
If you can believe it, 53.6% of all children in Detroit are living in poverty, and only 25 percent of all students in Detroit graduate from high school at this point.
And as I wrote about recently, justifiable homicide in Detroit increased by a whopping 79 percent during 2011, and the rate of self-defense killings in Detroit is now approximately 2200% above the national average.
Is it any wonder that you can still buy a house for $100 in some areas of Detroit?
The truth is that many areas of Detroit now resemble a post-apocalyptic wasteland. Perhaps that is why one team of investors actually wants to turn some of the worst areas of Detroit into a zombie theme park….
Derelict areas of Detroit face being taken over by hordes of ‘flesh and brain-eating zombies’ if an ambitious business plan takes off.
Entrepreneur Mark Siwak wants to create live-action terror theme park ‘Z World’ on Motor City’s run-down and abandoned streets.
Customers would pay to be chased by professional actors and try to seek shelter in ghostly homes, factories and businesses.
You can see some great video of the “ruins of Detroit” right here.
#4 Stockton, California
Stockton is one of the ten most dangerous cities in America and it recently made national headlines when it declared bankruptcy.
Unfortunately, as spending on law enforcement has declined it has given the criminals a lot more room to operate in Stockton. The following is from a recent Business Insider article….
The city has cut more than $90 million in spending over the past few years, specifically in its police department. The city has cut over one quarter of its police jobs, which has led to a “surge in murders,” and has created an “emboldened criminal element” in the city. According to police spokesman Joe Silva, the city has had 87 murders since the start of 2011, 29 of which have already occurred this year. In contrast, there were 35 murders in 2009 and 48 in 2010. With six months left in the year, there have already been more murders in the city since the start of 2011 than the two-year stretch of 2009-2010.
A while back in Stockton a billboard was put up with the following message: “Welcome to the 2nd most dangerous city in California. Stop laying off cops.”
#5 Flint, Michigan
Flint, Michigan is a city that Michael Moore has made famous. Flint once supported hordes of middle class workers thanks to a thriving auto industry, but today it is a just a rotting shell. It looks like a war went through it and nobody bothered to clean up the mess.
At this point, the murder rate in Flint, Michigan is worse than the murder rate in Baghdad. That is how nightmarish things have become in Flint.
The following is from an article in the New York Times….
It’s not that the cops here are scared; it’s just that they’re outmanned, outgunned and flat broke.
Flint is the birthplace of General Motors and the home of the U.A.W.’s first big strike. In case you didn’t know this, the words “Vehicle City” are spelled out on the archway spanning the Flint River.
But the name is a lie. Flint isn’t Vehicle City anymore. The Buick City complex is gone. The spark-plug plant is gone. Fisher Body is gone.
What Flint is now is one of America’s murder capitals. Last year in Flint, population 102,000, there were 66 documented murders. The murder rate here is worse than those in Newark and St. Louis and New Orleans. It’s even worse than Baghdad’s.
Politicians love to go to Flint and make speeches, but things never get any better. The following are comments that Joe Biden made about Flint, Michigan during a recent speech he gave to promote a jobs bill….
“In 2008, when Flint had 265 sworn officers on their police force, there were 35 murders and 91 rapes in this city. In 2010, when Flint had only 144 police officers, the murder rate climbed to 65 and rapes–just to pick two categories–climbed to 229. In 2011, you now only have 125 shields. God only knows what the numbers will be this year for Flint if we don’t rectify it.”
But don’t look down on Flint – these kinds of conditions are coming to where you live soon enough.
#6 West Philly
Did you know that 36.4% of all children that live in Philadelphia are living in poverty?
There are some sections of Philadelphia that are actually very nice, but there are others that look like society has forgotten about them for decades.
A recent article by Jim Quinn entitled “More Than 30 Blocks Of Grey And Decay” described the depressing conditions in West Philadelphia. Quinn refers to his drive through this area as “the 30 Blocks of Squalor”….
The real unemployment rate exceeds 50%, murder is the number one industry, with drugs a close second.
But it was not always this way. Once upon a time, West Philly was actually a thriving area and was full of middle class families.
So what happened?
That is a very good question.
According to Quinn, the physical decay in West Philly is matched by the social decay….
The once proud homes are in shambles. Bags of garbage dot the landscape. Most of the people who live here are parasites on society. Personal responsibility, work ethic, education and marriage are unknown concepts in this community. Even though more than 50% of the students in West Philly drop out of high school and the SAT scores of West Philly High students are lower than whale ****, the bankrupt school district spent $70 million to build a new high school/prison to babysit derelicts and future prison inmates. The windows do not have steel bars yet, as the architect was smart to put all windows at least eight feet above street level.
These days there is a lot of despair in “the city of brotherly love”. It is so sad to see what is happening to what once was such a proud city.
#7 Cleveland, Ohio
Cleveland has always had a love/hate relationship with itself. Many who live there call it “the mistake by the lake”, but the truth is that it was once a truly great city.
Sadly, today it is symbol of what has gone wrong with America.
There has been a steady stream of businesses that have left Cleveland and today 52.6% of all children that live in Cleveland are living in poverty.
There are not enough good jobs in Cleveland anymore, and so there are not enough workers to buy the tens of thousands of homes that have been foreclosed or abandoned.
So what is being done with all of those empty homes?
Unfortunately, they are being torn down.
The following comes from a recent CBS News report by Scott Pelley….
Across America, recession-fueled foreclosures and plummeting home values have left countless properties abandoned and vulnerable to looting. As Scott Pelley reports, the problem has gotten so bad in Cleveland, Ohio, that county officials have demolished more than 1,000 homes this year – and plan to demolish 20,000 more – rather than let the blight spread and render nearby homes worthless.
Does that seem right to you?
Should Cleveland be destroying tens of thousands of homes that families could be using?
Something has gone very, very wrong in this country.
#8 Camden, New Jersey
If you want to see what a hellhole looks like just visit Camden, New Jersey.
Although you will probably want to take an armed escort with you.
As industry has abandoned Camden, the gangs have basically taken over. The “growth industries” in Camden these days are drug dealing and prostitution.
In an article entitled “City of Ruins“, reporter Chris Hedges described what life is like in Camden at this point….
There are perhaps a hundred open-air drug markets, most run by gangs like the Bloods, the Latin Kings, Los Nietos and MS-13. Knots of young men in black leather jackets and baggy sweatshirts sell weed and crack to clients, many of whom drive in from the suburbs. The drug trade is one of the city’s few thriving businesses. A weapon, police say, is never more than a few feet away, usually stashed behind a trash can, in the grass or on a porch.
Not that other cities in New Jersey are shining examples for the rest of the world either.
For example, if you want to get really depressed just drive through the bad parts of Newark some time.
#9 St. Louis
According to U.S. News and World Report, the most dangerous city in the United States is St. Louis.
If you have a death wish, just wander around the streets of East St. Louis at night.
There is a decent chance that someone will shoot you.
Things were not always this way in St. Louis. But today things have gotten so bad that you can find packs of wild dogs roaming the city digging through trash and threatening children.
The following is from a report by the local CBS affiliate in St. Louis….
…Lewis Reed is sounding the alarm. “I’ve witnessed packs of dogs, 10 and 15 dogs running together, and I’ve seen all these dogs I’m talking about they don’t have collars, they don’t have tags, these are truly wild dogs,” he said.
Reed says stray dogs are terrorizing the north side. “It’s obscene that parents have to walk their kids to school, in some parts of the city, with a golf club to fend off wild dogs.”
This kind of thing is actually happening in America?
#10 New Orleans, Louisiana
The problems that New Orleans has experienced have been well documented.
But unlike most of the cities listed above, at least New Orleans has an excuse. New Orleans permanently lost 29% of its population after Hurricane Katrina, and large sections of the city were essentially destroyed by that storm.
Even today, there are still some areas of New Orleans that look as if they have just been bombed.
It has been estimated that about 20 percent of the homes in New Orleans are still standing vacant, and poverty is rampant. New Orleans will probably never fully recover to the level it was at before Hurricane Katrina hit.
#11 Oakland, California
Oakland has always been in the shadow of San Francisco, and the contrast between the two cities continues to grow.
Oakland has always been considered one of the more dangerous cities in America, and this year crime rates in Oakland are rising rapidly. The following is from a recent article in the New York Times….
At the beginning of April, murders in Oakland were up 26 percent over a year ago, rapes were up 41 percent, and robberies were up 35 percent.
When Chief Batts arrived as a “change agent” in 2009, the police department employed 837 officers. It now has 635. The department no longer responds to burglaries that are not still in progress, and frequently does not respond to other calls for help.
So if your house has been robbed and the burglars are gone what are you supposed to do?
Due to a crippling lack of resources, the previous police chief decided that his department would no longer be able to respond to all crimes.
The following is a partial list of the crimes that police in Oakland are no longer likely to respond to….
- grand theft
- grand theft: dog
- identity theft
- false information to peace officer
- required to register as sex or arson offender
- dump waste or offensive matter
- loud music
- possess forged notes
- pass fictitious check
- obtain money by false voucher
- fraudulent use of access cards
- stolen license plate
- embezzlement by an employee
- attempted extortion
- false personification of other
- injure telephone/power line
- interfere with power line
- unauthorized cable tv connection
So what do you do if you are a victim of one of those crimes in Oakland?
That is a very good question.
#12 Baltimore, Maryland
If you can believe it, Baltimore was actually once a great city.
But today it has become a crime-ridden, drug-infested hellhole.
I used to drive up to Baltimore all the time. It truly is a “blue collar” city. There are a lot of really hard working people there.
Unfortunately, there are not nearly enough jobs for everyone and a lot of people have turned to drugs and crime.
There are some areas of Baltimore that you really should never enter by yourself. If you do go into them, you might not make it back out.
There was one incident in Baltimore earlier this year that was particularly disturbing.
One poor young man had gotten drunk and was apparently wandering around all by himself. Some thugs approached him and they clearly sensed that he was vulnerable. So they knocked him to the ground, stripped him of his car keys, his watch, his money, his cell phone and his clothes.
A crowd gathered around to watch, and instead of helping the man, several of them got out their cell phones and laughed hysterically while they recorded the incident with their cell phone cameras for YouTube.
What made all of this even sadder is that this happened right in front of a Baltimore courthouse.
What in the world has happened to this nation?
All of us that still love this country should be deeply saddened by everything above.
America is rotting from the inside out, and if we are ever going to find any solutions we need to start admitting how bad things have really become.
The truth is that our problems are not limited to one political party, one special interest group or to one region of the country. The social decay that is plaguing America can literally be found everywhere.
For much more on this, please see the following four articles….
1) “25 Signs The Collapse Of America Is Speeding Up As Society Rots From The Inside Out”
2) “70 Reasons To Mourn For America”
3) “20 Signs That Society Is Breaking Down And That America Has Been Overrun By Psychos”
4) “12 Factors That Are Turning The Streets Of America Into A Living Hell”
So don’t laugh at Detroit or Cleveland or St. Louis.
The rest of the country is declining too.
If the city where you live is not a hellhole already, it will be soon enough.
As America watches large sections of Colorado literally burn to the ground, many are wondering why all of this is happening. There have always been wildfires, but what we are experiencing now seems very unusual. So is the number of wildfires in the United States increasing? As you will see later in this article, the answer is yes. 2011 was a record setting year for wildfires and this wildfire season is off to a very frightening start. Right now the eyes of the nation are focused on the Waldo Canyon Fire in Colorado. It doubled in size overnight and it has consumed more than 300 homes so far. It is threatening the city of Colorado Springs, and at this point more than 35,000 people have been forced to evacuate – including the U.S. Air Force Academy. On Twitter and Facebook residents are describing what they are seeing as “the apocalypse” and as “the end of the world”. But this is just the beginning of the wildfire season. We haven’t even gotten to July and August yet.
The Waldo Canyon fire is rapidly becoming one of the most expensive and destructive wildfires in Colorado history. The historic Flying W Ranch has already been burned totally to the ground by this fire. Local authorities are struggling to find the words to describe how nightmarish this fire is. The following are a couple of quotes from a CNN article….
Richard Brown, the Colorado Springs fire chief, described it as a “firestorm of epic proportions.”
Gov. John Hickenlooper surveyed the Waldo Canyon Fire, telling reporters it was a difficult sight to see.
“There were people’s homes burned to the ground. It was surreal,” he said late Tuesday night. “There’s no question, it’s serious. It’s as serious as it gets.”
But this is not the only wildfire that is raging in Colorado. Right now there are 10 wildfires burning in the state. Overall, there are 33 large wildfires currently burning in twelve U.S. states.
If you will remember, New Mexico just experienced one of the worst wildfires that it has ever seen. Conditions throughout most of the western United States are ideal for wildfires right now. As USA Today reports, much of the western half of the country is under a “red flag warning” right now….
Throughout the interior West, firefighters have toiled for days in searing, record-setting heat against fires fueled by prolonged drought. Most, if not all, of Utah, Colorado, Wyoming and Montana were under red flag warnings, meaning extreme fire danger.
But wait, didn’t this kind of thing happen last year too?
Yes it did.
In fact, 2011 was one of the worst years ever for wildfires in America. The following is a short excerpt from an EarthSky article….
Thousands of wildfires raged across the United States last year, 2011, burning a record amount of land, especially in the southern U.S. In fact, 2011 the third-most-active fire season since 1960 (when this record-keeping began) with respect to acres burned, according to preliminary data released from the National Interagency Fire Center (NIFC) in late December 2011. The NIFC will be releasing an official summary report detailing the 2011 wildfire season later in 2012, but for now you can read some of the details in the State of the Climate Wildfires 2011 report from NOAA.
During 2011, a total of 73,484 wildfires burned an estimated 8,706,852 acres (35,235 square kilometers) of land across the United States. Wildfire activity during 2011 was exceptionally high and was only exceeded in the historical record by wildfire activity during the years 2006 and 2007.
We have seen highly unusual wildfire activity throughout America in recent years. In the article quoted above you can find a chart which shows that wildfire activity in the United States has been far above normal during the past decade.
Wildfire records have only been kept since 1960. The 6 worst years on record for wildfires in the U.S. have all happened since the year 2000. The following is from an Earth Island Journal article that I found….
In the United States, where some of the most accurate wildfire statistics are kept, the six worst fire seasons in the past 50 years have occurred since 2000. In Texas, nearly 4 million acres were burned in 2011, double the previous record. This included the Bastrop Fire last September that destroyed 1,600 homes and became the most destructive fire in Texas history. In Arizona more than one million acres were burned in 2011, a new record. The Wallow Fire, which destroyed nearly a half million acres, was the largest fire in Arizona history. The Pagami Creek Fire in northern Minnesota became the third largest fire in state history when it burned 100,000 acres in September 2011, most of this in an unprecedented 16-mile run on a single day.
So what does all of this mean?
It means that the number of wildfires in the United States is increasing and wildfires are becoming more powerful and doing more damage.
So what is causing all of this?
The truth is that this is happening because we are seeing exceptionally dry conditions throughout the western half of the United States. In fact, according to the U.S. National Academy of Sciences, the U.S. interior west is now the driest that it has been in 500 years.
The eastern half of the country also gets very hot during the summer, but they don’t have as many wildfires because they get a lot more rain.
Many areas in the western half of the country have been experiencing drought conditions for quite a few years, and there seems to be no end in sight for the drought.
If you go check out the U.S. drought monitor, you will see that almost the entire southwest United States is experiencing some level of drought right now.
So what will July and August bring?
It is kind of frightening to think about that.
Earlier this year I wrote an article that postulated that we could actually see dust bowl conditions return to the middle of the United States. Many readers were skeptical of that article.
But as much of the western United States continues to experience bone dry conditions and continues to be ravaged by wildfires, perhaps more people will understand how bad things are really getting in the interior west.
Just because we have made great technological advances as a society does not mean that we know how to tame nature. We can attempt to contain the massive wildfires that are popping up all over the place and we can attempt to deal with the drought, but in the end we cannot stop what is happening.
So do you live in any of the areas that are being affected by these wildfires?
Do you have an opinion about why so much of America is on fire?
Please feel free to post a comment with your opinion below….
The Facebook IPO is kind of like a graduation party – everybody comes together for one huge blowout to celebrate the end of an era before going their separate ways. Unfortunately, most people on Wall Street do not understand how bittersweet this moment really is. A tremendous amount of pain is ahead for Wall Street in the next few years, and we will probably never see anything like the Facebook IPO ever again. But the Facebook IPO sure has been fun to watch. Facebook is one of the largest companies to ever go public in the United States. According to CNN, 247 million shares of Facebook exchanged hands in the first 45 minutes of trading. The Facebook IPO was nearly ten times larger than any other Internet IPO in history, and the amount of money being made by some people on this deal is absolutely amazing. For example, it is being reported that Bono will make more money on the Facebook IPO than he has from being part of the band U2 for the past 30 years. Sadly, this euphoria is not going to last for long. The next wave of the global financial collapse is rapidly approaching, and once it strikes there will not be much for anyone on Wall Street to be smiling about at all.
During the IPO process, Facebook sold more than 420 million shares and raised about 16 billion dollars.
Those are incredible numbers.
At 38 dollars per share, Facebook would have a market cap of about 81 billion dollars.
So is Facebook worth 81 billion dollars?
Of course not.
But most stocks are tremendously overvalued at this point.
Yes, Facebook has 900 million users and it made about a profit of about a billion dollars last year.
But that does not add up to an 81 billion dollar company.
Not even close.
A recent article by Jay Yarow explained this in more detail….
As good a business as that is, it’s not Google good. It’s not Apple good. And at the current IPO pricing, Facebook has to be a much better business in the near future.
In fact, Yarow says that Facebook is going to have to dramatically improve in order to justify the current valuation….
So, what’s the bull’s case for Facebook? Unfortunately, it comes down to faith. You have to have faith that Mark Zuckerberg, Sheryl Sandberg, and the rest of the executives at Facebook will discover a magical money making product that will justify its valuation.
Unfortunately, there are already signs that the growth of Facebook is slowing down.
Advertising revenue during the first quarter of 2012 was only $872 million. That was a decline of 7.5 percent from the previous quarter.
And eventually someone will come along and topple Facebook just like Facebook toppled MySpace.
Facebook did not even exist a decade ago. Right now there are young kids tinkering around in their college dorm rooms trying to figure out how to create something that will be even better than Facebook.
The truth is that Facebook is operating on borrowed time. It is not going to remain “hot” and “trendy” forever.
But for the moment, there are a whole lot of people out there that want a piece of Facebook.
Hey, I am not in the stock market at all, but even I am half-tempted to buy a few shares so that I can introduce myself as a “part-owner of Facebook”.
After all, who doesn’t like Facebook?
Yes, government agencies and big corporations use Facebook to spy on all of us. If you don’t believe this, just check out this article, this article and this article.
But there is an incredible upside to social networking websites such as Facebook and Twitter as well.
They have given average people the ability to communicate directly with each other on a massive scale.
In the past, the big corporations pretty much had a monopoly on mass communication.
If you wanted to get your message out independently of the big corporations, you could hand out fliers, you could send out mass mailings (very expensive) or you could try to get a book printed.
But today something that you post on Facebook or Twitter could be seen by thousands (or even millions) of people within a few days.
The Internet is filled with a whole lot of garbage, but it can also be used as an incredible tool for good.
Sitting at home behind your desk, you have the potential to touch the lives of people on the other side of the globe through the Internet that you would probably never have a chance of influencing any other way.
So I am very thankful for Facebook.
We should use tools like Facebook to wake people up while there is still time. Our world is becoming increasingly unstable and we might not always have the opportunity to freely share our thoughts with the entire globe like this.
Just try to imagine a world without Facebook, Twitter, YouTube, blogs and Internet forums.
All of those things have only existed for a relatively short period of time, and there is no guarantee that we will always have them.
Instead of wasting our lives away in front of our televisions, we should be taking advantage of these tools to help change the world.
Every single day, hundreds of people are directed to my website from Facebook. I am hoping to eventually increase that to thousands of people per day.
A great economic collapse is coming to this world. People need to keep their eyes on the financial crisis in Europe and on the derivatives market. The coming financial tsunami will likely be even worse than the crash of 2008.
People are going to be looking for answers.
Now is the time to be a light shining in the darkness.
Not everyone has the time or the knowledge to be able to set up a website or make YouTube videos, but nearly everyone is capable of setting up a Facebook account or a Twitter account.
If you make even a small effort, you could end up touching the lives of thousands upon thousands of people.
Yes, there are a lot of negative things that can be said about Facebook, but at least for today let us celebrate it for what it has given us.
It has given us the opportunity to make a difference on a massive scale, and that is a wonderful thing.