Financial Markets

Guess Who Is Preparing For A Major Stock Market Crash?

Pessimism is spreading like wildfire on Wall Street, and this is particularly true among one very important group of investors.  And considering how much money they have, it may be wise to listen to what they are telling us.  According to a very alarming survey that was recently conducted by UBS Wealth Management, most wealthy investors now believe that there will be a “significant” stock market decline before the end of next year.  The following comes from Yahoo Finance…

Wealthy people around the globe are hunkering down for a potentially turbulent 2020, according to UBS Global Wealth Management.

A majority of rich investors expect a significant drop in markets before the end of next year, and 25% of their average assets are currently in cash, according to a survey of more than 3,400 global respondents. The U.S.-China trade conflict is their top geopolitical concern, while the upcoming American presidential election is seen as another significant threat to portfolios.

Of course this could ultimately become something of a self-fulfilling prophecy if enough wealthy investors pull their money out of stocks and start increasing their cash reserves instead.  Nobody wants to be the last one out of the barn, and it isn’t going to take too much of a spark to set off a full-blown panic.  Perhaps the most troubling number from the entire survey is the fact that almost 80 percent of the wealthy investors that UBS surveyed believe that “volatility is likely to increase”…

Nearly four-fifths of respondents say volatility is likely to increase, and 55% think there will be a significant market sell-off before the end of 2020, according to the report which was conducted between August and October and polled those with at least $1 million in investable assets. Sixty percent are considering increasing their cash levels further, while 62% plan to increase diversification across asset classes.

During volatile times for the market, stocks tend to go down.

And during extremely volatile times, stocks tend to go down very rapidly.

Could it be possible that many of these wealthy investors have gotten wind of some things that the general public doesn’t know about yet?

Of course the truth is that anyone with half a brain can see that stock valuations are ridiculously bloated right now and that a crash is inevitable at some point.

And as I noted yesterday, corporate insiders are currently selling off stocks at the fastest pace in about two decades.

But why is there suddenly so much concern about 2020?

A different survey of business executives that was recently conducted found that 62 percent of them believe that “a recession will happen within the next 18 months”…

A majority of respondents – 62% – believe a recession will happen within the next 18 months. Private companies are particularly worried that a recession lurks in the near term, with 39% anticipating a recession in the next 12 months. This compares with 33% of public company respondents who felt the same way. About one-quarter – 23% – of respondents do not expect a recession within the next two years.

62 percent is a very solid majority, and without a doubt we are starting to see businesses pull back on investment in a major way.

In fact, according to Axios business investment in the United States has now dropped for six months in a row…

  • Business investment has fallen for six months straight and declined by 3% in the third quarter, the largest drop since 2015.
  • The retrenchment by businesses helped turn Wednesday’s U.S. workforce productivity report — a key economic metric that compares goods-and-services output to the number of labor hours worked — negative for the first time in four years.

I know that I bombard my readers with numbers like this on an almost daily basis, but I cannot stress enough how ominous the economic outlook is at this point.

And it isn’t just the U.S. that we need to be concerned about.  Two other surveys that measure the business outlook for the entire globe just fell to their lowest levels in a decade…

The IHS Markit global business outlook—which surveys 12,000 companies three times a year—fell to the worst level since 2009, when data was first collected.

The Ifo world economic outlook, which surveys 1,230 people in 117 countries, fell in the fourth quarter to the worst level since the second quarter of 2009.

Markit’s poll found optimism for activity, employment and profits in the year ahead were all at the lowest level since the financial crisis. Markit also reported a decline in planned investment spending, with inflation expectations at a three-year low.

It is really happening.

The global economy really is heading into a major downturn.

And once this crisis really gets rolling, it is going to be exceedingly painful.

All across America, big companies are already starting to go under at a pace that is absolutely frightening.  For instance, on Tuesday one of the biggest dairy companies in the entire country filed for bankruptcy…

Dairy giant Dean Foods filed for Chapter 11 bankruptcy protection as declining milk sales take a toll on the industry.

Dean Foods – whose more than 50 brands include Dean’s, Land O’ Lakes and Country Fresh – said it intends to continue operating.

The company said it “is engaged in advanced discussions” for a sale to Dairy Farmers of America, a national milk cooperative representing farmers, producers and brands such as Borden cheese and Kemps Dairy.

I have quite a few relatives in Minnesota, and I have always had a soft spot for Land O’Lakes butter.  So it definitely saddened me to hear that this was happening.

But a lot more major casualties are coming.

Of course the economic optimists will continue to insist that we are just experiencing a few bumps on a path that leads to a wonderful new era of American prosperity.  They will continue to tell us of a great “financial harvest” that is about to happen even when things are falling apart all around us.

You can believe them if you want, but most wealthy investors and most business owners believe that hard times are dead ahead.

I have never seen so much pessimism about a coming year as I am seeing about 2020 right now.

There is a growing national consensus that it is going to be a very chaotic year, and I would recommend using what little time you have left to get prepared for it.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

Stock Prices Are Plunging, And Many Fear This Could Be Another “Black October” For The Stock Market

The stock market hasn’t started a quarter this badly in about a decade, and if stock prices continue to plummet it could set off a wave of panic selling unlike anything that we have seen in a very long time.  Of course it wouldn’t be the first time that we have seen a major stock market crash during the month of October.  If I mention “October 1929”, you immediately know what I am referring to, and the same thing is true for October 1987 and October 2008.  Today, we are facing a global economic slowdown, an impeachment crisis in Washington and a rapidly escalating trade war simultaneously, and it seems like almost everyone on Wall Street is suddenly talking about “the coming recession”.  In such an environment, any piece of bad news is going to push stocks lower, and that is certainly what happened on Wednesday…

Stocks fell sharply on Wednesday, adding to Wall Street’s poor start to the final quarter of 2019 as investors grapple with fears of an economic recession.

The Dow Jones Industrial Average declined by 494.42 points, or 1.9% to close at 26,078.68. The Dow also broke below its 50-day and 100-day moving averages, two technical levels watched by traders. The S&P 500 lost 1.8% to 2,887.61 to fall below its 100-day moving average as the tech sector dropped 2%. All 11 S&P 500 sectors were down, with 10 of them sliding at least 1.2%.

Overall, the Dow Jones Industrial Average was down more than 800 points over the first two days of this month, and that makes this the worst start to a quarter for the stock market since 2009.

As I have repeatedly warned my readers, the stock market is more primed for a crash than it has ever been before in all of U.S. history, and investors are becoming increasingly concerned that the party is finally over.

And without a doubt, those in the financial community are very well aware of what has happened during previous Octobers, and that is making everyone just a little bit extra jittery right now…

The market is turning into a “sell first and ask question later market,” said Ryan Detrick, senior market strategist for LPL Financial.

“October is known for being one of the most volatile months and after two days, it is living up to that reputation,” Detrick added.

If a way to resolve our trade war with China could be found, that would greatly calm the markets.

Unfortunately, that isn’t going to happen.  Instead, the Trump administration just decided to escalate our trade war with Europe.  The following comes from Zero Hedge…

In the aftermath of today’s surprising WTO decision, in which the global trade mediator sided with the US in finding some $7.5BN in European Airbus subsidies illegal, moments ago the US Trade Rep confirmed that the US will waste no time in retaliating to what – for years – were illegal trade practices.

According to the USTR office, the US will impose a total of $7.5 billion in retaliatory tariffs on EU imports starting October 18, with 10% tariffs on large commercial aircraft, and 25% on agricultural and other industrial goods.

Needless to say, the Europeans are going to retaliate, and global trade will take another big hit.

Most Americans still seem to think that everything is going to work out just fine somehow, but the truth is that this economic downturn is starting to become really painful.

Nearly every day we are getting more bad economic numbers, and that was definitely true on Wednesday.  The following comes from Bloomberg…

U.S. auto sales took a big step back in September, setting the stage for hefty incentive spending by carmakers struggling to clear old models from dealers’ inventory.

Results were disastrous for leading Asian automakers Toyota Motor Corp. and Honda Motor Co., which both suffered double-digit declines that were worse than analysts anticipated. While a fuller picture will emerge Wednesday when General Motors Co. and Ford Motor Co. are due to report, the poor performance suggests that overall deliveries of cars and light trucks could come in worse than the 12% drop anticipated by analysts, based on six estimates.

Even worse than a 12 percent decline?

If the U.S. economy really was in “good shape”, this would not be happening.  In fact, this is the kind of number that we would expect to see in the middle of a very deep recession.

Meanwhile, we also just got some really bad economic news from New York City…

Just in case you thought the ISM number was a flukey ‘transitory’ one-off, the New York City ISM just plunged, with the outlook collapsing to its lowest since Feb 2009.

And ahead of Friday’s payroll print, NYC ISM’s employment index plunged to 52.5 from 69.0.

At one time, New York City was on the leading edge of “the economic recovery”, but now things have completely reversed.  Economic conditions are rapidly deteriorating, and property values in the city are absolutely plunging…

The Manhattan real estate market stumbled in the third quarter of 2019, new reports show, as prices plunged and fewer buyers were willing to purchase higher-priced properties in the wake of two recent tax increases.

The median sales price for properties fell 17 percent from the same quarter last year, to $999,950, according to new data from CORE. The average sales price dropped 12 percent, to $1.64 million.

Wall Street is starting to figure out that these horrible economic numbers are not going away, and investors are starting to get very nervous.

Many of them are still having a hard time believing that the bull market is completely dead, but at this point it definitely is not going to take much to set off an epic rush for the exits.

Whether it happens this month or not, everyone knows how this ridiculous stock market bubble will end.

Throughout U.S. history, whenever stock valuations have been stretched to such an extreme, a stock market crash has always followed.

This time around, it isn’t just an economic crisis that we are facing, and the drama in Washington is going to have a major impact on stock prices in the months ahead.

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

Goldman Sachs Has Just Issued An Ominous Warning About Stock Market Chaos In October

Are we about to see U.S. financial markets go crazy?  That is what Goldman Sachs seems to think, and it certainly wouldn’t be the first time that great financial chaos has been unleashed during the month of October.  When the stock market crashed in October 1929, it started the worst economic depression that we have ever witnessed.  In October 1987, the largest single day percentage decline in U.S. stock market history rocked the entire planet.  And the nightmarish events of October 2008 set the stage for a “Great Recession” that we still haven’t fully recovered from.  So could it be possible that something similar may happen in October 2019?  According to CNBC, Goldman Sachs is warning that the stock market could soon “go crazy again”…

For investors taking a breather from the chaos in August, buckle up as the market is about to go crazy again, Goldman Sachs warned.

Wall Street is now inches away from reclaiming its record highs, but a rockier ride could be around the corner as stock volatility has been 25% higher in October on average since 1928, according to Goldman. Big price swings have been seen in each major stock benchmark and sector in October over the past 30 years, with technology and health care being the most volatile groups, Goldman said.

Goldman derivatives strategist John Marshall is the man behind this new warning, and he believes that there are some fundamental reasons why the month of October is often so volatile…

“We believe high October volatility is more than just a coincidence,” John Marshall, equity derivatives strategist at Goldman, said in a note Friday. “We believe it is a critical period for many investors and companies that manage performance to calendar year-end.”

And even though October hasn’t arrived yet, we are already starting to see some things that we haven’t witnessed since the last financial crisis.

For example, the Federal Reserve had not intervened in the repo market since 2008, but this week the liquidity crunch was so bad that the Fed felt forced to conduct emergency overnight repurchase agreement operations on Tuesday, Wednesday, Thursday and Friday.

And then on Friday the Fed announced that it will continue to conduct emergency interventions “on a daily basis for the next three weeks”…

The New York Federal Reserve Bank said Friday it will inject billions into the US financial plumbing on a daily basis for the next three weeks in an effort to prevent a spike in short-term interest rates.

The Fed will offer up to $75 billion a day in repurchase agreements — exchanging secure assets for cash for very short periods — through October 10, it said in a statement.

In addition, it will offer three 14-day “repo” operations of at least $30 billion each.

In essence, the “plumbing” of our financial system has gotten all jammed up, and calling out Roto-Rooter is simply not going to get the job done.

Of course Fed officials are trying to assure us that this is no big deal and that they have everything under control.

But if all this is no big deal, why haven’t they had to conduct such emergency interventions for the last 11 years?

And this comes at a time when the deterioration of the U.S. economy appears to be accelerating.  In fact, on Friday St. Louis Fed President James Bullard publicly admitted that the U.S. manufacturing industry appears to already be in a recession…

The US manufacturing sector “already appears in recession” and overall economic growth is expected to slow “in the near horizon,” St. Louis Federal Reserve Bank president James Bullard said on Friday, explaining why he dissented at a recent Fed meeting and wanted a deeper, half-percentage-point rate cut.

That is a stunning admission, because normally Fed officials try very hard to maintain the narrative that everything is wonderful because they are doing such a great job of manipulating the economy.

The American people as a whole are becoming increasingly pessimistic about the economy as well, and Gallup just released some very alarming numbers…

Americans’ confidence in the economy has become less rosy this month as Gallup’s Economic Confidence Index fell to +17 from August’s +24 reading, marking the lowest level since the government shutdown ended in January.

At the same time, the public is evenly divided over the likelihood of a recession in the next year. The current expectation of a recession is nine points higher than it was in October 2007, just two months before the Great Recession began but slightly below a February 2001 reading, one month before that eight-month-long recession.

Every economic indicator that we have is telling us that big trouble is heading our way, but most Americans are partying instead of preparing.

U.S. financial markets have never been more primed for a crash than they are at this moment, and so many of the exact same patterns that we witnessed just prior to the last recession are happening again right now.

Over the past few months, my wife and I have felt a sense of urgency unlike anything that we have ever felt before.  You may have noticed a difference in our tone and in the types of stories that we have been sharing.  Everything that we have been doing has been leading up to this.  The time of “the perfect storm” is here, and most Americans won’t understand what is happening.

The storm clouds are looming and disaster could strike at any time.  This is one of the most critical times in the history of our nation, and most Americans are completely unprepared for what is going to happen next.

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

Why Does The Federal Reserve Keep Slamming The Panic Button Over And Over If Everything Is Okay?

What in the world is the Federal Reserve doing?  For months the Fed has been trying to publicly convince us that the U.S. economy is “strong”, and Fed Chair Jerome Powell recently unequivocally stated that “the Federal Reserve is not currently forecasting a recession”, but the Fed’s actions tell a completely different story.  If the U.S. economy really is performing well, any economics textbook will tell you that the Fed should not be reducing interest rates.  Interest rate cuts should be saved for times when the economy is in serious trouble, and using up all of your ammunition before a downturn has begun is simply foolish.  And the Federal Reserve continues to insist that the financial system is functioning normally, but meanwhile things are spinning so wildly out of control that they felt forced to announce overnight repurchase agreement operations for Tuesday, Wednesday and Thursday.  We haven’t seen this sort of emergency intervention since the last financial crisis, but the Fed’s message to the general public is that “all is well”.

Unfortunately, the truth is that all is not well, and we continue to get more troubling economic news with each passing day.

In a desperate attempt to inject some vigor back into the U.S. economy, the Fed cut interest rates for the second month in a row on Wednesday…

For the second time in two months, the Federal Reserve on Wednesday agreed to press down on the economy’s accelerator to keep the 10-year-old expansion chugging along.

A divided Fed lowered its benchmark interest rate by another quarter percentage point to a range of 1.75% to 2% in an effort to stave off a possible recession triggered by a global economic slowdown and the U.S. trade war with China.

Of course this wasn’t enough to please President Trump, and shortly after the rate cut was announced he posted the following on Twitter…

Jay Powell and the Federal Reserve Fail Again. No “guts,” no sense, no vision! A terrible communicator!

Apparently Trump wanted an even larger rate cut with the promise of more rate cuts in the future, but if the U.S. economy really is in good shape we shouldn’t be having any rate cuts at all.  This was a panic move by the Fed, and they are going to find themselves very short on ammunition when things really start to get crazy.

And conducting overnight repurchase agreement operations for three days in a row also reeks of desperation.  If you are not familiar with the repo market, the following is how Yahoo News described the key role it plays for our financial system…

Financial institutions use money markets to borrow for very short periods, from one day to a year, a crucial function to keep the gears of the economy running.

In so-called repurchase or “repo” agreements, banks borrow by putting up assets like Treasury notes as collateral and then repay the loans with interest the following day.

In a fit of panic, the Fed injected $53,000,000,000 into the system on Tuesday and another $75,000,000,000 on Wednesday.

But it turns out that Wednesday’s injection wasn’t nearly large enough.  The following comes from Zero Hedge…

20 minutes after today’s repo operation began, it concluded and there was some bad news in it: as we feared, yesterday’s take up of the Fed’s repo operation which peaked at $53.2 billion has expanded substantially, and according to the Fed, today there was a whopping $80.05BN in bids submitted, an increase of $27 billion, or 50% more than yesterday.

It also meant that since the operation – which is capped at $75BN – was oversubscribed by over $5BN, that there was one or more participants who did not get up to €5 billion in the critical liquidity they needed, and that the Fed will see a chorus of demands by everyone (because like with the discount window, nobody will dare to be singled out) to either expand the size of its operations, implement a fixed operation and/or – most likely as per the ICAP note yesterday –  transition to permanent open market operations, i.e. QE

And then we learned that the Fed had announced that they were going to inject another $75,000,000,000 on Thursday.

This is utter insanity, and to many it is clear evidence that the Fed is losing control…

“This just doesn’t look good. You set your target. You’re the all-powerful Fed. You’re supposed to control it and you can’t on Fed day. It looks bad. This has been a tough run for Powell,” said Michael Schumacher, director, rate strategy, at Wells Fargo.

We haven’t seen anything like this since the financial crisis of 2008, and many are deeply concerned about what will happen as liquidity demands reach a peak as we approach the end of the month.

As our financial system continues to become increasingly unstable, is this sort of Fed intervention going to become a regular thing?

Of course there are some analysts that are already projecting that a massive new round of quantitative easing is inevitable at this point, and there is a very good chance that they are right.

Meanwhile, the “real economy” continues to deteriorate as well, and one new survey has found that a majority of U.S. CFOs now expect our economy to tumble into a new recession by the end of next year…

Chief financial officers in the United States have started to prepare themselves and their finances for a recession. For the first time in several years, economic uncertainty is now their lead concern, replacing worries about the difficulty of hiring and retaining talented workers.

According to CNN, 53 percent of chief financial officers expect the United States to enter a recession prior to the 2020 presidential election. That information was sourced from the Duke University/CFO Global Business Outlook survey released on Wednesday. And two-thirds predict a downturn by the end of next year.

Unfortunately, we may not have to wait that long, and according to John Williams of shadowstats.com if honest numbers were being used they would show that the U.S. economy is already in a recession right now.

For the moment, most Americans are still buying the narrative that everything is going to be just fine, but that will soon change.

The pace at which things are deteriorating is beginning to accelerate, and the Fed is going to have to hit the panic button many more times in the months ahead.

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

Major Red Flag: The Fed Shocks Everyone With An Emergency Intervention In The Repo Market For The First Time Since 2008

For the very first time since the last financial crisis, the Federal Reserve has been forced to conduct an emergency intervention in the repo market.  I know that a lot of people out there don’t know what the repo market is or how it works, and so let me start out with a very basic analogy that may help people understand what we are facing.  It doesn’t really matter how shiny your toilet is – if the pipes underneath don’t work, you are in a whole lot of trouble.  The repo market plays a critical role in our financial system, because it allows our banks to rapidly borrow money to fund their short-term needs.  But this week interest rates in the repo market started to shoot up to frightening levels, and the Federal Reserve was forced to intervene for the first time since the financial crisis of 2008.  The following comes from Yahoo News…

The New York Federal Reserve Bank on Tuesday stepped into financial markets for the first time in more than a decade to keep interest rates in line with the Fed’s target.

Analysts say the operation appears to have been successful but it caused some jitters, coming as the Fed’s policy-setting Federal Open Market Committee opens a two-day meeting expected to produce a second cut in the benchmark lending rate.

This is essentially a form of “quantitative easing”, and many are concerned that this temporary intervention will not fix the larger problems that have resulted in this crisis.

And of course officials at the Fed probably never imagined that they would be intervening so soon, but they were compelled to make a move when interest rates started to spiral wildly out of control on Monday and Tuesday…

The rate on overnight repurchase agreements hit 5% on Monday, according to Refinitiv data. That’s up from 2.29% late last week and well above the target range set in July by the Federal Reserve, which is 2% to 2.25%. The surge continued Tuesday, with the overnight rate hitting a high of 10% before the NY Fed stepped in.

An “overnight repo operation” was hastily put together as interest rates soared, and it ultimately resulted in 53 billion dollars being injected into our financial system…

On Tuesday morning, the NY Fed launched what’s called an “overnight repo operation,” during which the central bank attempts to ease pressure in markets by purchasing Treasurys and other securities. The goal is to pump money into the system to keep borrowing costs from creeping above the Fed’s target range .

The first attempt by the NY Fed was canceled because of “technical difficulties.” Minutes later, the NY Fed successfully injected $53 billion into the system.

And guess what?

The Fed has already announced that they are going to do it again on Wednesday, and this time the goal will be to inject approximately 75 billion dollars into the system.

If that sounds absurd to you, that is because it is absurd.

Sadly, the truth is that our financial system is starting to show signs of serious distress for the first time in more than a decade, and nobody is quite sure what is going to happen next.

But everyone agrees that the Fed being forced to intervene in the marketplace is not a good sign.  In fact, one industry veteran said that it “is without a doubt one of the worst things that can happen”…

“If the plumbing doesn’t work, then it’s going to dramatically affect secondary trading of Treasuries. Which is the last thing they need when there’s massive issuance going on.

“This is without a doubt one of the worst things that can happen. In many respects it overshadows the Fed moving tomorrow, because if the plumbing doesn’t work everything starts to break down. Everything is predicated upon your getting a reasonable funding rate. Otherwise why would you buy this paper to begin with. If you’re funding your overnight position at 6 why would you buy a 10-year at 2?

And now that the Fed has begun to intervene, when will they be able to stop?

Will they have to keep doing it for the rest of the week?

And what happens if interest rates begin to go wild again next week or next month?

In essence, Pandora’s Box has now been opened, and things could get really crazy moving forward.  According to Zero Hedge, if this currently repo operation is not sufficient to calm things down, the Fed could soon formally launch a new quantitative easing program…

While the Fed did not disclose how many banks participated in the operation, it is safe to say it was a sizable number. Worse, the result from today’s unexpected repo operation, we can now conclude that in addition to $1.3 trillion in ‘excess reserves’, a Fed which is now cutting rates and will cut rates by 25bps tomorrow, the US financial system somehow found itself with a liquidity shortfall of $53 billion that almost paralyzed the interbank funding market.

Oh, and for those wondering why the Fed did a repo, the answer is simple: it did not want to launch QE just yet. But make no mistake, once repo is insufficient, the Fed will have no choice but to escalate to the next step which is open market purchases.

Which brings us to the bigger question of how long such overnight repos will satisfy the market, and how long before the next repo rate spike prompts the Fed to do the inevitable, and restart QE.

Of course quantitative easing is something that should never be done unless we have a major crisis on our hands, and with each passing day it is becoming clearer that the global economy is headed for enormous trouble.  In fact, we just received some more alarming news about global manufacturing…

The gloom of the world is centered around auto manufacturing, which is dragging on the global economy, fuelling fears that a worldwide trade recession has already begun.

The first domino to fall has been auto manufacturing, already hitting a near-record low in August, reported the Financial Times.

New data from IHS Markit global car industry purchasing managers’ index shows some of the sharpest declines across all sectors, not seen since 2009.

It is time to “batten down the hatches”, because rough weather is ahead.

Over and over again we keep seeing trouble signs that we haven’t seen since the last financial crisis, but most Americans still seem convinced that everything is going to be okay.

This move by the Fed is one of the biggest red flags yet, but I have a feeling that what we have seen so far is just the tip of the iceberg.

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

28 Signs Of Economic Doom As The Pivotal Month Of September Begins

Since the end of the last recession, the outlook for the U.S. economy has never been as dire as it is right now.  Everywhere you look, economic red flags are popping up, and the mainstream media is suddenly full of stories about “the coming recession”.  After several years of relative economic stability, things appear to be changing dramatically for the U.S. economy and the global economy as a whole.  Over and over again, we are seeing things happen that we have not witnessed since the last recession, and many analysts expect our troubles to accelerate as we head into the final months of 2019.

We should certainly hope that things will soon turn around, but at this point that does not appear likely.  The following are 28 signs of economic doom as the pivotal month of September begins…

#1 The U.S. and China just slapped painful new tariffs on one another, thus escalating the trade war to an entirely new level.

#2 JPMorgan Chase is projecting that the trade war will cost “the average U.S. household” $1,000 per year.

#3 Yield curve inversions have preceded every single U.S. recession since the 1950s, and the fact that it has happened again is one of the big reasons why Wall Street is freaking out so much lately.

#4 We just witnessed the largest decline in U.S. consumer sentiment in 7 years.

#5 Mortgage defaults are rising at the fastest pace that we have seen since the last financial crisis.

#6 Sales of luxury homes valued at $1.5 million or higher were down five percent during the second quarter of 2019.

#7 The U.S. manufacturing sector has contracted for the very first time since September 2009.

#8 The Cass Freight Index has been falling for a number of months.  According to CNBC, it fell “5.9% in July, following a 5.3% decline in June and a 6% drop in May.”

#9 Gross private domestic investment in the United States was down 5.5 percent during the second quarter of 2019.

#10 Crude oil processing at U.S. refiners has fallen by the most that we have seen since the last recession.

#11 The price of copper often gives us a clear indication of where the economy is heading, and it is now down 13 percent over the last six months.

#12 When it looks like an economic crisis is coming, investors often flock to precious metals.  So it is very interesting to note that the price of gold is up more than 20 percent since May.

#13 Women’s clothing retailer Forever 21 “is reportedly close to filing for bankruptcy protection”.

#14 We just learned that Sears and Kmart will close “nearly 100 additional stores” by the end of this year.

#15 Domestic shipments of RVs have fallen an astounding 20 percent so far in 2019.

#16 The Labor Department has admitted that the U.S. economy actually has 501,000 less jobs than they previously thought.

#17 S&P 500 earnings per share estimates have been steadily falling all year long.

#18 Morgan Stanley says that the possibility that we will see a global recession “is high and rising”.

#19 Global trade fell 1.4 percent in June from a year earlier, and that was the biggest drop that we have seen since the last recession.

#20 The German economy contracted during the second quarter, and the German central bank “is predicting the third quarter will also post a decline”.

#21 According to CNBC, the S&P 500 “just sent a screaming sell signal” to U.S. investors.

#22 Masanari Takada is warning that we could soon see a “Lehman-like” plunge in the stock market.

#23 Corporate insiders are dumping stocks at a pace that we haven’t seen in more than a decade.

#24 Apple CEO Tim Cook has been dumping millions of dollars worth of Apple stock.

#25 Instead of pumping his company’s funds into the stock market, Warren Buffett has decided to hoard 122 billion dollars in cash.  This appears to be a clear indication that he believes that a crisis is coming.

#26 Investors are selling their shares in emerging markets funds at a pace that we have never seen before.

#27 The Economic Policy Uncertainty Index hit the highest level that we have ever seen in the month of June.

#28 Americans are searching Google for the term “recession” more frequently than we have seen at any time since 2009.

The signs are very clear, but unfortunately we live at a time when “normalcy bias” is rampant in our society.

If you are not familiar with “normalcy bias”, the following is how Wikipedia defines it…

The normalcy bias, or normality bias, is a belief people hold when considering the possibility of a disaster. It causes people to underestimate both the likelihood of a disaster and its possible effects, because people believe that things will always function the way things normally have functioned. This may result in situations where people fail to adequately prepare themselves for disasters, and on a larger scale, the failure of governments to include the populace in its disaster preparations. About 70% of people reportedly display normalcy bias in disasters.[1]

For most Americans, the crisis of 2008 and 2009 is now a distant memory, and the vast majority of the population seems confident that brighter days are ahead even if we must weather a short-term economic recession first.  As a result, most people are not preparing for a major economic crisis, and that makes us extremely vulnerable.

In 2008 and 2009, the horrible financial crisis and the bitter recession that followed took most Americans completely by surprise.

It will be the same this time around, even though the warning signs are there for all to see.

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

Guess What Warren Buffett Is Doing With His Money Right Now?

Does Warren Buffett believe that a major financial crisis is coming?  In life, what people do is far more important than what they say, and what Warren Buffett is doing with his money right now speaks volumes.  During the second half of 2019, a lot of the “experts” are warning about the possibility of a market crash, and corporate insiders have been selling stocks at a rate that we haven’t seen since the last financial crisis.  There appears to be a widespread belief that the market is about to take a really negative turn, and we haven’t seen this sort of a “race for the exits” in a very long time.  But when there is a lot of fear on Wall Street, that can sometimes be an opportunity to make a lot of money.  Warren Buffett certainly hasn’t been afraid to “zig” when others are “zagging” over the years, and if he believed that there were great opportunities in the marketplace right now he would not hesitate to strike.  But as you will see below, he’s not doing that.

Warren Buffett is the most famous investor in America today, but if you are not familiar with him, the following is a pretty good introduction from Wikipedia…

Warren Edward Buffett (/ˈbʌfɪt/; born August 30, 1930)[2] is an American business magnate, investor, speaker and philanthropist who serves as the chairman and CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world[3][4] and has a net worth of US$82 billion as of July 18, 2019, making him the third-wealthiest person in the world.[5]

Buffett was born in Omaha, Nebraska. He developed an interest in business and investing in his youth, eventually entering the Wharton School of the University of Pennsylvania in 1947 before transferring and graduating from the University of Nebraska at the age of 19. He went on to graduate from Columbia Business School, where he molded his investment philosophy around the concept of value investing that was pioneered by Benjamin Graham. He attended New York Institute of Finance to focus his economics background and soon after began various business partnerships, including one with Graham. He created Buffett Partnership, Ltd in 1956 and his firm eventually acquired a textile manufacturing firm called Berkshire Hathaway, assuming its name to create a diversified holding company. In 1978, Charlie Munger joined Buffett and became vice chairman of the company.[6][7]

Buffett became one of the wealthiest people in the entire country by aggressively investing his money.  His keen instincts have enabled him to make the right move far more often than not, and that is why what he is doing with his money right now has so many people concerned.

Instead of pumping his company’s cash into the stock market, Buffett has decided to hoard it.  In fact, Berkshire Hathaway currently has 122 billion dollars that is just sitting there and doing nothing at all…

Warren Buffett, known for being one of the world’s most prescient investors, has kept quiet on whether U.S. equities are too expensive at a time when the global economy is slowing, Bloomberg reports. But he’s reportedly hoarding a record $122 billion in cash at Berkshire Hathaway Inc., leading to some speculation that he sees a recession on the horizon, or at least is sending some sort of warning. The cash pile is more than half the value of Berkshire’s $208 billion portfolio of public companies, and the only time that percentage has reportedly been higher since 1987 was in the years leading up to the 2008 financial crisis.

Yet again, we are talking about something that hasn’t happened since the last financial crisis.

Red flags are popping up all around us, and yet most people are choosing not to pay attention.

If Buffett believed that an “economic boom” was coming and that stock prices were going to go higher, sitting on a giant mountain of cash wouldn’t make any sense at all.

But if he believed that the market was about to crash and that stock prices would soon be far cheaper than they are now, having a mammoth cash hoard would make all of the sense in the world.

Of course Buffett is not the only one that can see what is coming.  Earlier today, a CNBC article lamented the fact that there has been a “sudden pullback” in spending among wealthy individuals all over America…

From real estate and retail stores to classic cars and art, the weakest segment of the American economy right now is the very top. While the middle class and broader consumer sections continue to spend, economists say the sudden pullback among the wealthy could cascade down to the rest of the economy and create a further drag on growth.

Luxury real estate is having its worst year since the financial crisis, with pricey markets like Manhattan seeing six straight quarters of sales declines. According to Redfin, sales of homes priced at $1.5 million or more fell 5% in the U.S. in the second quarter. Unsold mansions and penthouses are piling up across the country, especially in ritzy resort towns, with a nearly three-year supply of luxury listings in Aspen, Colorado, and the Hamptons in New York.

When an economic crisis is ahead, the correct thing to do is to reduce spending, and obviously that is precisely what many at the top of the economic pyramid have decided to do.

Meanwhile, millions of other Americans do not understand what is happening, and they just assume that everything is going to be just fine somehow.

A lot of people out there seem to believe that the problems that caused the last financial crisis were “fixed” and that the good times will just keep on rolling for many years to come.

Perhaps the blind optimists will be proven right and Warren Buffett will be proven wrong this time.

It is theoretically possible that this could happen, but I certainly wouldn’t bet on it.

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

Preparing For A Financial Apocalypse: Insiders Are Selling “$600 Million Of Stock Per Day In August”

In the U.S., corporate insiders have been selling stocks at an average rate of 600 million dollars per day during the month of August.  This kind of wild selling indicates that there is a tremendous amount of fear among corporate insiders right now, and such selling would only make sense if a stock market crash is imminent.  And without a doubt, we have already seen volatility return to Wall Street in a major way as our trade war with China has dramatically escalated.  Many Americans are hoping that things will start to calm down and that our trade conflict with China can be resolved calmly, because if things take a bad turn many analysts are warning that we could soon be facing the worst financial crisis since 2008.  Here is one example…

Remember the brutal sell-off last year when stocks suffered their worst December since the Great Depression? Something worse than that could happen in days, a Nomura analyst said.

Macro and quant strategist Masanari Takada turned heads earlier this month with his bold call for a “Lehman-like” plunge. He’s sticking with this prediction as market sentiment shows no signs of improving, leading him to believe a monster sell-off could arrive this week.

With chilling forecasts like that being thrown around on a regular basis these days, it is understandable that corporate insiders would be tempted to get out of the market, and right now they are racing for the exits at a pace that is absolutely breathtaking.  The following comes from CNN…

Corporate insiders have sold an average of $600 million of stock per day in August, according to TrimTabs Investment Research, which tracks stock market liquidity.

August is on track to be the fifth month of the year in which insider selling tops $10 billion. The only other times that has happened was 2006 and 2007, the period before the last bear market in stocks, TrimTabs said.

In other words, the last time we saw corporate insiders dump stocks like this was just before the last financial crisis.

Clearly, many among the elite are preparing for the worst.  They can see financial disaster looming on the horizon, and they are getting out of the market while the getting is still good.

On the other hand, there are multitudes of Americans out there that are completely convinced that President Trump will be able to successfully navigate us through any storms that may be ahead.

When Barack Obama was in the White House, national interest in prepping soared to all-time highs, but since Trump entered the White House things have completely reversed.  The following comes from Business Insider…

But since President Trump took office in 2016, prepping has taken a dive nationwide. There are fewer prepper conventions held across the US, and several prepper business owners who spoke with Business Insider (as well as Mills), say the prepping community is not as active as it was three years ago. It’s an indication of how Trump relieves many of the worst fears of his voters, including conservative preppers.

“It definitely seems to be cycling with the White House,” prepper and inventor Mikhail Merkurieff, who builds and sells prepping and camping tools including stoves, cooking utensils, and portable shelters, told Business Insider.

With a Republican in the White House, many conservatives simply do not see any reason to prep anymore, and so things are completely different than they were about four or five years ago.  Many former preppers seem to believe that having Trump in the Oval Office means that “we don’t have to worry about anything”…

Rick Austin, who organizes a popular “Prepper Camp” in the hills of North Carolina every year, which is attended by roughly 1,400 worst-case-scenario preparers hoping to beef up their skills, also noted a downturn.

“Businesses are down because people have kind of gone, ‘Oh, you know, Trump’s in office, we don’t have to worry about anything,'” he said while milking his goats from an “undisclosed location” in the Appalachian Mountains.

So we are witnessing something extremely strange right now.

Corporate insiders and the Wall Street elite are feverishly preparing as if a “perfect storm” was about to strike, but meanwhile millions upon millions of hardcore conservatives feel completely relaxed because they feel like Trump has everything under control.

And President Trump did cause quite a turnaround in the financial markets on Monday when he told the press that China had called and had requested a return to the negotiating table…

“China called last night our top trade people and said. ‘Let’s get back to the table,’ so we will be getting back to the table and I think they want to do something. They have been hurt very badly but they understand this is the right thing to do and I have great respect for it. This is a very positive development for the world,” Trump said.

Subsequently, however, the Chinese denied that such a call had taken place…

In Beijing, Foreign Ministry spokesman Geng Shuang said he was not aware that a phone call between the two sides had taken place. And Hu Xijin, editor-in-chief of Chinese state-run newspaper the Global Times, denied that negotiators had held the phone calls Trump described.

“China didn’t change its position. China won’t cave to U.S. pressure,” said Hu, who is widely seen as a mouthpiece for Beijing’s messaging.

We shall see where things go from here.

It would certainly be a step in the right direction if the two sides start talking again, and the Chinese have definitely expressed a desire to avoid any further escalations…

In response, Chinese Vice Premier Liu He told a state-controlled newspaper on Monday that “China is willing to resolve its trade dispute with the United States through calm negotiations and resolutely opposes the escalation of the conflict,” Reuters first reported, citing a transcript of his remarks provided by the Chinese government. Liu is China’s top trade negotiator.

Speaking at a technology conference in China, Liu added: “We believe that the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world.”

But with a presidential election looming about a year away, the Chinese are simply not going to accept any deal that is appreciably different from what they expect that they could get from Joe Biden or Elizabeth Warren.

And it is also very unlikely that President Trump will cave in and give the Chinese what they want.  So ultimately we will see episodes of hope on Wall Street on the days when it looks like the two sides may start talking again, but there won’t be a deal any time soon.

Many people believe that we are living during one of the most critical moments in U.S. history, and we haven’t seen this sort of fear in the financial markets in a long time.

At this moment, corporate insiders are dumping stocks as if “the everything bubble” was about to burst in a major way.  And if those corporate insiders are correct, millions upon millions of other Americans will be completely and utterly unprepared for what is about to happen.

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

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