Financial Marketplace

The “Stock Market Crash Of 2018” Is Rapidly Transforming Into “The Financial Crisis Of 2019”

Stock markets are crashing all over the world, we are seeing extremely violent “flash crashes” in the forex marketplace, economic conditions are slowing down all over the globe, and fear is causing many investors to become extremely trigger happy.  The stock market crash of 2018 wiped out approximately 12 trillion dollars in global stock market wealth, but things were supposed to calm down once we got into 2019.  But clearly that is not happening.  After Apple announced that their sales during the first quarter are going to be much, much lower than previously anticipated, Apple’s stock price started shooting down like a rocket and by the end of the session on Wednesday the company had lost 75 billion dollars in market capitalization.  Meanwhile, “flash crashes” caused some of the most violent swings that we have ever seen in the foreign exchange markets…

It took seven minutes for the yen to surge through levels that have held through almost a decade.

In those wild minutes from about 9:30 a.m. Sydney, the yen jumped almost 8 percent against the Australian dollar to its strongest since 2009, and surged 10 percent versus the Turkish lira. The Japanese currency rose at least 1 percent versus all its Group-of-10 peers, bursting through the 72 per Aussie level that has held through a trade war, a stock rout, Italy’s budget dispute and Federal Reserve rate hikes.

This is the kind of chaos that we only see during a financial crisis.

Investors are also being rattled by the fact that China just experienced its first factory activity contraction in over two years…

The People’s Bank of China said on Wednesday evening it had relaxed its conditions on targeted reserve requirement cuts to benefit more small firms.

The move came after China reported its first factory activity contraction in over two years in December. A long-term Chinese slowdown would cause global havoc.

But of course the biggest news of the day was what happened to Apple.  The Dow Jones Industrial Average was down 660 points on Wednesday, and the huge hit that Apple took was the biggest reason for that decline.

Including the 75 billion dollars that was just wiped out, the value of Apple has now fallen by 452 billion dollars since October 3rd…

In only three months, Apple has lost $452 billion in market capitalization, including tens of billions on Thursday as the tech giant’s stock sank further.

Apple shares have fallen by 39.1 percent since Oct. 3, when the stock hit a 52-week high of $233.47 a share. With its market cap down to about $674 billion, those losses are larger than individual value of 496 members of the S&P 500 — including Facebook and J.P. Morgan.

Ironically, the truth is that Apple is actually one of the strongest companies on Wall Street financially.  It is just that the company was priced well beyond perfection, and so any hint of bad news was likely to cause a decline of this magnitude.

The amount of paper wealth that stock market investors have just lost is absolutely staggering.  To put this in the proper perspective, here are some more facts about the money that Apple investors have lost that come from CNBC…

At this point U.S. financial markets are hypersensitive to any piece of bad news, and the fact that Apple sales are way down in China is definitely bad news.

One analyst said that this was “Apple’s darkest day in the iPhone era” and he expressed his opinion that “the magnitude of the miss with China demand …was jaw-dropping.”

Of course Apple is far from alone.  Economic activity is slowing down substantially all over the planet, and on Wednesday we learned that U.S. factory activity just declined by the most since the last recession…

Beyond Apple, investors were also rattled by the biggest one-month decline in US factory activity since the Great Recession. The closely-watched ISM manufacturing index tumbled to a two-year low, providing further evidence of slowing growth and pain from the US-China trade war.

In addition, both of Bloomberg’s economic surprise indexes have “turned negative for the first time since Trump was elected”.

The hits just keep on coming, and it is becoming quite clear that this is going to be a very tough year.

As this crisis continues to escalate, keep an eye on our big financial institutions.  Italy’s tenth largest bank just imploded, and it is likely that we will see more financial dominoes start to topple as the losses mount.

Over the past decade, there have been other times when Wall Street has been rattled, but those episodes only lasted for a few weeks at the most.

It has now been three months, and this new crisis shows no signs of abating any time soon.

What that means is that we are in a heap of trouble.  Because once this giant financial avalanche fully gets going, it is going to be impossible to stop.

For the moment, I think that this current wave of panic selling is subsiding and that Friday will be better for investors.  Of course the markets are so jittery at this point that a single piece of bad news could instantly send them tumbling once again.  But barring any bad news, hopefully things will be calmer on Friday.

There will be good days and there will be bad days in 2019.

There will be ups and there will be downs.

But it has become exceedingly clear that the downturn that so many have been anticipating has finally arrived, and the financial crisis of 2019 looks like it is going to be a doozy.

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

A Surprise Announcement Has Just Unleashed Another Wave Of Panic On Wall Street

Well, that sure didn’t take long.  Many had been hoping that 2019 would be a calmer year for Wall Street, but so far that has not materialized.  In fact, a surprise announcement by Apple has just sparked another wave of panic selling on Wall Street.  In a letter to shareholders, Apple CEO Tim Cook admitted that first quarter revenue is going to be way, way below expectations.  That immediately set off “flash crashes” all over the globe as investors reacted to this unexpected news.  According to Cook, the primary reason for the coming “revenue shortfall” is a slowing economy in China…

Apple said it sees first-quarter revenue of $84 billion vs. a previous guidance of a range of $89 billion and $93 billion. Analysts expected revenue of $91.3 billion for the period, according to the consensus estimate from FactSet. Apple blamed most of the revenue shortfall for struggling business in China. But the company also said that upgrades by customers in other countries were “not as strong as we thought they would be.”

Once this letter was released, many investors rushed to dump as much Apple stock as they could, and trading in the stock was temporarily halted…

After being halted temporarily, Apple shares resumed trading at 4:50 p.m. ET, quickly falling over 8 percent to $145.12. The plunging shares wiped out more than $50 billion in the company’s market value, according to Bloomberg data. Apple, which was trading around $146 in after-hours trading is now down more than 37 percent from its Oct. 3 high and has fallen mightily since becoming the first U.S. company to reach a $1 trillion market cap in August.

And many investors generally assume that pretty much any bad news for Apple is bad news for the tech sector as a whole, and so just about every big tech stock was being pummeled in the aftermath of this surprise announcement.  The following numbers come from Business Insider…

As I warned just yesterday, it looks like 2019 is going to be a very, very challenging year.

At this point the mood of the nation has turned downright gloomy.  Economic activity is slowing down all around the globe, the current government shutdown looks like it could last for a very long time, the endless investigations in Washington threaten to derail the Trump presidency, our trade war with China is becoming more painful with each passing week, and even many former optimists are openly admitting that the outlook for Wall Street looks very grim.  For example, just check out what venture capitalist Fred Wilson is saying…

Like many of his peers in the Valley, legendary New York VC Fred Wilson – the founder of Union Square Ventures – is typically a dewy eyed optimist (just take a look at Union Ventures’ many flailing crypto investments). But in a surprising twist, a list of Wilson’s market calls for 2019 is so gloomy, it reads as if it were ghostwritten by SocGen’s Albert Edwards.

According to Wilson, the S&P 500 will visit 2,000 (a roughly 500 point – 25% – drop from current levels) some time during 2019 as the bottom falls out of the global economy. President Trump will agree to resign after being impeached by the House following the publication of the Mueller report. And the slate of highly anticipated tech IPOs (Uber, Lyft, Airbnb etc.) will fall flat. In other words, 2019 will be a “doozy”, as Wilson describes it.

The new session of Congress begins at noon on Thursday, and Nancy Pelosi will once again be the Speaker of the House.  If something suddenly happened to President Trump and Vice-President Pence, she would become the president of the United States.

I don’t know about you, but just the thought of that chills me to the bone.

Now that the Democrats control the House, they are going to investigate the living daylights out of Trump, and it is likely to be a very, very tough year for him.

Many on the left are entirely convinced that Trump will be out of the White House by the end of 2019.  Perhaps they will be successful in that mission, but instead of fixing things that would just unleash a whole lot more chaos.

As this year rolls along, the bickering and fighting in Washington is going to continue to intensify, but meanwhile very little is going to get done.  With the Democrats in control of the House, the Republicans in control of the Senate, and Trump in control of the White House we have a recipe for gridlock that is pretty much unprecedented in modern American history.

What that means is that if things go really, really bad, we shouldn’t really expect any solutions to come out of Washington.  We desperately need real change, but the voters just keep on sending the same old faces back to D.C. and they just keep on pushing the same old tired policies.

It is funny how I often drift into talking about politics, but the truth is that economics and politics are inseparable.  And it is undeniable that what is going on in D.C. is going to have a dramatic impact on the U.S. economy throughout 2019.

As I write this, the numbers coming from Wall Street just keep getting worse and worse.  It looks like it is going to be a really tough day, and without a doubt it looks like it is going to be a really tough year.

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

2018 Was The Worst Year For The Stock Market Since The Financial Crisis Of 2008

Now that the year is finally over, we can officially say that 2018 was the worst year for stocks in an entire decade.  Not since the last financial crisis have we had a year like this, and many believe that 2019 will be even worse.  And of course the truth is that stocks are still tremendously overvalued.  Stock valuation ratios always return to their long-term averages eventually, and if the Dow Jones Industrial Average plunged another 8,000 points from the current level that would begin to get us into that neighborhood.  Unfortunately, the system is so highly leveraged that it will not be able to handle a price decline of that magnitude.  The relatively modest drops that we have seen already have caused a tremendous amount of chaos on Wall Street, and a full-blown meltdown would quickly result in a nightmare scenario potentially even worse than what we experienced in 2008.

For investors that had become accustomed to large gains year after year, 2018 was a brutal wake up call.  The following comes from Fox Business…

2018 may be remembered as the year the Grinch stole your retirement or stock investment account.

December was the worst month for the Dow Jones Industrial Average and the S&P 500  since 1931, as tracked by our partners at Dow Jones Market Data Group. The S&P 500, the broadest measure of stocks, lost 9 percent and the Dow over 8.5 percent.

For the year, stocks turned in the worst performance since 2008.

According to the bulls, this wasn’t supposed to happen.  In the middle of the year, they were projecting that a “booming” U.S. economy would continue to drive stock prices higher, but instead we just witnessed the worst three month stretch  for stocks since the 4th quarter of 2008, and the month of December was the most painful of all…

December was a particularly dreadful month: The S&P 500 was down 9% and the Dow was down 8.7% — the worst December since 1931. In one seven-day stretch, the Dow fell by 350 points or more six times. This year’s Christmas Eve was the worst ever for the index.

The S&P 500 was up or down more than 1% nine times in December alone, compared to eight times in all of 2017. It moved that much 64 times during the year.

Not even in 2008 did we have a December like this.  This was the second worst December for the Dow Jones Industrial Average ever, and you know that things are getting bad when you have to go all the way back to the Great Depression of the 1930s to find a time when stock prices were deteriorating more rapidly.

The amount of stock market wealth that has already been wiped out is absolutely staggering.  For example, Facebook CEO Mark Zuckerberg’s net worth plummeted by 20 billion dollars in 2018…

American billionaires saw the biggest loss this year, collectively dropping $76 billion, largely because of December’s market rout. Mark Zuckerberg saw the sharpest drop in 2018 as Facebook Inc. veered from crisis to crisis. His net worth fell nearly $20 billion, leaving the 34-year-old with a $53 billion fortune.

And this was not just a U.S. phenomenon.  Virtually every major stock market around the world was hit extremely hard, and a total of nearly 12 trillion dollars in global stock market wealth was wiped out over the course of the year.

The only time when more stock market wealth was wiped out in a single year was in 2008.

Are you starting to understand the magnitude of the crisis that has now erupted?

Of course the mainstream media continues to insist that this is just a temporary thing, and that markets will begin surging again soon as investors start scooping up stocks at “bargain prices”.  For example, just check out this excerpt from a CNBC article that was posted on Monday…

John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, said these declines are “setting the stage for upward surprises in 2019.”

“With what we believe to be almost all but the kitchen sink priced into current valuations, we see opportunity for multiples to return to levels seen at the end of the third quarter … with multiple expansions resulting in a global equity rebound in the coming year,” Stoltzfus wrote in a note.

It sure would be nice if the optimists are correct.  Even for those that are relatively poor, the truth is that we live very comfortably in the United States today.  The vast majority of us really have nothing to complain about, because we are enjoying a standard of living that is substantially higher than almost everyone else in the world.

Of course we don’t actually deserve this standard of living, but most Americans don’t want to hear that.  We consume far more than we produce, and only by going into increasingly absurd amounts of debt are we able to keep the game going.

It is easy to say that this bubble will inevitably burst, but it will be a very sad day when it does.

Those that gleefully look forward to the coming collapse of our financial system do not really understand what we will be facing.  It won’t be like 2008 when the authorities were able to patch things together and fairly rapidly restore our standard of living.  When this thing finally shatters, nobody is going to be able to put the pieces back together like they were before ever again.

This is a very dark time.  As I have stressed repeatedly, the elements for a “perfect storm” have been rapidly coming together, and 2019 is going to look a whole lot different than 2018 did.

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

This Is Exactly The Kind Of Behavior That You Would Expect During A Stock Market Implosion…

If a doctor tells you that his patient’s condition is swinging up and down wildly, is that a good sign or a bad sign?  Of course the answer to that question is quite obvious.  And if a doctor tells you that his patient’s condition is “stable”, is that a good sign or a bad sign?  Just like in the medical world, instability is not something that is a desirable thing on Wall Street, and right now we are witnessing extreme volatility on an almost daily basis.  On Thursday, the Dow was already down several hundred points when I went out to do some grocery shopping with my wife, and at the low point of the day it had fallen 611 points.  But then a “miracle happened” and the Dow ended the day with an increase of 260 points.  As I detailed yesterday, this is precisely the sort of behavior that you would expect during a chaotic bear market.

As Fox Business has noted, bear market rallies are typically “sharp, quick and usually short”.  I figured that the momentum from Wednesday would carry over into the early portion of Thursday, so I was surprised when the Dow was down by so much as we neared the middle of the day.  But then around 2 PM we witnessed an extraordinary market surge…

The Dow Jones Industrial Average posted a 865-point swing in less than two hours. The blue-chip index had been down in mid-afternoon more than 500 points to cut the previous session’s gains in half, before bargain hunters and short covering turned a big decline into a modest gain.

An 865 point swing in less than two hours is not “normal”.

In fact, it is about as far from “normal” as you can get.

Let’s talk about short covering for a moment.  During huge market downturns, speculators often try to make a lot of money very rapidly by shorting stocks.  But if momentum suddenly shifts, those short sellers can be caught with their pants down and the consequences can be quite dramatic.  The following comes from Marketwatch…

Indeed, market veterans warn that massive, one-day rallies are often more characteristic of downturns, occurring as selloffs lead to significantly oversold technical conditions that leave markets ripe for short covering only to give way to renewed selling once the frenzy of forced buying is exhausted. Investors who short a stock are essentially betting that its price will fall by first borrowing the shares, but those traders can be forced to buy shares back if prices suddenly swing higher, which, in turn, can amplify price swings.

In addition, it appears that on Thursday there was more of the “forced pension rebalancing” that Zero Hedge has been talking about…

It certainly has the smell of a massive pension reallocation as the moment stocks started to surge, bonds were dumped…

No stock market crash in U.S. history has ever gone in a straight line.  There are always huge ups and downs during every market crash, and this market crash is no exception.

Ultimately, there is no way that you can possibly interpret the behavior of the market in recent days as “healthy”…

Here’s the problem: as we discussed last night, since 1990, every comparable reversal – with a few exceptions – came during the 2008-2009 bear market.  According to Bloomberg data, in eight previous bear markets the S&P 500 experienced rallies of greater than 2.5% more than 120 times as the benchmark plunged from peak to trough. From the collapse of Lehman to the financial crisis bottom in March 2009, the S&P 500 rallied more than 4 percent on 13 different occasions.

“This is not the kind of price action you see in normal bull markets,” said Robert Baird equity sales trader Michael Antonelli. “This is just a face ripping short cover rally. I am 100 percent not saying we are in a situation like 2008 now, but look at October 10, 2008 to October 13, 2008: the market rose nearly 12 percent in one day. October 27 to October 28, 2008, it rose 11 percent.”

Meanwhile, it appears that one of America’s most iconic retailers is about to go down in flames.

For years I have been warning that Sears was eventually “going to zero”, and if a last ditch rescue attempt does not materialize by the end of the day on Friday, Sears will be liquidated…

The employer of more than 68,000 filed for bankruptcy in October. Its last shot at survival is a $4.6 billion proposal put forward by its chairman, Eddie Lampert, to buy the company out of bankruptcy through his hedge fund, ESL Investments. ESL is the only party offering to buy Sears as a whole, people familiar with the situation tell CNBC. Without that bid or another like it, liquidators will break the company up into pieces.

But as Lampert stares down a deadline of Dec. 28 to submit his offer, he is quickly running out of time. As of Thursday afternoon, Lampert had neither submitted his bid, nor rounded up financing, the people familiar said.

The inevitable demise of Sears could be seen from a mile away, and the same thing can be said about the country as a whole.

Our debt-fueled standard of living has been propped up by the biggest debt binge in the history of the world, and Wall Street has been transformed into the largest casino on the entire planet.

The entire U.S. economic system has become one huge Ponzi scheme, and all Ponzi schemes ultimately collapse.

Right now, we are in the early stages of a game that is going to take some time to fully play out.  The pessimism that has gripped Wall Street is starting to spread throughout the general population, and many experts were stunned to learn that consumer confidence just declined for a second month in a row…

The confidence Americans feel in the economy fell for the second month in a row and touched the lowest level since last summer, perhaps a sign that worries about the 9 1/2-year U.S. expansion have spread from Wall Street to Main Street.

The consumer confidence index dropped to 128.1 this month from a revised 136.4 in November, the Conference Board said Thursday. Economists polled by MarketWatch had forecast a 133.3 reading.

If you have been a regular visitor to my websites, then nothing that will happen over the next few months should be a surprise to you.

The inevitable consequences for decades of exceedingly foolish decisions are starting to roll in, and the bursting of “The Bubble To End All Bubbles” is going to be beyond excruciating.

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

U.S. Stocks Just Had Their Best Day Ever – And Here Is Why That Is A REALLY Bad Sign…

The Dow Jones Industrial Average just posted its biggest single day point gain ever.  On Wednesday, the Dow shot up 1,086 points, which shattered the old record by a staggering 150 points.  It truly was a remarkable day, and this is the sort of “Santa Claus rally” that investors had been hoping for.  Many are convinced that this rally is an indication that the crisis of the last three months is over, but as you will see below, this sort of extreme volatility is actually a really bad sign.  But for the moment, the mainstream media is pushing the narrative that everything is once again peachy keen in the financial world.  Just consider the following quote from CNN…

“Investors went bargain shopping the day after Christmas, where stocks just got too cheap relative to earnings, future earnings, any reasonable assessment of earnings,” said Chris Rupkey, managing director of MUFG. “The coast is clear, back up the truck, investors are saying enough already, the world is not ending.”

The coast is clear?

Really?

Do you think that they were saying the same thing on October 13th, 2008?  On that day, the Dow Jones Industrial Average rose 936 points, and at the time it was the biggest daily point increase that Wall Street had ever seen by a very wide margin.

Of course that was right in the middle of the last financial crisis, and stocks just kept on tumbling after that massive rally.

But then on October 28th, 2008 the Dow Jones Industrial Average rose 889 points.  Up until Wednesday, that was the second biggest daily point increase in U.S. history.

Was the crisis over then?

No way.  Subsequently, the Dow kept on falling until it eventually bottomed out in early 2009.

As I have explained many times before, there is going to be extreme volatility that goes both ways during any crisis on Wall Street.

When markets are calm, stock prices generally tend to go up.  And when markets get really choppy, the overall trend tends to be in a downward direction.

14 out of the 20 biggest daily point gains in the history of the Dow Jones Industrial Average happened either this year or during the financial crisis of 2008 and 2009.

During the great bull market that we witnessed during the intervening time period, stocks rarely shot up dramatically on any particular day.  Instead, it was more of a slow and steady rise, and that is what investors should really be wishing for.

On the flip side, 15 out of the 20 biggest point declines in the history of the Dow Jones Industrial Average happened either this year or during the last financial crisis.

So it goes both ways.  Extreme volatility is a clear indication that a crisis has arrived, and that means that what we witnessed on Wednesday should be very troubling for all of  us.

And even with Wednesday’s dramatic gains, it is important to note that the stock market is still on pace for its worst December since 1931.

So don’t get too excited yet.

And you won’t hear this from the mainstream media, but the primary reason why stocks shot up so much on Wednesday was because of forced pension rebalancing.  The following comes from Zero Hedge…

For those who missed our Friday post on the topic, Wells explained where this massive rebalancing comes from: the huge, end-of-quarter buy order was precipitated by the jarring divergence between equity and bond performances both in Q4 and the month of December. The stocks in the bank’s pro forma pension asset blend had suffered a 14% loss this quarter, including about an 8.5% drop in December. Contrast this with a roughly +1.6% quarterly total return for the domestic aggregate bond index. The gap between equity and bond performance in pension portfolios would have been even larger had IG credit OAS not widened nearly 40 bps in Q4.

As a result of this need for massive quarter-end rebalancing, corporate pensions would need to boost their equity portfolios by as much as $64 billion into year-end. Getting a bit more granular, Wells analyst Boris Rjavinski wrote that domestic stocks – both large cap and small cap – may need disproportionately large boosts of $35 billion and $21 billion, respectively, compared to “only” $9 billion for global developed equities (see table below). This is driven by large performance gaps within equity markets: U.S. stocks have trailed global and EM equities in Q4 and December after outperforming the ROW for quarters on end.

So the truth is that we may see more big stock rallies in the waning days of 2018 as tens of billions of dollars of corporate pension money shifts from bonds to stocks.

But if you think that this crisis is “over”, you are going to be in for quite a shock in 2019.

Meanwhile, global economic activity continues to deteriorate…

A global economy that until recently was humming has broken down, a sharp contrast to the picture just a year ago when the world was experiencing its best growth since 2010 and seemed poised to do even better.

Already, builders in the United States are erecting fewer single-family homes. German factories are sputtering, and in China, retail sales are growing at their slowest pace in 15 years.

In the final analysis, nothing that happened on Wednesday changed the long-term outlook one bit.

What we witnessed was simply a great deal of forced pension rebalancing, and that is only going to be a very short-term phenomenon.

Hopefully things will calm down as we approach the new year, but I wouldn’t count on it.  Extreme volatility appears to be here to stay, and that is definitely not good news for the markets.

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

“The Worst Is Yet To Come Next Year”

When talking heads on mainstream news networks are using phrases such as “the worst is yet to come next year”, that is a clear indication that a new financial crisis has arrived.  And that is an extremely bold statement to make considering that this is already the worst quarter for the stock market in 10 years, this is the worst December for stock prices since 1931, and we just experienced the worst Christmas Eve that Wall Street has ever seen.  So when Mark Jolley made the following statement during a recent guest appearance on CNBC, it definitely raised some eyebrows…

“I would love to be more optimistic but i just don’t see too many positives out there. I think the worst is yet to come next year, we’re still in the first half of a global equity bear market with more to come next year,” Mark Jolley, global strategist at CCB International Securities, told CNBC’s “Squawk Box.”

At this point last year, nobody on Wall Street was talking like this.

In fact, nobody was talking like this even four or five months ago.

But after three extremely painful months the outlook has completely changed, and a lot of market participants are really starting to freak out.

And this is not just happening in the United States.  The truth is that most most markets around the world started to fall well before U.S. markets did, and at this point almost all of the big global indexes are in a bear market…

Bear markets — typically defined as 20 percent or more off a recent peak — are threatening investors worldwide. In the U.S., the Nasdaq Composite closed in a bear market on Friday and the S&P 500 entered one on Monday. Globally, Germany’s DAX, China’s Shanghai Composite and Japan’s Nikkei have also entered bear market levels.

This is the first global bear market that we have seen in a decade, and if central banks are going to try to stop the bleeding they will need to move very quickly.

But the Federal Reserve has already indicated that they do not plan to intervene.  In fact, they just told everyone that they plan to keep raising interest rates.

That is completely insane, but since they aren’t accountable to us they can literally do whatever they want.

So if the central banks don’t step in, who is going to come riding to the rescue?

Individual national governments could try to stimulate economic activity by spending more money, but most of them are already drowning in debt.

Just look at the mess that the U.S. government has created.  Since the beginning of the last financial crisis, we have been adding more than a trillion dollars a year to the national debt.  And over the last 12 months our debt problems have actually accelerated.  Between December 25th, 2017 and December 25th, 2018 we added almost 1.4 trillion dollars to the national debt.  The following comes from CNS News…

The federal government has added another $1,370,760,684,441.54 to the debt since last December 25, according to numbers published by the U.S. Treasury.

On Dec. 25, 2017, the federal debt was 20,492,874,492,282.58, according to the Treasury.

According to the latest numbers published by the Treasury, which show where the debt stood on Dec. 20, 2018, the federal debt was $21,863,635,176,724.12.

So the reality of the matter is that there is simply no room for more “stimulus spending”, because we have already been spending money like drunken sailors that think that they are likely to die tomorrow.

Right now the government is shut down as President Trump and Chuck Schumer square off over 5 billion dollars in border wall funding.  But nobody on Capitol Hill is even talking much about the 1.37 trillion dollars that we just added to the national debt, and that is really what everybody should be focusing on.

We are literally committing national suicide.  No matter what happens with border wall funding, the U.S. will continue to steamroll toward financial oblivion unless something is done about this horrific debt that we are accumulating.

As I wrap up this article, I would like to share something that Austin Murphy wrote that really struck a chord with me.  Over the course of a 33 year career in journalism, Murphy interviewed five presidents and wrote thousands of articles for Sports Illustrated.  But now he is delivering packages for Amazon…

Let’s face it, when you’re a college-educated 57-year-old slinging parcels for a living, something in your life has not gone according to plan. That said, my moments of chagrin are far outnumbered by the upsides of the job, which include windfall connections with grateful strangers. There’s a certain novelty, after decades at a legacy media company—Time Inc.—in playing for the team that’s winning big, that’s not considered a dinosaur, even if that team is paying me $17 an hour (plus OT!). It’s been healthy for me, a fair-haired Anglo-Saxon with a Roman numeral in my name (John Austin Murphy III), to be a minority in my workplace, and in some of the neighborhoods where I deliver. As Amazon reaches maximum ubiquity in our lives (“Alexa, play Led Zeppelin”), as online shopping turns malls into mausoleums, it’s been illuminating to see exactly how a package makes the final leg of its journey.

Like Murphy, America’s future is going to be far less bright than its past if we don’t get things turned around, and right now there is absolutely no indication that this is going to happen.

Our national problems are multiplying, the conditions for a perfect storm are rapidly coming together, and pessimism is quickly growing all across America.

Mark Jolley believes that “the worst is yet to come next year”, and in the end he may turn out to be exactly correct.

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

 

The Worst Christmas Eve For The Stock Market EVER – The Dow Has Now Fallen More Than 5000 Points From The Peak

This is definitely not the gift that investors wanted for Christmas.  On Monday, the Dow Jones Industrial Average plunged 653 points as panic swept through Wall Street like wildfire.  That represented a 2.9 percent daily decline, and that made it the worst Christmas Eve for the Dow ever recorded.  Incredibly, the previous record had lasted for exactly 100 years.  Normally the day before Christmas is a very, very quiet day on Wall Street, but right now there are no “normal” days for the financial markets.  If you go back to early October, the Dow Jones Industrial Average hit an all-time record high of 26,951.81, and on Monday the Dow closed at just 21,792.20.  That means that the Dow has now plummeted more than 5,000 points in less than three months, and that is a major milestone.

The S&P 500 also crossed a major milestone on Monday when it entered bear market territory…

The term on Wall Street is synonymous with serious, long-lasting declines in stock markets. In numeric terms, a bear market is a 20 percent or more drop from a recent peak.

The S&P 500 hit that milestone on Monday, dropping 20 percent from its 52-week high. Markets have stumbled through what is usually one of their best months of the year, with indexes on track for their worst December performances since the Great Depression in 1931.

What this means is that the longest bull market in all of U.S. history is officially dead.

And there is still about a week left in the month.  If things continue to unravel, this could ultimately turn out to be the worst December that the stock market has ever experienced.

Now that a bear market has begun, it is likely to stick around for a while.  Just consider these numbers…

Since World War II, bear markets on average have fallen 30.4 percent and have lasted 13 months, according to analysis at Goldman Sachs and CNBC. When that milestone has been hit, it took stocks an average of 21.9 months to recover.

Of course all of the “experts” consulted by the mainstream media are going to assume that there will eventually be a recovery.

But could it be possible that this is the beginning of the “big crash” from which we will never recover?

Without a doubt, the elements for a perfect storm have been coming together for a long time.  We are witnessing great political shaking, our relationships with both Russia and China are rapidly deteriorating, a trade war has begun, social decay is spreading through our society like cancer, and the crust of our planet is becoming increasingly unstable.  Now we can add economic and financial instability to the mix, and a scenario is emerging that is eerily similar to what I have been warning about for a very long time.

Even before the markets crashed on Monday, U.S. Treasury Secretary Steven Mnuchin had scheduled an emergency call with the “Plunge Protection Team”.  The following comes from Reuters…

The Treasury said Mnuchin will convene a call on Monday with the president’s Working Group on Financial Markets, which includes Washington’s main stewards of the U.S. financial system and is sometimes referred to as the “Plunge Protection Team.”

The group, which was also convened in 2009 during the latter stage of the financial crisis, includes officials from the Federal Reserve as well as the Securities and Exchange Commission.

But instead of calming the markets, many were concerned that this would actually accelerate the panic on Wall Street…

“Panic feeds panic, and this looks like panic in the administration,” said Diane Swonk, chief economist at Grant Thornton. “Suggesting you might know something that no one else is worried about creates more unease.”

And without a doubt, what we witnessed on Monday was sheer panic.

Consumer lending has already been tightening up over the past couple of months, and the chaos on Wall Street is almost certainly going to cause financial institutions to become even tighter with their money.

As credit conditions tighten, economic activity will slow down, and that will make the coming recession even more inevitable.

There is one more key data point that I would like to share with you all today.  Since 1960, there have only been 13 years when the stock market has declined for the year.  As Joe Zidle has noted, most of the time those declines occur “before or during a recession”…

“I think there’s a massive gap between sentiment and fundamentals” for the market, Blackstone investment strategist Joe Zidle said on CNBC’s “Squawk Box.”

“If the market closes down for the year, which looks likely … it will only be the 13th time that we’ve seen a full year decline since 1960,” Zidle said. Of those 13 full year declines in the past 58 years, seven occurred before or during a recession.

Now that the Dow Jones Industrial Average has fallen more than 5000 points, I think that we can safely say that this is a stock market crash.

But how bad will this stock market crash ultimately turn out to be?

If the Federal Reserve had rushed in with emergency measures at the first signs of trouble, they probably could have stabilized things.  But the longer they wait, the harder it is going to be to stop the process that has been set in motion.

The Bubble of All Bubbles is starting to burst, and unless we see dramatic central bank intervention soon it is likely that an unprecedented financial nightmare is ahead.

I hope that you are able to rest and relax with family and friends this time of the year, because it looks like what is ahead in 2019 is going to be extremely painful.

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

This Was The Worst Week For The Stock Market Since The Financial Crisis Of 2008

Just when you thought that things couldn’t get any worse, they did.  During normal times, a Friday before Christmas is an extremely boring trading session, but these are not normal times.  On Friday, the Dow Jones Industrial Average was down another 414 points, and that brought the total drop for the week to 1,655 points.  The marketplace has been completely gripped by panic, and CNN’s Fear & Greed index has just registered the highest “fear rating” that we have ever seen.  I keep saying that we have not witnessed anything like this since the last financial crisis, and the numbers clearly back that assessment up.  In fact, this was the largest weekly percentage drop for the Dow since October 2008…

The Dow just suffered its deepest weekly plunge since 2008 and the Nasdaq is officially in a bear market.

The miserable performance reflects deepening fears on Wall Street of an economic slowdown and overly-aggressive Federal Reserve.

Apprehension about a looming government shutdown and anxiety over higher interest rates were two of the major factors that pushed stocks down on Friday.

Normally trading volume is very, very light in the days leading up to Christmas, so what we just witnessed was extremely unusual.  Trading volume on Friday was “really heavy” with “more than 12 billion shares” changing hands…

In a bad sign on Friday, volume was really heavy. More than 12 billion shares changed hands on U.S. exchanges on Friday, the biggest volume in at least two years.

When I have warned about a “rush for the exits” in the past, this is the kind of thing that I am talking about.

Many investors were panic-selling on Friday because they wanted to be out of the market before things closed down for the holidays, and stock prices just kept getting hammered lower and lower.

For the week, the carnage was absolutely colossal.  The following is how CNBC summarized what happened…

  • The Dow lost 6.8 percent and 1,655 points on the week. It was its worst percentage drop since October 2008.
  • The Nasdaq lost 8.3 percent on the week and is now 22 percent below its record reached in August, a bear market.
  • The S&P 500 lost 7 percent for the week and is now down 17.8 percent from its record.
  • The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 12 percent each this month.
  • Both the Dow and the S&P 500 are now in the red for 2018 by at least 9 percent.

It should also be noted that the number of stocks hitting 52-week lows right now is at historically high levels.  The following comes from Zero Hedge…

Since 1984, there were only eight days when a bigger proportion of shares did so, according to Sundial Capital Research. Two of them were in 1987 — during the famous Black Monday crash, when the Dow Jones Industrial Average lost 23 percent in one day, and then again during the following session. The rest were in the aftermath of the collapse of Lehman Brothers in October and November 2008.

And it isn’t just stocks that are getting hammered.  In fact, at this point 93 percent of all asset classes are down for the year.

As so many have already said, 2018 is a year when literally nothing is working.

A similar thing is happening over in Europe, where stocks are on pace for their worst year since 2008.  We are watching a truly global meltdown take place, and trillions upon trillions of dollars of paper wealth is being washed away.

Of course not everybody has lost money.  Those that sold before this stock market crash started made out like bandits, and it is very interesting to note that over the past couple of months “the smart money” has been getting out of stocks at a pace that we have never seen before.

So what happens next?

For now, there will be a pause.  The stock market will be closed for the weekend, then it will open for half a day on Monday, and then it will be closed for Christmas on Tuesday.

Hopefully this “cooling off period” will help things to be much calmer by the time the markets open on Wednesday.

But even if things do calm down during the holidays, the truth is that this crisis is far from over.

The largest financial bubble in U.S. history is starting to burst, and a great deal of pain is 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.

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