Stock Market Crash

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Trump Just Poked The Dragon In The Eye, And U.S.-China Relations Just Took An Ominous Turn For The Worse

After what President Trump just did, the odds of the U.S. and China being able to reach a trade agreement this year officially just went from slim to none.  For China, there is no issue more sensitive than the status of Taiwan.  For the Chinese, it is unthinkable for anyone to even suggest that Taiwan is not a part of China, and the Chinese are prepared to defend their “one China” policy to the death if necessary.  On the other hand, most Americans are entirely clueless about Taiwan.  In fact, if you gave them a blank map of the world the vast majority of Americans wouldn’t even be able to find Taiwan thanks to our exceedingly poor system of public education.  So for most Americans, a news story about how President Trump plans to sell 2 billion dollars worth of arms to Taiwan is completely and utterly meaningless.  But for the Chinese, such news is a deep national insult…

The United States is pursuing the sale of more than $2 billion worth of tanks and weapons to Taiwan, four people familiar with the negotiations said, in a move likely to anger China as a trade war between the world’s two biggest economies escalates.

An informal notification of the proposed sale has been sent to the U.S. Congress, the four sources said on condition of anonymity because they were not authorized to speak about the possible deal.

This arms sale barely made a blip in the U.S. news cycle, but over in China they are officially freaking out about this.  According to one report, this deal would send “over 100 tanks and almost 2,000 missiles” to Taiwan…

The US, which is the main weapons dealer to Taiwan, would send over 100 tanks and almost 2,000 missiles to the island. There was outrage in China, who said they were seriously concerned after Taiwan’s defence ministry confirmed the sale. The move is believed to further heighten tensions between Beijing and Washington.

It comes days after Chinese defence minister Wei Fenghe said: “If anyone dares to split Taiwan from China, the Chinese military has no choice but to fight at all costs.”

You can do quite a bit of damage with 2,000 missiles.

Most Americans may not realize this, but the truth is that U.S.-China relations just took a really ominous turn for the worse.

And in addition to announcing this arms sale to Taiwan, President Trump also just threatened China with even more tariffs…

DONALD Trump threatened to hit China with tariffs on “at least” another $300bn worth of goods today – as a Beijing propaganda campaign painted the US as evil bullies.

Tensions between the world’s two largest economies have soared sharply since talks aimed at ending a festering trade war broke down in early May.

But trust me, the announcement of the arms sale to Taiwan was far, far more insulting to China than the tariff threat was.

On the Chinese side, they have decided to hit the U.S. right in the farm belt by “putting purchases of U.S. soybeans on hold”…

China is reportedly putting purchases of U.S. soybeans on hold amid the growing trade war with the U.S., according to a report from Bloomberg News. As the world’s largest soybean buyer, China’s move could ramp up the economic pressure on American farmers.

This has already been the worst year for U.S. farmers in decades, and this move by the Chinese is going to make things even worse.  For much more on this, please see an article that I posted earlier today entitled “U.S. Farms Are Facing Their Worst Crisis In A Generation – And Now Here Comes Another Monster Storm”.

Also, anti-American rhetoric in China has now reached a fever pitch.  According to CNN, the Chinese just issued an official alert warning Chinese travelers of “shooting, robbery and theft” in major U.S. cities…

On Tuesday, China’s Culture and Tourism Ministry warned its citizens of the risks of traveling to the US in an alert, citing frequent recent cases of “shooting, robbery and theft.”

On the same day, the country’s Foreign Ministry — along with China’s embassy and consulates in the US — issued a security alert for Chinese citizens, alleging “repeated harassment” of Chinese nationals in the US by local law enforcement officials.

Of course the Chinese are correct when they warn about the violence in our cities.  For example, more than 50 people were shot in the city of Chicago last weekend alone.

In addition to the travel warnings, Chinese state media is doing all that it can to put the U.S. in a bad light.  In fact, one major Chinese paper just called the United States the “enemy of the world”…

The new travel advice did not come in isolation.

China’s ruling Communist Party has launched a trade war propaganda campaign, with recent efforts — delivered via state media — focusing on US “trade bullying” and “hegemony.” In one noteworthy article, published Tuesday in party mouthpiece the People’s Daily, the US was labeled the “enemy of the world.”

Does it sound to you like the Chinese are ready to surrender and head back to the negotiating table?

No, the truth is that they are just getting angrier with every week that goes by.  Most Americans don’t even know that we fought against the Chinese during the latter stages of the Korean War, but right now over in China those old battles against “the evil American invaders” are being publicly celebrated…

President Xi Jinping’s state media has even begun to refer to a very bloody battle between America and Chinese forces during the Korean War.

The 1952 battle of Triangle Hill – or Shangganling in Chinese – has been glorified in China for decades as a turning point in the war.

School children are told how the sacrifice of Chinese soldiers eventually led to the “defeat of the evil American invaders”.

At this point, most Americans may be vaguely aware that some sort of a trade war is going on, but over in China they are taking this deadly seriously.  And without a doubt, the stage is being set for a full-fledged global showdown between the two superpowers.

This is not a game, and if things go badly we could potentially be facing apocalyptic consequences.

So hopefully Trump knows what he is doing, because right now things appear to be starting to spiral out of control very rapidly.

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

All Of The Economic Momentum Is Moving In Just One Direction Now

Earlier today, I was greeted by this jarring headline when I visited the Drudge Report: “BONDS FLASH RECESSION WARNING”.  These days, it seems like the “R word” is being thrown around constantly, but at this time last year everyone was celebrating how well the economy was doing.  Unfortunately, we have witnessed a dramatic shift in recent months, and we just got some more really bad economic numbers.  Thanks to those bad numbers and an increasing amount of anxiety about the trade war, the Dow Jones Industrial Average fell another 237 points on Monday.  That means that we are on pace to potentially see the Dow fall for a sixth week in a row, and that is something that hasn’t happened since the last recession.

But right now investors are far more spooked about what is going on in the bond market.  According to Mish Shedlock, we haven’t seen this many yield curve inversions “since the start of the Great Recession”…

On Friday, US Treasury yields plunged at the mid to long end of the curve providing the most inversions since the start of the Great Recession. This is the biggest recession warning since 2007.

In so many ways, what we are witnessing at this moment is very reminiscent of the conditions that prevailed just prior to the last financial crisis.

Back then, the economic numbers were definitely starting to slide, but most Americans didn’t think that we were heading toward big trouble.  But those that understood what was happening were sounding the alarm, and the same thing is happening today.  For example, the following comes from a CNBC article entitled “Morgan Stanley says economy is on ‘recession watch’ as bond market flashes warning”…

“Recent data points suggest US earnings and economic risk is greater than most investors may think,” wrote Michael Wilson, the firm’s chief U.S. equity strategist.

Specifically, the stock strategist highlighted a recent survey from financial data firm IHS Markit that showed manufacturing activity fell to a nine-year low in May. That report also revealed a “notable slowdown” in the U.S. services sector, a key area for an American economy characterized by huge job gains in health care and business services.

In addition to disappointing manufacturing numbers, we also just learned that orders for capital goods were down significantly during the month of April…

The Commerce Department said on Friday orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dropped 0.9% last month as demand weakened almost across the board. Data for March was revised down to show these so-called core capital goods orders rising 0.3% instead of increasing 1.0% as previously reported.

Also, we just found out that U.S. home price gains have now fallen for 12 months in a row.

When you add those numbers to all of the other depressing economic numbers that have been rolling in lately, a very clear picture emerges.

The U.S. economy is heading in the wrong direction, and things are steadily getting worse.

A resolution to our trade war with China would be a huge economic boost in the short-term, but that is not likely to happen for the foreseeable future.  In fact, on Monday President Trump stated that he is “not ready” to make a deal with China…

Bank shares fell broadly amid the lower interest rates. Goldman Sachs dropped 1.8% while Citigroup and J.P. Morgan Chase fell 0.9% and 1.1%, respectively. Morgan Stanley and Wells Fargo also slipped.

The drop in bank shares and rates come after President Donald Trump said on Monday the U.S. was “not ready” to make a deal with China, before adding he expected one in the future. Trump also said tariffs on Chinese imports could go up “substantially.”

And the Chinese are clearly digging in as well.  The chief editor of the Global Times, Hu Xijin, has a very close relationship with top Chinese officials, and he just warned that China “is seriously considering restricting rare earth exports” to the United States…

While the official at China’s national planning body did not directly answer whether Beijing would restrict rare earth exports to the United States, Global Times Editor-in-chief Hu Xijin wrote on Twitter: ‘Based on what I know, China is seriously considering restricting rare earth exports to the U.S. China may also take other countermeasures in the future.’

Although the tabloid Global Times is not one of China’s official media, it is widely read and is published by the ruling Communist Party’s People’s Party newspaper.

Just a few days ago I published an entire article about the impact that such a move would have on the U.S. economy, and I won’t reproduce all of that information here.

But the bottom line is this – the U.S. economy would be in a massive amount of trouble if that happened.

A deteriorating relationship with China is part of the scenario that we have been anticipating, and events are definitely starting to accelerate now.

For most Americans, however, there is no reason to be concerned.  Most of us simply trust that our leaders in Washington have things under control and that everything will work out just fine somehow.

But if we do plunge into another deep economic crisis, many Americans will be in enormous trouble right away.  According to one recent survey, 45 percent of us rate our financial situations as either “fair” or “poor”…

Nearly 30% of respondents rate their financial situation as “only fair” and 15% say it’s “poor.” Meanwhile, 25% worry “all” or “most” of the time that their household income won’t be enough to cover their expenses.

Their biggest concerns: Saving enough for retirement and unplanned medical costs, with 54% and 51%, respectively, saying they’re “very” or “moderately” worried about each prospect.

In addition, another recent survey discovered that 59 percent of all Americans are currently living paycheck to paycheck.

Just like last time around, most Americans are living on the edge financially.

And just like last time around, millions of Americans will be completely blind-sided by an economic train wreck that they didn’t see coming.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What do you think the odds are of that happening?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Wal-Mart Executive Warns: “Higher Tariffs Will Lead To Higher Prices For Customers”

Wal-Mart gets approximately one-fourth of all the merchandise that it sells from China, and Wal-Mart’s CFO is warning that “higher tariffs will lead to higher prices for customers”.  In other words, U.S. consumers will soon be feeling a lot of pain.  Over the last several decades, major retailers such as Wal-Mart have become increasingly dependent on exports from China, and U.S. consumers have loved the “low, low prices” because those rock bottom prices enabled our society to enjoy a greatly inflated standard of living.  Of course in the process we were mortgaging our own economic future, because we have lost more than 60,000 manufacturing facilities and millions of good paying jobs since China first joined the WTO in 2001.  But we didn’t care because ultra-low prices felt good, and so our economy became increasingly integrated with China’s economy.  Well, now a trade war has begun and people all over America are demanding that we get tough with China.  And without a doubt something needs to be done about China, but the process of decoupling from the Chinese economy is going to be exceedingly painful.  We should have never allowed ourselves to become so dependent on China in the first place, and now the consequences for our past foolishness are going to be very bitter indeed.

Previously, I have warned that this trade war will be particularly painful for those on the bottom of the economic food chain, and now the CFO of Wal-Mart has confirmed that higher tariffs “will lead to higher prices for customers”…

Walmart has said that prices for shoppers will rise due to higher tariffs on goods from China, joining other retailers in warning consumers of cost hikes for imports.

‘Higher tariffs will lead to higher prices for customers,’ Walmart Chief Financial Officer Brett Biggs said on Thursday following the company’s report on its first quarter results.

So what this means is that a hundred dollars will not go nearly as far as it once did when you are shopping at Wal-Mart.

And some of Wal-Mart’s biggest vendors are also sounding the alarm.  For example, just consider what Del Monte CEO Greg Longstreet just said…

Also, Walmart’s vendors have started to raise prices, among them Del Monte Foods, which supplies fresh and packaged goods to Walmart, including mandarin oranges imported from China. Prices will go up again with tariffs rising.

‘It´s not just tariffs. Transportation costs are up, labor costs are up. It´s an inflationary environment,’ Del Monte CEO Greg Longstreet told Reuters on the sidelines of a conference. ‘A lot of that’s going to have to be passed on. The consumer is going to have to pay more for a lot of critical goods.’

Unfortunately, Longstreet is 100% correct.

The price of everything is going to go up in the months ahead, and this is particularly true when it comes to food prices.

Meanwhile, the trade war is really starting to hit hard in other parts of the economy as well.  At this point, the largest producer of farm tractors in the world is no longer “cautiously optimistic”…

Deere & Co. is no longer “cautiously optimistic” as it has been for so long. The machinery giant reported lower-than-expected earnings and cut its annual guidance as its farmer customers shun major purchases amid uncertainty about demand for their products.

“Ongoing concerns about export-market access, near-term demand for commodities such as soybeans, and a delayed planting season in much of North America are causing farmers to become much more cautious about making major purchases,” Chief Executive Officer Sam Allen said in a statement Friday.

If the U.S. and China are able to come to a trade agreement soon, that would greatly help things.

But at this juncture no new talks have even been scheduled because there really isn’t anything to talk about…

Scheduling for the next round of negotiations is “in flux” because it is unclear what the two sides would negotiate, two sources briefed on the status of the talks said. China has not signaled it is willing to revisit past promises on which it reneged earlier this month, despite showing up for talks in Washington last week.

Both sides have dug in on their positions this week. China propped up its currency and cut U.S. pork orders, while state media took on an increasingly nationalistic message. The Trump administration, meanwhile, put Chinese telecommunications company Huawei and its affiliates on a business blacklist and banned it from the supply chain, actions it had shelved earlier in the trade talks to smooth relations.

When President Trump decided to use the “nuclear option” on Chinese telecommunications giant Huawei, that was a major turning point.

At this moment, it would be difficult to overstate how angry the Chinese are at the Trump administration.  The Global Times is a mouthpiece for the Chinese government, and they just published a scathing editorial in which they accused Trump of “a declaration of war on China in the economic and technological fields”.  The following excerpt from that editorial comes from Zero Hedge…

Huawei is the symbol of China’s ability to do independent research. As a private company, it is the forerunner of China’s reform and opening-up. It has been deeply engaged in the development of global communications and become the leader of 5G technology. That Huawei will not lose to the US is significant for China’s response to the US’ strategic suppression.

The US has completely abandoned commercial principles and disregarded law. Its barbaric behavior against Huawei by resorting to administrative power can be viewed as a declaration of war on China in the economic and technological fields. It is time that the Chinese people throw away their illusions. Compromise will not lead to US goodwill.

A breakdown in relations with China is part of the long-term scenario that we have been anticipating.  But we had hoped that it would be put off for as long as possible, because what is coming next is going to be very painful.

This isn’t going to be just a trade war.

And in the long run, it isn’t going to be just an “economic war” either.

Unless somebody can pull off a miracle, things between are two nations are likely to start spiraling downhill rather quickly.  As the trade war escalates, the U.S. and China will take turns retaliating back and forth, and the entire globe is going to suffer as a result.

So let us hope for a miracle, because at this point the outlook for the months ahead is definitely quite bleak.

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.

Investors May Be Laughing At China’s “People’s War” Now, But Here Is Why They Won’t Be Laughing For Long…

Wall Street is still treating this crisis as a temporary trade dispute, but the Chinese see things completely differently.  At this point, the narrative in China is that the U.S. has deeply insulted their national honor, and every angry statement from U.S. officials is just digging the knife in a little bit deeper.  The Chinese began their retaliation to Trump’s new tariffs with some new tariffs of their own, but they won’t be stopping there.  As I stated yesterday, China literally has hundreds of different ways that they can hurt us, and the longer this crisis goes the more likely it is that they will utilize all of those weapons.

And we got a hint of what might be coming on Tuesday.  An editorial published in government-run media outlets boldly proclaimed that the conflict between the United States and China was now a “people’s war”…

In a series of opinion pieces and on-air editorials, the country’s government-controlled media used strong and nationalistic language to reassure a shaky domestic audience that China’s economy can weather the higher tariffs imposed last Friday by US President Donald Trump.

One strongly worded editorial published by both the Xinhua News Agency and the People’s Daily, the Communist Party mouthpiece, said that while the US was fighting for “greed and arrogance,” China fought to defend “its legitimate rights and interests.”

“The trade war in the United States is the creation of one person and his administration who have swept along the entire population of the country. Whereas the entire country and all the people of China are being threatened. For us, this is a real ‘people’s war,'” the editorial said.

And similar sentiments were expressed on state-owned television during a prime time broadcast…

During a prime time broadcast on Monday, CNN reported that the state broadcaster CCTV also aired a statement saying that China would “fight for a new world.”

“As President Xi Jinping pointed out, the Chinese economy is a sea, not a small pond,” anchor Kang Hui said on his 7 p.m. news show. “A rainstorm can destroy a small pond, but it cannot harm the sea. After numerous storms, the sea is still there.” Hui concluded echoing a popular refrain, that “China…doesn’t want to fight, but it is not afraid to fight.”

Amazingly, U.S. stocks actually went up on Tuesday following these remarks.  Apparently investors think that China’s new “people’s war” is pretty funny.

But they won’t be laughing when China starts playing hardball with us.

For example, how much pressure do you think that President Trump will feel when the Chinese suddenly announce a national boycott of U.S. goods in the middle of Trump’s re-election campaign?

As CNBC has pointed out, China has implemented such boycotts numerous times before…

At the height of the South China Sea conflict in 2016, China administered an unofficial boycott of mangoes and bananas from the Philippines. The region is still in dispute.

Years before that, China boycotted salmon from Norway during a hotly contested human rights issue, and Norway eventually relented.

Five years back, the world’s second largest economy also boycotted Japanese cars and minerals over a territorial dispute in the East China Sea.

In addition, a massive Chinese boycott of South Korean goods in 2017 turned out to be an immense blow to the South Korean economy.

What do you think that it would do to the U.S. economy and to U.S. financial markets if China suddenly did the same thing to us?

It would be absolute chaos, and Trump would feel an unbelievable amount of pressure to cave in because his re-election prospects would be diminishing with each passing day.

This is a strategic advantage that the Chinese have over Trump.  They don’t have to worry about the calendar, but Trump does.

And Trump could not hit back by declaring a national boycott of Chinese goods because he does not have that authority.  He could ask his supporters to conduct such a boycott, and undoubtedly some of them would go along, but most Americans would just continue to shop the way that they are shopping right now.

If large U.S. corporations lose all access to the second largest economy in the world, it would be a complete and utter disaster for them.  As Matt Egan has pointed out, the Chinese market has become “a critical growth engine” for some of the largest U.S. brands…

China’s booming middle class is a critical growth engine for Boeing (BA), Apple, Nike (NKE) and other American brands. China is expected to keep growing in importance as a buyer. And America’s insatiable appetite for cheap goods has created a Chinese factory juggernaut that employs millions of workers.

The world’s two largest economies are each other’s biggest trading partners. Nearly $700 billion in goods were sent between China and the United States in 2018 alone. And with $1.1 trillion of Treasuries, China is America’s largest foreign creditor.

In 2018, Apple reported total revenue of 265.6 billion dollars.

51 billion dollars of that total came from China.

Apple is extremely vulnerable, and so are dozens of other large U.S. corporations.

Out in the middle of the country, many farmers are already almost mad enough to pick up their pitchforks and march on Washington because of this trade war.

As a result of our deteriorating trade relationship, soybean exports from the U.S. to China have fallen from $14 billion in 2016 to $12 billion in 2017 to just 3.1 billion in 2018.

Desperately hoping that things would turn around, U.S. soybean farmers have stockpiled an all-time record of almost 1 billion bushels of soybeans…

Since December, when U.S. and China negotiators called a truce to tariffs and began signaling that an agreement might be reached, soybean farmers had been holding out hope that sales to China would resume, said Todd Hultman, an Omaha-based grain market analyst with agriculture market data provider DTN. In the meantime, the farmers had been storing a record stockpile of nearly 1 billion bushels.

The latest news of a new round of tariffs, with no agreement in sight, spooked the financial markets and some farmers who had been tentatively optimistic.

And now that trade negotiations have completely fallen apart, the price of soybeans is falling like a rock.  In fact, we just saw it hit the lowest level in a decade.

Needless to say, the American Soybean Association is not at all pleased with the latest developments…

In a statement Monday, the American Soybean Association reacted with frustration edged with anxiety.

“The sentiment out in farm country is getting grimmer by the day,” said John Heisdorffer, a soybean farmer in Keota, Iowa, who is chairman of the ASA. “Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting.”

Of course soybean farmers are far from alone.  Thousands upon thousands of farmers all over America are on the brink of financial ruin, and one J.P. Morgan analyst is describing it as a “perfect storm” for U.S. farmers…

The state of American agriculture is “rapidly deteriorating” into crisis, J.P. Morgan said Tuesday, due to three factors: declining exports, a poor crop of corn and soybeans and the trade war with China.

“Overall, this is a perfect storm for US farmers,” J.P. Morgan analyst Ann Duignan said in a note to investors.

It is funny how that term keeps popping up.  Without a doubt, a perfect storm is rapidly coming together for the entire U.S. economy, but most Americans are still in denial about what is happening.

As for this “trade dispute”, the truth is that it isn’t going to go away any time soon.

In fact, a senior official in the Trump administration just told Axios that “he can’t see the fight getting resolved before the end of the year”…

A senior administration official said the differences between the two sides are so profound that, based on his read of the situation, he can’t see the fight getting resolved before the end of the year.

The longer this trade war lasts, the more painful it will become for the U.S. economy.

And as we move toward a presidential election year, the Chinese will increasingly be the ones with the strategic leverage.

So Wall Street can laugh for now, but the Chinese are fully convinced that they will be having the last laugh in this matter.

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.

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