Stock Prices

Now Reddit Investors Are Talking About Targeting Silver, And That Could Change EVERYTHING

For decades, the big fish on Wall Street have been able to do virtually anything that they want, but now the small fish are fighting back and it has been a beautiful thing to watch.  Finally it is payback time, and the losses have been absolutely staggering.  In fact, Reuters is reporting that short sellers have lost more than 70 BILLION dollars so far this year.  But nobody should be crying for the short sellers.  As Charles Payne pointed out during an epic rant on Fox Business, the short sellers have ruthlessly crushed countless businesses over the years, and they did so without showing any mercy whatsoever.

So now the big hedge funds want mercy themselves?

It’s not likely to happen.

After sending GameStop, AMC and other beleaguered stocks into the stratosphere, now investors on Reddit are talking about going after a really huge whale.

The silver market is perfectly primed for an epic short squeeze, and a coordinated assault by retail investors could make it happen.

The following is an excerpt from the post on the “WallStreetBets” Reddit subgroup that everyone is talking about…

The silver futures market has oscillated between having roughly 100-1 and 500-1 ratio of paper traded silver to physical silver, but lets call it 250-1 for now. This means that for every 250 ounces in open interest in the futures market, only 1 actually gets delivered. Most traders would rather settle with cash rather than take delivery of thousands of ounces of silver and have to figure out to store and transport it in the future.

The people naked shorting silver via the futures markets are a couple of large banks and making them pay dearly for their over leveraged naked shorts would be incredible. It’s not Melvin capital on the other side of this trade, its JP Morgan. Time to get some payback for the bailouts and manipulation they’ve done for decades (look up silver manipulation fines that JPM has paid over the years).

The way the squeeze could occur is by forcing a much higher percentage of the futures contracts to actually deliver physical silver. There is very little silver in the COMEX vaults or available to actually be use to deliver, and if they have to start buying en masse on the open market they will drive the price massively higher. There is no way to magically create more physical silver in the world that is ready to be delivered. With a stock you can eventually just issue more shares if the price rises too much, but this simply isn’t the case here. The futures market is kind of the wild west of the financial world. Real commodities are being traded, and if you are short, you literally have to deliver thousands of ounces of silver per contract if the holder on the other side demands it. If you remember oil going negative back in May, that was possible because futures are allowed to trade to their true value. They aren’t halted and that’s what will make this so fun when the true squeeze happens.

That post has already been upvoted more than 9,400 times, and it appears that a consensus is building that this is going to be the next big thing after the raid on GameStop short sellers is done.

On Thursday, the price of gold was up 4.5 percent in anticipation that something might happen, and much of that price movement was apparently caused by short sellers that feverishly rushed to close their positions…

“After watching GameStop (NYSE:GME) and other shorts getting blasted, rumours that silver could be targeted has traders preemptively covering shorts just in case,” said Tai Wong, a trader at investment bank BMO in New York.

As Eric King has pointed out, if Reddit investors really do decide to go all-in on silver, they could do some serious damage…

“Chris, I just calculated the last 4 trading days in GameStop (GME) in dollar terms and it totals $82.3 billion. I think annual silver production is roughly 1 billion ounces and at current prices that would total about $25 billion. That means yesterday’s trading volume in GameStop of $29.9 billion would have purchased more than the entire annual silver mine production! And the last 4 trading days in GameStop ($82.3 billion in dollar terms) would have purchased more than a staggering 3-times the entire annual global silver mine production! This type of buying would obviously create one hell of a violent short squeeze in the silver market.”

Of course the other side doesn’t exactly play fair.

On Thursday, Robinhood and other trading platforms suddenly restricted trading in some of the key stocks that retail investors have been targeting…

Shares of AMC Entertainment Holdings, BlackBerry Ltd., Bed Bath & Beyond Inc., Express Inc., GameStop Corp., Koss Corp., Naked Brand Group and Nokia Corp. have been restricted to “position closing only,” Robinhood said in a blog post.

The decision means traders cannot initiate new positions in shares of those companies and can only sell existing holdings. The company also raised margin requirements for certain securities.

There are allegations that Robinhood and other trading platforms were persuaded to shut down trading in those stocks by the big fish on Wall Street, but Robinhood and the other trading platforms are denying this.

And Robinhood is also denying that it forced some users to suddenly dump their shares in GameStop and other key stocks…

No, Robinhood tells The Verge, it didn’t sell off full shares of GameStop, AMC, and other buzzy stocks without permission from its traders.

That contradicts the stories of twelve people who spoke with The Verge, saying that the app unexpectedly sold off their holdings in some of these companies. Quite a number of Robinhood users expressed their surprise on social media today that the app was selling off their stakes, and we tracked down a dozen of them. These traders didn’t believe they had prompted the sales, and they said they weren’t aware of anything on their account that would have automatically triggered them.

Hopefully authorities will investigate and get to the bottom of what actually happened.

At this point, Robinhood has already been slapped with two lawsuits because of what took place on Thursday…

Two Robinhood users filed separate lawsuits against the brokerage app Thursday after it and other apps restricted trading of certain securities.

The first lawsuit filed in the Southern District Court of New York alleges that Robinhood “purposefully, willingly, and knowingly” restricted certain securities transactions, including GameStop. The other filed in the Northern District Court of Illinois alleges that the app manipulated its platform.

And it is being reported that the House and the Senate will both be holding hearings on the matter…

The U.S. House Financial Services and Senate Banking committees said on Thursday they will hold hearings on the stock market after users of investment apps faced trading limits following the “Reddit rally” that put a charge into GameStop and other volatile stocks that were touted in online forums.

“We must deal with the hedge funds whose unethical conduct directly led to the recent market volatility and we must examine the market in general and how it has been manipulated by hedge funds and their financial partners to benefit themselves while others pay the price,” said Representative Maxine Waters, a Democrat who heads the House panel.

After everything that just went down, I don’t know how Robinhood is going to survive.

There are also rumors of a “liquidity crisis” at Robinhood, but the company insists that those rumors are simply not true.

Meanwhile, the firm has “tapped at least several hundred million dollars” in emergency credit in recent days…

Robinhood Markets, the trading app that’s popular with investors behind this month’s wildest stock swings, has drawn down some of its bank credit lines to ensure it has enough cash to clear trades, according to people with knowledge of the matter.

The firm, according to one of the people, has tapped at least several hundred million dollars, a significant amount of money for a firm that was valued at about $12 billion a few months ago. Robinhood’s lenders include JPMorgan Chase & Co. and Goldman Sachs Group Inc., according to data compiled by Bloomberg. Representatives for Robinhood and those banks declined to comment.

I have a feeling that this story is not going to end well for Robinhood.

But for the retail investors that are changing the course of history, this is truly an amazing time.

Finally, the small fish are standing up for themselves and are fighting back against the big fish, and the big fish have good reason to be quite scared.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on Facebook, Twitter and Parler, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

Revenge: An Internet Mob Is Turning The Stock Market Into “A Video Game”, And The Establishment Is Freaking Out

Retail investors have banded together to turn over the tables on Wall Street, and it has created a wild frenzy that is making headlines all over the globe.  Unprecedented short squeezes have pushed the share prices of GameStop, AMC, Macy’s and BlackBerry to insane heights, and prominent voices in the financial world are complaining that trading in those stocks has become completely divorced from the fundamentals.  In fact, these young retail investors are actually being accused of turning the market into “a video game”.  Infamous investor Michael Burry, who made crazy amounts of money betting against the housing market during the last financial crisis, even had the gall to claim that recent trading in GameStop was “unnatural, insane, and dangerous”.

Of course Burry is right, but the truth is that the entire market has been transformed into a giant casino and has been “unnatural, insane, and dangerous” for a very long time.

If the entire market fell 50 percent tomorrow, stock prices would still be overpriced.

So it is more than just a little bit hypocritical for the Wall Street establishment to be complaining about GameStop when they have been gaming the system for years.

Ultimately, GameStop is not a good long-term investment.  Most people download video games these days, and so a brick and mortar retail chain that sells physical copies of video games shouldn’t be attractive to anyone.

GameStop lost money last year, and they will lose money again this year.

But a group on Reddit known as “WallStreetBets” noticed that some big hedge funds had taken ridiculously large short positions against GameStop, and they sensed an opportunity.  They realized that if they all started to buy GameStop all at once, it would likely create a short squeeze of epic proportions.

And that is precisely what has happened.

A year ago, a single share of GameStop was going for about four dollars.

At the beginning of the month, GameStop was sitting at $17.25.

On Wednesday, it closed at $347.51.

In addition to making huge profits, the investors on “WallStreetBets” also wanted to get revenge on the big hedge funds for all the evil things they have done in the past.

Every great story needs a great enemy, and in this case the great enemy is a hedge fund called Melvin Capital…

Melvin Capital, the $12.5 billion hedge fund founded by Gabriel Plotkin, was one of the main targets of the Reddit campaign, after an SEC filing revealed that the fund had a large short position in GameStop.

‘By the end of the week (Or even the end of the day), Plotkin is going to have less than a college student 50k in debt who works part time at starbucks,’ one Reddit user wrote on Wednesday morning.

Nobody knows for sure how much money Melvin Capital has lost, but it appears to be in the billions…

CNBC could not confirm the amount of losses Melvin Capital took on the short position. Citadel and Point72 have infused close to $3 billion into Gabe Plotkin’s hedge fund to shore up its finances. On Wednesday’s “Squawk Box,” Sorkin said Plotkin told him that speculation about a bankruptcy filing is false.

Melvin Capital has supposedly closed all of their short positions in GameStop now, but not everyone is buying that claim.

In any event, the crowd on WallStreetBets intends to continue to drive up the prices of GameStop, AMC, Macy’s and Blackberry for the foreseeable future.

Eventually, each of those mini-bubbles will collapse, but for now the big short sellers are squealing in pain.

Needless to say, the large hedge funds have been reaching out to their “friends” for help, and the SEC just released a statement which indicated that they are watching developments closely…

We are aware of and actively monitoring the on-going market volatility in the options and equities markets and, consistent with our mission to protect investors and maintain fair, orderly, and efficient markets, we are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants.

And White House Press Secretary Jen Psaki told reporters just a few hours ago that the White House is “monitoring” the situation.

But what is there to “monitor”?

All is fair in love and investing, and the retail investors of “WallStreetBets” caught some big hedge funds with their pants down and punished them for it.

After everything that big hedge funds have gotten away with over the years, many would argue that a little bit of revenge was definitely in order.

But Wall Street has never seen anything like this before.

Retail investors are supposed to be small fish that get eaten alive by the bigger fish, but now technology has changed the rules of the game…

The way people trade stocks has been upended by the rise of no-fee apps like Robinhood. That technology has democratized investing, giving armchair investors far removed from traditional banks free access to sophisticated trading instruments, like options.

You could pay an analyst to tell you what stocks to buy, or you could create a Reddit account and follow forums like WallStreetBets. Millions of young people are opting for the latter, which is partly why the sudden surges in GameStop and AMC have caught Wall Street veterans by surprise.

Nobody should shed a tear for the short sellers.

They have made obscene amounts of money over the years by manipulating the markets and by preying on weak companies.

Now an Internet mob is preying on them, and many that are involved believe that revenge is a dish best served cold.

If you can’t handle the pain, don’t play the game.

In the end, this entire farce of a market is going to utterly collapse anyway.  So the truth is that very few are going to get out of this thing unscathed.

Since the financial crisis of 2008 and 2009, investors have seen their portfolios increase in value by trillions of dollars, but this bubble only exists because of unprecedented manipulation by the Federal Reserve and others.

Now a relatively small group of retail investors is manipulating stock prices to punish a couple of hedge funds and everyone is in an uproar over it?

What a joke.

Our financial markets are fraudulent, and they have been for many years.

Nobody should be accusing retail investors of turning the stock market into “a video game”, because the Federal Reserve already did that a long time ago.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on Facebook, Twitter and Parler, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

The Secret To The Stock Market: Just Buy Tech Companies That Are Losing Money And Watch Profits Rain From The Sky

For those that can’t detect sarcasm, I am not actually sharing “investment advice” in this article.  Rather, I am pointing out how absurd our financial markets have become at this point.  While the real economy is mired in the worst economic downturn since the Great Depression of the 1930s, the stock market just keeps soaring to record high after record high.  If the underlying profits that these corporations were generating actually justified the extremely high stock prices that we have been witnessing, then I wouldn’t have anything to complain about.  Sadly, the truth is that many of the companies that are seeing their stocks soar into the stratosphere are not making any money at all.

I know that this may sound bizarre to many of you that do not follow the markets on a regular basis, but this is what is actually happening.

In fact, Goldman Sachs actually has something called a “Non-Profitable Technology Index”, and it has been rising at an exponential rate during this pandemic…

Of course in order to be a part of the “non-profitable technology index” you have got to be losing money.

So as you can see, if you want to make big money in the stock market just buy tech companies that are losing boatloads of money and wait for the profits to rain from the sky.

At this point, the stock market has become such a rigged game that literally anyone can succeed.  Just ask this guy…

“I see a stock going up and I buy it.”

Wow.

That is brilliant.

And that will work as long as stocks only keep going one way.

When the COVID pandemic started hitting the U.S. really hard, the powers that be decided that they were going to do whatever it took to support the stock market.

The Federal Reserve literally poured trillions of dollars into the financial system, and as a result the ratio of the Fed’s balance sheet to U.S. GDP is at an all-time record high.

Our politicians in Washington kept passing stimulus package after stimulus package, and as a result the ratio of the U.S. budget deficit to U.S. GDP is at an all-time record high.

We are literally destroying our currency and we have placed ourselves on the hyperinflation highway, but very few of our leaders in Washington seem too concerned about what is happening.

So the stock market bubble will continue to expand and people will continue to mindlessly make money until one day a big enough trigger event comes along to burst the bubble once and for all.

And without a doubt, what we are in right now is an epic bubble.  According to CNBC, the trailing price to earnings ratio of the median stock “has never been higher”…

Right now, it’s hard to deny that on the whole, stocks are rich relative to past earnings and forecast earnings. The trailing price/earnings ratio of the median U.S. stock, tracked by Ned Davis Research, has never been higher.

Meanwhile, the real economy continues to deteriorate all around us.

Earlier today, we learned that chocolate giant Godiva will be closing every single one of their stores in North America…

It was sweet while it lasted.

Belgian chocolatier Godiva will sell or close all 128 of its North American shops within the next few months, the company said this week.

Out on the west coast, many small businesses have decided to “go underground” in a desperate attempt to survive…

Los Angeles City Attorney Mike Feuer has charged dozens of businesses with violations, including car washes, tobacco shops, beauty supply stores, massage parlors, nail salons, pet groomers, and an Egyptian artifact store.

The owners of one Bay area massage business made the decision to reopen underground after 93 days on no income, telling Cal Matters that it came down to either paying “the fine or we can’t pay our mortgage.”

But why should anyone even try to run a small business at this point?

After all, can’t we all make enormous profits just by buying the stocks of tech companies that are losing millions of dollars every year?

Not even during the “dotcom boom” did we ever witness euphoria like this.

The more absurd the business model, the more investors seem to like it.

And investors really seem to like it when a company is endlessly hemorrhaging money with seemingly no hope of ever becoming profitable.

For now, investing like an idiot works because everyone is winning.

Of course someday the party will come to a very abrupt end.

But for now the madness continues, and most investors definitely do not want to be awakened from their stupor.

At the same time, the World Economic Forum is preparing the rest of us for a dismal economic future in which we eat worms, live in “tiny houses”, and are forced to carefully follow the new “green rules” for a sustainable environment.

The standard of living is going down for most of us, but thanks to rising stock prices the rich are now richer than ever.

This rapidly expanding gap between the wealthy and the poor is creating an enormous amount of tension in our society, and it is just a matter of time before all of that tension explodes in frightening and unpredictable ways.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on Facebook, Twitter and Parler, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

The Worse Things Get, The More The Stock Market Likes It

No matter how bad things become, stock prices just keep going up and up and up.  In 2020, we experienced the worst public health crisis in 100 years, the U.S. economy was plunged into the worst economic downturn since the Great Depression of the 1930s, Americans filed more than 70 million claims for unemployment benefits, and civil unrest raged in major cities all across the United States.  Meanwhile, we witnessed the greatest stock market rally in American history.  No matter what happened, nothing could seem to dampen the wild euphoria on Wall Street.

To start 2021, many believed that we had finally reached a point when bad news would finally start driving stock prices down.  Yesterday, I wrote about how some experts were warning that stock prices could fall substantially if Democrats gained control of the U.S. Senate after the runoff elections in Georgia.  Well, in the short-term those experts were proven wrong.  In fact, the Dow Jones Industrial Average actually rose 437 points on Wednesday.

Of course the bigger news on Wednesday was the utter chaos that we witnessed at the U.S. Capitol in Washington.  Doors and windows were smashed, members of Congress had to be evacuated, and protesters freely roamed through the halls and offices.  You would think that something like that would definitely send stock prices plunging, but instead the Dow ended the day up 437 points.

Even though we have just come through the worst year in recent memory, and even though our system of government is in disarray, stock prices hit an all-time record high on Wednesday.

One explanation for this is that investors consider the chaos in Washington to just be “temporary”…

“Although the takeover of the Capitol is shocking, it’s widely perceived to be temporary and contained in scope, at least in the immediate term,” says Yung-Yu Ma, chief investment strategist and managing director at BMO Wealth Management.

“This is going to be dealt with pretty swiftly and won’t have lasting repercussions in terms of disruptions to the government,” Ma added. “It won’t change the trajectory of a Biden presidency in the coming weeks.”

We shall see what happens, but a lot of people out there are not so optimistic that the governmental shaking that we have been witnessing will pass so easily.

Moving forward, investors appear to be salivating at the prospect that a Biden administration will mean that more stimulus money is on the way…

“I think there’s an expectation … that there’s going to be a lot more spending,” Jason Trennert, chairman of Strategas, said on CNBC’s “Squawk Box” on Wednesday. “If the Democrats were to pick up two seats, there’s no question in my mind that later this year there would be a sense that more spending is needed.”

Goldman Sachs expects another big stimulus package to the tune of $600 billion in the near term if Democrats prevail and take the Senate.

Why not make it $600 trillion?

Every dollar that we borrow and spend just makes our long-term problems even worse, and so why not get the process over with?

As I discussed the other day, the trillions of dollars that have already been pumped into our system over the past 12 months by the Federal Reserve and by our politicians in Washington have fundamentally changed the trajectory of our future.  The money supply is rising at an exponential rate, and we are now on a hyperinflationary path.

Sadly, under a Biden administration there will be no going back.  Instead, the accelerator will be pushed even further toward the floor.

But it isn’t just our financial system that is in grave danger.

Our system of government is also in grave danger as well.

Our culture is in grave danger too.

In fact, our entire society is in grave danger.

There is no future for our country if we stay on the path that we are currently on.  We are engaging in self-destructive behavior in thousands of different ways, and even though there have been endless warnings, we are so addicted to our self-destructive behavior that we just can’t help ourselves.

At this point, it is difficult to imagine how anyone can possibly be optimistic about the future of our nation.

But apparently stock market investors disagree, because they just keep pushing stock prices higher and higher.

It shall be very interesting to watch how high they can go before the system finally implodes.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on Facebook, Twitter and Parler, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

Why Is The Mainstream Media Signaling That A Much Larger Stock Market Decline Is Coming?

Why would the mainstream media want all of us to believe that stock prices are about to fall dramatically?  Just like we witnessed earlier this year at the beginning of the pandemic, the corporate media is full of reports that seem to imply that it is a virtual certainty that stock prices are going to go even lower.  Of course it would make perfect sense for stock prices to go down because they are incredibly overvalued right now, but normally the mainstream media does not try to tell us where stock prices are going next.  And the fact that so many news outlets are repeating the same mantra right now is particularly troublesome.

Without a doubt, the momentum of stock prices is taking us in a downward direction at the moment.  All of the major stock indexes have posted declines for three weeks in a row, and it looks like this week could make it four.

As I write this article, the Dow Jones Industrial Average is down 4.5 percent for the month, the S&P 500 is down over 6 percent, and the Nasdaq has fallen about 8.5 percent.  Overall, the market is on pace for the worst September in 18 years, but the corporate-controlled media seems convinced that things are going to get even worse.  For example, the following comes from a CNBC article entitled “Stock sell-off accelerates and is expected to get worse before it gets better”…

Stock investors focused on new worries about the coronavirus and economy, selling into a market Monday that was already technically shaken and set for further declines.

I looked for evidence that would back up the assertion that the market is “set for further declines” in the remainder of that article, but I didn’t see any.

Without a doubt, I definitely agree that stock prices have a long, long way to fall, but there is no reason why they couldn’t bounce back for the rest of this week.

So it seems odd that CNBC would be so dogmatic.

And USA Today just posted an article that suggested that we are facing “a looming global financial crisis”…

“Massive fiscal and monetary policy stimulus” that came together to prop up the economy has caused debt to balloon and stocks to become potentially overvalued, posing “the serious risk of a looming global financial crisis as central banks begin to shift away from easy (monetary) policy at some point in the years to come.”

Once again, I definitely agree that a global financial crisis could erupt at any time.

But normally we don’t see the mainstream media using such language.

At this point, we are less than a month and a half away from the election, and many have suggested that uncertainty about the outcome could weigh heavily on the market.  In fact, CNN is telling us that we should anticipate “that volatility will be high” during the period surrounding election day…

Market experts have warned that volatility will be high toward the end of the year and around the election, especially because many expect the winner won’t be known immediately.

Could it be possible that there will be an attempt to disrupt the market in an attempt to make one of the candidates look bad?

I know that would sound absurd during normal times, but these are definitely not normal times.

And ultra-wealthy insiders definitely seem to believe that something is coming, because they have been selling stocks like crazy recently.  According to Zero Hedge, “during the week ended September 11, insiders sold $473 million in shares while only buying $9.5 million.”

I don’t know about you, but those numbers definitely got my attention.

Of course stock prices should have never, ever gotten so high in the first place.  The unprecedented market rally that we have witnessed in 2020 has occurred during a time when we have actually plunged into a new economic depression.  Almost every day I share more horrific economic numbers with my readers, and here are some more from the New York Post…

Nearly 90 percent of New York City bar and restaurant owners couldn’t pay their rent in August, heightening the continued crush the coronavirus shutdown has inflicted on Gotham’s economy.

Eighty-seven percent of bars, restaurants, nightclubs and event spaces in the five boroughs could not pay their full August rent, according to data from 457 businesses surveyed between Aug. 25 and Sept. 11, in a new study released Monday by the nonprofit NYC Hospitality Alliance.

How in the world can anyone possibly use the phrase “economic recovery” when we are seeing numbers like that?

We have never seen an economic downturn of this magnitude in all of modern American history, and many believe that what we have experienced so far is just the beginning.

With each passing day, we see more societal turmoil in the headlines, and the upcoming election threatens to bring our societal tensions to a thundering crescendo.

In such an environment, a huge stock market crash would not be surprising at all, and some are suggesting that the shove that pushes us over the edge could actually happen on purpose.  In his most recent video, Greg Mannarino warned that the upcoming financial crash “is going to be epic”, and he told his audience that our largest financial institutions could collapse the market any time that they want…

“They can crush the global economy or the market. The global economy, which is the middle class, is already crushed, ok. They can destroy the stock market like this [snaps fingers.] And you can see it playing out right now. So all to of this is more than likely going to get brushed under the rug as it always does,” Mannarino says of the banks controlling the world.

It is not unusual for pundits such as Mannarino to make such bold predictions, but what alarms me is that the mainstream media is also strongly suggesting that a market crash is coming.

Even if the mainstream media is not attempting to do it on purpose, their words can become a self-fulfilling prophecy as countless investors spooked by their reports pull money out of the marketplace.

Sadly, this is one instance in which the mainstream media will ultimately be proven correct.  Whether it happens in the immediate future or not, the truth is that we are heading for a financial meltdown that will be absolutely horrifying.

In recent months, the Federal Reserve was able to reinflate our financial bubbles one more time, and hordes of investors eagerly jumped aboard the rally train.

But now that train is in danger of being derailed, and those that do not hop off in time could find themselves plunging into a nightmarish financial abyss.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.com.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  By purchasing the book you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

A September Stock Market Crash?

Many of us have been waiting to see what surprises the month of September would bring, and it appears that a stock market crash may be one of them.  Even the most ardent market optimists were admitting that the absurd bubble that had developed over the course of the summer was completely unsustainable, and the only real debate was over when it would finally burst.  So is this it?  Stock prices have certainly plunged quite dramatically over the last several trading sessions, but it is always possible that things could stabilize for a little while.  But whether it happens in September, October, November, December or next year, the truth is that everyone knows that a crash is coming.

On Tuesday, the Dow Jones Industrial Average fell another 632 points, but that wasn’t the real story.  Far more noteworthy was the fact that the Nasdaq was down another 4.1 percent, and that means that it has now dropped a total of more than 10 percent since it hit a brand new record high last week.

Only two times since 2001 has the Nasdaq fallen more rapidly over three trading sessions.  The index is now officially in correction territory, and the losses have been staggering.  In particular, the six largest tech stocks have collectively lost more than a trillion dollars in value during this three day stretch…

The six biggest tech stocks have lost more than $1 trillion over the last three days alone, but it’s really just a dent coming off a huge rally that peaked last week.

Apple, which hit a $2 trillion market cap on Aug. 19, is down about $325 billion in that time period. Microsoft’s down $219 billion, Amazon fell $191 billion, Alphabet cratered by $135 billion, and Tesla, which fell 21% on Tuesday to mark its worst single-day loss in its history, is down $109 billion in the last three days. Finally, Facebook is off by $89 billion.

A trillion dollars is a serious amount of money.

If you had started spending a million dollars every single day when Jesus was born, you still wouldn’t have spent a trillion dollars by now.  So we are talking about a giant pile of money that is almost unimaginable.

Apple has the largest market cap of any of the tech giants, and over the past three trading days it is down a total of more than 14 percent.  That is the worst three day stretch for Apple since October 2008.

But if you want to see a real disaster, just look at what has been happening to Tesla’s stock price.  Do you remember a few days ago when I said that it would still be overvalued if it went down 90 percent?  Well, after Tuesday we only have 69 percent more to go before that actually happens…

Tesla shares closed down 21.06%, making it the worst one-day loss on record. Tuesday’s drop brought the company’s market valuation to $307.7 billion. The stock has been on a tear this year, having risen around 300%, and the company is now worth more than some of the world’s largest automakers, including Toyota and Volkswagen.

It was widely assumed that Tesla would be added to the S&P 500 on Friday, and when that didn’t happen it was “a big disappointment for investors”…

But while S&P Indexes announced late Friday that it was adding Etsy, an online marketplace for crafters; Teradyne (TER), a company specializing in industrial automation and robotics; and Catalent (CTLT), which develops pharmaceuticals, to the index, the absence of Tesla was a big disappointment for investors, prompting the sell-off.

But the bigger disappointment for Tesla investors will come when the general public finally realizes that a company that sold less than 100,000 vehicles and actually lost 862 million dollars last year is simply not worth 307 billion dollars.

I understand that people like to make money flipping Tesla stock, but to me the entire company is a giant mirage that will eventually collapse in spectacular fashion.

As for the market as a whole, I am not too excited about this current downturn just yet.  When CNBC asked Kristina Hooper about what we are seeing, she simply labeled it “a healthy period of consolidation after a dramatic run-up”…

“Some are suggesting this is the start of another dramatic sell-off, similar to the spring of 2000 when the ‘tech bubble’ burst. I highly doubt that,” Kristina Hooper, Invesco Chief Global Market Strategist, said in an email to CNBC. “I think of this rout not so much as a correction, but as a digestion given that the NASDAQ Composite rose more than 60% from its March bottom in the course of less than six months. All In all, I think this is a healthy period of consolidation after a dramatic run-up.”

Yes, it is still entirely possible that this could turn into the big crash that everyone has been waiting for.

But I think that I will wait until the Dow falls below 25,000 before I start hyperventilating.

Of course I am among those that are entirely convinced that a stock market crash is definitely coming at some point.  At this moment in history, stock prices are absurdly overvalued.  Back in 1990, the total value of all U.S. stocks was sitting at a level that was approximately 60 percent of U.S. GDP, and these days that number has been hovering around 200 percent…

In his 2007 memoir, former Federal Reserve chair Alan Greenspan wrote, referring to late 1996, that “America was turning into a shareholders’ nation”. He noted that the total value of US stock holdings had risen from 60 per cent of gross domestic product in 1990 to 120 per cent of GDP by 1996 — “a ratio topped only by Japan at the height of its 1980s bubble”.

In Japan, that ratio had jumped to 140 per cent by the end of 1989, according to the World Bank. The ratio of market capitalisation-to-GDP in the US in 2000, to the amazement of Mr Greenspan, would go on to reach that same level. Today, the market capitalisation-to-GDP ratio in the US is just shy of 200 per cent. The S&P 500 companies alone are worth about $30tn, or 150 per cent of GDP.

So that would seem to imply that stock prices could ultimately fall by more than two-thirds, although I believe in the long-term they will go a whole lot lower than that.

In the short-term, we will see what happens.  10 of the 20 worst single day percentage declines in stock market history have happened during the months of September and October, and it wouldn’t surprise me at all to see some huge waves of volatility during the weeks ahead.

But it is probably going to take some sort of a “trigger event” for the really big crash to happen.

That “trigger event” could happen tomorrow, or it may not happen for quite some time.  But without a doubt the market is perfectly primed for a major disaster, and it certainly won’t take too much to push it over the edge.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.com.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  By purchasing the book you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

Signs Of Trouble As We Make The Turn Toward The Fall?

Over the past several months we have been witnessing one of the most gloriously irrational stock market rallies in U.S. history.  Even CNN is admitting that this is “the worst economic crisis of our lifetimes”, but stock prices have just kept going higher and higher until this week.  Several months ago the Federal Reserve decided to do whatever it took to rescue the financial markets, and their exceedingly reckless behavior fueled a speculative boom that is unlike anything that we have ever seen before.  But now it appears that the boom may be ending.  The Dow Jones Industrial Average was down 807 points on Thursday, and it appears that Friday could be another very challenging day for Wall Street.  It is well documented that many of the greatest stock market crashes in history have happened in the fall, and many investors may be trying to bail out before this latest bubble bursts in spectacular fashion.

Tech stocks have led the way up during this latest rally, and now they could potentially start leading the market back in the other direction.  On Thursday, the biggest names in the tech world got hit particularly hard…

Apple shares fell 8% for their biggest one-day decline since March 16. Amazon and Netflix were both down more than 4% and Facebook slid 3.8%. Microsoft slipped 6.2%. Alphabet pulled back by 5.1%.

And Tesla has been absolutely monkey-hammered over the past several days.  If you can believe it, the stock is now 18 percent lower than it was on Monday…

Tesla shares slid 9% on Thursday, building on the stock’s recent losses after the company’s largest outside shareholder reduced its position, and after the automaker said it would raise up to $5 billion in a new share offering.

With Thursday’s decline, the stock is more than 18% below Monday’s close, a day when the name surged following its stock split.

But I wouldn’t be crying too much for those holding Tesla stock just yet.  The stock is still way, way up so far in 2020, and it is still massively overvalued.

In fact, if Tesla’s stock price fell 90 percent I would still think that it was overvalued.

Needless to say, the entire market is tremendously overvalued at this point.  It is absolutely absurd that the Dow is sitting above 28,000 at the moment.  Investors decided to divorce economic reality long ago, and even with the losses that we have seen this week they are still sitting really pretty.

But could that soon change?

According to one expert that was just interviewed by CNBC, the market could be heading into a “Minsky moment”…

Asset prices could be on the cusp of a sharp collapse known as a “Minsky moment,” and may retest lows last seen in March, according to Ron William, market strategist and founder of RW Advisory.

So exactly what is a “Minsky moment”?

The following is how CNBC defines it…

A “Minsky moment,” named after economist Hyman Minsky, refers to a sudden market collapse following an unsustainable bull run, which in this case could be fueled by the “easy credit” environment created as a result of unprecedented fiscal and monetary stimulus measures.

I think that may be a perfect description of what we are facing.  Since the second half of March, the Dow, the S&P 500 and the Nasdaq are all up more than 50 percent even though the U.S. economy as a whole has been falling apart all around us.

If we were ever due for a “Minsky moment”, it is now.

And it is interesting to note that the stock market also peaked in early September in 1929.  The following quote from Sven Henrich was just posted by Zero Hedge…

“September 3rd marked the top in 1929 following a furious rally fueled by wild optimism, excessive retail speculative behavior and markets disconnecting far above the fundamentals of the economy.”

It has been said that history doesn’t always repeat, but it often rhymes.

Meanwhile, we just learned that a huge number of Americans filed for unemployment benefits once again last week.

As I discussed a week ago, the Labor Department decided to change the way that it calculates seasonal adjustments for initial unemployment claims, and this week was going to be the first week when that change was going to show up.  So it wasn’t a surprise that the “official number” was lower than last week, but when you look at the unadjusted numbers the story is completely different.

In fact, those figures tell us that the number of Americans filing new claims for unemployment benefits was about 7,000 higher than the week before.

That is very troubling, because if we were going to have any sort of an “economic recovery” before the next wave of economic pain, it should be happening now.

And according to Wolf Richter, the number of continuing unemployment claims under all state and federal programs was way up over the previous week…

Powered by a nasty jump in continued unemployment claims under the federal Pandemic Unemployment Assistance (PUA) program for contract workers, established under the CARES Act, total continued claims under all state and federal programs jumped by 2.2 million, “not seasonally adjusted,” to 29.2 million people on unemployment rolls, the highest since August 1, according to the Department of Labor this morning.

In our entire history, we have never seen a spike in unemployment claims like we have in 2020.

But up until now, investors on Wall Street have been able to ignore what has been going on in the rest of the country.

In some ways it is easy to be in awe of their single-minded focus on speculative greed, and the mainstream media has been proudly touting how much richer some of the wealthiest investors have been getting.

Of course the truth is that you only make money in the stock market if you get out in time.  Nothing goes up forever, and this ridiculously absurd bubble will end the same way that so many others have.

Meanwhile, the real economy will continue to deteriorate as we plunge even deeper into the “perfect storm” that we are now dealing with.

In addition to everything else, a hotly contested presidential election is looming, and the fact that we are not likely to have a winner until some time well after November 3rd is just going to make matters even worse.

We truly live in historic times, and I have a feeling that they are about to get a whole lot more “interesting”.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.com.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  By purchasing the book you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

As The Stock Market Soars, The Numbers Say That The Real Economy Is In The Midst Of A Historic Crash

Have you been watching the madness that has been unfolding on Wall Street?  Even though we are in the middle of the worst global pandemic in 100 years, and even though rioters and looters have been turning our major cities into war zones, stock prices have been going up day after day.  In fact, the Nasdaq closed at an all-time record high on Monday.  Sometimes people ask me to explain this rationally, and I can’t, because the Federal Reserve has transformed our “financial markets” into a total mockery at this point.  The real economy is literally collapsing all around us, but thanks to Fed intervention stock investors are doing just fine.  It has been absolutely disgusting to watch, and if Adam Smith could see what was happening he would be rolling over in his grave.  Unfortunately, thanks to our rapidly declining system of education most Americans don’t even know who Adam Smith is anymore.

I can’t recall another time in modern U.S. history when stock prices skyrocketed as the U.S. economy plunged into a recession.  What we have been witnessing has truly been extremely bizarre, and it will be fascinating to see how long it can last.

Meanwhile, the real economy is a giant mess.  On Monday, the National Bureau of Economic Research finally got around to letting us know that a recession has officially begun…

It’s official: The United States is in a recession.

The National Bureau of Economic Research said Monday the U.S. economy peaked in February, ending the longest expansion in U.S. history at 128 months, or about 10½ years.

In truth, the announcement codifies the painfully obvious. States began shutting down nonessential businesses in mid-March to contain the spread of the coronavirus, halting about 30% of economic activity and putting tens of millions of Americans out of work.

And in other news, the sky is blue and the moon is not made out of cheese.

Anyone with half a brain can see that the economy is falling apart.  For example, we just learned that U.S. factory orders were down 22.3 percent in April compared to a year earlier…

Having collapsed by a record 10.4% MoM in March, April factory orders were expected to accelerate even lower and it did. However, the 13.0% plunge in April was modestly better than the 13.4% MoM drop expected… but is still the worst in American history.

Year-over-year, factory orders collapsed 22.3% – the worst since the peak of the financial crisis.

Of course it is not that difficult to find a number that is even worse than that.

Just look at heavy truck sales.  Last month they were down a whopping 37 percent from the same month in 2019…

The last three months have been catastrophic for segments of the trucking business, after an already tough period that started in late 2018. In May, orders for Class 8 trucks – the heavy trucks that haul much of the goods-based economy across the US – plunged 37% from the  low levels in May a year earlier, and by 81% from May two years ago, to 6,600 orders, according to estimates by FTR Transportation Intelligence today.

Not to be outdone, the number of corporate bankruptcies shot up 48 percent last month compared to the same period a year ago…

Corporate bankruptcies spiked during May as the coronavirus pandemic slammed the U.S. economy, pushing the number of filings to levels recorded in the wake of the 2007-09 recession.

U.S. courts recorded 722 businesses nationwide filing for chapter 11 protection last month, a yearly increase of 48%, according to figures from legal-services firm Epiq Global.

But every time we get another horrific economic figure, the stock market goes even higher.

The worse the news gets, the more investors seem to like it.  Week after week, we have seen unprecedented numbers of Americans file for unemployment benefits, and at this point a grand total of more than 42 million Americans have lost a job since this pandemic began.

And yet investors keep taking these job losses as signs that they should buy even more stocks.

Perhaps someone should spread a rumor that a planet-killing asteroid is about to hit us, because that would probably really get investors salivating.

Of course most ordinary Americans don’t get to live in a Fed-fueled fantasy world, and this new economic downturn is hitting most of them extremely hard.

In fact, it is being reported that approximately a third of all Americans “are now showing signs of clinical anxiety and depression”…

In the wake of the COVID-19 pandemic and resulting economic crash, which triggered depression-like unemployment with 40 million initial claims filed in ten weeks, a third of Americans are now showing signs of clinical anxiety and depression, according to new data collected by the Census Bureau. This, by far, is the most comprehensive and troubling sign yet of the psychological toll inflicted on Americans due to months of lockdowns.

The Census Bureau contacted one million households between May 7 and 12, and about 42,000 responded, said The Washington Post. The survey was about 20 minutes long and buried deep within, several questions asked respondents about depression and anxiety. Those who answered provided a laggard but clearest snapshot into people’s mental state at the tail end of the lockdown, where many folks were subjected to isolationism, virus fears, and widespread unemployment.

That is the most alarming number that I have shared with you so far in this article, but I am about to share with you some numbers that are even more alarming.

In recent days, we have watched rioters destroy large sections of our major cities all across America.  But when asked about “violent protests”, a surprising percentage of Americans actually support them…

A broad majority of Americans say the peaceful protests happening all across the country after police violence against African Americans are justified (84% say so), and roughly a quarter (27%) say violent protests in response to police harming or killing African Americans are justified. Both figures are higher than they were when similar protests rose in the fall of 2016. Then, 67% saw peaceful protests as justified while 14% felt violent protests were.

There isn’t much of a racial or partisan difference over whether peaceful protests are justified now, but the gaps are larger over violent protests. Among Democrats, 42% consider violent protests justified in response to police violence against African Americans, while just 9% of Republicans agree.

Yes, you read that last sentence correctly.

42 percent.

Unfortunately, a lot more economic pain is on the way, and that is just going to fuel even more rioting, looting and violence.

These are definitely not “the best of times” no matter what stock market investors seem to think.

We have entered a deeply disturbing new chapter in American history, and life in this country will never be the same again.

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

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