Wall Street

Stocks Are On Pace For Their Worst December Since The Great Depression – The Dow Is Now Down Over 3,300 Points From The Peak

U.S. stocks have not fallen this dramatically during the month of December since the Great Depression of the 1930s.  On Monday, the Dow Jones Industrial Average lost another 507 points, and it is now down more than 1,000 points from Thursday’s close.  This fresh downturn has pushed the Dow and the S&P 500 very firmly into correction territory, and the Russell 2000 is now officially in bear market territory.  The ferocity of this stock market crash is stunning many of the experts, and many investors are beginning to panic.  Back in early October, the Dow hit an all-time high of 26,951.81, but on Monday it closed at just 23,592.98.  That means that the Dow has now plunged more than 3,300 points from the peak of the market, and many believe that this stock crash is just getting started.

When it was first being reported that the stock market was on pace for the worst December since the Great Depression, I have to admit that I was skeptical.

But CNBC has the numbers to back up that claim…

Two benchmark U.S. stock indexes are careening toward a historically bad December.

Both the Dow Jones Industrial Average and the S&P 500 are on pace for their worst December performance since 1931, when stocks were battered during the Great Depression. The Dow and S&P 500 are down 7.8 percent and 7.6 percent this month, respectively.

And we still have two weeks remaining in December.  If things continue to unravel, we could potentially be talking about a truly historic month for Wall Street.

But we certainly don’t need things to get any worse, because the damage that has already been done has been immense.  The following numbers come from Zero Hedge…

  • Dow -12.7% from highs (correction)
  • S&P -13.7% from highs (correction)
  • Nasdaq Composite -17.3% from highs (correction)
  • Dow Transports -19.4% from highs (correction)
  • Russell 2000 -20.6% from highs (bear market)

The Russell 2000 is often an early indicator of where the rest of the market is going, and if that turns out to be the case this time around then we should expect the Dow and the S&P 500 to fall a lot farther.

When asked about this market downturn by CNBC, one equity strategist actually used the “R” word…

“The sell-off comes from the risk-off sentiment. Small caps are riskier than large caps, and there are some concerns about the end of a cycle in the U.S. and that we are entering a recession,” said Tobias Levkovich, chief U.S. equity strategist at Citi.

We haven’t even had any sort of a major “trigger event”, and yet stock prices have been steadily falling for weeks.

How bad could things ultimately get if there is some sort of “Lehman Brothers moment” that sets off a full-blown state of panic?

Already, many are using the term “bear market” to describe what is happening.  For instance, Jeffrey Gundlach attracted a huge amount of attention when he made the following statement on Monday…

DoubleLine Capital CEO Jeffrey Gundlach said Monday that he “absolutely” believes the S&P 500 will go below the lows that the index hit early in 2018.

“I’m pretty sure this is a bear market,” Gundlach told Scott Wapner on CNBC’s Halftime Report. The major averages fell to session lows following his comments.

And some high profile stocks are already well beyond bear market territory.  Goldman Sachs is now down 40 percent from the 52-week high, and the banking sector as a whole is just getting crushed.

Trillions upon trillions of dollars of paper wealth has disappeared, and needless to say, hedge funds are starting to go down like dominoes.  Earlier today, a New York Post article used phrases such as “losing their shirts” and “financial wipeout”…

The stars of the biggest hedge funds are losing their shirts as analysts fear a major financial wipeout is imminent.

From Ken Griffin’s Citadel, to Israel Englander’s Millennium Management, one big name after another is racking up negative returns lately, amid bad bets in a saturated market.

On Monday, we witnessed more forced hedge fund liquidations, and that was one of the major factors that pushed prices down…

As we noted previously, you are witnessing a massive culling of the hedge fund industry as hundreds of funds are liquidated and thousands more get sizable redemptions. Many of these funds own the same companies—the outcasts from the indexed world, the cheap, the unloved; the same stocks that many other hedge fund managers own. With the hedge fund industry going in reverse, there is suddenly no natural buyer for what must be sold. As a result, you are seeing waves of forced sell orders and few buyers (which for those so inclined, is creating good bargains all around).

Those of you that have been waiting for the stock market to implode can finally stop waiting.

It is here, and it is really, really bad.

Meanwhile, a new survey contains more evidence that average Americans are becoming increasingly pessimistic about the U.S. economy.  In fact, the numbers in the survey were “essentially reversed” from earlier this year…

Overall, 28 percent of Americans said the economy will get better in the next year, while 33 percent predict it will get worse, according to the survey, which was released Sunday. Those numbers were essentially reversed from January, when 35 percent said the economy would get better and 20 percent said it would get worse.

The psychological shift that I wrote about a few weeks ago appears to be accelerating.  It is starting to become exceedingly clear that a major crisis has begun, and now the big question is this – how bad will things get in 2019?

Well, Ron Paul told CNBC that “it could be worse than 1929″…

Paul said Thursday on CNBC‘s “Futures Now that “Once this volatility shows that we’re not going to resume the bull market, then people are going to rush for the exits.”  Paul added that “it could be worse than 1929.”  He was referencing the fateful day in October of 1929 when the stock market crashed, and the United States was flung into the Great Depression that lasted ten years. During that year, a worldwide depression was ignited because of the U.S.’s market crash.  The stock market began hemorrhaging and after falling almost 90 percent, sent the U.S. economy crashing a burning.

Will it ultimately be that bad?

Only time will tell, but right now things certainly do not look good, and I have a feeling that they are about to get a whole lot worse.

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.

 

“Something Is Wrong Here”: U.S. Stocks Plunge Again And Are Having Their Worst Quarter In 7 Years

The Dow Jones Industrial Average plummeted another 496 points on Friday as panicked investors continue to pull billions of dollars out of the stock market.  With less than two weeks to go until Christmas, the markets are not supposed to be experiencing this kind of turmoil, but it is happening and there is no end in sight.  During the fourth quarter of 2018, we have already seen the S&P 500 fall 11 percent.  Even if it doesn’t go down any further, that will be the worst quarter in 7 years.  And of course the S&P 500 is not alone – at this point all of the major indexes are officially in correction territory.  Things are certainly getting quite frightening on Wall Street, and many believe that the worst is yet to come.

Despite widespread assurances from the mainstream media that the wise thing to do is to keep your money in the market, investors are pulling money out of equities at a near record pace…

Jittery investors yanked a record $39 billion from global equities in the latest week, according to a Bank of America Merrill Lynch report released Friday. That included $28 billion that exited US stocks, the second-highest on record. And a record $8.4 billion was pulled from investment grade bonds.

The “race for the exits” that we have been witnessing really is turning into a bit of a stampede, and once panic starts to spread it can be very difficult to stop it.

So why is all of this happening?

Well, one market strategist told CNN that “something is wrong here” and that his firm cannot deny that we are in a “global slowdown”…

Markets were dinged by a batch of negative corporate and economic developments, especially weak growth numbers out of China and Europe.

“Something is wrong here. There is this global slowdown. We can’t deny it,” said Michael Block, market strategist at Third Seven Advisors, a private wealth management firm.

We most certainly are in a global economic slowdown, and this is something that I have been telling my readers for months.

On Friday, we got more troubling numbers out of China.  The following comes from CNBC…

China reported industrial output and retail sales growth numbers for November that missed expectations. This is the latest sign shown by China that its economy may be slowing down. The data also underscored the rising risks to China’s economy as Beijing works to resolve an ongoing trade war with the U.S.

“The economic data continues to bear out growth is slowing,” said Tom Martin, senior portfolio manager at Globalt. “There is still a lot of positive positioning out there. As the data continues to slow, people are feeling less comfortable with that and start to sell.”

Markets tend to go down a whole lot faster than they go up, and the losses are really starting to pile up.

Here is how Zero Hedge summarized the carnage that we have witnessed over the last several months…

  • Dow -10.5% from highs
  • S&P -11.3% from highs – lowest weekly close since March 2018
  • Nasdaq Comp -14.6% from highs
  • Trannies -17.8% from highs – Nov 2017 lows, worst 2-week drop since Aug 2011
  • Russell 2000 -18.5% from highs – lowest since Sept 2017

Financial stocks have been getting hit particularly hard.

S&P financials have now declined 20.3 percent from the 52-week high, and that officially puts them in bear market territory.

The S&P bank index has fallen even farther.  It is now down 24 percent from the 52-week high, and global banking stocks overall have been absolutely crashing.

Banking stocks led the way down in 2008, and now it is happening again.

This is very quickly becoming an extremely serious situation.  Trillions upon trillions of dollars worth of “paper wealth” is evaporating all over the globe, and we are witnessing disappointing economic numbers just about everywhere.

We will see what happens on Wall Street next week.  The second half of December is normally a very sleepy time for the markets, but that may not happen this year.  Volatility has returned with a vengeance, and we have already set an all-time record in 2018 for big moves of the VIX…

The S&P 500 has averaged a daily range of 2 percent for the month, while the Dow Jones Industrial Average has closed with triple-digit moves in all but three sessions.

Big moves have pushed the VIX to a record 13 one-day moves of more than 20 percent this year.

Over the past few years, a lot of Americans have become deeply complacent, and that is a huge mistake.  Just because our long-term financial problems were delayed does not mean that they were canceled.

The truth is that nothing has changed as far as the long-term outlook is concerned.  Without a doubt we will pay a very great price for our mistakes, and a day of reckoning is inevitably 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 to do so.

Sabotage: The Deep State Has Destroyed Trump’s Chances Of A Trade Deal With China, And The Stock Market Is Tanking As A Result

Somebody out there apparently does not want President Trump to make a trade deal with China.  Just after U.S. and Chinese officials agreed to suspend the implementation of new tariffs for 90 days, one of China’s most important tech executives was literally kidnapped as she was changing planes in Canada.  Huawei CFO Meng Wanzhou was simply on her way to Mexico, but at the urging of U.S. authorities the Canadians grabbed her and are refusing to let her go.  Reportedly, the plan is to extradite her to the United States where she will apparently face charges relating to Huawei’s evasion of U.S. sanctions against Iran.  When Trump was negotiating face to face with the Chinese, he was not aware that this was taking place.  So now all of Trump’s hard work is out the window, and our relations with the Chinese are probably the worst that they have been since the Korean War.

If U.S. authorities wanted to punish Huawei, they should have just slapped a big fine on them and have been done with it.

The Chinese would have been annoyed, but not that much damage would have been done.

But kidnapping a high profile member of Chinese tech loyalty and throwing her in prison is something that the Chinese will not forgive.

The Chinese are a deeply nationalistic people, and the kidnapping of Meng Wanzhou is being treated as a grave national insult in China.  If the goal of the Deep State was to really upset the Chinese, they picked a perfect target.  The following comes from Robert Wenzel…

“This is a really big deal. Ms. Meng is by birth and position a member of China’s corporate royalty,” David Mulroney, a former Canadian ambassador to China, is quoted by TGM as having said.

According to TGM, Meng, 46, who also goes by the name Sabrina, was appointed CFO of Huawei in 2011 and is also one of four deputy chairs. She appears to be being groomed for the top job at Shenzhen-based Huawei, which is now the world’s second-largest maker of telecommunications equipment.

Just imagine how Americans would feel if China kidnapped a high profile member of our tech royalty and multiply that outrage by about 10.

Until Meng Wanzhou is let go, there is not going to be any deal with China.  Many Americans are not familiar with Huawei, but they are essentially China’s version of Apple or Microsoft.  The following originally comes from CNN…

Huawei is one of the world’s biggest makers of smartphones and networking equipment. It is at the heart of China’s ambitions to reduce its reliance on foreign technology and become an innovation powerhouse in its own right.

The country is pumping hundreds of billions into its “Made in China 2025” plan, which aims to make China a global leader in industries such as robotics, electric cars and computer chips. The introduction of 5G wireless technology, which hinges on Huawei, is a top priority.

Meng Wanzhou is not just the CFO of the company.  She is also the daughter of the founder of the company and she is considered to be a hero by millions of Chinese.

So what in the world is the Deep State thinking?  Are we going to start regularly kidnapping individuals that work for foreign corporations that have somehow violated U.S. laws?

And should Americans expect the same treatment?  How would you like it if your mother or daughter was kidnapped while changing planes in a foreign country because the company that she works for had committed some sort of violation?

I don’t want to make it sound like Huawei is perfectly innocent, because they aren’t.  But this is a move that is not just going to ensure a nightmarish trade war with China.  Ultimately, things could get a whole lot worse than that.

At this point, the Chinese have summoned the U.S. ambassador and have formally demanded Meng Wanzhou’s release…

The Chinese foreign ministry on Sunday summoned U.S. Ambassador to China Terry Branstad to protest the detention of a senior tech executive by the Canadian authorities “at the unreasonable behest of the United States.”

Vice Foreign Minister Le Yucheng demanded the release of Meng Wanzhou, chief financial officer of Huawei Technologies, who is accused by U.S. officials of attempting to circumvent U.S. sanctions on Iran.

It would be wonderful if Meng Wanzhou was released, but it doesn’t look like that is going to happen.

So now our relationship with China is officially in the toilet, and this is one of the factors that could push stock prices much lower once again this week.  In fact, as I write this article Dow futures are way down…

U.S. stock futures fell on Sunday night as traders feared an intensifying trade war between the United States and China.

Dow Jones Industrial Average futures dropped 197 points, implying a decline of 173.95 points at Monday’s open. S&P 500 and Nasdaq 100 futures also declined. The losses would add to a steep decline from last week.

This current “correction” was supposed to be over by the time December rolled around, but instead stock prices accelerated their decline last week.

And many of those that work in financial circles are starting to use language that is much more pessimistic than we have become accustomed to seeing.  Here is just one example…

“We’re very mindful once again where we’re at in the cycle,” Gregory Carmichael, chief executive of the Cincinnati-based lender Fifth Third, said at a conference last week. “We’re well positioned to deal with the downturn in the economy, and we’ll be very cautious.”

I don’t know what “well positioned to deal with the downturn in the economy” means exactly, but it sounds nice.

It frustrates me that so few people seem to understand the gravity of the situation that we are facing.  Our stores are filled with cheap products that come from China and they own more than a trillion dollars of our national debt.  The two largest economies in the entire world are decoupling from one another, and if the Chinese conclude that they are not able to salvage the relationship then they will rapidly become an exceedingly dangerous enemy.

This is a major turning point, and the kidnapping of Meng Wanzhou has put us on a road that doesn’t lead anywhere good.  Hopefully things can rapidly be fixed, because if not, events are likely to start escalating quite dramatically.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

“Panic-like selling” grips Wall Street as the economic numbers point to “a lot of unpleasant things that nobody wants to admit”

Fear is spreading like wildfire on Wall Street, and on Friday we witnessed yet another wave of panic selling.  The Dow Jones Industrial Average fell another 559 points, closing at 24,389.  Previously I had warned that once we solidly broke through 25,000 that it could trigger an avalanche of panic selling, and that is precisely what has happened.  The Dow is now down more than 9 percent from the peak in early October, but the S&P 500 is doing even worse.  The S&P 500 is now down 10.2 percent from the September peak, and that means that it is officially in correction territory.  It has now been two solid months, and the sell-off on Wall Street shows no signs of abating.

And for certain sectors, the carnage that has been unfolding can definitely be called a “crash”.

FANG stocks are now down 24 percent from the peak, and global systemically important banks have now fallen a whopping 33 percent from the 52-week high.

Ladies and gentlemen, the big banks are officially in trouble once again, and it is going to be a wild ride moving forward.

And the way that things wrapped up for the markets on Friday has many wondering what Monday will bring.  According to one key index, investors were dumping stocks so rapidly on the Nasdaq on Friday afternoon that it was officially considered to be “panic-like activity”…

Selling on the Nasdaq reached panic-like proportions Friday afternoon with less than an hour left in regular trade, as the exchange’s Arms index rose. The Arms is a volume weighted breadth measure, that tends to rise when the broader market falls, as the intensity of the selling in declining stocks is usually greater than the intensity of buying in rising stocks. Levels above 2.000 are considered panic-like activity. The Nasdaq Composite Index COMP, -3.05% was off 3% at 6,969. The number of advancing stocks compared against decliners was at 2,108 to 787, pushing the Arms index on the exchange to 2.068.

Thanks to Friday’s nightmare, this week ended up being the worst week for U.S. stocks since March.

This wasn’t supposed to happen in December.  According to the experts, we were due for a nice “Santa Claus rally” and everybody was supposed to go home for the holidays really happy.

But that hasn’t happened.  Instead, the markets are coming apart like a 20 dollar suit.

And guess who CNN is blaming for the stock market decline?

I’ll give you just one guess, and his name rhymes with “Gump”.  The following comes from CNN…

From “Tariff Man” tweets and inverting yield curves to conflicting messages from Trump advisers and the arrest of a Chinese executive, there is no shortage of headlines keeping investors awake at night.

They don’t want to admit that the same thing would be happening if Hillary Clinton was in the White House.

This isn’t about politics.  This is about a financial system that has always been destined to collapse.

Meanwhile, the stunning implosion of the cryptocurrency bubble continues to accelerate.  At this point, the price of Bitcoin has now fallen more than 80 percent from where it was a year ago…

In December 2017, bitcoin prices hit a record high of just under $20,000. Flash forward to December 2018 and bitcoin is now trading a little below $3,400. That’s a more than 80% plunge. Bitcoin is at a 15-month low.

But prices have really gotten whacked this week, falling nearly 20% in just the past five days alone.

Other major cryptos such as Ripple, Ethereum and Litcoin have experienced similar crashes.

Yes, this is really happening.  Bubble after bubble is bursting, and a day of reckoning for the global financial system is here.

Things are unfolding just as myself and so many others have been warning.  Over the past couple of years, there has been a bubble of false hope even though none of the problems that caused the last financial crisis were ever fixed.  Instead, the Federal Reserve and other global central banks simply patched things together and inflated the bubbles to a much larger degree than we had ever seen before.

Now everything is unraveling, and many of the “experts” are still in denial.  I really like how Peter Schiff made this point during a recent interview…

“What has happened in the last week is very, very bullish for the price of gold, and the price of gold is not catching much of a bid. I think again, the main reason for this is because nobody gets it. People still think this is a bull market. They’re not worried about the decline. They think it’s just a buying opportunity. It’s just a correction. They still think the economy is good. Even though the bond market doesn’t, even though the yield curve is inverting in the front end of the curve, people are dismissing that. They’re dismissing the housing data; they’re dismissing the build in the crude inventories. They’re not looking at any of the real data because nobody wants to believe it. Everybody still wants to believe all the hype — that this economy is great, that this economy is booming. Nobody wants to deal with the truth; because you know how grim the reality is? Because if you have to accept the fact that this economy is going into recession, then you have to accept a lot of unpleasant things that nobody wants to admit.”

As always, Peter Schiff is making a lot of sense.

If you follow my work on a regular basis, than you already know that I have been highlighting the gloomy economic numbers as they have been steadily rolling out.

All of the numbers tell us that economic activity is slowing down.

All of the numbers tell us that we are heading into a recession (if we are not already in one).

And all of the numbers tell us that another great financial crisis is now upon us.

The time for false hope is over.  Now is a time to come to grips with reality, because things are going to get very tough in the months ahead.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

U.S. Accused Of “A Declaration Of War” Against China As The Stock Market Teeters On The Precipice Of Disaster

Things are sure getting wild on Wall Street.  On Thursday, the Dow Jones Industrial Average plummeted almost 800 points before roaring back and recovering nearly all of those losses.  The Dow closed just 79 points lower for the day, and if you only looked at the final number you would be tempted to believe that there is not much reason for concern.  But these wild swings up and down are precisely what we witnessed back in 2008, and they are a sign that the stock market is literally teetering on the precipice of disaster.  And it almost certainly would have been a historically bad day for stocks on Thursday if not for a very well-timed article in the Wall Street Journal.  Once news broke that the Federal Reserve is considering “a wait-and-see approach to rate hikes”, stock prices immediately began to rebound…

Stocks closed well off their session lows on Thursday after news broke that the Federal Reserve could tighten monetary policy at a slower pace than previously expected.

The Wall Street Journal reported the central bank is considering whether to signal a wait-and-see approach to rate hikes at its upcoming meeting this month. The report said Fed officials do not know what their next move on rates will be after December.

This just shows the immense power that the Federal Reserve possesses.

As I have discussed so many times previously, the Federal Reserve has far more power over the U.S. economy than anyone else does, and that includes the president of the United States.  Just the mere suggestion that the Fed may slow down the pace of rate hikes was enough to send Wall Street into a feeding frenzy.  Nothing that President Trump could have possibly said could have had that sort of a positive impact.

And this is a perfect example of how fundamentally flawed our system is.  Personally, I believe in free markets, and so it deeply, deeply offends me that we have an unelected, unaccountable panel of central bankers setting our interest rates for us.  As I have repeatedly proposed, we need to shut down the Federal Reserve and return to a system where interest rates are determined by the marketplace.

I’ll get off my soapbox for now.  As I noted yesterday, stocks originally began plunging when news broke that Huawei CFO Meng Wanzhou had been arrested in Canada and would be extradited to the United States…

Trade fears ratcheted up after news broke Wednesday that Huawei CFO Meng Wanzhou was arrested by Canadian authorities in Vancouver, where she faces extradition to the U.S. The arrest — which took place Dec. 1 — decreases the likelihood that a permanent U.S.-China trade deal will be reached. Huawei is one of the largest mobile phone makers in the world.

Meng Wanzhou is also the daughter of the founder of the company, and her arrest apparently has something to do with the Justice Department’s investigation into whether Huawei has violated U.S. sanctions on Iran.

To most U.S. citizens, this is rather meaningless news, but in China there has been a massive explosion of outrage.  The Chinese are demanding her immediate release, and the editor in chief of the Global Times is calling her arrest “a declaration of war”…

Hu Xijin, the editor in chief of the Global Times, described the arrest as a “declaration of war” against China, according to the New York Times.  The Global Times is a state-run newspaper whose views are thought to reflect the ruling communist party in China. Hu’s comments were made on Weibo, a Twitter-like service, the New York Times reported.

“Without any solid evidence, the Canadian and US governments trampled on international law by basically ‘kidnapping’ Chinese citizen Meng,” an official with the Chinese Ministry of Commerce said in a Global Times op-ed. “The China-US trade row could become a protracted war.”

Nothing is done or said at the Global Times without the approval of the Communist Party, and if Hu Xijin was out of line he would be immediately fired.

But he wasn’t fired, because he was simply expressing what most Chinese are feeling at this moment.  In China, the consensus is that relations between the U.S. and China have “gone nuclear”, and at this point the only thing that is going to soothe things is the immediate release of Meng Wanzhou.

Meanwhile, we just got more evidence that our trade war with China is not going very well at all.  Today we learned that the U.S. trade deficit shot up to a 10 year high during the month of October…

The U.S. trade deficit jumped to a 10-year high in October as soybean exports continued to fall and imports of consumer goods rose to a record high, suggesting the Trump administration’s tariff-related measures to shrink the trade gap likely have been ineffective.

The Commerce Department said on Thursday the trade deficit increased 1.7 percent to $55.5 billion, the highest level since October 2008. The trade gap has now widened for a five straight months.

And we also just got more evidence that the U.S. economy is slowing down.  Last month, factory orders declined at the fastest pace that we have seen in more than a year…

New orders for U.S.-made goods recorded their biggest drop in more than a year in October and business spending on equipment appeared to be softening, suggesting a slowdown in activity in the manufacturing sector.

Factory goods orders fell 2.1 percent amid a decline in demand for a range of goods, the Commerce Department said on Thursday. That was the largest decrease in orders since July 2017.

Economic conditions really are deteriorating, and our financial markets really are headed for big trouble.

But some people out there still refuse to accept reality.  For example, an article that was just posted by USA Today is strongly urging people “to buy the dip”…

If you have the courage, now might be a time to step in to buy stocks when they are beaten down and on sale, says Thorne Perkin, president of Papamarkou Wellner Asset Management.

The worst reaction is to panic and sell, as there’s a good chance you could miss a stock rebound in this environment, he says.

Sadly, a lot of people will take this advice and will watch their retirement savings go up in smoke.

We have reached a critical turning point, and things are really starting to heat up.  Unfortunately, most people out there still don’t seem to realize what is happening…

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Wall Street Seems To Believe That Endless Gridlock And Political Turmoil Will Be Good For America

It is difficult not to admire the relentless optimism on Wall Street.  A divided Congress is going to guarantee two years of gridlock and political turmoil in Washington, but many in the financial community are choosing to interpret the election results as a positive sign.  They remember the “gridlock” during the Obama years, and they are hopeful that the next couple of years will be at least somewhat similar.  The Dow Jones Industrial Average shot up 545 points on Wednesday, and that was the largest post-midterm rally that we have seen in 36 years.  Stock prices normally go up the day after midterm elections, but Wednesday’s rally was definitely unusual…

Wednesday’s post-midterms rally was larger than the average gain that follows the contests. Goldman Sachs noted the S&P 500 has averaged a gain of 0.7 percent from the day before the elections to the day after midterms. Wednesday marked the biggest post-midterms gain for both the Dow and S&P 500 since the day after the 1982 contests, when the indexes surged 4.3 percent and 3.9 percent, respectively.

To a certain extent, it is likely that investors were greatly relieved that the worst case scenario did not play out.  As I noted on Monday, a blue wave that would have resulted in Democrats taking control of both houses of Congress would have meant big trouble for Wall Street, and many are very thankful that we were able to avoid that outcome…

Investors also avoided the most-feared Wall Street outcome, a so-called “blue wave,” or Democratic sweep of both chambers of Congress. That could have put the president’s economic policies under assault and boosted the odds of a Democratic House pushing for Trump’s impeachment.

“Everything played out according to script,” Stephen Innes, head of Asia trading at Oanda, told USA TODAY. “The Trump agenda is not in serious jeopardy.”

But are Tuesday’s results actually good news for Wall Street?

The optimists are pointing to history as evidence that gridlock in Washington is typically good for investors…

Legislative gridlock has historically been good for financial markets. In fact, in years with a Republican president and a Republican-controlled Senate and Democrat-run House in place, the Standard & Poor’s 500 stock index has posted average gains of 10.8 percent, according to data from Strategas Research Partners.

“A split Congress means that gridlock is more likely, and that’s been fine for markets in the past,” says Kate Warne, investment strategist at Edward Jones.

Unfortunately, that is not a fair comparison.

The times that we are moving into are not going to be anything like the “gridlock” that we witnessed during the Reagan, Clinton and Obama presidencies.

During the Obama era, Republican leadership got along with the White House fairly well.  And even though there was often some wrangling, Republicans almost always gave Obama most of what he wanted when it came to budget deals and other critical pieces of legislation.

Sadly, the next two years are going to be much different.  It will be the political equivalent of trench warfare, and the carnage is going to be off the charts.

Top Democrats in the House are already threatening to hit the Trump administration with a wave of subpoenas, and Trump is warning that if that happens he will adopt a “war posture”.  Throughout his career, Trump’s philosophy has always been that if somebody hits him he is going to hit them back even harder.

I want you to imagine the most graphic battle scene that you have ever watched on television, because that is what the coming years will be like.  There will be an all-out attempt to take down Trump and everyone around him, and Trump will respond by going after everyone that he perceives to be an enemy.  In the end, a lot of politicians are not going to make it, and our system of governance will be badly damaged.

And the truth is that we aren’t going to have to wait long for things to erupt.  According to the Baltimore Sun, “political war” has already erupted…

Washington plunged into political war on Wednesday in the wake of a split decision by voters in the midterm elections, with President Donald Trump ousting his attorney general and threatening to retaliate against Democrats if they launch investigations into his personal conduct and possible corruption in the administration.

The rapid shift to battle stations signaled the start of what is likely to be two years of unremitting political combat as Trump positions himself for reelection. For the first time, Trump will be forced to navigate divided government as Democrats who won the House pledge to be a check on his power and face pressure from their liberal base to block him at every turn.

The left has been holding back for months so that they would not alienate any potential voters, but now that the midterm elections are over they are free to start causing chaos again.

If you do not believe that we are headed for great political conflict, I would like for you to consider what has already happened within the past 24 hours…

-Major progressive groups such as MoveOn.Org announced that they are organizing “response events” in 900 U.S. cities on Thursday to protest the firing of Attorney General Jeff Sessions.

-The White House pulled CNN reporter Jim Acosta’s press credentials.

-DC Antifa published the home addresses of Tucker Carlson, Ann Coulter, Sean Hannity and other prominent conservatives.

-A mob showed up outside Tucker Carlson’s home and warned him that they “know where you sleep at night” and ordered him to “leave town”.

As I have warned so many times, hatred and anger are growing to unprecedented levels in America.

Many had been hoping that the midterm elections would resolve much of the political tension in this country, but instead it looks like things are going to continue escalating quickly.

And it isn’t going to take very much at all to unleash major civil unrest.  The left already hates Trump more than any other president in American history, and one really bad move could set off an explosion of anger unlike anything we have ever seen before.

My friends, these are dark times, and I have a feeling that they are about to get a whole lot darker.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The Last Days Warrior Summit is the premier online event of 2018 for Christians, Conservatives and Patriots.  It is a premium members-only international event that will empower and equip you with the knowledge and tools that you need as global events begin to escalate dramatically.  The speaker list includes Michael Snyder, Mike Adams, Dave Daubenmire, Ray Gano, Dr. Daniel Daves, Gary Kah, Justus Knight, Doug Krieger, Lyn Leahz, Laura Maxwell and many more. Full summit access will begin on October 25th, and if you would like to register for this unprecedented event you can do so right here.

 

The One Election Scenario That Would Be A “Disaster” For The Financial Markets

On Tuesday night all of the speculation about the midterm elections will mercifully be over, and there is one potential outcome that is being called a “disaster” for the financial markets.  Over the past couple of years, stock prices have soared to unprecedented levels, and Wall Street has seemed to greatly appreciate the pro-business environment that President Trump has attempted to cultivate.  Regulations have been rolled back, corporate taxes have been reduced significantly, and many corporate executives no longer fear that the federal government is out to get them.  But after Tuesday, everything could be different.

The most likely outcome appears to be that the Democrats will take control of the House of Representatives and the Republicans will remain in control of the Senate.  For what it is worth, Nate Silver is currently projecting that the Democrats have an 88 percent chance of winning the House and only a 19 percent chance of winning the Senate.

But of course he was also projecting a huge landslide victory for Hillary Clinton in 2016.

In any event, a divided Congress would create gridlock in Washington, and according to Wedbush Securities managing director Steve Massocca that would produce “some negative fallout” for the financial markets…

Steve Massocca, Wedbush Securities managing director said there could be some negative fallout from a split Congress, since Democrats would hold committee chairmen seats in the House. “To what extent are they able to disrupt the Trump agenda will weigh on peoples’ minds,” he said.

“Donald Trump, the agenda, is very good for the markets. Less regulation, lower taxes,” he said.

But in the end, such a scenario is not likely to move stock prices too substantially.

However, if the Democrats are able to take control of both houses of Congress on Tuesday, Massocca believes that would truly be a “disaster” for stock prices…

The least likely scenario—a Democratic sweep— is also seen as the most negative for stocks.

“Disaster,” said Massocca.

Normally by now we would have a really good idea of what is going to happen tomorrow, but at this point the polls are all over the place.

For example, the last generic poll conducted by CNN has Democrats up by 13 points, but the last generic poll conducted by Rasmussen has Republicans in the lead…

One day before Americans head to cast their ballots in the crucial midterm congressional elections, two final polls conducted by CNN and Rasmussen have predicted wildly different results.

The final generic poll conducted by left-leaning CNN has put Democrats 13 points ahead of Republicans. Meanwhile, a separate poll carried out by the more right-leaning Rasmussen agency has suggested that Republicans are leading, but by a much smaller margin of one point.

For the record, Rasmussen was more accurate back in 2016, and in only about 24 hours we will find out who was more accurate this time around.

There are some that are entirely convinced that Republicans will be able to maintain control of both houses of Congress, and needless to say that would almost certainly cause a huge surge on Wall Street.  In fact, one Nevada lawyer is so sure that Republicans will maintain control of the House of Representatives that he just flew to London and bet $130,000 of his own money on that outcome…

A big political gambler I met in Las Vegas in 2016 is in London betting that the Republican Party will keep control of the U.S. Congress. Robert Barnes is essentially wagering that U.S. pollsters haven’t fixed any of the problems that led them astray during the 2016 presidential campaign.

Barnes, a trial lawyer, lives in Las Vegas, frequenting the city’s sportsbooks, but he has to travel to the British Isles to wager on U.S. politics since it’s not allowed in the U.S. On this side of the Atlantic, the bookies know him as a high roller; the political betting team at Ladbrokes even tweeted his photo to mark his arrival and his 100,000 pound ($130,000) bet on the Republicans’ House majority. Given that the entire U.S. primaries betting market is in the single millions in the U.K. and Ireland, that’s quite momentous.

$130,000 is an enormous amount of money, and so I hope that he knows what he is doing.

On the other side, Nancy Pelosi is so confident about the outcome that she has already declared victory on national television.

But of course many other leading Democrats are extremely nervous right now.  They remember the election night debacle of 2016, and they are concerned that something like that might happen again.

Democratic pollster John Anzalone is describing what they are going through as “the bed-wetting phase”…

Haunted by memories of 2016, liberals around the country are riven with anxiety in the campaign’s homestretch. They’re suspicious of favorable polls and making election night contingency plans in case their worst fears come true. Some report literal nightmares about a Democratic wipeout.

“We’re kind of just in the bed-wetting phase now,” said Democratic pollster John Anzalone, a Hillary Clinton campaign alumnus who spent election night 2016 in Clinton’s Manhattan war room.

If the Democrats are unable to take the House, that will probably mean that a late “red wave” has saved the day for the Republicans and it will also probably mean that they will likely increase their Senate majority by a little bit.

In that scenario, we will see a lot more than “bed-wetting” from the left.  Their hopes have been pinned on these midterm elections for nearly two years, and a crushing loss could set off a national temper tantrum of frightening proportions.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The Last Days Warrior Summit is the premier online event of 2018 for Christians, Conservatives and Patriots.  It is a premium members-only international event that will empower and equip you with the knowledge and tools that you need as global events begin to escalate dramatically.  The speaker list includes Michael Snyder, Mike Adams, Dave Daubenmire, Ray Gano, Dr. Daniel Daves, Gary Kah, Justus Knight, Doug Krieger, Lyn Leahz, Laura Maxwell and many more. Full summit access will begin on October 25th, and if you would like to register for this unprecedented event you can do so right here.

Stock Market Crash! The Dow Has Now Plunged 2,368 Points From The Peak Of The Market

The level of panic that we witnessed on Wall Street on Wednesday was breathtaking.  After a promising start to the day, the Dow Jones Industrial Average started plunging, and at the close it was down another 608 points.  Since peaking at 26,951.81 on October 3rd, the Dow has now fallen 2,368 points, and all of the gains for 2018 have been completely wiped out.  But things are even worse when we look at the Nasdaq.  The percentage decline for the Nasdaq almost doubled the Dow’s stunning plunge on Wednesday, and it has now officially entered correction territory.  To say that it was a “bloodbath” for tech stocks on Wednesday would be a major understatement.  Several big name tech stocks were in free fall mode as panic swept through the marketplace like wildfire.  As I noted the other day, October 2018 looks a whole lot like October 2008, and many believe that the worst is yet to come.

But in the short-term we should see some sort of bounce once the current wave of panic selling is exhausted.  During every major stock market crash in our history there have been days when the stock market has absolutely soared, and this crash will not be any exception.

If we do see a bounce on either Thursday or Friday, please don’t assume that the crash is over.  Most key technical levels have already been breached, and even a small piece of bad news can send stocks plunging once again.

On Wednesday there really wasn’t anything too unusual that happened, but stocks cratered anyway.  Here is a summary of the carnage…

-The Dow Jones Industrial Average plummeted 608 points on Wednesday.

-The Dow is now down 7.1 percent for the month of October.

-The S&P 500 has now fallen for 13 of the last 15 trading days.

-The S&P 500 is now down 8.9 percent for the month of October.

-A whopping 70 percent of all S&P 500 stocks are already in correction territory.

-A third of all S&P 500 stocks are already in bear market territory.

-It was the worst day for the Nasdaq since 2011.

-The Nasdaq is now down 11.7 percent for the month of October.

-At this point, the Nasdaq has officially entered correction territory.

-The Russell 2000 is now down about 15 percent from the peak as it hurtles toward bear market territory.

-Over in Germany, Deutsche Bank closed at yet another record low as it teeters on the brink of disaster.

-Global systemically important bank stocks have now fallen a total of 30 percent from the peak of the market.

Hopefully things will stabilize for a while, but many experts are warning that things could get much worse from here…

The latest swoon, which knocked the S&P 500 down more than 3 percent Wednesday, signaled to many Wall Street pros that the decline was entering a new, more dangerous phase. There’s growing concern now that this decline is more than a garden variety pullback, or drop of 5 percent to 9.99 percent, and could morph into a drop of 10 percent of more for the broad market.

“With the big sell-off today, the market may have moved from pullback into correction territory,” says Nick Sargen, chief economist and senior investment advisor for Fort Washington Investment Advisors.

All it is going to take is one more really bad day for the Dow to push us officially into correction territory.  And once we breach that 10 percent threshold, that could set off another round of panic selling.

On Wednesday, the one piece of bad news that kind of rattled investors was the fact that new home sales plunged dramatically in September…

This is a disastrous print:

August’s 629k SAAR was revised drastically lower to 585k and September printed 553k (SAAR) massively missing expectations of 625k (SAAR) – plunging to the weakest since Dec 2016…

That is a 13.2% collapse YoY – the biggest drop since May 2011

Without a doubt, a 13 percent year over year decline is catastrophic, and this is starting to remind many people of the housing crash that we witnessed back in 2008.  Homebuilder stocks have been plummeting all month, and home prices are collapsing all over the nation.

In my previous article entitled “Why Are So Many People Talking About The Potential For A Stock Market Crash In October?”, I noted that this has been the month with the most market volatility ever since the Dow was first established.  Absent some kind of major event, the stock market usually gets kind of sleepy around Thanksgiving and does not really spring to life again until after the new year has begun.

Of course it is entirely possible that this year could be different.

We have entered a time when global events appear to be accelerating significantly.  Earlier today, bombs were mailed to major political leaders all over the United States.  In the Middle East, it looks like Israel and Hamas could go to war at any moment.  And we continue to see a rise in major seismic events – including three very large earthquakes that just hit the Cascadia Subduction Zone.

It truly does appear that the elements for a “perfect storm” are beginning to come together.  We have been enjoying a period of relative stability for so long that many Americans have allowed themselves to become lulled into a state of complacency.  That is a huge mistake, because all along we have been steamrolling toward disaster, and nothing has been done to alter our course.

Dark days are ahead my friends, and I strongly urge you to get ready.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The Last Days Warrior Summit is the premier online event of 2018 for Christians, Conservatives and Patriots.  It is a premium members-only international event that will empower and equip you with the knowledge and tools that you need as global events begin to escalate dramatically.  The speaker list includes Michael Snyder, Mike Adams, Dave Daubenmire, Ray Gano, Dr. Daniel Daves, Gary Kah, Justus Knight, Doug Krieger, Lyn Leahz, Laura Maxwell and many more. Full summit access will begin on October 25th, and if you would like to register for this unprecedented event you can do so right here.

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