Hope For A U.S.-China Trade Deal Is Completely Dead, And Wall Street Is Starting To Panic

The reality of what we are now facing is starting to sink in for Wall Street investors, and they are starting to panic.  Hope that the U.S. and China would be able to agree to a trade deal had fueled a tremendous stock market rally over the last couple of months, but of course it just turned out to be a cruel mirage.  There isn’t going to be a trade deal prior to the 2020 presidential election, and at this point even President Trump is telling us not to expect one before November 2020.  Just check out what he told the press on Tuesday

“In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now and we will see whether or not the deal is going to be right,” Trump told reporters earlier on Tuesday.

When asked if he had a deal deadline, he added: “I have no deadline, no … In some ways, I think it is better to wait until after the election if you want to know the truth.”

President Trump is attempting to spin things to make it sound like it is his decision to hold off on a trade deal, and that may be a politically savvy thing to do.

But the truth is that the Chinese never wanted to do a comprehensive trade deal with Trump.  They have been stringing him along all this time, because they wanted to delay Trump’s tariffs for as long as possible.  But their original intention was to wait until a Democrat was in the White House to cut a deal.

Of course at this point the Chinese have soured on the Democrats as well.  The Chinese government views the pro-democracy protesters in Hong Kong the way that we view ISIS and al-Qaeda, and from the very beginning they have accused the United States of starting those protests.  And now that President Trump has signed the “Hong Kong Human Rights and Democracy Act of 2019” after it was overwhelmingly passed by both the House and the Senate, the Chinese are beyond angry.  At this point our relationship with China has been completely destroyed, and from now on we are going to have a deeply adversarial relationship with them no matter who is in the White House.

President Trump has threatened to go ahead with more tariffs on China on December 15th, and since there is zero chance of a trade deal by then, that is exactly what we should expect.

And if that happens, Wharton Business School Professor of Finance Jeremy Siegel is warning that chaos could be unleashed on Wall Street

If Trump doesn’t reach a trade deal with China and “the tariffs get put on on Dec. 15 … I don’t know if I want to be around equities then,” Siegel said on CNBC’s Closing Bell on Tuesday.

Unfortunately, Siegel is precisely correct.  In fact, stock prices have already fallen for three days in a row, and the downturn really started to accelerate on Tuesday

The Dow Jones Industrial Average fell 280.23 points, or 1% to 27,502.81. The 30-stock average was led lower by trade-vulnerable Apple, Caterpillar and Boeing. The S&P 500 slid 0.7% to 3,093.20 amid losses in chip stocks like Nvidia, Micron and Advanced Micro Devices. The Nasdaq Composite lost about 0.6% to end the day at 8,520.64.

At its lows of the day, the Dow was down 457.91 points, or 1.7%. The S&P 500 dropped as much as 1.7% while the Nasdaq traded lower by as much as 1.6%.

Hopefully things will settle down for the rest of this week, but if December 15th comes and the tariffs are fully implemented, many analysts are warning that there could be panic.  Here is one example

And while the US may (or may not) end up victorious in such a showdown, it will give Wall Street strategists – who have all flipped a U-turn and reversed from extremely optimistic to suddenly pessimistic – copious opportunities to impress their clients with superlatives such as this one from Manulife managing director Sue Trinh, who said that “if tariffs scheduled for Dec. 15 are implemented it would be a huge shock to the market consensus,” adding that “Trump would be the Grinch that stole Christmas” if the December 15 tariffs go through.

Even though there isn’t going to be any sort of an agreement with China, it would be helpful for the U.S. economy if Trump decided to delay the December 15th tariffs.

I don’t think that is going to happen though.

Meanwhile, the Trump administration is also looking at raising tariffs on goods from France, Brazil and Argentina

Heightened trade fears come a day after Trump threatened new tariffs on several more countries. On Monday, the president said he would raise tariffs on steel and aluminum imports from Brazil and Argentina. He also proposed slapping tariffs on France’s exports.

As I recently discussed, global trade has now fallen for four months in a row, and it certainly appears that things could get even worse in the months ahead.

And that means that it is more likely than ever that the U.S. economy as a whole will plunge into a deep recession.  In fact, Legg Mason is warning their clients that “the probability of a recession over the next 12 months is 50%”

Legg Mason, a diversified global asset management firm, said the probability of a recession over the next 12 months is 50%.

According to the variables the firm looks at to determine the health of the economy, recession risk is rising, said Jeff Schulze, the investment strategist for ClearBridge Investments, at Legg Mason’s market outlook for 2020 last Monday in New York.

Of course in the long-term what we are facing is going to be far worse than just another recession.

The “bubble to end all bubbles” is starting to look exceedingly vulnerable, and it isn’t going to take very much at all to push us into a new financial crisis.

Investing is all about hope.  People put their money into stocks and bonds because they anticipate a positive future in which the value of their investments goes up.

If you take that hope away, the entire foundation crumbles.  And now that the relationship between the United States and China has been destroyed, the future is looking a whole lot more bleak for investors than it was just a few weeks ago.

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

5 More Signs That The Global Economy Is Careening Toward A Recession

The global economy is already in the worst distress that we have seen since 2008, and it appears that the global slowdown is actually picking up pace as we head into 2020.  And this is happening even though central banks around the world have been cutting interest rates and pumping massive amounts of money into their respective financial systems.  The central bankers appear to be losing control, and it certainly wouldn’t take much of a push for this new crisis to evolve into a complete and utter nightmare.  The U.S. economy hasn’t been hit quite as hard as economies in Asia and Europe have been, but without a doubt things are slowing down here too.  Corporate earnings have been falling quarter after quarter, auto loan delinquencies just hit a record high, the Cass Freight Index has declined for 11 consecutive months, and we just witnessed the largest drop for U.S. industrial production since 2009.  Everywhere around us there is bad economic news, but most Americans are still completely oblivious to what is happening.

In this article, I am going to share even more evidence that a global economic slowdown has already begun.  When you add these numbers to all of the other numbers that I have been sharing in recent weeks, it becomes impossible to deny that something major is taking place.

The following are 5 more signs that the global economy is careening toward a recession…

#1 It is being projected that global auto sales will be down approximately 4 percent this year.  According to CNN, this will be the second consecutive year that global auto sales have fallen…

With only a month left in the year, global auto sales are on track for a 3.1 million drop, about 4%, for the year, according to Fitch. That would be the biggest decline since 2008, when the financial crisis hit, and the second year in a row that sales have fallen. Fitch expects worldwide car sales to total 77.5 million in 2019.

#2 Global trade just keeps falling.  According to Zero Hedge, total global trade has now declined on a year over year basis for four months in a row…

Global trade on a YoY basis contracted by 1.1% in September, marking the fourth consecutive YoY declines and the most extended period of subdued trade since the financial crisis in 2009.

The CPB said supply chain disruptions between the US and China, due mostly to the trade war, were the most significant drag on international trade volumes. US volumes fell 2.1% in September MoM. Though in China, imports plunged 6.9% MoM.

As you can see from those first two examples, we keep witnessing things happen that we haven’t seen since the last financial crisis.  Over the past few months, I have used phrases such as “since 2008” and “since 2009” over and over again.  We literally have not seen economic numbers this bad since the last recession, and we are still in the very early phases of this new downturn.

And in some cases, the numbers are actually even worse than anything that we saw during the last recession, and that brings us to our next sign…

#3 Chinese industrial profits just fell by the largest percentage ever recorded

China Industrial Enterprises total profits collapsed in October to CNY427.5bn from CNY575.6bn in September – a 9.9% YoY plunge, the biggest drop on record.

In fact, China’s Industrial sector has seen annual declines in its profits for 4 of the last 6 months.

The trade war has hit the Chinese economy really hard, but it doesn’t look like a trade deal will happen any time soon.

#4 U.S. consumer confidence has now fallen for four months in a row

Consumer confidence dipped for a fourth straight month in November as economic conditions weaken toward the end of 2019, data released Tuesday by The Conference Board shows.

The board’s consumer confidence index dipped to 125.5 this month. That’s down from 126.1 in October. Economists polled by Dow Jones expected the index to rise to 126.6.

This wasn’t supposed to happen, and if it keeps happening that is going to have important implications for the 2020 election.

#5 Even the wealthy are cutting back on their spending.  According to Yahoo Finance, this is a continuation of a trend that we have been seeing for the past three quarters…

Spending by the top 10% fell 1% in the second quarter from the same period last year, according to an analysis of Federal Reserve data by Moody’s Analytics. And a four-quarter average of outlays by the high earners has slipped on an annual basis the past three quarters, marking the first such declines since the Great Recession of 2007-09.

In recent years, global central banks have engaged in unprecedented intervention in an attempt to stave off another crisis, and for a while their efforts appeared to be successful.

But just because the coming crisis was delayed does not mean that it was canceled.

In fact, over the past few years our long-term financial problems have actually gotten a lot worse.  We are facing the biggest debt bubble in the history of the planet, global financial markets are more primed for a crash than they have ever been before, and civil unrest is breaking out all over the world.  The stage is certainly set for “the perfect storm” that I keep talking about, and most Americans have absolutely no idea what is coming.

In all the time that I have been writing about the global economy, things have never looked more ominous then they do right now.

So buckle up and hold on tight, because it certainly looks like we are in for a very bumpy ride in the months ahead.

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

Guess Who Is Preparing For A Major Stock Market Crash?

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

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

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

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

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

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

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

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

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

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

But why is there suddenly so much concern about 2020?

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

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

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

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

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

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

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

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

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

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

It is really happening.

The global economy really is heading into a major downturn.

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

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

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

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

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

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

But a lot more major casualties are coming.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Even worse than a 12 percent decline?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

And guess what?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Do NOT follow this link or you will be banned from the site!