2019

Investors Beware: “The World Economy Is Headed For A Recession In 2019 Unless Something Happens”

Global economic activity has been slowing down dramatically in recent months, and now the mainstream media is filled with dire warnings that a global recession is dead ahead in 2019.  And without a doubt, things do not look good right now as economic numbers from all over the globe just get bleaker and bleaker.  China’s trade numbers are imploding, Germany is “careening towards recession”, and the government shutdown in the United States is taking a huge toll on the U.S. economy.  In past years, the mainstream media usually tried to put a positive spin on any bad numbers, but now their mood seems completely different.  For example, in a Daily Mail article that was just posted we are told that “the world economy is headed for a recession in 2019 unless something happens”…

Global growth is slowing and the world economy is headed for a recession in 2019 unless something happens to give it renewed momentum.

The OECD’s (Organisation for Economic Co-operation and Development) leading indicator fell to just 99.3 points in November, its lowest since October 2012, and down from a peak of 100.5 at the end of 2017.

It appears that we are at a critical level on that OECD index, because whenever that number has fallen under 99.3 a recession has almost always followed…

In the last 50 years, whenever the index has fallen below 99.3, there has almost always been a recession in the United States (1970, 1974, 1980, 1981, 1990, 2001 and 2008).

The one exception was the weakening of the index in 1998, when the United States continued to grow, despite the weakening global economy in the aftermath of the Asian financial crisis.

Will we beat the odds this time?

I wouldn’t bet on it.

Meanwhile, Morgan Stanley’s chief equity strategist is warning of a potential recession and telling us that we should “embrace it”.  The following comes from CNN…

The S&P 500 will soon suffer a retest of the lows from Christmas Eve because of shrinking earnings estimates and mounting economic concerns, the investment bank warned in a Monday report titled “Don’t fear a potential recession; Embrace it.”

“Should the hard data deteriorate further, as we expect, we think the market will quickly return to pricing in a recession and rate cuts,” wrote Michael Wilson, Morgan Stanley’s chief US equity strategist.

When the “too big to fail” banks are warning that a recession is coming, you know that it is late in the game.

Also, a top economist at Moody’s Analytics just told Maryland’s Budget and Taxation Committee that they should be getting prepared for the coming recession…

An economist has warned Maryland Senators that a recession is coming and that they should begin to prepare for it. The economist said that the indicators point to the recession happening in mid-2020, perhaps sooner.

Dan White, director of government consulting and fiscal policy research for Moody’s Analytics, told members of the Senate’s Budget and Taxation Committee that there are financial indicators of an upcoming recession according to the Baltimore Sun.

And the latest housing numbers seem to confirm that a recession may be coming sooner rather than later.  In the month of December, U.S. home sales were down 11 percent…

The median US home price rose 1.2% to $289,800 in December, the slowest monthly pace since March 2012, when the housing market was just beginning to climb out of the hole left by the collapse. Meanwhile, sales dropped by 11%, the biggest drop for any one month since 2016, according to a report released by real estate company Redfin said. This follows a drop in the hottest markets, like San Jose, California, where prices dropped 7.3%.

As BBG explains, the housing market is softening after years of rapidly rising prices as the shortage in homes is beginning to wane. With interest rates on the rise, mortgages are becoming more expensive, which is cutting in to demand.

But just because a recession is coming does not mean that we should be afraid.

You may have noticed that I write about a lot of hard things on The Economic Collapse Blog and End Of The American Dream.  But my wife and I are not negative people at all.  We are not down, we are not depressed, and we are not on any pills.  We are excited about the future and we believe that our greatest days are still to come.

However, we are definitely realists.  We are greatly saddened by what is happening to this country, but we also know that it is not going to be avoided.  So we want to be in a position to make it through what is ahead, and we want to fulfill the purpose for why we were put on this planet.

Anxiety, fear and panic are for those that get their meaning in life from material possessions, that don’t understand what is happening, and that are going to totally freak out when everything falls apart.  For example, the following comes from an article by a member of the Council on Foreign Relations named Christian H. Cooper…

My most recent annual salary was over $700,000. I am a Truman National Security Fellow and a term member at the Council on Foreign Relations. My publisher has just released my latest book series on quantitative finance in worldwide distribution.

None of it feels like enough. I feel as though I am wired for a permanent state of fight or flight, waiting for the other shoe to drop, or the metaphorical week when I don’t eat. I’ve chosen not to have children, partly because—despite any success—I still don’t feel I have a safety net. I have a huge minimum checking account balance in mind before I would ever consider having children. If you knew me personally, you might get glimpses of stress, self-doubt, anxiety, and depression.

People like that are not going to be able to handle what is coming.

But if we understand the changes that are taking place and we have our priorities in order, we will be in a much better position to respond calmly to a world that is becoming more chaotic with each passing day.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

There will be ups and there will be downs.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

An Inside Look At The Social Decay That Is Eating Away At America Like An Aggressive Form Of Cancer

The character of a nation is a reflection of the character of millions of individual people, and one of the fastest ways to get a sense of the character of individual people is to visit their homes.  It is said that a picture is worth a thousand words, and if that is true then a home visit has got to be worth a million.  Sadly, there is a reason why so many Americans that make a living making service calls in other people’s homes absolutely hate their jobs.  Way too often they are confronted with the worst that America has to offer, and many of them end up psychologically scarred for life as a result.  For example, the following is from an article in which Lauren Hough described her time as a cable installer…

I’d walk in prepared for anything. There was sobbing, man or woman, didn’t matter. There were the verbal assaults. There were physical threats. To say they were just threats undermines what it feels like to be in someone else’s home, not knowing the territory, where that hallway leads, what’s behind that door, if they have a gun, if they’ll back you into a wall and scream at you. If they’ll stop there. If they’ll call in a complaint no matter what you do. Sure, we were allowed to leave if we felt threatened. We just weren’t always sure we could. In any case, even if we canceled, someone else would always be sent to the same house later. “Irate. Repeat call.” And we’d lose the points we needed to make our numbers.

America wasn’t always like this.

Once upon a time, Americans generally treated one another with kindness, dignity and respect.

But now social decay is spreading like wildfire, and this country is rapidly becoming unrecognizable.

Just recently, a congressional report discovered that one of the largest drug companies in the entire nation had shipped “more than 3 million prescription opioids” to a single pharmacy in West Virginia…

In just 10 months, the sixth-largest company in America shipped more than 3 million prescription opioids — nearly 10,000 pills a day on average — to a single pharmacy in a Southern West Virginia town with only 400 residents, according to a congressional report released Wednesday.

McKesson Corp. supplied “massive quantities” of the painkiller hydrocodone to the now-shuttered Sav-Rite Pharmacy in Kermit, even after an employee at the company’s Ohio drug warehouse flagged the suspect pill orders in 2007, the report found. That year, McKesson — ranked 6th in the Fortune 500 — reviewed its customers, including Sav-Rite, and reported to the Drug Enforcement Administration that the purchases were “reasonable,” according to the report.

Of course West Virginia is right at the heart of the horrific opioid crisis that is sweeping the nation.  But what amazes me is that nobody at McKesson Corp. saw anything wrong with pouring millions of highly addictive pills into a very small pharmacy in a town with only 400 residents.

Out on the west coast, drug addicts are shooting up and smoking crack right in front of the Ninth Circuit Court of Appeals…

Outside the Ninth Circuit Court of Appeals in downtown San Francisco, a woman urinates on the sidewalk and smokes a crack pipe.

Inside her purse are about a dozen used heroin needles. She shoots heroin up to 10 times per day, she says.

About 50 yards away, a man injects another woman in the neck with a needle. She puts her thumb in her mouth and blows on it to make her vein more visible. Her right arm is caked with dried blood.

The Ninth Circuit is the country’s largest federal appeals court, and President Trump recently nominated a radical left wing activist to fill a vacancy on it.  And right out in front of the court it literally looks like a third world cesspool.

You may be tempted to think that this is one of the worst neighborhoods in San Francisco, but the truth is that it is actually one of the best…

This San Francisco neighborhood is home to the headquarters of Uber, Twitter and Salesforce. But stroll around here, and you’re also likely to find used drug paraphernalia, trash, and human excrement on the sidewalks, and people lying in various states of consciousness.

During 2018, San Francisco citizens filed more than 20,000 complaints about human feces in the streets.  There are words to describe what San Francisco has become, but I am not able to print them in this space.

We like to think that we are an “example” to the rest of the world, but the truth is that they are all laughing at us.  And I had to laugh too when I recently came across this story…

A man has been arrested after he drove his pickup truck into a courthouse in Mississippi.

News outlets reported that the Gulfport Police Department said in a news release that 28-year-old Keith Cavalier told officers he intentionally crashed into the Harrison County Courthouse early Saturday because it was the best way to let them know his drug paraphernalia had been stolen.

What in the world is happening to us?

Let’s switch gears for a bit.  Instead of talking about drugs, we’ll talk about sex for a moment.

At one time, if a teacher had sex with a student it was a major national scandal.  But now it is happening so frequently that it is usually not considered to be “newsworthy” anymore.  In fact, during the most recent fiscal year the state of Texas alone “opened 429 cases into inappropriate student-educator relationships”…

During fiscal 2017-18, the TEA opened 429 cases into inappropriate student-educator relationships — an approximate 42 percent increase from the prior year, said Doug Phillips, director of educator investigations at TEA, during a Senate Education Committee meeting this week.

“I think we’re just getting a lot more of these reports that maybe would not have been reported in the past,” he said.

But just when you think that nothing could top Texas, Colorado comes along and says “hold my beer”.

After all, nothing says “classy” like a 1,000 person orgy…

A POLYAMOROUS events planner has revealed her quest to organize the world’s largest orgy – inviting 1,000 to the marathon sex party.

Pearl Derrier, 29, from Denver, Colorado, goes to orgies at least once a month as one person can’t fulfill her “every physical and emotional need”.

Her partners, boyfriend Dan Patrick, 35, and “homemaker” girlfriend Tomi Tailey, 30, are also happy for her to have casual liaisons with other people at orgies.

The fabric of our society is literally rotting away right in front of our eyes, but most Americans are still in denial about what is happening.

Just like all other major empires throughout human history, we are decaying from within, and we should be deeply alarmed at what we have become.

In his year in review article, Dave Barry made a great point about the current state of American culture…

What made this year so awful? We could list many factors, including natural disasters, man-made atrocities, the utter depravity of our national political discourse and the loss of Aretha Franklin. Instead we’ll cite one event that, while minor, epitomizes 2018: the debut of “Dr. Pimple Popper.”

This is a cable-TV reality show featuring high-definition slo-mo closeup videos of a California dermatologist performing seriously disgusting procedures on individuals with zits the size of mature cantaloupes. You might ask, “Who on Earth would voluntarily watch that?” The answer, in 2018, was: MILLIONS OF PEOPLE. That is the state of our culture. We can only imagine what new reality shows lie ahead. We would not rule out “Dr. Butt Wiper,” or “People Blow Their Noses Directly Onto The Camera Lens.”

Sadly, I have a feeling that a show called “Dr. Butt Wiper” would rapidly become one of the most popular television shows in America.

We truly are a nation in decline, and things are getting worse with each passing year.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The coast is clear?

Really?

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

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

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

Was the crisis over then?

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

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

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

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

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

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

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

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

So don’t get too excited yet.

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

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

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

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

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

Meanwhile, global economic activity continues to deteriorate…

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

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

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

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

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

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

The Psychological Bubble That Has Been Propping Up The U.S. Economy Is Starting To Implode

Optimism can be a very powerful thing.  For a long time Americans believed that things would get better, and that caused them to take action to make things better, and that actually resulted in things moving in a positive direction.  But now things have abruptly shifted.  In late 2018, an increasing number of Americans believe that an economic downturn is coming, and they are taking actions consistent with that belief.  As a result, they are actually helping to produce the result that they fear.  And without a doubt, any rational person should be able to see that signs that the U.S. economy is slowing down are all around us.  So it isn’t as if those that are preparing for the worst are being irrational.  It is just that when large numbers of people all start to move in the same direction, it has a very powerful effect.  We witnessed this in the stock market in recent years when people just kept buying stocks even though they were massively overvalued.  The collective belief that there was money to be made in the stock market became a self-fulfilling prophecy which pushed stock prices up to absurd heights.  But now that process is beginning to reverse as well, and ultimately the unwinding of that bubble will be quite painful.

Over the past couple of years the dominant economic narrative that the mainstream media was pushing was that the U.S. economy was “booming”, and this encouraged businesses to expand and consumers to go out and spend money.

But now the dominant economic narrative has changed, and businesses are starting to take actions that are consistent with the new narrative.  In the retail industry, if executives truly believed we would see an economic boom in the years ahead they would be expanding, but instead stores are being closed at a record pace…

Mall and shopping center owners across the U.S. are preparing to be hit by more store closures, following a brutal year that included department store chains like Bon-Ton and Sears going bankrupt, Toys R Us liquidating and even Walmart shutting dozens of its club stores.

Now, a slew of specialty retailers like Gap and L Brands are getting serious about downsizing, which will leave more vacant storefronts within malls until landlords are able to replace tenants.

As a result of these store closings, large numbers of workers will be without jobs, vendors will not be receiving orders and mall owners will be without tenants.

In other words, economic activity will slow down.

Another sector where there has been a major psychological shift is in the real estate industry.  Home prices have been falling all over the nation, and this includes markets that were once extremely hot such as San Francisco…

In San Francisco, the number of homes with a price cut in October nearly doubled, to 238 from 124 last October, according to data from Realtor.com.

That’s nothing compared to Santa Clara County, where the number of price cuts rose to 818 last month, more than six times last year’s number. Santa Clara County had been one of the nation’s hottest markets this year, and the Bay Area’s price appreciation leader until September.

“Clearly, there is a market shift,” said Rich Bennett, a Zephyr agent in San Francisco.

If homeowners believed that this dip was just temporary and that home prices would start surging again next year as the U.S. economy thrives, it would be quite foolish of them to slash their prices like this.

In some cases, home prices are being reduced by hundreds of thousands of dollars.  Why throw all of that money away if the market is going to bounce back shortly?

Over in the auto industry, there has also been a noticeable psychological shift.

If the U.S. economy was going to be doing extremely well in the years ahead, the major automakers should all be gearing up for record sales.

But instead, General Motors just shut a bunch of factories and laid off 14,000 workers, and Morgan Stanley analyst Adam Jonas is projecting that Ford will soon be laying off large numbers of employees…

“We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion,” Jonas wrote. “But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers.”

Ford’s 70,000 salaried employees have been told they face unspecified job losses by the middle of next year as the automaker works through an “organizational redesign” aimed at creating a white-collar workforce “designed for speed,” according to Karen Hampton, a spokeswoman.

“These actions will come largely outside of North America,” Hampton said of Ford’s restructuring. “All of this work is ongoing and publishing a job-reduction figure at this point would be pure speculation.”

Shifting gears, let’s talk about agriculture.

If farmers believed that the trade war was just temporary and that things would soon swing back in their favor, many of them would keep trying to hold on for as long as they possibly could.

But instead, farm bankruptcies are absolutely surging…

A total of 84 farms in the upper Midwest filed for bankruptcy between July 2017 and June 2018, according to the Minneapolis Star Tribune. That’s more than double the number of Chapter 12 filings during the same period in 2013 and 2014 in Wisconsin, Minnesota, North Dakota, South Dakota, and Montana, reported Vox.

Farms that produce corn, soybeans, milk, and beef were all suffering due to low global demand and low prices before the trade war, according to economists, but president Trump’s trade war is making the problem even worse by exacerbating the weaknesses in the American economy. China has retaliated against the tariffs by slapping billions of dollars worth of tariffs on United States agriculture exports in response to Trump’s tariffs on Chinese products. Other countries, including Canada, have also added duties to US agriculture products in response to Trump’s tariffs on all imported steel and aluminum.

Most Americans want to have hope, but when they look at our economic situation all they see is a very bleak future.

And in some parts of the nation, there still hasn’t been any sort of a “recovery” from the last recession.  For example, a recent Bloomberg article took a hard look at what conditions are currently like in eastern Kentucky…

Tiffany Hensley’s drive home takes her through some picturesque scenery, and an ugly economy.

“The first thing you see when you get down here is beauty,” says Hensley, midway through her shift at a diner in the rolling hills of eastern Kentucky. “But then you get to looking around. It’s real rough.’’

Of course eastern Kentucky is far from alone.  Yes, coastal cities such as San Francisco and New York have prospered in recent years, but rural communities all across America have been deeply suffering.

And now economic conditions are deteriorating once again nationally, and things are about to get a whole lot tougher for everyone.

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.

+ More