Will we someday look back on October 2018 as the turning point? As the month began, people were generally feeling pretty good about things, and the U.S. stock market quickly set a new all-time high. But from that point on, the wheels fell off for Wall Street. We just witnessed the worst October for U.S. stocks since the financial crisis of 2008, and at this point more than 8 trillion dollars of global wealth has been completely wiped out. But it isn’t just the stock market that is being shaken. The horrific violence in Pittsburgh is just the latest in a string of events that have rattled the entire nation. Sometimes I feel like I am literally watching the fabric of our society come apart right in front of my eyes. It is almost as if there is a tangible presence of evil in the air, and it seems to be getting stronger over time. For quite a while I have been warning that levels of anger and frustration are rising to unprecedented levels, and all of that anger and frustration is leading people to do things that are absolutely unthinkable. And if people are this crazed now, how bad are things going to get once the economy really starts unraveling?
Let there be no doubt – if U.S. stocks crash really hard, it will cause a massive credit crunch, and that would absolutely strangle economic activity.
Yes, October was bad, but we can recover from what happened in October.
But if November and December are equally as bad or worse, we could have a nightmarish crisis on our hands very rapidly. And many experts believe that this market is ultimately going to decline much, much further.
For example, just consider what Wolf Richter is saying…
So it boils down to this: Some stocks have gotten crushed, but the market overall has barely been dented – though the fundamentals are rotten, shares are still ludicrously overpriced, enthusiasm is still exuberant except on bad days, and blind faith in annually rising stock prices still reigns. And the fact that stocks like Tesla [TSLA] or Netflix continue to levitate beyond all reality shows that this downturn has a long way, and years, to go.
And Chris Martenson expressed similar sentiments in his most recent article…
The recent market weakness seen over the past two weeks is nothing compared to what’s in store. As we’ve been carefully chronicling, bubbles burst from ‘the outside in’, starting at the weaker places at the periphery before progressing to the center.Emerging market equities are now down -26% from their January highs and -18% year-to-date. China’s stock market is down -32%, even with substantial intervention by the government to prop things up.The periphery has been weakening all year, and the contagion has now spead worldwide.
But when I talk about a “perfect storm”, I am not just talking about money.
For years, I have been warning that the thin veneer of civilization that we all take for granted on a daily basis is rapidly disappearing, and the events of this past week made this exceedingly clear…
Wednesday, a white man with a history of violence shot and killed two African-Americans, seemingly at random, at a Kentucky Kroger store following a failed attempt to barge into a black church.After mail bombs were being sent to people who’d been criticized by the President, a suspect was arrested Friday — a man who had railed against Democrats and minorities with hate-filled messages online.And Saturday morning, a man shouting anti-Semitic slurs opened fire at a Pittsburgh synagogue, killing 11 people attending Jewish services.
I will not ever be able to understand the kind of hate that we have been witnessing. I have always preached against racism, and I even included an entire chapter against racism in my latest book. There is absolutely no room for racism in America, but it just seems to keep growing.
We are facing overwhelming challenges as a society, and if we do not learn how to love one another there is no way that we are going to make it.
This is a time of great governmental shaking as well. On November 6th, some candidates will win and some candidates will lose, but the hatred being expressed on both sides will not go away. Sadly, the truth is that there are corrupt politicians all around us, and the American people have been rapidly losing faith in our system. If the corruption is not cleaned up and some way is found to restore faith in our system of government, it is only a matter of time before it collapses.
On top of everything else, we also live at a time of impending global conflict. A major regional war could erupt in the Middle East at any time, and Russia and China are openly warning that they are “preparing for war” with the United States. World War 3 is a lot closer than people realize, and the fact that our relationships with both Russia and China are rapidly going downhill is a major concern.
And of course the planet itself is increasingly becoming unstable. Earthquakes and volcanic eruptions appear to be growing in both size and intensity, and massive storms have been hammering communities all over the globe in recent months.
The giant rock that we all live on is rapidly changing, and many believe that the Earth changes that we are currently witnessing are going to escalate dramatically in the years ahead.
Many ordinary Americans seem unconcerned about everything that is going on, and perhaps that is because they are unaware of the bigger picture. But the elite are definitely freaking out. In fact, the New York Times just published an article about how demand for private security services is higher than ever…
At Pinkerton, a private security and detective agency founded in 1850, requests for executive security have increased 20 to 30 percent annually over the last five years, said its vice chairman, Tim Williams. And people are looking for safeguards in all areas of their lives that pose risks, experts say, including information technology and social media.“People are scared right now,” Mr. Williams said.
And some among the elite even have plans to hop on private jets and leave the country completely when everything starts hitting the fan. For much more on this, please see my previous article entitled “Bankers And Tech Executives Know The Collapse Of Society Is Coming And Are Feverishly Prepping For It”.
We are entering a time that will cause many to have great fear, but now is not a time to be scared.
It is when times are the darkest that light is needed the most, and I believe that this coming “perfect storm” will be an absolutely thrilling time to be alive.
Yes, life is going to become a lot more uncomfortable for all of us, but it is during times of great challenge that we find out what is truly inside of us. This will be a time when some will show that they are great villains, but many will also emerge as great heroes.
We have reached a critical juncture in human history, and everything is about to change. I would encourage you to be a light in the darkness, because that is going to be greatly needed in the days ahead.
Fonte: qui
About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.
The Last Days Warrior Summit is the premier online event of 2018 for Christians, Conservatives and Patriots. It is a premium members-only international event that will empower and equip you with the knowledge and tools that you need as global events begin to escalate dramatically. The speaker list includes Michael Snyder, Mike Adams, Dave Daubenmire, Ray Gano, Dr. Daniel Daves, Gary Kah, Justus Knight, Doug Krieger, Lyn Leahz, Laura Maxwell and many more. Full summit access will begin on October 25th, and if you would like to register for this unprecedented event you can do so right here.
Equity Market Selloff Resembles Liquidity Squeeze of 2000
By Joseph Carson, Former Director of Global Economic Research, Alliance Bernstein.
The abrupt and sharp decline in equity prices in recent weeks has been largely pinned on the Federal Reserve as policymakers continue to move forward with their plan to raise official rates. Yet, the sell-off in the equity market is much more complex and in some ways resembles the early stages of the liquidity squeeze and the high equity valuations of 2000. Here’s why.
First, according to my estimates, the market valuation of household holdings of real and financial assets topped 6.1 times the level of nominal GDP at the end of Q3 2018, exceeding the peak valuations that occurred during the end of tech-equity bubble (5.1) and the housing-bubble (5.8). History shows that asset markets are most vulnerable when expectations of business profits and market returns outrun the economy’s fundamentals for a long period. In other words, the markets have a lot of good news priced in and need a constant of flow of even better news and more liquidity to continue to run hot.
Second, the liquidity backdrop is deteriorating. My proprietary liquidity index, which was developed years ago by the Department of Commerce and is based on the growth in real broad money, the change in business and consumer credit growth and new flows into liquid assets, has slowed dramatically over the course of the past year. The slowdown in liquidity growth has been underway for almost a year and resembles that of 2000. That by itself is a major warning sign for the financial markets, especially for the high-priced growth stocks.
Third, the US economy is absorbing more and more of the liquidity flows to finance the sharp acceleration in nominal GDP growth. Through the year ending in the third quarter of 2018 nominal GDP growth is estimated to have increased 5.5%, which is nearly 200 basis points faster than the average of the Nominal GDP growth rate of the past 8 years of the expansion and the fastest growth rate since early 2006. A large part of the acceleration in nominal GDP growth is directly linked to the changes in fiscal policy as Congress raised defense spending and discretionary domestic spending by over $300 billion for the next two fiscal years and also cut business and individuals taxes.
The bottom line is that the wide swing in equity prices is driven by confluence of factors and the revaluation process has just begun. The most important factor is the concomitant decline and shift in liquidity flows. To be sure, the collision between monetary policy draining liquidity and fiscal policy transferring more liquidity to the real economy results in a double whammy for the financial markets.
While some of these characteristics were also present in the tech-equity sell-off of 2000 what makes the current environment different and more risky is that asset valuations are at higher highs and stance of monetary policy is far from being even neutral. Indeed, today the real federal funds rate is still close to zero, and in 2000 it was around 400 basis points. As policymakers continue to lift official rates it's hard to see how that process of interest rate normalization does not lead to an additional squeeze on liquidity resulting in continued high volatility in financial markets, downward pressure on the market’s multiple and financial assets in general.
Stock Market Plunges Again – Global Stocks Down 5 Weeks In A Row – 8 Trillion Dollars In Wealth Wiped Out
It’s not over. The worst October stock market crash since 2008 got even worse on Friday. The Dow was down another 296 points, the S&P 500 briefly dipped into correction territory, and it was another bloodbath for tech stocks. On Wednesday, I warned that there would be a bounce, and we saw that happen on Thursday. But the bounce didn’t extend into Friday. Instead, we witnessed another wave of panic selling, and that has many investors extremely concerned about what will happen next week. Overall, global stocks have now fallen for five weeks in a row, and during that time more than 8 trillion dollars in global wealth has been wiped out. That is the fastest plunge in global stock market wealth since the collapse of Lehman Brothers, and it is yet another confirmation that a major turning point has arrived.
The wild swings up and down that we witnessed this week are very reminiscent of what we saw in 2008.
Markets just don’t go down in a straight line. In fact, some of the best days in all of Wall Street history happened right in the middle of the last financial crisis.
When markets are very volatile, the overall trend tends to be down. So what investors should be hoping for are extremely boring days on Wall Street when not much happens. That has been the usual state of affairs for much of the past decade, but now volatility has returned with a vengeance. The following is how CNBC summarized the carnage that we witnessed on Friday…
The Dow Jones Industrial Average closed 296.24 points lower at 24,688.31 after dropping 539 points at its lows of the day. The Nasdaq Composite dropped 2.1 percent to 7,167.21. At its lows, the tech-heavy Nasdaq had fallen more than 3 percent.The S&P 500 fell 1.7 percent to 2,658.69 and briefly entered into correction territory, trading more than 10 percent below its record high reached in September. The average stock market correction, since WWII, results in a 13 percent drop and lasts for four months if it does not turn into a full-fledged bear market.Larry Benedict, CEO of The Opportunistic Trader, said traders “don’t want to be long heading into the weekend.” He added, “S&P now down on the year and people are more afraid to be long today than they were when market was 10 percent higher.”
And when you step back and take a longer-term view of things, the devastation is breathtaking. The following facts come from Zero Hedge…
- Dow down 9% from record high (down 4 of last 5 weeks)
- S&P down 10.1% from record high (down 4 of last 5 weeks)
- Nasdaq down 13% from record high (down 4 weeks in a row)
- Dow Transports down 15.2% from record high (down 6 weeks in a row)
- Small Caps down 15.8% from record high (down 6 weeks in a row)
More importantly, global systemically important bank stocks have now fallen for 5 weeks in a row, and they have now plunged more than 30 percent from the peak.
In other words, the “too big to fail banks” around the world have already seen almost a third of their value wiped out.
There are quite a few global candidates that could potentially become “the next Lehman Brothers”, and once one “too big to fail bank” goes down, it could escalate this new financial crisis very rapidly.
But for most ordinary Americans, the main concern is about keeping their own money safe. Thanks to low returns almost everywhere else, more retirement money is in the stock market than ever before, and many Americans are very anxious about what a stock market crash would mean for their savings…
Nearly 40 percent of Americans said they were “anxious” about stock market volatility, according to Allianz Life’s 2018 Market Perceptions study, mainly because they worried they would not be able to protect their retirement savings.
In the end, a lot of people are going to get completely wiped out.
Hopefully you will not be one of them.
Of course the mainstream media continues to insist that everything is going to be just fine. In fact, CNN is telling people that now is “a good time for investors to double down on their investments”…
Experts say big sell-offs are often a good time for investors to double down on their investments. One recommended looking for companies that are expected to post healthy gains in sales and earnings. A strong balance sheet and a steadily growing dividend don’t hurt either.“With earnings season in full force, this is when stock pickers can add a lot of value,” said Ernesto Ramos, managing director of active equities with BMO Global Asset Management. “There really was no good reason for the market to be down as much as it was Wednesday.”
That is about the exact opposite from the advice that they should be giving, but unfortunately this is the narrative that we get from the corporate media before every major crisis.
October has historically been the most volatile month for stocks, and without a doubt this has been a wild month. Of course the midterm elections are coming up early next month, and those results could potentially spook investors. But once we get past that, hopefully the markets will start to settle down.
But if things continue to unfold as they did in 2008, this crisis could continue to escalate during the months ahead, and that would especially be true if some sort of “trigger event” sent a major surge of panic through the marketplace.
At this point, investors are extremely jumpy. For example, even though Amazon reported very good earnings this week, the stock crashed on Friday because revenue growth was slightly below expectations.
Any piece of bad news could send the markets tumbling right now, and if a major disaster were to happen we could be talking about a total collapse.
About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.
The Last Days Warrior Summit is the premier online event of 2018 for Christians, Conservatives and Patriots. It is a premium members-only international event that will empower and equip you with the knowledge and tools that you need as global events begin to escalate dramatically. The speaker list includes Michael Snyder, Mike Adams, Dave Daubenmire, Ray Gano, Dr. Daniel Daves, Gary Kah, Justus Knight, Doug Krieger, Lyn Leahz, Laura Maxwell and many more. Full summit access will begin on October 25th, and if you would like to register for this unprecedented event you can do so right here.
Fonte: qui
THE US DOLLAR IS DONE: China & Saudi Arabia Will Trade Oil In Yuan
KSA has been trading their oil to China for dollars for decades. China’s looking to change that, and the rest of the world will follow suit. Here’s more…
Josh Sigurdson talks with author and economic analyst John Sneisen about the currency swaps happening across the board as China convinces Saudi Arabia to trade oil in Yuan.
For years, Saudi Arabia has traded with China in US Dollars, the world reserve currency, frustrating China. Well now, as the US dollar sees its inevitable precipice, China says they will compel Saudi Arabia to trade oil in Yuan! If this is done, most experts believe the rest of the oil market will move with them.
China has been attempting to establish itself as the world reserve currency for quite some time as power incrementally shifts. It’s a massive phenomenon that’s not likely to stop any time soon.
Saudi Arabia is the kingpin of OPEC and the IMF is looking to base its headquarters in China in the next few years if all works out as planned.
This isn’t to mention the fact that China is pushing its centrally planned digital currency system or cashless society as the state gets more technocratic by the day, pushing social credit scores and examining every square foot with facial recognition technology.
Individuals must decentralize and find a way out of this dependent system or being forced into it with little recourse. Self sustainability and independence is key!
Fonte: qui
