Welcome To The New Normal: The Dow Crashes Another 390 Points And Wal-Mart Closes 269 Stores - Michael Snyder THE ECONOMIC COLLAPSE BLOG

Welcome To The New Normal: The Dow Crashes Another 390 Points And Wal-Mart Closes 269 Stores

Posted: 15 Jan 2016 03:17 PM PST  Michael Snyder  THE ECONOMIC COLLAPSE BLOG

Did you know that 15 trillion dollars of global stock market wealth has been wiped out since last June?  The worldwide financial crisis that began in the middle of last year is starting to spin wildly out of control. 

On Friday, Jan. 15, 2016, the Dow plunged another 390 points, and it is now down a total of 1,437 points since the beginning of this calendar year.  Never before in U.S. history have stocks ever started a year this badly. 

The same thing can be said in Europe, where stocks have now officially entered bear market territory.  As I discussed yesterday, the economic slowdown and financial unraveling that we are witnessing are truly global in scope.  Banks are failing all over the continent, and I expect major European banks to start making some huge headlines not too long from now.  And of course let us not forget about China. 

On Friday the Shanghai Composite declined another 3.6 percent, and overall it is now down more than 20 percent from its December high.  Much of this chaos has been driven by the continuing crash of the price of oil.  As I write this article, it has dipped below 30 dollars a barrel, and many of the big banks are projecting that it still has much farther to fall.

The other night, Barack Obama got up in front of the American people and proclaimed that anyone that was saying that the economy was not recovering was peddling fiction.  Well, if the U.S. economy is doing so great, then why in the world has Wal-Mart decided to shut down 269 stores?…

Walmart (WMT) will close 269 stores around the world in a strategic move to focus more on its supercenters and e-commerce business, the company said Friday.

The closures include 154 U.S. locations, encompassing Walmart’s entire fleet of 102 ‘Express’ format stores, its smallest stores that have been in pilot testing since 2011. Some supercenters, Sam’s Club locations and Neighborhood Markets will also close, plus 115 stores in Latin American markets. The closures were decided based on financial performance and how well the locations fit with Walmart’s broader strategy, says Greg Hitt, a company spokesman.

We have grown accustomed to other major retailers shutting down stores, but this is Wal-Mart.

Wal-Mart doesn’t retreat.  For decades, Wal-Mart has been on a relentless march forward.  They have been an unstoppable juggernaut that has expanded extremely aggressively and that has ruthlessly crushed the competition.

I was absolutely stunned when I saw that they were going to close down 269 stores.  If you want to know if your local store is in danger, you can view the full list right here.

Overall, 10,000 Wal-Mart employees will be affected.  I could understand closing down a few underperforming stores, but if the U.S. economy truly is in great shape then it wouldn’t make any sense at all to shut down hundreds of stores.

What in the name of Sam Walton is going on out there?

The truth, of course, is that the U.S. economy is in great danger.  We have now entered the next great crisis, but most communities around the country never even recovered from the last one.  In fact, the Wall Street Journal is reporting that a whopping 93 percent of all counties in the United States “have failed to fully recover” from the last recession…

More than six years after the economic expansion began, 93% of counties in the U.S. have failed to fully recover from the blow they suffered during the recession.
Nationwide, 214 counties, or 7% of 3,069, had recovered last year to prerecession levels on four indicators: total employment, the unemployment rate, size of the economy and home values, a study from the National Association of Counties released Tuesday found.

The next few weeks are going to be very interesting to watch.  The economic fundamentals continue to deteriorate, and the financial markets are finally starting to catch up with economic reality.

As the collapse on Wall Street accelerates, we are going to increasingly see panic selling and forced liquidations.  In the past, it was mostly humans that had their hands on the controls during market crashes, but today the machines are making more of the decisions than ever before.  The following comes from CNBC…

The new market age is decidedly different: Rather than that seething cacophony, aggressive corrections like the current ones are directed by a faceless metronome of computer-generated orders, triggering irresistible momentum and trillions in losses.

Amid it all, market veterans are left to ponder when the script will flip and market direction will turn not by newfound optimism among traders in the pits, but rather by algorithms that generate “buy” rather than “sell” signals.
“It feels like sell program after sell program,” said Michael Cohn, chief market strategist at Atlantis Asset Management, a boutique firm in New York. “It seems to happen first thing in the morning, and then however the market transpires during the day is how they close it. If it looks like it’s coming back, they’ll take it at the end. If if looks like it’s heading lower, they’ll slam it at the end of the day.”

Earlier today, an article authored by Michael Pento entitled “A recession worse than 2008 is coming” was posted on CNBC.  Here is a short excerpt…

But a recession has occurred in the U.S. about every five years, on average, since the end of WWII; and it has been seven years since the last one — we are overdue.

Most importantly, the average market drop during the peak to trough of the last 6 recessions has been 37 percent. That would take the S&P 500 down to 1,300; if this next recession were to be just of the average variety.
But this one will be worse.

If stocks do drop a total of 37 percent, that would just bring them back to levels that would be considered “normal” or “average” by historical standards.  There is certainly the possibility that they could fall much farther than that.

And of course the markets are so incredibly fragile at this point that any sort of a “trigger event” could cause a collapse of epic proportions.

All it is going to take is a major disaster or emergency of some sort.

Do you have a feeling that something really bad is about to happen?  This is something that I have been hearing from people that I respect, and I would like to know if it is a phenomenon that is more widespread.  If you have been feeling something like this, please feel free to share it with us by posting a comment below…

Stock Markets All Over The World Crash As We Begin 2016 - Michael Snyder THE ECONOMIC COLLAPSE

Stock Markets All Over The World Crash As We Begin 2016

Posted: 04 Jan 2016  

Michael Snyder  

THE ECONOMIC COLLAPSE blog

The first trading day of 2016 was full of chaos and panic.  It started in Asia where the Nikkei was down 582 points, Hong Kong was down 587 points, and Chinese markets experienced an emergency shutdown after the CSI 300 tumbled 7 percent.

When European markets opened, the nightmare continued.  The DAX was down 459 points, and European stocks overall had their worst start to a year ever.  In the U.S., it looked like we were on course for a truly historic day as well.  The Dow Jones Industrial Average was down 467 points at one stage, but some very mysterious late day buying activity helped trim the loss to just 276 points at the close of the market.

The sudden market turmoil caught many by surprise, but it shouldn’t have.  The truth is that a whole host of leading indicators have been telling us that this is exactly what should be happening.  The global financial crisis that began in 2015 is now accelerating, and my regular readers already know precisely what is coming next.

The financial turmoil of the last 24 hours is making headlines all over the globe.  It began last night in China.  Very bad manufacturing data and another troubling devaluation of the yuan sent Chinese stocks tumbling to a degree that we have not seen since last August. 

In fact, the carnage would have probably been far, far worse if not for a new “circuit breaker” that China recently implemented.  Once the CSI 300 was down 7 percent, trading was completely shut down for the rest of the day.  The following comes from USA Today…

Under a new market “circuit breaker” rule in China established last year, which is designed to slow down markets and halt panic in the event of moves of 5% or more, the CSI 300, a large-company stock index in mainland China was halted for 15 minutes in mid-afternoon trading after diving more than 5%. But when shares headed lower once again just minutes after the initial trading halt, and losses for the day swelled to more than 7%, the new circuit breaker rules kicked in, prompting a shutdown of mainland China’s stock market for the day, according to Bloomberg.

After the first 15 minute halt, panic set in as Chinese traders rushed to get out of their trades before the 7 percent circuit breaker kicked in.  This resulted in an absolutely chaotic seven minutes as investors made a mad dash for the exits…

The sell orders piled up fast on Monday at Shenwan Hongyuan Group, China’s fifth-biggest brokerage by market value.
China’s CSI 300 Index had just tumbled 5 percent, triggering a 15-minute trading halt, and stock investors were scrambling to exit before getting locked in by a full-day suspension set to take effect at 7 percent. When the first halt was lifted, the market reaction was swift: it took just seven minutes for losses to reach the limit as volumes surged to their highs of the day.
“Investors rushed to the door during the level-one stage of the circuit breaker as they fretted the market would go down further,” said William Wong, the head of sales trading at Shenwan Hongyuan in Hong Kong.

The financial carnage continued once the European markets opened.  Markets were red all across the continent, and things were particularly bad in Germany.  The DAX was down 459 points, and it is rapidly approaching the psychologically-important 10,000 barrier.  Overall, it was the worst start to a year that the European markets have ever experienced.

When U.S. markets opened, unexpectedly bad U.S. manufacturing data seemed to add fuel to the fire.  Monday morning we learned that our manufacturing sector is contracting at a pace that we haven’t seen since the last recession…

America’s manufacturing sector shrank for the second straight month in December. The industry’s key index — ISM — hit 48.2% in December, the lowest mark since June 2009. Anything below 50% is a contraction and a month ago it hit 48.6%.
The index has fallen for six straight months.
“The trend is certainly heading in a direction that would ring alarm bells,” says Sam Bullard, senior economist at Wells Fargo.

This is yet another sign that tells us that the U.S. economy has already entered the next recession. And what happens to the markets during a recession?

They go down.

In addition to the bad data that we got from the U.S. and China, there was another number that was also extremely troubling.

South Korean exports have traditionally been considered a key leading indicator for the entire global economy, and on Mondaywe learned that they were down a whopping 13.8 percent in December from a year earlier…

One of the more reliable indicators of the global economy continues to confirm fears of a worldwide slowdown.
South Korean exports — also referred to as the world’s economic canary in the coal mine — fell 13.8% in December from a year earlier.
This was a deterioration from the 4.8% decline in November, and it was much worse than the 11.7% decline expected by economists.

The “nothing is happening” crowd may not be willing to admit it yet, but the truth is that a major global economic slowdown is already happening.

And what happened to global markets today is perfectly consistent with the longer term patterns that have been emerging over the past six months or so.

In the weeks and months to come, things are going to get even worse.  There will always be days when the markets are up, but don’t let those days fool you into thinking that the crisis is over.  In the western world we are so accustomed to 48 hour news cycles, and many of us seem to be incapable of focusing on trends that develop over longer periods of time.

If I was going to put together a scenario for a global financial crisis for a textbook, what we have seen over the past six months or so would be perfect.  Things are playing out exactly how they should be, and that means big trouble for the rest of 2016.

But that doesn’t mean that we have to live in fear.  In fact, I just wrote an entire article entitled “2016: A Year For Living With No Fear“.  It is when times are at their worst that our character is put to the test.  Some will respond to what happens in 2016 with courage and strength, and others will respond with fear and panic.

As things start falling apart all around us this year, how will you respond?

What Really Happened With 2015 Finances, And What Is Coming In 2016? - Michael Snyder THE ECONOMIC COLLAPSE blog

What Really Happened In 2015, 

And What Is Coming In 2016…

Posted: 03 Jan 2016   Michael Snyder   THE ECONOMIC COLLAPSE blog

A lot of people were expecting some really big things to happen in 2015, and most of them did not happen.  But what did happen?  It is my contention that a global financial crisis began during the second half of 2015, and it threatens to greatly accelerate as we enter 2016.  During the last six months of the year that just ended, financial markets all over the planet crashed, trillions of dollars of global wealth was wiped out, and some of the largest economies in the world plunged into recession.

Here in the United States, 2015 was the worst year for stocks since 2008, nearly 70 percent of all investors lost money last year, and it is being projected that the final numbers will show that close to 1,000 hedge funds permanently shut down within the last 12 months.  This is what the early stages of a financial crisis look like, and the worst is yet to come.

If we were entering another 2008-style crisis, we would expect to see junk bonds crashing.  When financial trouble starts, it usually doesn’t start with the biggest and strongest companies.  Instead, it usually starts percolating on the periphery.  And right now bonds of firms that are considered to be on the risky side of things are rapidly losing value.

In the chart below, you can see that a high yield bond ETF that I track very closely known as JNK started crashing in the middle of 2008.  This crash began to unfold before the horrific crash of stocks in the fall.  Investors that saw junk bonds crashing in advance and pulled their money out of stocks in time saved an enormous amount of money.

Now, for the very first time since the last financial crisis, we are seeing junk bonds crash again.  In December, there was finally a sustained crash through the psychologically-important 35.00 level, and at this point JNK is sitting a bit below 34.00.

This stunning decline is a giant red flag that tells us that stocks will soon follow in the exact same direction…




In 2015, Third Avenue Management shocked Wall Street when they froze withdrawals from a 788 million dollar mutual fund that was highly focused on junk bonds.  Investors that couldn’t get their money out began to panic, and other mutual funds now find themselves under siege.  If junk bonds continue to crash, this will just be the beginning of the carnage.

One of the big reasons why junk bonds are crashing is because of the crash in the price of oil.  Over the past 18 months, the price of oil has plummeted from $108 a barrel to $37 a barrel.

There has only been one other time in all of history when we have ever seen an oil price crash of this magnitude. That was in 2008 – just before the greatest financial crisis since the Great Depression…



Why can’t people see the parallels?

Crashes are happening all around us, and yet so many of the “experts” seem completely blind to what is going on.
Unlike 2008, the price of oil is not expected to rapidly rebound any time soon.  The following comes from CNN…

Crude prices dropped a whopping 35% last year and are hovering around $37 a barrel. That’s a level not seen since the global financial crisis.
It won’t get better any time soon. Most oil experts believe prices will bounce back in late 2016, but they expect more pain first.
Goldman Sachs forecasts that oil will average about $38 a barrel in February, even lower than for most of 2015.

Meanwhile, the prices of industrial commodities have been crashing as well.  For example, the chart below shows that the price of copper started crashing hard just before the great financial crisis of 2008, and the exact same thing is happening once again right before our very eyes…



Things are unfolding just as we would expect they would during the initial stages of a new global financial crisis. And we have already seen a full blown stock market crash in many of the largest economies around the planet.  For instance, just look at what has been happening in Brazil.

The Brazilians have the 7th largest economy in the world, and Goldman Sachs says that they have plunged into an “outright depression“.  In the chart below, you can see the sharp downturn that took place in August, and Brazilian stocks actually kept falling all the way through the end of 2015…



We see a similar thing when we look at our neighbor to the north.  Canada has the 11th largest economy on the entire planet, and I recently wrote a lengthy article about the economic difficulties that the Canadians are now facing.  2015 was a very bad year for Canadian stocks as well, and they just kept falling steadily all the way through December…



Of course nobody can forget what happened to China.  The Chinese have the second largest economy on the globe, and news about their economic slowdown in making headlines almost every single day now.

Last summer, Chinese stocks crashed about 40 percent, and they did manage to bounce back just a bit since then. But they are still down about 30 percent from the peak of the market…



And there is plenty more that we could talk about.  European stocks just had their second worst December ever, and Japanese stocks are down about 500 points in early trading as I write this article.

Here in the United States, the Dow Jones Industrial Average, Dow Transports, the S&P 500 and the Russell 2000 all had their worst years since 2008.  As I mentionedthe other day, 674 hedge funds shut down during the first nine months of 2015, and it is being projected that the final total for the year will be up around 1000.

But we aren’t hearing much about this financial carnage on the news yet, are we?

Many people that I talk to still think that “nothing is happening”, but don’t you dare say that to Warren Buffett.
He lost 7.8 billion dollars in 2015.

How would you feel if you lost 7.8 billion dollars in a single year?

The truth, of course, is that signs of financial chaos are erupting all around us.  Corporate profits are plunging, the bond distress ratio just hit the highest level that we have seen since the last financial crisis, and corporate debt defaults have risen to the highest level that we have seen in about seven years.

If you run a business, you may have noticed that fewer people are coming in and it seems like those that do come in have less money to spend.  Economic activity is slowing down, and inventories are piling up.  In fact, wholesale inventories have now risen to the highest level that we have seen since the last recession…



Do you notice a theme?

So many things that have not happened in six or seven years are now happening again.

History may not repeat, but it sure does rhyme, and it astounds me that more people cannot see that 2015/2016 is looking eerily similar to a replay of 2008/2009.

Another number that I watch closely is the velocity of money.  When an economy is running well, money tends to circulate efficiently through the system.  But when an economy gets into trouble, people get scared and start holding on to their money.  As you can see from the chart below, the velocity of money declined during every single recession since 1960.  This is precisely what one would expect.

And of course during the recession that started in 2008, the velocity of money plunged precipitously.  But then a funny thing happened when that recession supposedly “ended”.  The velocity of money just kept going down, and now it has fallen to an all-time record low…



A big reason for this is the ongoing decline of the middle class.  In 2015, we learned that middle class Americans now make up a minority of the population for the first time ever.

But if you go back to 1971, 61 percent of all Americans lived in middle class households.

Meanwhile, the share of the income pie that the middle class takes home has also continued to shrink.

In 1970, the middle class brought home approximately 62 percent of all income. Today, that number has fallen to just 43 percent.

As the middle class is systematically destroyed, the number of Americans living in poverty just continues to grow. And those that often suffer the most are the children.  It may be hard for you to believe, but the number of homeless children in the U.S. has increased by 60 percent over the past six years.

60 percent!

How in the world can anyone dare to claim that “things are getting better”?

Anyone that says that should be ashamed of themselves.

We are in the midst of a long-term economic collapse that is now accelerating once again.

Anyone that tries to tell you that “things are getting better” and that 2016 is going to be a better year than 2015 is simply not being honest with you.

A new global financial crisis erupted during the last six months of 2015, and this new financial crisis is going to intensify throughout the early months of 2016.  Financial institutions will begin falling like dominoes, and this will result in a great credit crunch around the world.  Businesses will fail, unemployment will skyrocket and millions will suddenly be faced with economic despair.

By the time it is all said and done, this new financial crisis will be even worse than what we experienced back in 2008, and the suffering that we will see around the world will be off the charts.

So does that mean that I am down about this year?

Not at all.  In fact, my wife and I are greatly looking forward to 2016.  In the midst of all the chaos and darkness, there will be great opportunities to do good and to make a difference.

What a great shaking comes, people go looking for answers.  And I think that this will be a year when millions of people start to understand that our politicians and the mainstream media are not telling them the truth.

Yes, great challenges are coming.  But now is not a time to dig a hole and try to hide from the world.  Instead, this will be a time for those that have prepared in advance to love others, help others and show them the truth.

What about you?

Are you ready to be a light during the dark times that are coming?

58 Facts About The U.S. Economy From 2015 That Are Almost Too Crazy To Believe - Michael Synder THE ECONOMIC COLLAPSE BLOG

Michael Synder  THE ECONOMIC COLLAPSE BLOG
Dec. 23, 2015

58 Facts About The U.S. Economy From 2015 That Are Almost Too Crazy To Believe

The world didn’t completely fall apart in 2015, but it is undeniable that an immense amount of damage was done to the U.S. economy.  This year the middle class continued to deteriorate, more Americans than ever found themselves living in poverty, and the debt bubble that we are living in expanded to absolutely ridiculous proportions.

Toward the end of the year, a new global financial crisis erupted, and it threatens to completely spiral out of control as we enter 2016.  Over the past six months, I have been repeatedly stressing to my readers that so many of the exact same patterns that immediately preceded the financial crisis of 2008 are happening once again, and trillions of dollars of stock market wealth has already been wiped out globally.

Some of the largest economies on the entire planet such as Brazil and Canada have already plunged into deep recessions, and just about every leading indicator that you can think of is screaming that the U.S. is heading into one.  So don’t be fooled by all the happy talk coming from Barack Obama and the mainstream media.  When you look at the cold, hard numbers, they tell a completely different story.  The following are 58 facts about the U.S. economy from 2015 that are almost too crazy to believe…

#1 These days, most Americans are living paycheck to paycheck.  At this point 62 percent of all Americans have less than 1,000 dollars in their savings accounts, and 21 percent of all Americans do not have a savings account at all.

#2 The lack of saving is especially dramatic when you look at Americans under the age of 55.  Incredibly, fewer than 10 percent of all Millennials and only about 16 percent of those that belong to Generation X have 10,000 dollars or more saved up.

#3 It has been estimated that 43 percent of all American households spend more money than they make each month.

#4 For the first time ever, middle class Americans now make up a minority of the population. But back in 1971, 61 percent of all Americans lived in middle class households.

#5 According to the Pew Research Center, the median income of middle class households declined by 4 percent from 2000 to 2014.

#6 The Pew Research Center has also found that median wealth for middle class households dropped by an astounding 28 percent between 2001 and 2013.

#7 In 1970, the middle class took home approximately 62 percent of all income. Today, that number has plummeted to just 43 percent.

#8 There are still 900,000 fewer middle class jobs in America than there were when the last recession began, but our population has gotten significantly larger since that time.

#9 According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.

#10 For the poorest 20 percent of all Americans, median household wealth declined from negative 905 dollars in 2000 to negative 6,029 dollars in 2011.

#11 A recent nationwide survey discovered that 48 percent of all U.S. adults under the age of 30 believe that “the American Dream is dead”.

#12 Since hitting a peak of 69.2 percent in 2004, the rate of home ownership in the United States has been steadily declining every single year.

#13 At this point, the U.S. only ranks 19th in the world when it comes to median wealth per adult.

#14 Traditionally, entrepreneurship has been one of the primary engines that has fueled the growth of the middle class in the United States, but today the level of entrepreneurship in this country is sitting at an all-time low.

#15 For each of the past six years, more businesses have closed in the United States than have opened.  Prior to 2008, this had never happened before in all of U.S. history.

#16 If you can believe it, the 20 wealthiest people in this country now have more money than the poorest 152 million Americans combined.

#17 The top 0.1 percent of all American families have about as much wealth as the bottom 90 percent of all American families combined.

#18 If you have no debt and you also have ten dollars in your pocket, that gives you a greater net worth than about 25 percent of all Americans.

#19 The number of Americans that are living in concentrated areas of high poverty has doubled since the year 2000.

#20 An astounding 48.8 percent of all 25-year-old Americans still live at home with their parents.

#21 According to the U.S. Census Bureau, 49 percent of all Americans now live in a home that receives money from the government each month, and nearly 47 million Americans are living in poverty right now.

#22 In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.

#23 According to Kathryn J. Edin and H. Luke Shaefer, the authors of a new book entitled “$2.00 a Day: Living on Almost Nothing in America“, there are 1.5 million “ultrapoor” households in the United States that live on less than two dollars a day. That number has doubled since 1996.

#24 46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.

#25 The number of homeless children in the U.S. has increased by 60 percent over the past six years.

#26 According to Poverty USA, 1.6 million American children slept in a homeless shelter or some other form of emergency housing last year.

#27 Police in New York City have identified 80 separate homeless encampments in the city, and the homeless crisis there has gotten so bad that it is being described as an “epidemic”.

#28 If you can believe it, more than half of all students in our public schools are poor enough to qualify for school lunch subsidies.

#29 According to a Census Bureau report that was released a while back, 65 percent of all children in the U.S. are living in a home that receives some form of aid from the federal government.

#30 According to a report that was published by UNICEF, almost one-third of all children in this country “live in households with an income below 60 percent of the national median income”.

#31 When it comes to child poverty, the United States ranks 36th out of the 41 “wealthy nations” that UNICEF looked at.

#32 An astounding 45 percent of all African-American children in the United States live in areas of “concentrated poverty”.

#33 40.9 percent of all children in the United States that are being raised by a single parent are living in poverty.

#34 There are 7.9 million working age Americans that are “officially unemployed” right now and another 94.4 million working age Americans that are considered to be “not in the labor force”.  When you add those two numbers together, you get a grand total of 102.3 million working age Americans that do not have a job right now.

#35 According to a recent Pew survey, approximately 70 percent of all Americans believe that “debt is a necessity in their lives”.

#36 53 percent of all Americans do not even have a minimum three-day supply of nonperishable food and water at home.

#37 According to John Williams of shadowstats.com, if the U.S. government was actually using honest numbers the unemployment rate in this nation would be 22.9 percent.

#38 Back in 1950, more than 80 percent of all men in the United States had jobs.  Today, only about 65 percent of all men in the United States have jobs.

#39 The labor force participation rate for men has plunged to the lowest level ever recorded.

#40 Wholesale sales in the U.S. have fallen to the lowest level since the last recession.

#41 The inventory to sales ratio has risen to the highest level since the last recession.  This means that there is a whole lot of unsold inventory that is just sitting around out there and not selling.

#42 The ISM manufacturing index has fallen for five months in a row.

#43 Orders for “core” durable goods have fallen for ten months in a row.

#44 Since March, the amount of stuff being shipped by truck, rail and air inside the United States has been falling every single month on a year over year basis.

#45 Wal-Mart is projecting that its earnings may fall by as much as 12 percent during the next fiscal year.

#46 The Business Roundtable’s forecast for business investment in 2016 has dropped to the lowest level that we have seen since the last recession.

#47 Corporate debt defaults have risen to the highest level that we have seen since the last recession.  This is a huge problem because corporate debt in the U.S. has approximately doubled since just before the last financial crisis.

#48 Holiday sales have gone negative for the first time since the last recession.

#49 The velocity of money in the United States has dropped to the lowest level ever recorded.  Not even during the depths of the last recession was it ever this low.

#50 Barack Obama promised that his program would result in a decline in health insurance premiums by as much as $2,500 per family, but in reality average family premiums have increased by a total of $4,865 since 2008.

#51 Today, the average U.S. household that has at least one credit card has approximately $15,950 in credit card debt.

#52 The number of auto loans that exceed 72 months has hit at an all-time high of 29.5 percent.

#53 According to Dr. Housing Bubble, there have been “nearly 8 million homes lost to foreclosure since the home ownership rate peaked in 2004″.

#54 One very disturbing study found that approximately 41 percent of all working age Americans either currently have medical bill problems or are paying off medical debt.  And collection agencies seek to collect unpaid medical bills from about 30 million of us each and every year.

#55 The total amount of student loan debt in the United States has risen to a whopping 1.2 trillion dollars.  If you can believe it, that total has more than doubled over the past decade.

#56 Right now, there are approximately 40 million Americans that are paying off student loan debt.  For many of them, they will keep making payments on this debt until they are senior citizens.

#57 When you do the math, the federal government is stealing more than 100 million dollars from future generations of Americans every single hour of every single day.

#58 An astounding 8.16 trillion dollars has already been added to the U.S. national debt while Barack Obama has been in the White House.  That means that it is already guaranteed that we will add an average of more than a trillion dollars a year to the debt during his presidency, and we still have more than a year left to go.

What we have seen so far is just the very small tip of a very large iceberg.  About six months ago, I stated that “our problems will only be just beginning as we enter 2016″, and I stand by that prediction.

We are in the midst of a long-term economic collapse that is beginning to accelerate once again.  Our economic infrastructure has been gutted, our middle class is being destroyed, Wall Street has been transformed into the biggest casino in the history of the planet, and our reckless politicians have piled up the biggest mountain of debt the world has ever seen.

Anyone that believes that everything is “perfectly fine” and that we are going to come out of this “stronger than ever” is just being delusional.  This generation was handed the keys to the finest economic machine of all time, and we wrecked it.  Decades of incredibly foolish decisions have culminated in a crisis that is now reaching a crescendo, and this nation is in for a shaking unlike anything that it has ever seen before.

So enjoy the rest of 2015 while you still can.

2016 is almost here, and it is going to be quite a year…

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The Rate Hike Stock Market Crash Has Thrown Gasoline Onto An Already Raging Global Financial Inferno - MICHAEL SNYDER THE ECONOMIC COLLAPSE BLOG

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The Rate Hike Stock Market Crash Has Thrown Gasoline Onto An Already Raging Global Financial Inferno Posted: 20 Dec 2015 If the stock market crash of last Thursday and Friday had all happened on one day, it would have been the 7th largest single day decline in U.S. history.  On Friday, the Dow Jones Industrial Average was down 367 points after finishing down 253 points on Thursday.  The overall decline of 620 points between the two days would have been the 7th largest single day stock market crash ever experienced in the United States if it had happened within just one trading day.  If you will remember, this is precisely what I warned would happen if the Federal Reserve raised interest rates.  But when news of the rate hike first came out on Wednesday, stocks initially jumped.  This didn’t make any sense at all, and personally I was absolutely stunned that the markets had behaved so irrationally.  But then we saw that on Thursday and Friday the markets did exactly what we thought they would do.  The chief economist at Gluskin Sheff, David Rosenberg, is calling the brief rally on Wednesday “a head-fake of enormous proportions“, and analysts all over Wall Street are bracing for what could be another very challenging week ahead. When the Federal Reserve decided to lift interest rates, they made a colossal error.  You don’t raise interest rates when a global financial crisis has already started.  That is absolutely suicidal.  It is the kind of thing that you would do if you were trying to bring down the global financial system on purpose. Surely the “experts” at the Federal Reserve can see what is happening.  Junk bonds have already crashed, just like they did in 2008.  The price of oil has crashed, just like it did in 2008.  Commodity prices have crashed, just like they did in 2008.  And more than half of all major global stock market indexes are already down at least 10 percent for the year so far. You don’t raise interest rates in that kind of an environment. You would have to be utterly insane to do so. The Federal Reserve has thrown fuel onto a global financial inferno that is already raging, and things could spiral out of control very rapidly. As far as this upcoming week is concerned, we have now entered “liquidation season”.  Investors are going to be pulling their money out of poorly performing hedge funds before the end of the calendar year, and as CNBC has pointed out, more hedge funds have already failed in 2015 than at any point since the last financial crisis… Liquidation season occurs when clients of poorly performing hedge funds ask for their money back. It tends to occur at the end of a quarter or year. In response, hedge funds must sell stocks in the open market to raise the money that needs to be returned to investors. That means if a hedge fund performed poorly this year; it is probably flooded with liquidation requests right now. In fact, there have been more failed hedge funds this year than any time since 2008. The dominoes are starting to fall.  We have already seen funds run by Third Avenue Management, Stone Lion Capital Partners and Lucidus Capital Partners collapse.  Amazingly, there are some people out there that are still attempting to claim that “nothing is happening” even in the midst of all of this chaos. As they say, “denial” is not just a river in Egypt. And this crisis is going to get even worse as we head into 2016.  Egon von Greyerz, the founder of Matterhorn Asset Management, is convinced that we will soon see “one disaster after another”… Greyerz predicts, “I think we will have one disaster after another, first in the junk bond market, then inemerging markets and, after that, the subprime markets. Subprime car loans and student loans I see as another massive problem area. It is going to be one thing after another that will unravel. Since 2008, when the world almost went under, we have printed or increased credit by 50% or by $70 trillion, and the world economy is still struggling to survive. I think the real change in confidence will come down when markets come down. . . . I think things will come down very quickly.” And I think that he is right on target.  The global financial system is more interconnected today than ever before, and when one financial institution fails, it inevitably affects dozens of others.  And the failures that we have already seen are already spreading a wave of fear and panic that may be difficult to stop.  The following comes from Business Insider, and I think that it is a pretty good explanation of what we could see next… Funds such as Third Avenue and Lucidus close, liquidating their portfolios. Investors, spooked by the closures and the risk that they might not be able to get their money out of these funds, make a rush for the exits while they still can. That creates even more selling pressure. Funds sell the assets that are easiest to sell as they look to reduce risk, which pushes the selling pressure from the risky parts of the market to the higher-quality part of the market. Things evolve from there. If you have been waiting for the next financial crisis to arrive, you can stop, because it is already unfolding right in front of our eyes. The only question is how bad it is going to become. In the final analysis, I find myself agreeing quite a bit with Charles Hugh Smith, the author of “A Radically Beneficial World: Automation, Technology and Creating Jobs for All“.  He believes that the ridiculous monetary policies of the Federal Reserve have played a primary role in setting the stage for this new crisis, and that now this giant financial “Death Star” that they have created “is about to blow up”… By slashing rates to zero, the Fed ruthlessly eliminating safe returns for savers, pension funds, insurers and the millions of people with 401K retirement nesteggs. In effect, the Fed-Farce has pushed everyone into risk assets–and then played another Dark Side mind-trick by masking the true dangers of these risky assets. As oil-sector debt blows up, as junk bonds blow up, and emerging markets blow up, we are finally starting to see the real costs of going over to the Dark Side of endless credit expansion and throwing the gasoline of near-zero interest rates on the speculative fires of financialization. The Fed’s hubris has led it to the Dark Side, and now its Death Star of impaired debt, phantom collateral, speculative frenzy and bogus mind-tricks is about to blow up. Personally, instead of saying that it “is about to blow up”, I would have said that it is already blowing up. We have already seen trillions upon trillions of dollars of wealth wiped out around the world. Energy companies are failing, giant hedge funds are going under, and the 7th largest economy on the entire planet has already plunged into “an outright depression“. Everyone that warned of financial disaster in the second half of 2015 has been proven right, but this is just the beginning.  Now that the Federal Reserve has thrown gasoline onto the fire, our problems are only going to accelerate as we head into 2016. So for the upcoming year, let us hope for the best, but let us also prepare for the worst.

If The Economy Is Fine, Why Are So Many Hedge Funds, Energy Companies And Large Retailers Imploding? - MICHAEL SYNDER THE ECONOMIC COLLAPSE BLOG

If The Economy Is Fine, Why Are So Many Hedge Funds, Energy Companies And Large Retailers Imploding?  MICHAEL SYNDER  THE ECONOMIC COLLAPSE BLOG Posted: 18 Nov 2015 04:06 PM PST If the U.S. economy really is in “great shape”, then why do all of the numbers keep telling us that we are in a recession?  The manufacturing numbers say that we are in a recession, the trade numbers say that we are in a recession, and as you will see below the retail numbers say that we are in a recession.  But just like in 2008, the Federal Reserve and our top politicians will continue to deny that a major economic downturn is happening for as long as they possibly can.  In this article, I want to look at more signs that a dramatic shift is happening in our economy right now. First of all, let’s consider what is happening to hedge funds.  For many years, hedge funds had been doing extremely well, but now they are closing up shop at a pace that we haven’t seen since the last financial crisis.  The following is an excerpt from a Business Insider article entitled “Hedge funds keep on imploding” that was posted on Wednesday… BlackRock is winding down its Global Ascent Fund, a global macro hedge fund that once contained $4.6 billion in assets, according to Bloomberg’s Sabrina Willmer. “We believe that redeeming the Global Ascent Fund was the right thing to do for our clients, given the headwinds that macro funds have faced,” a BlackRock spokeswoman told Business Insider. The winding down of the Ascent fund is the second high-profile hedge fund closing in 24 hours. The Wall Street Journal reported Tuesday that Achievement Asset Management, a Chicago-based hedge fund, was closing. And those are just two examples.  Quite a few other prominent hedge funds have shut down recently, and many are wondering if this is just the beginning of a major “bloodbath” on Wall Street. Another troubling sign is the implosion of so many energy companies.  Just like in 2008, a major crash in the price of oil is hitting the energy sector really hard.  Just check out these stock price declines… -Cabot Oil & Gas down 37.27 percent over the past 12 months -Southwestern Energy down 68.11 percent over the past 12 months -Chesapeake Energy down 73.98 percent over the past 12 months A number of smaller energy companies have already gone out of business, and several of the big players are teetering on the brink.  If the price of oil does not rebound significantly very soon, it is just a matter of time before the dominoes begin to fall. We are also seeing tremendous turmoil in the retail industry.  The following comes from Investment Research Dynamics… The retail sales report for October was much worse than expected.  Not only that, but the Government’s original estimates for retail sales in August and September were revised lower.  A colleague of mine said he was chatting with his brother, who is a tax advisor, this past weekend who said he doesn’t understand how the Government can say the economy is growing (Hillary Clinton recently gave the economy an “A”) because his clients are lowering their estimated tax payments.  Businesses lower their estimated tax payments when their business activity slows down. The holiday season is always the best time of the year for retailers, but in 2015 there is a lot of talk of gloom and doom.  Most large retailers will not start announcing mass store closings until January or February, but without a doubt many analysts are anticipating that once we get past the Christmas shopping season we will see stores shut down at a pace that we haven’t seen since at least 2009.  Here is more from the article that I just quoted above… Retail sales this holiday season are setting up to be a disaster.  Already most retailers are advertising “pre-Black Friday” sales events.  Remember when holiday shopping didn’t begin, period, until the day after Thanksgiving?  Now retailers are going to cannibalize each other with massive discounting beforeThanksgiving.  Anybody notice over the weekend that BMW is now offering $6500 price rebates?   The collapsing economy is affecting everyone, across all income demographics. Last week we saw the stocks of Macy’s, Nordstrom and Advance Auto Parts do cliff-dives after they announced their earnings.  I mentioned to a colleague that the Nordstrom’s report should be the most troubling for analysts.  Nordstrom in their investor conference call said that they began seeing an “unexplainable slowdown in sales in August in transactions across all formats, across all catagories and across all geographies that has yet to recover.”   I think that a chart would be helpful to give you an idea of how bad things have already gotten.  Jim Quinn shared this in an article that he just posted, and it shows the change in retail sales once you remove the numbers for the auto industry.  As you can see, the numbers have never been this dreadful outside of a recession… But stocks went up 247 points on Wednesday so everything must be great, right? Wrong. The stock market has never been a good barometer for the overall economy, and this is especially true these days. In 2008, stocks didn’t crash until well after the U.S. economy as a whole started crashing, and the same thing is apparently happening this time around as well. One of the things that is keeping stocks afloat for the moment is stock buybacks.  In recent years, big corporations have spent hundreds of billions of dollars buying back their own stocks.  The following comes from Wolf Richter… IBM has blown $125 billion on buybacks since 2005, more than the $111 billion it invested in capital expenditures and R&D. It’s staggering under its debt, while revenues have been declining for 14 quarters in a row. It cut its workforce by 55,000 people since 2012. And its stock is down 38% since March 2013. Big-pharma icon Pfizer plowed $139 billion into buybacks and dividends in the past decade, compared to $82 billion in R&D and $18 billion in capital spending. 3M spent $48 billion on buybacks and dividends, and $30 billion on R&D and capital expenditures. They’re all doing it. Later in that same article, Richter explains that almost 60 percent of all publicly traded non-financial corporations have engaged in stock buybacks over the past five years… Nearly 60% of the 3,297 publicly traded non-financial US companies Reuters analyzed have engaged in share buybacks since 2010. Last year, the money spent on buybacks and dividends exceeded net income for the first time in a non-recession period. Big corporations like to do this for a couple of reasons.  Number one, it pushes the price of the stock higher, and current investors appreciate that.  Number two, corporate executives are usually in favor of conducting stock buybacks because it increases the value of their stock options and their own stock holdings. But now corporate profits are falling and it is becoming tougher for big corporations to borrow money.  So look for stock buybacks to start to decline significantly. Even though it is taking a bit longer than many would have anticipated, the truth is that we are right on track for a massive financial collapse. All of the indicators that I watch are flashing red, and even though things are moving slowly, they are definitely moving in the same direction that we saw in 2008. But just like in 2008, there will be people that mock the warnings up until the day when it becomes completely and utterly apparent that the mockers were dead wrong.