House Of Cards: Netflix Is One Of The Poster Children For Tech Bubble 2.0 - Posted: 30 May 2017 Michael Snyder

House Of Cards: Netflix Is One Of The Poster Children For Tech Bubble 2.0

Posted: 30 May 2017 Michael Snyder

How can a company that is going to generate $2,000,000,000 in negative free cash flow in 2017 be worth 70 billion dollars?  Netflix has soared in popularity in recent years, but so have their financial losses.  Just like during the original tech bubble, investors are ignoring basic fundamentals and are greatly rewarding firms that are bleeding giant mountains of cash year after year just because they are trendy “tech companies”.  

But somewhere along the line you actually have to quit losing money if you are going to survive.  Just ask tech bubble 1.0 victims Pets.com, Webvan and Etoys.com.  The investors that poured enormous amounts of money into those companies ended up losing everything, and similar tragedies will play out as tech bubble 2.0 bursts.

So far in 2017, the S&P 500 is up about 8 percent, but FANG stocks (Facebook, Amazon, Netflix and Google) are up a whopping 30 percent.

But at least Facebook, Amazon and Google are making money.

Netflix is not.

So why in the world has the stock shot up by more than 30 percent so far this year?  It just doesn’t make any sense at all.  According to CNBC, during the first quarter Netflix had $423 million in negative free cash flow, and for the entire year it is being projected that it will have $2 billion in negative free cash flow…

The California-based company is now dumping cash into original content to maintain its dominance over its growing field of rivals. The company’s had $423 million negative free cash flow during the quarter, wider than the $261 million negative free cash flow a year ago. Netflix expects to have $2 billion in negative free cash flow this year.

The bleeding of cash at Netflix only seems to be accelerating.  The number for the first quarter of 2017 was 62 percent worse than the number for the first quarter of 2016, and it was more than twice as bad as the number for the first quarter of 2015.

It is hard to imagine that Netflix will ever be more popular than it is right now.

So if Netflix is not making a profit at this point, when will it ever make a profit?

Similar things could be said about Twitter.  This is a company that has never made a yearly profit and that is actually starting to see revenues decline.  But somehow the stock just continues to go up.  Since the last time I wrote about Twitter, the market cap has shot up another 1.5 billion dollars.

At this point, the market values Twitter at 13 billion dollars, but in the entire history of the company it has actually lost 2 billion dollars.

What we are witnessing is a modern day version of “tulip mania”, and at some point this irrational euphoria will come to a sudden end.  In fact, there are already some signs that tech bubble 2.0 may be in a significant amount of trouble.  The following is an excerpt from a Bloomberg article entitled “Investors Go All-In on Tech Giants”…

The tech-powered rally has catapulted the sector to a price-to-earnings ratio of 24.4, or 41 percent above the 10-year average. But as Google and Amazon stretch to nearly $1,000 a share, not everyone is comfortable with the valuations. Investors pulled more than $716 million from the most popular technology exchange-traded fund last week — the $17.4 billion Technology Select Sector SPDR Fund, or XLK — its largest weekly outflow in over a year, data compiled by Bloomberg show.
“Most everybody remembers 2000, so they might be getting a little nervous with this development,” said Maley. “I just wonder how many people have said to themselves, ‘If AMZN gets to $1,000, I’m going to take at least some profits.’”

All over the financial world, prominent voices are warning that the enormous financial bubbles that we see all around us are not sustainable and that a major crisis is heading our way.  I wrote about some of these voices yesterday, and today we can add Paul Singer to the list…

Given groupthink and the determination of policy makers to do ‘whatever it takes’ to prevent the next market ‘crash,’ we think that the low-volatility levitation magic act of stocks and bonds will exist until the disenchanting moment when it does not. And then all hell will break loose (don’t ask us what hell looks like…), a lamentable scenario that will nevertheless present opportunities that are likely to be both extraordinary and ephemeral. The only way to take advantage of those opportunities is to have ready access to capital.

When the financial markets collapse, Donald Trump will likely get most of the blame.

But Donald Trump did not create the stock market bubble, and he will not be responsible for ending it either.

Since the Federal Reserve was created in 1913, we have seen this same story play out over and over again.  There have been 18 distinct recessions or depressions since the Fed was established, and the more the Fed interferes in the marketplace the larger the booms and busts tend to be.

And it could be argued that this time around the Fed has manipulated financial markets more than ever before.  Interest rates were pushed as low as possible and trillions of dollars were pumped into the financial system during the Fed’s quantitative easing programs.  Of course those actions were going to create a huge bubble, and of course that bubble is going to inevitably burst.

Unfortunately, this is not just a game.  Real people with real hopes and real dreams are going to be absolutely devastated.  Millions of Americans that were carefully saving for retirement are going to be financially crippled, and pension funds all over the nation are going to be wiped out.

I don’t know why we can’t seem to learn from history.  And I am not talking about events that happened decades ago.  The build up to this coming crisis is so similar to what we witnessed just before the crashes of 2000 and 2008, but we just keep getting fooled over and over again.

But once things fall apart this time, I think that the American people will finally be fed up.  I think that they will be sick and tired of an unelected, unaccountable central bank that creates endless booms and busts, and I think that they will finally be ready to push Congress to shut the Federal Reserve down for good.

Love For His People Editor's Note: I believe in what Michael Snyder says. Being an accountant by trade, I can see it as he has truthfully and accurately written it out so often before.

I don't leave much cash in the bank; I am not letting my 401(K) build up too far without drawing out the cash (even with the penalties. Some is better than none.)

October 2017 seems to be a critical month to be prepared for in your financial situation.

I am encouraging you to listen, learn and act, as the Lord leads you to do in obedience.

Steve Martin

Founder/President

Love For His People, Inc.

The Stock Market Has Predicted the Outcome of Presidential Elections With 86 Percent Accuracy - MICHAEL SNYDER CHARISMA NEWS

Overall, the stock market has predicted the outcome of presidential elections with 86 percent accuracy, and that is way too strong of a correlation to ignore. (REUTERS/Carlo Allegri)

The Stock Market Has Predicted the Outcome of Presidential Elections With 86 Percent Accuracy

 8/3/2016 MICHAEL SNYDER  CHARISMA NEWS

If you want Donald Trump to win the election, you should be rooting for a stock market crash between now and November. As you will see below, if stocks go up during the last three months before an election, the incumbent party almost always keeps the White House. But if stocks go down during the last three months before an election, the incumbent party almost always loses.

Trump warned Americans to get out of the stock market, and if his warning turns out to be correct it will likely benefit him politically as well. When the general population believes that things are going well, Americans tend to stick with current leadership, but when the general population believes that we have hit rocky times they are usually ready for a change.

It turns out that this very strong correlation between the direction of the stock market and the outcomes of presidential elections goes all the way back to before the days of the Great Depression. The following comes from Zero Hedge...

Since 1928, there have been 22 Presidential Elections. In 14 of them, the S&P 500 climbed during the three months preceding election day. The incumbent President or party won in 12 of those 14 instances. However, in 7 of the 8 elections where the S&P 500 fell over that three-month period, the incumbent party lost.

The last time this correlation failed was back in 1980, and at that time Americans were feeling depressed about the country for other reasons. Overall, the stock market has predicted the outcome of presidential elections with 86 percent accuracy, and that is way too strong of a correlation to ignore. Just consider the gains or losses that we have seen for the S&P 500 during the last three months prior to each election since 1928 and the outcomes of those elections...

1928: 13.6 percent gain—incumbent party won

1932: -2.6 percent loss—incumbent party lost

1936: 7.9 percent gain—incumbent party won

1940: 8.6 percent gain—incumbent party won

1944: 2.3 percent gain—incumbent party won

1948: 5.4 percent gain—incumbent party won

1952: -3.3 percent loss—incumbent party lost

1956: -2.6 percent loss—incumbent party won

1960: -0.7 percent loss—incumbent party lost

1964: 2.6 percent gain—incumbent party won

1968: 6.5 percent gain—incumbent party lost

1972: 3.0 percent gain—incumbent party won

1976: -0.1 percent loss—incumbent party lost

1980: 6.7 percent gain—incumbent party lost

1984: 4.8 percent gain—incumbent party won

1988: 1.9 percent gain—incumbent party won

1992: -1.2 percent loss—incumbent party lost

1996: 8.2 percent gain—incumbent party won

2000: -3.2 percent loss—incumbent party lost

2004: 2.2 percent gain—incumbent party won

2008: -19.5 percent loss—incumbent party lost

2012: 2.5 percent gain—incumbent party won

As you can see, the only times the correlation broke down were during the years of 1956, 1968 and 1980.

But this is a very strange year. We have never seen a candidate like Donald Trump before, and the establishment is pulling out all of the stops in an effort to derail his march to the White House. So the normal rules may not apply this time around.

On Tuesday, Barack Obama took time out of his busy schedule to tell the press that Trump is "woefully unprepared" to be president, and he called on Republican leaders to pull their support from him...

"There has to come a point at which you say somebody who makes those kinds of statements doesn't have the judgment, the temperament, the understanding to occupy the most powerful position in the world," Obama said at the event with PM Lee Hsien Loong.

"There has to be a point in which you say this is somebody I can't support for president of United States," the president said. "There has to be a point in which you say 'enough.'"

The funny thing is that the exact same things could be said of Hillary Clinton. In fact, three of the top four hardcover books on the New York Times nonfiction best sellers list are about how Hillary Clinton does not have the judgment, the temperament or the character to be the president of the United States. The following comes from the Washington Examiner...

For the first time, three of the top four New York Times nonfiction best sellers are anti-Clinton books.

Two new books jumped to the front of the all-important hardcover nonfiction list just this week: Armageddon, by Dick Morris and Eileen McGann, and Hillary's America, by Dinesh D'Souza.

They join No. 1 Crisis of Character by former Secret Serviceman Gary J. Byrne which has been on top of the list for four straight weeks.

If you want to see where Hillary Clinton, Barack Obama and the Democrats want to take America, all you have to do is to look at the meltdown of the "socialist paradise" in Venezuela. For a while socialism seemed to work just fine there, but now desperate citizens wait in lines for up to 12 hours hoping to get something to feed their families...

A BBC journalist, who attempted to film the crisis, was stopped and forced by soldiers to delete footage of a protest outside a supermarket as desperate Venezuelans waited for food.

Baying crowds shouted "We want to buy stuff!" as they grouped outside the store in the country's capital, Caracas.

BBC journalist Vladimir Hernandez reports that many people approached him to say they had queued for 12 hours without being able to buy what they wanted.

This is what the endgame of socialism looks like.

Unfortunately, the American people don't understand this.

Unfortunately, about half the country wants to make Hillary Clinton the next president of the United States.

And in the end, the outcome of this election may be swayed one way or the other based on what the stock market does between now and November.

I don't know what that says about our country, but it isn't good.

If the American people still had any sense, an ultra-corrupt, morally bankrupt politician such as Hillary Clinton would not have a prayer of being elected dog catcher, much less president of the United States. The fact that about half the country plans to vote for her at this point is extremely frightening, and it may indicate that this nation is in far worse shape than most of us would like to admit.

Michael Snyder is the founder and publisher of End Of The American Dream. Michael’s controversial new book about Bible prophecy entitled "The Rapture Verdict"is available in paperback and for the Kindle on Amazon.com.

3 Reasons Why you should read Life in the Spirit. 1) Get to know the Holy Spirit. 2) Learn to enter God's presence 3) Hear God's voice clearly! Go deeper!

Has God called you to be a leader? Ministry Today magazine is the source that Christian leaders who want to serve with passion and purpose turn to. Subscribe now and receive a free leadership book.

Donald Trump Warns Americans To Get Out Of The Stock Market As The Dow Falls For A 7th Day In A Row - Michael Snyder THE ECONOMIC COLLAPSE BLOG

Donald Trump Warns Americans To Get Out Of The Stock Market As The Dow Falls For A 7th Day In A Row

Posted: 02 Aug 2016  Michael Snyder  THE ECONOMIC COLLAPSE BLOG

One thing that you have to appreciate about Donald Trump is that unlike most politicians, he actually says what is on his mind.  On Tuesday, Trump told Fox Business that he had already gotten out of the stock market, and that he foresees “very scary scenarios” ahead for investors.  And of course things have already started to get a bit ominous for those holding stocks over the last week and a half. 

The Dow Jones Industrial Average has now closed down for seven days in a row, and that is the longest losing streak that we have seen since the panic of last August.  Over the past 12 months we have seen virtually every other major global stock market experience at least one major crash.  Could the U.S. markets be next?

What Trump told Fox Business earlier today was actually right on the money.  Our financial markets have been artificially inflated by the Federal Reserve, and all artificial bubbles of this nature eventually burst.  The following comes from a Bloomberg article that was posted on Tuesday entitled “Trump Urges Exit From Market Boosted by ‘Artificially Low’ Rates“…

Donald Trump on Tuesday said interest rates set by the Federal Reserve are inflating the stock market and recommended 401(k)-holders to get out of equities, just like he did.
“I did invest and I got out, and it was actually very good timing,” the Republican presidential nominee said in a phone interview with Fox Business. “But I’ve never been a big investor in the stock market.”
“Interest rates are artificially low,” Trump said. “The only reason the stock market is where it is is because you get free money.”

Trump’s comments come at a time when we are getting a whole host of bad news about the U.S. economy.  We just learned that U.S. GDP grew at a meager 1.2 percent annual rate during the second quarter, the rate of homeownership in the United States just hit an all-time record low, and corporate earnings have now been falling for five quarters in a row.

But perhaps most alarming of all is what is happening to the price of oil.  As I discussed yesterday, the price of oil has plunged well over 20 percent since June 8th, and it was down again on Tuesday.

As I write this article, the price of U.S. oil is sitting at just $39.66.  The psychologically-important 40 dollar barrier has been broken, but the price of oil doesn’t even have to go down another penny to do immense damage to the U.S. economy.  If it just stays at this price, we are going to bleed more energy industry jobs, more energy companies are going to default on their debts, and more financial institutions that are exposed to the energy industry are going to get into serious trouble.

All the ingredients are there for a major financial crisis, and perhaps that explains why so many investors are flocking to precious metals such as gold and silver right now.

The price of gold has gone up for six trading days in a row, and silver is approaching 21 dollars an ounce.

Meanwhile, things continue to unravel on the other side of the planet.  In Europe, let’s just say that the recent bank stress tests did not go as well as many were hoping…

If the goal of the EBA Stress Tests was to reassure investors and regain confidence that ‘all is well’ in Europe’s increasingly fragile and systemically interconnected banking system, then it has utterly failed. The broadest European bank stock index is now down 7% from the post-stress-test spike highs, Italian banks are at record lows and being halted (despite Renzi’s promises), Commerzbank is struggling with capital raise chatter, and Deutsche Bank and Credit Suisse are tumbling after being booted from the Stoxx 50.

It is funny – every time I write a major article about Deutsche Bank, their stock goes to a new record low.

And it has just happened again.  Less than a week ago, I posted this article, and on Tuesday Deutsche Bank plummeted to a brand new record low as renewed fears about the health of the bank spooked investors.

Problems at Deutsche Bank and Credit Suisse are now becoming so obvious that even mainstream analysts are admitting that they are “causing some anxiety”…

“Deutsche Bank and Credit Suisse … are dropping to where they were after the Brexit vote,” said Bruce Bittles, chief investment strategist at Baird. “That’s causing some anxiety.”
Deutsche and Credit Suisse’s U.S.-listed shares closed down 3.75 percent and 4.67 percent, respectively.

In Europe nobody is waiting for financial stocks to crash, because they are already crashing.
A “too big to fail” crisis is rapidly unfolding across the entire continent, but most Americans are totally oblivious to what is going on over there.  Instead, our major news outlets are feeding us an endless barrage of negative headlines about Donald Trump and a steady stream of positive headlines about Hillary Clinton.

I wonder who they want to win the election?

Of course I am being sarcastic.  The days when the mainstream media at least pretended to be “independent” are long gone.

But as far as the stock market is concerned, I am quite confident that Donald Trump will be vindicated.

And if you don’t want to believe Donald Trump, I would encourage you to consider what Jeffrey Gundlach, the chief executive of DoubleLine Capital, has been saying.  He has been right about the markets in recent years over and over again, and just a few days ago he publicly stated that “stocks should be down massively” and that now is the time to “sell everything“.

Unfortunately, very few people are likely to change course at this stage.  Most of those that could see the warning signs have already gotten out of the market, and those that prefer to have blind faith in the system are not likely to listen to warnings from men like Trump and Gundlach.

So now it is just a waiting game.

We shall see if Trump and Gundlach are right, and those that end up on the correct side of the equation are probably going to make a boatload of money during the months ahead.

George Soros Is Preparing For Economic Collapse – Does He Know Something That You Don’t? - Michael Snyder THE ECONOMIC COLLAPSE BLOG

George Soros Is Preparing For Economic Collapse – Does He Know Something That You Don’t? Posted: 09 Jun 2016   Michael Snyder  THE ECONOMIC COLLAPSE BLOG Why is George Soros selling stocks, buying gold and making “a series of big, bearish investments”?  If things stay relatively stable like they are right now, these moves will likely cost George Soros a tremendous amount of money.  But if a major financial crisis is imminent, he stands to make obscene returns.  So does George Soros know something that the rest of us do not?  Could it be possible that he has spent too much time reading websites such as The Economic Collapse Blog?  What are we to make of all of this? The recent trading moves that Soros has made are so big and so bearish that they have even gotten the attention of the Wall Street Journal… Worried about the outlook for the global economy and concerned that large market shifts may be at hand, the billionaire hedge-fund founder and philanthropist recently directed a series of big, bearish investments, according to people close to the matter. Soros Fund Management LLC, which manages $30 billion for Mr. Soros and his family, sold stocks and bought gold and shares of gold miners, anticipating weakness in various markets. Investors often view gold as a haven during times of turmoil. Hmmm – it sounds suspiciously like George Soros and Michael Snyder are on the exact same page as far as what is about to happen to the global economy. You know that it is very late in the game when that starts happening… One thing that George Soros is particularly concerned about that I haven’t been talking a lot about yet is the upcoming Brexit vote.  If the United Kingdom leaves the EU (and hopefully they will), the short-term consequences for the European economy could potentially be absolutely catastrophic… Mr. Soros also argues that there remains a good chance the European Union will collapse under the weight of the migration crisis, continuing challenges in Greece and a potential exit by the United Kingdom from the EU. “If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable,” he said. The Brexit vote will be held two weeks from today on June 23rd, and we shall be watching to see what happens. But Soros is not just concerned about a potential Brexit.  The economic slowdown in China also has him very worried, and so he has directed his firm to make extremely bearish wagers. According to the Wall Street Journal, the last time Soros made these kinds of bearish moves was back in 2007, and it resulted in more than a billion dollars of gains for his company. Of course Soros is not alone in his bearish outlook.  In fact, Goldman Sachs has just warned that “there may be significant risk to the downside for the market”… Goldman Sachs is getting nervous about stocks. In a note to clients, equity strategist Christian Mueller-Glissmann outlined the firm’s fears that there may be significant risk to the downside for the market. Ultimately, George Soros and Goldman Sachs are looking at the same economic data that I share with my readers on a daily basis. As I have been documenting for months, almost every single economic indicator that you can possibly think of says that we are heading into a recession. For instance, just today I was sent a piece by Mike Shedlock that showed that federal and state tax receipts are really slowing down just like they did just prior to the last two recessions… US federal personal tax receipts receipts are falling fast. So is the Evercore ISI State Tax Survey. The last two times the survey plunged this much, the US was already in recession. Is it different this time? And online job postings on LinkedIn have now been falling precipitously since February after 73 months in a row of growth… After 73 consecutive months of year-over-year growth, online jobs postings have been in decline since February. May was by far the worst month since January 2009, down 285k from April and down 552k from a year ago. Last week, the government issued the worst jobs report in nearly six years, and the energy industry continues to bleed good paying middle class jobs at a staggering rate.  The following comes from oilprice.com… That may seem counterintuitive in an industry that has been rapidly shedding workers, with more than 350,000 people laid off in the oil and gas industry worldwide. Texas is one place feeling the pain. Around 99,000 direct and indirect jobs in the Lone Star state have been eliminated since prices collapsed two years ago, or about one third of the entire industry. In April alone there were about 6,300 people in oil and gas and supporting services that were handed pink slips. Employment in Texas’ oil sector is close to levels not seen since the aftermath of the financial crisis in 2009. “We’re still losing big chunks of jobs with each passing month,” Karr Ingham, an Amarillo-based economist, told The Houston Chronicle. At this point it is so obvious that we have entered a new economic downturn that I don’t know how anyone can possibly deny it any longer. Unfortunately, the reality of what is happening has not sunk in with the general population yet. Just like 2008, people are feverishly racking up huge credit card balances even though we stand on the precipice of a major financial crisis… American taxpayers are quick to criticize the federal government for its ever-increasing national debt, but a new study released Wednesday found taxpayers are also saddled with debt, and are likely to end 2016 with a record high $1 trillion in outstanding balances. Wallethub, a site that recommends credit cards based on consumers’ needs, said that will be the highest amount of credit card debt on record, surpassing even the years during and before the Great Recession. The site said the record high was in 2008, when people owed $984.2 billion on their credit cards. Will we ever learn? This has got to be one of the worst possible times to be going into credit card debt. Sadly, the “dumb money” will continue to act dumb and the “smart money” (such as George Soros) will continue to quietly position themselves to take advantage of the crisis that is already starting to unfold. We can’t change what is happening to the economy, but we do have control over the choices that we make. So I urge you to please make your choices wisely. *About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*

We Are Being Killed On Trade – Rapidly Declining Exports Signal A Death Blow For The U.S. Economy - Michael Snyder THE ECONOMIC COLLAPSE BLOG

We Are Being Killed On Trade – Rapidly Declining Exports Signal A Death Blow For The U.S. Economy

Posted: 15 Mar 2016   Michael Snyder  THE ECONOMIC COLLAPSE BLOG

Exports fell precipitously during the last two recessions, and now it is happening again.  So how in the world can anyone make the claim that the U.S. economy is in good shape?
 
On my website I have been repeatedly pointing out the parallels between the last two major economic downturns and the current crisis, and I am going to discuss another one today.  Since peaking in late 2014, U.S. exports have been steadily declining, and this is something that we never see outside of a major recession.  On the chart that I have shared below, the shaded gray bars represent the last two recessions, and you can see that exports of goods and services plunged dramatically in both instances…

And this chart does not even show the latest numbers that we have.  During the month of January, U.S. exports fell to a five and a half year low…

The U.S. trade deficit widened more than expected in January as a strong dollar and weak global demand helped to push exports to a more than 5-1/2-year low, suggesting trade will continue to weigh on economic growth in the first quarter.
The Commerce Department said on Friday the trade gap increased 2.2 percent to $45.7 billion. December’s trade deficit was revised up to $44.7 billion from the previously reported $43.4 billion. Exports have declined for four straight months.

Because our exports are falling faster than our imports, our trade deficit is blowing out once again.  Every year we buy hundreds of billions of dollars more from the rest of the world than they buy from us, and this is systematically wrecking our economy.  Over the past several decades, we have lost tens of thousands of manufacturing facilities, millions of good paying manufacturing jobs, and major exporting nations such as China have become exceedingly wealthy at our expense.

We are being absolutely killed on trade, and yet very few of our politicians ever want to talk about this.

A brand new study that was recently discussed in the New York Times is bringing some renewed attention to these problems.  It turns out that the promised “benefits” of merging the U.S. economy into the global economic system simply have not materialized…

In a recent study, three economists — David Autor at the Massachusetts Institute of Technology, David Dorn at the University of Zurich and Gordon Hanson at the University of California, San Diego — raised a profound challenge to all of us brought up to believe that economies quickly recover from trade shocks. In theory, a developed industrial country like the United States adjusts to import competition by moving workers into more advanced industries that can successfully compete in global markets.
They examined the experience of American workers after China erupted onto world markets some two decades ago. The presumed adjustment, they concluded, never happened. Or at least hasn’t happened yet. Wages remain low and unemployment high in the most affected local job markets. Nationally, there is no sign of offsetting job gains elsewhere in the economy. What’s more, they found that sagging wages in local labor markets exposed to Chinese competition reduced earnings by $213 per adult per year.

Another study conducted by some of the same researchers discovered that 2.4 million American jobs were lost between 1999 and 2011 due to rising Chinese imports.

When are we going to finally wake up?

The middle class in America is being absolutely shredded, and yet only a few of us seem to care.

Meanwhile, global trade as a whole continues to slow down at a very frightening pace.  We just learned that the China Containerized Freight Index has now dropped to the lowest level ever recorded.  The following comes from Wolf Richter…

The China Containerized Freight Index (CCFI), published weekly, tracks contractual and spot-market rates for shipping containers from major ports in China to 14 regions around the world. Unlike most Chinese government data, this index reflects the unvarnished reality of the shipping industry in a languishing global economy. For the latest reporting week, the index dropped 4.1% to 705.6, its lowest level ever.

How many numbers like this do we have to get before we will all finally admit that we are in the midst of a major global economic meltdown?

Here in the United States, the recent rally in the stock market has most people feeling pretty good about things these days.  But the truth is that there are ups and downs during any financial crisis, and this recent rally is putting the finishing touches on a very dangerous leaning “W” pattern that could signal a big dive ahead.

Harry Dent, the author of “The Demographic Cliff: How to Survive and Prosper During the Great Deflation Ahead“, has shown that this leaning “W” pattern is part of a huge “rounded top” for the S&P 500.  The following is a brief excerpt from one of his recent articles…

The bull market from early 2009 into May 2015 looks just like every bubble in history, and I’m getting one sign after the next that we did indeed peak last May. The dominant pattern in the stock market is the “rounded top” pattern:

After trading in a steep, bubble-like channel from late 2011 into late 2014, with only 10% maximum volatility top to bottom, the market finally lost its momentum… just as the Fed finished tapering its QE. That’s because the Fed was the primary driver in this stock bubble in the first place!

Now is not the time to relax at all.

In fact, now is the time to sound the alarm louder than ever.

That is one reason why my wife and I have started up a new television program.  It will be airing on Christian television, but it will also be available on YouTube as well…



As I have said before, 2016 is the year when everything changes.

So don’t be fooled just because the stock market had a couple of good weeks.  The truth is that global economic activity is slowing down significantly, geopolitical instability continues to get even worse, and this political season has caused very deep, simmering tensions in the United States to rise to the surface.

Let us hope that we have a few more weeks of relative stability like we are currently experiencing so that we can have more time to get prepared, but I certainly wouldn’t count on it.

Dot-Com Bubble 2.0 Is Bursting: Tech Stocks Are Already Down Half A Trillion Dollars Since Mid-2015 - Michael Snyder THE ECONOMIC COLLAPSE

Dot-Com Bubble 2.0 Is Bursting: Tech Stocks Are Already Down Half A Trillion Dollars Since Mid-2015

Posted: 07 Feb 2016 Michael Snyder  THE ECONOMIC COLLAPSE

Do you remember how much stocks went down when the first dot-com bubble burst?  Well, it is happening again, and tech stocks are already down more than half a trillion dollars since the middle of 2015.  On Friday, the tech-heavy Nasdaq dropped to its lowest level in more than 15 months, and it has now fallen more than 16 percent from the peak of the market. 

But of course some of the biggest names have fallen much more than that.  Netflix is down 37 percent, Yahoo is down 39 percent, LinkedIn is down 60 percent, and Twitter is down more than 70 percent.  If you go back through my previous articles, you will find that I specifically warned about Twitter again and again.  Irrational financial bubbles like this always burst eventually, and many investors that got in at the very top are now losing extraordinary amounts of money.

On Friday, tech stocks got absolutely slammed as the bursting of dot-com bubble 2.0 accelerated once again.  The following is how CNBC summarized the carnage…

The Nasdaq composite fell 3.25 percent, as Apple and the iShares Nasdaq Biotechnology ETF (IBB) dropped 2.67 percent and 3.19 percent, respectively.
Also weighing on the index were Amazon and Facebook, which closed down 6.36 percent and 5.81 percent, respectively.
LinkedIn shares also tanked 43.63 percent after posting weak guidance on their quarterly results.

Overall, LinkedIn is now down a total of 60 percent from the peak of the market.  But they are far from the only ones that have already seen their bubble burst.

Many of the biggest names in the tech world have gotten mercilessly hammered over the past six months of so.  Just look at some of the famous brands that have already lost between 20 and 40 percent of their market caps…

Yahoo (YHOO) shares are off 39%, and Netflix (NFLX), the best-performing stock in the S&P 500 last year, is now off by 37% from its 52-week high.
Likewise, Priceline.com (PCLN) is off 31% and eBay (EBAY), 22%.

But there are other very big tech companies that have seen stock collapses that completely dwarf those numbers.  Here are some more absolutely stunning statistics from USA Today…

Twitter and Groupon are the biggest dogs of this boom, both off 70% from 52-week highs and well below their IPO prices.
FitBit shares have collapsed 70%, while Yelp’s valuation has shrunk by two-thirds.
Box, which has the distinction of posting quarterly net losses in excess of revenue, is down by half.
Match.com, the holding company for dating sites owned by parent Interactive Corp. that went public late last year, is down 39% from its high.

When your stock loses 70 percent of its value, that is a complete and utter collapse.
In the past, I have specifically singled out Twitter, Yelp and LinkedIn as tech stocks that were irrationally priced.

Hopefully people listened to those warnings and got out while the getting was good.
At the top of this article, I mentioned that tech stocks have already fallen in value by more than 500 billion dollars.  The financial crisis that began in the middle of last year is now greatly accelerating, and Wall Street is starting to panic.

As stocks crash, many hedge funds are being absolutely pummeled.  The following are just a few of the high profile names that are experiencing massive losses right now…

Some of the biggest names to get trounced include:
►Pershing Square Capital Management, the publicly traded investment vehicle of billionaire hedgie Bill Ackman, fell 11% last month following a 20% decline last year, data from the web site shows.
►Larry Robbins’ Glenview Capital, famous for picking stocks that could benefit from Obamacare, dropped 13.65% in January following a decline of 18% last year, according to data from HSBC’s Hedge Weekly report, a copy of which was obtained by USA TODAY.
►Marcato International, a well-known activist fund run by Ackman protege Mick McGuire, fell 12.1% last month following a 9% loss last year, according to HSBC.

When you lose more than 10 percent of your money in a single month, that is not good.
And if I am right, this is just the beginning of our troubles.

And of course I am far from the only one warning that big problems are on the horizon.  In fact, analysts at Citigroup just made international headlines by warning that the global economy was now trapped in a “death spiral”…

Some analysts — including those at Citi — have turned bearish on the world economy this year, following an equity rout in January and weaker economic data out of China and the U.S.
“The world appears to be trapped in a circular reference death spiral,” Citi strategists led by Jonathan Stubbs said in a report on Thursday.
“Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)… and repeat. Ad infinitum, this would lead to Oilmageddon, a ‘significant and synchronized’ global recession and a proper modern-day equity bear market.”

Signs of a significant economic downturn are all around us, and so many of the exact same patterns that played out during the last two stock market crashes are happening again, and yet most people continue to refuse to acknowledge what is taking place.

If you are waiting for this new dot-com bubble to crash, you can stop waiting, because it has already happened.

When your stock falls by 50, 60 or 70 percent, the game is already over.

But just like 2001 and 2008, many people out there will end up being paralyzed by indecision.  Once again the mainstream media is insisting that there is no reason for panic and that everything will be just fine, and once again millions upon millions of ordinary Americans will be wiped out as the financial markets implode.

This is now the third time this has happened since the turn of the century.

How clueless have we become?  The exact same thing keeps happening to us over and over and yet we still don’t get it.

Only this time around there isn’t going to be any sort of a “recovery” afterwards.

This is essentially our “third strike”, and the years ahead are going to be extremely bitter and painful for most people.

But if you want to believe that one of these politicians is going to come along and save America, you go ahead and keep on believing that.

Most people believe what they want to believe, and the capacity that many Americans have demonstrated for self-delusion is absolutely remarkable.