Author: David Haggith

The Great Recession

Economic cracks big enough to drive a car industry into are opening up all over the globe. Trade gaps are opening up between major allies. Widening spreads between the dollar and other currencies are shredding emerging markets. As we start into summer, these cracks and several others described below have become big enough to get everyone’s attention, just as I said last year would become the situation.

I had, as readers here know, predicted the same for last summer but revised my timing to this summer after Trump was elected and the hope for tax cuts lit on fire one of the world’s greatest stock rallies. Those tax cuts are also creating another rapidly rising gap between government revenue and government spending.   Continue reading “The Economy is Cracking Up. Are You?”

The Great Recession

A summer storm is gathering against the housing market all across the US. More than a year ago, I predicted the collapse of Housing Bubble 2.0 and then predicted as soon as the housing market collapse had begunthat it would see temporary reprieve until the summer of 2018.

Well, that reprieve has ended … two months ahead of the schedule I suggested as an outlier. The storm clouds are now evident across the entire nation. More importantly, lightning is already striking in the nation’s healthiest housing markets.   Continue reading “Housing Market Collapse 2.0 Has Begun”

The Great Recession

For a year and a half I’ve been writing about the retail apocalypse that is going to add to US financial woes. This is not a problem created by economic collapse but a problem that I have said will greatly contribute to economic collapse and that is so massive and widespread that it assures some level of economic decline all on its own. As everyone knows, the problem is largely created by a change in shopping paradigms (mostly due to Amazon) that is shuttering brick and mortar stores as people shop online.  Continue reading “Mid-Year Review of the Retail Apocalypse – Keeps Coming Like a Waterfall”

The Great Recession

Even the best day of the year for stocks in the United States struggled to pull this market into better shape. While summer is a down period overall for stocks, July 2nd holds the position of being historically the most bullish day of all for the S&P 500. Why? The S&P 500 shows an average return of +.32% on July 2nd and is, at least, positive 83.33% of the time. The Dow turns in numerically positive results 77.77% of the time. So, it’s a day bulls can count on most of the time.   Continue reading “Nation’s Most Bullish Day for Stocks Goes … Well, Mediocre”

The Great Recession

First I said I believed the US stock market would plunge in January, but I also said that January would not be the biggest drop, but just the first plunge that begins a global economic collapse: the big trouble for the economy and the stock market, I said, would show up in “early summer.” That’s when the stock market crash that began in January would take its second big leg down, and global economic cracks would become big enough that few could deny them.

(Now I’ll add a prediction — that even worse will unfold in the fall and early winter … unless summer becomes so bad that central banks rapidly reverse course on unwinding their balance sheets and raising interest; but I think they will stay their promised courses into the fall and winter and headlong into a global economic crisis.)   Continue reading “Epocalypse Ahead on Highway to Hell for Global Economy and US Stock Market”

The Great Recession

Europe’s many fault lines are spreading once again, bringing the endless euro crisis saga back in 3-D realism. Italy gained a new anti-establishment government last week, even as Spain elected a new Socialista government that could crack Catalonia off from the rest of Spain. All of Europe fell under Trumpian trade-war sanctions and threatened their own retaliation. And Germany’s most titanic bank got downgraded to the bottom of the junk-bond B-bin.   Continue reading “Return of the Euro Crisis: Italy Quakes, Rest of the World Shakes and Merkel’s Empire Breaks”

The Great Recession

It’s simple math — an equal and opposite reaction. After a long spell of QE took mortgage interest down to the lowest it has ever been, a long spell of QT (quantitative tightening) is going to take it back up again. That’s why I forecasted another housing collapse with confidence last year:

Rising mortgage rates will certainly cause housing sales to fall. Prices will follow for those houses that have to sell because, as mortgage interest rises, people won’t qualify for as large a mortgage as they do now. It’s all part of the developing Epocalypse in which multiple industries collapse into the final depths of the Great Recession as the fake recovery fades out of existence like a mirage.   Continue reading “Death of the Great Recovery Part 3: Housing Collapse 2.0 Has Begun”

The Great Recession

Like the disintegration of the formerly charmed stock market, the return of Carmageddon is right on schedule. I had stated early last year that one of the first cracks in our economy to become evident would be the crash of the car industry.

That crack materialized as promised, but then Hurricanes Harvey and Irma showed up to flood a million automobiles. Before any statistics materialized to show the economic impacts of those storms, I wrote the following revision for the dates of Carmageddon:   Continue reading “Death of the Great Recovery Part 2: The Second Coming of Carmageddon”

The Great Recession

We are now well into the year when I said stocks would plunge in January and would prove to be a gaping “crack” in the economy by summer, and look at how seriously the market has fallen apart since it started to drop in the last week of January:   Continue reading “Stocks Perfectly Poised to Plummet Past Point of No Return”

The Great Recession

One Loonie fell today, and another rose. The Canadian “Loonie” tested 2018 lows against the dollar when existing Canadian home sales crashed to their lowest in five years. On the same day Loony Larry Kudlow rose to a new chief position at the White House, more than justifying recirculation of the following article:   Continue reading “Larry Kudlow is Still an Idiot”

The Great Recession

Bloomberg this week ran a story telling us how the smart money gets out of the stock market when it hits its all-time peak and how the dumb money helps the smart money out. Only they didn’t know that was what they were writing. It typically happens this way:

At the end of a deliriously euphoric market rally when the market is preparing to crash, all the Joe Sixpacks, mom and pop and the family dog open trading accounts and try to chase the tail of market action. Many throw in their entire retirement funds, pawn the dog’s collar and take out loans on credit cards to buy in as much as they can. By buying in late, they help provide a smooth exit for the smart money. At least for some of it. It is the little guys, tough from hard labor, whose muscles are employed to push the money bags of the rich to the top of the mountain from which the little guys are allowed to jump off.  Continue reading “The Dumb Money is Helping the Smart Money Exit the Stock Market”

The Great Recession

How inflated with debt have we become? How long can we float on our own bloat? Reasonably trim in 1970, the sum of all debt publicly financed by the US government was $275 billion. Last week, the government sought to raise $258 billion in just one week! The weekly financing to keep the government afloat is now about equal to all the debt it amassed over the course of its first 188 years.   Continue reading “All Fed up on Peak Debt”

The Great Recession

The Federal Reserve is now hacking its own zombie recovery to death and eating it by reversing the actions it employed to create this artificially supported recovery. Each time the Fed unwinds its balance sheet, 10-year bond rates recoil, and the stock market dances along in countermoves and wild swings. The main theme of my blog has always been that the Fed’s centrally planned economic recovery dies as soon as the artificial life-support is removed.

Blinded by economic denial because they are evangelists to the Fed’s religion, market pundits are finding any rationale they can to avoid connecting the Fed’s Great Unwind with these huge swings in long-term interest rates and the obviously corresponding counter-swings of the stock market. For those who have eyes to see, however, it should be clear that the world’s largest bond and stock markets are shuddering as the supports are removed. Continue reading “As a Matter of INTEREST, Talk of Inflation Fear, the Fed’s Perfect Unwind, Concern about Wages is ALL Economic Denial”

The Great Recession

Talk about the market busting a move … and a lot of people! In less than half a month, the Trump Rally lost a third of the height it had developed over a period of sixteen months — the worst two-week drop since February 2009. (The market’s moves are so extreme by many measures that the Great Recession is the closest touchstone one can find to assay the last two weeks of market action.)

Most of the plummeting happened in two record-breaking 1,000-point plunges with the total fall taking all indices into the red for 2018. The remaining two-thirds of the Trump Rally remains at peril as the market probes downward to potentially test its 200-day moving average, with the Dow having readily broken through the 50-day and 100-day and now testing its 150-day average:   Continue reading “Stock Market’s Massive Moves Not Seen Since Great Recession: Many who didn’t see the bubble bursting have fallen”

The Great Recession

It took sixteen months to build the exceptionally steep Trump Rally, and just one week to eliminate a quarter of it. While I wouldn’t call that jolting reversal a stock-market crash in the ordinary sense, the largest one-day point fall in the history of the market (by far) certainly marks a massive change in market conditions. From this point forward, it won’t be the same market it was.   Continue reading “Epochal Stock Market Flash Crash Reconnects Stocks and Bonds, Portends End of Fake Recovery”

The Great Recession Blog

My 2018 economic predictions follow through on the accurate predictions I made in 2017. In my last article, I stated that I had bet my blog the stock market would crash by January 2018. In fact, however, I’ve gone back and rechecked those predictions and my bet, and I found that I wisely hedged my bet in terms of timing due to the Trump factor. I realized back then that, for the short term (2017-2018), Trump would seriously alter the economic trajectory of the US established during the Obama years — the path by which I had been predicting an economic apocalypse would soon be upon us. Trump would not, however, improve things over the long term because our underlying economic woes would only get worse.   Continue reading “I Bet My Blog on a 2018 Economic Collapse — 2018 Economic Predictions”

The Great Recession Blog

It’s not boasting to state plainly that you were right if you are equally direct about your errors. I have until now rightly predicted all of the stock market’s major downturns, starting with the one in 2007 that gave us the Great Recession. The first of those led to the writing of this blog. The next two were predicted and recorded as they happened on this blog, and the latest, whether it proves right or wrong, waits shortly in the future. Each time I made such a prediction here, I bet my blog on it. The blog is still here, but will it continue to be?   Continue reading “The Ghosts of Crashes Past, Recent, and Future as they Appeared on this Blog”