The Great Recession

A bump from Donald Trump’s thump on Mexico’s head is causing the US stock market to swell this week. Trump tariffied the market last week because his new threat against all things Mexican seemed to say Trump might use tariffs as leverage to get anything he wants. Agent Orange apparently got what he wanted — though it remains unclear whether he got anything that wasn’t already in the offing, but he says he did — so the market’s knock on the head is healing this week.  Continue reading “Breaking China Not as Easy as Toppling Tijuana”

The Great Recession

…when the stock market’s decade-long bottom trend becomes its new top trend and then it can’t even make it back up to that line as a top trend.

We’re sloughing away now, and it can be a long slide to the bottom or endless side-winding of big ups and downs that go nowhere, just as the market has now gone nowhere for fifteen months.  Continue reading “You Know Things are Falling When…”

The Great Recession

The graph here shows the point at which I said early last summer housing sales had turned over (for the worst) and would remain on a downtrend indefinitely, and it shows how that prediction has panned out.

Existing home sales were down again nationally (4.4%) in April (fourteenth month in a row of declining sales year on year). That is the longest stretch without a single positive month since the housing-market collapse that brought on the Great Recession.  Continue reading “Housing Collapse 2.0 Continues as Predicted Here … as does everything else!”

The Great Recession

Stocks posted their fourth straight weekly loss across all three headline indices this week, but more important than that they proved convincingly on Friday that the market is as fully intoxicated as I claimed in my recent article, “Hopium Floats.”

The path of indices through the day looked like a side-on view of the flight of my lunatic crow (sole heckler) just before he hits a wall at the end of his day and slides down it to the ground:  Continue reading “Market Loses its Hopium-Induced High, Falls Four Weeks Straight”

The Great Recession

In my January Premium Post, “An Interesting Interest Conundrum,” I laid out how the Federal Reserve was losing control over the Fed funds rate — a loss of control over its bedrock interest rate that indicates financial stresses are building in the banking system that increase the risks from runs on the banks:  Continue reading “Liquidity Stress Fractures Begin to Show in the Federal Reserve System”

The Great Recession

So much for the trade war being “good and easy to win.” Let’s be honest. Trump has been grinding away on it for almost a year now, and China has barely flinched in its negotiations. On Friday the tariff war became personal because it will now tap your own budget and every business budget in town.  Continue reading “Hopium Floats, and That’s How the Market got High on Friday”

The Great Recession

The highest summit of irrational exuberance ever not seen by those engaging in it makes the perfect peak for the greatest global economic collapse ever not known by those who fell into it.

Some days the level of denial in the stock market twists my head into a knot — not because I am surprised at lemmings jumping over a cliff because they know all the other lemmings are going to jump. In that case, the jump will pay off because the market IS the crowd, so it goes wherever the crowd goes, and the lemmings are merely betting on where the crowd is heading. I understand that. Continue reading “The Zombie Epocalypse: A River of Denial Floods Markets Everywhere”

The Great Recession

You may be worried my prediction that a recession will start sometime this summeris not looking too good. So was I after first-quarter corporate earnings started coming in better than what economists expected. Except that barely “beating expectations” is kind of pathetic when expectations are dumbed down as far as they were.  Continue reading “US GDP Not All it was Cracked up to be”

The Great Recession

Shares of 3M Co. plummeted toward its biggest one-day decline in over 30 years, after the industrial, health-care and consumer products company reported missed profit and revenue expectations, slashed its full-year outlook, and said it was cutting 2,000 jobs…. The percentage decline was second only to the 26% plunge on Oct. 19, 1987. That is the day referred to as Black Monday, with the Dow registered its biggest-ever one-day crash with a 22.6% tumble.

MarketWatch  

Continue reading “3M Crash May be the Shape of Things to Come”

The Great Recession

The 2018 stock market crash is now a fait accompli, having taken a polar bear plunge that put ice in the veins of the Fed and electrified their collective spine with such a deep chill they ran like a fat walrus from the bear market to halt their long-nurtured plans of economic tightening. With that event fulfilled, I’m now predicting a 2019 recession as the major economic news for this year (both US and global).  Continue reading “Tick, Tick, Talk, 2019 Recession Coming”

The Great Recession

The Fed’s surprise pivot away from any interest rate increases this year has boosted prices of stocks, high yield bonds and other risky assets in spite of nagging investor concerns about slowing global economic growth….. The quandary for the Fed is that easy monetary policy seems more effective in spurring asset values than it does in boosting prices of goods and services. The S&P 500 Index rose by an average 8.5 percent from 2014 through 2018, while the personal consumption expenditures price index increased 1.3 percent, well below the Fed’s 2 inflation target.”

Bloomberg  

Continue reading “One Big Tip for Huge Economic Growth”

The Great Recession

Laughable Larry Kudlow, as high priest of the Laffer Curve, has long been servant of “King Dollar,” as Larry has often reverently referred to US currency. The Laffer Curve is the central creed of trickle-down economics. It’s a bell-curve that demonstrates how lowering tax rates actually increases tax revenue to a certain point by stimulating the economy and then, beyond that point, lowering taxes lowers tax revenue. (If the latter were not true, the highest tax revenue would come in at a tax rate of zero, which is ludicrous. So, logically, you know at some point tax-rate reductions start to result in diminishing returns for revenue.)  Continue reading “The Two Stooges of Finance: Larry and Moore”

The Great Recession

For brick and mortar stores, the Retail Apocalypse is closing stores down like a slow-motion video of the asteroid event that took out dinosaurs 66 million years ago. While it may seem to drag on as we watch various species of retail collapse, I originally said this event would take, at least, three years (through the end of 2019) for the bulk of the impact to play out.

It was two years ago that I started writing about the damage that was to come and all the collateral damage that would ensue. I said that ultimately, it would take out malls all over the nation, nearby restaurants and eventually gas stations.  Continue reading “Retail Apocalypse Closing Stores Down Like Death of Dinosaurs”

The Great Recession

Two of my biggest and longest-term predictions for 2018 and 2019 proved resoundingly true this week, and my sole prediction for this year — a prediction of recession bolder than anyone else’s — moved a big step closer to coming true.  Continue reading “Two Down, One to Go, and the Fed is Stuck: My most important economic predictions have come in rock solid”

The Great Recession

Socialism is the price Capitalism pays for unrestrained and unpunished greed, and Alexandria Ocasio-Cortez is the new face of Socialism in America. AOC refers to her Socialist revolution— for now wrapped up in the Green New Deal before congress — as the “politics of optimism,” and so it is. That’s because Socialism is the direction to which hope among the young and idealistic most often flows when Capitalism run by the old has grown corrupt and exhausted and is destroying itself with unrestrained greed and unpunished financial crimes.   Continue reading “Socialist Revolution: The Price Capitalism Pays When Greed Goes Unrestrained”

The Great Recession

Let’s review this past devilishly whacky week to see if we can divine the way the world is turning and why the markets are churning. It was 2019’s worst week in stocks and, well, just about everything economic all across this crazily spinning planet. Volatility lifted its head back out of the water like Loch Ness’s monster while the citizenry took flight to treasury safe havens, bringing treasury yields down again to the five-year’s lowest point of the year. North Korea’s Rocketman returned to his rocketry, and the Chinese threw up their hands and ran as far from Mar-a-Lago as they could … or maybe they just threw up from too much chocolate cake.  Continue reading “A Week in the Life of a Topsy-Turvy Wildly Whirling World”

The Great Recession

In my first Premium Post back in January, “2019 Economic Headwinds Look Like Storm of the Century,” I laid out sixteen major headwinds that would be howling against the economy this year. One of those was the government debt, which I said was about to skyrocket:   Continue reading “US Budget Deficit and Interest Take Trip to the Moon”

The Great Recession

In my last article, “The Bears Have it Right: Economy went Polar Opposite of Bullish Predictions,” I laid out my first prediction for 2019 — a recession by summer. I don’t want the following revelations and facts that I have since come across to get lost in comments I recently posted to that article, so I’m bringing them all together here.   Continue reading “More Evidence that the Bears Have it Dead Right”

The Great Recession

Bears, like myself, picked the meat off market bulls throughout 2018. We scoffed at the start of the year when bulls concocted a narrative that said bears would starve because 2018 was going to be the year of “global synchronize growth.” We bears bawled that this was euphoric nonsense.

Global economies fell off a cliff as soon as the bulls’ narrative took hold, and all economies continued to falter for the entire year. The US was the only major economy to get a significant boost, due to absolutely massive tax cuts, which piddled away after two quarters (fourth quarter now estimated at 1.5%).   Continue reading “The Bears Have it Right: Economy went Polar Opposite of Bullish Predictions”