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Tough Economic Times

Saturday, June 18th, 2016

The Stock Market Crash Of 2016: Stocks Have Already Crashed In 6 Of The World’s 8 Largest Economies

June 17, 2016

Network-Earth-Continents-Public-DomainBy Michael Snyder

Over the past 12 months, stock market investors around the planet have lost trillions of dollars. Since this time last June, stocks have crashed in 6 of the world’s 8 largest economies, and stocks in the other two are down as well. The charts that you are about to see are absolutely stunning, and they are clear evidence that a new global financial crisis has already begun. Of course it is true that we are still in the early chapters of this new crisis and that there is much, much more damage to be done, but let us not minimize the carnage that we have already witnessed.

In general, there have been three major waves of financial panic over the past 12 months. Late last August we saw the biggest financial shaking since the financial crisis of 2008, then in January and February there was an even bigger shaking, and now a third “wave” has begun in June. Not all areas around the globe have been affected equally by each wave, but without a doubt this new financial crisis is a global phenomenon.

The charts that I am about to show you come from Trading Economics. It is an absolutely indispensable website that is packed full of useful data, and I encourage everyone to check it out.

Let’s talk about China first. The Chinese economy is the second largest on the entire planet, and since this time last year Chinese stocks are down an astounding 40 percent…

As things have started to unravel in China, the Chinese have been selling off U.S. debt and U.S. stocks like crazy. The following comes from Bloomberg…

(CHECK OUT LINK FOR CHARTS: http://www.activistpost.com/2016/06/the-stock-market-crash-of-2016-largest-economies.html)

For the past year, Chinese selling of Treasuries has vexed investors and served as a gauge of the health of the world’s second-largest economy.

The People’s Bank of China, owner of the world’s biggest foreign-exchange reserves, burnt through 20 percent of its war chest since 2014, dumping about $250 billion of U.S. government debt and using the funds to support the yuan and stem capital outflows.

While China’s sales of Treasuries have slowed, its holdings of U.S. equities are now showing steep declines.

Unfortunately for China, their economy just continues to slow down, and George Soros is so alarmed by this and a potential “Brexit” that he has been selling off stocks and buying enormous amounts of gold in anticipation of an even bigger global downturn.

Japan has the third largest economy in the world, and over the past year Japanese stocks are down a total of 26 percent from the peak…

Personally, I have been extremely alarmed by what has been happening in Japan lately. Japanese stocks were down almost 500 points last night, and overall the Nikkei is down a whopping 1,800 points so far in June.

Of course the Japanese economy as a whole is essentially a basket case at this point. For a detailed analysis of this, please see my previous article entitled “Watch Japan – For All Is Not Well In The Land Of The Rising Sun.”

Germany has the fourth largest economy in the world, and over the past year their stocks have fallen 19 percent from the peak of the market…

(GO TO: http://www.activistpost.com/2016/06/the-stock-market-crash-of-2016-largest-economies.html FOR CHART)

The key thing to watch for in Germany are serious troubles at their biggest bank. I wrote a long article about the slow-motion implosion of Deutsche Bank last month, and just this week Deutsche Bank stock hit an all-time low.

The fifth largest economy on the planet belongs to the United Kingdom, and since last June their stocks have fallen about 13 percent…

(LINK:  http://www.activistpost.com/2016/06/the-stock-market-crash-of-2016-largest-economies.html)

One week from today, the “Brexit” vote will be held in the UK, and if they vote to leave the EU that could have very serious economic and financial implications for them and for the rest of Europe as well.

France has the sixth largest economy in the world, and over the past year French stocks are down 20 percent from the peak of the market…

The French economy is really struggling these days, and we have not heard much about it in the U.S. media, but there have been tremendous riots in major cities in France in recent weeks.

The seventh largest economy on our planet belongs to India. Even though India is facing some very serious economic problems, their stocks are doing okay for the moment. Even though stocks in India are down over the past 12 months, we have not seen a major financial crisis over there just yet.

But there is definitely a major crisis in the eighth largest economy in the world. Italian stocks are down a staggering 32 percent from the peak of the market. That means approximately a third of all stock market wealth in Italy is already gone…

(LINK:  http://www.activistpost.com/2016/06/the-stock-market-crash-of-2016-largest-economies.html)

Earlier this year, I wrote about the horrifying collapse of the Italian banking system that has greatly accelerated since the start of 2016. It looks like virtually all of their big banks will ultimately need to be bailed out, and this threatens to become a far bigger crisis than the crisis in Greece ever was.

And let us not leave off the ninth largest economy in the world. Not too long ago, CNN ran an article entitled “Brazil: Economic collapse worse than feared.” So not only are they admitting that the ninth largest economy on the globe is collapsing, they are also admitting that it is even worse than what the experts had anticipated.

So did I leave anyone off the list?

Ah yes, I haven’t even addressed what has been going on in the United States yet.

U.S. stocks did crash last August, but then they recovered.

Then they crashed again in January, but then they recovered again.

Now U.S. stocks have been taking another tumble here in June, but we are being assured that there is nothing to worry about.

Meanwhile, the underlying numbers for the U.S. economy just continue to get worse and worse and worse.

Hopefully this article will clear a lot of things up. In this piece, I have presented undeniable evidence that a new global financial crisis has begun over the past 12 months. We have not seen global stock declines of this nature since the great financial crisis of 2008, but much worse is still to come.

I would love to be wrong about that last part.

It would be wonderful if the worst was now behind us and good times for the global financial system were ahead.

Unfortunately, every single indicator that I am watching is telling me just the opposite.

 

from:    http://www.activistpost.com/2016/06/the-stock-market-crash-of-2016-largest-economies.html

Economic Downturn

Friday, October 16th, 2015

Wal-Mart’s Worst Stock Crash In 27 Years Is Another Sign That The Economy Is Rapidly Falling Apart

walmartBy Michael Snyder

Now that a major global recession has begun, you would expect major retailers like Wal-Mart to run into trouble as consumer spending dries up, and that is precisely what is happening.  On Wednesday, shares of Wal-Mart experienced their largest single day decline in 27 years after an extremely disappointing earnings projection was released.  The stock was down about 10 percent, which represented the biggest plunge since January 1988.  Over 21 billion dollars in shareholder wealth was wiped out on Wednesday, and this was just the continuation of a very bad year for Wal-Mart stockholders.  Overall, shares had already declined by 22 percent so far in 2015 before we even got to Wednesday.  Here is more on this stunning turn of events from Bloomberg

Wal-Mart Stores Inc. suffered its worst stock decline in more than 27 years after predicting a drop in annual profit, underscoring the giant retailer’s struggles to reignite growth.

Earnings will decrease 6 percent to 12 percent in fiscal 2017, which ends in January of that year, the Bentonville, Arkansas-based company said at its investor day on Wednesday. Analysts had estimated a gain of 4 percent on average, according to data compiled by Bloomberg.

If it was just Wal-Mart that was having trouble, that would be bad enough.  But the truth is that signs that the U.S. economy has entered another major downturn are popping up all around us.  Just consider the following list of economic indicators that Graham Summers recently put out

The Fed has now kept interest rates at zero for 81 months.

This is the longest period in the history of the Fed’s existence, lasting longer than even the 1938-1942 period of ZIRP.

And the US economy is moving back into recession. Consider that…

1)   Industrial production fell five months straight in the first half of 2015. This has never happened outside of a recession.

2)   Merchant Wholesalers’ Sales are in recession territory.

3)   The Empire Manufacturing Survey is in recession territory.

4)   All four of the Fed’s September Purchasing Manager Index (PMI) readings (Philadelphia, New York, Richmond, and Kansas City) came in at readings of sub-zero. This usually happens when you are already 4-5 months into a recession. (H/T Bill Hester)

Another huge red flag is the fact that month after month fewer products are being shipped around the country compared to last year.

If less stuff is being shipped around by truck, rail and air, is it a sign that the economy is getting better or is it a sign that the economy is getting worse?

The answer, of course, is self-evident.  With that in mind, please read the following excerpt which comes from a recent article by Wolf Richter

It has been crummy all year: With the exception of January and February, the shipping volume has been lower year-over-year every month!

The index is broad. It tracks data from shippers, no matter what carrier they choose, whether truck, rail, or air, and includes carriers like FedEx and UPS.

Evidence keeps piling up in the most unpleasant manner that something isn’t quite right in the real economy. The world is now in an inexplicable slowdown – “inexplicable” for central bankers who’ve cut interest rates to zero or below zero years ago, and who’re still dousing some economies with QE even as governments are running up big deficits. And yet, despite seven years of this huge monetary and fiscal stimulus, the global economy is deteriorating.

Okay, so is there anyone out there that still believes that the U.S. economy is in good shape?

The Obama administration will probably not admit it for a very long time, but the truth is that the numbers very clearly tell us that we are in a recession.

Anybody out there, whether an “expert” or just someone you happen to know, that tells you that everything is just fine is either completely ignorant or they are purposely lying to you.

And just like in 2008, state and local governments are starting to get into tremendous financial trouble as the real economy sputters.  For example, the governor of Illinois has told reporters that “we are out of money now” and that pension fund payments will be delayed as a result…

Illinois will delay payments to its pension fund as a prolonged budget impasse causes a cash shortage, Comptroller Leslie Geissler Munger said.

The spending standoff between Republican Governor Bruce Rauner and Democratic legislative leaders has extended into its fourth month with no signs of ending. Munger said her office will postpone a $560 million retirement-fund payment next month, and may make the December contribution late.

“This decision is choosing the least of a number of bad options,” Munger told reporters in Chicago on Wednesday. “For all intents and purposes, we are out of money now.”

When these sorts of things started happening in 2008, Fed Chairman Ben Bernanke and the Bush administration went into full-blown denial mode.  They kept telling all of us not to worry and that everything would be okay, and that just made things worse in the end.

The same thing is happening now.  The Obama administration and the mainstream media keep talking about an “economic recovery” even in the face of numbers such as I have discussed in this article.

Perhaps things are going well for you personally at the moment, and that is great.  But now is not the time to buy lots of new toys.   Nor is it the time to accumulate more debt.

Instead, now is a time to position yourself for a period of difficulty that could stretch on for years.

The next recession is here, and it is going to grow progressively worse.

The wise will take heed and make preparations, but the foolish will just keep on doing what they have been doing until it is far too late.

Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

from:    http://www.activistpost.com/2015/10/wal-marts-worst-stock-crash-in-27-years-is-another-sign-that-the-economy-is-rapidly-falling-apart.html

Number of Verbs & Nouns As Indicators of Stock Market Trends?

Tuesday, July 19th, 2011

Fewer Verbs and Nouns in Financial Reporting Could Predict Stock Market Bubble, Study Shows

ScienceDaily (July 19, 2011) — When the language used by financial analysts and reporters becomes increasingly similar the stock market may be overheated, say scientists.

After examining 18,000 online articles published by the Financial Times, The New York Times, and the BBC, computer scientists have discovered that the verbs and nouns used by financial commentators converge in a ‘herd-like’ fashion in the lead up to a stock market bubble. Immediately afterwards, the language disperses.

The findings presented at the International Joint Conference on Artificial Intelligence, Barcelona, Spain, on July 19, 2011, show that the trends in the use of words by financial journalists correlate closely with changes in the leading stock indices.

“Our analysis shows that trends in the use of words by financial journalists correlate closely with changes in the leading stock indices — the DJI, the NIKKEI-225, and FTSE-100,” says Professor Mark Keane, Chair of Computer Science in University College Dublin, who was involved in the research.

to read more, go to:    http://www.sciencedaily.com/releases/2011/07/110718101202.htm

Problems with the Dow

Tuesday, July 5th, 2011

Why the Dow will end up plunging to 7,000

There are too many financial risks on the horizon that are being dismissed

By Douglas A. McIntyre
24/7 Wall St.
One theory of economics says that any market can return to a point where it has been in the past. The Great Recession was, by some measures as bad as the Great Depression. Unemployment was 3.6 percent in November 1966. It was at 4 percent in December 1999. There is no precedent for zero unemployment, but those two periods came close.

Recent movements in the stock market could repeat themselves as the economy lurches toward another recession. The DJIA fell to just below 6,630 on March 2, 2009. Back in October 2007, 17 months earlier, it briefly traded above 14,000. What happened? The most frequent answer is the recession that lasted from December 2007 until June 2009, a period determined by the National Bureau of Economic Research, caused the collapse. The recession lasted 18 months, which made it the longest of any downturn since World War II.

The DJIA could drop below 7,000 again before the middle of next year, down from 12,000 where it trades now. The market fell over 50 percent last 2008 and 2009. A correction to 7,000 this time would be 42 percent.

to read more, go to: http://www.msnbc.msn.com/id/43564461/ns/business-stocks_and_economy/