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Thursday, January 24, 2019

Urgent 🔴“Stock Market Crash Of 2018” Is Rapidly Transforming Into “Financial Crisis Of 2019”


The “Stock Market Crash Of 2018” Is Rapidly Transforming Into “The Financial Crisis Of 2019”

Stock markets are crashing all over the world, we are seeing extremely violent “flash crashes” in the forex marketplace, economic conditions are slowing down all over the globe, and fear is causing many investors to become extremely trigger happy.  The stock market crash of 2018 wiped out approximately 12 trillion dollarsin global stock market wealth, but things were supposed to calm down once we got into 2019.  But clearly that is not happening.  After Apple announced that their sales during the first quarter are going to be much, much lower than previously anticipated, Apple’s stock price started shooting down like a rocket and by the end of the session on Wednesday the company had lost 75 billion dollars in market capitalization.  Meanwhile, “flash crashes” caused some of the most violent swings that we have ever seen in the foreign exchange markets…
It took seven minutes for the yen to surge through levels that have held through almost a decade.
In those wild minutes from about 9:30 a.m. Sydney, the yen jumped almost 8 percent against the Australian dollar to its strongest since 2009, and surged 10 percent versus the Turkish lira. The Japanese currency rose at least 1 percent versus all its Group-of-10 peers, bursting through the 72 per Aussie level that has held through a trade war, a stock rout, Italy’s budget dispute and Federal Reserve rate hikes.
This is the kind of chaos that we only see during a financial crisis.
Investors are also being rattled by the fact that China just experienced its first factory activity contraction in over two years
The People’s Bank of China said on Wednesday evening it had relaxed its conditions on targeted reserve requirement cuts to benefit more small firms.
The move came after China reported its first factory activity contraction in over two years in December. A long-term Chinese slowdown would cause global havoc.
But of course the biggest news of the day was what happened to Apple.  The Dow Jones Industrial Average was down 660 points on Wednesday, and the huge hit that Apple took was the biggest reason for that decline.
Including the 75 billion dollars that was just wiped out, the value of Apple has now fallen by 452 billion dollars since October 3rd…
In only three months, Apple has lost $452 billion in market capitalization, including tens of billions on Thursday as the tech giant’s stock sank further.
Apple shares have fallen by 39.1 percent since Oct. 3, when the stock hit a 52-week high of $233.47 a share. With its market cap down to about $674 billion, those losses are larger than individual value of 496 members of the S&P 500 — including Facebook and J.P. Morgan.
Ironically, the truth is that Apple is actually one of the strongest companies on Wall Street financially.  It is just that the company was priced well beyond perfection, and so any hint of bad news was likely to cause a decline of this magnitude.
The amount of paper wealth that stock market investors have just lost is absolutely staggering.  To put this in the proper perspective, here are some more facts about the money that Apple investors have lost that come from CNBC
·         more than double the size of Wells Fargo
·         more than three times the size of McDonald’s
·         more than five times the size of Costco
·         more than 10 times the size of Raytheon
At this point U.S. financial markets are hypersensitive to any piece of bad news, and the fact that Apple sales are way down in China is definitely bad news.
One analyst said that this was “Apple’s darkest day in the iPhone era” and he expressed his opinion that “the magnitude of the miss with China demand …was jaw-dropping.”
Of course Apple is far from alone.  Economic activity is slowing down substantially all over the planet, and on Wednesday we learned that U.S. factory activity just declined by the most since the last recession
Beyond Apple, investors were also rattled by the biggest one-month decline in US factory activity since the Great Recession. The closely-watched ISM manufacturing index tumbled to a two-year low, providing further evidence of slowing growth and pain from the US-China trade war.
In addition, both of Bloomberg’s economic surprise indexes have “turned negative for the first time since Trump was elected”.
The hits just keep on coming, and it is becoming quite clear that this is going to be a very tough year.
As this crisis continues to escalate, keep an eye on our big financial institutions.  Italy’s tenth largest bank just imploded, and it is likely that we will see more financial dominoes start to topple as the losses mount.
Over the past decade, there have been other times when Wall Street has been rattled, but those episodes only lasted for a few weeks at the most.
It has now been three months, and this new crisis shows no signs of abating any time soon.
What that means is that we are in a heap of trouble.  Because once this giant financial avalanche fully gets going, it is going to be impossible to stop.
For the moment, I think that this current wave of panic selling is subsiding and that Friday will be better for investors.  Of course the markets are so jittery at this point that a single piece of bad news could instantly send them tumbling once again.  But barring any bad news, hopefully things will be calmer on Friday.
There will be good days and there will be bad days in 2019.
There will be ups and there will be downs.
But it has become exceedingly clear that the downturn that so many have been anticipating has finally arrived, and the financial crisis of 2019 looks like it is going to be a doozy.

Stocks Plunge, Consumer Pessimism Grows And U.S. Home Sales Just Hit Their Lowest Level In 3 Years

It appears to be more likely than ever that the U.S. economy is heading for a recession.  On Tuesday, the Dow Jones Industrial Average was down 301 points as investors were rattled by several very important pieces of news.  Back in 2008, home sales began to fall precipitously just prior to the financial crisis in the second half of that year, and now it is happening again.  Of course home sales are always going up and down, but the numbers that we are seeing now are definitely very unusual.  According to the National Association of Realtors, existing home sales just hit their lowest level in 3 years
U.S. home sales tumbled to their lowest level in three years last month and house price increases slowed sharply, suggesting a further loss of momentum in the housing market.
The National Association of Realtors said on Tuesday existing home sales declined 6.4 percent to a seasonally adjusted annual rate of 4.99 million units last month — the lowest level since November 2015.
And when you compare December 2018 to December 2017, the numbers look even worse.  According to Wolf Richter, last month existing home sales were down 10.3 percent on a year over year basis…
Sales of “existing homes” — including single-family houses, townhouses, condos, and co-ops — in December, plunged 10.3% from a year earlier, to a seasonally adjusted annual rate (SAAR) of 4.99 million homes, according to the National Association of Realtors this morning. This was the biggest year-over-year drop since May 2011, during the throes of Housing Bust 1
Those are absolutely horrible numbers, but thanks to high interest rates they aren’t going to get much better any time soon.  Just like a decade ago, this is going to be a very tough time to be in the real estate industry.
During the “boom years”, the west was the hottest region for real estate in the entire nation, but now it is leading the way down.  And last month was just abysmal, with sales falling 15 percent in that portion of the country…
  • Northeast: -6.8%, to an annual rate of 690,000.
  • Midwest: -10.5%, to an annual rate of 1.19 million.
  • South: -5.4%, to an annual rate of 2.09 million.
  • West: -15.0%, to an annual rate of 1.02 million.
Unfortunately, these are exactly the kinds of numbers that we would expect to see if the U.S. economy was heading into a recession.
Investors were also rattled on Tuesday by news that trade talks between the U.S. and China seem to be breaking down
Stocks fell to their lows of the day after the Financial Times reported the U.S. canceled a trade meeting with Chinese officials. CNBC later confirmed the report through a source. White House economic advisor Larry Kudlow denied the reports, saying the meetings are not canceled, giving stocks a boost into the close. China and the U.S. are trying to strike a permanent trade deal with the U.S. Both countries have been in a trade war since last year, slapping tariffs on billions of dollars worth of their goods.
We’ll see what happens, but the Chinese appear to be dragging their feet, and it does not look like there will be a major trade agreement between the two sides any time soon.
And when you throw in the fact that we are in the midst of the longest government shutdown in all of U.S. history, it becomes exceedingly clear that the elements for a “perfect storm” are definitely coming together.
In fact, Peter Schiff is entirely convinced that the coming recession is already “a done deal”…
“And they think simply because the Federal Reserve is no longer hiking rates that they no longer have to worry about the Fed pushing the economy into a recession. Well, it’s too late for that. The rate hikes of the past have already guaranteed that the economy is headed for recession. It doesn’t matter whether they continue to raise rates in the future. The recession is a done deal. It’s just now you have that calm between the storm while investors are still clueless and haven’t yet connected those, what should be, very obvious dots.
When the next recession comes, you will know who to blame.  Every time the Federal Reserve has engaged in a rate hiking program since World War II, it has always ended in either a recession or a stock market crash.  The Fed is the reason why the U.S. economy has been on a roller coaster ride for decades, and now we are steamrolling directly toward the “bust” portion of this cycle.  If we ever want to end this madness, we need to abolish the Fed, and that means that we need to send people to Congress that are willing to take action on these things.
Sadly, it is probably going to take a major collapse before abolishing the Fed becomes a big political issue again.  Economic issues have been on the back burner for a while, but that may be about to change, because pessimism about the economy is growing.  According to Gallup, the percentage of Americans that believe economic conditions are worsening has risen by 12 points over the past two months…
Americans are not feeling very confident about the economy these days.
Almost half (48%) of Americans say economic conditions are worsening, up from 45% in December and 36% in November, according to a recent poll by Gallup, a Washington, D.C.-based research and consulting firm.
This is more evidence of the national psychological shift that I have been talking about.  People are starting to realize what is happening, and they are becoming deeply concerned about what the future holds.
Well, the truth is that things are going to get a lot tougher.  But instead of getting down in the dumps about it, we need to prepare for what is ahead, and we need to be ready to implement some positive solutions in the aftermath of the coming crisis.


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