This just shows what can happen when you let crazy people run a state for several decades. In the 1960s and 1970s, the possibility of moving to the west coast was “the California dream” for millions of young Americans, but now “the California dream” has turned into “the California nightmare”. According to a brand new survey, 53 percent of those living in California are considering leaving the state, and there are certainly lots of reasons to hit the road and never look back. The cities are massively overcrowded, California has the worst traffic in the western world, drug use and illegal immigration both fuel an astounding amount of crime, tax rates are horrendous and many of the state politicians appear to literally be insane. And on top of all that, let us not forget the earthquakes, wildfires and landslides that are constantly making headlines all over the world. Last year was the worst year for wildfires in California history, and these days it seems like the state is hit by some new crisis every few weeks.
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…
Real estate, oil and the employment numbers are all telling us the same thing, and that is really bad news for the U.S. economy. It really does appear that economic activity is starting to slow down significantly, but just like in 2008 those that are running things don’t want to admit the reality of what we are facing. Back then, Fed Chair Ben Bernanke insisted that the U.S. economy was not heading into a recession, and we later learned that a recession had already begun when he made that statement. And as you will see at the end of this article, current Fed Chair Jerome Powell says that he is “very happy” with how the U.S. economy is performing, but he shouldn’t be so thrilled. Signs of trouble are everywhere, and we just got several more pieces of troubling news.
The U.S. economy is definitely deviating from the script, and we just got more evidence that “Housing Bubble 2” is bursting. Experts were expecting that new home sales in the U.S. would rise in October, but instead they plunged 8.9 percent. That number is far worse than anyone was projecting, and many in the real estate industry are really starting to freak out. And to be honest, things look like they are going to get even worse in 2019. One survey found that the percentage of Americans that plan to buy a home over the next 12 months has fallen by about half during the past year. Mortgage rates have steadily risen as the Federal Reserve has been hiking interest rates, and at this point most average Americans have been completely priced out of the market. Home prices are going to have to come way down from where they are right now, and just as we witnessed in 2008, rapidly falling home prices can put an extraordinary amount of stress on the financial system.
Things just continue to get even worse for the U.S. housing industry. New homes sales have been absolutely plummeting, homebuilder stocks have lost over a third of their value, and existing home sales just posted their biggest decline since 2014. For years, we had been witnessing a real estate boom in the United States, but now that has officially ended. It is starting to feel like 2008 all over again, and many of those that work in the industry are really starting to freak out. The Federal Reserve has been aggressively raising interest rates, and it is having the exact same effect on the housing industry that it did just before the last recession.
What goes up must eventually come down. For years, the California housing market was on the cutting edge of “Housing Bubble 2” as we witnessed home prices in the state soar to absolutely absurd levels. In fact, it got so bad that a burned down house in Silicon Valley sold for $900,000 earlier this year, and a condemned home in Fremont sold for $1.2 million. But now things have changed in a major way. The hottest real estate markets in the entire country led the way down during the collapse of “Housing Bubble 1”, and now it looks like the same thing is going to be true for the sequel.
We have repeatedly been told that the U.S. economy is “booming”, but meanwhile the middle class in the United States continues to be hollowed out. The financial bubbles that the Federal Reserve has created have been a great blessing for those at the very top of the economic pyramid, but most of the country is still deeply struggling. According to one survey, 78 percent of all full-time workers in the U.S. live paycheck to paycheck, and that doesn’t even include part-time workers or those that are unemployed. We have also been told that unemployment is “low”, but the real numbers tell us that there are more working age Americans without a job in 2018 than there was at any point during the last recession. Most of the people that my wife and I know are struggling, and I continually get emails from readers all over the country that are struggling. The sad truth is that the middle class is slowly but surely dying, and more people are falling into poverty with each passing day.
The housing market indicated that a crisis was coming in 2008. Is the same thing happening once again in 2018? For several years, the housing market has been one of the bright spots for the U.S. economy. Home prices, especially in the hottest markets on the east and west coasts, had been soaring. But now that has completely changed, and home sellers are cutting prices at a pace that we have not seen since the last recession. In case you are wondering, this is definitely a major red flag for the economy. According to CNBC, home sellers are “slashing prices at the highest rate in at least eight years”…