Recession

The Numbers Tell Us That The ‘Economic Recovery’ Is Dead And Businesses Are Failing At A Staggering Pace

Even though economic conditions were absolutely awful, during the month of June the mainstream media kept insisting that the U.S. economy was “recovering” and the stock market kept surging on every hint of good news. But now the “economic recovery” narrative is completely dead, because the numbers clearly show that the U.S. economy is rapidly moving in the wrong direction. On Thursday, the Labor Department announced that another 1.416 million Americans filed new claims for unemployment benefits last week. Prior to this year, the all-time record for a single week was just 695,000, and so we are talking about a level of unemployment that is absolutely catastrophic. But what is really alarming many analysts is that the number for last week was quite a bit higher than the number for the week before. Many states are rolling out new restrictions as the number of confirmed COVID-19 cases continues to surge, and this is having a huge impact on economic activity. For months I have been warning that fear of COVID-19 would prevent economic activity from returning to normal levels for the foreseeable future, and that is precisely what has happened.

Overall, more than 52 million Americans have filed new claims for unemployment benefits over the past 18 weeks, and that makes this the biggest spike in unemployment in U.S. history by a very wide margin.

In fact, this dwarfs all previous spikes by so much that the others are not even worth mentioning.

Of course it isn’t just the employment numbers that are depressingly bad. According to Jefferies, in late June 19 percent of all U.S. small businesses were closed, but now that number has risen to 24.5 percent…

As of Sunday, 24.5% of small businesses in the United States were closed, according to Jefferies. That is worse than late June, when only 19% were closed. Jefferies pointed to “particular weakness in COVID hot spots” and noted that small business employment had dropped to levels unseen since the end of May.

Just think about that number for a minute.

Nearly a quarter of all small businesses in the entire country are closed.

And the really bad news is that many of them will never end up reopening.

At the beginning of the pandemic, I received a lot of criticism for stating that many of the small businesses that were shutting down at that time would never open again, but over the long-term the numbers have shown that I was correct.

In fact, Yelp says that a whopping 60 percent of the restaurants that were initially listed as “temporarily closed” on their site are now classified as permanently closed…

It’s tough out there for restaurants and other small businesses.

Yelp’s Economic Average report out Wednesday shows exactly how tough: 60 percent of the 26,160 temporarily closed restaurants on the business review site as of July are now permanently shut. Temporary closures are dropping, and permanent shutdowns are increasing.

Fear of COVID-19 is going to cause a large portion of the population to continue to avoid restaurants for as long as this pandemic persists, and it is becoming clear that it is likely to persist for a long time to come.

We are going to lose so many small and independent places to eat. Many of the big corporate chains that have very deep pockets will survive, at least for a while, but there is simply no replacing what small and independent restaurants mean to our communities.

Bars and clubs are being hit extremely hard as well. According to Yelp, 44 percent of the bars and clubs on their site that were initially listed as “temporarily closed” have now been shut down on a permanent basis…

Bars and clubs are also closing forever at high rates: 44 percent (as of July) of 5,454 temporarily shuttered bars and other nightlife establishments are shut for good.

Other sectors of the economy are doing relatively better, but the overall outlook for small businesses in America is exceedingly bleak.

In New York City, it is being projected that one-third of all small businesses will never be able to open again…

As many as 76,000 small businesses in New York City – a third of the 230,000 citywide – may never reopen after forced to close during the COVID-19 lockdown, business leaders have warned.

The Partnership for New York City, a not-for-profit organization that connects business leaders with local government, predicted that 76,000 small businesses will never be able to reopen in a report produced by 14 consulting firms.

I know that number is hard to believe, but this is actually happening.

Our politicians want to encourage people “to go back to work”, but for millions upon millions of Americans the jobs that they once had are gone forever.

Air travel is another industry that is being absolutely devastated by this pandemic. After a modest bounce in June, the number of air passengers is starting to fall again…

The resurgence of coronavirus infections is derailing the travel industry’s modest recovery. The number of air passengers processed through TSA security lines fell during the week ended July 20, compared with the prior week, according to Bank of America. This metric is down more than 70% from a year ago.

United (UAL) CEO Scott Kirby told CNBC on Wednesday that the airline doesn’t “expect to get anywhere close to normal until there’s a vaccine that’s been widely distributed to a large portion of the population.”

All of the numbers that I have shared in this article tell us that we are in an economic depression.

Many had hoped that this economic downturn would be short-lived and that a “V-shaped recovery” would commence once the coronavirus lockdowns were lifted.

But instead a resurgence of cases has caused new restrictions to be implemented, and economic activity is slowing down again.

The bottom line is that all of us need to get prepared to weather a long-term economic storm that is going to be incredibly painful.

The last recession was bad, but it isn’t even worth comparing to the times that we are entering now. All of our lives are being turned upside down, and a lot of people are not going to be able to handle what comes next.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help. During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

Will This Be “Just A Recession” Or Will It Be “The Next Great Depression”?

As America slowly but surely shuts down from coast to coast, everyone is acknowledging the fact that we are heading into a very serious economic downturn. Originally, many experts were warning that this coronavirus pandemic could spark a recession, but now some are actually starting to use the “d” word. Yesterday, I wrote about the government planning document that envisions an 18 month pandemic, multiple “waves” of infections, and “critical shortages” of important supplies. If that scenario actually plays out, what we will experience will be far, far worse than the “Great Recession” of 2008 and 2009. So let us hope that a way can be found to slow down the spread of this virus.

At this point, many of our top minds are fearing the worst. On Thursday, former White House economist Kevin Hassett warned CNN that we could actually see a repeat of the Great Depression…

The widespread shutdown of the American economy because of the coronavirus could spark a repeat of the Great Depression, former Trump economist Kevin Hassett told CNN on Thursday.

The startling warning from a former White House adviser comes as Wall Street banks say the United States faces an historic collapse in GDP and mounting job losses.

Just a few weeks ago, the mainstream media was full of talk about how bright the future looked for the U.S. economy.

But now Hassett is telling us that we could be about to witness the “worst jobs number you ever saw”…

Hassett, who left the White House last year and is now a CNN commentator, predicted that when the April jobs report comes out it will be the “worst jobs number you ever saw,” with perhaps two million jobs lost.

That would easily surpass the worst jobs report of the Great Recession, when payrolls plunged by 800,000 during March 2009.

Could you imagine the panic that would cause on Wall Street if we actually do see a job loss of that magnitude?

Of course Hassett is not the only one using such strong language. A former economic adviser to Barack Obama says that this pandemic “could do more damage to the economy than the financial crisis did”…

Jason Furman was a top economic adviser to President Barack Obama, serving as deputy director of the National Economics Council from 2009 to 2013, and as chair of the Council of Economic Advisers from 2013 to 2017. He played a key role in designing the administration’s response to the financial crisis and Great Recession. He’s now a professor at Harvard’s Kennedy School of Government.

I’ve spoken with Furman often over the years, and to put it bluntly, I’ve never heard him as alarmed as on Thursday. He believes the coronavirus could do more damage to the economy than the financial crisis did, and that policymakers aren’t even close to designing a large enough response.

Sadly, he is likely to be entirely correct.

In fact, if this pandemic stretches on for many more months it will make what happened in 2008 look like a Sunday picnic.

For a long time I have been warning that a recession is coming, but I don’t have to warn about that any longer. On Thursday, Bank of America boldly declared that the next recession is already here…

Bank of America warned investors on Thursday that a coronavirus-induced recession is no longer avoidable — it’s already here.

“We are officially declaring that the economy has fallen into a recession … joining the rest of the world, and it is a deep plunge,” Bank of America U.S. economist Michelle Meyer wrote in a note. “Jobs will be lost, wealth will be destroyed and confidence depressed.”

If you can believe it, Bank of America is actually projecting that the U.S. economy will shrink by 12 percent on an annualized basis in the second quarter, and they are warning that more than 3 million jobs will be lost during this crisis…

Bank of America looked at the labor market as a way to understand the “magnitude of the economic shock.” The firm expects the unemployment rate to nearly double, with roughly 1 million jobs lost each month of the second quarter for a total of 3.5 million.

Actually, if we only lose 3.5 million jobs during the course of this pandemic that should be considered to be a rip-roaring success.

Never before in U.S. history have we witnessed such a widespread economic shutdown. On Thursday, the governor of Pennsylvania actually ordered almost every business in the entire state to close up shop…

Governor Tom Wolf ordered all non-life-sustaining businesses in Pennsylvania to close their physical locations by 8 p.m. Thursday in an effort to slow the spread of COVID-19.

Enforcement actions against businesses that do not close their physical locations will begin at 12:01 a.m. Saturday, the Wolf administration said in a press release.

That means that almost everyone is going to be staying home and virtually all economic activity in the state is going to come to a grinding halt.

There is a good chance that this will slow down the spread of the virus in Pennsylvania temporarily, but unless every other state does the same thing simultaneously, people from other states are just going to keep bringing the virus back in.

In Texas, Governor Greg Abbott just instituted a whole host of restrictions, but most businesses will continue operating normally…

Gov. Greg Abbott issued an executive order limiting public gatherings to 10 people, shutting schools, prohibiting visitors to nursing homes and retirement communities and limiting bars and restaurants to take-out through April 3 in an effort to slow the spread of COVID-19. He also recommended that non-essential state employees telework.

In California, about a third of the state is currently locked down, but the COVID-19 has just continued to spread.

In fact, Governor Gavin Newsom just told the press that he expects more than 25 million people to eventually become infected in his state alone…

California estimates that more than half of the state — 25.5 million people — will get the new coronavirus over the next eight weeks, according to a letter sent by Gov. Gavin Newsom to U.S. President Donald Trump.

“In the last 24 hours, we had 126 new COVID-19 cases, a 21 percent increase. In some parts of our state, our case rate is doubling every four days,” Newsom wrote in a letter dated Wednesday. Newsom asked Trump to dispatch the USNS Mercy Hospital Ship to the Port of Los Angeles through Sept. 1 to help with the influx of expected cases.

Overall, the number of confirmed cases in the United States has dramatically escalated over the last 48 hours.

As long as the number of confirmed cases continues to explode, the lockdowns will persist and the restrictions on our freedoms will become more severe.

And if this pandemic does end up lasting for 18 months as the government is now projecting, it will paralyze our society to an extent that we have never seen before.

The U.S. economy has fallen off a cliff, and I have a feeling that it has a long, long way to go before it hits bottom.

Japan’s GDP Is Collapsing, And Experts Are Warning That China Will Be Next

Global economic conditions are really starting to deteriorate quite rapidly. Economists were projecting that Japan’s GDP would shrink by 3.8 percent on an annualized basis in the fourth quarter, but instead it greatly surpassed expectations by plunging 6.3 percent. If Japan’s GDP falls again during the first quarter of 2020, and thanks to the coronavirus outbreak that seems very likely, then the world’s third largest economy will officially be in a recession. But of course the outlook for China is even worse. At this point, economic activity in China has come to a standstill, and this has thrown global supply chains into a state of chaos. It certainly appears that the entire global economy will shrink during the first quarter, and that will be the very first time that has happened in more than a decade. And if this coronavirus outbreak continues to intensify in the months ahead, the economic consequences are going to be absolutely catastrophic.

Even though the experts were anticipating a slowdown in Japan, nobody had any idea that it would be this bad…

Japan’s gross domestic product shrank at an annualized pace of 6.3 percent from the previous quarter in the three months through December, according to a preliminary estimate by the Cabinet Office released Monday.

Economists surveyed had predicted a fall of 3.8 percent, flagging the adverse impact of a sales tax increase, weak global demand and typhoon disruption.

The sales tax increase is being primarily blamed for this collapse in GDP, and without a doubt consumer spending in Japan was way down last quarter…

Consumer spending fell 11.1% after the national sales tax was raised in October to 10% from 8%. During the same month, Typhoon Hagibis ravaged a large swathe of the country.

Capital spending declined 14.1% and exports slipped 0.4% due to the fallout from the U.S.-China trade war.

Japanese officials were hoping that GDP would bounce back this quarter, but now the coronavirus outbreak has changed everything.

At this point it is very difficult to be positive about the immediate future of the Japanese economy, and an increasing number of experts are now anticipating a recession. Here is one example…

“I’m getting ready for another contraction in Japan’s first quarter. There just aren’t any positive factors to build a positive growth forecast,” said Mari Iwashita, chief market economist at Daiwa Securities Co., flagging her view that the economy is likely falling into recession.

The Japanese economy greatly benefits from the horde of tourists that usually come over from China, and the two nations have developed a very close trading relationship.

Now that those two factors are being disrupted, the outlook for the second quarter is decidedly grim…

“There is a good chance of Japan’s economy falling into a recession,” Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, said before Monday’s data was released. He flagged the risks of supply chains being affected if the outbreak was prolonged.

The coronavirus is taking a toll on the number of Chinese tourists to Japan and manufacturing activity due to the economy’s close ties with China, prompting some economists to forecast a contraction lasting two quarters.

Ultimately, it is going to be exceedingly difficult for Japan to avoid a recession.

But if Chinese GDP also plunges into recession territory this year, that will be even bigger news.

According to the New York Times, “the entire global economy could suffer from a prolonged shock in China”, and so investors will be watching the development of this crisis very carefully.

The number of confirmed cases and the official death toll both continue to rise, and the draconian measures that the Chinese have taken to contain the outbreak have slowed the Chinese economy to a crawl. The following is how Zero Hedge summarized the recent economic data that we have seen come out of China…

While not perfect, and certainly not a comprehensive view of what is really taking place “on the ground”, the above data is a useful real-time indicator of how the people in China perceive the threat of the coronavirus pandemic, and one thing is abundantly clear: as the pandemic spreads further without containment, and as the charts above flatline, so will China’s economy, which means that while Goldman’s draconian view of what happens to Q1 GDP is spot on, the expectation for a V-shaped recovery in Q2 and onward will vaporize faster than a vial of ultra-biohazardaous viruses in a Wuhan virology lab.

Of course many in the financial world are still hoping that things won’t be too bad.

For example, Dun and Bradstreet is hoping that the crisis in China will only “cause a drag of approximately one percentage point on global GDP”…

China, the world’s second largest economy after US, contributes about 20 percent to the world’s gross domestic product (GDP). However, according to a report by Dun and Bradstreet, the Chinese economy might cause a drag of approximately one percentage point on global GDP if prevention of Coronavirus gets delayed beyond the summer of 2020.

That is a wildly optimistic projection, but hopefully they are right.

Hopefully the coronavirus will fizzle out with the arrival of warmer weather and the global economy can start to get back to normal.

Unfortunately, a return to “normal” is probably not in the cards.

Even before this coronavirus outbreak, the global economy was really starting to slow down. Economic numbers were absolutely dismal all over the world, and many experts were warning that we were right on the verge of the next global recession.

Now that this outbreak has erupted, we definitely have much more momentum in a downward direction. Very challenging times are ahead, although most people in the western world still don’t understand what is happening.

As far as the coronavirus is concerned, the key will be what happens to the number of confirmed cases outside of China. Over the past week that number has roughly doubled, and if that keeps happening every week we will soon have a full-blown global pandemic on our hands.

There are now 75 confirmed cases in Singapore, 59 confirmed cases in Japan and 57 confirmed cases in Hong Kong. It is becoming increasingly difficult to keep this virus contained, and we are rapidly approaching a major tipping point.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

The Mainstream Media Admits We Are In “An Auto Recession” – And It Just Continues To Get Worse

Quite a few of the most important sectors of the global economy are already “in a recession”, and yet somehow we are still supposed to believe that the economic outlook for the rest of 2020 is a positive one. I am not buying it, and I know that a lot of other people aren’t buying it either. The global economic slowdown that began last year is really picking up pace here in early 2020, and global financial markets are perfectly primed for a meltdown of epic proportions. Unfortunately, most people simply do not understand how badly the global economy has been deteriorating. For example, global auto sales have now fallen for two years in a row, and even CNN is admitting that the global auto industry has been in a “recession” for some time…

The global auto industry plunged deeper into recession in 2019, with sales dropping more than 4% as carmakers struggled to find buyers in China and India. The pain is likely to continue this year.

The number of vehicles sold across major global markets dipped to 90.3 million last year, according to analysts at LMC Automotive. That’s down from 94.4 million in 2018, and well below the record 95.2 million cars sold in 2017.

Here in the United States, people keep trying to tell us that the economy is in good shape, but last year auto sales fell here too…

Nonseasonally adjusted passenger car sales in the U.S. for 2019 declined 10.9% to 4.7 million units, versus 5.3 million units in 2018, according to an S&P Global Market Intelligence analysis.

Sales of trucks, minivans and SUVs for the year totaled 12.2 million units, up 2.8% from the 2018 figure of 11.9 million units.

The overall nonseasonally adjusted U.S. vehicle sales for the period fell 1.4% to 17.0 million units, versus 17.2 million units a year ago.

Very few analysts are expecting these trends to turn around in 2020.

And considering how important the auto industry is to the global economy as a whole, that has very serious implications for all of us…

Recession comes with big ramifications for the global economy. According to the International Monetary Fund, the car industry accounts for 5.7% of economic output and 8% of goods exports. It is the second largest consumer of steel and aluminum.

Meanwhile, we are experiencing a very deep transportation recession in the United States as well. The following comes from Wolf Richter…

Shipment volume in the US by truck, rail, air, and barge plunged 7.9% in December 2019 compared to a year earlier, according to the Cass Freight Index for Shipments. It was the 13th month in a row of year-over-year declines, and the steepest year-over-year decline since November 2009, during the Financial Crisis

How in the world can the U.S. economy possibly be in “good shape” with absolutely horrific numbers like that?

When the amount of goods being shipped around the country by truck, rail and air is steadily falling, that is a crystal clear indication that economic conditions are slowing down.

And one of the biggest reasons why a transportation recession is upon us is because it looks like we are in a “manufacturing recession” too.

In fact, the manufacturing numbers for December were simply abysmal…

US manufacturing took a turn from lousy to worse in December, according to the Manufacturing ISM Report On Business, released today, with employment, new orders and new export orders, production, backlog of orders, and inventories all contracting.

The overall Purchasing Managers Index (PMI) dropped 0.9 percentage points from November to 47.2% in December 2019, the fifth month in a row of contraction, and the fastest contraction since June 2009.

Overall, 2019 was the worst year for U.S. industrial production since 2015.

Across the Atlantic, things are even worse in Europe. The following comes from Zero Hedge…

The manufacturing downturn across Europe deepened in the last month of 2019 according to the latest survey data released on Thursday.

IHS Markit Eurozone Manufacturing PMI lost momentum last month, printing at 46.3, down from 46.9 in November, if modestly above the 45.9 expected. The PMI averaged 46.4 in 4Q, a seven-year low.

When will global authorities finally admit that we have a real problem on our hands?

How much worse do the numbers have to get?

This month, the Baltic Dry Index has been plunging dramatically. For those that don’t know, the Baltic Dry Index is a key indicator of where global trade is heading, and on Monday it plummeted to a nine-month low…

The Baltic Exchange’s main sea freight index hit a nine-month low on Monday, dragged down by falling rates of capesize and panamax segments as world trade continues to slump.

The Baltic Dry Index, which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities across the world, dropped 25 points, or 3.3%, to 729 (according to Refinitiv data), the lowest level since April 2019

This is not what a healthy global economy looks like.

Of course many of those in positions of authority will continue to insist that everything is just fine for as long as possible.

In fact, back in 2008 Federal Reserve Chairman Ben Bernanke kept telling us that a recession wasn’t going to happen even after the worst economic downturn since the Great Depression had already started.

Just like back then, all of the hard economic numbers that we have are all saying the same thing.

Both the U.S. economy and the global economy as a whole have been slowing down for quite a while, and it looks like big trouble is ahead of us.

That means that now is not the time to be spending lots of money, making big financial commitments or going into debt.

Those that are wise will be positioning themselves to survive the coming economic storm, but unfortunately most people are paying no heed to the warning signs.

Just like last time around, most people have tremendous faith in the system, and so they will be absolutely blindsided by the crisis that is coming.

In the end, multitudes will be expecting the government to bail them out somehow, but considering the fact that we are already 23 trillion dollars in debt that simply is not going to be possible.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

12 Signs That The Economy Is Seriously Slowing Down As 2020 Begins

Lost in all of the headlines about Iran and impeachment is the fact that the U.S. economic slowdown which began during the latter stages of last year appears to be accelerating. The final numbers which will tell us if we are officially in a recession at this moment won’t be released until months from now, but for millions upon millions of Americans it definitely feels like one has already started. Yes, the stock market has been soaring, but at this point the stock market has become completely divorced from economic reality. And as you will see later in this article, stock prices are now the most overvalued that they have ever been in all of American history.

But before we get to that, let’s talk about what is happening in the real economy.

The following are 12 signs that the economy is seriously slowing down as 2020 begins…

#1 The U.S. Manufacturing Purchasing Managers Index has been in contraction for 5 months in a row, and it is now at the lowest level we have seen since June 2009.

#2 Last month, manufacturing employment fell at the fastest pace we have seen since August 2009.

#3 Last month, new manufacturing orders fell at the fastest pace we have seen since April 2009.

#4 Chicago PMI has been contracting for 4 months in a row.

#5 European manufacturing PMI declined again in December.

#6 Borden Dairy, one of the largest dairy companies in the entire world, declared bankruptcy just a few days ago.

#7 Earlier this month, the Baltic Dry Index had its worst day in 6 years.

#8 Overall, the decline in the Baltic Dry Index this month is the largest that we have seen since 2008.

#9 The auto recession just continues to get even worse. Thanks to the substantial slowdown we witnessed during the second half of 2019, the total number of cars and trucks sold in the United States during all of 2019 was actually below the level that we witnessed back in 2000 when our population was significantly smaller.

#10 Used heavy duty truck prices have fallen “as much as 50%“.

#11 Macy’s just announced that they will be closing 28 stores.

#12 To start the year, AT&T is laying off thousands of workers, and according to Robert Reich those being laid off “will have to train their foreign replacements“.

Of course many of the “experts” continue to assure us that everything will be just fine.

In fact, one panel of “experts” recently came to the conclusion that there is “almost no chance of a recession this year”.

That would be absolutely wonderful news if it was true.

Sadly, the numbers that I just shared with you tell a completely different story. They tell the story of an economy that is most definitely heading for a recession.

And according to John Williams of shadowstats.com, if the government was using honest numbers they would show that we are actually in a recession right now.

But what about the stock market?

Shouldn’t the fact that stock prices have been soaring be seen as an optimistic sign?

Well, there have been a few other stock bubbles of this nature throughout our history, and all of them have ended very badly.

In 1929, stock prices were at an all-time record high and it seemed like the economic good times would never end.

But then the stock market crashed and we plummeted into the Great Depression of the 1930s.

In 2000, the dotcom bubble pushed stock prices to absolutely absurd heights, but then stock prices quickly collapsed when the bubble burst and the U.S. economy fell into a very painful recession.

During the years leading up to 2008, stock prices once again rose to dizzying levels and it seemed like the party would last indefinitely.

But then the financial crisis struck, and the Great Recession of 2008 and 2009 was the most excruciating economic downturn our nation has experienced since the 1930s.

Unfortunately, we are even more primed for a stock market crash now than we were in any of the previous examples that I just shared.

So how do I know this?

Well, for one thing P/E ratios have become ridiculously inflated. The following comes from Marketwatch…

Indeed stocks are overvalued according to the popular measure of price-to-earnings (P/E) — which compares the price of one share of stock to one year of per-share earnings relative to recent history. The S&P 500 index SPX, -0.29% is trading at 18.6 times forward earnings, according to FactSet data, above the average ratio of 16.7 during the past five years and 14.9 over the past ten.

In addition, price-to-sales ratios for the S&P 500 are now at the highest level in all of U.S. history…

The above chart, from Ned Davis Research, shows that price relative to sales for the S&P 500 is at a record high, “well in excess of what they were in 2000 or 2007 at those peaks,” wrote Ned Davis in a Wednesday note to clients.

Other measures, like the median price to earnings ratio — which exclude the skewed effects of very profitable and very unprofitable companies — shows the S&P 500 overvalued by nearly 30% versus the typical valuation level seen since 1964.

In other words, in the entire history of the United States stock prices have never been more overvalued than they are at this moment.

And every other time we have seen stock price ratios get this high, an absolutely horrifying stock market crash has followed.

The optimists are insisting that things will somehow turn out differently this time.

They assure us that everything is under control and that very bright days are ahead.

You can believe them if you want, but every indicator is pointing in the opposite direction.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

We Haven’t Seen A Manufacturing Slowdown Like This Since The Last Financial Crisis

This isn’t what was supposed to happen. According to the economic optimists, there was going to be a great “manufacturing renaissance” as America entered a wonderful new golden age of boundless prosperity. But of course that is not what has happened. Manufacturing activity has been declining for the past three months, and all across the country we are seeing economic conditions rapidly deteriorate. Over and over, we are seeing economic numbers that are worse than anything we have seen since the last recession, but the economic optimists keep assuring us that these are just temporary blips on the way to America’s glorious economic renewal. Well, they can keep believing in a mirage of future prosperity if they want, but the hard numbers keep telling us another story. For example, the Chicago Purchasing Managers Index has now fallen to a level that was “last sustained during the financial crisis”…

Manufacturing activity across the country has contracted for three months, according to closely watched ISM data. In the Midwest, the slowdown has been more severe. The Chicago Purchasing Managers Index shows backlogs dropping to a level touched briefly four years ago but last sustained during the financial crisis.

In the middle of the country, it already feels like a manufacturing recession for many business owners. Manufacturing facilities are being closed down, machines are being idled and thousands of workers are being let go. The following comes from a CNBC article about our current manufacturing slowdown…

At Ameri-Source Metals’ machine shop outside Pittsburgh, stacks of graphite stubs have begun to pile up in a quiet corner.

Founder Ajay Goel said the customer who typically buys the stubs – a multinational chemicals company – now only needs one-fourth of the amount he used to produce. As a result, the machines have been idled and the workers who serviced them, laid off.

That sure doesn’t sound like a “booming economy” to me.

So far this year, thousands upon thousands of manufacturing workers have been laid off in the Upper Midwest. By now, we were supposed to be adding large numbers of these good paying jobs, but instead we are losing them at a frightening pace.

In fact, it is being reported that more than 8,000 manufacturing jobs have been lost in the key state of Pennsylvania alone…

From January to September, the states bordering the Great Lakes have lost more than 25,000 manufacturing jobs: Pennsylvania lost 8,100; Ohio lost 6,000; Michigan lost 6,500; and Wisconsin lost 4,700.

Of course it isn’t just the manufacturing industry where employment is cooling off. At this point, the number of job openings in the U.S. has fallen to an 18 month low, and it is expected to fall ever further in the months ahead.

Things have already gotten so bad that the mainstream media is running articles about how ordinary Americans can prepare for the coming recession. For instance, the following comes from a CNN article entitled “What can you do now to financially prepare for a layoff later?”…

Sometimes, there are warning signs that you are in danger of being laid off — a buyout of your company, a merger or a strategic change in direction. Other times, the cuts come without warning. But while being laid off is not in your control, being financially prepared for such an event is.

“Companies evolve, change and fail and employees, and even business owners, need to be prepared for the unexpected,” said Mike Silane, a chartered financial analyst with 21 West Wealth Management.

And remember, all of this is happening even though the federal government is running trillion dollar deficits and the Federal Reserve is using up all the ammunition that they should be saving for the depths of the next recession.

In essence, the authorities are already implementing emergency measures in a desperate attempt to support the faltering U.S. economy, but it isn’t working.

This week, we learned that orders for Class-8 trucks in the month of October were down 51 percent from a year ago.

Can anyone explain to me how that is consistent with the “booming economy” narrative that the economic optimists are endlessly pushing?

Unfortunately, the truth is that we can see signs of a major slowdown all around us. U.S. business hiring has fallen to a 7 year low, the Cass Freight Index has declined for 10 months in a row, and manufacturing is now the smallest share of the United States economy that it has been in 72 years.

But despite all of the evidence that is staring them right in the face, the economic optimists continue to insist that everything is probably going to be okay. In fact, Goldman Sachs CEO David Solomon is telling us that “the chance of a U.S. recession between now and the election is small”…

“I’ve said that I still think the chance of a U.S. recession between now and the election is small — in the distributions of outcomes, it’s a smaller outcome — I said roughly 25%,” Solomon told Bloomberg Television in Berlin on Tuesday. “Nine months ago I probably would have told you it was very small, kind of 15%,” he said. “So I do think the uncertainty has increased a little bit some of the risk,” but economic data and earnings momentum have held up well and American consumers are “still very healthy,” he said.

Of course the truth is that American consumers are actually not “very healthy” at this moment. Consumer confidence has fallen for 3 months in a row, and 44 percent of all Americans currently do not make enough money to cover their monthly expenses.

That is one of the reasons why consumers are piling up staggering amounts of debt, and that consumer debt bubble is starting to burst.

Unfortunately, the economic optimists will continue to push their false narrative up until the very end, and lots of people will believe them.

You can believe them too if you want, but it won’t change what is about to happen.

The crisis that so many have been anticipating is starting to play out, and our problems are likely to greatly accelerate in the months ahead.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

More Bad Economic Numbers Put A Huge Dent In The Case Of The Economic Optimists

For a long time, people have been trying to tell me that the U.S. economy is headed for a new golden era. They insist that the U.S. will be more powerful and more respected than ever before, and that we will see unprecedented prosperity in this nation. But despite extremely wild spending by the U.S. government and exceedingly irresponsible intervention by the Federal Reserve, the U.S. economy has not even had a “good” year in ages. As I have pointed out numerous times, we have not had a year when U.S. GDP grew by at least 3 percent since the middle of the Bush administration, and that makes this the longest stretch of low growth in all of U.S. history by a very wide margin. Many believe that brighter days may still be ahead, but all of the economic numbers that we have been getting in recent months make it abundantly clear that a new economic slowdown has begun. I shared 14 of those numbers earlier this week, and I will share some brand new ones with you today.

Let’s start by taking a look at how U.S. consumers are faring. U.S. consumer confidence has now fallen for 3 months in a row, and this week we learned that the Bloomberg Consumer Comfort Index has just fallen at the fastest pace in more than 8 years…

U.S. consumer comfort suffered its biggest weekly decline in more than eight years on a pullback in Americans’ assessments of the economy, personal finances and the buying climate, possibly signaling more moderate household spending approaching the holiday-shopping season.

The Bloomberg Consumer Comfort Index fell 2.4 points, the most since March 2011, to 61 in the week ended Oct. 27.

How in the world can anyone possibly claim that we have a “booming economy” after reading that?

We also just got another depressingly bad manufacturing number. Experts were expecting a reading of 48.3 for the Chicago Purchasing Management Index, but instead it came in at just 43.2…

The Chicago Purchasing Management Index sank to 43.2 in October from 47.1 in the prior month. This is the lowest level since December 2015. Economists has expected a reading of 48.3, according to Econoday.

Any reading below 50 indicates deteriorating conditions.

We were promised a “manufacturing renaissance”, but instead manufacturing is now the smallest share of the U.S. economy that it has been in 72 years.

That is terrible.

Manufacturing traditionally provides good paying jobs, and as I pointed out the other day, U.S. business hiring has now declined to the lowest level in 7 years.

But at least we have plenty of government jobs, eh?

In the private sector, things are getting really tough, and we are starting to see lots of big companies lay off workers.

For example, Molson Coors just announced that they will be laying off up to 500 workers as they desperately search for a way to survive in this difficult economic environment…

To further drive efficiency and enable growth, Molson Coors is consolidating and reorganizing office locations. The Denver office will be closed and Chicago will be designated as the North American operational headquarters. Functional support roles currently housed in several offices around the country will now be based in Milwaukee, Wisconsin.

As a result, we expect to reduce employment levels by approximately 400 to 500 employees as part of this restructuring, primarily in our existing United States, Canada and International reporting segments, as well as Corporate.

You know that things are getting tough when even beer companies start laying people off.

Of course the “retail apocalypse” continues to escalate, and we just learned that Forever 21 will be closing most of their stores and laying off most of their employees…

More than 100 Forever 21 stores are slated to close as part of the fashion retailer’s Chapter 11 bankruptcy protection case, according to court documents filed this week.

The family-owned company, which has about 32,800 employees, said it would close “most” of its stores in Asia and Europe and up to 178 stores in the U.S. when it filed for protection Sept. 29.

A similar scenario is playing out for Dressbarn. According to USA Today, all of their 544 stores “will close no later than Dec. 26″…

Liquidation sales at the remaining Dressbarn stores will start Friday, the struggling retailer announced Wednesday.

While the 544 stores will close no later than Dec. 26, the women’s clothing website is expected to relaunch in 2020 with a new owner, the company said in a news release.

It has been hoped that a limited trade agreement with China might bolster the economy at least temporarily, but now we are learning that Chinese officials expect “phase one” of the deal to “soon fall apart”. According to CNN, the Chinese are pessimistic that our two countries will ever be able to “reach a full trade deal”…

Chinese officials have expressed doubts about whether the world’s two largest economies can reach a full trade deal, Bloomberg reported. That is casting a long shadow over the “phase one” agreement that the countries reached earlier in October.

This is consistent with my warnings from previous articles. The Chinese wanted the Trump administration to stop the implementation of any more tariffs, and they were able to achieve that with “phase one”. But in order to move forward with “phase two”, the Chinese are going to insist on the removal of all tariffs…

According to BBG’s sources, this is the bare minimum that Beijing would accept to move ahead with Phase 1: a commitment from the Americans to removing tariffs in Phase 2, and agreeing to cancel the next round of tariffs, set to take effect in December.

This is something that the Trump administration will never agree to, and so that puts us back where we originally started.

The Chinese will continue to “negotiate”, but only for stalling purposes.

There is only about a year left until the 2020 elections, and the Chinese are hoping to run out the clock on the Trump administration with as little disruption to their own economy as possible.

Unfortunately for the Chinese, Trump could possibly win another term, and if either Elizabeth Warren or Bernie Sanders win they could potentially be even tougher on trade with China.

In any event, we should not expect a comprehensive trade deal with China any time soon, and that is really bad news for the economic optimists.

Of course the truth is that everything that I have just shared is bad news for all of us. The U.S. economy is seriously deteriorating, and things are only going to get worse in the months ahead.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I can only allow this to happen if this “About the Author” section is included with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

What In The World Is The Federal Reserve Thinking???

You don’t use up all of your ammunition before the battle even begins. The U.S. economy has not even officially entered recession territory yet, although many experts are definitely anticipating one in 2020. When that recession arrives, the Federal Reserve is going to want as much ammunition to fight it as possible. So I was horrified to learn that the Federal Reserve announced on Wednesday that interest rates are being slashed once again. We have now had three interest rate cuts in 2019 as the Federal Reserve desperately attempts to revive the stalling U.S. economy. But what are they going to do during the next recession when they have already pushed interest rates all the way to the floor and they can’t push them any lower? In addition, in recent days the Federal Reserve has decided to absolutely flood the financial system with new money in a desperate attempt to stabilize the repo market. In essence, the Federal Reserve has launched a massive new round of quantitative easing even before a major crisis has erupted on Wall Street. I can understand trying to be proactive, but in reality quantitative easing is an extreme emergency measure that should only be used in the most desperate of situations. If the Fed is creating this much new money now, what are they going to do once things really get bad? Are we destined to become the next Venezuela?

For a long time, the Federal Reserve has insisted that the U.S. economy is in good shape. If that is true, there is no way in the world that the Fed should be cutting interest rates. But that is exactly what happened on Wednesday…

In a vote widely anticipated by financial markets, the central bank’s Federal Open Market Committee lowered its benchmark funds rate by 25 basis points to a range of 1.5% to 1.75%. The rate sets what banks charge each other for overnight lending but is also tied to most forms of revolving consumer debt.

It was the third cut this year as part of what Fed Chairman Jerome Powell has characterized as a “midcycle adjustment” in a maturing economic expansion.

With rates now so close to zero, there isn’t going to be much that the Fed can do in that regard once the next recession strikes.

According to Fed Chair Jerome Powell, this latest rate cut was done for “insurance” purposes…

Powell said lowering the rate again was ‘insurance’, or protection needed because ‘weakness in global growth and trade developments have weighed on the economy and posed ongoing risks’.

If the U.S. economy doesn’t plunge into a deep recession next year, Powell and the other bureaucrats at the Fed will probably be applauded for these moves.

But if we do experience a significant economic downturn, they will be caught with their pants down.

Yes, the U.S. economy is definitely slowing down, but this week we learned that it still grew at an annual rate of 1.9 percent last quarter.

1.9 percent is not good at all, and if honest numbers were being used it would show that our economy is actually contracting. But at least things are relatively stable for the moment, and as long as things are relatively stable the Federal Reserve should not be resorting to emergency measures.

Of course Wall Street was absolutely thrilled that the Fed cut rates again, and news of the rate cut pushed the S&P 500 to yet another all-time record high…

Stocks advanced Wednesday after the Federal Reserve cut interest rates for the third time this year, propelling the Standard & Poor’s 500 to a fresh record.

The S&P 500 index added 9.88 points, or 0.3%, to close at 3046.77. The Dow Jones industrial average climbed 115.27 points, or 0.4%, to end at 27,186.69. The Nasdaq added 27.12 points, or 0.3%, at 8,303.98.

And without a doubt, this rate cut is good for consumers. Rates on mortgages, auto loans and credit cards will go down, and that will save average Americans a lot of money…

These Fed interest rate cuts are starting to add up, lowering costs for many Americans who use credit cards or take out loans while squeezing savers.

The Federal Reserve lowered its benchmark interest rate Wednesday by a quarter percentage point for the third time in the past three months. The move is likely to further trim borrowing costs on credit cards, home equity lines, adjustable-rate mortgages and auto loans.

But this is yet another example of the short-term thinking that is plaguing our society.

When the next recession arrives, the Fed will be able to cut rates a handful of times, and then that will be the end of it.

The Fed should have also held off on buying more bonds until we really needed it as well. Even though a new financial crisis has not even started yet, the Fed has been creating money like crazy and their balance sheet has ballooned “by about $100 billion over the past month”…

The Fed has been buying bonds again, but officials insist it is an effort to stabilize the funds rate within the target range rather than a resurrection of QE. Still, the central bank balance sheet has expanded by about $100 billion over the past month and is back above the $4 trillion mark, $3.6 trillion of which is in Treasurys and mortage-backed securities.

So if the Fed is being this crazy now, what are they going to do when a real financial crisis erupts?

Perhaps they should just get it over with and create trillions of dollars right now and turn us into the Weimar Republic already.

Because that is where all of this craziness is eventually going to take us. Our dollar is eventually going to be absolutely worthless and we will become the next Venezuela.

I have always been highly critical of the Federal Reserve, but at least in other eras those running the Fed were at least mildly competent.

But now it appears that incompetence is running wild over at the Federal Reserve, and we will all pay a great price for their mistakes in the not too distant future.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I can only allow this to happen if this “About the Author” section is included with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

The Boom Turns Into A Bust – Here are 14 Signs That The U.S. Economy Is Steadily Weakening

There should no longer be any doubt that the U.S. economy is slowing down, but most Americans still don’t realize what is happening because the major news networks are completely focused on the endless impeachment drama that is currently playing out in Washington. And without a doubt that is important, because it threatens to literally rip our entire nation in two. But meanwhile, economic activity has taken a very ominous turn. Hiring is slowing, consumer confidence is plunging, defaults on auto loans are rapidly escalating, the “transportation recession” continues to get deeper and it appears that the housing bubble is popping. Everywhere we turn, there are signs of economic trouble, and many are deeply concerned about what this will mean for us as we head into a pivotal election year in 2020.

Not since the last recession have we seen numbers this bad. The “mini-boom” that we witnessed for several years has now turned into a “bust”, and very tough times are ahead.

The following are 14 signs that the U.S. economy is steadily weakening…

#1 U.S. business hiring has fallen to a 7 year low.

#2 Consumer confidence in the United States has now declined for 3 months in a row.

#3 Defaults on “subprime” auto loans are happening at the fastest pace that we have seen since 2008.

#4 The percentage of “subprime” auto loans that are at least 60 days delinquent is now higher than it was at any point during the last recession.

#5 Vacancies at U.S. shopping malls have hit the highest level since the last recession.

#6 Destination Maternity has announced that they will be closing 183 stores as the worst year for store closings in U.S. history just continues to get worse.

#7 The Cass Freight Index has now fallen for 10 months in a row.

#8 U.S. rail carload volumes have plunged to the lowest level in 3 years.

#9 In September, orders for class 8 heavy duty trucks were down 71 percent.

#10 Tesla’s U.S. sales were down a whopping 39 percent during the third quarter of 2019.

#11 The bad news just keeps rolling in for the real estate industry. Last month, existing home sales in the United States declined by another 2.2 percent.

#12 New home prices have fallen to the lowest level in almost 3 years.

#13 According to one recent report, 44 percent of all Americans don’t make enough money to cover their monthly expenses.

#14 A recent survey found that more than two-thirds of all U.S. households “are preparing for a possible recession”.

All over the country, economic activity is slowing down, and this is hitting many small businesses particularly hard.

In Wisconsin, one aluminum firm “has seen bookings plunge by 40 percent” and was forced to lay off workers as a result…

Sachin Shivaram, the chief executive of Wisconsin Aluminum Foundry, started to worry this summer when orders for his brake housings and conveyor belt motors first grew scarce. Within weeks, what began as mild concern snowballed into a business drought that has seen bookings plunge by 40 percent.

In August, Shivaram, 38, reluctantly laid off two dozen workers, hoping to recall them when the outlook improved. It hasn’t.

“Things are not good. We didn’t anticipate this level of deterioration,” he said. “Orders are down across the board.”

Of course there are hundreds of other examples just like this one.

As times get tougher, many U.S. consumers are increasingly turning to debt to help make ends meet.

For those at the low end of the economic food chain, getting approved for credit cards and other conventional forms of debt can be quite difficult. This has opened up a door for online financial predators, and they are making a killing by making loans to people that really can’t afford them.

In fact, it is being reported that online lending has become a $50 billion industry, and sometimes these “loans” carry annual interest rates of more than 100 percent…

It’s called the online installment loan, a form of debt with much longer maturities but often the same sort of crippling, triple-digit interest rates. If the payday loan’s target audience is the nation’s poor, then the installment loan is geared to all those working-class Americans who have seen their wages stagnate and unpaid bills pile up in the years since the Great Recession.

In just a span of five years, online installment loans have gone from being a relatively niche offering to a red-hot industry. Non-prime borrowers now collectively owe about $50 billion on installment products, according to credit reporting firm TransUnion. In the process, they’re helping transform the way that a large swathe of the country accesses debt. And they have done so without attracting the kind of public and regulatory backlash that hounded the payday loan.

Just like the “payday loan” industry flourished during the last recession, now predatory lending is flourishing during this present era.

Unfortunately, as “the everything bubble” bursts, times are going to be very tough for all of us during the years ahead.

I think that Michael Pento of Pento Portfolio Strategies summed things up very well when he made the following statement during a recent interview…

‘When this thing implodes, we are all screwed. On a global scale, we have never before created such a magnificent bubble. These central bankers are clueless, and they have proven that beyond a doubt. All they can do is to try to keep the bubble going.’

We should give the central bankers credit for keeping the bubble going for as long as it has. It should have never lasted this long, but thanks to unprecedented intervention they have been able to keep it alive.

But no financial bubble lasts forever, and now things have started to shift in a major way.

2020 is rapidly approaching, and the time of “the perfect storm” is now upon us.

I encourage you to do what you need to do to weather the coming economic storm, because it is not going to be pleasant.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I can only allow this to happen if this “About the Author” section is included with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

They Are Telling Us That The Next Recession “Won’t Be As Bad As 2008”. They Are Wrong.

Are we really supposed to believe them? As the next recession rapidly approaches, the mainstream media is assuring us that there isn’t really that much to be concerned about. In fact, as you will see below, CNN is assuring us that “the next one won’t be as bad as 2008”. But how do they know? After all, we didn’t have a president that was in danger of being impeached in 2008. As this impeachment process moves forward, the mood of this nation is going to become increasingly sour. Over in Europe, they are dealing with endless Brexit drama, and over in China the Hong Kong protests have created instability unlike anything we have seen in the modern history of that country. Meanwhile, the Middle East has become an endless source of “wars and rumors of wars”. At some point missiles will start flying back and forth and a major war will erupt over there, and that will immediately throw the entire global economy into chaos. On top of everything else, our planet is shaking like a leaf, global weather patterns are becoming increasingly unstable and crops are failing all over the world. The truth is that the environment that the global economy operates within is far more unstable today than it was back in 2008, and it wouldn’t take much at all to push us into a complete and utter economic nightmare.

But if you listen to the mainstream media, you would be tempted to assume that everything is going to be just fine.

In fact, CNN just published an article entitled “Not all recessions are a crisis, and the next one won’t be as bad as 2008”…

Recession fears are on the rise in the United States. Memories of the last downturn are exacerbating these worries: The last time America faced a recession was in 2008, as the financial crisis was unfolding. Millions of people lost their jobs, GDP growth plummeted and businesses shut down.

But not all recessions are like that. Sometimes the economy can grow all the way through a recession. In fact, some economists believe the world is in a recession now and most people don’t even realize it.

Wouldn’t it be great if we could go all the way through the next recession without even realizing it?

I would love that.

Perhaps they should invent a way for us to eat Brussels sprouts without realizing it as well.

According to CNN, it is likely that we are headed for a “growth recession” rather than a recession in which we would have “millions of lost jobs like the last recession”…

For the United States, a global growth recession will probably mean sluggish growth, rather than millions of lost jobs like the last recession 10 years ago did. A growth recession would be nothing like 2008, when America entered a so-called technical recession: at least two consecutive quarters of a shrinking economy. The US economy is far away from that.

They can be optimistic if they want, but the thing about sticking your head in the sand is that your rear end is still exposed.

Look, I am not opposed to wishful thinking, but at some point you have to deal with reality. Personally, I would like to be able to dunk a basketball like Michael Jordan does, but it just isn’t going to happen.

And our reality is telling us that we are far more vulnerable economically today than we were back in 2008. Even though we have never had a full year of 3 percent economic growth since the last recession, the Dow Jones Industrial Average is nearly twice as high as it was at the peak of the bubble that burst during the last financial crisis.

In other words, stock prices are absurdly overinflated, and at some point there is going to be a dramatic implosion.

Much of the growth in stock prices has been driven by companies that are supposedly worth billions of dollars but that don’t actually make any profits.

WeWork is an example of the type of company that I am talking about. It is constantly hemorrhaging money, but back in January it was supposedly worth 47 billion dollars.

Of course that number was always completely and utterly ridiculous, and after all the trouble that the company has had in recent months the valuation of the company has changed dramatically.

In fact, at this point it is being reported that WeWork is only worth about 8 billion dollars…

As WeWork runs out of money, SoftBank Group is orchestrating the company’s “rescue financing plan” that could value it below $8 billion, Bloomberg reports.

Why it matters: $8 billion is a slim fraction of the $47 billion valuation WeWork gleaned in January from SoftBank. The rescue plan also comes after the office-sharing business slammed the brakes on its IPO, causing company bonds to tumble.

So how does a company lose 39 billion dollars in value in less than a year?

Well, it was never actually worth 47 billion dollars in the first place, and the truth is that WeWork is eventually going to zero.

But similar things could be said about company after company. Wall Street has become a theater for the absurd, and eventually this whole freak show is going to implode in spectacular fashion.

And so what happens if a historic stock market crash is one of the triggers that plunges us into an extended economic depression like we experienced in the 1930s?

Our society is not equipped to handle something like that. We are soft, lazy, self-obsessed and completely dependent on the system. If we had to suddenly become a lot more self-sufficient, most of us would fall flat on our faces.

Earlier today, I came across a Time Magazine article which explained that 71 percent of all 17-to-24-year-olds in the United States do not even meet the most basic qualifications for military service…

Approximately 71% of the 34 million 17-to-24-year-olds in the U.S. would not qualify for military service because of reasons related to health, physical appearance and educational background, according to the Pentagon.

The ineligible typically includes those who are obese, those who lack a high school diploma or a GED, convicted felons, those taking prescription drugs for ADHD and those with certain tattoos and ear gauges, the Wall Street Journal reports, though some requirements can be waived.

Only 1% of young people are both “eligible and inclined to have conversation with” the military about possible service, according to the Defense Department.

This is just one example of how badly our society has declined.

There are thousands more, and I write about them all the time.

So we better hope that things don’t get really, really bad in this country, because it would be a colossal mess unlike anything the world has ever seen before.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles in written form on their own websites, but only if this “About the Author” section is included. In order to comply with government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. You can follow me on social media on Facebook and Twitter. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of this website.

69 Percent Of U.S. Households “Are Preparing For A Possible Recession”

Do you believe that a recession is coming? If so, you certainly have a lot of company. It turns out that more than two-thirds of all U.S. households “are preparing for a possible recession” right now. There is a growing national consensus that that U.S. economy is heading for big trouble, and this is causing a lot of people to cut back on spending. In fact, we just witnessed the first drop in retail sales in seven months. If this slowdown in retail spending extends into the holiday season, that could potentially be absolutely disastrous for the entire retail industry. We are already in the midst of the worst “retail apocalypse” in U.S. history, and we are learning of more store closings with each passing day. But of course it isn’t just the retail industry that is in very serious trouble, and I have some brand new numbers from a couple of other sectors that I will share with you below.

But first let’s talk about this new survey that just came out that says that 69 percent of all U.S. households “are preparing for a possible recession”…

More than two-thirds of U.S. households say they are preparing for a possible recession.

Some 69% of participants in a recent poll said they were taking steps to shore up their finances ahead of a possible downturn, including 44% who said they were spending less money. Some 10%, including 13% of college graduates, are looking for a better or more stable job.

Considering what I do, it makes perfect sense to me that more than two-thirds of the country would be preparing for a recession.

But it would be very interesting to see this number broken down by political affiliation. In general, Democrats tend to be far more pessimistic about the economy than Republicans are right now, and that is just because Donald Trump is in the White House.

I would suspect that the percentage of Trump supporters that are “preparing for a possible recession” would be well under 50 percent, but that is just a guess on my part.

In any event, the truth is that 100 percent of Americans should be preparing for a recession, because the warning signs are all around us.

And on Wednesday another economic red flag emerged. For months, the economic optimists have been touting “the strength of the consumer” as one of the bright spots for the economy, but last month retail sales dropped for the first time in seven months…

U.S. retail sales fell for the first time in seven months in September, raising fears that a slowdown in the American manufacturing sector could be starting to bleed into the consumer side of the economy.

The Commerce Department said Wednesday that retail sales dropped 0.3% last month as households slashed spending on building materials, online purchases and especially automobiles.

That is certainly not the end of the world, but it does indicate that consumers are starting to scale back their spending.

Of course that is the last thing that retailers want to see happen. We are already on pace to absolutely shatter the all-time record for store closings in a single year, and we just learned that Sears and Kmart will soon be closing more stores…

Sears and Kmart store closings are expected to continue into early 2020.

While more than 100 Sears and Kmart stores will shutter in the coming months, additional closures will stretch into January.

Company officials did not release an official list of the locations that will close. But news outlets across the nation, as well as documents filed with state governments, show some of the closings will happen in January 2020.

Sears has essentially been in the process of liquidating for a very long time, and we can only hope that eventually this incredibly painful liquidation will mercifully come to an end.

For many other retailers, this holiday season will be a “make or break moment”, and we should probably expect another huge wave of store closing announcements early in 2020.

And as I noted above, it isn’t just the retail industry that is really struggling. We are already in a “transportation recession”, and we just learned that the Cass Freight Index has now declined for ten months in a row. The following comes from Wolf Richter…

Freight shipments by all modes of transportation – truck, rail, air, and barge – within the US fell 3.4% in September 2019, compared to September last year, according to the Cass Freight Index for Shipments. For the index – which tracks shipment volume of consumer and industrial goods but not of bulk commodities – it was the 10th month in a row of relentless year-over-year declines

Another sector that is facing very tough times is the auto industry, and according to Reuters over 7 million Americans are seriously delinquent on their auto loans…

More than 7 million Americans are already 90 or more days behind on their car loans, according to the New York Federal Reserve, and serious delinquency rates among borrowers with the lowest credit scores have by far seen the fastest acceleration.

If all these numbers remind you of the last recession, that would make perfect sense, because we haven’t seen anything like this in more than a decade.

And all of this is happening even though the federal government is adding a trillion dollars to the national debt each year and the Federal Reserve has begun flooding the financial system with fresh cash.

In terms of “economic stimulus”, our leaders are already pushing the accelerator all the way to the floor, and it is simply not working.

This truly is the beginning of the end (#ad) for the U.S. economy, and most Americans can now see that very tough times are ahead.

But what most Americans don’t understand is that what we will be facing won’t be anything like 2008.

Instead, it will be much, much worse.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles in written form on their own websites as long as this “About the Author” section is included. In order to comply with government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. You can follow me on social media on Facebook and Twitter. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of this website.

China Takes A Comprehensive Trade Deal Off The Table, And That Is Disastrous News For The U.S. Economy

The Chinese never intended to make a deal, and now they are publicly admitting it. For months, I have been warning readers of The Economic Collapse Blog that a comprehensive trade deal with China will not happen before the 2020 presidential election, and the reason why this is the case is actually very simple. The Chinese have concluded that President Trump will never give them the kind of deal that they are looking for, and so their entire goal has been to run out the clock on the Trump administration so that they can finally get to a Democrat that will be much more “reasonable” to deal with. Of course if Elizabeth Warren or Bernie Sanders wins the election, they won’t be very “reasonable” either, and so the best case scenario for the Chinese is for either Joe Biden or Hillary Clinton to emerge victorious in November 2020. In any event, the Chinese are now being very clear about the fact that they are never, ever going to agree to Trump’s core demands. The following comes from CNBC…

Chinese officials are growing hesitant to pursue a broad trade deal with the U.S. in negotiations set to begin this Thursday, people familiar with the matter told Bloomberg News.

Vice Premier Liu He, who will lead negotiations for China, told dignitaries that his offer to the U.S. will not include commitments on reforming Chinese industrial policy or government subsidies, according to to Bloomberg. These are among the Trump administration’s main demands in the trade talks.

In essence, the Chinese have completely taken a comprehensive trade deal off the table, and they probably believe that Trump’s looming impeachment may make him more agreeable to a more limited deal that would be more favorable to the Chinese.

But Trump is holding his ground, and he continues to insist that his negotiating stance has not changed…

Trump has said repeatedly he would entertain only an all-encompassing deal with China. People close to him say he remains firm in that view.

“We’ve had good moments with China. We’ve had bad moments with China. Right now, we’re in a very important stage in terms of possibly making a deal,” Trump told reporters on Friday. “But what we’re doing is we’re negotiating a very tough deal. If the deal is not going to be 100% for us, then we’re not going to make it.”

So what all of this means is that we should not expect any sort of a trade deal any time soon.

Unfortunately, the longer this trade war stretches on, the more painful it will become for our economy. Big companies are laying off workers all across America, and there are some industries that are being absolutely devastated by this trade conflict.

For example, just check out what has been happening to the lumber industry…

China used to account for about half of all U.S. hardwood lumber exports, about $2 billion annually. The Trump administration’s 25% tariff cut that demand.
In the 12 months since tariffs on U.S. hardwood were announced in July of last year, lumber exports to China were down by $615 million compared with the previous year, according to the American Hardwood Export Council.
In June of this year alone, when the full tariff rate went into effect, trade volume to China was half what it was a year ago.

Of course the lumber industry is far from alone. All over the country the impact of the trade war can be clearly seen, and we just learned that September was the worst month for U.S. manufacturers in more than a decade.

As the U.S. economy slows down, the mainstream media will gleefully blame Trump for our troubles. Just check out the following excerpt from Paul Krugman’s most recent article entitled “Here Comes The Trump Slump”…

Now the U.S. economy is going through another partial slump. Once again, manufacturing is contracting. Agriculture is also taking a severe hit, as is shipping. Overall output and employment are still growing, but around a fifth of the economy is effectively in recession.

But unlike previous presidents, who were just unlucky to preside over slumps, Trump has done this to himself, largely by choosing to wage a trade war he insisted would be “good, and easy to win.”

Even though we are way overdue for a recession, and even though the Federal Reserve has more control over our economy than anyone else does, the mainstream media is going to relentlessly push the narrative that Trump’s trade war has created a giant mess for the U.S. economy. And without a doubt, this trade war is causing economic pain, but placing 100 percent of the blame on Trump is not intellectually honest.

Unfortunately, the mainstream media is just going to keep telling us that everything would be just fine if it wasn’t for this trade war. The following is an excerpt from a recent CNN article entitled “America’s economy is slowing. Ending the trade war could fix that”…

The Federal Reserve doesn’t have a magic wand to revive the slowing American economy. But President Donald Trump might.

New evidence emerged last week showing how tariffs and the vast uncertainty surrounding the US-China trade war are hurting the economy.

The manufacturing sector suffered its worst month since June 2009. Services, the larger portion of the modern economy, grew at its weakest pace in three years.

If a trade agreement could be reached, that would undoubtedly be a substantial short-term economic boost, but it wouldn’t really do anything to address our much larger problems.

Today, our entire financial system has become a giant Ponzi scheme. We are living in the terminal phase of the biggest debt bubble in the history of the world, and the only way to keep the Ponzi scheme going is to keep expanding the bubble with even more debt.

At some point the entire sorry system is going to implode in spectacular fashion, and that is going to happen whether there is a trade deal with China or not.

But our trade war with China is certainly not helping matters, and if there is not a resolution soon it could certainly be one of the factors that helps to trigger our demise.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles in written form on their own websites as long as this “About the Author” section is included. In order to comply with government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. You can follow me on social media on Facebook and Twitter. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of this website.

Why Does The Federal Reserve Keep Slamming The Panic Button Over And Over If Everything Is Okay?

What in the world is the Federal Reserve doing? For months the Fed has been trying to publicly convince us that the U.S. economy is “strong”, and Fed Chair Jerome Powell recently unequivocally stated that “the Federal Reserve is not currently forecasting a recession”, but the Fed’s actions tell a completely different story. If the U.S. economy really is performing well, any economics textbook will tell you that the Fed should not be reducing interest rates. Interest rate cuts should be saved for times when the economy is in serious trouble, and using up all of your ammunition before a downturn has begun is simply foolish. And the Federal Reserve continues to insist that the financial system is functioning normally, but meanwhile things are spinning so wildly out of control that they felt forced to announce overnight repurchase agreement operations for Tuesday, Wednesday and Thursday. We haven’t seen this sort of emergency intervention since the last financial crisis, but the Fed’s message to the general public is that “all is well”.

Unfortunately, the truth is that all is not well, and we continue to get more troubling economic news with each passing day.

In a desperate attempt to inject some vigor back into the U.S. economy, the Fed cut interest rates for the second month in a row on Wednesday…

For the second time in two months, the Federal Reserve on Wednesday agreed to press down on the economy’s accelerator to keep the 10-year-old expansion chugging along.

A divided Fed lowered its benchmark interest rate by another quarter percentage point to a range of 1.75% to 2% in an effort to stave off a possible recession triggered by a global economic slowdown and the U.S. trade war with China.

Of course this wasn’t enough to please President Trump, and shortly after the rate cut was announced he posted the following on Twitter…

Jay Powell and the Federal Reserve Fail Again. No “guts,” no sense, no vision! A terrible communicator!

Apparently Trump wanted an even larger rate cut with the promise of more rate cuts in the future, but if the U.S. economy really is in good shape we shouldn’t be having any rate cuts at all. This was a panic move by the Fed, and they are going to find themselves very short on ammunition when things really start to get crazy.

And conducting overnight repurchase agreement operations for three days in a row also reeks of desperation. If you are not familiar with the repo market, the following is how Yahoo News described the key role it plays for our financial system…

Financial institutions use money markets to borrow for very short periods, from one day to a year, a crucial function to keep the gears of the economy running.

In so-called repurchase or “repo” agreements, banks borrow by putting up assets like Treasury notes as collateral and then repay the loans with interest the following day.

In a fit of panic, the Fed injected $53,000,000,000 into the system on Tuesday and another $75,000,000,000 on Wednesday.

But it turns out that Wednesday’s injection wasn’t nearly large enough. The following comes from Zero Hedge…

20 minutes after today’s repo operation began, it concluded and there was some bad news in it: as we feared, yesterday’s take up of the Fed’s repo operation which peaked at $53.2 billion has expanded substantially, and according to the Fed, today there was a whopping $80.05BN in bids submitted, an increase of $27 billion, or 50% more than yesterday.

It also meant that since the operation – which is capped at $75BN – was oversubscribed by over $5BN, that there was one or more participants who did not get up to €5 billion in the critical liquidity they needed, and that the Fed will see a chorus of demands by everyone (because like with the discount window, nobody will dare to be singled out) to either expand the size of its operations, implement a fixed operation and/or – most likely as per the ICAP note yesterday – transition to permanent open market operations, i.e. QE

And then we learned that the Fed had announced that they were going to inject another $75,000,000,000 on Thursday.

This is utter insanity, and to many it is clear evidence that the Fed is losing control…

“This just doesn’t look good. You set your target. You’re the all-powerful Fed. You’re supposed to control it and you can’t on Fed day. It looks bad. This has been a tough run for Powell,” said Michael Schumacher, director, rate strategy, at Wells Fargo.

We haven’t seen anything like this since the financial crisis of 2008, and many are deeply concerned about what will happen as liquidity demands reach a peak as we approach the end of the month.

As our financial system continues to become increasingly unstable, is this sort of Fed intervention going to become a regular thing?

Of course there are some analysts that are already projecting that a massive new round of quantitative easing is inevitable at this point, and there is a very good chance that they are right.

Meanwhile, the “real economy” continues to deteriorate as well, and one new survey has found that a majority of U.S. CFOs now expect our economy to tumble into a new recession by the end of next year…

Chief financial officers in the United States have started to prepare themselves and their finances for a recession. For the first time in several years, economic uncertainty is now their lead concern, replacing worries about the difficulty of hiring and retaining talented workers.

According to CNN, 53 percent of chief financial officers expect the United States to enter a recession prior to the 2020 presidential election. That information was sourced from the Duke University/CFO Global Business Outlook survey released on Wednesday. And two-thirds predict a downturn by the end of next year.

Unfortunately, we may not have to wait that long, and according to John Williams of shadowstats.com if honest numbers were being used they would show that the U.S. economy is already in a recession right now.

For the moment, most Americans are still buying the narrative that everything is going to be just fine, but that will soon change.

The pace at which things are deteriorating is beginning to accelerate, and the Fed is going to have to hit the panic button many more times in the months ahead.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

6 Of The Last 8 U.S. Recessions Were Preceded By Oil Price Spikes – Damage To Saudi Oil Industry Could Take “Months” To Repair

When the price of oil rises dramatically, that tends to be really bad for the U.S. economy. Because we are so spread out and goods are transported over such vast distances, our economy is particularly vulnerable to oil price shocks, and that is one reason why the events that we just witnessed in the Middle East are so alarming. According to an article that was published by the Federal Reserve Bank of San Francisco in 2007, five of the last seven U.S. recessions that had occurred up to that time “were preceded by considerable increases in oil prices”. Since that article was published in 2007, the recession that began in 2008 hadn’t happened yet, and of course that recession was immediately preceded by the largest oil price spike in history. So that means that six of the last eight U.S. recessions were preceded by oil price spikes, and now we may be facing another one. It is being reported that it may take “months” for Saudi Arabia to fully repair the damage that was done to their oil industry, and that could fundamentally alter the balance of supply and demand in the global marketplace.

Yesterday, I discussed why high oil prices are so bad for our economy. When the price of oil is too high, it can cause inflation and hurt economic growth simultaneously. The article from the Federal Reserve Bank of San Francisco that I mentioned in the last paragraph tried to explain why this happens in very basic economic terms…

Oil price increases are generally thought to increase inflation and reduce economic growth. In terms of inflation, oil prices directly affect the prices of goods made with petroleum products. As mentioned above, oil prices indirectly affect costs such as transportation, manufacturing, and heating. The increase in these costs can in turn affect the prices of a variety of goods and services, as producers may pass production costs on to consumers. The extent to which oil price increases lead to consumption price increases depends on how important oil is for the production of a given type of good or service.

Oil price increases can also stifle the growth of the economy through their effect on the supply and demand for goods other than oil. Increases in oil prices can depress the supply of other goods because they increase the costs of producing them. In economics terminology, high oil prices can shift up the supply curve for the goods and services for which oil is an input.

Needless to say, the unprecedented attack on Saudi oil production facilities was going to cause the price of oil to rise substantially. In fact, when global markets opened up on Sunday evening we witnessed quite a dramatic spike…

In an extraordinary trading day, London’s Brent crude leaped almost $12 in the seconds after the open, the most in dollar terms since their launch in 1988. Prices subsequently pulled back some of that initial gain of almost 20%, but rallied again as traders waited in vain for an Aramco statement clarifying the scale of damage.

So where is the price of oil going from here?

One analyst quoted by Oilprice.com believes that we could soon see it hit $80 a barrel, and others believe that it could move up toward $100 a barrel not too long from now.

In the days ahead, global markets will be watching Saudi Arabia very carefully. The longer it takes them to resume normal production levels, the higher the price of oil will go.

According to Bloomberg, one analyst is already publicly admitting that “full resumption could be weeks or even months away”…

All eyes are on how fast the kingdom can recover from the devastating strike, which knocked out roughly 5% of global supply and triggered a record surge in oil prices. Initially, it was said that significant volumes of crude could begin to flow again within days. While Aramco is still assessing the state of the plant and the scope of repairs, it currently believes less than half of the plant’s capacity can be restored quickly, said people familiar with the matter, asking not to be identified because the information isn’t public.

”Damage to the Abqaiq facility is more severe than previously thought,” said Amrita Sen, chief oil analyst at Energy Aspects Ltd. “While we still believe up to 50% of the 5.7 million barrels a day of output that has been disrupted could return fairly swiftly, full resumption could be weeks or even months away.”

That is really bad news, and that is assuming that there won’t be any more attacks like we just witnessed.

If there are more attacks, Saudi oil production could be far lower than normal for an extended period of time, and that would be catastrophic for the global economy.

Most Americans don’t realize this, but a lot of Saudi oil actually gets shipped to the west coast. The following comes from Fox Business…

Drivers in California, however, could be hit the hardest. Nearly half of what Saudi Arabia exports to the U.S. is sent to the West Coast, as reported by Reuters. In the year that ended in June, the West Coast imported an average of about 11.4 million barrels of Saudi crude every month – much of which went to California refineries.

The Golden State already has among the highest average gasoline prices in the country – at $3.63 per gallon as of Monday.

We are going to see higher gasoline prices right away, but in the short-term we should be able to handle them okay.

But if there are more attacks like the one we just saw, or if a major war breaks out in the Middle East, the price of gasoline could easily spike to levels that we have never seen in this country before.

The U.S. economy was already deeply struggling even before the attack in Saudi Arabia, and so this could definitely push us over the edge. We should all be getting prepared for an extended economic downturn, because it looks like that is precisely what we could be facing.

Hopefully we won’t see any more attacks on oil production facilities, but the attack on Saturday clearly demonstrated how extremely vulnerable such facilities are to terror attacks. And with Middle East tensions currently at an all-time high, USA Today is warning that our future “may well get much rockier soon”…

The new threat is tension among nations in the region, as well as the ability to attack based on new and relatively simple technology. Drones can be flown long distances carrying weapons just powerful enough to attack oil facilities. Middle East tensions are severe enough that attempts at similar attacks are not over.

Oil futures do not trade based on the present. They trade on forecasts about oil supply and demand in the future. The future looks rocky and may well get much rockier soon.

We are truly in uncharted territory, and we desperately need peace and calm to prevail in the Middle East.

Sadly, that is not likely to happen, and every new wave of violence is going to mean more economic pain for all of us.

60 Percent Of Americans Believe A Recession Is Coming – But Consumers Continue To Pile Up Debt At A Frightening Pace

We haven’t seen survey results like this since just before the last recession. Right now, 60 percent of Americans believe that a recession is “very or somewhat likely in the next year”, and the reason why that figure is so high is because there is already a tremendous amount of evidence that the economy is slowing down all around us. As I have been documenting repeatedly, U.S. economic performance has not been this dismal since 2008 and 2009, and the slowdown seems to be gaining pace as we move toward the end of 2019. So it really shouldn’t be a surprise that a solid majority of the country thinks that the next recession will officially begin very soon. The following comes from ABC News…

Ratings of the U.S. economy overall, 56% positive, are down from 65% last fall in this poll, produced for ABC by Langer Research Associates. Most ominously, 60% see a recession as very or somewhat likely in the next year. That’s within sight of the 69% who said so in November 2007, in advance of the Great Recession.

But at the same time, U.S. consumers continue to pile up more debt at a frightening pace.

According to NBC News, total revolving credit shot up at an 11.25 annual pace during the month of July…

According to the Federal Reserve’s consumer credit tracker, revolving credit — a category in which credit card debt predominates — increased at an annualized rate of 11.25 percent in July, the most recent month for which data is available.

“In terms of revolving debt, we see spikes like this every so often, but they don’t jump by double digits all that much,” said Matt Schulz, chief industry analyst at CompareCards. Typically, big jumps occur around the holidays, though — not in July.

If a severe economic downturn really is coming, the smart thing to do would be to get out of credit card debt.

But these days Americans have been trained to be very short-term thinkers. And when things start to get tight, it is really easy to put expenses on a credit card and worry about them later. This is something that I did when I was a much younger man, and it is something that millions of American families all over the nation are doing right now.

When the money simply isn’t there, it is just so tempting to whip out a credit card. But credit card debt is one of the most insidious forms of debt because of the high interest rates most credit card companies charge. And at this moment credit card companies are jacking up rates to a degree that we haven’t seen in many years…

WalletHub says average credit card APRs for people with good credit and business credit cardholders — at 20.9 percent and 18.5 percent, respectively — are the highest they’ve been since it began tracking rates in 2010.

For people with less than stellar credit, even those rates might be out of reach, McClary said. For example, a new applicant with a credit score in the low 600s might be offered an APR of about 22 percent, he said.

Unfortunately, the more debt that you accumulate, the less likely it becomes that you will ever start building up substantial wealth of your own.

Today, tens of millions of Americans are deep in debt and are working exceedingly hard to make other people rich. And this is one of the biggest reasons why well over half the nation is currently living in “asset poverty”…

Many Americans claim they simply don’t earn enough money to build any type of savings account or amass any meaningful financial assets. Now, a troubling study out of Oregon State University finds some definite statistical truth to these sentiments, concluding that over 63% of American children and 55% of Americans live in “asset poverty.”

In other words, most Americans are living right on the edge financially, and that is a very dangerous place to be. If you are not familiar with the term “asset poverty”, the following is a pretty good definition…

Asset poverty means having few or no financial assets to fall back on in the event of a financial calamity, such as losing one’s job or encountering a medical crisis. Some examples of common financial assets are vehicles, houses, savings accounts, and investments. Without these assets, weathering a financial crisis is extremely difficult.

When you really don’t have any real wealth of your own, you are essentially living paycheck to paycheck, and a single major setback can be absolutely disastrous.

In America today, financial difficulties are one of the biggest reasons why so many of us are completely stressed out, and the next recession hasn’t even officially begun yet.

But with each day we continue to get more numbers that tell us that big trouble is on the way. For example, we just learned that the U.S. lost 4,500 trucking jobs last month…

The trucking industry has been battling challenging circumstances so far in 2019 – which includes the loss of thousands of positions last month.

According to data from the Bureau of Labor Statistics, the industry lost 4,500 jobs between July and August.

And of course trucking companies continue to go bankrupt at a staggering pace. According to Business Insider, more than 600 trucking companies have already gone bankrupt so far this year…

Indicators from the trucking industry have been sour in 2019. In the first half of the year, around 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That’s more than triple the number of bankruptcies from the same period last year — about 175.

Sometimes people think that I exaggerate when I warn people about what is coming. But the truth is that I am not exaggerating at all. If anything, I feel frustrated that I am not able to effectively communicate how bad it will actually be when things start to get really crazy.

As a nation, we have been making incredibly bad decisions for decades, and we have been running in the exact opposite direction of where we should be headed as fast as we can.

In life, all decisions have consequences, and we are going to pay an extraordinarily high price for our exceedingly foolish decisions.

For the moment, things are relatively quiet. But that quietness will not last for much longer.

Federal Reserve Chair Jerome Powell Insists There Won’t Be A Recession When All The Evidence Suggests Otherwise

It’s happening again. Just like last time around, the head of the Federal Reserve is telling us that there won’t be a recession even though all of the evidence suggests otherwise. Just before the recession of 2008, Federal Reserve Chair Ben Bernanke told the country that “the Federal Reserve is not currently forecasting a recession”, and shortly thereafter we plunged into the worst economic downturn since the Great Depression of the 1930s. This time, it is Federal Reserve Chair Jerome Powell that is attempting to prop things up by making positive statements that are not backed up by reality. Speaking to a group at the University of Zurich, Powell insisted that the Fed is “not at all” anticipating that there will be a recession…

Federal Reserve Chairman Jerome Powell said Friday that he doesn’t “at all” expect the U.S. to enter a recession, though he hinted the central bank will likely cut interest rates as expected this month.

“Our main expectation is not at all that there will be a recession,” Powell said in a panel discussion at the University of Zurich.

Meanwhile, things are literally falling apart all around us. Just a few days ago, I put together a list of 28 data points that clearly indicate that a recession is imminent, and since then we have gotten even more bad news.

For instance, we just learned that Fred’s will be filing for bankruptcy and closing more than 500 stores…

Discount merchandise retailer and pharmacy chain Fred’s filed for Chapter 11 bankruptcy Monday with plans to close all of its stores.

The company plans to liquidate its assets, punctuating a swift collapse of its operations that involved a cascading series of store closures in recent months.

At this point, U.S. retailers have announced the closing of more than 8,200 stores in 2019, and we are going to break the old record for store closings in a single year by so much that the term “retail apocalypse” just doesn’t seem sufficient to describe the scale of what we are witnessing any longer.

Many are blaming “the Internet” for this colossal wave of store closings, but is “the Internet” also responsible for the transportation recession that has already started?

According to Zero Hedge, on a year over year basis heavy-duty truck orders were down 69 percent in June and 80 percent in July…

According to ACT Research, heavy-duty truck orders from the four largest truck makers in North America (Daimler Trucks North America, Paccar, Volvo Trucks USA, and Navistar International) collapsed 80% in July YoY. Orders in June plunged 69% from a year earlier.

As heavy-duty truck orders collapse, suppliers, such as ones who produce transmissions have predicted that the outlook for sales this year will be horrible.

And as global trade continues to plummet, one of the biggest shipping companies in the entire world has “temporarily suspended” one of their main routes…

Growth in the world continues to collapse into late summer, so much so that Maersk and Mediterranean Shipping Company (MSC) had to “temporarily suspend” their AE2/Swan Asia to North Europe loop until mid-November, removing 20,000 twenty-foot equivalent unit (TEU) a week from trade, reported The Loadstar.

None of this would be happening if economic conditions were good.

So let’s stop with the nonsense. Fed Chair Jerome Powell can deny reality all that he wants, but that isn’t going to change anything.

There are some people out there that are still finding solace in the fact that the official unemployment number in the U.S. is still so low. At just “3.7 percent”, it is the lowest that it has supposedly been in decades, but most people don’t realize that it has also been highly manipulated. It doesn’t include tens of millions of people that are working part-time for economic reasons, that are working temporary jobs or that are part of “the missing labor force”.

John Williams of shadowstats.com compares the official employment numbers to what they would look like if honest numbers were being used, and his figures tell an entirely different story.

According to Williams, the “real” rate of unemployment in the U.S. was hovering around 12 or 13 percent prior to the last recession, and then it shot up above 20 percent and has stayed there ever since. In fact, the alternate unemployment rate on shadowstats.com is currently sitting at 21.2 percent.

So that would suggest that we have never even come close to recovering from the last recession.

But of course “3.7 percent” sounds so much better than “21.2 percent”, and millions of Americans have completely bought into the false narrative that unemployment has been steadily falling since the early days of the Obama administration.

Unfortunately, we live at a time when a lot of people don’t want to hear the truth, and “reality” is defined by whoever has the biggest spin machine. Americans are more deeply divided than ever, and there is very little agreement on the direction that our country should go. Meanwhile, economic conditions are deteriorating a little bit more with each passing day and it has become exceedingly clear that a new crisis is upon us. And this new crisis has arrived at a time when our debt bubble is larger than it has ever been before. In fact, one expert has calculated that our total debt burden is now “running close to 2,000% of GDP”…

Total potential debt for the U.S. by one all-encompassing measure is running close to 2,000% of GDP, according to an analysis that suggests danger but also cautions against reading too much into the level.

AB Bernstein came up with the calculation — 1,832%, to be exact — by including not only traditional levels of public debt like bonds but also financial debt and all its complexities as well as future obligations for so-called entitlement programs like Social Security, Medicare and public pensions.

There is no way that this is going to end well.

The two major political parties will continue to relentlessly fight with one another, and it will mostly be about really silly stuff. But as they fight, our nation is literally steamrolling into oblivion, and there appears to be very little hope of avoiding our fate at this point.

Uh Oh: U.S. Layoffs Rise 38 Percent – Highest Level For August Since 2009

We continue to get more numbers that indicate that U.S. economic activity is really starting to slow down. According to Challenger, Gray & Christmas, the number of layoffs in the United States was 38 percent higher in August than it was in July. A 38 percent increase in one month is more than just a little bit startling, and many believe that if this momentum continues we could soon be facing an avalanche of job losses similar to what we witnessed in 2008. And without a doubt, all of the other economic numbers that have been rolling in lately also confirm that the U.S. economy is heading into harder times. But is our country ready to handle another major economic downturn?

Even though there have been moments of difficulty over the past decade, we truly haven’t seen anything like this since the last recession. In fact, the latest job cut numbers that we just got from Challenger, Gray & Christmas are the highest that we have seen during any August since 2009…

Employers also announced the most layoffs of any August since 2009, the outplacement firm Challenger, Gray & Christmas said.

Job cuts rose 38 percent over July, with 53,480 positions to be slashed from employer payrolls, led by workforce reductions in health care, which had been a mainstay of recent job creation, the tech sector and manufacturing.

So why is this happening?

Well, certainly there are many factors at play, but Andrew Challenger has singled out “the trade war” as one of the biggest reasons…

“Employers are beginning to feel the effects of the trade war and imposed tariffs by the US and China,” Andrew Challenger, the firm’s vice president, said in a statement.

Other nations are really starting to feel the effects of the trade war as well. This week, Germany reported a startling drop in new manufacturing orders…

Contracts for ‘Made in Germany’ goods fell 2.7% from the previous month in July, data showed on Thursday, driven by a big drop in bookings from non-euro zone countries, the economy ministry said. That undershot a Reuters consensus forecast for a 1.5% drop.

“The misery in manufacturing continues. The decline in new orders significantly increases the risk of a recession for the German economy,” VP Bank analyst Thomas Gitzel said.

During the second quarter, German GDP growth fell into negative territory, and it looks like that will happen again here in the third quarter.

That would mean that Germany is already in a recession right now, and that is very troubling news for all of Europe.

Here in the U.S., just about everything that we would expect to see happen just prior to the beginning of a recession is happening in textbook fashion right in front of our eyes.

In particular, the transportation industry is already mired in a very deep downturn, and we just learned that orders for heavy trucks in August were down by 80 percent compared to a year earlier…

Orders for heavy trucks that haul part of the economy’s goods across the US plunged by 80.1% in August 2019 compared to August last year, to about 10,400 orders, according to preliminary estimates by FTR Transportation Intelligence. It was the 10th month in a row of year-over-year declines, and the second month in a row of 80%-plus declines, with orders in July having plunged 81.2% to about 9,800, not seen since 2010.

I don’t know about you, but an 80 percent decline sure seems like an awfully big red flag to me.

Overall, it is still being projected that the U.S. economy will stay out of contraction territory in the third quarter, but GDP forecasts have continued to slip. The following comes from Reuters…

The U.S. economy is likely growing at a 1.7% annualized rate in the third quarter, based on weaker-than-forecast data on domestic manufacturing activity and construction spending, the Atlanta Federal Reserve’s GDPNow forecast model showed on Tuesday.

This was slower than the 2.0% pace estimated by the Atlanta Fed’s GDP program on Aug. 30.

In the end, any number above zero for the third quarter should be considered a big victory in this global economic environment.

But even if we eke out slight growth in the third quarter, nobody should be using the word “booming” to describe our economy. In fact, we haven’t been “booming” for a very, very long time. We haven’t had a full year when U.S. GDP grew by at least 3 percent since the middle of the Bush administration, and at this point nearly 40 percent of the nation struggles to pay for the basics…

Many people still struggle to pay bills — even for something as basic as food.

That’s the difficult conclusion of a new report released this week by the Urban Institute, a nonpartisan, nonprofit policy group based in Washington, D.C., which surveyed almost 7,600 adults last December. Some 39.4% of adults said their families had trouble meeting at least one basic need for food, health care, housing, or utilities last year.

The gap between the “haves” and the “have nots” continues to grow in our country, and that has dire implications for our future. If those with money and power continue to have a “let them eat cake” attitude about all of this, eventually we will see chaos in our streets, and this is something that Umair Haque recently discussed…

How can the economy be “strong” when 40% of people are struggling to eat? Isn’t that a little bit like the Hunger Games actually coming to life? Is that where America is now? What on earth?

Think about the fact itself for a second, before we discuss it — 40% of people in the world’s richest country struggle to afford food. It’s a “Let Them Eat Cake” moment happening before our eyes. How much more Versailles can you get? There’s nothing — nothing — more basic than being able to afford food. When a society can’t provide food for its people, it’s one of the most severe and fundamental indicators that something’s badly, badly wrong.

More government handouts are certainly not the answer. The U.S. government already hands out money and benefits to more than 100 million people every month, and yet our problems just continue to escalate.

In the end, people want to be able to work hard and provide for their own families. We need an economy that creates more good paying jobs and makes it easy to start businesses, and we haven’t had such an economy for a very long time.

And now it appears that we are heading into a new economic crisis. The job losses are likely to escalate in the months ahead, and many believe that the economic pain that we will experience will be even greater than what we experienced during the last recession.

As China Settles In For A Long Trade War, Economic Pressure On Trump Continues To Grow

The trade war between the United States and China is increasingly weighing on the global economy, but unfortunately it does not appear that it will end any time soon. Many pundits in the U.S. originally believed that the trade war would be short because the economic pain would be too much for the Chinese to handle. But the truth is that the Chinese are not nearly as motivated by short-term concerns as we are. They have always been long-term planners, and they are not afraid to set goals that may take multiple generations to achieve. So they are not going to allow an angry American president that may be voted out of office by the end of next year to greatly alter their long-term economic strategies.

If an acceptable agreement could have been reached with Trump, the Chinese would have jumped at that opportunity. But right now the two sides are so far apart that they are basically not even on the same playing field, and any additional “negotiations” are not going to change that. However, the Chinese are likely to try to keep talks with the Trump administration alive in an attempt to prevent the trade war from escalating even more. In essence, the Chinese are trying to minimize the damage while running out the clock on the Trump presidency.

So for China, this trade war has become an exercise in endurance, and this is something that a Fox Business article recently discussed…

Researchers from Deutsche Bank wrote a note over the weekend, explaining how they believe China appears to have shifted its strategy from a focus on “resolution to one of endurance.”

“We think China is neither aiming to quickly reach a trade deal, nor trying to hit back at the U.S. as hard as it can,” Deutsche Bank China Economist Yi Xiong wrote in a report. “Rather, China seems to have internalized the trade war as a given fact, and is trying to preserve China’s economic resilience under rising tariffs.”

Here in the U.S., we have become quite accustomed to sacrificing our long-term prosperity in order to avoid short-term pain, but the Chinese are simply not going to do that in this case.

Instead, they are going to work extremely hard to do what they can to bolster the Chinese economy internally while they wait for a more “reasonable” U.S. president to get elected. The following comes from the South China Morning Post…

China will “enhance countercyclical measures in macroeconomic policies … to ensure sufficient liquidity and reasonable growth in credit,” according to a statement by the government’s Financial Stability and Development Commission on Sunday. The wording marked a subtle change from previous policy statements that called only for “appropriate” fine-tuning of monetary policy.

The statement did not mention the trade war with the US, but included specific guidelines on what China should do to manage its economy in the coming months. It urged financial institutions to help sell local government special bonds, with proceeds to be used for government-backed investment projects, while it also told local authorities to “fully tap investment potential”.

Unlike Chinese officials, President Trump has an upcoming election that he must deal with, and the longer this trade war persists the worse his re-election chances are going to become.

As I detailed yesterday, signs of economic trouble are erupting all around us, and the pain from this trade war is only going to become more intense as each new month passes.

So Trump is going to become increasingly desperate to get China to come to an agreement, and that may lead to some very rash decisions. For example, it is being reported that he “wanted to double tariff rates on Chinese goods” after the Chinese responded to recent U.S. tariffs by imposing some of their own…

President Donald Trump wanted to double tariff rates on Chinese goods last month after Beijing’s latest retaliation in a boiling trade war before settling on a smaller increase, three sources told CNBC.

The president was outraged after he learned Aug. 23 that China had formalized plans to slap duties on $75 billion in U.S. products in response to new tariffs from Washington on Sept. 1. His initial reaction, communicated to aides on a White House trade call held that day, was to suggest doubling existing tariffs, according to three people briefed on the matter.

Unfortunately for Trump, no amount of pressure is going to get the Chinese to budge.

Yes, the Chinese will “talk” to U.S. officials as a delaying tactic, but they have already decided that they will never accept the sort of deal that Trump wants.

Meanwhile, our economic numbers just continue to deteriorate. On Tuesday, we learned that a key measure of U.S. manufacturing just fell to the lowest level in three years…

A key U.S. factory gauge unexpectedly contracted for the first time since 2016, sending stocks and bond yields lower and boosting expectations for interest-rate cuts as global manufacturing woes deepen.

The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Figures below 50 indicate the manufacturing economy is generally shrinking. The group’s gauge of new orders dropped to a more than seven-year low, while the production index hit the lowest since late 2015.

In response to that number and more troubling news about the trade war, U.S. stocks were sharply down…

Stocks fell on Tuesday, the first trading day of a historically tough month, after the world’s two largest economies began imposing new tariffs on each other’s goods. Weak manufacturing data also dented investor sentiment.

The Dow Jones Industrial Average closed 285.26 points lower, or 1.1%, at 26,118.02. The S&P 500 lost 0.7% to end the day at 2,906.27 while the Nasdaq Composite pulled back 1.1% to 7,874.16.

We have reached an absolutely critical moment in modern American history. The largest financial bubble in our entire history is on the verge of bursting, and many believe that we could be on the precipice of an economic downturn even worse than what we experienced in 2008 and 2009.

A trade deal with China would greatly help the short-term outlook, but the Chinese are not willing to give Trump what he desires. So the only way one will happen is if President Trump completely caves in, but I don’t see that happening.

That means that a tremendous amount of pain is ahead, and the American people are completely unprepared for that.

28 Signs Of Economic Doom As The Pivotal Month Of September Begins

Since the end of the last recession, the outlook for the U.S. economy has never been as dire as it is right now. Everywhere you look, economic red flags are popping up, and the mainstream media is suddenly full of stories about “the coming recession”. After several years of relative economic stability, things appear to be changing dramatically for the U.S. economy and the global economy as a whole. Over and over again, we are seeing things happen that we have not witnessed since the last recession, and many analysts expect our troubles to accelerate as we head into the final months of 2019.

We should certainly hope that things will soon turn around, but at this point that does not appear likely. The following are 28 signs of economic doom as the pivotal month of September begins…

#1 The U.S. and China just slapped painful new tariffs on one another, thus escalating the trade war to an entirely new level.

#2 JPMorgan Chase is projecting that the trade war will cost “the average U.S. household” $1,000 per year.

#3 Yield curve inversions have preceded every single U.S. recession since the 1950s, and the fact that it has happened again is one of the big reasons why Wall Street is freaking out so much lately.

#4 We just witnessed the largest decline in U.S. consumer sentiment in 7 years.

#5 Mortgage defaults are rising at the fastest pace that we have seen since the last financial crisis.

#6 Sales of luxury homes valued at $1.5 million or higher were down five percent during the second quarter of 2019.

#7 The U.S. manufacturing sector has contracted for the very first time since September 2009.

#8 The Cass Freight Index has been falling for a number of months. According to CNBC, it fell “5.9% in July, following a 5.3% decline in June and a 6% drop in May.”

#9 Gross private domestic investment in the United States was down 5.5 percent during the second quarter of 2019.

#10 Crude oil processing at U.S. refiners has fallen by the most that we have seen since the last recession.

#11 The price of copper often gives us a clear indication of where the economy is heading, and it is now down 13 percent over the last six months.

#12 When it looks like an economic crisis is coming, investors often flock to precious metals. So it is very interesting to note that the price of gold is up more than 20 percent since May.

#13 Women’s clothing retailer Forever 21 “is reportedly close to filing for bankruptcy protection”.

#14 We just learned that Sears and Kmart will close “nearly 100 additional stores” by the end of this year.

#15 Domestic shipments of RVs have fallen an astounding 20 percent so far in 2019.

#16 The Labor Department has admitted that the U.S. economy actually has 501,000 less jobs than they previously thought.

#17 S&P 500 earnings per share estimates have been steadily falling all year long.

#18 Morgan Stanley says that the possibility that we will see a global recession “is high and rising”.

#19 Global trade fell 1.4 percent in June from a year earlier, and that was the biggest drop that we have seen since the last recession.

#20 The German economy contracted during the second quarter, and the German central bank “is predicting the third quarter will also post a decline”.

#21 According to CNBC, the S&P 500 “just sent a screaming sell signal” to U.S. investors.

#22 Masanari Takada is warning that we could soon see a “Lehman-like” plunge in the stock market.

#23 Corporate insiders are dumping stocks at a pace that we haven’t seen in more than a decade.

#24 Apple CEO Tim Cook has been dumping millions of dollars worth of Apple stock.

#25 Instead of pumping his company’s funds into the stock market, Warren Buffett has decided to hoard 122 billion dollars in cash. This appears to be a clear indication that he believes that a crisis is coming.

#26 Investors are selling their shares in emerging markets funds at a pace that we have never seen before.

#27 The Economic Policy Uncertainty Index hit the highest level that we have ever seen in the month of June.

#28 Americans are searching Google for the term “recession” more frequently than we have seen at any time since 2009.

The signs are very clear, but unfortunately we live at a time when “normalcy bias” is rampant in our society.

If you are not familiar with “normalcy bias”, the following is how Wikipedia defines it…

The normalcy bias, or normality bias, is a belief people hold when considering the possibility of a disaster. It causes people to underestimate both the likelihood of a disaster and its possible effects, because people believe that things will always function the way things normally have functioned. This may result in situations where people fail to adequately prepare themselves for disasters, and on a larger scale, the failure of governments to include the populace in its disaster preparations. About 70% of people reportedly display normalcy bias in disasters.^[1]

For most Americans, the crisis of 2008 and 2009 is now a distant memory, and the vast majority of the population seems confident that brighter days are ahead even if we must weather a short-term economic recession first. As a result, most people are not preparing for a major economic crisis, and that makes us extremely vulnerable.

In 2008 and 2009, the horrible financial crisis and the bitter recession that followed took most Americans completely by surprise.

It will be the same this time around, even though the warning signs are there for all to see.

When It Comes To The U.S. Economy, Everyone Wants To Pin The Credit Or The Blame On Donald Trump

No matter what happens with the U.S. economy, most of the credit or the blame is going to go to President Trump. And now that the U.S. economy appears to be headed for big trouble, the mainstream media is salivating over what this could mean for Trump’s chances of winning in 2020. Within the past few days, the New York Times, the Washington Post, CNN, MSNBC and Fox News have all run stories about Trump and the economy, and they are all perpetuating the false premise that presidents should be held accountable for how the economy performs. As I have repeatedly reminded my readers, the truth is that U.S. presidents generally have relatively little control over the direction of the economy. In our system, it is the central planners at the Federal Reserve that primarily direct our economy, and so most of the credit or the blame for our economic performance should go to them. And the truth is that even President Trump realizes this. He understands that the Federal Reserve has control over key economic tools that he does not, and that is one of the reasons why he is so frustrated right now. The Fed is not running things the way that he would run them, and he realizes that this could severely hurt his chances of winning the next election.

During his first term, President Trump has not actually been able to do much to alter the overall trajectory of the economy. Some pundits point to the tax cuts that he was able to pass, and certainly reducing corporate tax rates helped things a little bit in the short-term, but the overall impact of the tax bill was relatively negligible. Ultimately, the moves that the Federal Reserve has been making have been far more important, and at this point Trump seems to be convinced that Fed Chair Jerome Powell and others are intentionally trying to undermine him…

He has insisted that his own handpicked Federal Reserve chair, Jerome H. Powell, is intentionally acting against him. He has said other countries, including allies, are working to hurt American economic interests. And he has accused the news media of trying to create a recession.

“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” Mr. Trump tweeted last week. “The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”

Trade policy is one area where presidents do have more power than anyone else, and this is definitely where President Trump has had the biggest impact on the economy. After claiming for months that a trade war would be “easy” to win, President Trump is now acknowledging that our trade war with China could potentially result in a recession…

“I am doing this whether it’s good or bad for your statement about, ‘Oh, will we fall into a recession for two months?’ The fact is, somebody had to take China on,” Trump said.

“Whether it’s good for our country or bad for our country, short term, it had to be done,” he said, repeating that “whether it’s good or bad, short term, is irrelevant.”

And to be honest, this is the argument that Trump should have been making all along. A trade conflict with China is most definitely going to be very painful, but it is also very true that something had to be done about China. They have been taking advantage of us and ripping us off for years, and when previous administrations decided to do nothing about China they were being exceedingly negligent.

However, there is a huge difference between recalibrating our relationship with China and antagonizing them so much that our relationship with the Chinese is completely destroyed. At this point it appears that we are doing the latter, and that is going to have enormous implications in 2020 and beyond.

And if our trade war with China does push us into a recession, there are many on the left that would greatly rejoice. The following comes from a Fox News editorial by Steve Hilton…

It’s pretty obvious that these establishment Trump-hating hysterics — all of them, of course, living comfortable coastal lives — actually want a recession because they think that’s the best way to get rid of Trump. At least one of them is honest about it.

“I’ve been saying for about two years — that I hope we have a recession, and people get mad at me,” said Bill Maher, host of HBO’s “Real Time with Bill Maher.”

Unfortunately for Trump, most Americans will squarely blame him if a recession happens even if it wasn’t his fault. When the U.S. economy was doing relatively well, Trump repeatedly took full credit for it, and that was a huge mistake. Because if the economy is really struggling in 2020, he probably won’t be able to successfully shift the blame to someone else. The mainstream media will hammer him over and over again with editorials about “the failure of Trumponomics”, and even though most of those editorials won’t make any sense, they will still have a huge impact on millions of Americans voters.

It is often said that “pride goeth before destruction”, and President Trump has repeatedly told us that this is the greatest economy ever and that he is responsible for it. But of course this isn’t even close to the greatest economy ever. The following comes from another Fox News editorial…

The fact is Trump’s best economic growth is 3.5 percent in two quarters out of the 10 quarters he’s been in office, CNBC’s John Harwood reports, adding that same growth figure, 3.5 percent, is Obama’s seventh best quarter, George W. Bush’s eighth best, and Bill Clinton’s 17th best. Yet, Trump claims his economy is the best ever. Far from it.

When things were going relatively well, President Trump should have said that it was a team effort and he should have acknowledged that we still had an enormous amount of work to do.

And all along he should have been educating the American people about the fact that the Federal Reserve has far more power over the performance of the economy than he does.

But now it appears that we are facing a nightmare economic scenario, and everybody is going to blame him for the failure of the economy.

Meanwhile, the Federal Reserve will once again escape accountability for running our economy into the ground, and that is extremely unfortunate.

In The U.S., A Transportation Recession Has Already Officially Arrived

A transportation recession often precedes a recession for the entire economy, and while the debate about when the U.S. economy as a whole will plunge into a recession is quite vigorous right now, the truth is that the debate is over regarding when a transportation recession will begin. Throughout 2017 and most of 2018, U.S. freight shipment volume was booming, and that was a very strong sign that overall economic activity was rising. But when economic activity begins to decline, freight shipment volume often goes negative, and that is precisely what is happening right now. In fact, U.S. freight shipment volume has now declined on a year over year basis for eight months in a row…

Freight shipments within the US by all modes of transportation – truck, rail, air, and barge – fell 5.9% in July 2019, compared to July 2018, the eighth month in a row of year-over-year declines, according to the Cass Freight Index for Shipments, which tracks shipments of consumer and industrial goods but not of bulk commodities such as grains. This decline along with the 6.0% drop in May were the steepest year-over-year declines in freight shipments since the Financial Crisis

When something happens for eight months in a row, that is definitely a trend, and we haven’t seen declines of this magnitude since the last recession.

And other numbers confirm what the Cass Freight Index is telling us. For example, ACT Research says that the trucking industry is officially in a recession after “two consecutive quarters of negative growth”…

The trucking industry is officially in a recession, according to data tracked by ACT Research.

After months of suggesting a pullback was possible, ACT President Kenny Vieth told FreightWaves on Thursday, July 11 that all metrics his firm tracks meet the technical definition of a recession – two consecutive quarters of negative growth.

“Every freight metric we look at has been negative for at least six months,” he said.

Of course it is possible that the transportation industry could pull out of this recession without the U.S. economy as a whole dipping into one, but I wouldn’t count on it this time.

As I have been documenting for months, just about every economic indicator is telling us that big trouble is ahead.

And more bad news just keeps rolling in on a daily basis. In fact, we just learned that yet another major retailer is shutting down all of their stores…

Plus-size women’s clothing retailer Avenue Stores, LLC is shutting down all locations.

On Wednesday, the company announced plans to close all 222 stores across 33 states. Everything from clothing to store fixtures will be sold from locations across America, according to a press release.

Usually major retailers don’t do this sort of thing so late in the year. If at all possible, there is usually an all-out effort to hang on through the highly lucrative Christmas season, and so things must have been really bad for Avenue Stores to pull the plug here in mid-August.

And all of this is happening even though interest rates are still much lower than the long-term average and the federal government is borrowing and spending money like there is no tomorrow. According to Wolf Richter, our national debt is up by more than a trillion dollars over the last 12 months…

The US Gross National Debt has jumped by $363 billion in the two weeks since President Trump signed the law that suspended the debt ceiling. This surge pushed the total debt to $22.39 trillion. That’s up by $1.01 trillion from 12 months ago. And these are the good times.

This is emergency level spending, and it has been happening while the U.S. economy has still been relatively stable.

When the federal government borrows money that it does not have and spends it into the economy, that tends to boost overall economic activity and raise GDP numbers. This was Barack Obama’s favorite economic trick, and Donald Trump has followed right in his footsteps. But of course in the process we are literally destroying the bright future that our children and our grandchildren were supposed to have. What we are doing to future generations of Americans is beyond criminal, and all of us should be deeply disgusted by what is happening.

But of course the politicians in D.C. are deathly afraid to do anything about our exploding debt, because if we cut spending to sustainable levels that would immediately plunge the U.S. economy into a horrific recession. And when bad economic times come, voters tend to vote out the people that are already holding office.

For President Trump, keeping the U.S. economy out of a recession is absolutely critical to his chances of winning in 2020, and he knows it.

His opponents know it too, and that is why many of them are openly rooting for a recession. For instance, just check out what Bill Maher said on his show on Friday…

HBO’s Real Time host Bill Maher made another desperate plea for a recession on Friday, saying that the economic downturn “would be very worth getting rid of Donald Trump.”

“So I’ve been saying for about two years that I hope we have a recession,” Bill Maher said. “And people get mad at me, as Sean Hannity thinks I’m actually causing a recession. I’m just saying we can survive a recession. We’ve had 47 of them. We’ve had one every time there’s a Republican president.”

“So, yes, a recession would be very worth getting rid of Donald Trump and these kind of policies,” Maher said after citing a dubious United Nations report that claims a million species are at risk of extinction.

On the other side, President Trump and his team are going to try to make things seem as rosy as possible between now and election day.

So they will keep telling us that everything is just wonderful, and they will keep insisting that a recession is not coming…

Top White House economic adviser Larry Kudlow said Sunday he does not forecast a recession “at all,” despite warning signs exhibited by the bond market last week.

“First of all, I don’t see a recession at all,” Kudlow told “Fox News Sunday.” “Second of all, the Trump pro-growth program, which I believe has been succeeding – lower tax rates, big rollback of regulations, energy opening, trade reform – we’re gonna stay with that. We believe that’s the heart of the free enterprise. We want an incentive-oriented supply-side economy, providing opportunities for everybody across the board.”

In the end, it really isn’t going to matter who is in the White House. What is coming to America is going to be extremely painful, and we are about to reap the consequences for decades of incredibly foolish decisions.

How we view reality should never be distorted based on what political party we identify with. When we willingly choose not to see things objectively, we become very susceptible to deception.

The truth is always going to be the truth, and in our case the truth is not pretty.

Is There A Hidden Political Agenda? The Mainstream Media Is Suddenly Full Of Stories About The Coming Recession

All of a sudden, it seems like the mainstream media just can’t stop talking about “the coming recession”. If you go to Google News and type in the word “recession”, you will literally get dozens of articles from the last couple of days with “recession” in the headline. And of course it is true that there are signs of global economic trouble all around us, and I have been documenting them on my website all throughout 2019. So we don’t want to criticize the mainstream media when they actually decide to tell the truth, because a recession is definitely coming, but could it be possible that there is also a hidden political agenda at work? The economy is generally regarded to be one of the bright spots for President Trump, and political operatives on the left clearly understand that a major economic downturn now would spell almost certain doom for Trump’s chances of winning the 2020 election. And when mainstream reporters talk about the possibility of a recession as we approach the next election, many of them almost seem gleeful as they describe how it could hurt Trump politically. Ultimately, when things start to really get bad it is inevitable that the mainstream media will place the blame directly at the feet of Trump. It is easy to imagine a narrative along the lines of “Trump’s handling of the economy has plunged the nation into a recession” being relentlessly pounded into the heads of American voters over the next year. And if the end result is Trump being voted out of office, more than 90 percent of those that work for the big news companies will be just fine with that.

This week, we have seen an absolute explosion in the number of stories about the possibility of an imminent recession. The following are just a few of the stories I came across while doing research earlier today…

–A global recession may be coming a lot sooner than anyone thought

–Recession watch: 6 financial moves to make when the economy slows down

–Trump 2020 can’t afford a recession

–The recession question we should be asking isn’t ‘when’ but ‘how bad?’

–Recession fears explained in one simple sentence

–Recession ahead? Dow, stocks tank on fears that bond market signals a downturn

–Recession indicator with perfect track record flashing red

–Recession signs are flashing, but Americans are still shopping at Walmart

–Worried about a recession? Don’t panic, but be prepared

Of course many of these stories were sparked by a major event that we just witnessed on Wall Street. The following comes from Fox Business…

The yield curve is blaring a recession warning.

The spread between the U.S. 2-year and 10-year yields on Wednesday turned negative for the first time since 2007. Such a development has occurred ahead of each and every U.S. recession of the last 50 years, sometimes leading by as much as 24 months.

Yes, it is possible that the yield curve could be wrong this time, but I wouldn’t bet on it.

And the economic news that is coming in from all over the world just continues to confirm that conditions are deteriorating. On Thursday, we learned that U.S. manufacturing has slumped back into contraction territory, and earlier this week we got some really troubling news from Germany and China…

Germany – Europe’s largest economy – reported that its gross domestic product, a measure of an economy’s health, went negative in the second quarter.

In China, the country’s industrial output in July hit a 17-year low, Detrick said. Retail sales and investment in real estate and other fixed assets weakened, an indication the world’s second-biggest economy is feeling pressure.

So it isn’t as if the mainstream media is being dishonest with us in this case. Global economic activity is most definitely slowing down, and many believe that things will get much worse during the second half of this year.

And a global economic slowdown would be terrible news for the Trump campaign, because their entire narrative depends on President Trump making the economy great again. A substantial percentage of American voters are convinced that since he is a billionaire, Trump must really understand the economy very well. And according to a CNN poll from earlier this year, the performance of the economy is one of the main reasons for his current level of support…

Right now, the main reason voters approve of Trump’s job performance is the economy. A CNN poll from late May found that 26% of those who approve of Trump’s job performance said it was mainly because of the economy. That was more than double the next most commonly given answer. Additionally, 8% said jobs/unemployment was the main reason for why they approved of Trump. Among those who disapproved, few said anything related to the economy was the main reason why they disapproved of Trump. For example, only 1% said the Trump tax cuts.

But if the U.S. economy plunges into a painful recession, the game completely changes.

For those on the left that would like to see Trump voted out in 2020, the timing of the next recession will be key. If the next recession doesn’t begin until the second half of 2020, there may not be enough economic pain before November to swing the election in the favor of the Democratic candidate. So what the left really needs is for a recession to begin during the second half of 2019 or the first half of 2020 so that Americans are really suffering by the time election day rolls around.

I know that is a very sick way to think, but these are the sorts of conversations that these people actually have. For example, on his own television show Bill Maher publicly stated that a recession would be “worth it” if Trump is voted out in 2020. As we approach the next election, many on the left will be so desperate to see Trump gone that they will be willing to pay just about any price to see that happen.

And to be honest, the U.S. economy is definitely way overdue for a major downturn, and so it is only prudent to get prepared for rough times ahead. At this point, even USA Today is providing us with “recession survival tips”…

Do you really need that bundle package from your cable provider, or to pay a gardener to mow your lawn every week? Now might be a good time to figure out what’s an essential expense, and what you can let go.

“Review the family budget to see what could be reduced or cut if there was a sudden drop in monthly income,” says Richard Fleming, a certified financial planner based in Colorado Springs, Colorado. “Be prepared to make those reductions (or) cuts as soon as it becomes necessary.”

That is actually really good advice.

Now is a time to cut costs, get out of debt and build up your emergency fund.

The coming year promises to be quite chaotic, and those that hate President Trump are likely to pull out all the stops in an all-out attempt to get him voted out in 2020.

If The Federal Reserve Cuts Interest Rates Now, It Will Be An Admission That A Recession Is Coming

So there is a lot of buzz that the Federal Reserve is about to cut interest rates – and it might actually happen. We’ll see. But if it does happen, it will directly contradict the carefully crafted narrative about the economy that the Federal Reserve has been perpetuating all this time. Fed Chair Jerome Powell has repeatedly insisted that the U.S. economy is in great shape even when there has been a tremendous amount of evidence indicating otherwise. And of course President Trump has been repeatedly telling us that this is “the greatest economy in the history of our country”, but now he is loudly calling for the Federal Reserve to cut interest rates as well. Something doesn’t seem to add up here. If the U.S. economy really was “booming”, there is no way that the Fed should cut interest rates. Right now interest rates are already low by historical standards, and theoretically it is during the “boom” times that interest rates should be normalized. But if the U.S. economy is actually slowing down and heading into a recession, then a rate cut would make perfect sense. And if that is the reality of what we are facing, then the economic optimists have been proven dead wrong, and people like me that have been warning of an economic slowdown have been proven right.

If the talking heads on television are correct, we’ll probably see a rate cut. In fact, apparently there are some people that are even pushing “for a 50 basis point cut”…

Most Fed watchers believe that the central bank will cut its funds rate, now hovering between 2.25% and 2.5%, by a quarter point, also known as 25 basis points. A small group — including President Donald Trump’s latest nominee for Fed governor — are pounding the table for a 50 basis point cut, which would take the rate below 2%. A rate cut of any size would be the first since the 2008 financial crisis.

A 50 basis point cut is something that would normally only be done during an economic emergency.

Have we already reached such a point?

That wouldn’t seem to be the case. Stock prices are still at record highs, and at least according to the government’s highly manipulated figures, U.S. GDP is still growing…

The nation’s gross domestic product – the value of all goods and services produced in the U.S. – increased at a seasonally adjusted annual rate of 2.1% in the April-June period, following a 3.1% gain in the first quarter, the Commerce Department said Friday. Economists expected a 1.8% increase in output.

The report comes amid mounting worries that the sluggish global economy and President Trump’s trade war with China could lead to a recession by next year.

Yes, there are tons of other indicators that are clearly telling us that an economic slowdown has already begun, and I am not going to repeat everything that I have been saying for the past 6 months in this article.

But even though things are definitely moving in the wrong direction, I would definitely not call what we are currently experiencing “an economic emergency” just yet.

After all, things can’t be too bad if a 16-year-old kid just won 3 million dollars playing video games…

A teenager from Pennsylvania won $3 million and took home the top prize at the 2019 Fortnite World Cup on Sunday. Kyle “Bugha” Giersdorf scored 26 more points than runner-up “psalm” to win the eSports tournament held at Arthur Ashe Stadium in Queens.

“Words can’t even explain it. I’m just so happy,” the 16-year-old said in an interview posted to Twitter by organizers. “Everything I’ve done, the grind, it’s all paid off. It’s just insane.”

Good for that kid. I wish that I was talented enough to be a world champion at something.

Unfortunately, when things get really bad in this country money is going to start getting really tight, and we simply are not there yet.

So could it be possible that there is another reason for the sudden push to get the Fed to reduce rates?

Well, CNBC’s Steve Liesman seems to think that there could be a political motivation…

“Think about what happens when a person gets up at a rally and starts railing against The Federal Reserve, and starts to create what could lead to Congressional pressure on The Fed, then you could imagine that their could be support for a different system.”

“I think they think there’s a lot of political downside risk to getting this wrong.”

If the Federal Reserve doesn’t cut rates and the U.S. economy really starts going off the rails, they will be President Trump’s number one economic target during the 2020 campaign.

And it has already gotten to the point where Trump is regularly attacking them on social media. For example, he posted the following just a little while ago…

The Fed “raised” way too early and way too much. Their quantitative tightening was another big mistake. While our Country is doing very well, the potential wealth creation that was missed, especially when measured against our debt, is staggering.

If a wave of anti-Fed sentiment helps get Trump re-elected, that could potentially be a nightmare scenario for the folks over at the Federal Reserve. With a full second term and a Republican majority in Congress, President Trump could decide to dramatically reform or completely get rid of the Federal Reserve system altogether. Of course those that follow my work regularly know that I would be thrilled by this, because I have been advocating for the elimination of the Federal Reserve system for many years.

The sort of political scenario that I just outlined probably won’t happen, but even if there is a small chance that it could happen the people running the Federal Reserve have got to account for that possibility.

So cutting rates would be a way to “play it safe” by appeasing President Trump and his supporters. If President Trump senses that the Fed is on his team, then he probably won’t be inclined to make a big move against them.

In any event, a small rate cut is definitely not going to do much to alter our overall economic trajectory.

Because the truth is that an economic slowdown has already begun, and many experts are anticipating that it will greatly accelerate during the second half of this year.

An “Earnings Recession” Is Here – Big Companies All Over America Are Reporting Disastrous Financial Results

If the U.S. economy really was “booming”, then corporate earnings would be rising. But that isn’t happening. In fact, we haven’t seen corporate earnings fall like this since the last recession. They fell during the first quarter of this year, and based on the results we have so far, it appears that corporate earnings will be down substantially once again in the second quarter. When corporate earnings drop for two quarters in a row, that is officially considered to be an “earnings recession”, and that normally occurs just before the overall economy plunges into recession territory. As things get tighter for our corporate giants, we should expect a lot more layoffs in the months ahead, and the unemployment rate should rise quite briskly. In other words, it looks like our economic problems are about to accelerate substantially.

This week, some of the largest companies in the entire country reported results for the second quarter, and we witnessed disappointment after disappointment.

Let’s start with Boeing…

The 737 Max is already more than four months into an unprecedented global grounding, which authorities ordered after two fatal crashes. The manufacturer provided hints of the strain on its resources, starting with a US$1.01 billion burn of free cash flow in the second quarter — a US$5 billion swing from last year’s gain during the same period.

Of course Boeing made a bad plane, and so their disastrous results could certainly be blamed on that.

But what about Netflix? Once one of the darlings of Wall Street, Netflix has been absolutely monkeyhammered in recent days…

Netflix’s disappointing quarter reported last Wednesday has caused the streaming darling of Wall Street to shed more than $24 billion in value in six days as the stock has sunk 15 percent.

Shares of Netflix have now fallen each of the last nine trading days, as the stock began its downfall even before it released its quarterly financial report, which indicated it lost subscribers in the U.S. for the first time since launching its streaming service nearly a decade ago.

Yes, Netflix could be considered a special case because they are facing a lot of new competition. Last December I wrote an entire article predicting that this would happen, and this is just the beginning of the company’s problems.

On the other hand, the future was supposed to be exceedingly bright for Tesla, but the firm is hemorrhaging money like crazy and over the past 24 hours the stock price has crashed hard…

Even after delivering a record number of cars in its second quarter, Tesla (TSLA) is still bleeding money. Tesla said Wednesday that it lost $408 million during the three months ending in June, far worse than Wall Street had expected. Shares of Tesla fell more than 10% in after hours trading following the earnings report.

The loss was slightly less painful than the previous quarter, in which Tesla lost $702 million.

But Elon Musk has a gift for getting investors to hand over giant piles of money, and so Tesla is going to survive for now.

Meanwhile, the rest of the auto industry is really struggling as well. In fact, Ford just reported very disappointing results and reduced the forecast for the remainder of 2019 significantly…

Ford shares plunged Wednesday after the automaker reported second-quarter earnings that were short of expectations and issued a disappointing forecast for the year.

Ford, which has slashed thousands of jobs this year, is also investing $11 billion by 2022 in electric and hybrid vehicles to try to keep pace in a changing industry.

Are you starting to see a pattern?

Even Paypal is falling short of expectations. The following comes from CNBC…

Shares of PayPal fell as much as 6% in after-hours trading after the payments giant missed Wall Street’s estimates for second-quarter revenue and lowered its full-year guidance.

Everything that I have just shared with you makes complete and total sense if the U.S. economy is in the process of plunging into a new recession.

And other economic numbers continue to tell us the exact same thing. For example, we just got the worst U.S. manufacturing PMI number in 118 months. That is absolutely terrible news, but Europe’s manufacturing sector is doing even worse.

Manufacturing activity is slowing down all over the globe, and a big reason for that is because global trade is shrinking at the fastest pace that we have seen since the last financial crisis.

Meanwhile, we just learned that existing home sales in the United States have now fallen on a year over year basis for sixteen months in a row.

After something happens 16 times in a row, you would think that the experts would be able to spot a “trend” by now, but so many of them continue to be optimistic about the real estate industry.

In addition, store closing announcements just continue to roll in at a stunning rate. This week, we learned that GNC is planning to close up to 900 stores by the end of 2020.

We were already on pace to absolutely shatter the all-time record for store closings in a single year even before that announcement, and the phrase “retail apocalypse” almost doesn’t seem strong enough to describe what we are witnessing any longer.

Just as I have warned, America’s landscape is being littered by boarded up stores and abandoned malls, and this is particularly true in our poorest areas.

Unprecedented money printing by the Federal Reserve and an unprecedented debt binge by the federal government may have bought us a very brief reprieve, but none of the fundamental economic problems that were identified during the last recession were ever fixed.

Now a new crisis has arrived, and we are just in the very early chapters of it.

As Wall Street Celebrates Rising Stock Prices, Companies Are Literally Shutting Down All Over America

How long can the stock market possibly stay completely disconnected from economic reality? On Monday, the Dow Jones Industrial Average rose just 27 points, but that was good enough to push it to yet another new all-time record high. Investors have been absolutely thrilled by the extremely impressive bull run that we have witnessed so far in 2019, but there is no way that this is sustainable. Wall Street may be celebrating for the moment, but meanwhile all of the hard economic numbers are telling us that we have now entered a new economic slowdown. Just like in 2008, it appears to be inevitable that the party on Wall Street is about to hit a brick wall, but nobody should be surprised when it happens. Everywhere around us there are signs of economic trouble, and right now companies are literally shutting down all over America.

For example, just take a look at what is happening to the trucking industry. I recently warned about the trucking “bloodbath” that was unfolding, and over the past week it has greatly accelerated.

On the 12th of July, we learned that trucking giant LME had abruptly shut down. The following comes from Zero Hedge…

Less-than-truckload carrier LME has reportedly “suddenly and abruptly” shut down its operations, according to FreightWaves.

The company is a regional carrier based in Minnesota that operated throughout the Midwest. The company had terminals in 30 locations across the U.S. and through interline agreements services all of North America. It also worked with major companies like 3M, John Deere and Toro.

The company reportedly included “over 600 men and women” and has been listed as having 382 power units and 1,228 trailers, with 424 truck drivers.

Then today we learned that Timmerman Starlite Trucking suddenly shut down without any notice…

40 year old California trucking outlet Timmerman Starlite Trucking, Inc. is the latest victim in the “trucking apocalypse” and announced that it would be shutting down effective immediately, according to FreightWaves.

30 employees are expected to lose their jobs as a result. The company is based in a mid sized city about 100 miles east of San Francisco and had a fleet of 30 trucks, 150 trailers and 28 drivers.

The company’s owner cited “a tough freight market and environmental regulations” as reasons for the shut down. The company announced the shutdown on its Facebook page.

Of course those two trucking companies are definitely not the only victims of this “bloodbath”. According to Business Insider, ALA Trucking, Williams Trucking, Falcon Transport and New England Motor Freight have also completely ceased operations in 2019.

If the U.S. economy really was “booming”, this would not be happening.

Meanwhile, major retailers continue to fall like dominoes. Charming Charlie is headed for bankruptcy and will be closing all of their stores…

Fashion accessory retailer Charming Charlie will close all its stores after going bankrupt for the second time in less than two years. More than 3,000 full- and part-time employees could lose their jobs.

Charming Charlie Holdings Inc. filed for Chapter 11 protection in Delaware with plans for going-out-of-business sales at about 261 stores, according to court documents. The chain expects the liquidation to take about two months.

In addition, we just learned that Fred’s will be shuttering another 129 stores as it desperately attempts to stay alive…

Troubled discount merchandiser Fred’s has announced another round of store closures.

The chain will shutter 129 stores, leaving it with about 80 locations, USA Today reported. Going-out-of business sales have already begun.

Not too long ago, I went to a going out of business sale at a local store that was closing down, and it was definitely depressing. At one time the shelves had been packed full of products, but by the time I got there people were clawing through the small handfuls of deeply discounted merchandise that still remained.

Sadly, such scenes are being repeated over and over again all around the country. In fact, things are already so bad that even Manhattan retailing legend Barneys is likely headed for bankruptcy…

Barneys may be on the cusp of filing for bankruptcy protection as the luxury Manhattan retailer contends with high rents and shoppers going online, according to two media reports.

Reuters, citing unnamed sources, reported Saturday that Barneys has tapped law firm Kirkland & Ellis LLP and is weighing a potential bankruptcy filing among other options that could occur in the coming weeks.

The all-time record for store closings in a single year was set in 2017 when 8,139 stores shut down.

According to a brand new report that was just released, we are on pace to absolutely shatter that old record.

In fact, Coresight says that the number of store closings in the U.S. could hit 12,000 by the end of this year…

The “going-out-of-business” sales and liquidation of other brands is expected to continue. Coresight estimates closures could reach 12,000 by the end of the year, the report said.

In The Beginning Of The End, I painted a picture of a future in which America’s communities would be littered by boarded up stores that had been abandoned by major retailers.

Now it is happening right in front of our eyes.

Everything that is taking place in the “real economy” makes perfect sense, and unfortunately our economic problems are likely to accelerate significantly in the months ahead.

What doesn’t make sense is what we are witnessing on Wall Street.

There is no way that stock prices should be rising like this, but financial bubbles don’t typically follow rational patterns.

Instead, they usually just keep going until something comes along to end them.

And considering everything that is going on in the world right now, that “something” could definitely arrive sooner rather than later.

The Pain Of This New Economic Downturn Is Starting To Show Up All Over The Country

It is going to take a miracle for the U.S. economy to pull out of this tailspin, because the economic numbers are really starting to deteriorate very rapidly now. On Tuesday we got some more new numbers, and they were just as bad as we thought they might be. But even before today’s numbers all of the data were telling us the exact same thing. The New York Fed’s Empire State manufacturing index just suffered the worst one month decline in U.S. history, Morgan Stanley’s Business Conditions Index just suffered the largest one month decline that we have ever seen, global trade numbers are the worst they have been since the last recession, and just last week I detailed the complete and utter “bloodbath” that we are witnessing in the U.S. trucking industry right now. So considering what we already knew, it shouldn’t have been a surprise that new home sales in the U.S. were down a whopping 7.8 percent during the month of May…

Sales of new U.S. homes slumped 7.8% in May, as sales plunged in the pricier Northeastern and Western markets.

The Commerce Department said Tuesday that new homes sold at a seasonally adjusted annual rate of 626,000 in May, down from 679,000 in April. During the first five months of the year, purchases of new homes have fallen 3.7% compared to the same period in 2018.

Those are absolutely horrible numbers, and this is precisely what a recession looks like.

On Tuesday we also learned that U.S. consumer confidence is rapidly declining…

Consumer confidence is on the decline.

The Conference Board’s Consumer Confidence Index tumbled to 121.5 in June, dropping from a downwardly revised reading of 131.3 in May and snapping three consecutive months of improvements.

June’s results missed consensus expectations for a reading of 131.0, according to Bloomberg-compiled data, and marked the lowest level in nearly two years.

Once again, this is precisely what we would expect to see during a recession.

And yet I continue to see some clueless mainstream media reports that insist that the U.S. economy is doing well. Apparently FedEx didn’t get that memo, because they lost nearly 2 billion dollars in the quarter ending May 31st…

In the fiscal fourth quarter, which ended May 31, FedEx reported a loss of $1.97 billion, compared with profit of $1.13 billion a year earlier.

FedEx blamed this horrible number on the ongoing global economic slowdown, and unfortunately things are not likely to get any better for them any time soon.

Many in the mainstream media continue to speak of “the next recession” as some future event, but when we get the final economic numbers many months from now we may discover that it had already started by now. In fact, one prominent economist recently stated that he believes that “we’re probably already in a recession”…

Gary Shilling, an economist and financial analyst who is credited with predicting several recessions over the past 40 years, thinks the U.S. is in a relatively mild slump.

“I think we’re probably already in a recession but I think it will probably be a run-of-the-mill affair, which means real GDP would decline 1.5% to 2%, not the 3.5% to 4% you had in the very serious recessions,” Shilling, president of economic and financial research firm A. Shilling & Co., said in a recent interview broadcast this week by Real Vision.

And even Federal Reserve Chair Jerome Powell is now admitting that our economic outlook has become “cloudier”. The following comes from ABC News…

Federal Reserve Chairman Jerome Powell said Tuesday the economic outlook has become cloudier since early May, with rising uncertainties over trade and global growth causing the central bank to reassess its next move on interest rates.

Speaking to the Council on Foreign Relations in New York, Powell said the Fed is now grappling with the question of whether those uncertainties will continue to weigh on the outlook and require action.

I find it very interesting that Powell chose the Council on Foreign Relations as the venue for this address. I think that tells us a lot about where Powell’s true loyalties are. The Council on Foreign Relations has dominated the political landscape in Washington for a long time, and this has been true no matter which political party has been in power.

Meanwhile, the global trade war continues to intensify, and over 300 companies are literally begging the Trump administration to find a way to end it…

More than 300 companies are talking to government officials in Washington this month about how detrimental the trade war between the U.S. and China has been and will be to their business.

Testifying in front of the Office of the U.S. Trade Representative, major U.S. companies including Best Buy, HP and Hallmark Cards are voicing concerns about how the additional tariffs that President Donald Trump threatened to slap on China would impact their businesses and cause them to lose business to foreign competitors.

Sadly, it isn’t likely that the trade war will end any time soon.

In fact, it is probably much more likely that a shooting war will start in the Middle East instead. And if that happens, our current economic problems will dramatically escalate.

The wheels are starting to come off, and the U.S. economy is beginning to spin out of control. Perhaps the Federal Reserve will be able to pull another rabbit out of the hat and pull off a miracle once again, but I doubt it. We haven’t seen conditions like this since the great financial crisis of 2008, and the remainder of 2019 threatens to be extremely “interesting” indeed.

U.S. Steel Plants Are Going Idle, But The Fed Continues To Perpetuate The Myth That Everything Is Just Fine

Even though there is a tremendous amount of evidence to the contrary, the Federal Reserve continues to insist that the U.S. economy is in good shape. On Wednesday, Federal Reserve Chair Jerome Powell told the nation that “the economy has performed relatively well” in 2019 and he insisted that “the baseline outlook is a good one.” Of course he didn’t say anything about our collapsing manufacturing numbers, the worst global trade numbers since the last recession or the “bloodbath” in the U.S. trucking industry. Powell did concede that “the risk of less favorable outcomes has risen”, but other than vague statements like that he really didn’t acknowledge our growing economic problems at all. Considering the fact that Powell has more power over the U.S. economy than anyone else in the entire country, this should deeply concern all of us. To me, Powell’s performance on Wednesday was quite reminiscent of the moment in 2008 when Fed Chair Ben Bernanke told us that the Federal Reserve was not “currently forecasting a recession” after a recession had already begun.

As I have been documenting for weeks, evidence that another major economic downturn has already started can be clearly seen all around us.

For example, we got some very alarming news from the steel industry on Wednesday. When the Trump administration slapped a 25 percent tariff on steel imports last year, that was supposed to greatly help the U.S. steel industry. But instead, a dramatic drop in demand due to this new economic downturn is forcing steel companies to take dramatic measures. According to CNN, U.S. Steel just announced that it will be shutting down a blast furnace in Gary, Indiana and another one that is located just outside of Detroit…

Pain has returned to the US steel industry despite the tariffs put on imported steel last year that were designed to help.

Late Tuesday US Steel announced it will idle two of the blast furnaces where it makes steel, one in its flagship mill in Gary, Indiana, near Chicago, the other in Ecorse, Michigan, near Detroit. The idled furnaces will cut production by about 200,000 tons of steel or more a month, the company said.

“We will resume blast furnace production at one or both idled blast furnaces when market conditions improve,” said the company.

But when will market conditions improve?

In 2020?

After this new economic downturn is over?

Never?

Of course U.S. Steel is not the only steel producer that is hurting right now. In fact, Nucor and Steel Dynamics have both cut profit forecasts…

US Steel’s action follows similar warnings Monday from Nucor, the nation’s largest steelmaker, and Steel Dynamics. Both are now forecasting lower profits. Nucor pointed to weaker demand from the US auto industry.

Sadly, the truth is that major industry after major industry is deeply suffering at this moment…

-Our ongoing “retail apocalypse” is absolutely brutalizing the retail industry, and we are on pace to have the worst year for store closings in our entire history.

-Auto industry sales have been absolutely abysmal, and auto loan delinquencies have shot up to alarmingly high levels.

-The agriculture industry is going to have the worst year it has seen in at least several decades.

-Our 800 billion dollar trucking industry is already in the midst of a “bloodbath”.

-The real estate industry is poised for the worst downturn that we have seen since the subprime mortgage meltdown during the last financial crisis.

-The manufacturing industry has not seen numbers this bad since the last recession, and things are rapidly getting worse.

But yeah, let’s tell the American people that the economy is “booming” and see if they will buy it.

Really?

Let’s get real. The U.S. economy is mired in the worst slump in a decade, and economic conditions continue to deteriorate rapidly. The Federal Reserve could have given us a short-term boost by cutting interest rates on Wednesday, but they decided not to do that…

A divided Federal Reserve held the line on interest rates Wednesday and indicated formally that no cuts are coming in 2019. The decision came amid divisions over what is ahead and still leaves open the possibility that policy loosening could happen before the end of the year depending on how conditions unfold.

The central bank predicts one or two rate cuts in its set of economic predictions, but not until 2020. Despite cautious wording in the post-meeting statement Wednesday, markets are still betting the Fed cuts, as soon as July.

Perhaps they want to save their very limited ammunition for when the recession officially starts, and I can understand that.

But this latest move by the Fed is definitely not going to please President Trump, and it will likely prompt more speculation that Trump would like to demote Powell…

The action sets up a possible confrontation between Fed Chairman Jerome Powell and President Donald Trump, who has been pressuring the Fed to cut rates. Just Tuesday, Trump said “let’s see what he does” at the Fed meeting when asked if he still wants to demote Powell.

At the post-statement news conference, Powell was asked about his future as chairman. “I think the law is clear that I have a four year term, and I fully intend to serve it,” he said.

Trump needs the U.S. economy to be as strong as possible as he heads into an election year.

The stronger the U.S. economy is, the more likely it is that he will be re-elected.

And actually the Federal Reserve may be doing Trump a favor by trying to perpetuate the myth that everything is just fine. Because if the Fed had cut rates on Wednesday, it would have essentially been an admission that a new recession is on our doorstep. As John P. Hussman has aptly pointed out, almost every initial rate cut in history “has been associated with an oncoming or ongoing recession”…

With the exception of 1967 and 1996, every initial Fed rate cut has been associated with an oncoming or ongoing recession. Be careful what you wish for.

So for now, the Fed seems to have adopted a “fake it until you make it” approach, and sometimes that can work.

Unfortunately, I don’t think it is going to work this time. And meanwhile millions upon millions of Americans have been lulled into a false sense of security, and they are not getting prepared for the exceedingly hard times that are coming.

One of my readers recently left a comment in which he stated that what we are facing “is not a drill”, and I believe that he is quite correct.

We haven’t seen economic conditions anything like this since the last recession, and the outlook is getting worse with each passing day.

New Survey: 69% Of U.S. CFOs Believe That A Recession Will Start “By The End Of 2020”

Throughout 2017 and most of 2018, U.S. corporate executives were generally very optimistic about the future of the economy, but now that optimism has been replaced by a deep sense of doom and gloom. And of course there are very good reasons for all of the doom and gloom. The trade war with China looks like it is going to last for an extended period of time, recent global manufacturing numbers have been absolutely dismal, and it is being projected that corporate earnings will be down significantly in the second quarter. The economic environment is tough and it is rapidly getting tougher, and a brand new survey that was just released has found that 69 percent of U.S. CFOs believe that a new recession will start “by the end of 2020″…

The longest economic expansion in modern American history could come to a screeching halt right before the 2020 presidential election.

At least that’s what US finance leaders fear. Nearly half (48.1%) of chief financial officers in the United States are predicting the American economy will be in recession by the middle of next year, according to the Duke University/CFO Global Business Outlook survey released on Wednesday. And 69% of those executives are bracing for a recession by the end of 2020.

Other surveys have come up with similar results. For example, a recent National Association for Business Economics survey concluded that there is “a 60% chance” that a recession will start by the time next year ends…

There is about a 60% chance of a recession starting in the United States by the end of next year, according to a National Association for Business Economics survey published earlier this month. Most economists in that report cited protectionist trade policy as the leading risk to the US economy.

Even before trade negotiations with China completely broke down U.S. economic numbers were looking quite bleak, but now it has become clear that the trade war is going to accelerate our economic problems.

In fact, it is being reported that large U.S. corporations that get over half of their sales internationally “are expected to see a 9.3% slump in second-quarter earnings”…

The trade war and global slowdown are combining to trigger a sharp drawdown in profits for U.S. multinational companies.

Companies that derive more than half their sales outside the U.S. are expected to see a 9.3% slump in second-quarter earnings as the reporting season looms about a month away, according to FactSet estimates that see the S&P 500 broadly reporting a 2.3% decline.

The one thing that could really help our economic situation right now would be a trade agreement with China that would end this trade war.

And it would seem that both sides should have a strong incentive to make a deal, because both sides have so much to lose.

But at this point it appears that any hopes of a deal in the short-term are completely dead. President Trump has made it abundantly clear that he will not accept anything dramatically different from the deal that he thought he almost had when talks broke down, and the Chinese have made it abundantly clear that such a deal is completely and totally unacceptable.

So many U.S. companies are now operating under the assumption that this trade war will be here for the long haul. For example, the following comes from an opinion piece that Canary CEO Dan K. Eberhart recently authored for CNN…

At Canary, we plan to operate as if the tariffs on Chinese goods are here to stay. China’s government recently released a white paper on the trade standoff that makes it clear Beijing is not giving in to US demands anytime soon.

We have moved much of our manufacturing to Vietnam, India, Malaysia and South Korea. We still depend on China for a significant portion of the wellheads and other steel products used in the oilfields, but it’s on the decline. Our goal is for non-Chinese sources to account for 25% of our international purchases within the year, up from our previous target of 10%.

And the Chinese appear to be preparing as if this struggle could potentially last for quite a few years. The following is a short excerpt from a recent Bloomberg article entitled “Tour of China Shows a Nation Girding for Protracted Trade War”…

Now, Trump says, it’s China’s turn to cower. Yet to visit China these days is to encounter the limits of his punch-them-in-the-nose strategy. Even as Trump threatens to raise import duties to painful levels, 10 days of meetings with Chinese officials, academics, entrepreneurs and venture capitalists revealed a nation rewriting its relationship with the U.S. and preparing to ride out a trade war.

Trump is seeking to increase pressure on Xi Jinping, his Chinese counterpart, before this month’s G-20 summit, but Trump may already have pushed too far. Last month, Xi exhorted his countrymen to a second Long March, an echo of Mao’s seminal strategy to preserve the communist revolution.

Without a doubt, we needed to get tough with China, because they have been lying, cheating, manipulating their currency and stealing our intellectual property for many years.

So doing nothing was not an option.

But let there be no doubt that this trade war is going to be exceedingly painful, and the longer it lasts the more painful it is going to become.

Are Americans ready to make the sacrifices necessary in order to win a protracted trade dispute?

That is a a very good question, and only the passage of time will reveal the true answer.

This Wasn’t Supposed To Happen: U.S. Employment Growth Just Plunged To The Lowest Level In 9 Years

If the U.S. economy was heading into a recession, we would expect to see a slowdown in the employment numbers, and that is precisely what is happening. According to payroll processing firm ADP, the U.S. economy only added 27,000 new jobs in May, and that is way below the number that is needed just to keep up with population growth. Of course some in the mainstream media are attempting to put a positive spin on this, but there really is no denying that this is a truly awful number. In fact, we have not seen a number this bad in more than 9 years…

Job creation skidded to a near-halt in May in another sign that the U.S. economic momentum is slowing.

Companies added just 27,000 new positions during the month, according to a report Wednesday from payroll processing firm ADP and Moody’s Analytics that was well below Dow Jones estimates of 173,000.

The reading was the worst since around the time the economic expansion began and the jobs market bottomed in March 2010 with a loss of 113,000.

9 years is a very long time, but this terrible employment number is perfectly consistent with all of the other horrible economic numbers that have been rolling in lately.

Time after time in recent weeks I have been using phrases such as “since the last recession” to describe what we are witnessing. The U.S. economy has not been in such rough shape in nearly a decade, and things just keep getting worse.

So how did Wall Street respond to the latest employment news?

Actually, stock prices surged, because investors are super excited about the prospect that the Federal Reserve could soon lower interest rates…

Stocks added to strong week-to-date performance on Wednesday as investors grew even more confident that the Federal Reserve will lower interest rates this year to reignite an economy wounded by trade battles.

The Dow Jones Industrial Average rose 207.39 points to 25,539.57, while the S&P 500 advanced 0.8% to 2,826.15. The Nasdaq Composite closed 0.6% higher at 7,575.48.

Pushing interest rates all the way to the floor certainly helped the stock market recover after the last recession, but this time around there is a major twist.

The U.S. is currently engaged in a major trade war with China, and the normal tools that the Fed utilizes may not be powerful enough to overcome the negative effects of such a conflict.

And to make things worse, now the U.S. is also starting a trade war with Mexico. On Wednesday, President Trump made it clear that “not nearly enough” progress had been achieved during negotiations with Mexican officials…

President Donald Trump said “not nearly enough” progress was made in talks with Mexico to mitigate the flow of undocumented migrants and illegal drugs, raising the likelihood that the U.S. will follow through with tariffs next week.

So tariffs will be slapped on Mexican goods starting on Monday, and President Trump seems quite excited about this…

“If no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule,” Trump tweeted Wednesday. “The higher the Tariffs go, the higher the number of companies that will move back to the USA!”

Of course the Mexicans will almost certainly retaliate, and both countries will start seeing higher prices and significant job losses.

In fact, one study has concluded that the U.S. economy could lose more than 400,000 jobs as a result of these tariffs on Mexico. The following comes from CNN…

If the 5% US tariff on all goods from Mexico takes effect and is maintained, more than 400,000 jobs in the United States could be lost, an analysis released this week found.

The tariffs on Mexico, set to go in effect on Monday, would cost Texas alone more than 117,000 jobs, according to the analysis by The Perryman Group, an economic consulting firm. Texas is Mexico’s largest export market, making the two economies closely intertwined.

And the truth is that those numbers could actually be on the low side.

According to Marc Thiessen, a trade war with Mexico would literally put millions of U.S. jobs at risk…

Indeed, Mexican tariffs could be even more devastating for Americans than those imposed on China. Deutsche Bank estimates the tariffs could raise the average price of automobiles sold in the United States by $1,300. Indeed, U.S. and Mexican auto-supply chains are so deeply integrated that many parts cross the border multiple times before they end up in a finished vehicle — which means they would be hit by tariffs multiple times, compounding costs. Ten million U.S. workers’ jobs depend on this supply chain; tariffs would put those jobs at risk, including those of the “forgotten Americans” in the industrial Midwest whose jobs Trump vowed to protect.

We shall see what happens, but the outlook for the U.S. economy for the rest of this year is not good at all, and beyond that things look exceedingly grim.

Hopefully I am wrong, but it certainly appears that a major economic downturn is developing just in time for the 2020 presidential election.

There is one more thing that I would like to mention before I wrap up this article. This week, a Russian news source reported that Russia and China “will sign an agreement” regarding the use of their own national currencies in bilateral trade with one another…

Russia and China will sign an agreement on possible payments in national currencies. A decree of the Russian government on signing of a relevant agreement with the Chinese side was released on the official portal of legal information on Wednesday.

According to the draft decree approved through that government document, “settlements and payments for goods, service and direct investments between economic entities of the Russian Federation and the People’s Republic of China are made in accordance with the international practice and the legislation of the sides’ states with the use of foreign currency, the Russian currency (rubles) and the Chinese currency (yuan).”

In other words, they are dumping the dollar in favor of their own national currencies when trading with each other. This is a direct threat to the international dominance of the U.S. dollar, and other countries have been discussing similar moves.

For decades, the U.S. dollar has essentially been a global currency. More dollars are actually used outside of the United States than within this country, and most Americans don’t realize that.

This has given us some enormous advantages in the global marketplace, and it could be just a matter of time before those advantages begin to disappear.

Things that used to take months or years to happen are now happening in a matter of days. The pace of change is really picking up, and right now the momentum of events is heading in a direction that is definitely not favorable to the United States.

Economic Chaos Erupts! – Global Manufacturing Plunges, The Trade War Expands And The Nasdaq Enters Correction Territory

The global economic slowdown is really starting to accelerate. Just within the past few days, we have gotten more really awful global manufacturing numbers, the trade war has expanded to more nations, and the Nasdaq has officially entered correction territory. We have not witnessed this sort of global economic environment since the Great Recession, and if the economic chaos continues to escalate it won’t take too much to spark a brand new financial crisis. Of course the global financial system is far more vulnerable than it was back in 2008, and so if we stay on the path that we are currently on we could be facing a nightmare scenario very rapidly.

Let’s talk about the manufacturing numbers first. The numbers coming out of Germany are already at a crisis level, and manufacturing is also now contracting in Japan, South Korea and China as well.

Overall, global manufacturing as a whole has now fallen into contraction territory for the first time in seven years…

Global manufacturing was the weakest since 2012 last month, a victim of mounting trade tensions and further reason to worry that the world economy is weakening.

With softness in Germany, Japan, the U.K. — as well as the lowest U.S. result in a decade — IHS Markit’s global Purchasing Managers Index fell to 49.8 in May, below the 50 level that divides expansion from contraction.

The reports underscore the growing threat posed by the escalating U.S.-China trade war, and they coincided with a fresh warning from Wall Street about recession risks.

The reason why so many people are freaking out about these numbers is because this is exactly what we would expect to see if we were entering a global recession.

Meanwhile, global financial markets are looking increasingly shaky. On Monday, the Nasdaq fell another 120 points and it has now officially entered correction territory…

Stocks ended mostly lower Monday, June’s first day of trading, amid reports that the U.S. government is planning to target a host of big tech companies with antitrust and business practice probes. Shares of Alphabet, Amazon, Facebook and Apple all weighed on the market during Monday’s session.

The Nasdaq dropped 1.6% to enter correction territory, closing more than 10% below its record high set in late April.

The term “correction territory” might not mean a lot to many of you, so let me put what is happening in terms you may understand.

On Monday alone, America’s most prominent tech stocks lost approximately 150 billion dollars in value. It looks like the Trump administration is getting ready to go to war with the big tech companies, and that is really, really bad news for tech investors. The following comes from Breitbart…

The Masters of the Universe got hit hard by investors on Monday. Like $150 billion hard.

Shares of the top tech giants fell sharply on Monday after reports that U.S. antitrust regulators had divided up oversight of the sector, with the Department of Justice assuming responsibility for Alphabet and Apple and the Federal Trade Commission taking on Facebook and Amazon. This triggered fears that the government could mount challenges to the business models of the companies.

Shares of Alphabet dived 6.1 percent on Monday after the Wall Street Journal reported that the Justice Department is in the early stage of preparing an antitrust probe of the company. Reuters reported that the Department of Justice is also looking into Apple’s business for possible antitrust violations.

Speaking of war, our trade conflict with China continues to escalate. The mainstream media hasn’t been talking much about it, but apparently the Chinese have decided to put purchases of U.S. soybeans “on hold” until a trade agreement is reached…

China, the world’s largest soybean buyer, has put purchases of American supplies on hold after the trade war between Washington and Beijing escalated, according to people familiar with the matter.

State-grain buyers haven’t received any further orders to continue with the so-called goodwill buying and don’t expect that to happen given the lack of agreement in trade negotiations, said the people, who asked not to be named because the information is private.

U.S. soybean farmers have been sitting on unprecedented amounts of soybeans in hopes that an end to the trade war would raise prices.

But instead, demand for U.S. soybeans is going to go through the floor, and this could potentially force thousands of soybean farmers into bankruptcy.

And in addition to our trade war with China, the Trump administration has apparently decided that now is a good time to start a trade war with Mexico…

From produce to cars, a wide variety of Mexican goods could become more expensive if Trump follows through on his threat to hit Mexican imports with tariffs that soon could climb to 25%. Trump wants to pressure Mexico into doing more to halt the flow of Central American migrants to the U.S. via the Mexican border.

The tariffs, set to begin June 10, would gradually climb to 25% on Oct. 1 if Mexico doesn’t take steps “to dramatically reduce or eliminate” the number of migrants, Trump said Thursday. Such a strategy would hurt American shoppers, the economy and stocks, experts say, just as U.S. growth is slowing and the threat of more tariffs on Chinese imports looms larger.

At least in this case the U.S. and Mexico are still talking, and so perhaps some kind of resolution can be reached.

On top of everything else, the Trump administration has also just decided to add India to the trade war as well…

Mr. Trump on Friday said India would be removed from the U.S.’s privileged-trading program called the Generalized System of Preferences on Wednesday. Under the decadeslong program meant for some developing economies, the U.S. had allowed India to avoid tariffs on certain exports to the U.S. in the interest of promoting tighter trade ties and development.

India, the U.S.’s ninth-largest trading partner, is a top beneficiary of the GSP program. Mr. Trump’s move will add tariffs of as much as 7% on Indian exports of goods like chemicals, auto parts and tableware to the U.S., which in 2018 accounted for more than 11%, or $6.3 billion, of India’s total exports of goods valued at $54.4 billion, according to the Congressional Research Service, a research agency for the U.S. Congress.

A global trade war is going to be incredibly painful for everyone, and this is all happening at a time when the global economy was already starting to slow down substantially.

Here in the United States, a lot of businesses are really starting to notice a big decline in economic activity. Here is just one example that was published on Zero Hedge earlier today…

Down here, in Texas, I am seeing a big drop in economic activity over the last 6 months. Our healthcare businesses’ volume over this period is at 629, down from 770, year-on-year, almost a 20% decline, and the worst six month decline in our 15 year history. We have been pulling out all of the stops for business development, cutting overhead, and running all the QC traps to determine if it is something within our business, within our local market, within our industry, or having to do with the economy in general.

In this period, we have seen seven competitors go out of business in our city. We have recently confirmed similar experiences with colleagues in Kentucky, Colorado, and elsewhere in Texas. One of them asked me, “If this is not temporary, what would the strategy be?” My response was, “Hunker in the bunker and wait for everyone else to die.”

This is what we have all been preparing for, and things are going to get progressively tougher in the months ahead.

Unfortunately, most Americans are completely and totally clueless about what is ahead. Today, 59 percent of all Americans are living paycheck to paycheck, and the truth is that the vast majority of us are entirely unprepared to go through another recession.

And of course many believe that what we are facing is going to be much worse than just a “recession”. A perfect storm is rapidly coming together, and the chaos that we have seen so far is nothing compared to what is rapidly approaching.