Recession

Could The Stock Market Crash?

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By David Chapman – Re-Blogged From http://www.Silver-Phoenix500.com

“I don’t believe we will see another financial crisis in our lifetime.”

  • Janet Yellen, Fed Chair, June 27, 2017

Oh, Janet. We hope you are right. One should never say never—that has a nasty habit of coming back to bite you.

Texas and Houston are currently going through their crash. No, not a stock market crash but a hurricane and flooding crash. Hurricane Harvey has been called a “once in 500 years’ event.” Except in the past twelve years, we have also had Hurricane Katrina and Sandy. They were called “once in 100 years events.” The 400-year difference seems moot. It is becoming a little flippant to call them “once in a lifetime” events when three “lifetime” events have occurred in twelve short years. Yet, for all of them the experts did not see the devastation that was coming.

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Track Record of Stock Market & Macro Economic Predictions

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By David Haggith – Re-Blogged From Great Recession Blog

 

I’ll let the chart speak for itself. During the first part of the chart, I did all my writing in newspaper articles, so you won’t find support here on this blog or those early years. I began the blog in 2012. The rest is history.As for the Trump Rally at the end, I didn’t predict it (any more than anyone did), but only declared it the typical euphoric rally (period of irrational exuberance) that comes before a crash, and you can see that it is far more exuberant than any period in the past.

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Blow Off Top…Could It Happen?

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By David Chapman – Re-Blogged From http://www.Gold-Eagle.com

Every time we pick up some article on the stock market of late, all we read is the stock market is on the verge of a devastating wipeout, or that the next collapse is just around the corner. One of the best headlines we saw recently was from a famed market guru with a headline of “2017 Is Going to Be Worse than the Great Depression!” It is enough to make you run home, pour a long hot bath, slit your wrists, and climb in to the tub.

Okay, maybe that is extreme. Naturally, there are many reasons writers give to back up their case. Those range from the election of Donald Trump, Brexit, rising interest rates in the US, and of course the best one—that the bull market is now into its ninth year from the major low of March 2009 without a correction exceeding 20% and is in the mother of all bubbles. All of that is true. But none of that makes for a final top just because the stock market has been rising for eight years plus.

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Here Comes Quantitative Tightening

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By Peter Schiff – Re-Blogged From http://www.Silver-Phoenix500.com

All of a sudden the Fed got a little tougher. Perhaps the success of the hit movie Wonder Woman has inspired Fed Chairwoman Janet Yellen to discard her prior timidity to show us how much monetary muscle she can flex when the time comes for action.

Although the Fed’s decision this week to raise interest rates by 25 basis points was widely expected, the surprise came in how the medicine was administered. Most observers had expected a “dovish” hike in which a slight tightening would be accompanied by an abundance of caution, exhaustive analysis of downside risks, and assurances that the Fed would think twice before proceeding any farther. But that’s not what happened. Instead Yellen adopted what should be viewed as the most hawkish policy stance of her chairmanship.

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Alternative Unemployment Measurement

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By John Williams – Re-Blogged From http://www.ShadowStats.com

Counting All Discouraged/Displaced Workers, May 2016 Unemployment Rose to About 23.0%. Discussed frequently in the regular ShadowStats Commentaries on monthly unemployment conditions, what removes headline-unemployment reporting from common experience and broad, underlying economic reality, simply is definitional. To be counted among the U.S. government’s headline unemployed (U.3), an individual has to have looked actively for work within the four weeks prior to the unemployment survey conducted for the Bureau of Labor Statistic (BLS). If the active search for work was in the last year, but not in the last four weeks, the individual is considered a “discouraged worker” by the BLS, and not counted in the headline labor force.

ShadowStats defines that group as “short-term discouraged workers,” as opposed to those who, after one year, no longer are counted as “discouraged” by the government. Instead, they enter the realm of “long– term discouraged workers,” those displaced by extraordinary economic conditions, including regional/local businesses activity affected negatively by trade agreements or by other factors shifting U.S. productive assets offshore, as defined and counted by ShadowStats (see the extended comments in the ShadowStats Alternate Unemployment Measure).

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Curve Inversion and Chaos to Begin by December 2017

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By Michael Pento – Re-Blogged From PentoPort

The bounce in Treasury yields witnessed after the election of Donald Trump is now decaying in the D.C. swamp. If the Fed continues to ignore this slow growth and deflationary signal from the bond market and continues along its current rate hiking path, the yield curve will invert by the end of this year and an equity market plunge and a recession is sure to follow.

An inverted yield curve, which has correctly predicted the last seven recessions going back to the late 1960’s, occurs when short-term interest rates yield more than longer-term rates.  Why is an inverted yield curve so crucial in determining the direction of markets and the economy? Because when bank assets (longer-duration loans) generate less income than bank liabilities (short-term deposits), the incentive to make new loans dries up along with the money supply. And when asset bubbles are starved of that monetary fuel they burst. The severity of the recession depends on the intensity of the asset bubbles in existence prior to the inversion.

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Exploding Debt, Inverted Yield Curve, and Then “Economic Armageddon”

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By Mike Gleason – Re-Blogged From http://www.PentoPort.com

Listen to the Podcast Audio: Click Here

Mike Gleason: Michael, how are you today? Welcome back.

Michael Pento:  I’m doing fine, Mike. Thanks for having me back.

Mike Gleason:  When we had you on last you commented that you believed the market was pricing in President Trump getting virtually all of his policy agenda pushed through Congress, the tax cuts, repealing Obamacare, and so forth. To say Trump has encountered some resistance in Washington would be a major understatement. The establishment of the right doesn’t seem to like him. The left and the mainstream media of course hate him. So, Michael before we get into the effects this will have on the markets here, first off, handicap for us the chances of Trump, based on what’s been transpiring in recent weeks, miraculously gaining enough allies in Congress in order to get his initiatives passed.

Michael Pento:  I did say that the market was pricing in the imminent effect of a massive tax cut — and I meant tax cut, not a tax reform package. In other words, cutting the rate from 30% to 15% or even 20%, but certainly not offset by any spending cuts or an elimination of deductions. The market is still pricing in a lot of that hope and hype, in my opinion. But I had said and warned from the beginning, this was back right after the election, I did say that the Trump “stimulus” package — and I’ll put “stimulus” in quotes and I’ll explain why in a second — I said that the Trump “stimulus” plan would be both diluted and delayed.

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