- It’s not over. The worst October stock market crash since 2008 got even worse on Friday. The Dow was down another 296 points, the S&P 500 briefly dipped into correction territory, and it was another bloodbath for tech stocks. On Wednesday, I warned that there would be a bounce, and we saw that happen on Thursday. But the bounce didn’t extend into Friday. Instead, we witnessed another wave of panic selling, and that has many investors extremely concerned about what will happen next week. Overall, global stocks have now fallen for five weeks in a row, and during that time more than 8 trillion dollars in global wealth has been wiped out. That is the fastest plunge in global stock market wealth since the collapse of Lehman Brothers, and it is yet another confirmation that a major turning point has arrived.
The wild swings up and down that we witnessed this week are very reminiscent of what we saw in 2008.
Markets just don’t go down in a straight line. In fact, some of the best days in all of Wall Street history happened right in the middle of the last financial crisis.
After more than two years of mania about Russia stealing the 2016 election for Trump and demonization of anyone who questioned it, an embarrassing end may soon be near for the Russia-gaters…
In a new article titled “Mueller report PSA: Prepare for disappointment“, Politico cites information provided by defense attorneys and “more than 15 former government officials with investigation experience spanning Watergate to the 2016 election case” to warn everyone who’s been lighting candles at their Saint Mueller altars that their hopes of Trump being removed from office are about to be dashed to the floor.
“While [Mueller is] under no deadline to complete his work, several sources tracking the investigation say the special counsel and his team appear eager to wrap up,” Politico reports.
- “We gathered on porches; the moon rose; we were poor.
- And time went by, drawn by slow horses.
- Somewhere beyond our windows shone the world.
- The Great Depression had entered our souls like fog.” – Pantoum of the Great Depression – Donald Justice.
- Wall Street insiders relish market troughs.
- They bask sanguine in their confidence of history. Tenured pros are comforted in the belief that monetary and fiscal stimulus triggers are cocked and at the ready, reinforced in the knowledge that taxpayers without choice in the matter, will again, be the bail-out solution.
- In a last irony to turn the blade in the back slowly, this group confidently takes credit for saving a system they helped to bust in the first place.
- They are the strong hands who patiently await to scoop up shares when markets falter. As the smart money, these players unload inflated shares to the ‘dumb’ money or retail investors at “FOMO” or fear-of-missing-out emotional peaks.
- After hinting for months that the FBI was not forthcoming with federal surveillance court judges when they made their case to spy on the Trump campaign, Texas Rep. John Ratcliffe (R) said on Sunday that the agency is holding evidence which “directly refutes” its premise for launching the probe, reports the Daily Caller‘s Chuck Ross.
- Texas Rep. John Ratcliffe provided Sunday the clearest picture to date of what the FBI allegedly withheld from the surveillance court.
- Ratcliffe suggested that the FBI failed to include evidence regarding former Trump campaign adviser George Papadopoulos, in an interview with Fox News.
- Ratcliffe noted that the FBI opened its investigation on July 31, 2016, after receiving information from the Australian government about a conversation that Papadopoulos had on May 10, 2016, with Alexander Downer, the top Australian diplomat to the U.K. –Daily Caller
- Here we go again… After roiling stock markets in Asia and Europe last night when he blamed the longest stock-market losing streak of his presidency on the Federal Reserve and its “crazy” interest rate hikes, President Trump again lit into the central bank in a Fox News interview Thursday morning where he said the Fed has gotten “a little too cute” with its interest rate hikes. “It’s ridiculous what they’re doing,” he added.
He added that he’s “paying high interest rates because of the Fed” and that Powell & Co. are “making a big mistake” and that he’d like the Fed to “not be so aggressive.”BREAKING: Trump says Fed ‘making a big mistake’ by being too aggressive.
- But Trump quickly turned his attacks on the Obama Administration, accusing Democrats of “having it easy” and insisting that the economy is still doing “great” because “we have more people working in the US today than at any time in the history of our country” (though he did say he could “work with the Democrats” on infrastructure spending).
Towards the end of economic expansions, interest rates usually start to rise as strong loan demand bumps up against central bank tightening.
At first the effect on the broader economy is minimal, so consumers, companies and governments don’t let a slight uptick in financing costs interfere with their borrowing and spending. But eventually rising rates begin to bite and borrowers get skittish, throwing the leverage machine into reverse and producing an equities bear market and Main Street recession.
We are there. After a year of gradual increases, interest rates are finally high enough to start popping bubbles. Consider housing and autos:
Mortgage Rates Up, Affordability Down, Housing Party Over
The past few years’ housing boom has been relatively quiet, but a boom nonetheless. Mortgage rates in the 3% – 4% range made houses widely affordable, so demand exceeded supply and prices rose, eventually surpassing 2006 bubble levels in hot markets like Denver and Seattle.
But this week mortgages hit 5% ..