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Category: Bear Market News
“Until then men felt they had found the answer to a steady, orderly, civilized life. For 100 years the Western world had been at peace. For 100 years technology had steadily improved. For 100 years the benefits of peace and industry seemed to be filtering satisfactorily through society. Life was all right. The Titanic woke them up.” Read More.
US economic activity collapsed in April, according to the Chicago Fed. The national index, which draws on 85 economic indicators, crashed to a record low -16.74 in April versus -4.97 in March (and massively worse than the expected level of -3.50). Read More.
05/26/20 – Samuele Murtinu: The Fed Is Doing “Whatever It Takes” to Prop Up the Economy. That’s a Very Bad Thing.
No sooner had the COVID-19 recession hit the US economy—with its mandatory business and school closures, travel bans, shelter-in-place orders, and a massive drop in commercial activity—than politicians, academics, journalists, and business leaders began calling for the Fed to save it. Read More.
05/25/20 – Tyler Durden: World’s Most Bearish Hedge Fund Manager: “If It’s In Zerohedge, Then Central Banks Have Already Devised A Plan To Stop If From Happening”
There are two notable highlights in the latest note from the CIO of Horseman Global, Russell Clark, the man we dubbed years ago as the “world’s most bearish hedge fund manager” (a name that appears to have stuck) due to his penchant to run a net short book for the past 8 years (see chart below). Read More.
In 2017, I wrote an article discussing the “Unavoidable Pension Crisis.” At that time, most did not understand the risk. However, two years later, the “Unavoidable Pension Crisis” has arrived. To understand we are today, we need a quick review. Read More.
05/25/20 – Michael Every: Rabobank: “Quite A Market Disconnect Has Formed: We May Be Just Weeks Away From The Levee Breaking”
“Arrogant and offensive”. Not today’s Daily. Well not deliberately and/or any more than usual. Rather those three words, followed by “Can you imagine having to work with these truth twisters?” were tweeted out by the British civil service on its official account yesterday before being deleted. Read More.
Anyone hoping for a semblance of a normal economy might be left waiting up to five years, according to influential economist David Rosenberg of Rosenberg Research and Associates. “It’s going to take years – maybe three, four, five years to even get back to normal, and that’s assuming we get a vaccine,” he said in an interview with BNN Bloomberg Monday. Read More.
President Reagan memorably said that the nine words you don’t want to hear are “I’m from the government, and I’m here to help.” Governments in all the major jurisdictions are now making good on that unwanted promise and are taking responsibility for everything from our shoulders. Read More.
Central banks have deployed a total of around $4 trillion of asset purchases over the past eight weeks, and the global equity market cap has surged by $15 trillion. Despite the economic crisis brought about by the coronavirus pandemic, risk assets have been rallying of late. Read More.
Market Update Friday 05/15/20
It was a relatively quiet day on Wall Street, as the SkyNet StockBots mostly stayed on the sidelines. Stocks zigged and zagged their way to a modestly higher close. The DJIA ended higher by 60 points (0.2%) and the NASDAQ gained 71 points (0.8%).
Stay tuned as the battle 0of the SkyNet StockBots continues.
Nothing like what we’re witnessing has ever happened before. Even the savviest analysts cannot yet internalize what happened. As I explained earlier, comparisons to the 2008 crisis or even the 1929 stock market crash that started the Great Depression fail to capture the magnitude of the economic damage of the virus. You may have to go back to the Black Plague of the mid-14th century for the right comparison. Read More.
It has been a full century since Mises dropped the economic calculation bomb, but the argument apparently still haunts socialists. It should, since Mises managed to show that a socialist economy is not an economy at all but calculational chaos. Read More.
Historically, it is typical for the most widely held, over-valued stocks in a market cycle to have negative or zero returns for many years thereafter. Today, the top five stocks in the S&P 500–Microsoft, Apple, Amazon, Alphabet (GOOGL), and Facebook–make up over 20% of the large-cap US index and 40% of the NASDAQ 100. Read More.
Although painful, the solution to the 2020 economic recession is simple—uncover our problems, let prices adjust, and reallocate capital toward productive usages. The quicker we adjust, the shorter the recession and the sooner we create a sustainable economic foundation for future prosperity. This approach is the polar opposite to the current interventionist and inflationist orthodoxy. Read More.
Nobel laureate for economics and former chief economist of the World Bank Paul Romer is warning that until government and health care leaders solve the health crisis it’s possible that the U.S. economy would see a severe prolonged depression. Read More.
Jerome Powell says absolutely not. But Jerome Powell also once said balance sheet reduction was on autopilot and that the Federal Reserve wasn’t going to cut interest rates. What the Fed chair says today doesn’t necessarily line up with what the Fed chair does tomorrow. Read More.
05/17/20 – Michael Snyder: 10 Numbers That Show The U.S. Has Fallen Into A Horrifying Economic Depression
The last recession was really, really bad, but it was never like this. It is time for us to face reality, and that means admitting that the U.S. economy has plunged into a depression. This is already the worst economic downturn that America has experienced since the Great Depression of the 1930s, and we are right in the middle of the largest spike in unemployment in all of U.S. history by a very wide margin. Read More.
Fewer Americans are calling their mortgage servicers to ask for relief from mortgage payments, but the housing industry isn’t out of the woods yet. More than 4.1 million homeowners are in forbearance plans now, according to the latest data from the Mortgage Bankers Association. Read More.
Last week, House Democrats unveiled their latest pandemic-relief package. The bill combines aid for families, a bailout for struggling cities and states, and additional funds for testing, tracing, and hospitals. The price tag is about $3 trillion—and it comes just weeks after the president signed an economic-relief package worth about $2 trillion. Read More.
With the BLS’s JOLTs, or job openings and labor turnover, survey coming in with an extra month delay, we already knew that the March data would be dismal (especially considering the total implosion in April when over 20 million people lost their jobs), and sure enough that’s what happened when the BLS reported that in March the number of job openings plunged from an upward revised 7.004 million to just 6.191 million, the 813K monthly drop the largest on record going back to 2000. Read More.
U.S. factory production plummeted in April by the most in records back to 1919 as coronavirus-related shutdowns exacted a bigger toll on the economy. Read More.
U.S. retail sales tumbled by a record 16.4% from March to April as business shutdowns caused by the coronavirus kept shoppers away, threatened the viability of stores across the country and further weighed down a sinking economy. Read More.
The German economy fell into recession after recording the sharpest quarterly contraction since the 2009 financial crisis as coronavirus-related shutdowns decimated the end of the first quarter, data showed on Friday.Read More.