2008 Is Starting Again - Stock Market Crash Incoming

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Guys pay attention. This headline may seem like mumbo jumbo market lingo but this shit is very very important. The 3 and the 10 do not invert unless something serious is happening. Save your money, try to pay off your debt, and do not live beyond your means because the economy is about to get very tough. A recession is coming but unlike 2008, the fed doesn't have much room to work with in terms of lowering interest rates.. You should not be blind sided by this one guys. The indicators are screaming and signaling massive warning flags.

The yield curve as measured by the spread between the 3-month Treasury bill and the 10-year note inverted for the first time since 2007

The last nine times the yield curve has inverted, a recession has followed, according to the San Francisco Fed.

https://www.marketwatch.com/story/yi...03-22?mod=bnbh

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U.S. Treasury Yield Curve Inverts for First Time Since 2007



A closely watched section of the Treasury yield curve on Friday turned negative for the first time since the crisis more than a decade ago, underscoring concern about a possible economic slump and the prospect that the Federal Reserve will have to cut interest rates.

https://www.bloomberg.com/news/artic...7?srnd=premium

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S&P 500 could fall 40% as yield curve inverts, says analyst

Stock investors should heed the warning emanating from the bond market, says at least one hedge-fund manager, as the yield curve staged a stunning inversion Friday.

“I think people are going to be surprised where the S&P 500 is trading at the end of the year. We’re going at least for a 40% decline from the S&P’s top,” Otavio Costa, a macro analyst at Crescat Capital, a hedge fund that oversees $52 million, told MarketWatch in an interview.

The analyst of the investment firm, says the inversion of the yield curve, where short-dated yields rise above their longer-dated peers, signals an ignominious end to a 10-year bull run for the S&P 500 index, which bottomed in March of 2009 but has mounted a record-long rally, by some measures, since that point.

In particular, Costa said the growing number of inversions in yield spreads across Treasury maturities suggested a bear-market for equities was at hand, in the face of a darkening global growth picture.

An inversion of this spread — the most closely watched by economists — has preceded every recession since 1960.

https://www.marketwatch.com/story/sp..._theo_homepage

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Housing starts drop 9% in February

Construction on new homes, known as housing starts, fell almost 9% in February and remained well below year-ago levels, offering more evidence of a broad slowdown in the housing market that still isn’t showing much spark.

Housing starts slowed to an annual pace of 1.16 million, according to a Commerce Department report delayed by the partial government shutdown earlier this year. Economists polled by MarketWatch had forecast a seasonally adjusted 1.21 million rate.

Permits to build new homes, fell a smaller 1.6% to an annual rate of 1.3 million.

https://www.marketwatch.com/story/ho...03-26?mod=bnbh

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Trump Completely Fails In China Trade Deal

With 4 minutes to go before the close of trading and stocks within spitting territory of red for the day, someone had to take control of "price discovery" and with the FT's street cred already used up after it's "90% done" report last night, it was up to Bloomberg to preserve the "trade talk optimism" which it did when it reported fresh details on the ongoing trade deal being finalized (and we use the term loosely) between the US China, which according to Bloomberg source would give Beijing until 2025 to meet commitments on commodity purchases and allow American companies to wholly own enterprises in the Asian nation.

And here is where the "deal" gets downright farcical: according to the proposed agreement (and we again use the term loosely), China would commit by 2025 to buy more U.S. commodities, including soybeans and energy products, and allow 100 percent foreign ownership for U.S. companies operating in China as a binding pledge that can trigger retaliation from the U.S. if left unfulfilled.

In other words, any deal announced this week would be nothing more than a photo opportunity, and be completely toothless for the next 6 years. More importantly, as we noted earlier, the 5 years interval would allow stocks to levitate each and every day for the next 5 years on "trade deal optimism", putting S&P 36,000 within grasp.

Other hilarious non-binding promises China has offered to implement by 2029 wouldn’t be tied to U.S. retaliation, Bloomberg's sources said.

And now that a "bogey" for the 2025 target has been set, the talks are continuing in Washington where Chinese Vice Premier Liu He began planned meetings with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Wednesday.

The goal over the next few days, Bloomberg reports, "is to strike an agreement on the core issues so President Donald Trump and Chinese leader Xi Jinping can hold a ceremony to sign a deal." To achieve that, Lighthizer, Mnuchin and Liu held a working dinner Tuesday night, according to one of the people.

In other words, some sort of announcement is practically assured; the only problem is that - thanks to the stated 2025 deal implementation target - this would fall of Trump's second term (assuming he wins re-election), in other words both sides implicitly admit that any deal is a sham for all practical purposes, and all that would happen is to give markets a brief, last minute push higher, as the entire US-China trade war episode is put in the rear view mirror.

Of course, the White House is "careful" to avoid giving the impression that all Trump cares about now is the market reaction, and as such the posturing is one suggesting heated, complicated negotiations, when the reality is anything but with both sides eager to put this episode behind them:

As the talks resumed on Wednesday morning, Trump’s top economic adviser touted progress but cautioned that a final deal to end the trade war remains elusive. Negotiators are “making good headway,” White House economic adviser Larry Kudlow told reporters at an event in Washington. “But we’re not there and we hope this week to get closer,” he said.

The problem for Trump is that should he sign this joke of a "deal", the blowback from both his core base and Democrats, which will both immediately see right through the hollow facade of the "deal", would be violent. Bloomberg does not help by noting that "the limited time frame raises questions about how much a deal would reshape the longer-term economic relationship, rather than simply serve as a political win for Trump that would last through his potential second term as the 2020 election campaign kicks off."

BBG adds that "while some progress is being made, resolving more contentious issues such as intellectual-property protection is taking longer." Actually, if Trump signs this version of the deal, it virtually assures that there would be no IP protection at all and once Trump is gone, China will revert to its old "reverse engineering" ways.

That said, there is still some flickering hope that a deal would be more than just a photo opportunity, and its name is Robert Lighthizer:

The two sides are still haggling over how to enforce the deal, which Lighthizer has said is the fundamental issue in the talks. In congressional testimony in February, Trump’s top trade negotiator said the U.S. wants the right to take unilateral, “proportional” action against China if it fails to abide by the rules. A person familiar with the text said China so far agreed only to contemplate not to retaliate if the U.S. took action against Beijing, but stopped short of a formal pledge to refrain from counter-punches.

One final issues to be decided is what will happen to the tariffs the two sides have imposed on about $360 billion of each other’s goods in the past nine months. Trump has suggested that at least some of the tariffs will stay in place, saying they are necessary “for a substantial period of time” to ensure Beijing keeps up its end of the bargain.

And since Beijing has absolutely no intention to keep up its end of the bargain, look for this US demand to be quietly struck from the "to do" list of demands, as Trump is now just focused on one thing: how to get the S&P to new all time highs driven by the naive belief that it is the level of the S&P that will be critical in getting him re-elected, instead of being perceived by his core constituency as having folded promptly under Chinese pressure, an outcome which would almost assure Trump hands over the 2020 presidency to whatever socialist is running from the other side.

And with that, we sit back and wait for the 2025 round of US-China trade negotiations which will be led by Emperor for life (and death) Xi, and comrade Alexandra Ocasio-Jones of the American Socialist Democrat Party. We are confident they will be delightful.

https://www.zerohedge.com/news/2019-...-deadline-2025

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Bori, get ready for the quality of life in Germany to slowly plunge....

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One day after Germany’s leading economic institutes slashed their forecasts for 2019 growth by more than half on Thursday (and warned that the economy could slow much more if Britain quits the European Union without an agreement), Germany again confirmed just how bad the manufacturing recession at the heart of the Eurozone is, when it reported that Industrial orders fell by the biggest margin sequentially in more than two years in February, slumping 4.2%, badly missing consensus expectations of a 0.3% rebound, and worse than last monght's -2.1% drop, highlighting the extent of the slowdown amid ongoing global trade disputes.

On an annual basis, the collapse was almost unprecedented, with the 8.2% drop matching the worst since the global financial crisis.

https://www.zerohedge.com/news/2019-...nancial-crisis

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Ray Dalio argues that an ever widening wealth gap Capitalism is no longer working for most Americans, according to one hedge-fund billionaire.

Ray Dalio, founder of Bridgewater Associates LP, the world’s largest hedge fund, says capitalism has developed into a system that is promoting an ever wider wealth gap that puts the very existence of the United States at risk. In the first part of a two-part series published on LinkedIn, the noted investor argues that capitalism is now in need of reform — and says he has a plan for how to accomplish it:

‘I have also seen capitalism evolve in a way that it is not working well for the majority of Americans because it’s producing self-reinforcing spirals up for the haves and down for the have-nots. This is creating widening income/wealth/opportunity gaps that pose existential threats to the United States because these gaps are bringing about damaging domestic and international conflicts and weakening America’s condition.’

Dalio says he was fortunate to grow up in a middle-class family, to be educated at a good public school and to be able to enter a job market that offered him equal opportunity — at the time when most people believed equal education and equal opportunity were fair and productive.

The investor says he became a capitalist at 12 when he earned his first wages by delivering newspapers, mowing lawns and caddying, and invested them in the stock market while it was hot in the 1960s.

That experience led Dalio, now 69, to become a global macro investor, a career he has pursued for nearly a half-century and one that has shaped his understanding of economics and markets. Dalio believes capitalism is the most effective allocator of resources that raise living standards, arguing that communist systems fail because they do not recognize the need for people to be rewarded properly in order to motivate them to work.

Today, however, the system has produced little or no real income growth for most people for decades, according to the Dalio essay on LinkedIn. Prime-age workers in the bottom 60% have had no real (inflation-adjusted) income growth since 1980, and the percentage of children who grow up to earn more than their parents has fallen to 50% from 90% in 1970.

The wealth gap is at its widest point since the late 1930s, with the top 1% owning more than the bottom 90% combined, “which,” Dalio notes, “is the same sort of wealth gap that existed during the 1935-40 period (a period that brought in an era of great internal and external conflicts for most countries).”

Most people in the bottom 60% “are poor,” he writes. About 40% of all Americans would struggle to raise $400 in the event of an emergency, he says, citing a recent Federal Reserve study. The childhood poverty rate stands at 17.5% and has not shown meaningful improvement in decades. That, in turn, leads to poor academic achievement, low productivity and low incomes.

“The income/education/wealth/opportunity gap reinforces the income/education/wealth/opportunity gap,” Dalio writes, citing statistics showing that richer communities have better funded public schools, with better teachers, equipment and materials. Poverty hurts the family unit, too, leading to divorces and separations that exacerbate hardships for children raised in poverty. Bad child care and bad education can lead to badly behaved adults, creating higher crime rates and higher levels of incarceration.

The wealth gap is weakening the U.S. because it is undermining the country’s strength relative to global competitors, according to Dalio. It is also creating dangerous social and political divisions that threaten cohesion — and capitalism itself.

“Disparity in wealth, especially when accompanied by disparity in values, leads to increasing conflict, and, in the government, that manifests itself in the form of populism of the left and populism of the right and often in revolutions of one sort or another,” Dalio writes. “For that reason, I am worried what the next economic downturn will be like, especially as central banks have limited ability to reverse it and we have so much political polarity and populism.”

Capitalists don’t know how to divide the economic pie, while socialists don’t know how to grow it, he writes, “yet we are now at a juncture in which either a) people of different ideological inclinations will work together to skillfully re-engineer the system so that the pie is both divided and grown well or b) we will have great conflict and some form of revolution that will hurt most everyone and will shrink the pie.”

https://www.marketwatch.com/story/fo..._theo_homepage

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Bitcoin is making its case an uncorrelated, safe-haven asset while mainstream markets tumble.

The world’s largest cryptpcurrency was up as much as 15 percent on Monday, hitting a high of $7,946.01, according to data from industry site CoinDesk. Meanwhile, U.S. equity markets were headed in the other direction. The Dow Jones Industrial Average fell as much as 696 points Monday and was on track for its biggest one-day loss since January.

The sharp decline for stocks came after news that China would raise tariffs on roughly $60 billion of U.S. goods in an ongoing trade war between the world’s largest economies. Stocks in mainland China also dragged lower Monday while the Chinese yuan reached a four-month low this week.

Head of International Fixed Income at National Alliance Securities Andy Brenner, pointed out bitcoin’s recent and sharp divergence from Chinese currency prices.

“If you were in China and you wanted to diversify, it would seem logical that Bitcoin would be a short term alternative,” Brenner said in a note to clients Monday. “While we do not see the direct flows of who is buying bitcoin, we can see that the bid for bitcoin in this latest run has coincided with a big down tick in the value of the Chinese Yuan versus the dollar.”

https://www.cnbc.com/2019/05/13/bitc...trade-war.html

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One of the biggest banks in the world. Weekly Chart. This is what a dieing company looks like. From $140 share to a now less then $8 per share. When this thing collapses Europe will see a new level of despair. And since it's a world economy this will only hurt the US.

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Early morning financial news...



Sent from my Moto G7 using Tapatalk

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Ford Shedding 10% of its workforce...

Ford Motor Co. plans to eliminate more salaried jobs worldwide as part of its redesign, according to an email sent to employees that was published by Automotive News.

Notifications will be sent to North American workers on Tuesday, while restructuring work continues in Europe, China, South America and other international markets, Ford’s Chief Executive Jim Hackett said in the email on Monday.

By the end of August, including layoffs and resignations over the past year, Ford F, -0.10% will have eliminated 7,000 salaried jobs or about 10% of its salaried workforce, an annual savings of around $600 million, Hackett said.

Related: Ford stock rising the most in 10 years after ‘massive’ Q1 beat

The move will reduce the company’s management structure by close to 20% as Ford had planned, said the email.

“We also made significant progress in eliminating bureaucracy, speeding up decision making and driving empowerment as part of this redesign,” Hackett said in the email. The redesign is on its final phase, he said.

Ford shares have been on a tear this quarter, up 17%. The company last month reported first-quarter results that were well above Wall Street expectations.

It also retook the title of No. 2 U.S. car maker by valuation from Tesla Inc. TSLA, -2.15% ; on Monday, Ford was worth about $40 billion, while Tesla, mired in a 2 1/2 year low for its shares, was worth around $38 billion. General Motors Co. GM, -0.08% is comfortably No. 1, valued at about $52 billion.

Ford shares have lost more than 9% in the past 12 months, but are up 34% this year. That compares with gains of 4.9% in the last 12 months and of 13% this year for the S&P 500 index.

https://www.marketwatch.com/story/fo...=mw_latestnews