This page has been archived and commenting is disabled.

11 "Alarm Bells" That Show The Global Economic Crisis Is Getting Deeper

Tyler Durden's picture




 

Submitted by Michael Snyder via The Economic Collapse blog,

Economic activity is slowing down all over the planet, and a whole host of signs are indicating that we are essentially exactly where we were just prior to the great stock market crash of 2008.  Yesterday, I explained that the economies of Japan, Brazil, Canada and Russia are all in recession.  Today, I am mainly going to focus on the United States.  We are seeing so many things happen right now that we have not seen since 2008 and 2009. 

In so many ways, it is almost as if we are watching an eerie replay of what happened the last time around, and yet most of the “experts” still appear to be oblivious to what is going on.  If you were to make up a checklist of all of the things that you would expect to see just before a major stock market crash, virtually all of them are happening right now.  The following are 11 critical indicators that are absolutely screaming that the global economic crisis is getting deeper…

#1 On Tuesday, the price of oil closed below 40 dollars a barrel.  Back in 2008, the price of oil crashed below 40 dollars a barrel just before the stock market collapsed, and now it has happened again.

 

#2 The price of copper has plunged all the way down to $2.04.  The last time it was this low was just before the stock market crash of 2008.

 

#3 The Business Roundtable’s forecast for business investment in 2016 has dropped to the lowest level that we have seen since the last recession.

 

#4 Corporate debt defaults have risen to the highest level that we have seen since the last recession.  This is a huge problem because corporate debt in the U.S. has approximately doubled since just before the last financial crisis.

 

#5 The Bloomberg U.S. economic surprise index is more negative right now than it was at any point during the last recession.

 

#6 Credit card data that was just released shows that holiday sales have gone negative for the first time since the last recession.

 

#7 As I mentioned yesterday, U.S. manufacturing is contracting at the fastest pace that we have seen since the last recession.

 

#8 The velocity of money in the United States has dropped to the lowest level ever recorded.  Not even during the depths of the last recession was it ever this low.

1-TMS-2, annual rate of growth

 

#9 In 2008, commodity prices crashed just before the stock market did, and late last month the Bloomberg Commodity Index hit a 16 year low.

 

#10 In the past, stocks have tended to crash about 12-18 months after a peak in corporate profit margins.  At this point, we are 15 months after the most recent peak.

 

#11 If you look back at 2008, you will see that junk bonds crashed horribly. 

Why this is important is because junk bonds started crashing before stocks did, and right now they have dropped to the lowest point that they have been since the last financial crisis.

Bonus Alarm #12: The US Services economy is weakening in its usual lagged way to manufacturing. This is a problem as the narrative has been that Services will save the economy even as manufacturing collapses.

 

If just one or two of these indicators were flashing red, that would be bad enough.

The fact that all of them seem to be saying the exact same thing tells us that big trouble is ahead.

And I am not the only one saying this.  Just today, a Reuters article discussed the fact that Citigroup analysts are projecting that there is a 65 percent chance that the U.S. economy will plunge into recession in 2016…

The outlook for the global economy next year is darkening, with a U.S. recession and China becoming the first major emerging market to slash interest rates to zero both potential scenarios, according to Citi.

 

As the U.S. economy enters its seventh year of expansion following the 2008-09 crisis, the probability of recession will reach 65 percent, Citi’s rates strategists wrote in their 2016 outlook published late on Tuesday. A rapid flattening of the bond yield curve towards inversion would be an key warning sign.

Personally, I am convinced that we are already in a recession.  There is a lag in the official numbers, so often we don’t know that we are officially in one until it is well underway.  For example, we now know that a recession started in early 2008, but in the summer of 2008 Ben Bernanke and our top politicians were still insisting that there was not going to be a recession.  They were denying what was actually happening right in front of their eyes, and the same thing is happening now.

And of course if the government was actually using honest numbers, we would all be talking about the recession that never seems to end.  According to John Williams of shadowstats.com, honest numbers would show that the U.S. economy has continually been in recession since 2005.

But just like in 2008, the “experts” at the Federal Reserve are assuring all of us that everything is going to be just fine.  In fact, Janet Yellen is convinced that things are so rosy that she seems quite confident that the Fed will raise interest rates in December

Federal Reserve Chair Janet Yellen signaled Wednesday that the Fed is all but certain to raise interest rates this month for the first time in nearly a decade, saying that gains in the economy and labor market have met the central bank’s goals.

 

Her comments at the Economic Club of Washington amount to the strongest indication the Fed has provided so far that it will take action at a December 15-16 meeting.

This is the exact same kind of mistake that the Federal Reserve made back in the late 1930s.  They thought that the U.S. economy was finally recovering, and so interest rates were raised.  That turned out to be a tragic mistake.

 

But this time around, any mistake that the Fed makes will have global consequences.  The rising U.S. dollar is already crippling emerging markets all around the globe, and an interest rate hike will just push the U.S. dollar even higher.  For much more on this, please see my previous article entitled “The U.S. Dollar Has Already Caused A Global Recession And Now The Fed Is Going To Make It Worse“.

Many people are waiting for “the big crash”, but the truth is that almost everything has crashed already.

  • Oil has crashed.
  • Commodities have crashed.
  • Gold and silver have crashed.
  • Junk bonds have crashed.
  • Chinese stocks have crashed.
  • Dozens of other stock markets around the world have already crashed.

But the “big event” that many are waiting for is the crash of U.S. stocks.  And just like in 2008, it is inevitable that a U.S. stock crash will follow all of the other crashes that I just mentioned.

Sometimes I get criticized for issuing these kinds of alarms.  But just think of how many people could have been helped if they would have known that the financial crisis of 2008 was going to happen ahead of time.

The exact same patterns that we experienced back then are playing out once again right in front of our eyes, and the more people that we can warn in advance the better.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 12/03/2015 - 20:33 | 6873434 MD
MD's picture

Too many people buying puts to short the market instead of selling outright.  What if the market itself never crashes?  What if the only thing that crashes are the puts - going straight to zero on expiration?

Thu, 12/03/2015 - 20:46 | 6873477 Truther
Truther's picture

MD, only puts crashing? are you fucking kidding me? Where have you been the last 7 years?

Do any of the indicators mean anything to you?

Thu, 12/03/2015 - 21:41 | 6873650 NoDebt
NoDebt's picture

"#8 The velocity of money in the United States has dropped to the lowest level ever recorded.  Not even during the depths of the last recession was it ever this low."

Um... the graph that supposedly shows this is a "growth of money supply" graph, not a "velocity of money" graph.

 

Thu, 12/03/2015 - 21:48 | 6873685 nakki
nakki's picture

Wrong chart? Plus it was clearly lower in 2008.

Thu, 12/03/2015 - 21:52 | 6873697 DaddyO
Thu, 12/03/2015 - 23:08 | 6873966 palmereldritch
palmereldritch's picture

Technically it's 12 but let's go with 11

Thu, 12/03/2015 - 23:05 | 6873955 Still Losing Money
Still Losing Money's picture

he is only talking about puts, not everything. Market makers take the money from selling puts that go to zero to buy shares to hit prices that run stops and squeeze the shorts which causes prices to rise which causes puts to go to zero. wash rinse repeat. market keeps going higher. It will drop when people step back and stop tryig to front run the crash. You will know it when it happens. 

Thu, 12/03/2015 - 20:38 | 6873448 NotApplicable
NotApplicable's picture

Only a fool would believe that the Fed's destruction is a mistake.

Thu, 12/03/2015 - 20:40 | 6873456 A Lunatic
A Lunatic's picture

There's lots of fools out there.......

Thu, 12/03/2015 - 20:47 | 6873482 Truther
Truther's picture

And Yellen leads them all.

Thu, 12/03/2015 - 20:48 | 6873486 nmewn
nmewn's picture

Everything's in run-off, right down to the linoleum tile under the tables. And just think, we can tell our grandchildren we saw a Fisker Roadster catch on fire back in the day.

Its a great time to be alive! ;-)

Thu, 12/03/2015 - 20:55 | 6873512 t0mmyBerg
t0mmyBerg's picture

The tragic mistake in 37 was not in raising rates, it was in electing a statist fool earlier to lead the world into a massive increase in governmentism.  these articles that cry like a little girl about getting the overnight rate off of zero are idiotic

Thu, 12/03/2015 - 21:04 | 6873536 mvsjcl
mvsjcl's picture

It almost seems as if most presidents, since even before 1913, have been "elected" in order to advance some incremental step toward where we are now.

Thu, 12/03/2015 - 21:22 | 6873595 nmewn
nmewn's picture

Yeah that Woodrow Wilson, one helluva "progressive!" ;-)

Thu, 12/03/2015 - 21:32 | 6873624 DOGGONE
DOGGONE's picture

Hi,
I do some history too.
http://showrealhist.com/yTRIAL.html

Thu, 12/03/2015 - 20:39 | 6873452 nmewn
nmewn's picture

Not to worry friends! Mr.Yellen says 100,000 new jobs a month is all this economy needs to maintain Stahhhwbiliteee!

Way to set that bar lower, better than expected ;-)

Thu, 12/03/2015 - 21:05 | 6873540 Savyindallas
Savyindallas's picture

Jobs like in Greece where you can sell your vagina for 4 bucks an hour. This has been a savior to greek women  - most would rather become prostitutes than starve. It's like a charity  -the problem is that the amounts are not worth writing off as a charitable deduction. Hardly fair to the Johns. Probably good for the Greek tourist industry. I'll bet thousands have booked vacations to Greece when they found out they could get laid for so little. In a one week period, you can bang 15 desparate Greek babes - - that's probably one reason why Putin can get away with such heavy sanctions on Turkey. Now russians can all go vacation in Greece. Soon Turkish women will be desparate and you can have sex with a Turkish Babe for the price of a Big Mac. I myself am waiting for this to hit America. I read about rich dudes (Sugar daddies) sponsoring 3 to four college babes (Sugar babies) on seekingarrangements.com for 3 grand a month (450,000 clients) and I see that this may even be available to the average Joe  -Hell, panhandlers here make a lot more than $4 an hour. Soon they too can have a great sex life.  

Thu, 12/03/2015 - 21:16 | 6873579 nmewn
nmewn's picture

#LivesInTheHamptonsMatter!

How much you wanna bet Chuckie Spooner, Elmer Kerry and Jon Blankfein are net short right now? ;-)

Fri, 12/04/2015 - 08:41 | 6874839 SunRise
SunRise's picture

Long Penicillin!  Here's the fine print:  The corollary to Free Sex is Free Six (sparking, personal, incurable diseases for Free, for Ever).

Fri, 12/04/2015 - 08:44 | 6874841 SunRise
SunRise's picture

Just thinking:  As strong as the appetite for sex is, people's appetite for water is stronger.  Try drifting on a raft for 3 days in the Atlantic with nothing to drink and see what the fantasy is about.

Fri, 12/04/2015 - 09:34 | 6875010 Dick Gazinia
Dick Gazinia's picture

To Savy

As a longtime traveler to Amsterdam I can tell you one thing.

If you screw more than four girls in one day, you are just showing off.

Thu, 12/03/2015 - 20:44 | 6873471 GreatUncle
GreatUncle's picture

2008 until today - The period in time where all those entitled were allowed to preserve themselves economically before the economic support is removed and the REAL CRASH BEGINS.

Thu, 12/03/2015 - 21:00 | 6873526 Hugh G Rection
Hugh G Rection's picture

Israel still needs our cannon fodder to establish Eretz Yisrael.  Once they have bled us dry and finished balkanizing all her Arab neighbor States then it's game over man.

Thu, 12/03/2015 - 20:45 | 6873474 Dr. Engali
Dr. Engali's picture

Again I will say, any policy move the fed makes is not a mistake. They get these numbers just like we do and they know raising in this environment will blow things up. If they raise rates it's because the insiders are positioned for them to do so.

Thu, 12/03/2015 - 21:11 | 6873561 Truther
Truther's picture

It's all carefully planned. Once all hell brakes loose after the hike (which I seriously doubt mother Yellen has the guts to unleash), that'll be their catalyst for MOAR QE and NIRP. Only then you can kiss this fucking market goodbye, and roll the guillotines down to the FRB front steps (wishful thinking), and corner the lying scum.

Thu, 12/03/2015 - 21:47 | 6873683 FreeNewEnergy
FreeNewEnergy's picture

The problem is that Janet Yellen, the dumb bitch that she is, has no idea of the consequences of her actions.

Thu, 12/03/2015 - 20:47 | 6873481 SillySalesmanQu...
SillySalesmanQuestion's picture

Those charts point out that the gubbermint statistics are unadulterated, 200 proof, unanimous, no-doubt, guaranteed lock, bullshit.

Thu, 12/03/2015 - 20:47 | 6873485 Bluntly Put
Bluntly Put's picture

It's been a slow motion trainwreck since 2000, once the real depression is recognized in 50 years, they'll peg the rubicon around 2000.

Thu, 12/03/2015 - 22:16 | 6873799 uhland62
uhland62's picture

You are saying that the system is broken? Never! 

Because if it started in 2000 there was no influence from the ME wars after 9/11 which sucked such a lot of money from the US and did not yield. They just cost, and cost, and cost, and cost - and nothing to show for it except destruction, more wars and veterans in wheelchairs. War veterans will cost for 50 years, too!

Too much war expense plus the wrong system design cannot produce anything else than a trainwreck, but without some drastic development the faulty design of the economy, micro and macro, will not be improved. 

 

Thu, 12/03/2015 - 20:50 | 6873490 I am Jobe
I am Jobe's picture

Americans are pussies not doing the right thing and going into debt. Now go out there and shop till you drop you POS

Thu, 12/03/2015 - 21:02 | 6873530 tarabel
tarabel's picture

 

 

Just hold your horses, son. Everybody knows that gun shows are weekend events.

Thu, 12/03/2015 - 20:51 | 6873495 IridiumRebel
IridiumRebel's picture

Restaurants across the city are cutting way back.
Signs and portents....

Thu, 12/03/2015 - 20:55 | 6873514 yogibear
yogibear's picture

McD's is a good indicator. If their in trouble you know cheap is not cheap enough.

Thu, 12/03/2015 - 22:18 | 6873807 IridiumRebel
IridiumRebel's picture

I wait tables as I finish up my M.Ed. It's gone WAY down. I've always seen recession/depressions first. It looks worse than 2007.

Thu, 12/03/2015 - 20:52 | 6873501 Toy soldiers
Toy soldiers's picture

It better crash, my puts are soon out of the money

 

Thu, 12/03/2015 - 20:57 | 6873516 fowlerja
fowlerja's picture

Thanks Michael for the warning...but you said the same things 3 years ago...so I quit my job...and cashed out my bank accounts and built my bomb shelter... purchased my food and water and bought chickens and goats and started living again...except the farm animals all died and my food has passed the shelf life expiration date, and my water is now being recalled for some damn bacteria, and thanks to you  I have already experienced "economic collapse"... anyway no hard feelings and Merry Christmas to you and your family.  My family deserted me about 6 months ago... and so in my bomb shelter all I have is a "Peanuts Charlie Brown" Christmas tree...

Thu, 12/03/2015 - 21:26 | 6873607 PoasterToaster
PoasterToaster's picture

lol

Thu, 12/03/2015 - 23:59 | 6874145 Midas
Midas's picture

Come to think of it, the economic collapse is quite a bit like Lucy holding the football for Chuck....

Thu, 12/03/2015 - 20:56 | 6873517 Yen Cross
Yen Cross's picture

 " Is there anything? , That there isn't a chart for?"

Thu, 12/03/2015 - 21:09 | 6873554 mvsjcl
mvsjcl's picture

If it's on a chart, it's probably manipulated.

Thu, 12/03/2015 - 21:02 | 6873529 Berspankme
Berspankme's picture

Bennie Shalom Bernanke, the lying fucking cunt says Print Moar money

Thu, 12/03/2015 - 21:06 | 6873543 Truther
Truther's picture

Bennie Shalom Bernanke, the lying fucking cunt says Here is my Fiat copter.

Thu, 12/03/2015 - 21:44 | 6873667 PirateOfBaltimore
PirateOfBaltimore's picture

In the 30s they had less data, less track record, less fed history. They were merely wrong.

 

Now they're purposefully dishonest, trying to keep the facade of a good economy up in time to elect another democrat who will continue the trend of distorting marketd, including labor.

Thu, 12/03/2015 - 21:51 | 6873692 FreeNewEnergy
FreeNewEnergy's picture

I'm going to bite a bullet and submit to a background check, just because I think the time is very close that I actually may need a gun.

I do not like the government, local, state and/or federal.

Glad I don't live in Euoland, with an extra level. I'd probably end up buying a gun and shooting myself.

Thu, 12/03/2015 - 23:30 | 6874047 blue51
blue51's picture

FreenewEnergy,
I finally bought the bullet a few months ago myself . I passed the background check. Amazingly. 2 guns deep already. My Sixth sense smells chaos ahead also.

Thu, 12/03/2015 - 23:38 | 6874074 forwardho
forwardho's picture

If you aint done at least that yet...

You. Are. Screwed.

That you saw fit to tell the entire internet, (and all that that entails)of your intentions and dislikes.

Means...

You, Are. Really, Screwed.

Loose lips and all that.

Just saying.

:)))

Fri, 12/04/2015 - 02:41 | 6874464 22winmag
22winmag's picture

Slow your roll.

 

Many states allow for legal private sales between residents with no check!

Thu, 12/03/2015 - 22:17 | 6873806 VW Nerd
VW Nerd's picture

Today's equity markets didn't suprise me as much as the move in UST 10yr.  If the long bond starts to let go, look out, it could crush the private debt market.

Fri, 12/04/2015 - 07:48 | 6874765 Magooo
Magooo's picture

#6 Credit card data that was just released shows that holiday sales have gone negative for the first time since the last recession.

 

I thought bricks mortar were hurting because of online sales...

 

Last I looked you needed plastic to buy online...

 

WTF

Fri, 12/04/2015 - 07:58 | 6874779 lucky and good
lucky and good's picture

The words illusion and mirage are both very interesting and can be used to describe this market. Often when we look behind the curtain we find the products of sophisticated traders are highly leveraged and stack layers of risk upon the huge amount of risk that already exist. When we mix in the impact of derivatives and its sister "shadow-banking" the water gets really murky.

The carry trade exploits small differences generally in a highly leveraged environment in the hope of banging out a profit. We sometimes have to wonder just how much the central banks consider this in their overall scheme of economic control. In the end when the dominoes known as "world currencies" come under pressure and begin to fall, the direction or how they fall will make a great deal of difference in the financial landscape we are left to face. The article below explores this important part of the economy.

 http://brucewilds.blogspot.com/2015/09/cross-border-money-flows-and-carry-trade.html

Fri, 12/04/2015 - 12:21 | 6875853 Arthur Two Shed...
Arthur Two Sheds Jackson's picture

>puts on 20,000 hat

Fri, 12/04/2015 - 12:42 | 6876000 Youri Carma
Youri Carma's picture

WHERE’S THERE A CRASH? WORLD ECONOMY COLLAPSING!!! – HEADLINES NOVEMBER 2015

http://forum.prisonplanet.com/index.php?topic=100571.msg1580310#msg1580310

Do NOT follow this link or you will be banned from the site!