The world's central banks' safety harness finally gave way and one by one the world's markets started to plunge.
Global stock markets lost almost $12 trillion in 2018 - the largest market cap loss since 2008 (and second largest in history)...
In fact, from its highs in January, world market cap is down $20 trillion.
As global central banks 'allowed' their balance sheets to contract on an annual basis for the first time ever...
But they said "It could never happen again" ... fortress balance sheets and all, and yet global systemically important banks collapsed in 2008.
No corner of the world escaped unscathed.
Asia Ex Japan was the worst year since 2008 (and 2nd worst on record)
This was China's 2nd worst year on record (2nd to 2008).
All the major Chinese markets were a mess.
The only major Asian market in the black for the year was India, where the BSE was ahead by almost 6 percent.
Europe was a bloodbath with the Stoxx 600 down 13% in 2018, its biggest loss since 2008.
And as Project Fear kicked in, The FTSE 100 ended 2018 down 12% - also its worst year since 2008 - but Germany's export-heavy DAX was even worse.
US equities looked unstoppable... until Humpty Dumpty fell off the wall.
... and December was a bloodbath (even with the last few days' manic bounce):
And so, this is still the worst December for US stocks since The Great Depression.
Gold and bonds outperformed notably in December as stocks plunged.
But on the year, only the dollar survived unscathed...
This is the first time since the 1970s that the S&P 500 has slumped so much when earnings growth was more than 10%.
So what should retail investors do? Well don't turn to the hedgies - Long-short equity fund performance in December is the worst since August 2011.
Bonds were all underwater on the year - despite a huge compression in yields over the last two months - with the short-end the worst performer on a yield basis.
In fact this is the Treasury market's biggest monthly rally since Jun 2016.
And the yield curve collapsed further this year...(inverting in the 2s5s region)
And yields have a long way to fall if cyclical stocks are right.
While Treasuries were bid recently, corporate bonds were not... Junk bonds tumbled in December, for the worst month since Dec 2015.
And worst quarter for junk bonds since Q3 2015.
Investment Grade corporate bond prices suffered their worst yearly loss since at least 2002:
Meanwhile, the dollar rallied on the year to its best annual gain since 2015:
While all commodities ended the year lower, gold outperformed (and WTI did not):
Oil suffered its first annual decline since 2015,
“We are most likely past the peak of this long economic uptrend,” said analysts at JBC Energy GmbH in Vienna.
While gold is down in 2018 in dollar terms, it appreciated against the yuan:
US Economic data was the most disappointing since 2008:
"Simply looking at the markets would suggest that the global economy is headed into recession,” said Robert Michele, chief investment officer and head of fixed income at J.P. Morgan Asset Management.
“However, while we agree the global economy is in a growth slowdown, we don’t see an impending recession,” he added, looking at the Fed to provide a policy cushion.
"Already, commentary out of the Fed suggests that it is nearing the end of a three-year journey to normalise policy."
And the market agrees that The Fed will cut rates more than hike them from here on out...
The question is - will the Fed's policy error reversal crash stocks further amid a total loss of confidence in central command once again?
Finally, we note with a glass of champagne inches away from our hands, this will not end well for bond bears and if bond shorts are squeezed - what happens to stocks from there?