Preps and Solutions
(Sponsored Ads)
Silver
Strategic Relocation
Recently Posted Articles and Videos
Ready Nutrition - Homesteading and Preparedness
Ready Gardens - A Ready Nutrition Company
The Daily Sheeple
The Prepper Website
SGT Report
The Daily Coin
top Prepper Web Sites
Featured Destinations
The Liberty Mill
Web Destinations

Clarocet for Kids
Silver

3 Things That Happened Just Before The Crisis Of 2008 That Are Happening Again Right Now

Michael Snyder
November 30th, 2018
The Economic Collapse
Comments (42)
Read by 7,769 people

This report was originally published by Michael Snyder at The Economic Collapse

Real estate, oil and the employment numbers are all telling us the same thing, and that is really bad news for the U.S. economy. It really does appear that economic activity is starting to slow down significantly, but just like in 2008 those that are running things don’t want to admit the reality of what we are facing. Back then, Fed Chair Ben Bernanke insisted that the U.S. economy was not heading into a recession, and we later learned that a recession had already begun when he made that statement. And as you will see at the end of this article, current Fed Chair Jerome Powell says that he is “very happy” with how the U.S. economy is performing, but he shouldn’t be so thrilled. Signs of trouble are everywhere, and we just got several more pieces of troubling news.

Thanks to aggressive rate hikes by the Federal Reserve, the average rate on a 30 year mortgage is now up to about 4.8 percent. Just like in 2008, that is killing the housing market and it has us on the precipice of another real estate meltdown.

And some of the markets that were once the hottest in the entire country are leading the way down. For example, just check out what is happening in Manhattan

In the third quarter, the median price for a one-bedroom Manhattan home was $815,000, down 4% from the same period in 2017. The volume of sales fell 12.7%.

Of course things are even worse at the high end of the market. Some Manhattan townhouses are selling for millions of dollars less than what they were originally listed for.

Sadly, Manhattan is far from alone. Pending home sales are down all over the nation. In October, U.S. pending home sales were down 4.6 percent on a year over year basis, and that was the tenth month in a row that we have seen a decline…

Hope was high for a rebound (after new-home-sales slumped), but that was dashed as pending home sales plunged 2.6% MoM in October (well below the expected 0.5% MoM bounce).

Additionally, Pending Home Sales fell 4.6% YoY – the 10th consecutive month of annual declines…

When something happens for 10 months in a row, I think that you can safely say that a trend has started.

Sales of new homes continue to plummet as well. In fact, we just witnessed a 12 percent year over year decline for sales of new single family houses last month

Sales of new single-family houses plunged 12% in October, compared to a year ago, to a seasonally adjusted annual rate of 544,000 houses, according to estimates by the Census Bureau and the Department of Housing and Urban Development.

With an inventory of new houses for sale at 336,000 (seasonally adjusted), the supply at the current rate of sales spiked to 7.4 months, from 6.5 months’ supply in September, and from 5.6 months’ supply a year ago.

If all of this sounds eerily similar to 2008, that is because it is eerily similar to what happened just before and during the last financial crisis.

Up until now, at least the economic optimists could point to the employment numbers as a reason for hope, but not anymore.

In fact, initial claims for unemployment benefits have now risen for three weeks in a row

The number of Americans filing applications for jobless benefits increased to a six-month high last week, which could raise concerns that the labor market could be slowing.

Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 234,000 for the week ended Nov. 24, the highest level since the mid-May, the Labor Department said on Thursday. Claims have now risen for three straight weeks.

This is also similar to what we witnessed back in 2008. Jobless claims started to creep up, and then when the crisis fully erupted there was an avalanche of job losses.

And just like 10 years ago, we are starting to see a lot of big corporations start to announce major layoffs.

General Motors greatly upset President Trump when they announced that they were cutting 14,000 jobs just before the holidays, but GM is far from alone. For a list of some of the large firms that have just announced layoffs, please see my previous article entitled “U.S. Job Losses Accelerate: Here Are 10 Big Companies That Are Cutting Jobs Or Laying Off Workers”.

A third parallel to 2008 is what is happening to the price of oil.

In 2008, the price of oil shot up to a record high before falling precipitously.

Well, now a similar thing has happened. Earlier this year the price of oil shot up to $76 a barrel, but this week it slid beneath the all-important $50 barrier

Oil’s recent slide has shaved more than a third off its price. Crude fell more than 1% Thursday to as low as $49.41 a barrel. The last time oil closed below $50 was in October 4, 2017. By mid morning the price had climbed back to above $51.

Concerns about oversupply have sent oil prices into a virtual freefall: Crude hit a four-year high above $76 a barrel less than two months ago.

When economists are asked why the price of oil is falling, the primary answer they give is because global economic activity is softening.

And that is definitely the case. In fact, we just learned that economic confidence in the eurozone has declined for the 11th month in a row

Euro-area economic confidence slipped for an 11th straight month, further damping expectations that the currency bloc will rebound from a sharp growth slowdown and complicating the European Central Bank’s plans to pare back stimulus.

In addition, we just got news that the Swiss and Swedish economies had negative growth in the third quarter.

The economic news is bad across the board, and it appears to be undeniable that a global economic downturn has begun.

But current Fed Chair Jerome Powell insists that he is “very happy about the state of the economy”

Jerome H. Powell, the Federal Reserve’s chairman, has also taken an optimistic line, declaring in Texas recently that he was “very happy about the state of the economy.”

That is just great. He can be as happy as he wants, and he can continue raising interest rates as he sticks his head in the sand, but nothing is going to change economic reality.

Every single Fed rate hiking cycle in history has ended in a market crash and/or a recession, and this time won’t be any different.

The Federal Reserve created the “boom” that we witnessed in recent years, but we must also hold them responsible for the “bust” that is about to happen.

***

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

GetPreparedNow-MichaelSnyderBarbaraFixMichael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream

If you want to know what is coming and what you can do to prepare, read his latest book Get Prepared Now!: Why A Great Crisis Is Coming.

Click here to subscribe: Join over one million monthly readers and receive breaking news, strategies, ideas and commentary.
The Most Trusted Tactical Gas Mask In The World
Please Spread The Word And Share This Post

Author: Michael Snyder
Views: Read by 7,769 people
Date: November 30th, 2018
Website: http://theeconomiccollapseblog.com/

Copyright Information: This content has been contributed to SHTFplan by a third-party or has been republished with permission from the author. Please contact the author directly for republishing information.

42 Comments...

Vote: Click here to vote for SHTF Plan as a Top Prepper Web Site
  1. durangokidd says:

    “Thanks to aggressive rate hikes by the Federal Reserve, the average rate on a 30 year mortgage is now up to about 4.8 percent. Just like in 2008 …”

    4.5% mortgage rates are still HISTORICALLY LOW. Moreover, when mortgage rates rise, home values drop. It’s an inverse relationship. So, it balances out the “affordability issue”.

    The real estate home market is saturated and I first noticed that softness and I mentioned that here six months ago. The business cycle is over, the FED is BEHIND the curve, and the pent up demand of potential buyers (if any) recognizes that home values will fall farther as the contraction intensifies.

    No reason to buy now when bargains galore will manifest on the horizon in 2019. 🙂

    • Justice says:

      durangokidd, I respect your posts regarding economics, however I would point out that (while 4.5% rates are Historically Low) all levels (Governmental, Business and Consumer) of DEBT are at ALL TIME HIGHEST LEVELS. Consequently, even historically LOW rates can bankrupt specific entities (e.g. GE and GM) and the entire system!

      I recently read in the NY Times that As Debt and Interest Rates Rise, the Government Will Soon Spend More on Interest Than on the Military

      My point is that it only takes a small rise in rates to bring the whole thing down. In today debt world interest rates are EVERYTHING!

      • Swandog says:

        The thing about debt is no one forced it upon the borrowers. Yes sometimes there is good debt, but keeping up with Jones will cost us all.

      • durangokidd says:

        “Consequently, even historically LOW rates can bankrupt specific entities (e.g. GE and GM) and the entire system!”

        Agreed and a number of firms will go under …. they always do. It’s the survival of the economic fittest and the companies with the lowest debt and strongest balance sheets survive.

        I would point out that the system COLLAPSED back in 2008 and we are all still here. There are always ways to mitigate, write off, bury, and transform the debt of NPL. Finance is an extremely creative industry.

        The Resolution Trust Company back in 1987 is the perfect example of how to isolate bad debt, bad mortgages, & bad securities.

        As long as you are not stashing your cash in the banks or having them hold your securities, you are OK. Banks & brokerages acting as trustees will hold your assets as their security and make you a creditor under the new banking laws.

        If you must have a financial institution hold your excess cash, credit Unions are a good way to go. They typically sell the loans they make to their Correspondent Banks and service the loan to generate fees, so their exposure to adversity is minimal. 🙂

  2. john stiner says:

    The 4th thing that happened just before the 2008 crash that just happened again: I liquidated my stock holdings and bought a shit ton of silver.

  3. george says:

    No more free toasters ?

  4. Stuart says:

    “Concerns about oversupply have sent oil prices into a virtual freefall”

    What nonsense. What sent prices lower was not “concern” but actual abundance of supply. Seeing how oil & gas is a basic feed-stock for one hell of a lot of industries, this is a good thing for the world economy. That supply was not caused by the world suddenly stopping (the world economy is not capable to suddenly stopping)but through drilling success.
    According to Snyder oil prices rising are bad news and oil prices falling are bad news. What drivel.

  5. john stiner says:

    There is a direct correlation to home prices falling and interest rates rising.

    If it costs more to borrow money, then your borrowing power is more limited, so you have to buy a less costly house.

    That is why the housing market is slumping.

  6. Heads up. 7.0 earthquake near Anchorage, Alaska. Shallow enough for damage. Tsunami warning. Pics on TV show school kids under desks for protection. Seems it would be much better to get out of the building and away from it. Office workers staying in their buildings and getting coffee. Not very bright.

    • Maranatha says:

      Statistically more people are killed running for the exits (and getting hit by falling debris) besides creating a stampede. When the tremor comes, your look for a braced section plus cover.

      Then soil liquifaction can make the ground give way and cause things to sink plus open fissures.

    • rellik says:

      Him,
      Most places in American earthquake prone areas have very strict building codes. The building may move a lot but for the most part it won’t fall down. There will be a very big mess as the contents of the building are spewed all over, but generally they don’t fall down. And if the Office workers are anything like me having lived virtually all my life in natural disaster prone areas, they are just going to keep on keeping on.

    • lost karma says:

      I was in the San Fran bay area in 1989 when the 6.9 quake hit. I was in my 3rd floor room at a Hyatt Inn.

      I couldn’t stand up at all. All I did was hang on to the bed. The water in toilette was thrown out onto the floor and walls.

      It’s not that easy to walk around in a good shaker. It’s difficult to even stand up.

    • Stuart says:

      When I was a kid we hid under the desk to protect us from an atomic bomb. OK, sounds reasonable but I don’t think hiding under a desk will protect them from a Tsunami.
      But that’s just me. What do I know.

  7. Someone says:

    I’m confused, after purchasing a home at rediculous low apr isn’t it better for you if the prices go down because then the property tax goes down as well? The home prices are way inflated as it is.

    • Stuart says:

      If you own the house free & clear then you are right but if you have a mortgage and the value drops you could owe more than the house is worth. The mortgage company can make you cough up more money to get your equity back in the black. If you can’t come up with the money, you lose the house.

      • rellik says:

        Stu,
        “The mortgage company can make you cough up more money to get your equity back in the black”, Confuses me.
        I’ve had a mortgage and I had lot of rules to follow, but I don’t recall having to cough up money to get my “equity” back
        or lose the house. As long as I paid per our initial agreement they don’t care what the house is worth 10, 20 or 30 years down the road.
        If you want to sell an “underwater” house then you have to make up any difference in order to deliver a clear title, but if you don’t sell, you don’t have a problem.

  8. Anonymous says:

    What happened before the 2008 crash was huge numbers of people jumping into the housing market buying homes they couldn’t afford then using refinancing and credit against their increasing values to pull money they didn’t earn out of them to finance both the homes and their unearned lifestyles.

    Remember when Refi and Flipping were the financial savy words of the day?

    When you see that happening again it’s time to be ready for the crash and, if you’re smart, to take advantage of the resulting crash and buy that overpriced real estate at depressed bargain prices afterward.

    That’s how major recessions and depressions create new millionaires out of ordinary people and make the existing ones even wealthier.

    • Maranatha says:

      Moronic bipartisan politicians facilitated the now scandalous subprime mortgages that typically were to minorities with very bad credit. The loans were infamous for having schemes like adjustable interest and balloon payments. Some of these folks then lost their jobs and this created a massive crisis with foreclosures.

      Wait it gets worse, the banks sold these mortgages so many time with the robosigning scandal, that it became impossible to tell who actually held the mortgage. So those who defaulted would squat in their own homes and sometimes for years as it was a major legal snarlup.

      Typically after two months, you can get served by the county sheriff and then subsequently kicked out. But due to these complex issues, there were so many and so much legal and banking trouble, it was difficult to extract them. In fact, when people moved out, since the properties were vacant, new squatters would move in, and the whole rigamarole started all over again.

      People would turn the water back on, and fools would juryrig electricity as well.

      But these events then ended up triggering family homelessness and nonprofit agencies were swamped with requests. Churches ended up buying lots for homeless camping just to deal with so many. And it became commonplace for families to sleep in a stationwagon parked in the Walmart parking lot.

  9. Duh jones says:

    I remember that 08 crash. Firewood was $300 cord. Everyone went nuts. It doesn’t take much to throw the US in disarray. $5 gas this place would blow apart. Talk about walking the line.

  10. Anonymous says:

    USSA not only economically bankrupt but – more importantly – morally & spiritually BANKRUPT.

    It’s O-V-E-R… ALL of it.

    Deal with THAT… if you can – and most will not be able to.

  11. Luke Warm says:

    We’re looking forward to real estate prices plunging again so we can buy a second home 🙂

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Commenting Policy:

Some comments on this web site are automatically moderated through our Spam protection systems. Please be patient if your comment isn't immediately available. We're not trying to censor you, the system just wants to make sure you're not a robot posting random spam.

This web site thrives because of its community. While we support lively debates and understand that people get excited, frustrated or angry at times, we ask that the conversation remain civil. Racism, to include any religious affiliation, will not be tolerated on this site, including the disparagement of people in the comments section.

 

Web Design and Content Copyright 2007 - 2015 SHTF Plan - When It Hits The Fan, Don't Say We Didn't Warn You - All Rights Reserved

Our Supercharged Intel Xeon E5-2620 v4 Octo-Core Dual Servers are Powered By Liquid Web

Dedicated IP Address: 69.167.174.108

The content on this site is provided as general information only. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a financial interest in any company or advertiser referenced. Any action taken as a result of information, analysis, or advertisement on this site is ultimately the responsibility of the reader.

SHTFplan is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.