This article was written by Michael Snyder and originally published at his Economic Collapse blog.
Editor’s Comment: There is a very real danger here, but the fact that the collapse has not come after repeated warnings has given everyone a false sense of stability. Yet, it is clear enough that the Fed has been avoiding a rate hike for political purposes, and that much is dangling over a cliff and extremely vulnerable to collapse.
When will it happen, and how bad will it be when things finally go down the tank? Best to reinforce your preparations and try to avoid the worst of whatever is coming.
Marc Faber Issues A Stunning Warning That A Gigantic 50 Percent Stock Market Crash Could Be Coming
by Michael Snyder
Are we about to witness one of the largest stock market crashes in U.S. history? Swiss investor Marc Faber is the publisher of the “Gloom, Boom & Doom Report”, and he has been a regular guest on CNBC for years. And even though U.S. stocks have been setting new record high after new record high in recent weeks, he is warning that a massive stock market crash is in our very near future. According to Faber, we could “easily” see the S&P 500 plunge all the way down to 1,100. As I sit here writing this article, the S&P 500 is sitting at 2,181.74, so that would be a drop of cataclysmic proportions. The following is an excerpt from a CNBC article that discussed the remarks that Faber made on their network on Monday…
The notoriously bearish Marc Faber is doubling down on his dire market view.
The editor and publisher of the Gloom, Boom & Doom Report said Monday on CNBC’s “Trading Nation” that stocks are likely to endure a gut-wrenching drop that would rival the greatest crashes in stock market history.
“I think we can easily give back five years of capital gains, which would take the market down to around 1,100,” Faber said, referring to a level 50 percent below Monday’s closing on the S&P 500.
Of course Faber is far from alone in believing that the market is heading for hard times. Just recently, I wrote about how legendary investor Jeffrey Gundlach is warning that “stocks should be down massively” and that he believes this is the time to “sell everything“.
And on Tuesday, Donald Trump told Fox News that the stock market is “a big bubble”…
“If rates go up, you’re going to see something that’s not pretty,” the billionaire businessman told Fox News during a Tuesday morning phone interview. “It’s all a big bubble.”
Worries that the Fed has created a market bubble have shadowed the second-longest bull market in history as the central bank has kept its key rate near zero and expanded its balance sheet by $3.8 trillion in order to pump liquidity into the financial system.
Trump actually has a vested interest in seeing the stock market go down, because that would help his chances in November.
In a previous article on The Most Important News, I explained that the stock market has indicated who would win the presidential election 86 percent of the time since 1928. During the final three months before election day, if the stock market goes up the incumbent party almost always wins. But if the stock market goes down, the incumbent party almost always loses. The only times this correlation has not held up since 1928 were in 1956, 1968 and 1980.
For the moment, the stock market is defying the laws of economics, and that is a very good thing for Hillary Clinton. But if this bubble suddenly bursts and the market starts catching up with economic reality, that is going to turn out to be very favorable for Donald Trump.
And without a doubt, the fundamental economic numbers just continue to get worse. Earlier today, we learned that productivity in the U.S. has now been falling for three quarters in a row…
Productivity, a sore spot for the U.S. economy over the past few years, has now declined in three straight quarters, according to data released Tuesday.
Productivity in the second quarter unexpectedly fell 0.5%, well below expectations, the Labor Department said. Economists surveyed by MarketWatch had forecast a 0.3% gain in productivity in the quarter.
Productivity is down 0.4% from a year earlier, the first year-over-year decline since the second quarter of 2013.
On Tuesday we also learned that real estate sales in Las Vegas were down about 10 percent in July compared to the same period a year ago, and things are not looking so good in San Francisco either. Just check out what has been going on at Twitter…
Twitter is shaking up San Francisco. It’s the city’s 10th largest employer, and second largest tech employer, after Salesforce. But it hasn’t yet figured out, despite a decade of trying, how to make money. Last October, it announced that it would lay off 8% of its workforce. A couple of weeks ago, it reported a second-quarter net loss of $107 million along with disappointing user metrics and lousy projections. Its shares have lost 74% since their miracle-IPO-hype peak at the end of December 2014.
And now Twitter is dumping nearly one third of its total office space on the San Francisco sublease market.
Las Vegas and San Francisco are both prone to huge “booms” and “busts”. So the fact that it appears that both cities are starting to move into the “bust” end of the cycle is a very ominous sign.
Conditions are changing, and now is the time to position yourself for the exceedingly challenging times that are coming. As I end this article today, I want to share with you something written by Jim Quinn. He recently went out to visit his son Kevin in Colorado for a couple of weeks, and the following is how he ended his article about that trip…
After spending a week in this stunning paradise, it’s tougher than you know to go back to my two and half hour daily round trip commute into the slums of West Philly. John Muir’s words were right 100 years ago and they are right today. I am losing precious days and my days are spent trying to make money. I’ve got responsibilities. I’ve got bills to pay. I’ve got kids to get through college. We’ve got aging parents to help. I work because I have to.
I’m not learning anything in this trivial world of distractions and iGadgets. I don’t fit into this materialistic society. I don’t do small talk. I have no patience for fools. I prefer solitude. If I can survive this despicable rat race for seven more years, I’ll be joining Kevin in Colorado and living the life I’d like to live. The sun is setting and time is slipping away. Those mountains are calling me home.
I can definitely identify with what Jim is going through, because I once experienced similar emotions.
To Jim and everyone else that hopes that someday in the future they will be able to live the lives that they would like to be living right now, I would say this…
Don’t put it off.
Seize the day and find a way to make your dreams a reality.
Things are rapidly changing in this country, and if you keep putting off the life you want to be living for too long it may end up slipping away for good.
Michael 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 [amazon text=Get Prepared Now!: Why A Great Crisis Is Coming & How You Can Survive It&asin=150522599X].
We will see. If it happens sooner than later the better off Trump will be.
I don’t have anything in stocks and the wife has everything in guaranteed.
If he is right time to take out what you have and get P.M.s, What ever you call P.M.s?
Heh Sgt, I also have some assets that are supposedly guaranteed but I also am a believer in the principle of if you can not hold it in your hand you don’t have it. I this whole thing goes down, only things in your possession can be counted on! God Bless james
I believe the same. You Don’t Hold it You Don’t Have It!!!
And Thanks for the Blessing request from God. I CAN USE ALL I CAN GET. SAME TO YOU.
I wouldn’t be surprise if the J….ew owned banks and the WallStreet create such drop to keep the zionist owned government crimes and the election off the radar.
I know a guy with your name…. Could it really be that small of a world?
ProShares UltraPro Short S&P500 (SPXU)
This is a 3x inverse fund of the S&P500. S&P goes up, this fund goes down 3x……but if the S&P falls big time, this fund jumps way up.
52wk Range is $22.96 – $48.10, trading today around $23. I was considering buying some back a few months ago when it was in the mid 30 range,thinking “this can’t go on, can it ?”
Well I didn’t, and it has….but with every buck down in the fund, it looks more and more attractive.
If one really believes a big crash is coming, then this is the play.
I’ve bought the double short sds about 3 times in the last 3 years every time at what looked like a top to me. Now have 300 sh with a loss of 800. Its hard to pick the top of a market especialy when political moves (to keep Hillary in the running) falsify the real data that would send most investors running for cash or gold.
How Long Can Economic Reality Be Ignored? — Paul Craig Roberts
When this happens, then we will see banks foreclose on homes and people in the streets. Especially the elderly living on retirement funds in the market.
Then the trail to the Fema Camps will begin. But will be a buying opportunity for those who have cash on hand.
An opportunity to buy a house you might not had been able to afford before the crash but unused /homes real estate is a burden to the banks and loan companies.
Just my opinion.
I would follow the advice of Jim Rickards and invest in gold and gold mining stocks now. Tocqueville Gold Fund (TGLDX) is a good fund for achieving both of these goals (up 93.8% already this year, with lots of room to grow as things get worse economically).
Regardless of what happens in the stock market and elections, it is my observation that city rats WANT to be city rats, although they come up with compelling reasons for not leaving the city. And by city, I mean Any densely POPULATED Area INCLUDING most outer loop suburbs and exurbs. People want to be close to the box stores and the chichi chain restaurants. I miss a few things from Houston proper, like Gringo’s and Brennan’s restaurants… gumbo from Landry’s… the zoo. But, the initial sense of consumer deprivation dissapated soon enough after getting used to driving on open roads and spotting wildlife constantly.
The city has a certain kind of gravity all its own. It takes determination to get out.
Don’t care about $. The persuit of $ makes you easier to control. Glad I don’t worship$ never gonna be rich anyhow. In fact I don’t care if my job closes I’m ahead of the game and feel they need me more than I need them. They of course try to play it like I need them. We will part ways at some point and I’m not gonna lose sleep over it. Investing is like gambling to me I don’t do it. I’m of the opinion that there is no easy $. I have a realistic point of view of the world. Been working since I was 14 and earned everything I got. nobody gave me shit. If half the market disappears fine by me. My world will still turn. Hope y’all planned for your future.
What price will bits of paper be worth is we keep going like we are doing and allow the banker puppets from the US of “A” to pick a fight with Russia.
The world knows that the US created ISIS under the guise of being “Moderate Rebels” in Syria and now the CIA is sending terrorists into the Crimea with plastic explosives to blow up bridges so it could be game on at any moment if americans don’t grow some balls and stop there rouge government.