This article was originally published by Michael Snyder at The Economic Collapse
These large stock market declines are starting to become a regular thing, and tech stocks are getting hit particularly hard. But we have been in a bull market for such a long time that many investors are having a difficult time comprehending what is happening. Many just keep believing that their beloved tech stocks will eventually bounce back because they just can’t accept the fact that the party is over. At this point, all of the “FANG stocks” have officially entered bear market territory. Facebook is down 39.5 percent from their 52 week high, Amazon is down 25.4 percent, Netflix is down 35.6 percent and Google is down 20.3 percent. And since many throw in Apple to make the acronym “FAANG”, we should also note that Apple’s stock price is now down more than 20 percent from the peak. The tech stock crash that so many have been waiting for has arrived, and many analysts believe that it is going to get a whole lot worse.
The combined market value of Facebook, Amazon, Netflix and Google has fallen by 610 billion dollars so far.
Just think about that for a moment.
Most Americans don’t even realize that tech stocks have been crashing, and many of them simply assume that their investments are safe.
And at one time Facebook was considered to be a very safe investment, but now 39.5 percent of the value of Facebook has already been completely wiped out.
It looks like November will be Facebook’s third month in a row in the red, and that will be the longest monthly losing streak that it has ever had.
A lot of people are shocked that this is happening so rapidly. But really the only surprise is that it has taken this long for these massively overvalued stocks to crash and burn.
The truth is that these companies have been priced beyond perfection. So when even the smallest piece of bad news comes along, investors can start to panic.
For example, one of the big reasons why Apple has declined so much is because production orders for all three of the new iPhones that were unveiled in September have been slashed. It looks like iPhone sales are not going to be at quite the level everyone had anticipated, and Wall Street responded by throwing a huge temper tantrum.
And things look even more ominous for Facebook. As Joel Kulina of Wedbush recently noted, the number of people that are using Facebook on a daily basis in North America is falling…
Joel Kulina of Wedbush says problems in the company have been evident longer than this month. “If you go back to that earnings report back in July, they missed across the board and what really jumps out at me is that we’re seeing declining daily and monthly active users in North America or stalling active user metrics in North America, declining in Europe and the only regions that are seeing growth is in Asia where the average revenue per user is much lower than the Western world,” Kulina said.
When Facebook decided to start censoring people for their political views on a massive basis, that was the beginning of the end for the company. At this point they have alienated millions upon millions of users that were once addicted to the service, and that is damage that will never be repaired.
And it is inevitable that something newer, better and more engaging will eventually come along. Not too long ago, MySpace was the unbeatable giant in social media, but then Facebook came along and crushed them. Now it is clear that Facebook has peaked, and the void that is being created as Facebook declines will certainly be filled by someone else.
But what we are witnessing in the financial marketplace is not just about tech stocks. This is a broad-based global decline, and it has been going on for quite some time.
In fact, just check out the following tidbit from Simon Black…
Deutsche Bank says 89% of all asset classes it tracks are negative this year – the worst year since 1901.
This is often how a big downturn begins: gradually, then suddenly. Asset prices stew and fester, slowly grinding downward for months while people maintain hope that prices will recover.
Yes, you read that correctly.
89 percent of all the asset classes that they track are down in 2018.
That is an absolutely astounding number.
We haven’t seen anything like this since the last financial crisis. Most people seem to assume that the problems that caused the last financial crisis have been fixed, but that is not the case at all. Instead, things were patched together and the global financial bubble was made even bigger. Here is more from Simon Black…
Instead of giving million-dollar mortgages to unemployed borrowers with a history of default, investors are loaning billions of dollars to money-losing zombie businesses, or to governments that are already in debt up to their eyeballs, all while pretending these are safe, credible investments.
Total global debt back in 2008 was about $173 trillion, worth about 280% of GDP.
Today total global debt is $250 trillion, worth about 320% of GDP. It’s only gotten worse.
Now the “Bubble To End All Bubbles” is starting to burst, and great chaos is ahead. What we experienced in 2008 and 2009 is nothing compared to what is in front of us, and most Americans have absolutely no idea what is coming.
At the moment, one key thing to keep a close eye on is the high yield bond market.
High yield bonds (also known as “junk bonds”) crashed really hard just before the financial crisis of 2008 erupted, and now it is happening again.
Even if high yield bonds didn’t go down any further, they have already dropped to a level that indicates that stocks still have a lot more room to fall.
But if high yield bonds do continue to plummet like this, it is a clear indication that it is time to put your crash helmet on.
These are interesting times, and I have a feeling that they are about to get a whole lot more interesting.
***
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.
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].
If you invested ANY amount of money into an entity which practices censorship and supports one-world government then I don’t feel sorry for you at all. Go cry me a river.
I don’t use Facebook; never have. A lot of my co-workers do. Idiots. Lots of turnover where I work; the jobs might be out there for a few days, but I would hold on to my job. Gas prices dropped to around $2.18 a gallon for regular unleaded and I suspect jobs are drying up in my area.
The crash may be coming. Stock up, peeps.
Yup. Time to pull out the popcorn and enjoy the show.
Facebook crashing and going broke? Couldn’t happen to more deserving scum, save youtube and google….. Are they dying from the same cancer , hopefully?
Are the financial related fields people jumping from windows yet on Wall Street? If they are associated with the banking field or Financials…they should start jumping..ALL OF THEM, don’t care if they are bankers you admin assistants….they ALL have been screwing America over for years, all should jump or be forced to jump. Ameerica INSTANTLY becomes a better plpace if Wall Street runs red 12 inches deep with Bankers and their employees blood for the crooked dealings and screwings they have cost us.
Amen.
Let the political correct censors implode.
This is USA. Free thought. Free speech.
There are many idiots that say stupid things.
Let them say their piece.
FaceBook-Apple-Twitter-Google-YouTube-PayPal
Starbucks-Boy Scouts of America-NFL-HollyWood
ALL are Against free speech and free thought, Traditional American values..
To me they seem antiAmerican. Therefore i refuse to support them all. So I avoid, cancel, stop using.
These Tech Bully Tyrants have Offended me.
Therefore I NEVER use their services. (Except for YouTube. But I have an ad blocker.)
My sons play soccer and baseball. Never will step on a football field. They care nothing about it. NFL will dwindel in next generation. Good.
Knee takers that do not appreciate the National Anthem. Do not appreciate brave men who have sacrificed arms, legs, peace of mind, brothers, and men who sacrificed their own lives. The National Anthem represents All of that. Represents brave men of all colors. And I might note that many of those brave soldiers, sailors, Marines, where brown and black men. Especially in Vietnam. Respect these men and our Nation. Never take a knee.
Professional NFL players who are Spoiled over paid deliquients that are always in trouble with Law, knee takers, are NOT good role models.
My family was a season ticket holder for Basketball. There was a NBA strike. I have never attended or watched a complete NBA game since that NBA strike.
Chicago Bulls pre season game was cancelled that year. I would have had floor seats thanks to my father’s customers generosity, Strike ruined my chance to see Jordan and Pippin show. NBA spoiled players ruined basketball. So I no longer care about Basketball even today many years past.
Same for NFL now. My sons will not care about pro football.
Same for FaceBook, Twitter, young people are over both. Now only parents and business, cops, government snoops, on there. Young people have moved on.
Crash and burn farcebook fuckers
Menzo, agreed. I won’t miss any of the scum either.
Can’t get truth in tv media, newsprint, most internet, all highly controlled speech. So free speech is a joke and a threat to the government if persisted upon. Only self serving candidates are elected in a never ending downward spiral of freedom and justice. Honest people must not exist because these days there are none elected ever.
How much longer before we hear: “But nobody could’ve seen this coming” on the “news”? They said the same thing in 2008-2009.
I find it a beautiful and entertaining show to watch unfold. And agree totally that the dumb asses that invested in something with no physical value deserve to loose. Although it seems the ones that sold early made a fortune so as the food chain goes. The stock market and bond market are all scams to leach money from the masses alot like taxes and insurance banks ect. Although insurance companies are the worst cus they collect premiums then invest thoes to make money off your money but when you have a claim screw you in paying. Fook them let them die and rot
“Facebook Investors Have Already Lost 39 Percent Of Their Paper Wealth”
Ahhhh boohoo, poor babies. Bunch of friggen Communist bastards.
I have to laugh my ass off at those Cripto fools that bought into Bit-Coin at $19K, now worth $5.5K HAHAHAHA Can ya say 70% loss? HAHAHAHAHA
If it was me and i had a fat 401k built up via employer i would so quit and cash out asap. But i dont so im just gonna watch the show then listen to the audience boo hoo and cry over the sad sad ending… last time shit went down all 401k lost 50% value so if someone has 100 or 150 200 grand in 401k yea why not cash out and get a big hunk of money all at once cus then pay off home debt ect and get set up decently cus when the ball falls there will be layoffs and cut backs and closing of a shit load of places. And not only your 401k goes to shit but no job too. A bird in hand is better than 2 in the bush
Greed its whats on the menue. Lot of sheeple gonna fook themselves and shoot themselves in the foot cus theres nothing like hind sight the moment you realize you fooked yourself… just saying.. wonder if they are stocked up on their antidepressants and zanax. Lol
Its gonna be like the Lawrence Welk show with all the bubbles that are gonna be popping lol
So many Americans have max out credit and black Friday’s sales run on people’s credit spending. Sooo wonder if it wont go so good for them… time will tell
That one Apple fruit company that my buddy Forrest Gump bought into is down more than facebook
Note the “losses” are paper losses in the sense that a previously over priced stock is being priced closer and closer to its true value.
Other than Amazon the rest of FANG do not produce anything tangible.
My curiosity is why the rest of FNG are worth more than pennies per share.
Even amazon doesn’t produce anything to speak of they make all the money just being an on line store. Not even a reseller ( they buy and resell at a profit ) but more of a market handler.
Because of my remote location, I do a lot of business with Amazon.
Amazon has a few classes of sales that I’m aware of.
Sold by Amazon, Fulfilled by Amazon, or supplied by an outside seller. Amazon provides services that have value added to me, much as Sears, Home Depot, or Lowe’s provides. Service provided mainly is the shipping and the warehousing of what I want. Those services have a tangible value.
I do not like the politics of Amazon and Home depot corporations,
I don’t like the politics of my doctor either, but I use their services as I have little other options.
I don’t have to use Facebook, Netflix, or Google because they don’t provide tangible services that I can’t get elsewhere,
so I don’t use FNG services.
Almost of the wealth created through Wall Street was and is non-tangible paper wealth. The market has done well up to recently for three reasons and basically three reasons only; stock buy backs – which really only artificially increases stock value, low interest rates – which facilitate stock buy backs because it makes borrowing cheap for individuals and companies to buy back their stock, and of course quantitive easing (QE) – the Fed. flooded the markets and banks with hundreds of billions (or even trillions) of digital dollars.
Now, the market is suffering for basically six reasons; no trade deal with China and to a lesser degree Europe, the global economy is slowing down, gigantic gov’t debt (which is unpayable), rising interest rates- making consumer borrowing too expensive, broad consumer demand is becoming tapped out anyway, and tech. stocks are crashing in a big way – their 15 year market dominance is running its course The future market is going to have to adjust to these new realities, money isn’t going to be so easy as it was.
When I left my last job I rolled over my entire IRA into precious metals. Sure, I missed out on some good paper profits, but I bought PM’s when they were in bear market phases, and it will soon be the commodities turn for big profits.
I believe there are turning points ahead; economically, socially, and politically. And that these turns do not necessarily bode well for us.
Economically/financially – the debt at all levels of gov’t – fed., state, and local has about reached it saturation point. There is widespread acknowledgement it has long surpassed the unpayable point. Now with rising interest rates, financing massive public debt will be near impossible. We will definitely start hearing politicians discussing inevitable cutbacks in Social Security, Medicaid, and Medicare, gov’t budgets can no longer maintain them, they are unsustainable as they presently exist. A second economic issue is the hyper-extreme concentration of wealth, the highest in American history.
Now that the hostile Democrat party controls the House of Rep.’s with a Republican Senate and President there will be little cooperation. This will be the president’s time to shine, his success can still translate into good for America without the House, but they will work hard against him, seeing they love power and their ideology more than America and its people. Look for Democrats to seek raising taxes, more gun control, more regulation of the internet, and more regulations.
There will be no cooperation to craft laws or to limit illegal immigration, and the Demo.’s will not even consider funds in the budget to address the issue in an effort to cripple Pres. DT initiative. The number one, over-arching, primary policy goal of TPTB and officialdom is to change the demography and culture of the US. This is a necessary step to towards changing our type of gov’t, and to eventually nullify the Constitution.
While I have empathy for the mom and pop “investor” who own 100 shares of this and 50 shares of that, I have none whatsoever for the Upper Class who own 100,000+ blocks of shares. In theory, the latter are financially literate enuf to protect themselves.
Jump you F*ckers.
Censor then cry. What were they thinking? That everyone is a libtard? FK FB.
Great insights and analysis shared by Bill.
I have been trading stocks for fifteen years. I’m willing to bet that by Dec 1, the stock market is headed up again. I mistrust the market manipulators, but I play the hand that is dealt.
There is a war on, anything said on the Internet is openly available. Most of it is lies.
Be on task, ignore the lies.
Yep Steve you are probably right, end of the year , managers of funds want to look good on paper,so look for an upturn in December. Not to mention Christmas ,biggest fleecing of population yearly………ho ho ho !……