Listen to my Alternative Visions radio show this friday, October 12, at 2pm eastern time on the Progressive Radio Network. The lead topic will the steep plunge in US stocks (DOW down 831 pts yesterday; NASDAQ and S&P 500 more). Over night even bigger declines in Japan, Hong Kong, and China’s stocks worst day since its 2015 crash.
Trump growing worried and attacking the Fed again. Pakistan joining Argentina and asking the IMF for a big bailout. (Other EMEs soon to follow). Italy’s government drawing a line in the sand with the EU, as Italian bonds deteriorate more rapidly. Sears announces bankruptcy (other retail to follow) and GE in trouble. Watch for defaults on the rise as financial assets continue to decline. CHina refusing to bow to Trump threats of more trade war. IMF warning Trump as US tariffs start to bite into US and global growth, as Fed rates rise and US inflation accelerates while US autos and construction now hitting a wall.
Here’s some of my quick tweets of yesterday on the stock-financial instability emerging:
#Fed lock in your fixed income investments by year end. One more Fed rate hike coming, at best maybe two. Fed will over-react and fall behind the curve, as it always has raising rates too fast, too high, and reversing too late, too slow. That’s its history.
##DOW Profits up 20% over 2017. Trump $4T tax cuts 2018 add profits windfall 20%. So no real growth 2018. Markets know: 2019 profits will fall, Fed rates rising, oil costs up, Trump artificial tax windfall over, EMEs in crisis, China slowing, etc. I repeat: US recession late 2019
#Stockmarket DOW drops 831 pts today. NASDAQ-S&P proportionally even more. As I’ve been predicting, Fed rate hikes to 2.75% (now 2.25%) will precipitate financial asset mkts big decline. Looks like 2.5% may even be enough. Recovery will occur, then decline sharper coming weeks.
Jack, I am so looking forward to Friday. It is getting scary with the financial markets and geopolitical tensions.