Sunday, October 13, 2019

Stock Market Overview -- Top 21 Signs of an Economic Collapse

Top 21 Signs of an Upcoming Economic Collapse....

The outlook for the economy has never been as dire as it is right now, since the end of the last economic collapse. Economic red flags are popping up everywhere you look, and the mainstream media is suddenly full of stories about the coming stock market crash.
Things appear to be changing dramatically for the US and global economies, after several years of relative economic stability. We are seeing things happen that have not been witnessed, since the last economic collapse, and many analysts expect our troubles to accelerate as we head into the final months of 2019.

There are hopes that things will turn around, but at this point that does not appear to be likely. Below are the top 21 signs of a global economic collapse at this key and pivotal point:
1.) The US and China trade war has just escalated to an entirely new level, with the commencement of 15% US tariffs on Chinese goods worth an estimated $110 billion, and the retaliatory action of China imposing tariffs on about $75 billion worth of US goods. 

The world has already lived through two rounds of US tariffs and subsequent retaliation, but these recent tariffs, along with the ones being delayed until mid-December 2019, are different than the ones that came before, since they will broadly affect global economic growth.

2.) US tariffs on China have already caused American households $600 per year, which will now rise to over $1,000 annually, after the September and December 2019 tariffs go into effect.

3.) Interest rate yield curve inversions have preceded every economic recession since the 1950s -- a major reason for the enhanced stock market volatility, globally.

4.) The US consumer sentiment index just posted a monthly decline in August 2019 of -8.6 points, the largest drops since December 2012 of -9.8 points. The overall consumer buying attitude towards appliances and other household durable goods fell to their lowest level in five years, with "net price" references more negative than anytime since 2008.

5.) The mortgage default rate is rising for the first time since the last financial crisis, with the national default rate increasing 3% in the second quarter of 2019, when compared to the same quarter in the prior year -- the first such rise in over a decade.

6.) Luxury real estate is having its worst year since the financial crisis, with pricey markets like New York City seeing six straight quarters of sales declines. Sales of homes priced at $1.5 million or more fell 5% in the US for the second quarter of 2019. Unsold mansions and penthouses are piling up across the United States, especially in ritzy resort towns where there is a three-year supply, like in Aspen, Colorado as well as the Hamptons in New York.

7.) The US manufacturing sector has contracted for the first time since 2009 as manufacturing companies continue to feel the slowing economic conditions, with global ramifications. The US manufacturing purchasing managers index (PMI) was 49.9 in August 2019, down from 50.4 in July 2019, and below the neutral 50.0 threshold for the first time since September 2009.

8.) The Cass Freight Index has been contracting for the past eight months, falling 6% in May, then 5.3% in June, and 5.9% in July 2019. It is subsequently predicting negative Gross Domestic Product (GDP) growth by the third or fourth quarter of 2019.

9.) Gross Private Domestic Investment tumbled 5.5%, the worst since the fourth quarter 2015, as spending on structures slumped 10.6%. This decline reduced the US second quarter 2019 GDP growth by one full percentage points, being revised downward to 2.0%. The falling inventories also caused a 0.86% drag on the economy.

10.) Crude oil processing at US refiners has fallen by the most since the financial crisis, due to slack fuel demand. US refineries slashed an average of 247,000 barrels per day, since January 2019, compared with the same period in 2018. Crude oil processing has fallen for the first time since 2011, and by the most since the 2008 and 2009 financial crisis.

11.) Retailers Sears and Kmart will be closing an additional 100 stores by the end of 2019, further confirming the reduced consumer spending abilities, which represents 70% of the US economy.

12.) Sales of US recreational vehicles (RVs) are down 20% so far in 2019, partly due to some of the imposed tariffs. Recreational vehicle shipments to domestic dealers have subsequently plummeted 20%, compared to the same period last year, after already dropping 4% in 2018. The RV industry is a great bellwether of the US economy, and right now it is screaming that a financial crisis is coming.

13.) There are actually 102 million working age Americans that do not have a job right now, but according to the Bureau of Labor Statistics (BLS), there were 6.1 million unemployed working age Americans in August 2019, which would be incredible if it was an honest number. but it does not include all working age Americans that are not currently employed. The BLS is not considering them officially unemployed, because they're not part of the labor force. 

The Federal Reserve indicated in August 2019 that there were 95.9 million not in the labor force, an all-time record high. The BLS unemployed number keeps going down, and the "not in the labor force" number keeps going up. Hence, you come up with a grand total of 102 million working age Americans that do not have a job right now, when you add 6.1 million and 95.9 million together.

14.) The S&P 500 earnings per share estimates have been declining, since the beginning of 2019 -- a clear and established trend.

15.) Global trade fell 1.4% compared to a year earlier. World trade volume, a measure of imports and exports around the globe, declined in June 2019 to the lowest level since October 2017, representing the biggest year-over-year decline, since the financial crisis -- a major reversal from the strong growth in 2017 and 2018 that topped at 6.7%.

16.) Germany stands on the edge of a recession precipice. Their government's statistics agency reported that their economy shrink by 0.1% in the second quarter 2019. Furthermore, Germany's central bank is predicting that they will post declining third-quarter growth as well, confirming the definition of a recession -- two consecutive quarters of economic contraction.

17.) The correlation between present day sentiment and that of the 2008 financial crisis is quite similar. Even the recent risk-on phase (rally) after the initial shock of the yield curve inversion, and the risk-off mood (sell-off) that struck later, neatly track patterns recorded in 2008.

18.) Corporate insiders have been selling an average of $600 million per day in August 2019, as they prepare for a financial apocalypse. This confirms the level of fear that presently exist within corporate insiders -- such selling would only exist if a stock market crash was possible.

19.) Investors are liquidating emerging funds at a never seen before pace, representing nearly $12 billion in just the past 11 weeks.

20.) The economic policy uncertainty index reached its highest level ever in June 2019, exceeding all prior peaks, since the index was established in January 1997.

21.) Americans are searching on Google the term "recession" more times today than what was realized during the financial crisis in 2008. 

The signs are clear, but, unfortunately, we live at a time when "normalcy bias" is rampant in our society. This is also referred to as "normality bias," which is defined as the belief that people hold, when considering the possibility of a disaster. It causes people to underestimate both the likelihood of a disaster and the possible effects, because people believe that things will always function the way things have normally functioned. 

This may result is situations where people fail to adequately prepare themselves for disasters, and, on a larger scale, the failure of governments to include the populace in its disaster preparations. About 70% of people reportedly display "normalcy bias" in disasters.

In summary, the financial crisis of 2008 and 2009 is a distant memory for most Americans and global investors. The vast majority of the population feel confident that brighter days are ahead, even if we must first whether an economic recession. As a result, most people are not preparing for a major economic crisis, and that makes them extremely vulnerable. 

Most Americans were completely surprised by the horrible financial crisis of 2008 and 2009 as well as the recession that followed -- it will be the same, this time around, even though the warning signs are there for everyone to see. 

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The stock market information discuss has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. The stock market overview was issued for informational purposes, and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. This overview is based on information obtained from sources believed to be reliable, but are not guaranteed to be accurate, nor is it a complete statement or summary of the securities, markets or developments referred to in this stock market overview. Recipients should not regard this overview as a substitute for the exercise of their own judgment. Any options or opinions expressed in this stock market overview is subject to change without any notice and Wavetech Enterprises, LLC is not under any obligation to update or keep current the information contained within. Past performance is not necessarily indicative of future results. Wavetech Enterprises, LLC and its stock market overview accept no liability for any loss or damage of any kind arising out of the use of any or all parts of this information.

Tuesday, September 10, 2019

Stock Market Overview -- Financial Crisis Consequence(s)

Possible Financial Crisis Consequence(s)....

Trade Imbalance: It starts with people living beyond their means, and taking on debt. Wages become distorted, production costs escalate, and industries move offshore, resulting in trade deficits, and an unsustainable national debt.


Financial Instability: The financial system suddenly and dramatically destabilizes, when debt levels reach the tipping point. Companies and individuals can no longer borrow money, leading to bankruptcies and soaring unemployment.

Currency War: Politicians seek to cheat economic laws. Governments print money to pay debts and devalue their currency, which temporarily promotes exports and discourages imports -- those who devalue first, gain the most.

Trade War: Governments enact tariffs, taxes, and subsidies as they work to steal trade from each other. Global trade plunges, exacerbating the financial crisis, and unemployment rises. Politicians, again, devalue currencies, and enact more radical populist measures.

Hot War: First mover advantage goes to those who unexpectedly strike first, just like currency wars.

Visit our website at www.wavetechenterprises.com, view the cover page video PowerPoint presentation, click on the "Sign Up" link, and fill out the mentioned inquiry form with your own personalized password as well as answer a few questions, to gain entrance to the over 150 internal pages within the website.


Disclaimer: The information contained in this message may be privileged and confidential and thus protected from disclosure. You are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited, if the reader of this message is not the intended recipient, or an employee or agent responsible for delivering this message to the intended recipient. Please notify us immediately by replying to the message and deleting it from your computer, if you have received this communication in error. 

The stock market information discuss has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. The stock market overview was issued for informational purposes, and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. This overview is based on information obtained from sources believed to be reliable, but are not guaranteed to be accurate, nor is it a complete statement or summary of the securities, markets or developments referred to in this stock market overview. Recipients should not regard this overview as a substitute for the exercise of their own judgment. Any options or opinions expressed in this stock market overview is subject to change without any notice and Wavetech Enterprises, LLC is not under any obligation to update or keep current the information contained within. Past performance is not necessarily indicative of future results. Wavetech Enterprises, LLC and its stock market overview accept no liability for any loss or damage of any kind arising out of the use of any or all parts of this information.

Tuesday, July 2, 2019

Stock Market Overview -- Consumer Debt Crisis

Statistics Proving the US Consumer is facing Debt Apocalypse...

Consumers have never been in so much debt, during the entire history of the United States, and there would not be an economic collapse as long as the vast majority of consumers are regularly making their debt payments, but as you will see below, the delinquencies are starting to rise to extremely disturbing levels.


In fact, some of the numbers that are coming in are even worse than what we witnessed, at any point, during the last economic crisis. Just imagine what things are going to look like, once the economy really begins to deteriorate, especially when there are already alarming areas of concern.

It appears we are heading into a new economic collapse, even though, according to the Federal Reserve, it has not officially begun quite yet -- meaning, the worst is yet to come.

Millions of Americans will likely lose their jobs, just like in previous economic recessions as well as depressions, and without an income, most of those that suddenly find themselves unemployed will not be able to pay their bills.
The stage is set for the largest tsunami of consumer debt defaults that the United States has ever seen, which will absolutely devastate major financial institutions across America as well as have global repercussions.

Please carefully review the below list, which is proof that we are not exaggerating things even a little bit. The following 12 statistics prove that the US is facing a consumer debt apocalypse:

1.) Total consumer debt in the US just surpass the $4 trillion level, which has never happened before in all of US history -- most of it comprised of auto loans, student loans, personal loans and credit cards.

2.) US consumers are now in debt for a total of $13.5 trillion, when you throw in mortgages and all other kinds of individual debt. There was a 22% increase in debt, during the first quarter of 2019, when including mortgages.

3.) There are 480 million credit cards currently in circulation within the United States, which is an 13% increase since 2015. Credit card balances are now exceeding the previous 2008 peak level, just as the prior economic recession was underway.

4.) US consumers are carrying $870 billion worth of balances on their credit cards right now, with 35% of them being over the age of 60.

5.) Over 55% of Americans, with credit card balances, have been carrying them for more than a year.

6.) There are 37 million credit card accounts in the US that are classified as "seriously delinquent" -- 90 days or more past due.

7.) Americans now owe a total of $1.3 trillion on their auto loans, up $584 billion, since 2010.

8.) At the moment, 7 million consumers are delinquent on their monthly auto loan payments by 90 days or more -- surpassing the previous peak, during the last economic collapse, by 1 million Americans.

9.) The total amount of student loan debt in the United States has reached $1.5 trillion, consisting of 44 million borrowers, with an average loan balance of $28,000. This total outstanding loan amount has doubled over the last 10 years, while still representing all demographics and age groups.

10.) There is $166 billion in student loans debt that is considered to be "seriously delinquent" -- 90 days or more past due.

11.) Millennials are now more than $1 trillion in debt, with no generation of Americans having ever been deeper in debt at this stage in life -- drowning in debt.

12.) One recent survey found that 78% of Americans are "living paycheck to paycheck." Suffocating debt levels are a big reason why that percentage is so incredibly high -- very little room for error.

We have not seen anything like this, since the last economic crisis. At this point, even main street economist, are openly admitting what is coming, and when the next economic collapse strikes, things are going to get very difficult for US consumers. A debt apocalypse is coming, and is going to be incredibly painful, especially for US consumers. 

Job cuts are starting to rise, and a recent Fed surveys expects second quarter 2019 Gross Domestic Product (GDP) growth to be only 1%, as the economy begins to rapidly slow -- a concerning trend, when 70% of the US economy is depended upon US consumer spending. 

Businesses are already nervous, so a major US downturn would happen swiftly, with the worldwide ripple-effect, ushering in a global slowdown.

Visit our website at www.wavetechenterprises.com, view the cover page video PowerPoint presentation, click on the "Sign Up" link, and fill out the mentioned inquiry form with your own personalized password as well as answer a few questions, to gain entrance to the over 150 internal pages within the website.


Disclaimer: The information contained in this message may be privileged and confidential and thus protected from disclosure. You are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited, if the reader of this message is not the intended recipient, or an employee or agent responsible for delivering this message to the intended recipient. Please notify us immediately by replying to the message and deleting it from your computer, if you have received this communication in error. 

The stock market information discuss has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. The stock market overview was issued for informational purposes, and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. This overview is based on information obtained from sources believed to be reliable, but are not guaranteed to be accurate, nor is it a complete statement or summary of the securities, markets or developments referred to in this stock market overview. Recipients should not regard this overview as a substitute for the exercise of their own judgment. Any options or opinions expressed in this stock market overview is subject to change without any notice and Wavetech Enterprises, LLC is not under any obligation to update or keep current the information contained within. Past performance is not necessarily indicative of future results. Wavetech Enterprises, LLC and its stock market overview accept no liability for any loss or damage of any kind arising out of the use of any or all parts of this information.

Sunday, March 24, 2019

Stock Market Overview -- Financial Crisis Catalyst

Deteriorating Corporate Debt could be the Financial Crisis Catalyst...


Financial crises tend to involve one or more of these three key ingredients: excessive borrowing, concentrated bets, and a mismatch between assets and liabilities. The crisis of 2008 was so serious because it involved all three -- big bets on structured products linked to the housing market, and bank-balance sheets that were both overstretched and dependent on short-term funding. The Asian crisis of the 1990s was a result of companies borrowing too much in US dollars, where their revenues were in local currencies. The dot com bubble had less serious consequences in either of these, because the concentrated bets were in equities, where debt did not play a significant role.
It may seem surprising to assert that the catalyst of the next financial crisis is probably lurking in corporate debt.

A few companies may be rolling in cash, but plenty are not. Companies, in recent decades, have sought to make their balance sheets more "efficient" by raising debt, and taken advantage of the ability to deduct interest payments, for additional tax savings. Businesses, with spare cash, have tended to use it to buy-back shares, either under pressure from activist investors or because doing so will boost the share price, and thus the value of executives' stock options.

A prolonged period of low rates has made it very tempting to take on more debt, with 37% of global companies being highly indebted -- five percentage points higher than they were 11 years ago, just before the previous financial crisis hit. Also, more private-equity deals are loading up on debt, amounts much higher than at any time.

One sign of a upcoming financial crisis is that the credit quality of the bond market has been deteriorating globally, with the median bond ratings having dropped steadily since the 1980s, from A to BBB-. The bond market is divided into investment-grade debt with a high credit rating, and speculative, commonly referred to as "junk" bonds, which are below that level. The dividing line is at the border between BBB- and BB+, with the medium bond rating being now just one notch above "junk."

Even the quality of investment-grade bond debt has gone down, with 48% of such American bonds now being rated at BBB, up from 25% in the late 1990s. Issuers of such bonds are also more heavily indebted than before, with a net leverage ratio for BBB issuers of 2.9, compared to 1.7 in 2000.

Investors are not demanding higher yields to compensate for the deteriorating quality of corporate debt, but just the reverse. In some European countries, investors are demanding no excess return on corporate bonds, to reflect the issuers credit risk. In America, the spread between government and corporate bond yields is at the lowest level in 20 years. Investors have been tempted to buy the bonds, because of the poor returns available on cash, just as low rates have encouraged companies to issue more debt.

In addition, the cost of insuring against a bond issuer failing to repay, as measured by the credit-default-swap market, has fallen by 40% over the last two years -- meaning, investors are less worried about corporate default. However, a model looking at the way banks assess the probability of default, suggest that the risks have barely changed over this period.

Hence, investors are getting less reward for the same amount of risk. Combining this with the declining liquidity of the bond market, because banks have withdrawn from the market-making business, and you have the recipe for the next financial crisis, with already-present ominous signs.

Foreign purchases of American corporate debt has dried up in recent months, and the return on investment-grade debt, so far this year, has been -3.5%. 

The withdrawal of Central banks monetary stimulus will eventually lead to liquidity concerns, and further downgrades of corporate bond debt, from investment-grade to the junk rated status, will force companies to liquidate the undesirably rated bond debt, with virtually little demand -- trying to improve their balance sheets and stabilize their companies declining share prices.

Visit our website at www.wavetechenterprises.com, view the cover page video PowerPoint presentation, click on the "Sign Up" link, and fill out the mentioned inquiry form with your own personalized password as well as answer a few questions, to gain entrance to the over 150 internal pages within the website.


Disclaimer: The information contained in this message may be privileged and confidential and thus protected from disclosure. You are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited, if the reader of this message is not the intended recipient, or an employee or agent responsible for delivering this message to the intended recipient. Please notify us immediately by replying to the message and deleting it from your computer, if you have received this communication in error. 

The stock market information discuss has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. The stock market overview was issued for informational purposes, and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. This overview is based on information obtained from sources believed to be reliable, but are not guaranteed to be accurate, nor is it a complete statement or summary of the securities, markets or developments referred to in this stock market overview. Recipients should not regard this overview as a substitute for the exercise of their own judgment. Any options or opinions expressed in this stock market overview is subject to change without any notice and Wavetech Enterprises, LLC is not under any obligation to update or keep current the information contained within. Past performance is not necessarily indicative of future results. Wavetech Enterprises, LLC and its stock market overview accept no liability for any loss or damage of any kind arising out of the use of any or all parts of this information.