Tick, Tick, Talk, 2019 Recession Coming

Tick, Tick, Talk, 2019 Recession Coming by David Haggith for The Great Recession

The 2018 stock market crash is now a fait accompli, having taken a polar bear plunge that put ice in the veins of the Fed and electrified their collective spine with such a deep chill they ran like a fat walrus from the bear market to halt their long-nurtured plans of economic tightening. With that event fulfilled, I’m now predicting a 2019 recession as the major economic news for this year (both US and global).

To confirm my bearish claim on the market’s crash:

Several leading stock market indexes around the globe endured bear market declines in 2018. In the U.S. in December, the small cap Russell 2000 Index (RUT) bottomed out 27.2% below its prior high. The widely-followed U.S. large cap barometer, the S&P 500 Index (SPX), just missed entering bear market territory, halting its decline 19.8% below its high.

Investopedia

But the Dow fell completely into bear territory and the NASDAQ even further into the bear’s territory. Even the S&P hit an intraday low that was 20% down, so it’s stop right at the edge by the end of the day is nothing but a rounding error.

In terms of real cost, anyone who scoffed at my 2018 warnings and held their stocks through 2018 is still recovering from his or her losses. That we have only just this week recovered those losses is quite easily proven with one simple graph of 2018 where the breakdown begins in January where I said it would and hits full crash velocity in the fall:

2018 Stock Market Crash

And, technically, we’re still in the bear market, as we’ve recovered to the point where the market broke all to pieces in January 2018 but not to the point from which the bear market began.

If you like wild financial roller coaster rides that end right back where you started, stocks were the place to be in 2018. Obviously, it was an extremely bumpy ride to worse than nowhere for those who bought and held in the market thoughout 2018. The year was, however, a completely pleasant financial ride for those who were in cash all year, which was the only major asset that performed positive for the year! (And, of course, if you are the rare prodigy who can accurately time every peak and every trough, years of high volatility can make you more money than a steady climb; but then you are a very rare bird with a very high tolerance for risk — some would say a fantasy.)

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David Haggith

Knave Dave — vigilante against the false profits of The Great Recession Too many criminal CEOs still fill their porky bellies with the biggest taxpayer bailouts in the history of the world. These bailouts protect their reputations, saving them from the fall they should have taken. They continue to receive bonuses for having done an unparalleled job of destroying their companies! Many of their companies wouldn’t be making any profit at all if not for the interest they’re making off of nearly free government bailouts. Just this week Hewlett-Packard fired its CEO, but is still paying him a bonus of millions of dollars in exchange for a year of corporate wandering in the wilderness. Netflix’s CEO cost his company hundreds of thousands of subscribers and had to reverse his decision. Bank of America’s CEO launched a debit-card fee plan that was immediately stupid in the eyes of many, but greed an arrogance led him to think he could pass it by his customers, and he lost customers in droves and had to reverse his decision, as did the many major banks that followed him. Since these corporate leaders do things most of us can immediately see as being dumb, why are they rewarded with salaries a thousand times greater than many of us make?