The Great Recession Blog
by David Haggith
If it weren’t so serious for the world, it would have been funny to watch on Thursday as the stock market rose sharply upon news that oil prices were rising. Robotraders with silicone brains, I thought. Do people really believe today’s rise in the price of oil means anything? There must be a built-in desperation to the robotraders’ algorithms — that would cause them to so desperately bid the market up on such a meaningless hint of good news.
I don’t know if it is the bots — designed with their creators’ imperfections built in — or human buyers who are so desperate that they actually priced oi-company stocks up because of an increase in oil prices that everyone knew wouldn’t last a week.
We all know that Iran is going to immediately flood the markets with even more oil, driving the price back down. So, in anticipation of that day, oil prices and stocks went into convulsions the next day (Friday) and fell of a cliff. I half smiled at how quickly it went down as I drank my morning coffee and read the news on the west coast of the Dow already being down 300 points. The robo-rally didn’t even last a day!
From robotraders to old-time traders, the stock market crash is fully underway
The legendary Art Cashin, director of NYSE floor operations for Switzerland’s largest bank (UBS), has said that, if oil dropped below $30 a barrel, it would likely have a trap-door effect on the stock market. Well, oil just broke below that; so Friday’s plunge may have been that door opening … if Cashin is right, and Cashin has watched over the NYSE like he is the father of the exchange. After fifty-plus years on the exchange floor, Cashin has pretty much seen everything the market can go through. He knows a worried market, and he says this market is deeply concerned:
This market shows no robustness. The people who sell mutual fund would give their right arm to get an up year [in 2015] so the advertising would say “S&P up for x number of years in a row….” With all that power — and they were actually in plus territory with two days to go in the year — the markets abated. So, that tells me that there is some kind of a latent negative built into the marketplace that will not carry it much higher…. You have a fairly distorted market here that can cause a great many surprises…. History tells me that it shouldn’t be two down years in a row, but looking at the geopolitical risks that I see out there, and looking at the sputtering of the global economy … we should keep the caution flags flying and be very careful. (Art Cashin on King World News)
China’s central bank acknowledged that it pumped $15 billion into its stock market on Friday to slow its continuous crash. Yet, the Chinese stock market still ended the day down another 3.5%. Nevertheless, every week, some blathering TV economist with a pimple for a brain tells his audience that China has taken the aggressive action needed in order to end its train wreck.
At one point in the day, Friday, the Dow had fallen more than 500 points (2.4%). It eventually ended the day down 391 points. The S&P 500 broke below its Aug. 24 low; several market analysts have said this would constitute a major sell signal if it happened. That would be its lowest level since October 2014, which was the last market plunge I predicted (until the present time).
Traditional safe-haven investments went up: the price of government bonds jumped, and gold rose 1.6%. Futures for the market, on the other hand, went even lower than the market’s closing, which hints at more trouble on Tuesday when the US stock market re-opens after a holiday.
The human traders described sentiment as the “worst in months.” One financial advisor said he received more phone calls from nervous clients than he has ever received. He, of course, tried to cheer his clients up by writing the day off as just a little bad news from China — good feelings being more important than wise caution. If his clients had two firing brain cells that should have been all they needed to hear in order to find another broker. Nothing against blind folks, but never stay in a taxi after you learn the driver is blind, even if he does turn around and smile reassuringly.
Just a little bad news from China?
- Surprise, surprise, oil wasn’t up to stay. It dropped below $30/barrel — Art Cashin’s danger point — settling at its lowest price in thirteen years. Thus, Thursday’s rise on good oil news turned immediately into Friday’s falling tide upon bad oil news — a current that took most stocks down with it. (Gee, and it was just going up.)
- Surprise, surprise, China crashed to its lowest point in a year even with $15 billion dollars of instabank propping. (Who could have seen that coming? Well, maybe readers of this blog.)
- Surprise, surprise, retail sales in the US turned out to have declined in December after all. (Hold it! In December? The one month in which retailers make all their profit for the year, having spent eleven months covering all their expenses?)
- Surprise, surprise, corporations started reporting lower profits, including particularly big banks and the top-ten stocks that kept the market alive in 2015.
- European stocks (Stoxx Europe 600) dropped 2.8%.
So much bad news in a single day? If not Black Friday, it was certainly Ugly Friday. Who would have thought? (Maybe readers of this blog?)
“Just a little overreaction due to some temporary bad news from China,” said the blind cabbie, as he unwittingly extinguished his cigarette in his Crown Royal, instead of the ash tray, and then took another drink.
These market bulls have been breathing the rarified air at the top of their skyscrapers for too long, and their brains are turning blue. When are they going to stop believing that bad news from China is over and that China has solved its problems? When are they going to stop pretending that China’s demand will return anytime short of another five years? When are they going to stop pretending that the United States is immune to China and all the rest of the world? When will they stop kidding themselves that Saudi Arabia is going to blink before crushing some American oil companies out of existence?
Ah well, they’re called “bulls” because they’re bull-headed, certainly not because they’re smart. To wit, I present the following evidence:
“While we expected to have more volatility in 2016, I certainly did not expect the year to start with this big of a downdraft,” said Kate Warne, investment strategist at retail brokerage Edward Jones. (WSJ)
Obviously, she doesn’t believe the right blogs, or she’d be better informed. She would have known that every bit of this was going to happen, and that it isn’t going away anytime soon. People hear what they want to believe in and tune the rest out. Anyone who approaches them with reality is just a worry monger or is “predicting the unpredictable,” never mind that people like Kate are always predicting the future themselves, forecasting an eternal bull market for their clients to buy into. Ah well, you can’t save stupid. Not when it is bullheadedly stupid.
“When stocks start dropping, investor fears increase, which leads to more drops in the short term.”
Ah, see. Bad as the market has become and rapidly as it is gaining speed on its way down, it is only falling into a “short-term” gully, not a canyon. Poor Krazy Kate. Even poorer customers of Kate, for that is what they will become — poor.
Here’s another dim candle, trying desperately to hold its light in the wind:
“We’re hitting a meaningful inflection point in the market. When you see this type of activity — big 2 percent moves up, 2 percent moves down — you see this type of volatility at market inflection points,” he said. “If that’s the case, you have to ask yourself if this is a point where you sell everything, or is this a point where you buy. With how much this market has fallen…a level-headed person is going to conclude the latter.” (CNBC)
Obviously this man hasn’t recovered from his recent brain injury when he bounced his head off the market’s ceiling several times last fall. He actually thinks the level-headed person would leap with both feet in a crashing market during the onset of global economic collapse. In other words, a level-headed person, when he or she hears the sucking sound of the whirlpool start to really roar, will go for a swim.
Such lack of imagination for the trouble that lies ahead. He’s right in knowing major volatility where the market spasms up 2% and then down 2% indicates an infection point. What he cannot imagine is that the inflection is to turn down at an even faster pace.
Listen as the following dingleberry says Friday’s vortex was just a “sentiment driven reaction” because the “fundamentals still remain extremely strong in the United States.” (as if mountains of debt, crashing oil prices, failing oil bonds, a highly overpriced currency related to others, a manufacturing industry that is solidly in recession for several months now and a decline in transportation business — just to tick off a couple of items — is “fundamentally extremely strong.”)
You can’t even make up this kind of sad entertainment. What can you do but pull up a lawn chair and watch the running of the bulls? You’re not going to talk them out of it. They are headstrong and determined to run off a cliff.
The machines took over the world
In days of old, a Wall Street blowout like Friday’s would have featured harried traders shouting out sell orders on exchange floors, trying to limit their losses as the market crumbled.
The new market age is decidedly different: Rather than that seething cacophony, aggressive corrections like the current ones are directed by a faceless metronome of computer-generated orders, triggering irresistible momentum and trillions in losses….
It’s no secret that humans are having increasingly less influence on the markets generally. But traders feel the machines are having an outsized influence during the most recent slide, which has sent the major U.S. averages into correction territory. (CNBC)
Wow! Who saw that coming?
Can anyone be certain that some algorithm that is making auto-stock decisions for investors while they sleep won’t misfire now that the market is running in reverse where there are no more Fed puts? Most of the toddlers who created today’s robotrading applications never knew the real world where money wasn’t free. Will all their clients wake up some morning to find a soft-coded circuit breaker failed to trip, and the computers of the world got into a bidding war and priced all stocks down to zero? You think I’m kidding? (Oh, gee, that would be me in my “2016 Economic Predictions” a week ago.)
Imagine that! The robots are taking over?
Yeah, well who created the robots and decided to let them do all the trading on autopilot? Someone must be selling stupidity in bulk now, and investors are stocking up. They’re going to blame the machines they made for troubles in the market they put them in charge of, even when they were dumb enough to know such problems might exist yet sat there and watched the machines whir and click away and exaggerate the market’s gyrations.
Why this crash was predictable as programmed
I first predicted an autumn stock market crash and global economic collapse in the spring of 2015. It’s important to remember that, at that time, the stock market was going up and up; jobs were going up and up; and all the respected “experts” were saying 2015 was going to be the year when the Federal Reserve’s recovery finally gained traction and took off. It was champagne time on Wall Street. Goldman Sachs and all the big boys reveled in how the economy was picking up velocity and about how the year would end nicely positive. (You know, that year they ALL now call a “horrible year for stocks.”)
By summer, the stock market reached historic new highs, but I stayed steadfastly with predicting it would start its fall in the final quarter of the year. “Nope,” I said, against all their odds, “We’ll be entering a global economic collapse in the fall, and the US stock market will begin its trip over the cliff.” Crash. Boom. Bash. Here we are.
Since those distant summer days when the US stock market peaked, the market has erased $2.3 trillion! Think of how much money that is. That’s enough to give $7,000 to every person in the United States, and half of that evaporated in the last two weeks! USA Today calls that a market crash. And …
The Standard & Poor’s 500-stock index … is now down … nearly 12 percent below its benchmark high reached last year…. “Technically we are in a bear market,” said Laurence D. Fink, the chief executive of BlackRock, the world’s largest money management company…. The Russell 2,000, a measure of small-cap stocks, is actually down 23 percent from its peak…. The debate now is whether the steep drops in the markets are an indication that the United States economy is falling into a trough that the country’s economic policy makers have not anticipated. (The New York Times)
So, the number of impartial judges that say I won my bet and that my blog is safe steadily increases by the day. And we haven’t seen anything yet. Wait until there is more than emotional contagion between the Chinese stock market and the US. Wait until the first major US corporation goes down because it was heavily invested in China or Brazil or some other part of the world that is crashing far faster than the US.
It is inevitable that will happen! Wait until corporations that are suffering from crashing global ties are hit with the newly rising interest rates and the now-universal falling of stock prices. (Throughout world markets and broadly across all shares, it’s been the worst start of a year since the Great Depression. So, I think we can say this is a significant crash!)
Look at the inevitability in another common-sense way: since the stock market was going down for the entire last half of 2015 while zero interest was fully available, how much faster will it go down with zero interest stripped away? While zero interest was no longer capable of inflating the market, it was, at least, slowing the fall. (It was still heating the air in the balloon enough to keep it from deflating quickly.) If zero-interest still had any effect at all, then the market is going to be worse than it was at the end of 2015 now that zero-interest is gone; and if zero interest had no effect left, then there is nothing in the Fed’s satchel that can save the market from this fall.
Over the past eight years, I’m four-for-four on my predictions of when the economy would turn down and the stock market would dive. I’m not going to keep blowing that horn, as it has got to be getting obnoxious; but I want to make sure it is absolutely clear that this demise has been predictable throughout the entire recovery period. I want to make sure of that because I want no one to be able to escape blame by claiming “No one could have seen this coming.”
Yes, someone could. Someone did. (And I, of course, am not the only someone.)
This market’s major inflection points have all been predictable and have happened when predicted. But to see it, you have to be willing to cast aside blind and baseless optimism and look reality in the eyes. It is important to underscore that because, unless the majority of people take out their rose-colored contacts, there is no hope of recovery … ever. Follow the Fed and you’re dead.
It was, for example, predictable that the Federal Reserve would raise rates at the worst possible timing in December because 1) The Fed has a pattern of raising rates with the worst timing; 2) the economic gauges it chooses to go by are trailing indicators, not leading indicators, so it never sees these things coming; 3) it believes in its unsustainable stimulus program and in its recovery; and 4) it desperately needed to prove, after all of its scary talk throughout 2015 of raising rates imminently, that it actually could and would do so; or it would lose a lot of credibility; 5) Fed officials were dying for victory day when they could proudly announce as an established fact, “Our program was a success. The recovery is real and it is stable. Break out the champagne.”
It was equally predictable that the stock market would crash as soon as the Fed did raise rates for the simple reason that the stock market is nothing but a hugely inflated asset balloon created by the Fed’s stimulus. So, end stimulus, end hot air, balloon falls. Just logical conclusions. No fancy math or charts. (Nothing against those things, but you could see this just by looking at the big picture.)
Even if the Fed didn’t raise rates, it was clear that the law of diminishing returns was now the prevalent force because the market was rounding more and more downward, even with zero-interest fully engaged. Zero interest stopped lifting the market in the summer; after which, it was barely able to slow the market’s rate of descent.
It was less predictable that the stock market would crash by going up, but that prediction was based on the years of fear that had been building over what would happen when the Fed raised interest and knowledge that there would be a brief lag between the Fed’s decision and an actual change in interest rates. There would also likely be a lag between the time when bad news started being seen as bad news again and the first real bad news to hit. During that momentary lag, the bulls would all look around and exude, “See, we said nothing would happen!” They’d go wild with joy and stage their last hurrah because the miserable bears were all wrong.
And what is the underlying reason that all of this was so predictable? Simple: the laws of economics (Econ. 101, the limit of my formal education in economics). We were living in a law-defying Federal Fantasy in which we tried to create wealth by forever expanding debt. The Law of Diminishing Returns said we would have to keep increasing the rate of debt expansion just to maintain the same growth rate. Eventually that non-sustainable stimulus-driven economy dies of its own debt weight (where returns on stimulus become zero), or the stimulus is terminated because the amount required to get the same effect is more than we can muster. The longer we spent in a fantasy universe, the harder re-entry to Planet Earth was going to be; but here we are.
2016 is the year we get to see how stupid the Fed heads really are. We all get to see how Ben Burn-the-Banky saved us with the courage to lead and then bravely turned the wheel of the ship over to Janet Yellin as he fled to his lifeboat and shoved off to that glorious island in the storm from which he wrote his book about how brave and wise he was. What we are about to see is how the only wise thing he did — though far from brave — was abandoning ship.
To those who bullheadedly stay with saying, you cannot predict the future, I say, “Really? The back half of my ship was just blown off with a torpedo, and I know that none of the sealable bulkheads are working right now. I predict the ship is going to sink. If you want to stay in it, you’re welcome to. The cafeteria for your last meal is right over there.”
Some things are predictable by physical law (or economic law) once you know the overwhelming forces that are in play. There are many variables that might try to save my ship with the back blown completely off, but none that are strong enough to do the job. I can safely predict its going to sink and give a pretty good estimate of how long that will take.
Read James Rickards, The Death of Money. “The coming collapse of the dollar and the international monetary system is entirely foreseeable. . . . Only nations and individuals who make provision today will survive the maelstrom to come.”
Down, down, down
The biggest wealth destroyers during the time of our sinking have been the high-tech companies — Apple, Amazon, Google, Microsoft and Oracle along with Warren Buffet’s company, Berkshire Hathaway. Those are the stocks where the double-digit billions have been lost, and those are the very companies that were keeping the wounded market above water all through 2015. So, the floats, themselves, are sinking.
The biggest ships in the banking sea are slipping into the vortex — JP Morgan, Bank of America, Citigroup and Wells Fargo, all lead the retreat.
So, I say sarcastically to people like President Obama, who claim the US economy is strong, “Sure, there’s no recession in sight! Just don’t look down into this yawning abyss that already has you in its jaws”:
The worst start to a year in stock market history, just added another week’s plunge. Remember, as goes January, so goes the year, according to proverbial stock market wisdom. Half of January is behind us today, and the downward momentum seems to be building as futures-trading points down for the opening of the second half of the month.
Look at the news when we left off: How about those retail sales? How bad was the holiday season? I’ve already written that the Santa Claus Rally never happened because his evil alter ego, Santa Claws, took over. Friday, however, we got to look at actual December retail data:
Worse than dismal. Sales growth was the lowest it has been since 2009 in the belly of the Great Recession. Bear in mind that population grows every year, especially with so much immigration, so sales should grow even if no one is buying more stuff just because there are so many more people. This year, growth was down to 2.2%. That barely matches population growth, and doesn’t adjust for inflation. Factor in how much sales, measured in total dollars, were up just because of price inflation, and you realize this was close to 0% real growth. Then factor in that the details show that nearly all the growth that did happen was in car sales. Take out car sales, and retail sales actually shrank for the year if you adjust for inflated prices. That’s the first actual recession in sales since 2009.
To make it worse, it was the final months of the year that pulled the annual average down that far, and those are the months that are supposed to be the best! Wasn’t it less than two months ago that everyone in the media was saying consumer confidence was strong and sales in November were up? Oops. Something slipped.
Sales at U.S. retailers declined in December to wrap the weakest year since 2009, raising concern about the momentum in consumer spending heading into 2016. (Bloomberg)
If you step back a little, you see in the graph Bloomberg provides that retail sales growth actually hit its peak in 2001, and has been pretty much slacking off ever since with just a minor uptick in 2014. I don’t recall anyone mentioning that. It’s all been “recovery, recovery, recovery” and “growing consumer confidence.” But that’s the Law of Diminishing Returns in action. With stimulus full on, each year’s growth was less than the year’s before.
I told you the holiday shopping season looked like it was going to be a bust this year, and here’s how it came out now that the data is in:
“There isn’t anything encouraging in this report,” said Thomas Simons, a money-market economist at Jefferies Group LLC in New York. “It’s very disappointing. The labor market is in good shape, which suggests the outlook is probably better than this.”
Way to put some positive spin on it at the end there, Tom; but wait until you get next week’s unemployment stats and this month’s new jobs statistics. Of course, the Bureau of Lying Statistics may cook up numbers as much as they did last week with the new jobs report. In last week’s report, they claimed 292,000 jobs were added to the economy in December. It turned out, according to David Stockman, that only 11,000 of those were actual jobs. The rest were the BLS’s “seasonal adjustment.”
Hmm. Isn’t December the time of year when more people are hired as seasonal help? So, why would you have to adjust the actual number of newly employed upward? Wouldn’t you want to reduce the actual number by the assumed seasonal hires in order to report only lasting job gains? The seasonal jobs are just fluffy down that blows away in January. I’ll bet they will beef up the number for January on the basis that people were seasonally laid off, even after beefing up the number in December when people were seasonally laid on.
Ah, but you see, it was really more about the climate this year. You know how new jobs grind down when it’s snowy. So, you adjust the actual new jobs reported to say, “Here is what the number would have likely been if the snow hadn’t held back construction.”
Hmm. Wasn’t this December unseasonably warm? Last year, we were told jobs were weak due to severely cold weather. So, why did the BLS make the same upward seasonal adjustment this year? The BLS had to adjust real jobs up by 281,000 due to all that 70-degree weather? I guess they must have figured construction companies didn’t want to hire because the weather was too pleasant. They would have hired more than the actual 11,000, except that all the construction managers wanted to take some vacation time to enjoy the sun. So, better adjust the real number up to what it would have been if the weather were not so stinkin’ enjoyable for the most populated part of the US. (You have to wonder what the perfect job weather actually is where no adjustment is required.)
This year the balmy weather on the east coast was also blamed for the particularly bad shopping season: “Warmer than usual weather last month probably curtailed purchases.” Yeah, who likes to go shopping when the weather is perfect? O.K., the theory was that sunshine shoppers didn’t buy as many mittens and coats. However, whenever the weather has been freezing cold during this great recession, the theory has been that shoppers were not out buying mittens and coats because they didn’t want to brave the icy roads.
I don’t know about you, but I’m getting tired of years of seasonal adjustments that always seem to make the picture look brighter. You kind of get the feeling someone is screwin’ with the picture.
Back in the belly of the beast
Ah well, we may be finicky, but at least our credit is still good.
Well…. Standard & Poors just came out with their new corporate credit ratings:
Corporate issuer ratings globally are at their highest negative level since 2009.
Standard & Poor’s Ratings Services has the most number of ratings on negative outlooks relative to positive ones at Dec. 31, 2015, since June 2010.
The net outlook bias deteriorated to a negative 11% at Dec. 31, 2015, four percentage points down from six months previously. This constitutes the worst half-year change in the net outlook bias since the 2008-2009 global financial crisis. (Wolf Street)
The drop in corporate credit ratings now that corporations have taken out massive debt to fund all their share buybacks comes at the same time that corporate earnings are declining (for the third quarter in a row):
Profits are expected to have dropped by 7.2 percent in the fourth quarter on a share-weighted basis, according to data compiled by Bloomberg, while revenues are expected to have fallen by 3.1 percent. This would represent the worst earnings season since the third quarter of 2009. (Newmax)
There is that “worse since the Great Recession” thing again. Seems to be popping up in every perspective of the US economy. Kind of sounds like we are returning to the belly of the Great Recession.
There must be something that is making it so that “fundamentals still remain extremely strong in the United States.” Wish I knew what. As of this week (depending on which index you use), stocks have suffered two 10% corrections in a few months time. The only other times that has happened have been 1929, 2000 and 2008.
I’ve already reported that US manufacturing has been in a recession for some time, but look at how much worse that recession has gotten, as described in the Empire State Manufacturing Survey:
The contraction in factory activity in the New York manufacturing region, which began way back in August, unfortunately is picking up a lot of steam this month, at minus 19.37 for the January headline which is the lowest reading since April 2009. New orders, at minus 23.54, are contracting for an eighth straight month and at the sharpest pace since March 2009. Unfilled orders, at minus 11.00, are in an even deeper string of contraction. Employment, at minus 13.00, is down for a sixth straight month as is the workweek, at minus 6.00. And there’s a crumbling going on in the 6-month outlook which, at 9.51 is still in the positive column but shows the least optimism since way back in March 2009. (Econoday)
Worst “since 2009” is everywhere! Isn’t that where I have been saying throughout all of the years of this blog we’d wind up? “Take away all the artificial supports, and we’ll sink right back into the belly of the Great Recession.” Ta da, Here we are!
If you add in non-manufacturing industries, such as oil, gas, mining and utilities, the picture looks like industry has fallen off a cliff:
President Obama sounded quite upbeat though:
“Our concern is that things will only get worse (effects of commodity super-cycle, bankruptcies, debt defaults, hedge fund redemption/failures, global economic slowdown, equity weakness, global debt deleveraging, etc, etc) before they get better.” (Oh wait, that was Treasury strategist Marty Mitchell, Zero Hedge)
Guess the Treasury analysts aren’t as perky as the president. Ah well, that Marty is probably a permabear anyway.
Let’s see what the perspective looks like from further back … like overseas, as seen by the head of one of London’s largest banks:
“Developments in the global economy will push the US back into recession,” Edwards told an investment conference in London. “The financial crisis will reawaken. It will be every bit as bad as in 2008-09 and it will turn very ugly indeed.” (Contra Corner)
Oh, my gosh. You can’t get away from that 2009!
Yeah, but he’s a known permabear, too … and a banker! What’s he know? He probably punches little kids in the face, has pickle breath and a perpetual British-butler scowl. Are you going to believe a guy like that or the president of the United States?
So, here’s the president’s quote from last week:
“The United States of America, right now, has the strongest, most durable economy in the world!”
That’s great! Well, until you consider what a pile of junk the rest of the world is looking like right now. Then it’s like bragging we’re the best-smelling corpse in the morgue.
If things are as rosy smelling as President Obama described the state of this grand union to be, why is the nation’s biggest superstore, Walmart, that rich Titan of cheap retail, closing down 269 of its stores (154 of which are in the US) and laying off 16,000 employees? And, if retail is that bad, what’s all this talk about consumer confidence? Are you going to judge consumers by their words in a survey or by their actions? For me, it will be the latter.
Still think the stock market isn’t crashing and that were not entering a global economic collapse? Well, we’ve got another week of news ahead before this turns out to be the worst January in history. So, maybe the bad news will turn around.
What does the belly of the Great Recession look like?
Into the gaping jaws of the Epocalypse we go, and as we are sliding back down into the belly of the Great Recession, consider how massive Fed money printing and low interest barely arrested that fall last time around. How much deeper does the belly get when we return to it without that stimulus available anymore and with now four times the national debt weighing us down?
Consider, also, that the United States was pretty much down in the belly of the whale by itself back in 2009. The rest of the world entered it after we got the recession started on their behalf. So, what will it be like now that everyone is down in the same abyss, trying to crawl over the top of each other to get out?
I said back then that forestalling the needed corrections, including price deflation, and piling up debts to buy our way out of the hole that debt created would only make the pain so much worse when that unsustainable anesthesia finally ran out. Well, here we are, and this time with no China to help pull us through and a Federal Reserve that has pretty much exhausted its reserve capacity. Even a Fed official said the Fed is “out of ammunition.”
And that’s why I call this second dip of the Great Recession “the Epocalypse.”