The Ecomonic Collapse of our lifetimes will happen this month... It's phoenix time

A great visual depiction of the idea of a phoenix, burning up then being reborn from the ashes, courtesy of Harry Potter.  That phoenix, Fawkes, gave a feather that is the core of Harry's wand.   

It's October 1st, 2019.  For a couple of years now, I've been writing and talking about the coming recession.  Back in early 2018, when the financial market thought the economy was going to surge for 3 to 5 more years, because of Trump's massive tax cuts, I disagreed.  I predicted that the stock market would start to turn down a month or two after the tax cuts were signed, because the promise of that massive windfall to corporate America, and the super rich, was the main force driving the markets up (here's one post, January 2, 2018).  President Trump sign the tax cuts on December 22, 2017.  Almost a month to the day, January 26thm 2018, the stock market turned downward, you can check the chart.

What I got wrong was the incredible manipulation that was going to take place to try and keep the market moving up, mostly to make the economy appear vibrant, and get Donald Trump, and a lot of Republicans in other offices, elected again.  Nomi Prins and her explanation of the collective central banks actions after 2008 helped me, and others, understand this weird financial Never Never Land we find ourselves in now.  There are trillions of government bonds paying negative interest rates, for example.  Are wealthy individuals and institutions really going to keep investing in bonds that cost them money?  I doubt it.

As I write this, the Dow Jones Industrial Average is only 26 points above where it was on January 26th, 2018.  Overall, the Dow is up 26 freakin' points in 20 months.  Not 26%, 26 points!  Healthy and vibrant economy?  Nope.  The bond yields have been dropping, and are now below the dismal inflation numbers, by and large.  And that's the strong part of the economy.  


Across rural, small town, and mid-size city America, things have been pretty dismal economically since 2008.  There are some exceptions, of course, but much of this country has missed out on the 10+ years of expansion that did happen.  For many rural areas and small towns, they've basically been in a great depression, a geographic great depression, for 11 years now.

I've been interested in futurist thinking since I was a kid.  I've been interested in economics since high school, and I'm 53 now.  This is my geek zone, long term social dynamics and economic trends are the weird stuff I find fascinating.

So now, I think we'll see this recession's "Lehman Brother Moment" happen this month, during October 2019. 

 I think we are very likely already in "the next recession."  But recessions are officially labeled months, maybe even years, after they actually happen.  So it's always arguable that we're in a recession, while we're in one.  But I think we're due for the big moment, a Lehman Brothers-style moment, this month, that will make the economic downturn obvious to everyone.  It  may be a collapse of GE, based on the allegations from about 6 weeks ago.  Or it could be the impeachment, the trade war, or something else.  But I think the big moment will happen in October 2019.   And yeah, that's going to suck for most people.  That's the bad news.

The good news is that the long term forces in play here are the collapse of the remaining parts of the Industrial Age infrastructure, and our long, messy, sticky transition into a functional Information Age world.  That's the phoenix part.

Things like our education system, particularly the college system, largely held up by $1.6 TRILLION of student debt, will meet the Disruption Monster.  College as an institution will collapse, much in the way we see the Retail Apocalypse now.  And then it will have to be rebuilt.  Colleges won't go away completely, we need them for certain jobs and career paths.  But many colleges will go under, or be absorbed into larger, more viable ones.

A perfect example is that Mount Ida College, where hardcore entrepreneur Gary Vaynerchuk went to school, is now out of business.  But Gary Vaynerchuk isn't, he's not only thriving, he's looking forward to this economic downturn, and the incredible amount of opportunities it will bring about.  Rich Dad, Poor Dad author Robert Kiyosaki is also looking forward to the coming opportunities, and talking openly about it.  Warren Buffet is too, I imagine, but he doesn't say it, although he drops a little hint here and there.

This economic downturn will be much more than a typical recession.  This is the Phoenix Recession, a collapse of much of the obsolete parts of the Industrial Age world, businesses, power structures, and systems, and new, Information Age businesses and systems will be built, taking their place.  That's the long term Big Picture that I see, and have been writing about as I have been able.  My question for each of you is, do you want to ride the collapse down and be crushed, or do you want to look ahead and help build a viable future, using today's technology, platforms, and opportunities? 

Personally, I'm in a really down and out place financially, and there's a long story about that, a story I won't get into.  But I'm looking to build something cool with some of the opportunities this economic downturn, this Phoenix Recession, will provide.  We're at the top of the roller coaster hill, are you ready for this ride?

A day later... 10/2/2019- The markets were down a couple hundred points yesterday, and I didn't expect a huge drop right away.  But as of close of the stock markets today, the Dow Industrial Average was down over 800 points.  It's a really rough start to Quarter 4 of this business year, and a lot of traders and investors are feeling a recession is more likely.  But this post was to predict that I believe the big event no one can deny, the "Lehman Brothers Moment" of this economic downturn will happen this month.  The markets will rebound a bit tomorrow or the next day, but the think the big economic bomb will drop later this month, and we'll be on our way down do about Dow 17,500, and similar percentage rate declines in the other averages.  

We've just officially begun the prelude to The Great Depression of 2019

Ann and Nancy Wilson of Heart, with Jason Boham on drums, lead a huge ensemble in Led Zepplin's "Stairway to Heaven," when the band was honored at the Kennedy Center in 2012.  I love Jimmy Paige's reaction to this performance.

As I begin to write this, 32 minutes ago, the Federal Reserve just reduced the Fed Funds interest rate by 1/4 of one percent, or 25 basis points, as they usually say.  What does that mean?  That means the people in charge of the U.S. economy lowered the interest rate that most other interest rates are guided by.  The last time The Fed did this, was late August 2007, 3-3 1/2 months before the official start of The Great Recession.  You can see that on this historical chart of the Fed Funds rate.  The Fed Funds rate is already near historical lows, which is one problem leading into this coming economic downturn.  The last time the Fed started to lower interest rates (to "stimulate" the economy) before 2007 was in early 2001 (the Dot Com Bubble recession), and before that was in 1998 (the Asian Currency Crisis), and the time before that was in 1990 (right before another recession, and a six year long downturn/stagnation of the real estate market here in Southern California).  The Fed ONLY lowers interest rates in time of extreme distress.  We've just "officially" entered one of those.

The Southern California real estate market is topping out, before turning downward.  Over 30% of the $1.5 trillion in student loans are not currently being paid back.  The U.S. stock markets have just hit new highs, but those highs are only 3% to 4% above the highs hit 18 months ago, in January 2018, after the Trump Tax Cuts were signed.  By comparison, the price of gold, that boring investment that old guys like, is up about 9% to 10%, three times as much, in the same18 months. 

When The Fed reduces interest rates after a long period of steady or rising rates, it means they think we are either entering a recession right now, or we will enter a recession in the next several weeks.  Basicially, them lowering interest rates is like pulling the ripcord on a parachute to soften the landing of an otherwise dangerous crash.  That just happened this morning.

So what does this have to do with Led Zepplin's "Stairway to Heaven?"  You know that long, mellow, beautiful acoustic guitar melody at the beginning of the song, that riff so iconic you're not allowed to play it in a music store?  The economy has entered that type of period, where nothing much different will seem to happen right away.  But like "Stairway to Heaven," the economic craziness, over the next year, before the 2020 presidential election, will crank up to epic proportions as we go forward.  Enjoy this beginning part, before things get really gnarly financially.  Hell, about 2/3 of the people in the U.S. feel like the last recession never really ended.  Every bubble eventually bursts, and every period of economic growth eventually ends and markets go down for a while, sometimes quite a while.

On the bright side, as I have said before:

Recessions are when the whole world goes on sale, but hardly anybody wants to buy.

They are also one of the best times to start a new business, because nearly everyone else, all the "Big Boys" (and "Big Girls"), are struggling, too.  This Great Recession (or very likely Great Depression, which lasts longer) will probably really be set off by more trade war actions by President Trump.  Instead of sub prime mortgages being the thing everyone blames, it will be student loan debt this time around that becomes the larger trigger and will drop considerably, or completely collapse.  But that opens up great opportunities for people who have solid businesses, people with no debt, or people with  a lot of money to work with.

I'm not the only one looking forward to the economic downturn.  Here are some very successful business people also looking forward to the opportunities that will be popping up as the financial world goes down:

"How to Get Rich in the Next Crash" - Rich Dad Radio Show, March 2019- Robert Kiyosaki (and wife Kim), owners of thousands of rental properties, oil drilling businesses, and author of financial bestseller, Rich Dad, Poor Dad, and several other best selling books.

"Jim Rogers: The Coming Global Financial Crisis will be the Worst in Our Lifetime" -Geopolitics & Empire- April 5, 2009- Jim Rogers (along with Geroge Soros) was the co-founder of the legendary Quantum Fund in the 1970's, and is semi-retired, living in Asia (the future), and head of Rogers Holdings today.

"How to Prepare For the Next Economic Collapse"- DailyVee- 501 -  November 2018- Founder/owner of VaynerMedia, guy who took his dad's liquor store from $3 million to $60 million by drinking wine on You Tube, internet/social media expert, guy who's going to buy the New York Jets and try to win lots of Super Bowls.  

"Jim Rickards Exclusive: The Aftermath of the 2008 Crisis is what we never really escaped" (part 1)- Kitco News- April 18 2019-  Jim Rickards is a lawyer, precious metals expert, and financial author. 

Even though The Fed did exactly what the stock market wanted it to do, because chairman Powell insinuated that he doesn't plan to keep lowering interest rates this year (he probably will anyhow), the Dow Jones Industrial average is down 333 points (1.2%) in the last two hours, and the Nasdaq is down 98 points (nearly 1.2%). 

The Unraveling...

Wall Street Warns of Mounting Recession Risk from Trade War

This article above is from Bloomberg business news, yesterday, 6/2/2019. The article says we could face a looming global recession due to the trade wars in 9 months.  We could face a global recession due to the trades wars in 9 days.  That's really where we are right now.  It'll probably be a couple more months or so, but I don't think our horribly manipulated economy can be propped much longer.

Before I left Richmond, nearly a month ago, I started thinking of the Big Picture of where things are headed as "The Unraveling."  I've been writing about the looming recession for a couple of years now.  I predicted that the stock markets would start dropping soon after the Corporate Welfare plan, aka the Trump Tax Cuts, were passed.  The Tax bill was signed by President Trump on December 22, 2017, and went into effect January 1, 2018. The stock markets continued to rise early in Trumps presidency because major corporations knew that huge windfall was coming.  The NYSE markets peaked on January 26, 2018, and began to drop.  That's what I predicted, and that came true.  The tech heavy Nasdaq went up a while longer.

Here's where I screwed up.  I didn't realize just how much our economy was being rigged, I completely underestimated the corruption at the top levels in our world.  A relatively small number of major investors soon began to buy a small number of key stocks, and the market averages climbed again, as the huge windfall major corporations got in the tax cuts were used mostly to buy back their own stocks.  There was no much-needed infrastructure plan, that both parties promoted in the 2016 election. There was very little major capital investment.  We didn't hear of dozens of new factories opening in the last year.  The tax cuts did exactly what all major tax plans are designed to do, they made the super rich richer.  

But even that focused investment to buoy up the stock averages, aided by a decade of super cheap money due to artificially low interest rates, couldn't raise the markets much past the January 26th high point.  The Dow Jones Industrial Average peaked again on September 21st, then began dropping again when the Federal Reserve did exactly what the Fed should have been doing, they began to raise interest rates back to a reasonable level.  Some of the markets dropped 20%, some individual stocks were down 40% or more, and that led to the huge market drop last Christmas Eve.  The stock market, according to one analyst, was actually halted 40 times, that day, to try and negate the carnage.  

Ultimately, Federal Reserve chairman Jay Powell completely flip-flopped, to such a degree that many people watching wondered just what he had been threatened with.  So the Fed stopped doing its job, it cut plans to hike up interest rates further.  And that bought the stock markets some more time, which was the whole point, to prop up the economy until after the 2020 election.  Stupidity came back in vogue, and the markets climbed back near the two previous peaks.  But stocks, by and large, are priced high right now.  Even the best investor in the U.S., Warren Buffet, said he was sitting on $112 billion to invest, and had no good place to put it, in an interview this past spring.  

So now our President Trump has stoked the Trade War fires, at the time when he's under threat of an impeachment, has been named a co-conspirator in the case that put his lawyer in Federal prison, and has about 16 major investigations into corruption, financial issues, and obstruction of justice, some of which could turn to be outright treason, if proven.  

Things have gone off the rails.  It's not going to get any better for the President and the establishment Republicans anytime soon.  And now a potential trade war with Mexico, which we are completely intertwined with, business-wise and financially, is escalating.  A trade war with Mexico would be taking a metaphorical baseball bat to the knees of many of our major corporations, they have operations on both sides of the border.  A report last night said about a billion dollars in trade, A DAY, goes back and forth over the Mexican border.  It's just a really bad idea.  Even worse, it threatens our guacamole supply.  We can't have that.  

So this is what I kind of anticipated, we will see an unraveling in President Trump as he tries to cope with bad news from all sides.  This will lead to some really bad decisions, like a trade war threat with Mexico, and many others.  This will put the brakes on the wobbly stock markets, which we've seen happen over the last 5 weeks.  I just don't see any other rabbits to be pulled out of this economic hat.  I think we will finally slide, slowly at first, then increasingly faster, into the recession that's been held off for a couple of years now.  That's hard, but not entirely bad.  We NEED a recession, they sort out the well run businesses and weed out the poorly run ones. 

I've only been talking about the stock markets so far, which are largely the wealth of the financial elites.  The stock market over the last few years has basically detached itself from "Main Street" America.  Most Americans are already struggling.  Around 60% of workers struggle with low wage service jobs, and at least another 25%, that make good salaries in tech and other fields, are struggling with massive student loan debt.  That student loan debt will be the thing to watch when things really head South in the stock markets.  Because much of the $1.5 TRILLION in student loan debt, has been repackaged and resold, just like sub prime mortgages were in 2007-2008.  

Maybe, someone, somewhere, behind the scenes, will find another form of manipulation to stave off the recession (actually, we're likely looking at a full blown, decade long, Great Depression at this point), for a few more months, but I really doubt it.  

As I've said before, buckle up, it's going to be a bumpy ride.  But for the three of you who read this far, there is hope.  Remember, a recession is when the whole world goes on sale, but nobody wants to buy.  There will be incredible opportunities in the next few years, whatever happens.  but few people will take advantage of them.  Hopefully you are one of them.

This outlook on the future, depressing as it seems, is why I believe that helping workers learn to become functional small business people, is a key to our future.  The major corporations, like today's tech giants, don't hire tens of thousands of people like major manufacturing companies once did.  Not until they get to an Amazon size, anyhow.  Somebody needs to create lots of jobs, and tens of thousands of tiny businesses, aided by today's technology, is the best bet I see to do that.  

Hey, it's Monday.  I guess that's as good a time as any to hit you with the "bad news."  Whatever happens, Friday's still on its way.  

Hmmmm... haven't I heard this somewhere?

In this CNBC article this afternoon, (March 25, 2019) it says the bond market is signaling a recession is coming.
Bond market says not only is a recession coming, but the Fed will cut interest rates to stop it

Here's my January 2018 blog post, "Larry Kudlow's Wishful Thinking," (unedited, of course) where I predicted the recession the bond market is now predicting.  Sorry I predicted it 17 months ago, I tend to be early on these things.  

"We're the hottest economy in the world."

-Larry Kudlow, President Trump's Economic Advisor, and former CNBC host

Here's the March 8th, 2019 CNBC news clip that quote above came from.  Two weeks ago.  Hmmmm... maybe Larry Kudlow is wrong.  You know, like he was in 2008 when he said the economy was fine.   

By the way, in May of 2018, I had a bunch of guys, in the city I lived in then, come out into the woods, stomp around the tent I lived in, and tell me they were going to beat the fuck out of me with baseball bats.  Why?  Partly because I was a homeless guy blogging about the idea that there was a serious recession coming.  Ultimately, they left and didn't beat me up, as a storm was rolling in.  Now the U.S. Bond Market agrees with me.  

Oh yeah, if I happened to own rental properties in a college town or city right now, I'd sell the sucker QUICK.  But that's just me, and should not be construed as financial advice.    

Our Economy is Powered by Unicorn Farts

Since buying a ounce of silver in 1980, when I was 14 and the price soared to about $50 an ounce, I've been interested in the economy.  I've been watching it seriously since a reading a book predicting a coming Great Depression in 1990.  We didn't have a depression, technically it was called a double dip" recession, but the economy sucked for a full six years, 1990 to 1996.  Most people forget that now.

At this point, I believe our economy is about as stable as a house of cards, resting on egg shells, sitting on the back of a unicorn that's standing on stilts.  In other words, the financial system we all rely on might as well be powered by unicorn farts.  It sounds funny, until you remember that unicorns don't really exist.  We're running on illusions (or delusions), at this point.  One little thing, the right thing at the wrong time, will bring it crumbling down into a pretty serious, and lengthy, economic downturn.  And that's gonna suck for most people.

Recession?  Depression?  It doesn't really matter.  What matters is that you can become aware that things will be financially sketchy, on a big scale, for quite a while.  Once that seeps into your brain, you can do things to cope with this downturn, or even work to take advantage of all the great opportunities that it will present.

Remember: A recession is when the whole world goes on sale, and almost no one wants to buy anything.

Why am I so focused on the next recession, and money and economics in general?  1) Unlike a big issue like global warming, this next economic downturn will affect people much sooner, in the next year or two, and it will affect EVERYONE.  Global warming is a huge and serious issue, but it will seriously affect a fairly small number of people in the early years, and won't be a serious issue for most people for 10-20 years or more.  A really bad economy could literally wipe us all out long before that happens.  2) It's always been something I find interesting, and have spent decades now learning about.  3) Because of the larger social changes we're in the middle of, this next economic downturn will destroy whole industries, iconic American institutions, and will probably provide the biggest opportunities most people will see in their lifetimes. 

Here's where we stand right now.  The United States has a recession, on average, every 4 to 10 years.  The last technical recession was in 2008, and the Federal Reserve started lowering interest rates, in response to growing worries, in October 2007.  So purely from a time standpoint, we're in year 10 or 11 of a 4-10 year cycle, depending how you figure.  Simply put, we're overdue for a recession (or depression), just on the timeline scale.

The U.S. National Debt, the amount of money our country owes people, is $21.974 Trillion.  That's 21, 974, 000, 000, 000 when written out.  That's a really big "credit card bill."  That's $2 Trillion more than when President Trump took office.  There are currently about 328.605 million people in the country so your personal share of the national debt is $66, 871.  Here's the U.S. National Debt clock.  Here's the U.S. population clock (.& the world, too)

U.S. corporate debt, what all businesses together owe, is now in the neighborhood of $9 Trillion.  CNBC 11/21/2018

U.S. personal debt, what individual people owe, is about $19.594 Trillion

U.S. mortgage debt is about $13.533 Trillion.  This is included in the number above.

U.S. student debt is about $1.587 Trillion.  This is included in personal debt above.

U.S. credit card debt is about $1.062 Trillion.  This is included in personal debt above.

The average American owes $59,624 in debt.  That share of the national debt I mentioned above, that's a whole different thing, and if it actually had to be paid by us, it would be added to this number.

A reminder.  A million is 1,000 thousands.  A Billion is 1,000 millions.  A Trillion is 1,000 billions.  A quadrillion is 1,000 trillions.

This is a shitload of debt we all owe.  Actually, it's a whole bunch of shitloads.  That's not good.  Basically, our entire economy right now is like letting your college student live off their credit cards, and not making them pay anything for three or four years.  By the time they had to deal with paying, the amount would be just plain ridiculous, and they wouldn't know how or deal with it.  That's the situation our country is in now.

Also, interest rates are super low right now, by historical standards.  When interest rates go up, and they will some day, all the payments on these incredible amounts of debt also go up.

In 2008, about $1.3 Trillion is "sub prime" mortgage loan debt began to collapse, because a lot of people simply couldn't pay those mortgages.  That was the main trigger of The Great Recession of 2007-2009.  Those loans were called "sub prime," because they were loans given to people who didn't have to have great credit, like people used have to, to get a home loan.  On top of that, those loans were sold to other businesses, then they were turned into weird, complicated, financial investments called CDO's, (collateralized debt options), and pieces of those were sold to all kinds of investors, most of whom had no idea how those CDO's really worked.  When a critical mass of people stopped paying their mortgages, the CDO's went down in value, and the whole system collapsed.

Confused?  Of course you are.  So here's model Margo Robbie, in a bubble bath, explaining sub prime mortgages in the movie The Big Short.  That movie was based on true stories from The Great Recession.  If you think "student loans" every time you hear her say "sub prime" you'll get the idea of what's happening now.  Oh yeah, when these crash, so do most colleges, college towns, and college sports, in the U.S..  Yeah, it's going to get pretty nutty in the next few years.

The gigantic rise in student debt since 2008 happened because student loans took the place of sub prime mortgages, were sold and repackaged into investments called SLABS (student loan asset backed securities), which are nearly identical to CDO's, and now more than a million college students are delinquent in paying their student loans.  Like I said above, the total mount of student loans is $1.587 Trillion, more than the total of sub prime mortgage debt, which crashed the economy in 2008.  In addition to that, most other forms of debt have reached levels we've never seen in all of human history.

Meanwhile, the stock market is high priced, has peaked twice and dropped back in the last year.  It peaked again, lower than the high of last year, and can't seem to get much higher.  Stocks are, by and large, priced really high right now.  The world's greatest investor, Warren Buffet, is sitting on $112 Billion in "cash" right now, and can't find any good deals to invest in.  Everything big enough for him to buy, is overpriced.  He said that in a CNBC interview last month.

These are some of the underlying factors of why I've been telling people to get ready for a serious recession for the last year or year and a half.  It's getting close.  Get ready.  Maybe next week.  Maybe next month.  Maybe in the next 6 to 12 months.  But, it'll happen.

Here's another scene from The Big Short that explains the mortgage loan market in more depth.



In my humble opinion, this, above, is what will happen to the student loan market in the next five years, and that will shut off a huge part of the money that now funds our nation's colleges.  And that's gonna be pretty ugly...

My stock market index predictions for 2019

There are far worse bear attack videos online, but I'm not going for the gore today.  The bear is the stock market in the next several months, the cage is your 401k or investments, and the guy is you.  Like the bear handlers say, "Get ready to brace yourself." 

These predictions below are numbers I think the four major stock indices will hit, almost certainly in 2019, but possible slightly later.  I'm not saying these numbers will be the bottom of the markets.  But I think if you are looking for a bottom before these numbers are reached, you're going to be disappointed.  But hey, I'm just a homeless artist/blogger guy, what could I possibly know about the stock market, right?

Here are my predictions (I've rounded to the nearest dollar):

Dow Jones Industrial Average: 
Peak- 26,828
Prediction- 17,025

Nasdaq:
Peak- 8,110
Prediction- 4,702

S&P 500:
Peak- 2,931
Prediction- 1,833

Russell 2000:
Peak- 1,741
Prediction- 1,046

Let's see how close I get...

This is the lead in to the recession I've been talking about...

You read that right, December 2018 is shaping up (or maybe slimming down?) to be the worst December for the stock market since 1931.  You know1931, back during The Great Depression, when your grandpa used to walk four miles to school each day, barefoot, on his hands in knee deep snow, up hill... both ways.  The major stock indexes, (Dow Jones Industrial, Nasdaq, S&P 500, and Russell 2000) have all dropped considerably since this video was shot.... three days ago.  This guy in the hoodie is young, I'm not familiar with him, but he's a serious stock trader judging by his talk, and his YouTube channel has nearly  a quarter million subscribers.  So he's not just another yahoo talking smack, a lot of people listen to him.  The point is, the stock market is getting pummeled right now, at a historic level. 

I wrote a blog post on January 2nd, 2018, a day after the 2017 tax cut bill went into effect.  The tax cut was a huge windfall for major corporations and ultra rich individuals.  That windfall, according to President Trump's economic advisor Larry Kudlow, was supposed to create a great investment boom in the U.S. in 2018.  Instead, it mostly led to large corporations buying back a whole bunch of their own stock. 

Here's a paragraph I wrote in that post on January 2nd, 2018, when every official person in economic and big business circles seemed ready for stocks and the economy to soar, even higher, for many years to come:

"I see the stock market going a bit higher, while most of the mid-sized cities, small towns, and rural areas, most of America, continues to struggle.  We may even see the stock market go up as most of the country slides into a recession in a few months.  Something, maybe Trump's looming impeachment and leaving office (and Pence might get the boot, too), will trigger a collapse like 2008.  Except this time it's $1.4 trillion in student loan debt that will turn into an anchor on global markets."

Here's the actual post from Jan. 2, 2018-
"Larry Kudlow's wishful thinking..."

Now, President Trump is still in office, but several of his closest advisors have plead guilty to serious crimes, and the president himself currently has 17 investigations looking into him and his affairs.  In January, a Democratic led House takes over, which makes impeachment a serious possibility.  Also the student debt has not imploded.  Yet.  It was the tariffs and potential trade war with China that seemed to tip the financial house of cards.  There have been more articles and talk about student debt recently in the financial media it seems.  The complete mentality of the financial markets has changed in the last 2-2 1/2 months.  Everything I mentioned is being discussed now.  Time will tell how it all plays out.  Most important, the serious stock market drop has opened up the conversation about whether we're heading into a recession.  I say we are.  Again, time will tell. 

Here's another post I wrote on September 22, 2017.  It goes into some of the big, underlying issues with jobs, as we continue to transition from the Industrial Age into the Information Age.  These issues, brought up in th e2013 TED Talk in the post, are still largely unaddressed by our society.  That's not good.
"The crazy future of the work world"

The Dow Jones Industrial Average (DIJA) was at 24,824 on January 2, 2018.  It got up to 26,828 on October 3, 2018.  As I write this post, about 2:25 pm on December 20, 2018, the DIJA is at 22,791.  It's down more than 500 points today alone, down more than 2,000 points from January 2, 2018 and down more than 4,000 points ( over 15% down) from it's peak in October.  The Russell 2000 average is down about 20% since its peak.  The Nasdaq hit the "down 20%" point today.  The S&P 500 is down over 16%.  In Wall Street speak, the Russell and the Nasdaq are now in "Bear Market territory" (-20% or more) and the Dow and the S&P are well into "Correction territory," (-10% or more).

If you listen to the clip of presidential economic advisor Larry Kudlow in that Jan 2 post, you'll hear him say that he expects President Trump to win on the DACA issue, to have major economic growth in 2018, to get his Mexican border wall construction going soon, to start  a TRILLION DOLLAR infrastructure rebuilding plan, and then Larry says he expects the Republicans to do well in the 2018 midterm elections.  So, the esteemed Larry Kudlow was basically completely wrong on his predictions at the beginning of 2018.  To be clear, I don't think Larry is stupid.  I think he was just lying.  That's his job.  Sell the public on ideas that help the ultra-rich get ultra richer.  He was doing his job.  If we realize he's doing his job, and that job is not to help YOUR best interests, then you know to take what he says with a grain of salt.  Or maybe the whole salt shaker.

Meanwhile, I was the homeless artist/blogger that was living in a tent in the woods of Winston-Salem, North Carolina at the time I wrote that post.  I expected stocks to rise for a while, but then the underlying issues would drag things down and we'd head into a serious recession.  We are in a MAJOR stock market correction, and I believe this is the lead into the recession I expected.  

Here's my prediction today, December 20th, 2018:  

We will see the Dow Jones Industrial Average near or below the 18,000 point mark, long before we see Dow 25,000 again.  The other averages I expect to drop a similar percentage.  This could take 6 to 8 months, but it could happen much sooner.


I wrote this post, and many others like it, because what's happening now, and will happen throughout 2019, is simply inevitable.  The financial world is completely manipulated and disjointed at this point, so figuring out the timing of when things would head down was harder than in previous recessions.  I was early on my prediction.  I expected the markets to drop big time in the late spring, and it happened in the fall.  

This will probably "officially" be called a recession next summer or early fall.  We are always several months into a recession by the time the data proves it's "officially" a recession.  Student loan debt will be the big debt bomb this time around.  Keep an eye on that.  It won't be too hard.  That term will be all you hear in the media at some point.

I realize this is a huge bummer right before Christmas, or whatever holidays you celebrate.  Sorry about that.  Don't freak out.  Have a good time, buy some presents, do your normal holiday thing.  Just don't go on a crazy buying spree.  Don't rack up a ton of credit card debt buying presents.  Keep it reasonable.  Next year is going to present a bunch of serious challenges on a bunch of levels.  But there will also be a lot of opportunities, as well.  

Enjoy your holidays, and then get ready to buckle down for a bit s serious work.