Market crash or market correction?
By Gerald Celente
Publisher, Trends Journal
KINGSTON, NY, 20 January 2016—At the conclusion of just another typical volatile day, with the Dow up nearly 200 points, then down 80 before closing up 28 points on Tuesday, a CNBC host commented that “By most measures, this market has been oversold…”
Hours earlier, CNBC’s Top News feature was, “Investor sentiment sends the wrong message.” The story claimed that “…the pain of the downturn could already be behind us, and there could be ways to capitalize.”
It went on to say, “Research suggests that low investor sentiment is actually a contrary indicator, meaning that when it’s down, the market is more likely to start rising soon. The idea is that by the time the crowd is feeling glum about the market, it’s time to start buying.”
Or feeling broke?
Since the start of 2016, depending on who’s crunching the numbers, between $4 trillion and $6 trillion of global share value has been wiped from the face of the world’s equity markets.
Indeed, Friday’s close that sent the Dow down nearly 400 points not only capped the worst start of a new year in Wall Street history, it helped push the Russell 2000, a broad measure of US equity markets, down 1.75 percent. It’s now off some 23 percent from its peak.
In just two weeks, the Shanghai Composite Index fell over 20 percent from a high in late December, and now, with Japan’s Nikkei Index, is in bear-market territory.
In just two weeks, oil prices collapsed some 21 percent. And with sanctions against oil-rich Iran lifted, the forecast is for lower prices as increased supply outstrips demand.
Back in the States, since the beginning of 2015, crashing oil prices have resulted in 24 oil companies filing for bankruptcy, and, according to Standard & Poor’s, some 50 percent of energy junk bonds are “distressed.”
Multiply that times Nigeria, Angola, Brazil, Venezuela, Saudi Arabia, Kuwait, Norway, Russia, Kazakhstan and dozens of other nations whose principal revenues are oil- and energy-based.
Take a trip across the once high-flying, raw-material-rich emerging markets whose stock markets have sunk to six-year lows, their currencies collapsing, inflation soaring and economies sinking into deep recession -- as commodities prices hit new lows.
From coal mines to oil fields, from shopping malls to manufacturers, not as “glum” as those laid-off tens of thousands of workers from Walmart to Macy’s, General Electric to Tata Steel. They’re among the tens of millions of economic casualties that will suffer from the global recession we had forecast -- and is now underway.
Trend Forecast: We only skimmed the depth and causes of the equity-market crisis and global recession here but go into much more detail in our Trends Journal and nightly broadcasts. Absent from mainstream coverage is the role central banks played in creating the now-deflating financial bubble, with its cheap money-pumping schemes. Thus, we remain bullish on gold as a safe-haven shelter in the midst of worsening economic storms.